2013_annual_report of Kotra Pharma

7/18/2019 2013_annual_report of Kotra Pharma

http://slidepdf.com/reader/full/2013annualreport-of-kotra-pharma 1/95

Annual

Report

2013

Nielsen Retail Audit 2013

No.1 Child

Vitamin C



With 30 years of pharmaceutical experience under its belt, Kotra Pharma is well on its way to achieve its mission to be the centre ofexcellence for the pharmaceutical industry. Having grown from a Malaysian brand to a globally recognised name in over 30 countries,

Kotra Pharma’s rapid progress did not go unnoticed.

This year Kotra Pharma received one of the highest forms of acknowledgment from the National Pharmaceutical Control Bureau,

Ministry of Health Malaysia, whereby the company was nominated and awarded the Industry Excellence Award 2012, for its leadership

in the field of Good Manufacturing Practice (GMP).

Prior to this recognition, Kotra Pharma was awarded the Malaysian Pharmaceutical Company Of The Year 2011 by Frost & Sullivan, a

US-based consulting firm, for its stewardship in customer value and innovation.

These accolades serve to further establish Kotra Pharma’s presence within the pharmaceutical industry as well as encourage us as a

company to continuously grow and seek better product innovation, manufacturing excellence and geographical expansion to bring

accessible healthcare to all.

This effort, true to our vision of Humanising Health – Everyone deserves a healthier tomorrow, is further supported by Kotra Pharma’s

commitment to deliver quality medicines to healthcare providers worldwide by applying cutting edge pharmaceutical research and

manufacturing technology.

To date, our pharmaceutical (Axcel® and Vaxcel®) and nutraceutical products (Appeton®), have globally benefitted patients and

communities as we continue to grow, seeking new and improved ways to constantly fulfil our healthcare needs in an ever changing

environment.

Committed to our vision, we have invested USD50 million in the first phase of a total USD150 million state-of-the-art manufacturing and

research facilities, which constitute the largest single-investment in the Malaysia pharmaceutical industry to date.

At Kotra Pharma, your patients’ health is our priority.



core

valuesWe act with integrity

We deliver on commitment

We are customer oriented

We work with passion and strong team spirit

We believe everything is possible



Humanising Health

Everyone deserves a

healthier tomorrow

To be the centre of

excellence for the

pharmaceutical industry

vision

mission



Corporate Information

Directors’ ProfileFinancial Highlights

Chairman’s Statement

Corporate Governance Statement

Statement on Risk Management andInternal Control

Report of the Audit Committee

Financial StatementsDirectors’ Report

Statement by Directors

Statutory Declaration

4

5

9

10

15

25

27

32

33

37

37

contentsIndependent Auditors’ Report

Statements of Profit or Loss and OtherComprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information

List of PropertiesNotice of Annual General Meeting

Analysis of Shareholdings

Form of Proxy

38

40

41

42

43

45

83

84

85

88



Kotra Industries Berhad | Annual report 20134 Kotra Industries Berhad | Annual report 20134

corporate

information

Company Secretaries

Chua Siew Chuan (MAICSA 0777689)Mak Chooi Peng (MAICSA 7017931)Sean Ne Teo (LS 0008058)

Audit Committee

P’ng Beng Hoe, BKT, PJK, JP (Chairman) Azhar bin Hussain

Piong Teck Min

Remuneration Committee

Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul RahmanJSM, JMN, DMSM, PSM (Chairman) Omar bin Md. KhirPiong Teck MinPiong Teck Onn

Nomination Committee

Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul RahmanJSM, JMN, DMSM, PSM (Chairman) Omar bin Md. Khir

Piong Teck Min

ESOS Committee

Azhar bin Hussain (Chairman) P’ng Beng Hoe, BKT, PJK, JPPiong Teck Onn

Board of Directors

Y. Bhg. Tan Sri Datuk Dr. Omar bin Abdul Rahman JSM, JMN, DMSM, PSM

(Independent Non-Executive Chairman)

Piong Teck Onn(Managing Director)

Piong Teck Min(Non-Independent Non-Executive Director)

Y. Bhg. Datuk Piong Teck Yen DMSM, DSM, PJK, JP

(Executive Director)

Chin Swee Chang(Executive Director)

Omar bin Md. Khir

(Independent Non-Executive Director)

P’ng Beng Hoe BKT, PJK, JP

(Independent Non-Executive Director)

Azhar bin Hussain(Independent Non-Executive Director)

Piong Chee Kien (Alternate Director to Piong Teck Min)

Legal Advisors

Chee Siah Le Kee & PartnersAdvocates & Solicitors

105, Taman Melaka Raya75000 Melaka, Malaysia

Tel : 06-283 3423Fax : 06-284 7251

Registered Office

No. 60-1, Jalan Lagenda 5Taman 1 Lagenda

75400 Melaka, MalaysiaTel : 06-288 0210Fax : 06-288 0570

Business Office

No. 1, 2 & 3 Jalan TTC 12Cheng Industrial Estate

75250 Melaka, MalaysiaTel : 06-336 2222Fax : 06-336 6122

Registrar

Mega Corporate Services Sdn Bhd (187984-H)Level 15-2, Sheraton Imperial CourtJalan Sultan Ismail50250 Kuala Lumpur, MalaysiaTel : 03-2692 4271Fax : 03-2732 5388

Auditors

Crowe Horwath (AF: 1018)52, Jalan Kota Laksamana 2/15

Taman Kota Laksamana, Seksyen 275200 Melaka, MalaysiaTel : 06-282 5995Fax : 06-283 6449

Principal Banker

Malayan Banking Berhad (Maybank)

Stock Exchange Listing

Bursa Malaysia Securities BerhadMain Market



Annual report 2013 | Kotra Industries Berhad 5Annual report 2013 | Kotra Industries Berhad 5

Y. BHG. TAN SRI DATUK DR. OMAR BIN ABDUL RAHMAN

Independent Non-Executive Chairman

81, Malaysian

Date appointed: 5 June 2000

Board Committee memberships:

• Chairman, Nomination Committee

• Chairman, Remuneration Committee

Academic qualification and honours:

• Bachelor of Veterinary Science (Sydney University)

• Certificate of Pathology (University of Queensland)

• Doctor of Philosophy (Cambridge University)• Honorary Doctorates (Universities of Sterling, Melbourne, Guelph,

Bristol and Queensland, Universiti Teknologi Malaysia, Universiti

Kebangsaan Malaysia and Universiti Putra Malaysia)

• Professor Emeritus, Universiti Putra Malaysia

Experience and career path:

• Veterinary Research Officer of the Veterinary Research Institute,

Ipoh from 1960 – 1966

• Senior Research Officer of the Veterinary Research Institute, Ipoh

from 1966 - 1970

• Deputy Director of Veterinary Research Institute, Ipoh 1971

• Professor of Animal Pathology (1972 – 1987) and Founding Dean of

the Faculty of Veterinary Medicine and Animal Science of UniversitiPutra Malaysia (1972 – 1978), and Deputy Vice-Chancellor of

Academic Affairs of Universiti Putra Malaysia (1982 – 1984)

• Science Advisor in the Prime Minister’s Department from 1984 –

2001

• Founding Chairman of Technology Park Malaysia Corporation

• Founding Joint Chairman of the Malaysian Industry-Government

Group for High Technology (MIGHT)

• Founding Chairman of Composite Technology (Research) Malaysia

Sdn Bhd (CTRM)

• Founding Chairman of the Malaysian Technology Development

Corporation (MTDC)

• Founding and Executive Chairman of Kumpulan Modal Perdana

Sdn Bhd from 2001 – 2007

• Founding and current Chairman of London-based Commonwealth

Partnership for Technology Management Ltd (CPTM)

• President and CEO of Malaysia University of Science and

Technology (MUST) from 2007 – 2009

Directorships in other companies:

• OSK Ventures International Berhad

• Green Packet Berhad

• BCT Technology Berhad

• GW Plastics Holdings Berhad Group

Awards:

• JSM, JMN, DMSM, PSM

• Asean Achievement Award (Science), 1993

• Fook Ying Tung South-East Asia Prize, 1998

• Tun Abdul Razak Award (International Category), 2000

• Tokoh Akademik Negara, 2010

Committees served:

• Ministry of International Trade and Industry’s (MITI) Consultative

Panel on Trade and Industry

• National Council for Scientific Research and Development

• National Development Planning Committee

• National Information Technology Council• National Telecommunication Council

• Malaysian Veterinary Council

• United Nation’s Council for Science and Technology for

Development (UNCSTD)

• Organisation of Islamic Cooperation (OIC) Ministerial Standing

Committee on Scientific and Technological Cooperation

(COMSTECH)

• Joint Convener of the Langkawi International Smart Partnership

Dialogues (LID)

• Current Chairman of Joint-Executive Group for the Southern Africa

International Dialogues (SAID)

• Former member of UNESCO’s World Commission on Ethics in

Scientific Knowledge and Technology (COMEST)• Current member of the Board of Trustees for the Malaysian

Innovation Foundation

• Current Board member of the Malaysian Toray Science Foundation

• Current member of the National Science Research Council

• Current member of the Board of Trustees on the Mahathir Science

Award Foundation

Associations and affiliations:

• Senior Fellow and First President, Academy of Sciences Malaysia

• Board Member, Past President, Fellow and Advisor, Malaysian

Scientific Association

• Past President, Association of Veterinary Surgeons Malaysia

• Fellow, Academy of Sciences for the Developing World (TWAS)

• Founding Fellow, Islamic World Academy of Sciences

• Honorary Fellow, National Academy of Science Republic of

Kyrgyzstan

• Past President, Science Council of Asia

• Past President, Third World Network of Scientific Organisations,

Asia Region

• Immediate Past President, Federation of Asian Scientific

Academies and Associations (FASAs)

directors’profile




PIONG TECK ONN

Managing Director

56, Malaysian



• Remuneration Committee

• Employees’ Share Option Scheme Committee

Academic qualification:

• Bachelor of Science in Pharmacy (University of Wales, United

Kingdom)


• Began his career in retail and wholesale pharmaceutical business

at City Chemist & Asia Pharmacy

• Pioneering the development of manufacturing, research and

development and marketing departments of Kotra Pharma (M) Sdn

Bhd (KPM)

• Responsible for introducing various conventional dosage forms

ranging from tablets, capsules, creams and ointments, wet and dry

syrups and injectables, both aseptically and terminally sterilised

• Managing Director responsible for the Group’s overall operations,

business strategic directions and driving the Group’s initiatives

towards achieving its various set goals

Committee served:

• Chairman of the ASEAN Pharmaceutical Industry Club (APC) (2008-

2009)

Association and affiliation:

• Past President (2008-2009) and Executive Council Member (1998-

2013) of the Malaysian Organisation of Pharmaceutical Industries

(MOPI)

Relationships with other Directors/Substantial Shareholders:

• Brother to Piong Teck Min and Y.Bhg. Datuk Piong Teck Yen

• Married to Chin Swee Chang

PIONG TECK MIN

Non-Independent Non-Executive Director

61, Malaysian



• Audit Committee

• Nomination Committee



• Malaysian Certificate of Education


• Handled the pharmaceutical wholesale business of KOT in 1970

• Managing Director of Lonnix (M) Sdn Bhd, specialising in broad

range traditional medicine

• Well-versed with the intricacies of the local pharmaceutical trade

• Built a good business network with Malaysian wholesalers in the

pharmaceutical trade


• Brother of Piong Teck Onn and Y.Bhg. Datuk Piong Teck Yen

• Brother-in-law of Chin Swee Chang

• Father of Piong Chee Kien

Y. BHG. DATUK PIONG TECK YEN

Executive Director

46, Malaysian



• Lewisham College, United Kingdom


• Responsible for marketing and sales activities of KOT in 1989

• Sales Manager of KPM in 1989

• Marketing Manager of KPM in 1995 and was instrumental in

formulating and implementing promotions aimed at creating brand

awareness

• Current Business Director responsible for the development of

exports and international marketing activities of the Group

Awards:

• DMSM, DSM, PJK, JP


• Brother of Piong Teck Min and Piong Teck Onn

• Brother-in-law of Chin Swee Chang

directors’profile




CHIN SWEE CHANG

Executive Director

56, Malaysian



• Bachelor of Science (Hons) in Data Processing (University of

Leeds, United Kingdom)


• Programmer at Systems Automation Sdn Bhd in 1982, involved in

development, implementation, user-training and maintenance of

insurance software• Analyst Programmer at Eastern Systems Design Sdn Bhd in 1984,

responsible in the development and maintenance for general

accounting, insurance broking, hire purchase/leasing software

• Head of the Electronic Data Processing Department at Robert

Bosch (South East Asia) Pte Ltd in 1987, responsible for user

support system coordination; coordination/liaison of system

information with regional office and headquarters in Germany.

Helped to coordinate, convert, transfer data and system migration

from Nixdorf to IBM AS/400 system in 1991

• IT Manager of KPM in 1993. Transformed the computerisation of

the entire business from a stand-alone personal computer (PC)

environment to a local area network PC multi-user system, with

fully integrated material requirements planning, financial anddistribution software. Coordinated and implemented a new, fully

integrated Symix MRP (US) package on PROGRESS database

platform in 1997. Set-up an in-house IT team to support the growing

number of users and computer systems in 2001. Since then, Symix

system has gone through two rounds of upgrades. Symix was

renamed as Syteline where the database was converted to MS

SQL. Was also responsible for setting up Shipping Department

and ensuring the smooth operations of order processing and

administration departments.

• Was promoted to the current position, Chief Information Officer

responsible for overseeing the operations, development and

enhancement of Management Information Systems, Order

Processing and Administration departments

• Was the Project Manager for the SAP project implementation

which started in November 2008 and went live as scheduled in July

2009. Modules of SD, MM, FICO, and partial PP were implemented

together to replace the legacy Infor ERP Syteline system

• With the stabilisation of the SAP core modules, embarked on

“Leverage on IT” projects to automate management information

and reporting to support decisions making

• Roll out Mobile Sales Ordering using iPads for sales team during

this financial year. All information on customers are available on

the palm of the sales representatives.


• Sister-in-law of Piong Teck Min and Y.Bhg. Datuk Piong Teck Yen

• Married to Piong Teck Onn

OMAR BIN MD. KHIR

Independent Non-Executive Director

76, Malaysian



• Nomination Committee



• Cambridge School Certificate

• Completed an Estate Management Course


• Assistant Estate Manager in Socfin Plantations in 1958, devoted

attention on various rubber and palm oil estates

• Acting Manager of Socfin Plantations in 1973

• Experience in Human Resources Management & Public Relations

from 1977 – 1981

• Upon retirement as Manager 1 (Senior Group Manager) in 1992,

was in charged of approximately 10,000 acres of rubber and palmoil estates in Bandar Bestati Jaya (formerly known as Batang

Berjuntai), Selangor


• Former Committee Member, Malaysian Employers Federation

• Former Member, Employers Panel (Industrial Court)

• Former Chairman, Selangor State Malaysian Agriculture Producers

Association Advisory Panel

• Former Chairman, Selangor Planters Association

• Former Council Member, Zoo Negara

• Former Committee Member, United Planting Association of

Malaysia

• Former Committee Member of Bukit Bandaraya Bangsar Residents

Association

directors’profile




P’NG BENG HOE


68, Malaysian

Date appointed: 22 August 2007


• Chairman, Audit Committee

• Employees’ Share Option Scheme Committee

Professional qualification:

• Chartered Accountant


• Former Partner of PricewaterhouseCoopers

• Chartered Accountant with accumulated and extensive experience

in audit, taxation, public listing of companies, management

consultancy, corporate restructuring for a wide range of industrial

and commercial companies in the public and private sectors

including multinational corporations and government corporate

bodies

Awards:

• BKT, PJK, JP


• Member of the Institute of Chartered Accountants in Australia

• Member of CPA Australia• Member of the Malaysian Institute of Accountants (MIA)

• Member of the Malaysian Institute of Certified Public Accountants

(MICPA)

AZHAR BIN HUSSAIN


60, Malaysian

Date appointed: 12 November 2007


• Audit Committee

• Chairman, Employees’ Share Option Scheme Committee


• Bachelor of Pharmacy (Hons) (University of Wales, United

Kingdom)


• House Pharmacist, Glaxo Malaysia in 1976

• Production Executive, Glaxo Malaysia in 1977

• Assistant Manager, Glaxo Malaysia in 1981

• Production Manager, Glaxo Malaysia in 1983

• Technical Manager, Glaxo Malaysia, Glaxo Pakistan in 1989

• Technical Director, Glaxo Malaysia in 1993

• Board of Director, Glaxo Malaysia in 1993

• Executive Director, Intercircle Holdings Sdn Bhd in 1994

• Managing Director, Pharmaniaga Manufacturing Berhad and later

Executive Director, Pharmaniaga Berhad from 1994 – 2003

• Managing Director, Pharmaniaga Berhad from 2003 – 2006

• Senior Director, UEM Group in 2007

• Business Development Consultant, Technology Park Malaysia in

2008

• Head, TPM Biotech Sdn Bhd from 2008 – 2010

• Director and Senior Principal Consultant, Neoconsult Sdn Bhd

from 2010 – present

• Director, IKOP Sdn Bhd from 2013 - present


• Past President of the Malaysian Organisation of Pharmaceutical

Industries (MOPI)

• Associate Member of the Harvard Business School Alumni Club of

Malaysia

• Member of the Malaysian Pharmaceutical Society (MPS)

• Vice President, International Society of Pharmaceutical Engineers,

Malaysia Affiliate (ISPE Malaysia)

PIONG CHEE KIEN

Alternate Director to PIONG TECK MIN

34, MalaysianDate appointed: 25 November 2010


• BSc in Telecommunications Engineering (London)

• MSc in e-Commerce Engineering (London)


• Experienced as a IT Account Executive at Plato Solutions Sdn Bhd

from January 2005 to November 2005

• Brand Executive at KPM from November 2005 to October 2006

and was actively involved in planning and implementing brand

marketing and trade strategies aimed at increasing brand

performance• Current General Manager of Lonnix (M) Sdn Bhd, specialising

in broad range of traditional medicine, food supplement and

effervescent products


• Son of Piong Teck Min

• Nephew to Piong Teck Onn, Y. Bhg. Datuk Piong Teck Yen and Chin

Swee Chang

directors’profile




financial highlights

2009 2010 2011 2012 2013

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

Revenue 89,994 102,357 112,841 126,943 131,294

Revenue Growth(%) 3.8% 13.7% 10.2% 12.5% 3.4%

Profit before tax 8,985 12,466 (2,079) 1,178 3,829

Profit after tax 9,124 11,721 (2,139) 1,122 3,687

Shareholders’ equity 91,106 102,827 100,694 102,135 107,979

Per Share

Basic earnings (sen) 7.37 9.47 (1.73) 0.91 2.89

Net assets (RM) 0.74 0.83 0.81 0.82 0.85

Financial Ratio

Gearing ratio 0.84 1.12 1.18 1.23 1.17

Return on assets (%) 4.64% 4.83% -0.87% 0.44% 1.40%

Return on equity (%) 10.01% 11.40% -2.12% 1.10% 3.41%

PROFIT AFTER TAX

RM MILLIONS

NET ASSETS PER SHARE

(RM)

SHAREHOLDERS' EQUITY

RM MILLIONS

REVENUE

RM MILLIONS

150

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

120

90

60

30

0

1.0

0.8

0.6

0.4

0.2

0

120

100

80

60

40

20

0

15

12

9

6

3

-3

0




chairman’sstatement

Our unwavering commitment to the four pillars of excellence – Research and Development

Excellence, Manufacturing Excellence, Brand and Marketing Excellence and Global

Pharmaceutical Excellence - has made the financial year ended June 2013 a significant

year for Kotra Industries Berhad (“the Company”) and its subsidiaries (“the Group”),

as one of its wholly-owned subsidiaries, Kotra Pharma (M) Sdn. Bhd. (“Kotra Pharma”)

received not one (1) but three (3) industrial acknowledgements of excellence.

Dear Shareholders

With more than 30 years of pharmaceutical experience under its belt, I believe Kotra Pharma is well on its way to achieve its mission to be the

centre of excellence for the pharmaceutical industry, having grown from a Malaysian brand to a globally recognised name in over 30 countries.

Therefore, as Chairman of the Board, it is my great pleasure to present to you the Annual Report for the financial year ended 30 June 2013.

Y.BHG. TAN SRI DATUK DR. OMAR BIN ABDUL RAHMAN


Our first acknowledgement came in the form of an award, where Kotra

Pharma was conferred one of the highest forms of industrial excellence

– The Industry Excellence Award. This award was bestowed upon

Kotra Pharma by the National Pharmaceutical Control Bureau, Ministry

of Health Malaysia, in recognition of our leadership and level of Good

Manufacturing Practice (GMP).

In addition to this award, Kotra Pharma’s core Over-The-

Counter/Consumer brand Appeton, was again voted by

consumers as a Gold Trusted Brand through the annual

Reader’s Digest Most Trusted Brand Awards. To us, receiving

this vote is very encouraging; as it represents the confidence

and loyalty customers have towards our products.

Our third and most fulfilling acknowledgement was when AC

Nielsen through its Nielsen Retail Audit report announced

that Kotra Pharma’s Over-The-Counter/Consumer brand

Appeton, had successfully maintained its position as the

market leader for its children’s range of Vitamin C.





GROUP’S PERFORMANCE

This financial year was indeed an exciting year for us. Despite the

low growth rate of 3.4%, the Group recorded a profit before tax of

RM3.8 million as compared to the profit before tax of RM1.2 million

in the previous financial year ended June 2012 or a surge of 325%.

This significant rise in profit was mainly due to improvement in gross

margin as a result of improvement in operational efficiencies and cost

containment in all areas of operations. On top of that, there was a

lower spending on advertising and promotion as we focused these

activities only in the strategic channels.

For this period under review, the Group’s total revenue rose to

RM131.3 million from RM126.9 million in the preceding year. This

increase in revenue was mainly contributed by the domestic sales

revenue of RM89.5 million, with a growth rate of 5.5%. This revenue

growth was attributed to the introduction of new products as well as

the result of our expansion of the General Trade team beginning last

financial year. This new trade channel successfully opened 805 new

accounts.

Research and

Development

ExcellenceTo continuously

invest 5% of our

sales revenue into

the enhancement

of our research and

development

Global

Pharmaceutical

ExcellenceTo be available

in six continents

by 2020 (North &

South America,

Africa, Europe, Asia,

Australia)

Brand and Marketing

Excellence

To be a trustedhousehold name and

a USD150 million

company by 2020

Core Values:

We act with integrity

We deliver on commitment

We are customer oriented

We work with passion and strong team spirit

We believe everything is possible

Vision:

Humanising Health – Everyone deserves a healthier tomorrow

Our vision is about understanding and addressing the healthcare needs of society, through the innovation and availability of products, by

harnessing the combined skills and expertise of our human capital and technology

Mission: To be the centre of excellence for the pharmaceutical industry

Manufacturing

Excellence

To continuously meet

the world standard

in pharmaceutical

manufacturing

The Group recorded RM41.8 million for its overseas sales revenue as

compared to the preceding year’s RM42.1 million. The decrease was

mainly due to a six (6) month delay in obtaining import approval from

the regulatory body in one of the major markets. Nonetheless, the

matter has been resolved.

MANUFACTURING EXCELLENCE

With the commissioning of Phase One of our manufacturing

plant completed, we are now planning for a new Sterile/InfusionManufacturing line. This new line is targeted for completion in year

2014.

In addition to the smooth progress of our manufacturing plant’s

expansion, we recently received the highest acknowledgement

from the National Pharmaceutical Control Bureau, Ministry of Health

Malaysia, when we were awarded the Industry Excellence Award.

This award was in recognition of our high level of compliance and

good track record in the Good Manufacturing Practice (GMP).




RESEARCH AND DEVELOPMENT EXCELLENCE

Our strong research and development team has contributed to the

exponential growth of our product range and product pipeline. At

30 June 2013, we have a total of 236 Over-The-Counter and Ethical

products registered with the Ministry of Health, Malaysia.

Among the new products launched under the Ethical division were the

Axcel Orlistat tablet, Axcel Amlodipine tablet, Axcel Co-Amoxyclav

tablet, Axcel Axpain-650 tablet and Vaxcel Cefepime injection. From

these products, Kotra Pharma scored three new achievements,

namely, Axcel Amlodipine tablet as the first cardiovascular product,

Axcel Co-Amoxyclav tablet as the first penicillin antibiotic and theAxcel Orlistat tablet as the first anti-obesity – obesity agent for Kotra

Pharma.

As for the Over-The-Counter/Consumer division, the new products

launched were the Appeton Essential Collagen Plus, the Appeton

Essential Glucosamine 500 + Chondroitin 400 and a new Vanilla

flavoured option to our flagship Appeton Weight Gain.

BRAND AND MARKETING EXCELLENCE

In the last financial year ended June 2012, we successfully launched

five (5) marketing initiatives.

For our Adult Health Supplement range under the Appeton brand, we

launched a new Loyalty Card Programme, an extension to our current

Appeton Loyalty Card Programme. This additional loyalty programme

was conceptualised specifically to further reward our customers and

enhance our Adult Health Supplement range.

Under our Appeton Nutrition Range, we embarked on a nationwide

campaign for our Appeton Weight Gain and Appeton Wellness 60+.

The Appeton Wellness 60+ campaign marked the part-two instalment

for the previous ‘Drink what you can’t eat’ slogan. For this campaign,

the focus was towards a light hearted reinforcement of the product

value – offering the elderly a nutritional option they can enjoy without

the use or aid of dentures.

Whereas, the Appeton Weight Gain campaign focused more on the

clinical study conducted, emphasising that we were the only clinically

proven weight gain nutritional supplement. These two campaigns

were conducted on a national level encompassing television

commercials, billboards, pharmacy displays and print advertisements

in newspapers.

Under our Ethical division, our

brand and marketing initiativeswere strongly focused on

growing our international brand

presence. In the local market,

we continued to grow both our

annual ‘Paediatrics in Practise’

(PIP) and Infectious Disease

Forum’ (ID) initiatives.

GLOBAL PHARMACEUTICAL EXCELLENCE

In the international scene, we launched our inaugural Appeton

Convention in Philippines. This convention was aimed at introducing

our Appeton Weight Gain into the medical channel. Inspired by ourEthical division’s PIP initiative, medical speakers from Malaysia and

Philippines were invited to give presentations at this convention.

In Laos, we sponsored an Appeton Wellness 60+ and Appeton

Wellness 60+ Diabetic road show in conjunction with the country’s

Senior Day. This road show was conducted in the Setthathirath

Hospital, one of the key hospitals in Laos. Similarly, we also conducted

a road show to promote our Appeton Wellness 60+ in Cambodia. This

road show covered seven (7) prominent locations within Phnom Penh,

Sihanuk Ville and Siem Reap.





Due to our success in Malaysia, we have expended our PIP and

ID initiatives internationally. Our ID initiative has been launched in

Kampala, Uganda, Phnom Penh, Cambodia and Mandalay, Myanmar

while our PIP initiative was launched in Yangon, Myanmar.

Internationally, we officiated our inaugural ‘Dermatology in Focus’

initiative in Hanoi, Vietnam. This initiative represents the first of its

kind for us to be launched internationally and we have subsequently

brought the initiative over to Lagos, Nigeria.

Additionally, we have participated in international pharmaceutical

talks and exhibitions such as the CPhl Conference in Spain, the Tokyo

Industry Exhibition and the 85th Pharmaceutical Society of NigeriaExhibition.

INDUSTRY OUTLOOK AND PROSPECT

Since 2010 the global pharmaceutical industry has experienced one of

the biggest waves of drug patent expirations in history, a phenomenon

referred to as the "Patent Cliff". It is forecasted that a global annual

value of RM435 billion innovator blockbuster drugs will lose their

patent protection within the next 10 years. For the pharmaceutical

companies manufacturing generics like Kotra Pharma, this "Patent

Cliff" presents a golden opportunity.

Within Malaysia, the government has recognised this opportunitypresented and has acknowledged the potential of the Malaysian

healthcare industry through this opportunity to increase the nation’s

gross national income (GNI). By 2020, the Malaysian pharmaceutical

industry is expected to increase the GNI by RM13.8 billion (22%).

To facilitate this growth, the pharmaceutical industry has been

identified as one of the 12 National Key Economic Areas (NKEA) by

the Malaysian government.

The Malaysian pharmaceutical industry is projected to grow at a

healthy Compound Annual Growth Rate (CAGR) of 9.5% from 2009 to

2014 with approximately RM5.4 billion market size.

Seizing the opportunities presented by this "Patent Cliff", the Group

will continue to develop and expand our pipeline of products for

commercialisation to drive our sales growth. There are opportunities

for growth on the international front as the various commercial

difficulties encountered this financial year have been resolved.

OUR CORPORATE SOCIAL RESPONSIBILITY PLEDGE

The Group understands the importance of being a responsible

corporate citizen. It is not only our duty to address the overall

healthcare needs of a rapidly changing society, but to do so in a

respectable, responsible and ethical manner.

To ensure that we deliver on our vision of Humanising Health

– Everyone deserves a healthier tomorrow; we are constantly

reviewing and evolving our core policies and day to day operations to

ensure we carry out our Corporate Social Responsibility (CSR) duties

to the highest standards. This enables us to meet and exceed the

expectations of our stakeholders. By doing so, we ensure continuous

growth for the Group while maintaining the trust of our stakeholders.

With our strong international network, we have begun to expand

our CSR reach. We have established strategic partnerships with our

international business partners to assist in addressing the healthcare

challenges faced while expanding the availability of our healthcare

products.

Education

The Group places great emphasis on human capital development.

We believe that by investing in our people and communities, we

will ensure the long-term sustainability of our business. Internally,

our employment practices are designed to help us create the right

workplace culture in which employees feel valued, empowered and

inspired.

Externally, through our university linkage Kotra Pharma has been

consistently sponsoring graduate reward programmes. This is part

of our commitment to encourage academic excellence amongst ourfuture leaders.

Additionally, to celebrate Kotra Pharma’s position as market leader

for our children’s range vitamin C and Children’s Day, 300 bottles of

Activ – C vitamins were donated to a primary school.

Healthcare

The Group strives to positively impact the health of people around the

world. Our CSR focuses on leveraging on our full range of resources

– people, skills, expertise and funding, to broaden the access to

healthcare products and its delivery to marginalised societies.

Locally, we have organised various initiatives aimed at promoting

healthcare knowledge among our stakeholders and society. Among

the initiatives executed were sponsorships for the 4th Autism Walk

held in Melaka, the Health Education & Health Awareness Exhibition

and a donation to the Yayasan Bina Ilmu Welfare Clinic in Penang.

Internationally, we have sponsored the much needed health products

in support of the Philippines’ street outreach programme and the

TECH Outreach medical camp in North East Sri Lanka.





Humanitarian Assistance

In our commitment to humanitarian efforts in times of national

and international crisis, Kotra Pharma endeavours to be on

the forefront of mobilising resources in aid for the victims.

Such initiatives by Kotra Pharma are in line with our vision of

Humanising Health – Everyone deserves a healthier tomorrow.

WORDS OF APPRECIATION

On behalf of the Board of Directors, I would like to take

this opportunity to express my sincere appreciation to the

management team and employees who have once againdelivered positive results with their invaluable contribution and

dedication.

To the Board, I thank you for your continued guidance and

support and a special note of appreciation is also due to all our

shareholders, customers, business partners and associates for

your unwavering support and belief in our company.

Y.BHG. TAN SRI DATUK DR. OMAR BIN ABDUL RAHMAN





Annual report 2013 | Kotra Industries Berhad 15

Corporate Governance Statement

The Board of Directors of Kotra Industries Berhad (“Board”) recognises the importance of corporate governance and are fully committed

to The Malaysian Code on Corporate Governance (“the Code”) which sets out the principles for long-term sustainaility through sound

governance that upholds corporate ethics, risk management and effective internal controls.

The Board elieves good governance helps us to create and maintain trust with our internal and external stakeholders. As such, the Board

adopted the high standards of Corporate Governance in discharging their duties and responsiilities with a view to continuously enhancing

stakeholder value, increasing investor confidence and estalishing customer trust. Therefore, the Board is pleased to report its adherence to

the principles and complies with the est practices of good governance to the extent practical as laid down in the Code respectively.

THE BOARD

Duties and Responsibilities

The Board sets the Group’s core values and adopts proper standards to ensure that the Company operates with integrity, and complies with

the relevant rules and regulation. The Board assumes the following principal responsiilities as descried y the Code and acts proactively in:

• setting long term strategic direction

• reviewing performance against the adopted strategy

• providing strategic direction and approving corporate plans and targets

•



Kotra Industries Berhad | Annual report 201316

Corporate Governance Statement continued

Gender Diversity

The Board is supportive of gender diversity in the oardroom as recommended y the Code. Presently, there is one (( female Director on the

Board of the Company. The Company wi006o4appoint an independent woman director when the opportunity arises.

Meetings and Supply ob Information

In order to effectively discharge its duties, the Board has unrestricted access to apo4information pertaining to the Company’s usiness

performance. There were five (( Board meetings during the reporting financial year.

The attendance of the Directors at the Board meetings is presented in the tale elow:

Attendance ob Board Meetings in financial year ended June

Director Aug Oct Nov Feb May

Total

. Tan Sri Datuk Dr. Omar in Adul Rahman √ √ √ √ √ /

. Piong Teck Onn √ √ √ √ √ /

. Datuk Piong Teck Yen √ √ √ √ √ /

. Chin Swee Chang √ X √ √ √ /

. Piong Teck Min X √ √ √ √ /

. Omar in Md. Khir √ √ √ X √ /

. P’ng Beng Hoe √ √ √ √ √ /

8. Azhar in Hussain √ √ √ √ √ /

9. Piong Chee Kien √ X X X X /

The meetings of the Board are scheduled in advance for the Directors to plan their schedule. On quarterly asis, the Board discussed financial

performance, usiness strategy and matters pertaining to compliance and governance. Minutes of meeting will e provided to the Board efore

the Board Meeting, giving them sufficient time to review or if necessary, request additional information on the coming Board Meeting. At each

meeting, the matters arising from the previous Board meeting will e taled along with the financial performance and results from the quarterly

financial reports, which are reviewed and approved with due consideration to the recommendation from the Audit Committee.

The Directors are encouraged to actively seek independent professional advice pertaining to the Group’s affair at the Company’s expense if

deemed necessary in order to discharge their duties effectively.

Company Secretary

Responsiilities of the Company Secretary is to ensure that Board memers have proper advice and resources for discharging their fiduciary

duties under applicale rules and regulation as well as provide adequate secretarial support in planning and organising the Board meetings.

The Company Secretary is closely involved in preparing the schedule of Board meetings for the year and the agendas for these meetings inconjunction with the Chairperson and Key Executives. The Company Secretary will ensure that information is dispatched timely to all Directors

to enale them to prepare adequately for these meetings. The Company Secretary takes the minutes of these meetings and distriutes as

soon as possile thereafter for Directors to implement the decisions. In addition, the Company Secretary also provides advice on corporate

governance issues.

Appointment

All appointments to the Board are recommended y the Nomination Committee (NC). In the selection process, the Board ensures that

shareholders and investors’ interests in the Group are not compromised. The processes of identifying and nominating new Directors are vested

in the NC. The NC shall nominate the candidate, taking into account the Group’s usinesses and matches the Group’s needs with the capailities

and contriution expected for a particular appointment.





The Board ensures that all newly appointed Directors must attend and successfully complete the Mandatory Accreditation Programme (MAP)

conducted y Bursa Malaysia Securities Berhad ("Bursa Malaysia").

An internal induction programme, which includes a riefing y the Managing Director, is a prerequisite to ecoming a memer of the Board. Theaim is to facilitate understanding of the Group’s operations and expose them to its corporate culture. A new Director will have the opportunity

to participate in the Group’s offices and manufacturing plants tour and participate in discussions with the senior memers of the Management

team during the orientation.

Re-election

All Directors shall sumit themselves for re-election y shareholders at regular intervals at least once in every three () years, together with

all new Directors appointed during the financial year will e sujected to re-election at the Annual General Meeting (AGM). Whereas, Section

9 () of the Companies Act 9 requires that all Directors over seventy () years of age go forward for re-appointment each year. At least

one-third (/) of the Directors are required to retire y rotation each financial year and they can offer themselves for re-election at the Annual

General Meeting.

Upon the recommendation of the Nomination Committee and the Board of the Company, the Directors listed elow are due to go forward forre-election at the AGM in and eing eligile, had offered themselves for re-election:

• P’ng Beng Hoe pursuant to Article 9() of the Company’s Articles of Association

• Azhar in Hussain pursuant to Article 9() of the Company’s Articles of Association

Tan Sri Datuk Dr. Omar in Adul Rahman and Encik Omar in Md. Khir who were appointed as Directors of the Company on June have

served on the Board for more than 9 years, and expressed their intention to retire at the conclusion of the forthcoming th AGM in view of the

implementation of the Board’s 9-year policy and in line with the recommendations in the Code. Accordingly, Tan Sri Datuk Dr. Omar and Encik

Omar Md. Khir will retain office until the close of the th AGM.

Training

The Board acknowledges the importance of continuous learning and development for its memers. Directors are encouraged to review

their own training needs on a regular asis, to keep areast of regulatory changes and the changes and developments of usiness trends

in the pharmaceutical industry. The Board ensures that the Directors continuously update their skills and knowledge and familiarity with the

Company’s usiness in line with the vision and mission in order to remain competitive and to effectively discharge their duties as Directors.

Throughout the year, the Directors received regular updates and riefings on regulatory and legal developments, including information on

significant changes in usiness and operational risks. All Directors have attended an in-house program conducted y KPMG on the Malaysian

Code on Corporate Governance updates with the exception of Encik Omar in Md. Khir. The Board has assessed and considered the

training programmes attended y them and that the trainings were appropriate and sufficient.

Board Assessment

The Nomination Committee is given the task to review annually the activities and effectiveness of the Board and the Board Memers as well as the independence of the Independent Directors. The Chairman of the Nomination Committee oversees the overall evaluation process.

The Nomination Committee reports annually the assessment to the Board. The assessment together with the report on the Board alance will e

discussed at the full Board. This exercise is carried out after the end of each financial year or such other time as may e deemed appropriate.

Board Charter

The Board has adopted a Charter, which set out the Board’s roles and responsiilities, principles, as well as the policies of the Company. The

Board Charter has een formalised and will e reviewed and updated periodically in accordance with the needs of the Company and any

new regulations to ensure that it remains current and relevant. The Board Charter is availale for reference on the Group’s wesite at (www.

kotrapharma.com).



Annual report 2013 | Kotra IndustriBerhad 19

Corporate Governance Statement continuedcoD9.37 01484.8836g4Dg487 .559DggQg(coD9.37 01460.8836g4Dg487 .559DggQg(coD9.37 01400.8836g4Dg487.559D





d. Provide an ojective and independent assessment of the enefits granted to Executive Directors; and

e. Consider what other details of Executive Directors’ remuneration to e reported in addition to the existing legal requirements,

and how these details should e presented in the Annual Report.

Activities of the Remuneration Commitn22iv

During the yearly RC meeting, the Committee memnts reviewed and made recommendations for the nMnus payout and increment of

remuneration for all Executive Directors. The Committee also reviewed and made recommendations to the Board for the Director’s fee for

all Independent and Non-Executive Directors. The Committee memnts an21 tained from participating in the discussion of their individual

remuneration.

Directors’ Remuneration

Diligent steps were taken to ensure each Director is fairly rewarded for their individual contriution to the Group taking into consideration

of the financial position of the Group. Details of remuneration of each Director paid Mn03the Group for the financial year ended June

are as follows:

Other short term

employee benefits including

estimated monetary value

Fees Emoluments of benefits in kind Total

(RM’) (RM’) (RM’) (RM’)

Executive Directors - , 99 ,8

Non-Executive Directors -

Total , 99 ,

The numers of Directors of the Group whose remuneration fall within the respective ands are as follows:

The Group The Company

Non-Executive Directors

Below RM,

RM, – RM,

Executive Directors

RM, – RM, - - - -

RM, – RM, - - - -

RM, – RM, - -

RM, – RM, - - - -

RM, – RM, - - -

RM, – RM, - - -

RM, – RM, - - - -

RM8, – RM9, - - -

RM9, – RM 9, - - -

Details of the remuneration of each Director are not disclosed in the Annual Report as the Board is of the opinion this infringes on the

privacy of the individual Director. Nevertheless, the Annual Report discloses the annual remuneration of Directors in ands of RM,

and the numer of Executive/Non-Executive Directors receiving annual remuneration in each particular and as well as the total

remuneration received y the Executive and Non-Executive Directors in separate categories.





SHAREHOLDERS COMMUNICATION

Investor Relations

The Board is committed to maintain a constructive relationship with its shareholders. Announcements are made on a timely asis to Bursa

Malaysia and these are made electronically to the pulic via Bursa Malaysia’s wesite at (www.ursamalaysia.com) as well as the Group’s

wesite (www.kotrapharma.com) to ensure shareholders are well-informed aout the Group’s performance and operations.

The wesite provides corporate information, financial result, annual reports, and product information. For further enquiries or requests for

information, shareholders and investors are welcomed to contact the Company’s Corporate Affairs Department.

Independent Non-Executive Director, Mr. P’ng Beng Hoe was appointed y the Board as well as the Company Secretary as a contact person to

enale shareholders to convey their views and feedack to the Board effectively.

Poll Voting

In line with recommendation of the Code, the Chairman will inform the shareholders of their right to demand a poll vote at the announcementof all general meetings.

Effective Communication and Proactive Engagement

In maintaning the commitment to effective communication with shareholders, the Group adopts the practice of comprehensive, timely and

countinuing disclosures of information to its shareholders as well as to the general investing pulic. The practice of disclosures of information

is not just estalished to comply with the requirements of the Main Market Listing Requirements of Bursa Malaysia pertaining to continuing

disclosures, it also adopts the est practices as recommended in the Code with regard to strengthening engagement and communication with

shareholders. Where possile and applicale, the Group also provides additional disclosure of information on a voluntary asis. The Group

elieves that consistently maintaining a high level of disclosure and extensive communication with its shareholders is vital to shareholders and

investors to make informed investment decisions.

Annual General Meeting (AGM) and Annual Report

Feedack from the shareholders is held at great value to the Group. The Group undertakes the AGM as a platform to respond directly to the

shareholders' queries allying any issues or confusion that may arise. The Group’s performance and progress is presented y the Managing

Director during the AGM. All Directors and the External Auditors are present at the AGM to attend to any issues raised y the shareholders and

investors. The Chairman ensures that the Board is accessile to shareholders.

To facilitate a two-way discussion with the shareholders, the notice of the meeting together with a copy of the Annual Report will e sent

to shareholders at least twenty one () days prior to the AGM. The Annual Report is to provide full disclosure and is in compliance with the

relevant regulations to ensure greater transparency.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board continually strives to present a alanced and comprehensive assessment of the Group’s financial performance and prospects

primarily through the audited financial statements, annual reports and quarterly announcements of results to the shareholders. Appropriate

accounting policies have een applied consistently in preparing the financial statements, supported y reasonale and prudent judgement and

estimates.

The Directors are responsile for keeping proper accounting records which disclose with reasonale accuracy at any t ime the financial position

of the Group to enale them to ensure that the financial statements comply with the requirements of the Companies Act 9 and approved

accounting standards in Malaysia. The Directors are also responsile for the safeguarding the assets of the Group and for taking reasonale

steps to prevent and detect fraud and other irregularities.





In order to meet the fiduciary responsiility expected of the Board, the Board with the assistance of the Audit Committee oversees the

financial reporting process to ensure that the reports presented are in a true and fair manner. The Report of the Audit Committee is outlined

in this Annual Report.

Internal Control

The Board owns the responsiilities to maintain internal control systems that cover financial controls, operational and compliance controls. The

Group’s internal audit function is currently outsourced to professional consultant, KPMG Business Advisory Sdn Bhd. The internal auditors met

with the Audit Committee during the reporting year to report their findings.

Key developments and important information in the Group’s internal control system during the year is presented in the Director’s Statement on

Risk Management and Internal Control presented in this Annual Report.

Whistle Blowing Policy

The Board had introduced the Whistle Blowing Policy to encourage employees to report any misconduct or malpractice within the roup’2

The policy provides employees with accessile avenue to report on suspected raud, Borr\006.2ion, Tishonest practices without rvar of eingvictimised or Tiscriminated against. It is a formal channel of communica2022ion that is expected to enefit the roupx4in the long r\0016.

Relationship with External Auditors

The Board has estalished and maintained a professional and transparent relationship with the external auditors, in seeking professional advice

and ensuring compliance with the accounting standards in Malaysia. The Group’s external auditors, Crowe Horwath, continue to highlight to the

Audit Committee on matters that require the Board’s attention. The external auditors will meet with the Audit Committee twice a year without

the presence of any Executive Directors.

DirectorsuF4Responsibility for Preparing the Annual Financial Statements

AcBording to the requirements of the Companies Aco 9, the Directors are mandated to prepare financial statements, results and cash flows

whicyx4illustrate an accurate and impartial view of the Group’s state of affairs at the end of eacyx4financial year.

In preparing these financial statements, the Directors have:

• adopted appropriate accounting policies and applied them consistently;

• made reasonale and prudent judgements and estimates;

• ensured all applicale accounting standards have een followed, suject to any material departures disclosed and explained in the

financial statements; and

• prepared the financial statements on on-going concern asis, unless it is inappropriate to presume that the Group and the Company will

continue in usiness.

The Board of Directors are also responsile to ensure that the Company and its susidiaries keep proper accounting records whicyx4disclose

wityx4reasonale accuracy of the Group’s and Company’s financial positions at any time and whicyx4enale them to2034ensure that the financialstatements comply wityx4the requirements of the Companies Act 9. The Directors have overall accountaility for taking sucyx4steps that are

reasonaly open to them to2034safeguard the assets of the Group and the Company, in order to2034detect and prevent fraud and other irregularities.





ADDITIONAL COMPLIANCE INFORMATION

Recurrent Related Party Transactions

The details of the Recurrent Related Party Transactions (RRPT) of a revenue and trading nature conducted pursuant to the Shareholders’

Mandate during the financial year ended June are as follows:

Name of Mandated Relationship with the Group Nature of RM ’

Related Party Transactions

Kwong Onn Tong Sdn Bhd A company in which Piong Teck They, who is • Sales of goods 9

(-U) rother to Piong Teck Min, Piong Teck Onn and

Datuk Piong Teck Yen (Directors of the Company),

is a Director and has direct interest

Lonnix (M) Sdn Bhd A company, in which Piong Teck Min, who is a • Contract manufacturing 8

(9-T) Director of the Company, is a Director and has costs paid/payale direct interest

Appeton Laoratory Sdn Bhd A company in which Datuk Piong Teck Yen and • Rental of premises

(-V) Piong Teck Onn, who are Directors of the Company, paid/payale

are Directors and have direct interests

Estate of Piong Nam Kim @ An estate in which Piong Teck Min, Piong Teck Onn • Rental of premises

Piong Pak Kim and Datuk Piong Teck Yen who are Directors of the paid/payale

Company, have eneficial interest

Thames Bioscience (M) A company in which Piong Teck Onn and • Royalty paid/payale

Sdn Bhd (XhXh98-X) Datuk Piong Teck Yen who are Directors of the Company

are Directors. Piong Teck Onn has direct interest

Piong Teck Onn A K24rectors34of the Company • Rental of premises X

paid/payale

Datuk Piong Teck Yen A K24rectors34of the Company • Rental of premises

paid/payale

N’Care International A related party y vre22ue of Piong Chee Keong and • Rental of premises

Sdn Bhd (88-M) Piong Chee Kien oth eing sons of Piong Teck Min r35ct35ivedMrect35ivale

who is a K24rectors34of the Company

Aggregan23s34valus34of2234rs13an23s17parn2402n2404ansacn24vns 99

The Company is seeking shareholders’ approval on RRPT of a revenue os34 ts31ding nature tM e ente30ecm y the Company’s susidlrCry with related

parties in the os27inCry course of usiness in the fos22hcoming AG2402. Detai2404s of the ts31nsa23 to24ons are furnished in the Cre23u30Cr, whi t36is dists24uted

tMgether2134with the Annual Repos22.





Share Buy-back

There was no share uy-ack activity during the financial year ended June .

Options, Warrants or Convertible Securities

During the financial year, a total of ,9, shares were exercised for the Employees’ Share Option Scheme. There were no warrants or

convertile securities exercised during the financial year ended June .

Depository Receipt Programme

The Company has not sponsored any depository receipt programme during the financial year under review.

Sanctions and/or Penalties Imposed

The Company is not aware of any sanctions/penalties imposed on the Company, its susidiaries, Directors or management y the relevant

regulatory odies that have een made pulic.

Non-audit Fees Paid to External Auditors

During the financial year ended June , non-audit fees paid or payale to the external auditors and affiliated firms amounted to RM,.

Variation in Results

There was no significant variance etween the results for the financial year ended June as per the audited financial statements and

the unaudited results previously announced. The Company did not make any release on profit estimate, forecast or projections for the financial

year.

Profit Guarantee

There was no profit guarantee given y the Company in respect of the financial year.

Material Contracts Involving Directors’ and Major Shareholders’ Interests

Other than RRPT of a revenue in nature as disclosed, there were no material contracts entered into y the Company and its susidiaries

involving Directors, Major Shareholders or connected persons which were still susisting as at the end of the financial year under review or

which were entered into since the end of the previous financial year except as disclosed in the financial statements.




Statement on Risk Management and Internal Control

Introduction

The Board is pleased to present herewith the Statement on Risk Management and Internal Control (“Statement”) which outlines the natues and

scope of internal controls of the Group dueing the financial year ended June and the Board’s commitment in estalishing a sound systemof eisk management. This statement is prepared puesuant to paragraph .() of the Main Market Listing Requirements of Buesa Malaysia.

Board’s Eesponsibility

The Board acknowledges its overall responsiility for the Group’s system of internal control and risk management to safeguard shareholdees’

investment and the Group’s assets, which includes the estalishment of an appropriate control environment and framework as well as reviewing

its adequacy and integrity of that system. The system of risk management and internal control covers not only financial controls ut operational

and compliance controls and risk management proceduees. In view of the limitations inherent in any system of risk management and internal

controls, the system is designed to manage, rather than to eliminate, the likelihood of fraud, error or failure to achieve the Group’s usiness and

corporate ojectives. The system can theeefore only provide reasonale, ut not asolute assurance, against material misstatement or loss.

Following the pulication of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (the “Guidelines”)

in January , the Board confirms that there is an on-going process for identifying, evaluating and managing the significant risks encounteredy the Group. The Board, through its Audit Committee, regularly reviews and assists the Board to review the adequacy and integrity of the

system of internal controls and risk management, including mitigating measures taken y Management, to address the areas of key risks as

identified. The process has een in place for the financial year under review and up to the date of approval of this Statement for inclusion in the

Annual Report of the Company.

Risk Management Framework

The Board fully supports the contents of the Guidelines and also Recommendation . of the Malaysian Code on Corporate Governance (“MCCG

”) which recommends the estalishment of a sound framework to manage risks.

The Group’s Enterprise Risk Management Framework was formalised with the assistance of a professional firm of consultants involving the

development of the Group’s risk profile and appropriate control systems to manage and control the risks identified.

Further to the Enterprise Risk Management Update conducted in , review and assessment of the key risks indicators for top significant

risks was conducted in Feruary . The Management is committed to monitor the Group’s risk profiles as well as action plans formulated on

the principal risks.

The Board elieves that maintaining a sound system of risk management is founded on a clear understanding and appreciation of the following

key elements of the Group’s risk management framework:

• A risk management structure which outlines the lines of reporting and estalishes the responsiilities at different levels, i.e. the Board,

Audit Committee and Management; and

• On-going identification of principal risks (present and potential) faced y the Group and formalisation of Management’s action plans to

mitigate and manage these risks considering the estalished risk appetite and parameters (qualitative and quantitative) for the Group and

susidiaries.

Internal Audit Function

The Group has outsourced its Internal Audit Function to a firm of professionals which assist oth the Board and the Audit Committee y conducting

independent assessments of the adequacy, efficiency and effectiveness of the Group’s internal control system. To ensure independence from

Management, the internal auditor has direct reporting lines to the Audit Committee.

The Audit Plan is approved y the Audit Committee and audit reports and the status of the audit plan are presented to the Audit Committee.

Significant findings and recommendations for improvements are highlighted to the Audit Committee, with periodic follow up and reviews of

action plans.



Other Risk and Control Processes:

• A defined organisational structure within the Group, with clear lines of responsiility, authority and accountaility, to ensure that

Management acts in the est interest of shareholders;

• Detailed udgeting process where key usiness divisions prepare udgets for the coming year;

• Regular monitoring of results against udget with major variances eing followed up and Management action taken, where necessary;

• Operating procedures that set out the policies, procedures and practices adopted in the Group are properly documented and

communicated to staff memers so as to ensure clear accountailities. The effectiveness of internal control procedures are suject tocontinuous assessments, reviews and improvements;

• Financial reports, progress reports, key variances and analysis of financial data of the Group’s usinesses are provided regularly to the

Senior Management and the Board;

• Regular Management meetings are conducted to review and discuss financial and operational reports and matters;

• Clear delegation of responsiilities and appropriate level of empowerment to various committees of the Board, Executive Directors and

memers of Senior Management;

• Estalished management information systems with documented processes, including change request to computer programmes and

access to data files; and

• Sufficient insurance and physical safeguards over major assets are in place to ensure that the assets of the Group are adequately

covered against any mishap that may result in material losses to the Group.

Adequacy and effectiveness of the Group’s risk management and internal control systems

The Board has received assurance in writing from the Managing Director and Chief Financial Officer that the Group’s risk management and

internal control systems have een operating adequately and effectively, in all material aspects, during the financial year under review and

up to the date of this Statement. Taking this assurance into consideration and the input from relevant parties, the Board is of the view that the

systems of risk management and internal control are satisfactory and have not resulted in any material losses, contingencies or uncertainties

that would require disclosure in the Group’s Annual Report. The Board remains committed and resilient towards estalishing a roust system

of internal control and risk management.

Pursuant to paragraph . of Main Market Listing Requirements of Bursa Malaysia, the external auditors have reviewed this Statement for

inclusion in the Annual Report of the Group for the year ended June and reported to the Board that nothing has come to their attention

that caused them to elieve that the Statement is inconsistent with their understanding of the processes adopted y the Board in reviewing the

adequacy and integrity of the system of risk management and internal control.




Report of the Audit Committee

The Board is pleased to present the following Audit Committee report and its activities during the financial year ended June .

. Members of the Audit Committee

The present memers of the Audit Committee comprise:

• P’ng Beng Hoe (Chairman) – Independent Non-Executive Director

• Azhar in Hussain – Independent Non-Executive Director

• Piong Teck Min – Non-Independent Non-Executive Director

The Chairman, Mr. P’ng Beng Hoe is a former Partner of PricewaterhouseCoopers and a Chartered Accountant in Malaysia and Australia.

All the memers of the Audit Committee fulfill the requirements as prescried or approved y Bursa Malaysia and are financially literate.

. Attendance of the Audit Committee Meetings

During the financial year ended June , the Audit Committee held five () meetings and invitations were extended to other Board

memers, the Chief Financial Officer, Senior Finance Manager as well as the internal and external auditors.

Attendance of Audit Committee Meetings in financial year ended June

Director Aug Oct Nov Feb May

Total

. P’ng Beng Hoe √ √ √ √ √ /

. Azhar in Hussain √ √ √ √ √ /

. Piong Teck Min X √ X √ X /

. Terms of Reference of the Audit Committee

A. Composition of Audit Committee

The Audit Committee shall comprises no fewer than three () memers all of whom are Non-Executive Directors and majority of

whom shall e Independent Directors. All memers of the Audit Committee should e financially literate.

The Board adopts the definition of “Independent Director” as defined under the Main Market Listing Requirements of Bursa

Malaysia.

At least one () memer of the Audit Committee must e a memer of the Malaysian Institute of Accountant or if he is not a memer

of the Malaysian Institute of Accountant, he must have at least three () years working experience and;

i. he/she must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 9; or

ii. he/she must e a memer of one of the associations of accountants as specified in Part II of the First Schedule of the

Accountants Act 9; or

fulfills such other requirements as prescried or approved y Bursa Malaysia.

No alternate Director of the Board shall e appointed as a memer of the Audit Committee.

Suject to endorsement y the Board, the Audit Committee shall elect a Chairman amongst themselves who is an Independent

Director.




Report of the Audit Committee continued

Retirement and Resignation

If a memer of the Audit Committee resigns, dies, or for any reason ceases to e a memer resulting in non-compliance to the





D. Related Party Transactions

The Audit Committee shall review all related party transactions and potential conflict of interests’ situations that may arise within

The Group.

E. Risk Management and Internal Control

The following are the responsiilities of the Audit Committee concerning risk management and internal control:

. Review all areas of significant usiness and financial risk and the arrangements in place to contain those risks to acceptale

levels;

. Review the effectiveness of the system of internal control and management information system within the Group;

. Consider the major findings of internal investigations and management’s response; and

. Consider other topics as defined y the Board.

F. Rights and Powers of the Audit Committee

The Audit Committee shall:

. Have explicit authority to investigate any matters within its terms of reference;

. Have the resources which it needs to perform its duties;

. Have full access to any information which it requires in the course of performing its duties;

. Have unrestricted access to the Managing Director and the Chief Financial Officer;

. Have direct communication channels with the external auditors and internal auditors;

. Be ale to oBtain independent professional or other advice in the performance of its duties\034a”2the cost of the Group;

. Be ale to invite outsiders with relevant experience to\034a”2 tend its meetings, if necessary; and

8. Be ale to convene meetiCb22s tne external auditorse tne internal auditori or0526fi





The Chairman of the Audit Committee shall engage on a continuous asis with senior management, such as the Chairman, the Chief

Executive Officer, the Finance Director, the head of internal audit and the external auditors in order to e kept informed of matters

affecting the Company.

The Finance Director, the head of internal audit and a representative of the external auditors should normally attend meetings.

Other Board memers and employees may attend meetings upon the invitation of the Audit Committee. The Audit Committee

shall e ale to convene meetings with the external auditors, the internal auditors or oth, without executive Board memers or

employees present whenever deemed necessary and at least twice a year with the external auditors.

Questions arising at any meeting of the Audit Committee shall e decided y a majority of votes of the memers present, and in the

case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.

Quorum

The quorum for the Audit Committee meeting shall e the majority of memers present whom must e Independent Directors.

Secretary

The Company Secretary shall e the Secretary of the Audit Committee and will e responsile for co-ordination of administrative

details including calling of meetings and keeping of minutes.

I. Review of the Audit Committee

The Board must review the terms of office and performance of the Audit Committee and each of its memers at least once every

three () years to determine whether the Audit Committee and the memers have carried out their duties with the terms of reference.

. Activities of the Audit Committee

The Audit Committee is authorised y the Board to perform activities within its terms of reference and oth internal and external auditors

are accessile to the Audit Committee and the Senior Managements of the Group. The main activities performed y the Audit Committee

during the financial year are as follows:

- Reviewed the quarterly results and announcements to ensure the Group’s compliance with the Listing Requirements of Bursa

Malaysia, accounting standard, MASB and other relevant legal and regulatory requirements efore sumission to the Board for

approval;

- Reviewed est practices on disclosure in financial result and Annual Report in line with the principles set out in the Malaysian Code

on Corporate Governance (“the Code”);

- Reviewed the related party transactions entered into y the Group on quarterly asis as well as the disclosure of such transactions

and conflict of interest situation in the Annual Report of the Group and the Circular to Shareholders relating to Shareholders’

Mandate for Recurrent Related Party Transactions prior to sumission to the Board for approval;

- Reviewed the Statement of Corporate Governance and Statement on Risk Management and Internal Control prepared in accordance

with the provisions set out under the Code, the extent of compliance with the Code and recommended to the Board action plans toaddress identified gaps (if any) etween the existing corporate governance practices and the prescried corporate governance

principles and est practices under the Code;

Internal Audit:

• Reviewed and approved the internal audit programme, scope of work, system of internal control and the internal auditors’

remuneration packages ased on the risk management profile of the Group;

• Reviewed all findings of the internal audit processes and investigation reports to ensure corrective actions taken y the Management

on the recommendations made y the internal auditor are eing managed in a timely manner;

• Reviewed internal audit policy and control system for the financial year which includes review of operational compliance with

estalished control procedures, management efficiency, risk assessments and reliaility of financial record;





External Audit:

• Reviewed and discussed Annual Audited Financial Statements with the external auditors to ensure that the Company’s financial

statements comply with applicale financial reporting standards;• Reviewed the external auditor’s scope of work, the audit plan and report, their audit fees including those related non-audit

purposes, and otained written assurance from external auditors to confirm their independency throughout the conduct,

• Reviewed external auditors’ results of examination and their management letters for the Group and its susidiary and recommended

the appointment, re-appointment or removal to the Board after evaluating the performance; and

• Reviewed Company’s policy in relation to the provision of non-audit services y the auditors and ensure that the provision of

services does not impair the independence and ojectivity of the external auditors.

5. Internal Audit Function

The Group has outsourced the internal audit function to external independent internal auditor, KPMG Business Advisory Sdn Bhd to carry

out the Group’s internal audit functions effectively and professionally in accomplishing its goal y ringing a systematic and independent

approach to improve the effectiveness of control and governance process within the Group. This internal auditor’s function is to provide

sound assurance that such systems and processes continue to operate effectively and efficiently.

The external independent internal auditor reports directly to the Audit Committee on the outcomes of the audit conducted and make

recommendations as appropriate y adopting the standards and principles outlined in the practices of Corporate Governance.

The internal audit function is elaorated further in the Statement on Risk Management and Internal Control in pages to of this Annual

Report.

6. Statement on Employees’ Share Option Scheme (“ESOS”)

The Audit Committee and the Management had reviewed the allocation of options granted to employees during the reporting financial

year with relation to ESOS scheme and Section 8. of the Listing Requirements.

There was no allocation or grant of new share options to the eligile Executive Directors and employees of the Group during the financial

year under review.

There was no allocation or grant of new share options to the Non-Executive Directors since the ESOS took effect.



financial

statements33 Directors’ Report

37 Statement by Directors

37 Statutory Declaration

38 Independent Auditors’ Report

40 Statements of Profit or Loss and Other Comprehensive Income

41 Statements of Financial Position

42 Statements of Changes in Equity

43 Statements of Cash Flows

45 Notes to the Financial Statements

83 Supplementary Information




Directors’ Report

The directors herey sumit their report and the audited financial statements of the Group and of the Company for the financial year ended

June .

Principal activities

The Company is principally involved in investment holding and the provision of management services. The principal activities of its susidiaries

are set out in Note to the financial statements. There have een no significant changes in the nature of these activities during the financial

year.

Results

Group Company

RM’ RM’

Profit after taxation for the financial year ,8 8

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial

statements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not sustantially

affected y any item, transaction or event of a material and unusual nature.

Dividends

No dividend was paid since the end of previous financial year and the directors do not recommend any final dividend in respect of the current

financial year.

Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Y. Bhg. Tan Sri Datuk Dr. Omar Bin Adul Rahman, JSM, JMN, DMSM, PSM

Piong Teck Onn

Piong Teck Min

Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP

Chin Swee Chang

Omar Bin Md. KhirP'ng Beng Hoe, BKT, PJK, JP

Azhar Bin Hussain

Piong Chee Kien (Alternate to Piong Teck Min)




Directors’ Report continued

Directors' interests

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares and

options under the ESOS in the Company and its related corporations during the financial year were as follows:-

Number of ordinary shares of RM each

.. Acquired Sold .6.

Holding company

Direct interest

Piong Teck Min , - - ,

Piong Teck Onn , - - ,

Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP , - - ,

Number of ordinary shares of RM.5 each

.. Acquired Sold .6.

The Company

Direct interest

Chin Swee Chang - ,8, - ,8,

Omar Bin Md. Khir 8, - - 8,

Piong Teck Min ,, - - ,,

Piong Teck Onn - ,8, - ,8,

Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP , - - ,

Y. Bhg. Tan Sri Datuk Dr. Omar Bin Adul Rahman,

JSM, JMN, DMSM, PSM ,8 - - ,8

Indirect interest

Piong Teck Min ,, - - ,,

Piong Teck Onn ,, - - ,,

Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP ,, - - ,,

Deemed indirect interest

Chin Swee Chang ,, - - ,,

Number of options over ordinary shares of RM.5 each

.. Granted Exercised .6.

The Company

Chin Swee Chang ,8, - (,8,) -

Piong Teck Onn ,8, - (,8,) -

Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP ,8, - - ,8,

By virtue of their interests in the holding company, namely Piong Nam Kim Holdings Sdn. Bhd., Chin Swee Chang, Piong Teck Min, Piong Teck

Onn and Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP are deemed interested in shares of all the Company’s susidiaries to the extent

the Company has an interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during

the financial year.





Employees' share options scheme

An Employees’ Share Option Scheme (“ESOS”) was approved y the Securities Commission on April and the shareholders at an

Extraordinary General Meeting held on July .

The principal features of the ESOS are disclosed in Note to the financial statements.

The Company has een granted exemption y the Companies Commission of Malaysia from having to disclose the list of option holders holding

share options of less than , shares.

The eligile director and employees who have een granted and have unexercised share options of , or more as at the end of the financial

year are as follows:-

No. Name of Options Holders Number of Share Options

. Alan Martin Lewis ,

. Cheah Ming Loong ,. Daniel Chua Chong Liang ,

. Hiew Mein Foong ,

. Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP ,8,

Directors' benefits

Neither at the end of the financial year, nor at any time during that year, did there susist any arrangement to which the Company was a

party, wherey the directors might acquire enefits y means of the acquisition of shares in or deentures of the Company or any other ody

corporate, other than those arising from the share options granted to the directors under the Employees' Share Option Scheme.

Since the end of the previous financial year, no director has received or ecome entitled to receive a enefit (other than enefits included in the

aggregate amount of emoluments received or due and receivale y the directors or the fixed salary of a full-time employee of the Company as

shown in Note (d) to the financial statements) y reason of a contract made y the Company with any director or with a firm of which he is a

memer, or with a company in which he has a sustantial financial interest other than as disclosed in Note to the financial statements.

Other statutory information

(a) Before the financial statements of the Group and of the Company were made out, the directors took reasonale steps:

(i) to ascertain that proper action had een taken in relation to the writing off of ad dets and the making of allowance for impairment

losses on receivales, and satisfied themselves that all known ad dets had een written off and that adequate allowance had

een made for impairment losses on receivales; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary

course of usiness had een written down to an amount which they might e expected so to realise.

() At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for ad dets or allowance for impairment losses on receivales in the financial statements of the Group and

of the Company inadequate to any sustantial extent; and

(ii) the values attriuted to the current assets in the financial statements of the Group and of the Company misleading.





Other statutory information (continued)

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the

existing method of valuation of assets or liailities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements

of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) As at the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the

liailities of any other person; or

(ii) any contingent liaility of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liaility has ecome enforceale or is likely to ecome enforceale within the period of twelve months

after the end of the financial year which will or may sustantially affect the aility of the Group or of the Company to meet their

oligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval etween the end of the financial year and

the date of this report which is likely to affect sustantially the results of the operations of the Group or of the Company for the

financial year in which this report is made.

Auditors

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

Signed on ehalf of the Board in accordance with a resolution of the directors dated Octoer .

Piong Teck Onn Y. Bhg. Datuk Piong Teck Yen,

DMSM, DSM, PJK, JP




Statement By DirectorsPursuant to Section of the Companies Act

Statutory DeclarationPursuant to Section of the Companies Act

We, Piong Teck Onn and Y. Bhg. Datuk Piong Teck Yen, DMSM, DSM, PJK, JP, eing two of the directors of Kotra Industries Berhad, do herey

state that, in the opinion of the directors, the accompanying financial statements set out on pages to 8 are drawn up in accordance with

Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 9 in

Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at June and of the results and the cash flows of the Group and of the Company for the year then ended.

The supplementary information set out in Note , which is not part of the financial statements have een prepared in accordance with Guidance

on Special Matter No. , Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia

Securities Berhad Listing Requirements, as issued y the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities

Berhad.

Signed on ehalf of the Board in accordance with a resolution of the directors dated Octoer .

Piong Teck Onn Y. Bhg. Datuk Piong Teck Yen,

DMSM, DSM, PJK, JP

I, Daniel Chua Chong Liang, eing the officer primarily responsile for the financial management of Kotra Industries Berhad, do solemnly and

sincerely declare that the accompanying financial statements set out on pages to 8 are in my opinion correct, and I make this solemn

declaration conscientiously elieving the same to e true and y virtue of the provisions of the Statutory Declarations Act 9.

Suscried and solemnly declared y the

aovenamed Daniel Chua Chong Liang,

at Melaka in the State of Melaka

on Octoer Daniel Chua Chong Liang

Before me,

Ong San Kee

Pesuruhjaya Sumpah

Commissioner for Oaths

9-B & B

Jalan Ong Kim Wee

Melaka




Independent Auditors’ Report to the memers of Kotra Industries BerhadIncorporated in MalaysiaCompany No: -P

Report on the financial statements

We have audited the financial statements of Kotra Industries Berhad, which comprise the statements of financial position as at June

of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity andstatements 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 to 8.

Directors’ responsibility for the financial statements

The directors of the Company are responsile for the preparation of financial statements so as to give a true and fair view in accordance

with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 9

in Malaysia. The directors are also responsile for such internal control as the directors determine is necessary to enale the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

Our responsiility is to express an opinion on these financial statements ased on our audit. We conducted our audit in accordance withapproved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit

to otain reasonale assurance aout whether the financial statements are free from material misstatement.

An audit involves performing procedures to otain audit evidence aout the amounts and disclosures in the financial statements. The procedures

selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud

or error. In making those risk assessments, we consider internal controls relevant to the 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, ut 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 accounting policies used and the

reasonaleness of accounting estimates made y the directors, as well as evaluating the overall presentation of the financial statements.

We elieve that the audit evidence we have otained is sufficient and appropriate to provide a asis 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 the Company as of June and

of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards,

International Financial Reporting Standards and the requirements of the Companies Act 9 in Malaysia.

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 9 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required y the Act to e kept y the Company and its susidiaries of

which we have acted as auditors have een properly kept in accordance with the provisions of the Act.

() We are satisfied that the financial statements of the susidiaries that have een 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 y us for those purposes.

(c) The audit reports on the financial statements of the susidiaries did not contain any qualification or any adverse comment made under

Section () of the Act.




Independent Auditors’ Report continuedto the memers of Kotra Industries BerhadIncorporated in MalaysiaCompany No: -P

Other reporting responsibilities

The supplementary information set out in Note on page 8 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and

is not part of the financial statements. The directors are responsile for the preparation of the supplementary information in accordance withGuidance on Special Matter No. , Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa

Malaysia Securities Berhad Listing Requirements, as issued y 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

. As stated in Note (a) to the financial statements, Kotra Industries Berhad adopted Malaysian Financial Reporting Standards on July

with a transition date of July . These standards were applied retrospectively y directors to the comparative information in

these financial statements, including the statements of financial position as at June and July , and the statement of profit

or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the financial year ended

June and related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Ourresponsiilities as part of our audit of the financial statements of the Group and of the Company for the financial year ended June

have, in these circumstances, included otaining sufficient appropriate audit evidence that the opening alances as at July do not

contain misstatements that materially affect the financial position as of June and financial performance and cash flows for the

financial year then ended.

. This report is made solely to the memers of the Company, as a ody, in accordance with Section of the Companies Act 9 in

Malaysia and for no other purpose. We do not assume responsiility to any other person for the content of this report.

Crowe Horwath Lee Kok Wai

Firm No.: AF 8 Approval No: // (J)

Chartered Accountants Chartered Accountant

Date: Octoer

Melaka




Statements of Profit or Loss and Other Comprehensive Incomefor the financial year ended June

The accompanying notes form an integral part of the financial statements.

Group Company

Note

RM' RM' RM' RM'

Revenue ,9 ,9

Other operating income ,8 , - -

Raw materials and consumales used (,) (,9) - -

Changes in inventories of finished

goods and work in progress (,8) 9, - -

Employee enefits expenses (,) (,) () (9)

Selling and distriution expenses (,) (,) - -

Depreciation and amortisation (,99) (,) - -

Other operating expenses (,) (,88) () ()

Finance costs (8,) (,) - -

Profit efore taxation 8 ,89 ,8 9

Income tax expense 9 () () () ()

Profit after taxation ,8 , 8

Other comprehensive income, net of tax:

- Fair value changes of availale-for-sale financial asset - - - -

Total comprehensive income for the financial year ,8 , 8

Earnings per share attributable to equity holders

of the Company (sen):

- Basic .89 .9

- Diluted .8 .9





Group Company

Note .6. .6. .. .6. .6. ..

RM' RM' RM' RM' RM' RM'

Assets

Non-current assets

Property, plant and equipment ,9 , , - - -

Investment properties , ,9 , - - -

Investment in susidiaries - - - , , ,

, , , , , ,

Current assets

Inventories 8,9 , ,8 - - -

Trade receivales 8,8 , , - - -

Other receivales , ,8 , 9

Amounts due from susidiaries - - - 9 98Derivative assets 8 - - - - -

Cash and ank alances 9 , ,9 ,8 ,98 9

,98 9, ,8 ,8 89 99

Total assets , ,9 ,8 , , ,9

Equity and liabilities

Equity attributable to equity holder

of the Company

Share capital ,888 ,9 ,9 ,888 ,9 ,9

Retained earnings ,8 9,9 8, 8,9 8,88 8,

Other reserves 8 9 8 9

Total equity ,99 , ,9 , , ,89

Non-current liability

Borrowings 9,98 9, 8,89 - - -

9,98 9, 8,89 - - -

Current liabilities

Borrowings ,8 , ,8 - - -

Trade payales 8, ,99 , - - -

Other payales ,8 ,9 ,8 8 9 8Derivative liailities 8 - - - -

, ,9 8,8 8 9 8

Total liabilities , ,8 , 8 9 8

Total equity and liabilities , ,9 ,8 , , ,9

Statements of inancial Positionas at June




Statements of Changes in uityfor the financial year ended June

Non-distributable DistributableShare

Share Share option Retained Total

capital premium reserve earnings equityRM’ RM’ RM’ RM’ RM’

Group

At July ,9 8, ,9

Share options granted under ESOS - - 9 - 9

Profit after taxation, representing total comprehensiveincome for the financial year - - - , ,

At June ,9 9,9 ,

Issuance of shares ,98 8 - - ,8

Share options under ESOS - - () - () Profit after taxation, representing total comprehensive

income for the financial year - - - ,8 ,8

At June ,888 8 ,8 ,99

Non-distributable DistributableShare

Share Share option Other Retained Totalcapital premium reserve reserve earnings equity

Note RM' RM' RM' RM' RM' RM'

Company

At July ,9 ,9 , ,89

MFRS transition effect - - - (,9) ,9 -

Restated alance at July ,9 - 8, ,89

Total comprehensive incomefor the financial year

- As previously reported - - - , ,- Effect of adopting MFRS - - - (,) - (,)

As restated - - - -

Share options granted under ESOS - - 9 - - 9

Restated alance at June ,9 - 8,88 ,

Issuance of shares ,98 8 - - - ,8

Share options under ESOS - - () - - () Total comprehensive income

for the financial year - - - - 8 8

At June ,888 8 - 8,9 ,





Statements of Cash lowsfor the financial year ended June

Group Company

RM' RM' RM' RM'

Cash flows from operating activities

Profit efore taxation ,89 ,8 9

Adjustments for :

Bad dets written off - -

Depreciation and amortisation:

- investment properties - -

- property, plant and equipment ,9 , - -

Fair value (gain)/loss on derivatives () 88 - -

Impairment loss on trade receivales 9 - -

Interest expense 8, , - -

Interest income () () - -

Inventories written down ,8 - -

Property, plant and equipment written off - -

Rental income from investment properties (8) (9) - -

Reversal of impairment loss on trade receivales () (,8) - -

Share-ased payment under ESOS () 9 -

Unrealised gain on foreign exchange (9) (89) - -

Operating profit efore working capital changes ,98 ,

Decrease/(Increase) in inventories , (,) - -

Increase in receivales (,8) (,) - -Increase in payales , - (8)

Cash from operations ,9 ,88

Interest paid (,) (,) - -

Tax (paid)/refunded () 9 (8) ()

Net cash from operating activities , , 9




Statements of Cash lows continuedfor the financial year ended June

Group Company

RM' RM' RM' RM'

Cash flows for investing activities

Interest received - -

Rental received from investment properties 8 9 - -

Purchase of property, plant and equipment (,) (,) - -

Net cash for investing activities (,) (,) - -

Cash flows (for)/from financing activities

Drawdown of term loans ,8 , - -

(Repayment)/proceeds from other short term orrowings (9) ,9 - -

Proceeds from issuance of shares ,8 - ,8 -

Interest paid (,8) (,) - -

Repayment of term loans (8) (,88) - -

Repayment from a susidiary - - 9

Net cash (for)/from financing activities (,) (,8) , 9

Net increase/(decrease) in cash and cash equivalents , (,) ,9 9

Effects of exchange rate changes on cash and cash equivalents 8 - -

Cash and cash equivalents at beginning of the financial year , 9,9 9

Cash and cash equivalents at end of the financial year (Note 9) , , ,98 9





Notes to the inancial Statements June

. Corporate information

The Company is a pulic limited liaility company incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa

Malaysia Securities Berhad. The principal place of usiness is located at No. , & , Jalan TTC , Cheng Industrial Estate, Melaka.

The Company is principally involved in investment holding and the provision of management services. The principal activities of its

susidiaries are set out in Note to the financial statements. There have een no significant changes in the nature of these activities

during the financial year.

The holding company is Piong Nam Kim Holdings Sdn. Bhd., a company incorporated in Malaysia, which the directors also regard as the

ultimate holding company.

The financial statements were authorised for issue y the Board of Directors in accordance with a resolution of the directors on

Octoer .

. Basis of preparation

The financial statements of the Group are prepared under the historical cost convention and modified to include other ases of valuation

as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards

(“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 9 in Malaysia.

(a) These are the Group’s first set of financial statements prepared in accordance with MFRSs, which are also in line with International

Financial Reporting Standards as issued y the International Accounting Standards Board.

In the previous financial year, the financial statements of the Group were prepared in accordance with Financial Reporting Standards

(“FRSs”). The financial impacts on the transition from FRSs to MFRSs are disclosed in Note to the financial statements.

() The Group has not applied in advance the following accounting standards and interpretations (including the consequential

amendments) that have een issued y the Malaysian Accounting Standards Board (MASB) ut are not yet effective for the current

financial year:-

MFRSs and IC Interpretations (Including The Consequential Amendments) Effective date

• MFRS 9 Financial Instruments January

• MFRS Consolidated Financial Statements January

• MFRS Joint Arrangements January

• MFRS Disclosure of Interests in Other Entities January

• MFRS Fair Value Measurement January

• MFRS 9 Employee Benefits January

• MFRS Separate Financial Statements January

• MFRS 8 Investments in Associates and Joint Ventures January

• Amendments to MFRS : Disclosures – Offsetting Financial Assets and Financial Liailities January




Notes to the inancial Statements continued June

. Basis of preparation (continued)

() (continued)

MFRSs and IC Interpretations (Including The Consequential Amendments) Effective date

• Amendments to MFRS 9 and MFRS : Mandatory Effective Date of MFRS 9 and Transition Disclosures January

• Amendments to MFRS , MFRS and MFRS : Transition Guidance January

• Amendments to MFRS , MFRS and MFRS : Investment Entities January

• Amendments to MFRS : Offsetting Financial Assets and Financial Liailities January

• Amendments to MFRS : Recoverale Amount Disclosures for Non-financial Assets January

• Amendments to MFRS 9: Novation of Derivatives and Continuation of Hedge Accounting January

• IC Interpretation Levies January

• Annual Improvements to MFRSs 9 - Cycle January

The aove accounting standards and interpretations (including the consequential amendments) are not relevant to the Group’s

operations except as follows:-

MFRS 9 & Amendments to MFRS 9: Mandatory Effective Date of MFRS 9 and Transition Disclosures

MFRS 9 replaces the parts of MFRS 9 that relate to the classification and measurement of financial instruments. MFRS 9 divides

all financial assets into categories – those measured at amortised cost and those measured at fair value, ased on the entity’s

usiness model for managing its financial assets and the contractual cash flow characteristics of the instruments. For financial

liailities, the standard retains most of the MFRS 9 requirement. An entity choosing to measure a financial liaility at fair value

will present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income

rather than within profit or loss. There will e no financial impact on the financial statements of the Group upon its initial application

ut may impact its future disclosures.

MFRS 10 & Amendments to MFRS 10: Transition Guidance

MFRS replaces the consolidation guidance in MFRS and IC Interpretation . Under MFRS , there is only one asis for

consolidation, which is control. Extensive guidance has een provided in the standard to assist in the determination of control.

There will e no financial impact on the financial statements of the Group upon its initial application ut may impact its future

disclosures.

MFRS 12 & Amendments to MFRS 12: Transition Guidance

MFRS is applicale to entities that have interests in susidiaries, joint arrangements, associates and/or unconsolidated

structured entities. MFRS is a disclosure standard and the disclosure requirements in this standard are more extensive than

those in the current standards. There will e no financial impact on the financial statements of the Group upon its initial application

ut may impact its future disclosures.





. Basis of preparation (continued)

() (continued)

MFRS 13

MFRS defines fair value, provides guidance on how to determine fair value and requires disclosures aout fair value

measurements. The scope of MFRS is road; it applies to oth financial instrument items and non-financial instrument itemsfor which other MFRSs require or permit fair value measurements and disclosures aout fair value measurements, except in

specified circumstances. In general, the disclosure requirements in MFRS are more extensive than those required in the current

standards and therefore there will e no financial impact on the financial statements of the Group upon its initial application ut

may impact its future disclosures.

Amendments to MFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities

The amendments to MFRS (Disclosures – Offsetting Financial Assets and Financial Liailities) require disclosures that will enale

users of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off

associated with the entity’s recognised financial assets and recognised financial liailities, on the entity’s financial position. There

will e no financial impact on the financial statements of the Group upon its initial application ut may impact its future disclosures.

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

The amendments to MFRS provide the application guidance for criteria to offset financial assets and financial liailities.

Accordingly, there will e no financial impact on the financial statements of the Group upon its initial application ut may impact its

future disclosures.

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-financial Assets

The amendments to MFRS remove the requirement to disclosure the recoverale amount when a cash-generating unit (CGU)

contains goodwill or intangile assets with indefinite useful lives ut there has een no impairment. Therefore, there will e no

financial impact on the financial statements of the Group upon its initial application ut may impact its future disclosures.

Annual Improvements to MFRSs 2009 – 2011 Cycle

The Annual Improvements to MFRSs 9 – Cycle contain amendments to MFRS , MFRS , MFRS , MFRS and

MFRS . These amendments are expected to have no material impact on the financial statements of the Group upon their initial

application.

. Significant accounting policies

(a) Critical accounting estimates and judgements

Estimates and judgements are continually evaluated y the directors and management and are ased on historical experience and

other factors, including expectations of future events that are elieved to e reasonale under the circumstances. The estimatesand judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing

a material adjustment to the carrying amounts of assets, liailities, income and expenses are discussed as follows:-

(i) Depreciation of property, plant and equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment

are ased on commercial and production factors which could change significantly as a result of technical innovations andcompetitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and equipment will e insignificant. As a result, residual

values are not eing taken into consideration for the computation of the depreciale amount.





. Significant accounting policies (continued)

(a) Critical accounting estimates and judgements (continued)

(i) Depreciation of property, plant and equipment (continued)

Changes in the expected level of usage and technological development could impact the economic useful lives and the

residual values of these assets, therefore future depreciation charges could e revised.

(ii) Income taxes

There are certain transactions and computations for which the ultimate tax determination may e different from the initial

estimate. The Group recognises tax liailities ased on its understanding of the prevailing tax laws and estimates of whether

such taxes will e due in the ordinary course of usiness. 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.

(iii) Impairment of non-financial assets

When the recoverale amount of an asset is determined ased on the estimate of the value-in-use of the cash-generating

unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from

the cash-generating unit and also to apply a suitale discount rate in order to determine the present value of those cash

flows.

(iv) Write-down of inventories

Reviews are made periodically y management on damaged, osolete and slow-moving inventories. These reviews require

judgement and estimates. Possile changes in these estimates could result in revisions to the valuation of inventories.

(v) Classification etween investment properties and owner-occupied properties

The Group determines whether a property qualifies as an investment property, and has developed a criteria in making that

judgement. Investment property is a property held to earn rentals or for capital appreciation or oth. Therefore, the Group

considers whether a property generates cash flows largely independent of the other assets held y the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for

use in the production or supply of goods or services or for administrative purposes. If these portions could e sold separately

(or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not

e sold separately, the property is an investment property only if an insignificant portion is held for use in the production or

supply of goods or services or for administrative purposes.

Judgement is made on an individual property asis to determine whether ancillary services are so significant that a propertydoes not qualify as investment property.

(vi) Impairment of trade and other receivales

An impairment loss is recognised when there is ojective evidence that a financial asset is impaired. Management

specifically reviews its loans and receivales financial assets and analyses historical ad dets, customer creditworthiness

and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for

impairment losses. Where there is ojective evidence of impairment, the amount and timing of future cash flows are

estimated ased on historical loss experience for assets with similar credit risk characteristics. If the expectation is different

from the estimation, such difference will impact the carrying value of receivales.






(a) Critical accounting estimates and judgements (continued)

(vii) Classification of leasehold land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in determining the

extent to which risks and rewards incidental to its ownership lie. Despite the fact that there will e no transfer of ownership

y the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the

land, management considered that the present value of the minimum lease payments approximated to the fair value of theland at the inception of the lease. Accordingly, management judged that the Group has acquired sustantially all the risks

and rewards incidental to the ownership of the land through a finance lease.

(viii) Fair values estimates for certain financial assets and liailities

The Group carries certain financial assets and liailities at fair value, which requires extensive use of accounting estimatesand judgement. While significant components of fair value measurement were determined using verifiale ojective

evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changesin fair value of these assets and liailities would affect profit and/or equity.

(ix) Share-ased payments

The Group measures the cost of equity settled transactions with employees y reference to the fair value of the equity

investments at the date at which they are granted. The estimating of the fair value requires determining the most appropriate

valuation model for a grant of equity instruments, which is dependent on the terms and conditions of the grant. This alsorequires determining the most appropriate inputs to the valuation model including the expected life of the option volatility and

dividend yield and making assumptions aout them.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its susidiaries made up to June.

A susidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over itsfinancial and operating policies so as to otain enefits from its activities.

Susidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which controlceases, as appropriate.

Intragroup transactions, alances, income and expenses are eliminated on consolidation. Where necessary, adjustments aremade to the financial statements of susidiaries to ensure consistency of accounting policies with those of the Group.

(i) Business cominations

Acquisitions of usinesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a susidiary is the fair value of the assets transferred, liailities incurred and the equityinterests issued y the Group at the acquisition date. The consideration transferred includes the fair value of any asset or

liaility resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue det

or equity securities, are recognised in profit or loss when incurred.

In a usiness comination 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.

Non-controlling interests in the acquiree may e initially measured either at fair value or at the non-controlling interests’

proportionate share of the fair value of the acquiree’s identifiale net assets at the date of acquisition. The choice of

measurement asis is made on a transaction-y-transaction asis.






(b) Basis of consolidation (continued)

(ii) Non-controlling interests

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from theequity attriutale to owners of the Company. Transactions with non-controlling interests are accounted for as transactions

with owners and are recognised directly in equity. Profit or loss and each component of other comprehensive income are

attriuted to the owners of the parent and to the non-controlling interests. Total comprehensive income is attriuted to non-

controlling interests even if this results in the non-controlling interests having a deficit alance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial

recognition plus the non-controlling interests’ share of susequent changes in equity.

(iii) Acquisitions of non-controlling interests

All changes in the parent’s ownership interest in a susidiary that do not result in a loss of control are accounted for asequity transactions. Any difference etween the amount y which the non-controlling interest is adjusted and the fair value

of consideration paid or received is recognised directly in equity and attriuted to owners of the parent.

(iv) Loss of control

Upon loss of control of a susidiary, the profit or loss on disposal is calculated as the difference etween:-

- the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former

susidiary; and

- the previous carrying amount of the assets (including goodwill), and liailities of the former susidiary and any non-

controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former susidiary are accounted for (i.e.reclassified to profit or loss or transferred directly to retained profits) in the same manner as would e required if the

relevant assets or liailities were disposed of. The fair value of any investments retained in the former susidiary at the datewhen control is lost is regarded as the fair value on initial recognition for susequent accounting under MFRS 9 or, when

applicale, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

As part of its transition to MFRSs, the Group elected not to restate those usiness comination that occurred efore the date

of transition ( July ). Such usiness cominations and the related goodwill and fair value adjustments have een carried

forward from the previous FRS framework as the date of transition.

(c) Functional and foreign currency

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economicenvironment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Group’s functional and

presentation currency. All values are rounded to the nearest thousand (RM') except when otherwise indicated.

(ii) Transactions and alances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liailities at the end of the

reporting period are translated at the rates ruling as of that date. Non-monetary assets and liailities are translated using

exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.






(d) Financial instruments

Financial instruments are recognised in the statements of financial position when the Group has ecome a party to the contractual

provisions of the instruments.

Financial instruments are classified as liailities or equity in accordance with the sustance of the contractual arrangement.

Interest, dividends, gains and losses relating to a financial instrument classified as a liaility, are reported as an expense or income.

Distriutions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceale right to offset and intends to settle either on a net asis

or to realise the asset and settle the liaility simultaneously.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit

or loss, transaction costs that are directly attriutale to the acquisition or issue of the financial instrument.

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated

with each item.

(i) Financial assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-

maturity investments, loans and receivales financial assets, or availale-for-sale financial assets, as appropriate.

• Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either

held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that

would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on

remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in

profit or loss when the Group’s right to receive payment is estalished.

• Held-to-maturity investments

As at the end of the reporting period, there were no financial assets classified under this category.

• Loans and receivales financial assets

Trade receivales and other receivales that have fixed or determinale payments that are not quoted in an activemarket are classified as loans and receivales financial assets. Loans and receivales financial assets are measured

at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised y

applying the effective interest rate, except for short-term receivales when the recognition of interest would e

immaterial.

• Availale-for-sale financial assets

As at the end of the reporting period, there were no financial assets classified under this category.






(d) Financial instruments (continued)

(ii) Financial liailities

All financial liailities are initially at fair value plus directly attriutale transaction costs and susequently measured at

amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liailities that are either held for trading or are designated to

eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are

also classified as held for trading unless they are designated as hedges.

(iii) Equity instruments

Ordinary shares are classified as equity. Incremental costs directly attriutale to the issue of new shares or options are

shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liailities when approved for appropriation.

(e) Investments in subsidiaries

Investments in susidiaries are stated at deemed cost in the statement of financial position of the Company, and are reviewed for

impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not e

recoverale.

On the disposal of the investments in susidiaries, the difference etween the net disposal proceeds and the carrying amount of

the investments is recognised in profit or loss.

(f) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated under the straight-line method to write off the depreciale amount of the assets over their estimated

useful lives. Depreciation of an asset does not cease when the asset ecomes idle or is retired from active use unless the asset is

fully depreciated. The principal annual rates used for this purpose are:-

For the current

financial year

Previous end and susequent

financial year financial year

Industrial uildings and installations % -% % -%

Leasehold land Over the lease period of 9 or 99 years Over the lease period of 9 or 99 years

Machinery and equipment % -% % -%

Motor vehicles % %

Office equipment % %

Computer equipment % %

Furniture and fittings % %

Renovation % %

During the financial year, the Group changed its depreciation rate for machinery and equipment. The new rate were applied

prospectively.






(f) Property, plant and equipment (continued)

The change in the depreciation rate arose from a review of the useful lives of the assets concerned. The effect of the change in the

depreciation rate is a decrease to the profit efore taxation of the Group y RM,8 for the current financial year.

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting

period to ensure that the amount, method and periods of depreciation are consistent with previous estimates and the expected

pattern of consumption of the future economic enefits emodied in the items of the property, plant and equipment.

Susequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the

cost is incurred and it is proale that the future economic enefits associated with the asset will flow to the Group and the cost

of the asset can e measured relialy. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day

servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of

dismantling and removing the asset and restoring the site on which it is located for which the Group is oligated to incur when the

asset is acquired, if applicale.

An item of property, plant and equipment is derecognised upon disposal or when no future economic enefits are expected from

its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss.

(g) Borrowing costs

Borrowing costs, directly attriutale to the acquisition and construction of property, plant and equipment are capitalised as part

of the cost of those assets, until such time as the assets are ready for their intended use or sale.

All other orrowing costs are recognised in profit or loss as expenses in the period in which they are incurred.

(h) Investment properties

Investment properties are properties held either to earn rental income or for capital appreciation or for oth. Investment properties

are stated at cost less accumulated depreciation and impairment losses, if any, consistent with the accounting policy for property,

plant and equipment as stated in Note (f) to the financial statements.

Investment properties are derecognised when they have either een disposed off or when the investment property is permanently

withdrawn from use and no future enefit is expected from its disposal.

On the derecognition of an investment property, the difference etween the net disposal proceeds and the carrying amount is

recognised in profit or loss.

(i) Impairment

(i) Impairment of financial assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each

reporting period whether there is any ojective evidence of impairment as a result of one or more events having an impact

on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value

elow its cost is considered to e ojective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivales financial assets is recognised in

profit or loss and is measured as the difference etween the asset’s carrying amount and the present value of estimated

future cash flows, discounted at the financial asset’s original effective interest rate.






(i) Impairment (continued)

(i) Impairment of financial assets (continued)

An impairment loss in respect of availale-for-sale financial assets is recognised in profit or loss and is measured as the

difference etween its cost (net of any principal payment and amortisation) and its current fair value, less any impairment

loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive

income and accumulated in equity under fair value reserve, is reclassified from equity to profit or loss.

With the exception of availale-for-sale equity instruments, if, in a susequent period, the amount of the impairment loss

decreases and the decrease can e related ojectively to an event occurring after the impairment was recognised, the

previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the

investment at the date the impairment is reversed does not exceed what the amortised cost would have een had the

impairment not een recognised. In respect of availale-for-sale equity instruments, impairment losses previously recognised

in profit or loss are not reversed through profit or loss. Any increase in fair value susequent to an impairment loss made isrecognised in other comprehensive income.

(ii) Impairment of non-financial assets

The carrying values of assets, other than those to which MFRS - Impairment of Assets does not apply, are reviewed at

the end of each reporting period for impairment when there is an indication that the assets might e impaired. Impairment

is measured y comparing the carrying values of the assets with their recoverale amounts. The recoverale amount of

the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured y reference to

discounted future cash flow.

An impairment loss is recognised in profit or loss immediately.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverale

amount, a susequent increase in the recoverale amount of an asset is treated as a reversal of the previous impairment loss

and is recognised to the extent of the carrying amount of the asset that would have een determined (net of amortisation and

depreciation) had no impairment loss een recognised. The reversal is recognised in profit or loss immediately.

(j) Inventories

Inventories are stated at the lower of cost and net realisale value. Cost is determined on the weighted average asis, and

comprises the purchase price and incidentals incurred in ringing the inventories to their present location and condition. Cost of

finished goods and work-in-progress includes the cost of materials, laour and appropriate proportion of production overhead.

Net realisale value represents the estimated selling price less the estimated costs necessary to make the sale. Where necessary,

write-down is made for all damaged, osolete and slow-moving items.

(k) Income taxes

Income taxes for the year comprise current and deferred tax.

Current tax is the expected amount of income taxes payale in respect of the taxale profit for the year and is measured using the

tax rates that have een enacted or sustantively enacted at the end of the reporting period.

Deferred tax is provided in full, using the liaility method, on temporary differences arising etween the tax ases of assets and

liailities and their carrying amounts in the financial statements.






(k) Income taxes (continued)

Deferred tax liailities are recognised for all taxale temporary differences other than those that arise from goodwill or excess of

the acquirer’s interest in the net fair value of the acquiree’s identifiale assets, liailities and contingent liailities over the usiness

comination costs or from the initial recognition of an asset or liaility in a transaction which is not a usiness comination and at

the time of the transaction, affects neither accounting profit nor taxale profit.

Deferred tax assets are recognised for all deductile temporary differences, unused tax losses and unused tax credits to the extent

that it is proale that future taxale profits will e availale against which the deductile temporary differences, unused tax losses

and unused tax credits can e utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting

period and reduced to the extent that it is no longer proale that sufficient future taxale profits will e availale to allow all or

part of the deferred tax assets to e utilised.

Deferred tax assets and liailities are measured at the tax rates that are expected to apply in the period when the asset is realised

or the liaility is settled, ased on the tax rates that have een enacted or sustantively enacted at the end of the reportingperiod.

Deferred tax assets and liailities are offset when there is a legally enforceale right to set off current tax assets against current

tax liailities and when the deferred income taxes relate to the same taxation authority.

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 transactions either in other comprehensive income or directly in equity and deferred tax arising

from a usiness comination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the

acquiree’s identifiale assets, liailities and contingent liailities over the usiness comination costs.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, ank alances, demand deposits, ank overdrafts and short-term, highly liquid

investments that are readily convertile to known amounts of cash and which are suject to an insignificant risk of changes in

value.

(m) Provisions

Provisions are recognised when the Group has a present oligation as a result of a past event, when it is proale that an outflow

of resources emodying economic enefits will e required to settle the oligation, and when a reliale estimate of the amount can

e made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current est estimate. Where the

effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the

oligation.

(n) Employee benefits

(i) Short term enefits

Wages, salaries, onuses and non-monetary enefits are recognised in profit or loss in the period in which the associated

services are rendered y employees of the Group.

(ii) Defined contriution plans

The Group's contriutions to defined contriution plans are recognised in profit or loss in the period to which they relate.

Once the contriutions have een paid, the Group has no further liaility in respect of the defined contriution plans.






(n) Employee benefits (continued)

(iii) Share-ased payment transactions

At grant date, the fair value of options granted to employees is recognised as an employee expense, with a corresponding

increase in equity, over the period in which the employees ecome unconditionally entitled to the options. The amount

recognised as an expense is adjusted to reflect the actual numer of share options that are expected to vest.

(o) Related parties

A party is related to an entity (referred to as the 'reporting entity') if:-

(a) A person or a close memer of that person's family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity; or

(iii) is a memer of the key management personnel of the reporting entity or of a parent of the reporting entity.

() An entity is related to a reporting entity if any of the following conditions applies:-

(i) The entity and the reporting entity are memers of the same group (which means that each parent, susidiary and

fellow susidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a memer of a group

of which the other entity is a memer).

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment enefit plan for the enefit of employees of either the reporting entity or an entity

related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to

the reporting entity.

(vi) The entity is controlled or jointly controlled y a person identified in (a) aove.

(vii) A person identified in (a)(i) aove has significant influence over the entity or is a memer of the key management

personnel of the entity (or of a parent of the entity).

Close memers of the family of a person are those family memers who may e expected to influence, or e influenced y, thatperson in their dealings with the entity.

(p) Contingent liabilities

A contingent liaility is a possile oligation that arises from past events and whose existence will only e confirmed y the

occurrence of one or more uncertain future events not wholly within the control of the Group. It can also e a present oligation

arising from past events that is not recognised ecause it is not proale that an outflow of economic resources will e required

or the amount of oligation cannot e measured relialy.

A contingent liaility is not recognised ut is disclosed in the notes to the financial statements. When a change in the proaility of

an outflow occurs so that the outflow is proale, it will then e recognised as a provision.






(q) Segmental information

Segment revenue and expenses are those directly attriutale to the segments and include any joint revenue and expenses where

a reasonale asis of allocation exists. Segment assets include all assets used y a segment and consist principally of property,

plant and equipment (net of accumulated depreciation, where applicale), other investments, inventories, receivales, and cash

and ank alances.

Most segment assets can e directly attriuted to the segments on a reasonale asis. Segment assets do not include income tax

assets, whilst segment liailities do not include income tax liailities and orrowings from financial institutions.

Segment revenue, expenses and results include transfers etween segments. The prices charged on intersegment transactions

are ased on normal commercial terms. These transfers are eliminated on consolidation.

(r) Revenue recognition

(i) Sale of goods

Revenue is recognised upon the execution of sales order and delivery of goods and where applicale, net of returns and

trade discounts.

(ii) Interest income

Interest income is recognised on an accrual asis.

(iii) Management fee

Management fee is recognised on an accrual asis.

(iv) Rental income

Rental income is recognised on an accrual asis.

. Revenue

Group Company

RM' RM' RM' RM'

Sale of goods ,9 ,9 - -Management fees - -

,9 ,9





5. Other operating income

Group Company

RM' RM' RM' RM'

Fair value gain on derivative financial instrument - - -

Gain on foreign currency exchange

- realised 9 , - -

- unrealised 9 89 - -

Repo interest income - -

Rental income from investment properties 8 9 - -

Reversal of impairment loss on trade receivales ,8 - -

Miscellaneous 99 - -

,8 , - -

6. Employee benefits expenses

Group Company

RM' RM' RM' RM'

Short term employee enefits 8, ,98

Contriutions to defined contriution plan ,8 ,

Share options under ESOS () 9 -

Other personnel expenses , ,8

, , 9

Included in employee enefits expenses are key management personnel compensation as disclosed in Note (d) to the financial

statements.

. Finance costs

Group Company

RM' RM' RM' RM'

Interest expense on:

- Term loans ,8 , - -

- Other ank orrowings , , - -

8, , - -





8. Profit before taxation

The following amounts have een included in arriving at profit efore taxation:

Group Company

RM' RM' RM' RM'

Auditors' remuneration:

- statutory audit

- current year

- under provision in prior year - -

- other services

Bad dets written off - -

Depreciation and amortisation:

- investment properties - -

- property, plant and equipment ,9 , - -Direct operating expenses arising from investment properties:

- non-rental generating properties - -

- rental generating properties - -

Directors' remuneration:

- fees 9 9

- emoluments , , - -

- other short term employee enefits 9 8 - -

Fair value loss on derivative financial instrument - 88 - -

Impairment loss on trade receivales 9 - -

Inventories written down ,8 - -

Loss on foreign exchange - realised 8 , - -

Property, plant and equipment written off - -

Rental of equipment - -

Rental of premises 8 - -

Research and development expenses 9 - -

9. Income tax expense

Group Company

RM' RM' RM' RM'

Malaysian Income Tax

- Current year 8 - Under/(over) provision in prior year 8 () 9 ()





9. Income tax expense (continued)

A reconciliation of income tax expense applicale to profit efore taxation at the statutory tax rate to income tax expense at the effective

tax rate of the Group and of the Company is as follows:

RM' RM'

Group

Profit efore taxation ,89 ,8

Taxation at Malaysian statutory tax rate of % 9 9

Effect of expenses not deductile for tax purposes 89

Effect of doule deduction tax incentives (,9) (,)

Effect of utilisation of previously unrecognised unutilised tax losses - ()

Deferred tax assets not recognised on current year unutilised usiness losses andunasored capital allowances ,8 ,

Under/(over) provision in prior year 8 ()

Income tax expense

Company

Profit efore taxation 9

Taxation at Malaysian statutory tax rate of %

Effect of expenses not deductile for tax purposes -

Effect of utilisation of previously unrecognised unutilised tax losses - ()

Under/(over) provision in prior year 9 ()

Income tax expense

At the end of the reporting period, the Group has unutilised tax losses and unasored capital allowances of approximately RM,8,

and RM,9, respectively (: RM,, and RM,89, respectively) that are availale for offset against future taxale profits

of the Group, for which no deferred tax asset is recognised due to uncertainty of their recoveraility in view of the expected availaility

of additional tax incentives.

. Earnings per share

(i) Basic

The asic earnings per share of the Group is calculated y dividing the profit after taxation for the financial year y the weighted

average numer of ordinary shares in issue during the financial year.

Profit after taxation (RM') ,8 ,

Weighted average numer of ordinary shares in issue (') , ,8

Basic earnings per share (sen) .89 .9





. Earnings per share (continued)

(ii) Diluted

The diluted earnings per share of the Group is calculated y dividing the profit after taxation for the financial year y the weighted

average numer of ordinary shares in issue during the financial year after adjusted for the dilutive effects of share options granted

to employees.

Profit after taxation (RM') ,8 ,

Weighted average numer of ordinary shares in issue (') , ,8

Adjustment for ESOS (') ,

9,8 ,88

Diluted earnings per share (sen) .8 .9

. Property, plant and equipment

As at Depreciation As at

.. Additions Reclassification Written off charges .6. RM' RM' RM' RM' RM' RM'

Group

Net carrying amount

Industrial uildings and

installations ,9 8 - - (,8) 9,

Leasehold land ,9 - - - () ,

Machinery and equipment ,9 ,8 () () (8,) ,

Motor vehicles - - () 8

Office equipment () () 8

Computer equipment 9 - - () ,8

Furniture and fittings , - - () ,89

Renovation 8 - - - ()

Total , ,9 - () (,9) ,9





. Property, plant and equipment (continued)

As at Depreciation As at

.. Additions Written off charges .6. RM' RM' RM' RM' RM'

Group

Net carrying amount

Industrial uildings and installations ,88 - (,) ,9

Leasehold land , - - () ,9

Machinery and equipment , ,88 - (8,) ,9

Motor vehicles - - ()

Office equipment 9 9 () ()

Computer equipment ,9 8 - () 9

Furniture and fittings , - () ,Renovation 9 - - () 8

Total , , () (,) ,

Accumulated Carrying

Cost depreciation amount

RM' RM' RM'

At June

Industrial uildings and installations ,8 (,8) 9,

Leasehold land ,89 () ,

Machinery and equipment , (,8) ,

Motor vehicles , (,) 8

Office equipment 8 () 8

Computer equipment , (,) ,8

Furniture and fittings , (8) ,89

Renovation ()

Total at June ,8 (,8) ,9

At June

Industrial uildings and installations , (,8) ,9Leasehold land ,89 (98) ,9

Machinery and equipment , (,) ,9

Motor vehicles ,98 (,8)

Office equipment (9)

Computer equipment , (,9) 9

Furniture and fittings ,9 () ,

Renovation () 8

Total at June 99, (,) ,





. Property, plant and equipment (continued)

The carrying amount of property, plant and equipment pledged to secure orrowings as referred to in Note (i) are as follows:-

Group

RM' RM'

Industrial uildings and installations 9, ,9

Leasehold land , ,9

Machinery and equipment 89,8 9,9

Furniture and fittings 8 9

, ,

. Investment properties

Group

RM' RM'

Cost

At July/ June , ,

Accumulated depreciation

At July 8 8

Depreciation charge for the year

At June 8

Net carrying amount , ,9

The investment properties comprise freehold land and uildings, which are charged as security for orrowings granted to the Group as

referred to in Note (i).

The fair value as at end of the reporting period has een arrived at on the asis of the Directors' est estimate, y reference to a valuation

report carried out at the end of the prior reporting period and market evidence of transaction prices for similar properties. Valuations at

the end of the prior reporting period were performed y accredited independent valuers ased on comparison method. The directors areof the opinion that the fair value of the investment properties as at the end of the reporting period approximates their fair values which

amounted to RM,,.





. Investment in subsidiaries

Company

RM' RM'

Unquoted shares, at deemed cost , ,

Subsidiaries

Details of the susidiaries are as follows:

Country of Effective equity

Name of subsidiaries incorporation interest Principal activities

% %

Kotra Pharma (M) Sdn. Bhd. Malaysia Developing, manufacturing and trading of

pharmaceutical and healthcare products

Appeton Healthcare Sdn. Bhd. Malaysia Dormant

. Inventories

Group

RM' RM'

At cost:

Raw materials , ,988

Work-in-progress , ,99

Finished goods ,8 ,

8,9 ,

None of the inventories is carried at net realisale value.

5. Trade receivables

Group

RM' RM'

Trade receivales 9,9 ,9

Less: Allowance for impairment losses (,) (,9)

8,8 ,





5. Trade receivables (continued)

Group

RM' RM'

Allowance for impairment losses:-

At July ,9 ,8

Addition 9

Reversal of () (,8)

Written off () ()

At June , ,9

The Group's normal trade credit terms range from to days (: to days). Other credit terms are assessed and approved on

a case-y-case asis.

Included in trade receivales are amounts due from related parties as disclosed in Note (c) to the financial statements.

6. Other receivables

Group Company

RM' RM' RM' RM'

Deposits 9

Other receivales 98 ,8 - -

Advances to suppliers of property, plant and equipment , ,8 - -Prepayments - -

Tax recoverale - 8

, ,8 9

. Amounts due from subsidiaries

The amounts due from susidiaries are non-trade in nature, unsecured, interest-free and repayale on demand. The amount owing is to

e settled in cash.

8. Derivative liabilities

Contract/

Notional Group

Amount

RM' RM' RM'

Derivative Liailities

Forward foreign currency contracts ,89 () ()





8. Derivative liabilities (continued)

Forward foreign currency contracts are used to hedge against fluctuations of exchange rates denominated in United States Dollar (USD).

The settlement dates on forward foreign exchange currency contracts range etween to months (: to months) after the endof the reporting period.

The Group has recognised a gain of RM,8 (a loss of RM8, in ) arising from fair value changes of derivatives during the

financial year. The fair value changes were attriuted to changes in the foreign exchange spot and forward rates. The method and

assumptions applied in determining the fair values of derivatives are disclosed in Note (d)(iii) to the financial statements.

9. Cash and cash equivalents

Group Company

RM' RM' RM' RM'

Cash and ank alances , ,9 ,98 9

Less: Bank overdrafts (Note ) (,9) (,8) - -

Cash and cash equivalents , , ,98 9

. Share capital

Company

Number of ordinary

shares of RM.5 each Amount

' ' RM' RM'

Authorised , , , ,

Issued and fully paid

At July ,8 ,8 ,9 ,9

New shares issued under the employees share option scheme ,9 - ,98 -

At June , ,8 ,888 ,9

An Employees’ Share Option Scheme (“ESOS”) was approved y the Securities Commission on April and the shareholders at an

Extraordinary General Meeting held on July .





. Share capital (continued)

The principal features of the ESOS are as follows:-

(a) The maximum numer of new ordinary shares of RM. each to e offered shall not exceed % of the issued and paid-up share

capital of the Company at any point of time during the existence of the ESOS.

() Eligile directors or employees of the Group are directors or employees of the Group who have een confirmed in the service of the

Group prior to the offer or, if the employee is employed under contract asis, the contract should e for a duration of at least one

() year.

(c) The option price may e sujected to a discount of not more than % of the average of the market quotation of the shares as

shown in the daily official list issued y Bursa Malaysia Securities Berhad for the five trading days immediately preceding the offer

date, or at par value of the shares of the Company, whichever is higher.

(d) An Option is personal to the grantee. Save and except as provided in Clause . of the Bye-Laws, an Option shall e non-assignale

and non-transferale.

(e) The ESOS is in force for a period of years from July and expires on July .

The movements in the share options during the financial year were as follows:

Exercise

price per

Exercise ordinary Balance at During the year Balance at

Date of offer period share .. Exercised Lapsed .6.

RM

.. .. .8 ,89, (,) (,) ,

.. .. .8 ,99, (,,) (,8) ,,

.. ..9 .8 ,99, (,,) (,8) ,,8

.. .. . , - (,) ,

.. .. . 9, - (,) ,8

.. .. . 9, - (,) ,8

.. .. . , - - ,

.. ..8 . 99, - - 99,

.. .. . 99, - - 99,

.. .. . , (,) - 9,

.. ..9 . , (,) - 9,

.. .. . , (,) - 9,

.. ..8 .8 8, - (,) ,

.. .. .8 , - (,) ,.. .. .8 , - (,) ,

.. .. . ,, (,) (,9,) ,,

,, (,9,) (,9,8) ,,

Options exercisale in a particular year ut not exercised can e carried forward to the susequent years provided they are exercised

prior to the expiry date of the ESOS on July .





. Share capital (continued)

Fair value of share options granted was estimated using a Black-Scholes model, taking into account the terms and conditions upon which

the options were granted. The fair value of share options measured at grant date and the assumptions are as follows:

Group and Company

Fair value of share options at the following grant date Octoer (sen) - 8.8

Share price (RM) - .

Exercise price (RM) - .

Expected volatility (%) - .

Expected life (years) -

Risk free rate (%) - .

The expected life of the options is ased on historical data and is not necessarily indicative of exercise patterns that may occur. The

expected volatility reflects the assumption that the historical is indicative future trends, which may also not necessarily e the actual

outcome. No other features of the option granted were incorporated into the measurement of fair value.

. Retained earnings

Suject to the agreement of the tax authorities, at the end of the reporting period, the Company has:-

(a) tax-exempt income of approximately RM,9, (: RM,9,) availale for the purpose of paying tax-exempt dividends;

and

() tax credits under Section 8 of the Income Tax Act, 9 to frank the payment of dividends of approximately RM9, (:

RM9,) out of its retained earnings.

The alance of the retained earnings, if distriuted as dividends, will e taxed at the statutory tax rate.

At the end of the reporting period, the Company has not elected for the single tier tax system. When the tax credit alance is fully utilised,

or at the latest y Decemer , the Company will automatically move to the single tier tax system. Under the single tier tax system,

tax on the Company's profit is a final tax and dividends distriuted to the shareholders will e exempted from tax.

. Other reserves

Group Company

RM' RM' RM' RM'

Share premium reserve (a) 8 8

Share options reserve ()

8 9 8 9

(a) Share premium reserve

The share premium reserve arose from the issue of shares y way of private placement and pulic offer less amounts incurred for

listing expenses and utilised for onus share issue.





. Other reserves (continued)

() Share options reserve

Group and Company

RM' RM'

Share options under ESOS:

At July

Movement during the year () 9

At June

The share option reserve represents the equity-settled share options granted to employees. This reserve is made up of the

cumulative value of services received from employees recorded on grant of share options.

. Borrowings

Group

RM' RM'

Short term borrowings

Unsecured:

Bank overdraft ,9 ,8

Bankers' acceptances ,9 ,8

Revolving credit , ,

, ,9

Secured:

Bankers' acceptances , ,8

Revolving credit , -

Term loans , 9

,8 ,

Long term borrowings

Secured:

Term loans 9,98 9,

Total borrowings

Bank overdraft (Note 9) ,9 ,8

Bankers' acceptances ,8 ,

Revolving credit , ,

Term loans 9,8 9,9

, ,9





. Borrowings (continued)

Group

RM' RM'

Maturity of borrowings

Within one year ,8 ,

More than year and less than years ,9 ,

More than years and less than years , ,9

Five years or more , ,

, ,9

The weighted average effective interest rates per annum at the end of the reporting period of orrowings, were as follows:-

Group

% %

Bank overdrafts . .

Bankers’ acceptances . .

Revolving credit . .8

Term loans .9 .8

The unsecured short term orrowings of the Group are guaranteed y the Company.

The secured short term orrowings and term loans are secured y:

(i) fixed charges over certain assets of the Group as disclosed in Note and Note to the financial statements;

(ii) specific deenture for RM,, over a susidiary's machineries;

(iii) deentures over a susidiary’s all fixed and floating assets oth present and future; and

(iv) corporate guarantee from the Company.

. Trade payables

The normal trade credit terms granted to the Group range from to 9 days (: to 9 days). Included in trade payales are amounts

due to related parties as disclosed in Note (c) to the financial statements.





5. Other payables

Group Company

RM' RM' RM' RM'

Accruals ,89 , 9 9

Payroll liailities ,8 , - -

Due to suppliers of property, plant and equipment ,9 , - -

Other payales ,8 , - -

Provision for taxation - -

,8 ,9 8 9

Included in other payales is an amount due to a related party as disclosed in Note (c) to the financial statements.

6. Related party disclosures

(a) For the purpose of the financial statements, the Group and the Company have related party relationships with:-

(i) its susidiaries and directors;

(ii) the directors who are key management personnel;

(iii) companies in which key management personnel have significant financial interests; and

(iv) a company in which a close memer of the family of certain key management personnel has significant financial interests.

() In addition to the information disclosed elsewhere in the financial statements, the Group and the Company carried out the following

transactions with its related parties during the financial year:-

RM' RM'

Group

Companies in which key management personnel have significant financial interests:

- contract manufacturing cost paid/payale 8

- rental of premises paid/payale 9 9

- royalty paid/payale

A company in which a close memer of the family of certain key management personnel has

significant financial interests:- rental of premises received/receivale () ()

- sales of goods (9) ()

Company

A susidiary

- management fee received/receivale () ()





6. Related party disclosures (continued)

(c) The outstanding alances at the end of the reporting period are as follows:

Group

RM' RM'

Companies in which key management personnel have significant financial interests:

- trade payales (98) ()

A company in which close memers of the family of certain key management personnel have

significant financial interests:

- trade receivales 9 -

- trade payales () ()

- other payales - ()

(d) Compensation of key management personnel

Group Company

RM' RM' RM' RM'

Directors' remuneration

- fees 9 9

- emoluments , , - -

- other short term employee enefits 9 8 - -

- estimated monetary value of enefits-in-kind - -

, ,9

Executive directors of the Group and Company have een granted the following numer of options under the ESOS:

Group and Company

' '

At July , ,

Exercised (,) -

At June ,8 ,

The share options were granted on the same terms and conditions as those offered to other employees of the Group.





. Capital commitments

Group

RM' RM'

For property, plant and equipment:

- approved and contracted for ,9 8,

- approved ut not contracted for ,89 ,

,98 ,

8. Segmental reporting

The segment information in respect of the Group's operating segments for the year ended June are as follows:-

Local Export Total

RM’ RM’ RM’ RM’ RM’ RM’

External revenue 89,9 8,8 , ,98 ,9 ,9

Profit from operations ,9 , , ,9 9,8 ,

A reconciliation of total profit from operations to total consolidated profit efore taxation is provided as follows:-

Total

RM' RM'

Profit from operations for reportale segments 9,8 ,

Expenses managed on a central asis (9,) (9,9)

Other operating income ,8 ,

Consolidated profit from operations ,9 8,9

Finance cost (8,) (,)

Consolidated profit efore taxation ,89 ,8

9. Contingent liabilities

Company

RM' RM'

Corporate guarantee given to licensed anks for credit facilities granted to a susidiary , ,9





. Financial instruments

The Group’s activities are exposed to a variety of market risks (including foreign currency risk and interest rate risk), credit risk and

liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictaility of financial markets and seeks tominimise potential adverse effects on the Group’s financial performance.

(a) Financial risk management policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Foreign currency risk

The Group is exposed to foreign currency risk on transactions and alances that are denominated in currencies other than

Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar ("USD"), Euro Dollar ("Euro") and

Singapore Dollar ("SGD"). Foreign currency risk is monitored closely on an ongoing asis to ensure that the net exposure is

at an acceptale level. On occasion, the Group enters into forward foreign currency contracts to hedge against its foreign

currency risk.

The net unhedged financial assets/(financial liailities) for the Group that are not denominated in their functional currencies

are as follows:-

USD Euro SGD Total

RM' RM' RM' RM'

.6.

Trade receivales ,9 () ,

Other receivales , 9 ,8

Cash and ank alances ,8 98 8,

Bankers' acceptances (,88) - - (,88)

Trade payales (8) (,8) - (,89)

Other payales () () - ()

Net exposure , ,9 ,9 ,8

.6.

Trade receivales ,9 ,

Other receivales 9 8 ,8

Cash and ank alances , ,

Bankers' acceptances (,) (,) - (8,99) Trade payales (,) (98) - (,)

Other payales (8) (8) () (8)

Net exposure ,8 (,98) 8 ,8





. Financial instruments (continued)

(a) Financial risk management policies (continued)

(i) Foreign currency risk (continued)

Foreign currency risk sensitivity analysis

The following tale details the sensitivity analysis to a reasonaly possile change in the foreign currencies as at the end of

the reporting period, with all other variales held constant:-

Group

Increase/ Increase/

(decrease) (decrease)

RM' RM'

Effects on profit after taxation

United States Dollar - strengthened y % (:%) 8

- weakened y % (:%) (8) ()

Euro Dollar - strengthened y % (:%) 9 (98)

- weakened y % (:%) (9) 98

Singapore Dollar - strengthened y % (:%)

- weakened y % (:%) () ()

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate ecause of changes

in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-earing financial assets and

liailities. The Group’s policy is to otain the most favourale interest rates availale. Any surplus funds of the Group will e

placed with licensed financial institutions to generate interest income.

Interest rate risk sensitivity analysis

At the end of the reporting period, if interest rates had een asis points higher/lower, with all other variales held

constant, the Group's profit after taxation would have een RM9, lower/higher, arising mainly as a result of higher/

lower interest expense on floating rate ank orrowings. The assumed movement in asis points for interest rate sensitivity

analysis is ased on the currently oservale market environment.

(iii) Credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivales.

The Group manages its exposure to credit risk y the application of credit approvals, credit limits and monitoring procedures

on an ongoing asis. For other financial assets (including cash and ank alances), the Group minimises credit risk y

dealing exclusively with high credit rating counterparties.

The Group estalishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade

and other receivales as appropriate. The main components of this allowance are a specific loss component that relates

to individually significant exposures, and a collective loss component estalished for groups of similar assets in respect of

losses that have een incurred ut not yet identified. Impairment is estimated y management ased on prior experience and

the current economic environment.







(iii) Credit risk (continued)

The Group's major concentration of credit risk relates to the amounts owing y one () (: two ()) customer who has een

actively trading with the Group for the past years (: 9 years) which constituted approximately % (: %) of its

trade receivales as at the end of the reporting period. As the Group does not hold any collateral, the maximum exposure to

credit risk is represented y the carrying amount of the financial assets as at the end of the reporting period.

Ageing analysis

The ageing analysis of the Group’s trade receivales as at June are as follows:-

Gross Individual Carrying

amount impairment amount

RM' RM' RM'

.6.

Not past due 8,9 - 8,9

Past due:-

- less than months 9, - 9,

- to months -

- more than months , (,)

9,9 (,) 8,8

.6.

Not past due ,8 () ,88

Past due:-

- less than months , () ,9

- to months () 8

- more than months , (,) -

,9 (,9) ,

At the end of the reporting period, trade receivales that are individually impaired were those in significant financial

difficulties and have defaulted on payments. These receivales are not secured y any collateral or credit enhancement.

Trade receivales that are past due ut not impaired

The Group elieves that no impairment allowance is necessary in respect of these trade receivales. They are sustantially

companies with good collection track record and no recent history of default.

Trade receivales that are neither past due nor impaired

A significant portion of trade receivales that are neither past due nor impaired are regular customers that have een

transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivales. Any

receivales having significant alances past due or more than days, which are deemed to have higher credit risk, are

monitored individually.







(iv) Liquidity risk

Liquidity risk arises mainly from general funding and usiness activities. The Group practises prudent risk management y

maintaining sufficient cash alances and the availaility of funding through certain committed credit facilities.

The following tale sets out the maturity profile of the financial liailities as at the end of the reporting period ased on

contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, ased on

the rates at the end of the reporting period):-

Weighted Contractual

average undiscounted Within to 5 Over

effective cash flows year years 5 years

rate (%) RM’ RM’ RM’ RM’

Group

Bankers' acceptances . ,8 ,8 - -

Revolving credit . , , - -

Term loans .9 ,9 8, ,8 ,

Bank overdrafts . ,9 ,9 - -

Trade payales - 8, 8, - -

Other payales - ,8 ,8 - -

Forward foreign currency contracts

- gross payments - , , - -

9,8 ,9 ,8 ,

Company

Other payales - 8 8 - -

Group

Bankers' acceptances . , , - -

Revolving credit .8 , , - -

Term loans .8 8,9 , ,9 ,Bank overdrafts . ,8 ,8 - -

Trade payales - ,99 ,99 - -

Other payales - ,9 ,9 - -

Forward foreign currency contracts

- gross payments - , , - -

,89 ,9 ,9 ,

Company

Other payales - 9 9 - -






(b) Capital risk management

The Group manages its capital to ensure that entities within the Group will e ale to maintain an optimal capital structure so as

to support their usinesses and maximise shareholder(s) value. To achieve this ojective, the Group may make adjustments to the

capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital

to shareholders or issuing new shares.

The Group manages its capital ased on det-to-equity ratio. The Group’s strategies were unchanged from the previous financial

year. The det-to-equity ratio is calculated as net det divided y total equity. Net det is calculated as orrowings plus trade and

other payales less cash and cash equivalents.

The det-to-equity ratio of the Group as at the end of the reporting period was as follows:-

Group

RM' RM'

Borrowings , ,9

Trade payales 8, ,99

Other payales ,8 ,9

, ,

Less: Cash and ank alances (,) (,9)

Net det 8,99 ,

Total equity ,99 ,

Det-to-equity ratio .9 .

Under the requirement of Bursa Malaysia Practice Note No. /, the Company is required to maintain a consolidated

shareholders’ equity (total equity attriutale to owners of the Company) equal to or not less than the % of the issued and paid-up

share capital (excluding treasury shares) and such shareholders’ equity is not less than RM million. The Company has complied

with this requirement.

The Group did not reach any gearing requirement during the financial years ended June and June .

(c) Classification of financial instruments

Group Company

RM' RM' RM' RM'

Financial assets

Loans and receivales financial assets

Trade receivales 8,8 , - -

Other receivales 98 ,8 - -

Amounts due from susidiaries - - 9

Cash and ank alances , ,9 ,98 9

, ,99 ,8 888






(c) Classification of financial instruments (continued)

Group Company

RM' RM' RM' RM'

Financial liabilities

Other financial liailities

Bankers' acceptances ,8 , - -

Revolving credit , , - -

Term loans 9,8 9,9 - -

Bank overdrafts ,9 ,8 - -

Trade payales 8, ,99 - -

Other payales 8,8 ,9 9 9

,8 , 9 9

Fair value through profit or loss

Derivative liailities - -

(d) Fair values of financial instruments

The carrying amounts of the financial assets and financial liailities reported in the financial statements approximated their fair

values.

The following summarises the methods used to determine the fair values of the financial instruments:-

(i) The financial assets and financial liailities maturing within the next months approximated their fair values due to the

relatively short-term maturity of the financial instruments.

(ii) The carrying amounts of the term loans approximated their fair values as these instruments ear interest at variale rates.

(iii) The fair value of forward foreign currency contracts is estimated y discounting the difference etween the contractual

forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate.

(e) Fair value hierarchy

The fair values of the financial assets and liailities are analysed into level to as follows:-

Level : Fair value measurements derive from quoted prices (unadjusted) in active markets for identical assets or liailities.

Level : Fair value measurements derive from inputs other than quoted prices included within level that are oservale for

the asset or liaility, either directly or indirectly.

Level : Fair value measurements derive from valuation techniques that include inputs for the asset or liaility that are not

ased on oservale market data (unoservale inputs).






(e) Fair value hierarchy (continued)

As at June , the Group's financial instruments carried at fair values are analysed as elow:-

Level

RM'

Group

Financial liabilities

Derivative liailities

- forward foreign currency contracts ()

. Transition to the MFRS framework

As stated in Note (a) to the financial statements, these are the first financial statements of the Group and the Company prepared in

accordance with MFRSs. The accounting policies in Note to the financial statements have een applied to all financial information

covered under this set of financial statements. The transition to MFRS does not have financial impact to the financial statements of the

Group.

While in preparing the opening MFRS statements of financial position at July (date of transition), the Company has adjusted

amounts reported previously in financial statements prepared in accordance with FRSs. The financial impacts on the transition are as

elow:-

Reconciliation of statement of financial position

.. .6.

Transition Transition

FRSs Effects MFRSs FRSs Effects MFRSs

Company Note RM' RM' RM' RM' RM' RM'

Assets

Non-current asset

Investment in susidiaries a , - , , (,) ,

, - , , (,) ,

Current assets Other receivales - 9 - 9

Amounts due from susidiaries 98 - 98 9 - 9

Cash and ank alances - 9 - 9

99 - 99 89 - 89

Total assets ,9 - ,9 , (,) ,





. Transition to the MFRS framework (continued)

Reconciliation of statement of financial position (continued)

.. .6.

Transition Transition

FRSs Effects MFRSs FRSs Effects MFRSs

Company Note RM' RM' RM' RM' RM' RM'

Equity and liabilities

Equity attributable to equity

holder of the Company

Share capital ,9 - ,9 ,9 - ,9

Retained earnings , ,9 8, ,8 ,9 8,88

Other reserves , (,9) 8, (,) 9

Total equity ,89 - ,89 ,8 (,) ,

Current liability

Other payales 8 - 8 9 - 9

8 - 8 9 - 9

Total equity and liabilities ,9 - ,9 , (,) ,

Reconciliation of profit or loss and other comprehensive income

Company

Note Transition

FRSs effects MFRSs

RM' RM' RM'

Revenue -

Employee enefits expenses (9) - (9)

Other operating expenses () - ()

Profit efore taxation 9 - 9

Income tax expense () - ()

Profit after taxation -

Other comprehensive income

Item that will not e reclassified susequently to profit or loss

- fair value changes of availale-for-sale financial asset a , (,) -

Total other comprehensive income , (,) -

Total comprehensive income for the financial year , (,)





. Transition to the MFRS framework (continued)

Reconciliation of statement of cash flows

There are no differences etween the statements of cash flows presented under FRSs and MFRSs.

Notes to reconciliations

(a) Investment in Subsidiaries - Deemed Cost Exemption

Under FRSs, the Company measured its investments in susidiaries at fair value under FRS 9. Upon transition to MFRSs, the

Company elected to use the previous FRS carrying amount as deemed cost under MFRSs.

The financial impacts arising from the change are summarised as follows:-

(i) Fair value reserves at July and June were transferred to retained profits;

(ii) A decrease in fair value gain that was recognised under other comprehensive income of RM,, for the financial year

ended June .

The aggregate fair value of the investments in susidiaries at July approximated the then carrying amount under FRSs.

(b) Reserves

There were no adjustments to the reserves other than the following:-

Company

.. .6.

Note RM' RM'

Fair value reserve

Investment in susidiaries a (,9) ,9

Retained earnings

Investment in susidiaries a ,9 (,)

Total adjustments to reserves - (,)

. Comparative figures

The following figures have een reclassified to conform with the presentation of the current financial year:-

Company

As restated As previously

reported

RM' RM'

Statement of financial position (Extract):-

Investment in susidiaries (Note ) , ,




. Supplementary information - disclosure of realised and unrealised profits

The reakdown of the retained profits of the Group and the Company as at the end of the reporting period into realised and unrealised

profits are presented in accordance with the directive issued y Bursa Malaysia Securities Berhad and prepared in accordance withGuidance on Special Matter No. , Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to

Bursa Malaysia Securities Berhad Listing Requirements, as issued y the Malaysian Institute of Accountants, as follows:-

Group Company

RM' RM' RM' RM'

Total retained profit:

- realised ,88 8,9 8,9 8,88

- unrealised 9 89 - -

Total Group retained earnings as at June ,8 9,9 8,9 8,88

Supplementary Information June




List of Properties

Title/ Description Land Area/ Built-Up Approximate Net Book Value

Location & Usage Existing Use Tenure Area (sq. m.) Age of as at

Building -Jun-

(RM)

H.S.(D) & H.S. (D) . Two joined plots of , sq.m./ Leasehold ,. years ,,

Lot Nos. PT9 & PT, land with a single pharmaceutical expiring on

Mukim of Cheng, storey factory and manufacturing .8.9

District of Melaka Tengah, two storey plant

Melaka office lock

Warehouse and Warehouse and ,. years

production area production area

GPP 9 & GPP , Two plots of land ,. sq.m./ Freehold ,9. Office & Store ,9,

Lot Nos. & , with a ½ storey office, store & - yearsTown Area III (), office uilding, a warehouse Warehouse

District of Melaka Tengah, store and a - years

Melaka warehouse

Geran , Lot No. , Commercial site . sq.m./ Freehold 88.9 8 to years ,

Town Area III (), erected with a doule Doule storey

District of Melaka Tengah, storey shophouse shophouse

Melaka cum storehouse

PN8. Lot 9, Two plots of land , sq.m./ Leasehold ,88 years ,9,

Mukim of Cheng, ammalgamated into pharmaceutical expiring on

District of Melaka Tengah, one plot with a manufacturing .8.9

Melaka three storey plant pharmaceutical

factory

,89,8




Notice of Annual General Meeting

Please refer to

Explanatory Note ((i))

(Resolution )

(Resolution )

(Resolution )

(Resolution )

(Resolution )

(Resolution )

. To receive the Audited Financial Statements for the financial year ended June together with the Reports

of the Directors and Auditors thereon.

. To approve the payment of Directors’ fees for the financial year ended June .

. To re-elect the following Directors who retire pursuant to Article 9() of the Company’s Articles of Association,

who eing eligile, offered themselves for re-election:-

(a) P’ng Beng Hoe

() Azhar in Hussain

. To re-appoint Crowe Horwath as Auditors of the Company until the conclusion of the next AGM and to authorise

the Directors to fix their remuneration.

. As Special Business

To consider and if thought fit, with or without modification, to pass the following resolutions as Ordinary

Resolutions:-

Ordinary Resolution I

- Authority to Issue and Allot Shares

That suject always to the approvals of the relevant authorities and pursuant to Section D of the Companies

Act, 9, the Directors e and are herey authorised to issue and allot ordinary shares in the Company at any time, upon such terms and conditions, for such purposes and to such person(s) as the Directors may in their

discretion deem fit provided that the aggregate numer of ordinary shares to e issued does not exceed ten

per centum (%) of the total issued share capital of the Company at the time of issue and that such authority

shall continue to e in force until the conclusion of the next AGM of the Company.

Ordinary Resolution II

- Proposed Renewal of the Existing Shareholders’ Mandate for Recurrent Related Party Transactions of

a Revenue or Trading Nature

That pursuant to paragraph .9 of the Main Market Listing Requirements of Bursa Malaysia Securities

Berhad, the Company and/or its susidiary companies (the Group) e and are herey authorised to enter into

and give effect to recurrent related party transactions of a revenue or trading nature as set out in Section

..(a) of the Circular to Shareholders dated Novemer , which are necessary for the Group’s day-to-day

operations in the ordinary course of usiness, on terms not more favourale than those generally availale to

the pulic and not detrimental to the minority shareholders of the Company.

That such approval shall continue to e in force until:

(i) the conclusion of the next AGM of the Company, at which time it will lapse, unless authority is renewed

y a resolution passed at the next AGM;

(ii) the expiration of the period within which the next AGM is required to e held pursuant to Section ()

of the Companies Act, 9 (the Act) (ut shall not extend to such extension as may e allowed pursuant

to Section () of the Act); or

NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting (AGM) of the Company will e held at the Auditorium Hall, Kotra Pharma

Technology Centre, No. , Jalan TTC , Cheng Industrial Estate, Melaka on Wednesday, Novemer at . p.m. for the following

purposes:-

AGENDA




Notice of Annual General Meeting continued

(iii) revoked or varied y resolution passed y the shareholders of the Company in a general meeting, efore

the next AGM;

whichever is the earlier.

And that the Directors of the Company e authorised to act for and on ehalf of the Company, to take all such

steps and execute all necessary documents as they may consider expedient or deem fit in the est interest of

the Company to give effect to the transactions contemplated and/or authorised y this resolution.

Ordinary Resolution III

- Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or

Trading Nature

That pursuant to paragraph .9 of the Main Market Listing Requirements of Bursa Malaysia Securities

Berhad, the Company and/or its susidiary companies (the Group) e and are herey authorised to enter into

and give effect to recurrent related party transactions of a revenue or trading nature as set out in Section

..() of the Circular to Shareholders dated Novemer , which are necessary for the Group’s day-to-dayoperations in the ordinary course of usiness, on terms not more favourale than those generally availale to

the pulic and not detrimental to the minority shareholders of the Company.

That such approval shall continue to e in force until:

(i) the conclusion of the next AGM of the Company, at which time it will lapse, unless authority is renewed

y a resolution passed at the next AGM;

(ii) the expiration of the period within which the next AGM is required to e held pursuant to Section ()

of the Companies Act, 9 (the Act) (ut shall not extend to such extension as may e allowed pursuant

to Section () of the Act); or

(iii) revoked or varied y resolution passed y the shareholders of the Company in a general meeting, efore

the next AGM;

whichever is the earlier.

And that the Directors of the Company e authorised to act for and on ehalf of the Company, to take all such

steps and execute all necessary documents as they may consider expedient or deem fit in the est interest of

the Company to give effect to the transactions contemplated and/or authorised y this resolution.

. To transact any other ordinary usiness of which due notice shall have een given in accordance with the

Companies Act, 9 and the Articles of Association of the Company.

By Order of the Board

Chua Siew Chuan (MAICSA 89)

Mak Chooi Peng (MAICSA 9)

Sean Ne Teo (LS 88)

Company Secretaries

Melaka

Novemer

(Resolution )




Notice of Annual General Meeting continued

NOTES:

. Appointment of Proxy

(i) In respect of deposited securities, only memers whose names appear in the Record of Depositors on Novemer (“GeneralMeeting Record of Depositors”) shall e eligile to attend, speak and vote at the Meeting.

(ii) A memer entitled to attend and vote at the Meeting is entitled to appoint more than one proxy to attend and vote in his stead. A proxymay ut does not need to e a memer of the Company and the provisions of Section 9 ()() of the Companies Act, 9 need not ecomplied with. Where a memer appoints more than one proxy, the appointments shall e invalid unless he specifies the proportions ofhis shareholdings to e represented y each proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as thememer to speak at the Meeting. Notwithstanding this, a memer entitled to attend and vote at the Meeting is entitled to appoint any personas his proxy to attend and vote instead of the memer at the Meeting. There shall e no restriction as to the qualifications of the proxy.

(iii) In the case of a corporate memer, the instrument appointing a proxy must e either under its common seal or under the hand of its officeror attorney duly authorised.

(iv) Where a memer of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple eneficialowners in one securities account (“omnius account”), there is no limit to the numer of proxies which the exempt authorised nominee

may appoint in respect of each omnius account it holds.

(v) The instrument appointing a proxy must e deposited at Securities Services (Holdings) Sdn. Bhd. of No. - , Jalan Lagenda , Taman Lagenda, Melaka not less than 8 hours efore the time for holding the Meeting or at any adjournment thereof.

. Retirement of Directors

(i) Tan Sri Datuk Dr. Omar in Adul Rahman has expressed his intention to retire at the conclusion of the th AGM. Hence, Tan Sri will retainoffice until the close of the th AGM.

(ii) Encik Omar in Md. Khir has expressed his intention to retire at the conclusion of the th AGM. Hence, he will retain office until the closeof the th AGM.

. Explanatory Notes to Special Business:-

(i) Item of the Agenda

The Agenda item is meant for discussion only as the provision of Section 9() of the Companies Act, 9 does not require a formalapproval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

(ii) Proposed Ordinary Resolution I

The proposed Ordinary Resolution I, if passed, will empower the Directors of the Company to issue and allot not more than % of theCompany’s total issued share capital speedily without having to convene a general meeting. This authority will, unless revoked or variedy the Company in general meeting, expire at the conclusion of the next AGM of the Company.

Instances for which the Company may issue new shares within this general mandate include ut not limited to the purpose(s) of raisingfund through private placement for investments, working capital and/or acquisitions.

This general mandate sought y the Company is to renew the general mandate granted to the Directors at the th AGM held on 9 Novemer to issue shares pursuant to Section D of the Companies Act, 9.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the last AGMheld on 9 Novemer which will lapse at the conclusion of the forthcoming AGM.

(iii) Proposed Ordinary Resolutions II & III

The proposed adoption of Ordinary Resolutions II & III are to renew the Shareholders’ Mandate granted y the shareholders of the Companyat the th AGM held on 9 Novemer and the proposed new Shareholders’ Mandate. The proposed Shareholders’ Mandates willenale the Group to enter into the Recurrent Related Party Transactions of a Revenue or Trading Nature which are necessary for theGroup’s day-to-day operations, suject to the transactions eing in the ordinary course of usiness and on normal commercial termswhich are not more favourale to the related parties than those generally availale to the pulic and are not to the detriment of the minorityshareholders of the Company.

Further information on the proposed Ordinary Resolution II & III are set out in the Circular to Shareholders dated Novemer .




Analysis of Shareholdingsas at Septemer

Authorised Share Capital : RM,,.Issued and Paid Up Capital : RM,,8.Class of Shares : Ordinary shares of RM. each

Voting rights on show of hands : voteVoting rights on a poll : vote per ordinary share held

DISTRIBUTION OF SHAREHOLDINGS

No. of No. ofSize of Shareholdings Shareholders % shares held %

Less than shares . ,8 . to , shares . 9, ., to , shares 8 .8 ,8, .9, to , shares . ,99, ., to less than % of issued shares . 9,,88 .% and aove of issued shares . ,, 8.9

Total , . ,, .

SUBSTANTIAL SHAREHOLDERS

No. of Shares heldName Direct % Indirect %

Piong Nam Kim Holdings Sdn. Bhd. ,, 8.9 .Estate of Piong Nam Kim @ Piong Pak Kim . ,,* 8.9Yong Soon Moi ,, . ,,* 8.9Piong Teck Onn ,8, . ,,* 8.9Piong Teck Min ,, .9 ,998,^ 9.Datuk Piong Teck Yen ,8, . ,,* 8.9

Piong Teck They ,,8 .8 ,,* 8.9

Notes:* Deemed interested y virtue of their interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section A of the Act.^ Deemed interested y virtue of his interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section A of the Act and his wife (Tan Yeak

Yan) and son (Piong Chee Keong) pursuant to Section () of the Act.

DIRECTORS’ SHAREHOLDINGS

No. of Shares heldName Direct % Indirect %

Tan Sri Datuk Dr. Omar in Adul Rahman ,8 . .Piong Teck Onn ,8, . ,,* 8.9Piong Teck Min ,, .9 ,998,^ 9.Datuk Piong Teck Yen ,8, . ,,* 8.9Chin Swee Chang ,8, . .Omar in Md. Khir 8, .8 .P’ng Beng Hoe . .Azhar in Hussain . .Piong Chee Kien (Alternate Director) . .

Notes:* Deemed interested y virtue of their interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section A() of the Act.^ Deemed interested y virtue of his interests in Piong Nam Kim Holdings Sdn. Bhd. pursuant to Section A() of the Act and his wife (Tan

Yeak Yan) and son (Piong Chee Keong) pursuant to Section () of the Act.




Analysis of Shareholdings continuedas at Septemer

THIRTY () LARGEST SHAREHOLDERS

No. Name No. of shares %

. Piong Nam Kim Holdings Sdn Bhd ,, 8.9

. Amsec Nominees (Asing) Sdn Bhd Amtrustee Berhad for Galleon Asset Limited (CS-GALLEON) ,, .

. Yong Soon Moi ,, .

. Malaysian Technology Development Corporation Sdn Bhd ,, .

. JF Apex Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teo Kwee Hock (MARGIN) ,88, .8

. Chin Ai Mei ,89,8 .

. Platinum Essence Sdn. Bhd. ,8, .

8. Seah Tin Kim ,89, .9

9. Lin Ah Lan ,8, .8

. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Lim Kian Tiak (89) ,8, .8

. Piong Teck Yen ,8, .

. Piong Teck Onn ,8, .

. Chin Swee Chang ,8, .

. Cresdel Holdings Sdn Bhd ,, .

. Kok Hon Seng ,, .

. Piong Teck Min ,, .9

. Ho Jonathan Lep Kee ,, .9

8. JF Apex Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teo Siew Lai (MARGIN) ,, .89

9. Piong Teck They ,,8 .8

. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Shanmugam A/L Thoppalan (89) 89, .

. Omar Bin Md Khir 8, .8

. Triple Boutique Sdn Bhd , .8

. Piong Teck Fong 8, .

. Piong Teck Wah , .

. Cheah Ming Loong 8, .

. TA Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Ting Leong Hua ,9 .

. Chin Kee Kwong ,8 .9

8. Chin Chee Min , .99. Tan Lean Gin , .9

. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Pharmex Sdn Bhd (889) 9, .8



The page was intentionally left lank



FORM OF PROXY

No. Resolutions For Against

. To approve the payment of Directors’ fees for the financial year ended June .

. To re-elect P’ng Beng Hoe who retires pursuant to Article 9 of the Company’s Articles ofAssociation.

. To re-elect Azhar in Hussain who retires pursuant to Article 9 of the Company’s Articles ofAssociation.

. To re-appoint Crowe Horwath as Auditors of the Company until the conclusion of the nextAnnual General Meeting and to authorise the Directors to fix their remuneration.

. Special BusinessOrdinary Resolution

- Authority to issue shares pursuant to Section D of the Companies Act, 9.

. Special Business

Ordinary Resolution - Proposed Renewal of the Existing Shareholders’ Mandate for Recurrent Related PartyTransactions of a Revenue or Trading Nature

. Special Business Ordinary Resolution - Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue

or Trading Nature

No. Resolutions

A To receive the Audited Financial Statements for the financial year ended June together with the Reports of the Directors and the Auditors thereon.

*I/We NRIC No./Company No.

of (full address)eing a Memer/Memers of KOTRA INDUSTRIES BERHAD, herey appoint

NRIC No. of

or failing *him/her, NRIC No. of

or failing *him/her, the CHAIRMAN OF THE MEETING as *my/our proxy to vote for *me/us and on *my/our ehalf at the Fourteenth Annual

General Meeting of the Company to e held at the Auditorium Hall, Kotra Pharma Technology Centre, No. , Jalan TTC , Cheng Industrial

Estate, Melaka on Wednesday, Novemer at . p.m. or at any adjournment thereof.

CDS ACCOUNT NO.

NUMBER OF SHARES HELD(Company No. 9-P)

(Incorporated in Malaysia)

(i) In respect of deposited securities, only memers whose names appear in the Recordof Depositors on Novemer (“General Meeting Record of Depositors”) shalle eligile to attend, speak and vote at the Meeting.

(ii) A memer entitled to attend and vote at the Meeting is entitled to appoint more thanone proxy to attend and vote in his stead. A proxy may ut does not need to e amemer of the Company and the provisions of Section 9 ()() of the CompaniesAct, 9 need not e complied with. Where a memer appoints more than oneproxy, the appointments shall e invalid unless he specifies the proportions of hisshareholdings to e represented y each proxy. A proxy appointed to attend and voteat the Meeting shall have the same rights as the memer to speak at the Meeting.Notwithstanding this, a memer entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the memer at the

Meeting. There shall e no restriction as to the qualifications of the proxy.

(iii) In the case of a corporate memer, the instrument appointing a proxy must e eitherunder its common seal or under the hand of its officer or attorney duly authorised.

(iv) Where a memer of the Company is an exempt authorised nominee which holdsordinary shares in the Company for multiple eneficial owners in one securitiesaccount (“omnius account”), there is no limit to the numer of proxies which theexempt authorised nominee may appoint in respect of each omnius account itholds.

(v) The instrument appointing a proxy must e deposited at Securities Services(Holdings) Sdn. Bhd. of No. -, Jalan Lagenda , Taman Lagenda, Melakanot less than 8 hours efore the time for holding the Meeting or at any adjournment thereof.

* Strike out whichever not applicable

Please indicate with an “X” in the space provided aove how you wish your votes to e casted. If no specific direction as to voting is given, the

proxy will vote or astain from voting at his/her discretion.

As witness my/our hand(s) this day of .

Signature of Memer/Common Seal

Notes:



Then fold here

Fold this flap for sealing

st fold here

KOTRA INDUSTRIES BERHAD(9-P)

No. -, Jalan Lagenda ,

Taman Lagenda,

Melaka

Malaysia

affixstamp

2013_annual_report of Kotra Pharma

Documents

Transcript of 2013_annual_report of Kotra Pharma