kamdar annualreport2011 (2.1mb)

KAMDAR GROUP (M) BHD ANNUAL REPORT 2011 i

Corporate Information 2 Notice of Annual General Meeting 3 Directors’ Profile 5 Corporate Structure 8 Chairman’s Statement 9 Corporate Governance Statement 10 Audit Committee’s Report 16 Statement of Internal Controls 19 Other Disclosure Requirements Pursuant to the Listings Requirements of Bursa Securities 22 Directors’ Report 23 Statement by Directors 28 Statutory Declaration 28 Independent Auditors’ Report 29

Statements of Financial Position 32 Statements of Comprehensive Income 33 Statements of Changes in Equity 34 Statements of Cash Flow 35 Notes to the Financial Statements 37 Group’s Landed Properties 91 Analysis of Shareholdings 98 Form of Proxy

CONTENTS

2 KAMDAR GROUP (M) BHD ANNUAL REPORT 2011

Bipinchandra A/L Balvantrai – Executive Chairman Hamendra A/L B.M. Kamdar – Deputy Chairman/ Executive Director Kamal Kumar Kishorchandra Kamdar – Managing Director Datuk Emam Mohd Haniff bin Emam Mohd Hussain – Senior Independent Non-Executive Director Liang Ah Wah @ Frank Liang – Independent Non-Executive Director Rajesh Kumar A/L Gejinder Nath - Independent Non-Executive Director Ong Liang Beng – Independent Non-Executive Director (appointed w.e.f. 15.9.2011) AUDIT COMMITEE PRINCIPAL BANKERS Chairman Affin Bank Berhad Ong Liang Beng AmBank Berhad Members Bank Islam Malaysia Berhad Datuk Emam Mohd Haniff bin Emam Mohd Hussain Bank Muamalat Malaysia Berhad Liang Ah Wah @ Frank Liang CIMB Bank Berhad Rajesh Kumar A/l Gejinder Nath Hong Leong Bank Berhad HSBC Bank Malaysia Berhad REMUNERATION COMMITEE Malayan Banking Berhad OCBC Bank (Malaysia) Berhad Chairman Public Bank Berhad Liang Ah Wah @ Frank Liang RHB Bank Berhad Members Standard Chartered Bank Malaysia Berhad Datuk Emam Mohd Haniff bin Emam Mohd Hussain United Overseas Bank (M) Berhad Hamendra A/L B.M. Kamdar NOMINATION COMMITTEE SOLICITORS Chairman Shahrizat Rashid & Lee Datuk Emam Mohd Haniff bin Emam Mohd Hussain Soo Thien Ming & Nashrah Members Lim Soh & Goonting Rajesh Kumar A/L Gejinder Nath Stella Soo Geok & Co Liang Ah Wah @ Frank Liang Syarikat Ng & Annuar COMPANY SECRETARIES AUDITORS Lim Seck Wah SJ Grant Thornton (AF : 0737) (MAICSA NO.: 0799845) Chartered Accountants M. Chandrasegaran A/L S. Murugasu (MAICSA NO.: 0781031) STOCK EXCHANGE LISTING REGISTERED OFFICE Main Board of Bursa Securities Bursa Securities refers to Level 15-2, Bangunan Faber Imperial Court Bursa Malaysia Securities Berhad Jalan Sultan Ismail 50250 Kuala Lumpur STOCK CODE: 8672 Tel: 03-26924271 Fax: 03-27325388 SHARE REGISTRAR MEGA CORPORATE SERVICES SDN. BHD. (Company No.: 187984-H) Level 15-2, Bangunan Faber Imperial Court Jalan Sultan Ismail 50250 Kuala Lumpur Tel No. : 03-26924271 Fax No. : 03-27325388

Corporate Information

3KAMDAR GROUP (M) BHD ANNUAL REPORT 2011

Notice Of Annual General MeetingKAMDAR GROUP (M) BERHAD

Company No. 577740-A (Incorporated in Malaysia)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of the members of the Company will be held at Dynasty Hotel Kuala Lumpur, Function Room 2 & 3, Level 4, 218 Jalan Ipoh, 51200 Kuala Lumpur on Friday, 15 June 2012 at 10.00 a.m. for the following purposes:- AGENDA AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 31st December 2011 together

with the Directors' and Auditors' Reports thereon. Please refer to

Note A. 2. To approve the payment of a first and final single tier dividend of 4 sen per ordinary share of RM1.00

each for the financial year ended 31 December 2011. Resolution 1

3. To approve the payment of Directors’ fees for the year ended 31 December 2011. Resolution 2 4. To re-elect the following directors retiring pursuant to Article 102 of the Company’s Articles of

Association:

a. Hamendra A/L B.M. Kamdar b. Kamal Kumar Kishorchandra Kamdar

Resolution 3 Resolution 4

5. To re-elect the following director retiring pursuant to Article 109 of the Company’s Articles of

Association:

Ong Liang Beng

Resolution 5

6. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the Directors to

fix their remuneration. Resolution 6

AS SPECIAL BUSINESS To consider, and if thought fit, to pass the following Resolution:

ORDINARY RESOLUTION 1. AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION 132D OF

THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue, new shares in the Company from time to time upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company as at the date of this Annual General Meeting and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company and THAT the Directors be and are hereby also authorised to obtain the approval from Bursa Securities for the listing and quotation of the additional shares so issued.”

Resolution 7

2. To transact any other business which may properly be transacted at an Annual General Meeting for

which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT Subject to the approval of the shareholders, a first and final single tier dividend of 4 sen per ordinary share of RM1.00 each for the financial year ended 31 December 2011 will be paid on 9 July 2012 to Depositors registered in the Record of Depositors at the close of business at 5.00 p.m. on 20 June 2012. A depositor shall qualify for entitlement only in respect of:- (a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 20 June 2012 in respect of ordinary

transfers; and (b) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa

Malaysia Securities Berhad.


By order of the Board LIM SECK WAH (MAICSA 0799845) M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA 0781031) Company Secretaries Dated this: 24 May 2012 Kuala Lumpur Notes

A. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

1. For the purpose of determining a member who shall be entitled to attend and vote at the Annual General Meeting, the Company shall be requesting the Record of Depositors as at 8 June 2012. Only a depositor whose name appears on the Record of Depositors as at 8 June 2012 shall be entitled to attend the said meeting or appoint proxies to attend and vote on his/her stead.

2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint up to two proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(a) & (b) of the Companies Act, 1965 shall not apply.

3. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. A member who is an exempt authorized nominee is entitled to appoint multiple proxies for each omnibus account it holds.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

6. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

7. Explanatory Notes To Special Businesses Resolution Pursuant to Section 132D of the Companies Act, 1965 The proposed Ordinary Resolution no. 7 is a renewal of the mandate given to the Company by the shareholders at the previous Annual General Meeting held on 28 June 2011, if duly passed, will give the Directors of the Company the flexibility to issue and allot new shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of next Annual General Meeting of the Company. The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/ diversification proposals involves the issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve the issue of new shares even though the number involved may be less than 10% of the issued capital. In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes. The renewed authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/ or acquisitions. No shares have been issued and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General Meeting held on 28 June 2011.


Directors’ ProfileDIRECTORS’ PROFILE

1. BIPINCHANDRA A/L BALVANTRAI – Executive Chairman

Mr. Bipinchandra, a Malaysian, aged 53, has over 35 years experience in the textile and textile-related industries. After completing his General Certificate in Education Ordinary Level in 1976, he joined Globe Textiles Sdn Bhd as a Sales Executive in 1977. He joined Kamdar Sdn. Bhd. (“KSB”) in 1980 and became a director in 1994. He is currently responsible for the Group’s procurement and sourcing of merchandise, locally as well as internationally. He was re-designated as Executive Chairman of KGMB on 21 April 2008. He is also a director of KSB, Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd. (“PMBK (Penang)”), Kesar Sdn. Bhd. (“Kesar”), Kamdar Stores Sdn. Bhd. (“KStores”), Kamdar Holdings Sdn. Bhd. (“KH”) under the KGMB Group and director of Kamdar Properties Sdn. Bhd. (“KPSB”). He is not a member of any board committee.

He does not hold any directorships in any other public companies. He holds 56,278,884 shares in KGMB and also has an indirect interest of 955,171 shares via his wife’s shareholding in KGMB. He is a sibling to Hamendra A/L B.M. Kamdar. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

2. HAMENDRA A/L B.M. KAMDAR – Deputy Chairman/ Executive Director Mr. Hamendra, a Malaysian, aged 59, has over 40 years experience in the textile and textile-related industries. After completing his Senior Cambridge in 1970, he joined Kesar as a Sales Executive in 1972 and in 1976 became a director of Kesar. He is currently responsible for the export and wholesale operations of KGMB, and the distribution of merchandise within the KGMB Group. He was appointed as an Executive Director of KGMB on 10 November 2004 and resigned on 26 February 2007, subsequently, he was appointed as an Alternate Director to Bipinchandra A/L Balvantrai on 3 August 2007. He ceased to be Alternate Director and was appointed as Executive Director on 5 June 2008, subsequently he was redesignated to Deputy Chairman of KGMB on 12 January 2009. He is also a director of KSB, Pusat Membeli-Belah Kamdar Sdn. Bhd. (“PMBK”), PMBK (Penang), Kesar and Mint Saga (M) Sdn. Bhd. (“MS”) under the KGMB Group. He is a member of the Remuneration Committee.

He does not hold any directorships in any other public companies. He holds 16,830,414 shares in KGMB and also has an indirect interest of 1,868,610 shares via his wife’s shareholding in KGMB. He is a sibling to Bipinchandra A/L Balvantrai. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

3. KAMAL KUMAR KISHORCHANDRA KAMDAR – Managing Director / Executive Director

Mr. Kamal Kumar, a Malaysian, aged 42. He graduated with an LLB (Hons) degree from Leicester University, and completed the Barrister at Law at Middle Temple, United Kingdom. He was previously a manager of KSB. He is also a director of several private limited companies. He was appointed as a Non-Independent Non-Executive Director of KGMB on 16 February 2005 and redesignated to Executive Director on 5 June 2008 and was subsequently redesignated to Managing Director on 27 May 2011. He is not a member of any board committee. He holds 26,538,715 shares in KGMB. He has family relationship with other directors and major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.


4. DATUK EMAM MOHD HANIFF BIN EMAM MOHD HUSSAIN – Senior Independent Non-

Executive Director Datuk Emam Mohd Haniff, a Malaysian, aged 69. He graduated with a Bachelor of Arts (Hons) degree from the University of Malaya in 1966 and, in the same year, joined the Ministry of Foreign Affairs (Wisma Putra). Since then he has held various positions both in the Ministry as well as in Malaysian diplomatic missions abroad, culminating in his appointment as Malaysia’s Ambassador to Pakistan (1983-1986), Ambassador to the Philippines (1987-1991), and High Commissioner to Singapore (1992-1997). He retired from the Malaysian Diplomatic Service upon reaching the mandatory age of 55 in 1997. He was appointed as an Independent Non-Executive Director of KGMB on 16 February 2005. He is the Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees. He currently sits on the boards of Edaran Berhad and Lion Corporation Berhad. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

5. LIANG AH WAH @ FRANK LIANG – Independent Non-Executive Director

Mr. Liang Ah Wah @ Frank Liang, a Malaysian, aged 65. He completed SC/MCE from English College, Johor Bharu. He was appointed as a Director of Suria Pembekal Umm Sdn Bhd from 1974 until 2005. In 2005, he worked at Business Series Sdn Bhd (Consortium) as a Director / Corporate Advisor until 2007. He was appointed as an Independent Non-Executive Director of KGMB on 18 May 2011. He is the Chairman of the Remuneration Committee and a member of the Audit and Nomination Committee. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

6. RAJESH KUMAR A/L GEJINDER NATH – Independent Non-Executive Director

Mr. Rajesh Kumar A/L Gejinder Nath, a Malaysian, aged 44. He graduated with a Bachelor of Letters and Law (Hons) from University of London in 1992. In 1995, he was admitted to the Malaysian Bar. He has since been in active practice covering a vast scope of litigation matters pertaining to civil, commercial and corporate litigation, construction claims and disputes, industrial relations and appellate matters. He is currently a partner of Messrs. Vicknaraj, R.D. Ratnam, Rajesh Kumar & Associates. He is also a member of the Malaysian BAR Council Disciplinary Committee. He was appointed as an Independent Non-Executive Director of KGMB on 18 May 2011. He is a member of the Nomination and Audit Committees. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

Directors’ Profile (Cont’d)


7. ONG LIANG BENG – Independent Non-Executive Director

Mr. Ong Liang Beng, a Malaysian, age 57. He is a Chartered Accountant, a member of The Institute of Chartered Accountants in England and Wales (ICAEW) and a member of The Malaysian Institute of Accountants (MIA) since 1983. He was trained with a firm Chartered Accountants’ in the City of London, England. He was employed in Financial Management with a local Conglomerate, Hong Leong group and Multinational companies for more than 10 years. He then pursued a career in Internal Auditing heading the internal audit department in Local Banking Group and Local General Insurance group. Later, he joined Management Consulting firms providing corporate governances services to listed companies and large public companies in Malaysia, specializing in Internal Auditing, Risk Management, Business Processes development and Corporate Management. He was appointed as an Independent Non-Executive Director of KGMB on 15 September 2011. He is the Chairman of the Audit Committee. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

Directors’ Profile (Cont’d)


Corporate Structure

100% Kamdar Sdn. Bhd.

100% Pusat Membeli-belah

Kamdar Sdn. Bhd.

100% Beauty Gallant

Sdn. Bhd.

100% Pusat Membeli-belah

Kamdar (Penang) Sdn. Bhd.

LOGO

Kamdar

100% Kamdar (South) Sdn.

Bhd.

45% Mayfair Fabric & Linen (Pty) Ltd) Group

(M) Berhad

100% Kesar Sdn. Bhd.

100% Orisea Trade Sdn.

Bhd. 100% Kamdar Holdings Sdn.

Bhd.

100% Kamdar Stores Sdn. Bhd. 100% Mint Saga (M) Sdn. Bhd. 100% Kamdar (B) Sdn. Bhd. 70% Kamdar (Bru)

Sdn. Bhd.


Chairman’s Statement

On behalf of the Board of Directors, I am pleased to present to you the Annual Report And Audited Financial Statements of Kamdar Group (M) Berhad (Kamdar Group) for the year ended 31 December 2011.

FINANCIAL REVIEW

The Company has achieved yet another year of continuing improvement in its financial performance. Localisation and consistent market positioning is the key strategy for the continued growth and success of the Company. We tailor our merchandise assortment, brand mix and floor space allocation on store-by-store basis to better serve our targeted range of consumers in every city that we operate.

I am delighted to report that for the financial year ended 31 December 2011, the Company’s net profit increased by 5.5% to RM 14,295,303 million from net profit of RM13, 547,120 million from the previous financial year. This resulted in improvement of earnings per share from 6.8 sen in FYE2010 to 7.2 sen for FYE2011.

BUSINESS REVIEW

Amidst gradual subsidy rationalization causing inflation and the rising cost of living concerns, Kamdar continued to produce strong creditable performance in its retailing business. The growth was contributed by overall better performances of our 28 outlets.

In Kamdar, we believe that customers’ spending will continue to remain positive. Kamdar with its established brand name, merchandise differentiation and middle-income customers’ market focus will maintain if not improve its position within the retail market. We believe that our business will continue to grow in line with the economy.

During the course of 2011, we have closed 2 outlets. One non-performing outlet, Putrajaya and the second, Kotaraya outlet has been closed due to renovation of the complex. In spite of these closures we have managed to increase turnover of the group. We are in the midst of further rationalization exercise and may close more non- performing branches in the coming months. Simultaneously we are on the lookout for new growth areas to open more profitable stores. We have acquired a plot of land in Shah Alam where we intend to develop a large store.

DIVIDEND

The Board of Directors has proposed a first and final single tier dividend of four sen per share equivalent to RM7,919,600. This would result in total dividend payout ratio of 55.4% of the net profit for FYE2011, representing an increase of 100% over last year dividend of two sen only.

ACKNOWLEDGEMENT

On behalf of the Board, I wish to extend my sincere thanks to all our valued customers, suppliers, financier, business associates, Government authorities and shareholders for their continued support, co-operation and confidence in the Group.

I would also like to convey my sincere appreciation and gratitude to my fellow Directors for their invaluable efforts, contributions and guidance throughout the year as well as to record my appreciation to all our employees at all levels for the dedication, commitment and contributions to the Group.

Bipinchandra BalvantraiExecutive Chairman


Corporate Governance StatementCORPORATE GOVERNANCE STATEMENT The Board of Directors (“the Board”) of Kamdar Group (M) Berhad is committed to a corporate culture that emphasises good corporate governance and practices throughout the Company and its subsidiaries (“the Group”). The Group will continue to endeavor to comply with all the key Principles and Best Practices of the Malaysian Code on Corporate Governance (“the Code”) in its effort to observe high standards of transparency, accountability and integrity. The Group believes that good corporate governance will help to realise long-term Shareholders value, whilst taking into account the interest of other stakeholders. The Board is pleased to disclose below, a description of the application of the principles of good governance and the extent to which the Group has complied with the best practices advocated by the Code. BOARD OF DIRECTORS The Company is led and managed by an experienced Board, comprising members with a wide range of experience in relevant fields such as textile and furnishing fabrics, entrepreneurship, economics, marketing, finance, accounting, legal and public service. The Directors bring a broad range of skills, experiences and knowledge required to successfully direct and supervise the Group’s business activities. A brief profile of each Director are set out in the Directors’ Profile of this Annual Report. Board Composition and Balance The Board consists of an Executive Chairman, a Deputy Executive Chairman, a Managing Director (“MD”) and four (4) Independent Non-Executive Directors. The roles of the Executive Chairman of the Board and MD are segregated. The Chairman is primarily responsible for the proper conduct and working of the Board whilst the MD is responsible for the day-to-day running of the business and implementation of Board policies and decisions. The four (4) Independent Non-Executive Directors of the Company are independent of management and free from any business relationship which could materially interfere with the exercise of their judgement. They present a good mix of industry specific knowledge plus broad business and commercial experience. They provide guidance, unbiased, fully balanced and independent views, advice and judgement to many aspects of the Group’s strategy so as to safeguard the interests of minority shareholders and to ensure that the highest standards of conduct and integrity were maintained by the Group. The Board has also appointed Datuk Emam Mohd Haniff bin Emam Mohd Hussain as the Senior Independent Director to whom concerns may be conveyed. Board Responsibilities The Board retains full and effective control of the Group and has developed corporate objectives and position descriptions including the limits to management’s responsibilities, which the Executive Directors are aware and are responsible for meeting. The Board has a formal schedule of matters reserved to itself for decision, which includes the overall Group strategy and direction, investment policy, major capital expenditures, consideration of significant financial matters and review of the financial and operating performance of the Group. The Board understands the principal risks of all aspects of the business that the Group is engaged in recognising that business decisions require the incurrence of risk. To achieve a proper balance between risks incurred and potential returns to shareholders, the Board ensures that there are in place systems that effectively monitor and manage these risks with a view to the long term viability of the Group.


Corporate Governance Statement (Cont’d)

As certain Board functions are delegated to management, the Board ensures management is of the highest calibre and has in place programmes to train and develop management and also provide for the orderly succession of management. The Company has in place a policy to enable the Group to communicate effectively with its shareholders, other stakeholders and the public generally. The policy ensures that it effectively interprets the operations of the Group to the shareholders and accommodates feedback from shareholders, which should be factored into the Group’s business decisions. Supply of Information Prior to Board meetings, an agenda together with the relevant documents and information are distributed to all Directors. The MD and/or other relevant Board members will provide comprehensive explanation of pertinent issues and recommendations by the management. The issues would then be deliberated and discussed thoroughly by the Board prior to decision-making. Apart from the above, the Board members are updated on the Company’s activities and its operations on a regular basis. All Directors have access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities. All Directors have access to the advice and services of the Company Secretary and to obtain independent professional advice, whenever necessary, at the expense of the Company. Board Meetings There were seven (7) Board of Directors’ Meetings held during the financial year ended 31 December 2011. Details of the attendance of the Directors at the Board of Directors’ Meetings are as follows:

Name of Director Attendance (a) Mr. Bipinchandra A/L Balvantrai 7/7 (b) Mr. Hamendra A/L B.M. Kamdar 6/7 (c) Mr. Kamal Kumar Kishorchandra Kamdar 7/7 (d) Datuk Emam Mohd Haniff Bin Emam Mohd Hussain 6/7 (e) Mr. Liang Ah Wah @ Frank Liang (appointed w.e.f. 18.5.2011) 4/4 (f) Mr. Rajesh Kumar A/L Gejinder Nath (appointed w.e.f. 18.5.2011) 4/4 (g) Mr. Ong Liang Beng (appointed w.e.f. 15.9.2011) 2/2

Appointments to the Board A Nomination Committee has been established by the Board comprising exclusively of Independent Non-Executive Directors as follows: 1. Datuk Emam Mohd Haniff Bin Emam Mohd – Chairman (Senior Independent Non-Executive Director) 2. Mr Rajesh Kumar A/L Gejinder Nath – Member (Independent Non-Executive Director) 3. Mr Liang Ah Wah @ Frank Liang – Member (Independent Non-Executive Director).



The Committee is generally responsible to assess: i. the effectiveness of the Board as a whole, the Committees of the Board and the contribution of each

individual Director. ii. the size of the Board and review the mix of skills and experience and other qualities of the Board members

required for the Board to function completely and efficiently. iii. and recommend new nominees for appointment to the Board for the Board’s final decision-making. The Board is entitled to the services of the Company Secretary who would ensure that all appointments are properly made upon obtaining all necessary information from the Directors. The Nomination Committee met once during the financial year ended 31 December 2011. Re-election In accordance with the provisions of the Articles of Association of the Company, one-third (1/3) of the Board of Directors for the time being or if their number is not three (3) or multiples of three (3), then the number nearest to one-third (1/3) shall retire from office at each Annual General Meeting and shall be eligible for re-election. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act 1965. Directors’ Training All the Directors of the Company have attended the Mandatory Accreditation Programme conducted by Bursa Malaysia Training Sdn Bhd within the stipulated timeframe required in the Listing Requirements. As the Continuous Education Programme (CEP) has been repealed by Bursa Malaysia with effect from 01 January 2005, the Board of Directors have adopted a training programme deemed appropriate for the Directors. During the year, the Board Members have attended the directors’ training as detailed below:-

Name of Director Training

attended Reason for non-

compliance (a) Mr. Bipinchandra A/L Balvantrai - Note 1 (b) Mr. Hamendra A/L B.M. Kamdar - Note 1 (c) Mr. Kamal Kumar Kishorchandra Kamdar 1 day Note 2 (d) Datuk Emam Mohd Haniff Bin Emam Mohd Hussain 2 days Note 3 - 6 (e) Mr. Liang Ah Wah @ Frank Liang (appointed w.e.f. 18.5.2011) 2 days Note 7 (f) Mr. Rajesh Kumar A/L Gejinder Nath (appointed w.e.f. 18.5.2011) 2 days Note 7 (g) Mr. Ong Liang Beng (appointed w.e.f. 15.9.2011) - Note 1 Note 1: Had an exceptionally committed schedule for 2011, however, they will continue to undergo further training

from time to time.



Mode of training

Title of training

Number of hours/days spent

Seminar The Global Economy Still Slowing Down? 1 day Note 2 Seminar Sustainability – Taking Corporate Governance A

Step Further ½ day Note 3

Seminar Malaysia Competitive Strength & Resilience ½ day Note 4 Seminar Managing A Competitive Global Business ½ day Note 5 Seminar Sustainability – Taking Corporate Governance A


Seminar Mandatory Accreditation Programme For Directors

For Public Listed Companies 2 days Note 7

Throughout the year, directors also received updates and briefings, particularly on regulatory, industry and legal developments, including information on significant changes in business and procedures instituted to mitigate such risks. Directors’ Remuneration A Remuneration Committee has been established by the Board comprising a majority of Non-Executive Directors as follows: 1. Mr Liang Ah Wah @ Frank Liang – Chairman (Independent Non-Executive Director). 2. Datuk Emam Mohd Haniff bin Emam Mohd Hussain – Member (Senior Independent Non-Executive

Director). 3. Mr Hamendra A/L B.M. Kamdar – Member (Deputy Chairman/ Executive Director) The Remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors of the quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the executive directors. In the case of non-executive directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the non-executive directors concerned. The Remuneration Committee met twice during the financial year ended 31 December 2011 to review the remuneration of the Directors.

Mode of training

Title of training

Number of hours/days spent

Seminar The Global Economy Still Slowing Down? 1 day Note 2 Seminar Sustainability – Taking Corporate Governance A


Seminar Malaysia Competitive Strength & Resilience ½ day Note 4 Seminar Managing A Competitive Global Business ½ day Note 5 Seminar Sustainability – Taking Corporate Governance A


Seminar Mandatory Accreditation Programme For Directors

For Public Listed Companies 2 days Note 7

Throughout the year, directors also received updates and briefings, particularly on regulatory, industry and legal developments, including information on significant changes in business and procedures instituted to mitigate such risks. Directors’ Remuneration A Remuneration Committee has been established by the Board comprising a majority of Non-Executive Directors as follows: 1. Mr Liang Ah Wah @ Frank Liang – Chairman (Independent Non-Executive Director). 2. Datuk Emam Mohd Haniff bin Emam Mohd Hussain – Member (Senior Independent Non-Executive

Director). 3. Mr Hamendra A/L B.M. Kamdar – Member (Deputy Chairman/ Executive Director) The Remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors of the quality required to manage the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the executive directors. In the case of non-executive directors, the level of remuneration shall reflect the experience and level of responsibilities undertaken by the non-executive directors concerned. The Remuneration Committee met twice during the financial year ended 31 December 2011 to review the remuneration of the Directors.

Is The Global Economy Still Slowing Down?Implications On Malaysian Business


Corporate Governance Statement (Cont’d)Details of Directors’ remuneration of the Group for the financial year ended 31 December 2011 are as follows: Executive Directors

(RM) Non-Executive Directors

(RM) Directors’ fees 80,000 186,008 Salaries 2,110,815 - Other emoluments 261,435 14,500 Benefits in Kind 117,311 - Total 2,569,561 200,508 The number of Directors whose remuneration fall into the following bands are as follows:- Range of Remuneration (RM) Executive Non-Executive 50,000 and below - 5 50,0001 – 100,000 1 1 100,001 – 150,000 - - 150,001 – 200,000 - - 200,001 – 250,000 3 - 250,001 – 300,000 - - 300,001 – 350,000 - - 350,001 – 400,000 - - 400,001 – 450,000 - - 450,001 – 500,000 - - 500,000 – 550,000 - - 550,000 – 600,000 2 - 600,000 – 650,000 1 - SHAREHOLDERS Dialogue with Investors Recognising the importance of timely dissemination of information to shareholders and other stakeholders, the Board is committed to ensuring that the shareholders and other stakeholders are well informed of major developments of the Company and the information is communicated to them through the following: (i) the Annual Report; (ii) the various disclosures and announcements made to Bursa Malaysia Securities Berhad including the

Quarterly Results and Annual Results; and (iii) the website at www.kamdar.com.my which shareholders as well as members of the public are invited to

access for the latest information on the Group. General Meetings The Company’s Annual General Meeting (“AGM”) serves as a principle forum for dialogue with shareholders. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. Extraordinary General Meetings is held as and when required.



ACCOUNTABILITY AND AUDIT Financial Reporting The Directors are responsible to present a true and fair assessment of the Group’s position and prospects in the annual reports and quarterly reports. The quarterly financial results were reviewed by the Audit Committee and approved by the Board of Directors prior to submission to Bursa Malaysia Securities Berhad. A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing section.

Statement of Directors’ Responsibility for Preparing Financial Statements The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended. The Directors are satisfied that in preparing the financial statements of the Group for the year ended 31 December 2011, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis. The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965. Internal Control The Board has an overall responsibility in maintaining a sound internal control system that provides reasonable assurance of effective and efficient operations and compliance with internal procedures and guidelines. The Statement on Internal Control is set out in this Annual Report. Relationship with the Auditors The Board has established a formal and transparent arrangement for maintaining appropriate relationships with the external auditors in seeking professional advice and ensuring compliance with the appropriate accounting standards. The Audit Committee met with the external auditors to discuss their audit plan, audit findings and the financial statements. To this effect, the Audit Committee Chairman met the out-sourced Internal Audit service provider without the presence of Management during the financial year. COMPLIANCE STATEMENT The group has complied with the principles as set out in parts 1 and 2 respectively of the code.


Audit Committee ReportAUDIT COMMITTEE REPORT

AUDIT COMMITTEE 1. COMPOSITION

The Audit Committee was established by the Board on 16 February 2005. The Committee presently comprises the following four (4) members of the Board who are Independent Non-Executive Directors.

Chairman : Mr Ong Liang Beng Independent Non-Executive Members : Datuk Emam Mohd Haniff bin Emam Mohd

Hussain Independent Non-Executive

: Mr Liang Ah Wah @ Frank Liang Independent Non-Executive Mr Rajesh Kumar A/L Gejinder Nath Independent Non-Executive

2. ROLE OF AUDIT COMMITTEE

The Audit Committee assists, supports and implements the Board’s responsibility to oversee the Group’s operations in the following manner :-: - Provides means for review of the Group’s processes for producing financial data, its internal controls

and independence of the Group’s Internal and External Auditors; - Reinforce the independence of the Group’s external auditors; and - Reinforce the independence and objectivity of the Group’s internal auditors.

3. KEY FUNCTIONS AND RESPONSIBILITIES The key functions and responsibilities of the Audit Committee are as follows:

- to consider the nomination of external auditors, the audit fees and any question of resignation or dismissal;

- to oversee all matters pertaining to audit including the review of the audit plan and report; - to review the adequacy of existing external audit arrangements, with particular emphasis on the

scope and quality of the audit; - to discuss problems and reservations arising from the interim and final results, and any matters the

external auditors may wish to discuss (in the absence of management where necessary); - to review the quarterly interim results, half-year, annual financial statements and audit report,

focusing on :

• any changes in accounting and operating policies and practices; • significant adjustment arising from the audit; • adequacy of disclosure of all information in the financial statements essential to a true and fair

representation of the financial affairs of the Company and its subsidiary companies; and • compliance with applicable approved accounting standards and business practices.

:


Audit Committee Report (Cont’d)

- to review any management letter sent by the external auditors to the Company and the management’s response to such letter;

- to discuss with the external auditors their evaluation of the quality and effectiveness of the internal

control and management information systems; - to review the adequacy of the scope, functions, resources and competency of the internal audit

function and that it has the necessary authority to carry out its work; - to review the internal audit programme, processes, the results of the internal audit programme,

processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

- to review and approve the annual audit plan proposed by Internal Auditors; - to review the co-operation or assistance given by the Company’s officers to both external and

internal auditors; - to review all areas of significant financial risk and the arrangements in place to contain those risks

to acceptable levels; - to review all related party transactions and potential conflict of interests situations; and - to consider other matters, act upon the Board of Directors’ request to investigate and report on any

issues or concerns in regard to management of the Group, as defined. 4. ATTENDANCE OF MEETINGS

There were five (5) meetings held during the year 2011. Details of the attendance of the committee members are as follows:

The Audit Committee members were served with meeting agendas and relevant papers which were distributed earlier before the meeting. The Company Secretary is the Secretary to all Audit Committee meetings.

Attendance (a) Datuk Emam Mohd Haniff Bin Emam Mohd Hussain 5/5 (b) Mr. Liang Ah Wah @ Frank Liang

(appointed w.e.f. 18.5.2011) 3/3

(c) Mr. Ong Liang Beng (appointed w.e.f. 15.9.2011)

1/1

(d) Mr. Rajesh Kumar A/L Gejinder Nath (appointed w.e.f. 29.2.2012)

-


Audit Committee Report (Cont’d)

5. SUMMARY OF ACTIVITIES UNDERTAKEN BY THE AUDIT COMMITTEE FOR 2011

During the financial year, the activities of the Committee included:- • Reviewing the quarterly financial result announcements of the Group prior to seeking the Board of

Directors’ approval; • Reviewing the audit strategy and plan of the External Auditors; • Reviewing External Auditors’ reports in relation to audit and accounting issues arising from the

audit, and updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board;

• Reviewing the annual financial statements of the Group and the Company; and • Reviewing the internal audit reports and the recommendations on audit findings.

6. INTERNAL AUDIT FUNCTION

The Group’s internal audit functions are outsourced to, CGRM Infocomm Sdn Bhd, an independent professional consulting firm, which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and internal controls. The Audit Committee approves the internal audit plan tabled during the Audit Committee meeting during the financial year. The scope of internal audit covers the audits on risk management, internal control, governance and compliance activities of the Group. The reviews were carried out in conformance with the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors. The costs incurred for the internal audit function for the financial year 2011 is RM65,204.75. The approach adopted by the Group is of a risk based approach to assess and review the implementation and monitoring of controls of the subsidiary companies. The audit encompasses the following activities:

• Review and assess the risk management and governance structure of the Group. • Review and appraise the soundness, adequacy and application of accounting, financial and other key

controls promoting effective control in the Group. • Ascertain the extent to which the Group’s assets are safeguarded. • Ascertain the level of compliance to the Group policy and procedures. • Recommend improvements to the existing systems of risk management, internal control and

governance.

5. SUMMARY OF ACTIVITIES UNDERTAKEN BY THE AUDIT COMMITTEE FOR 2011

During the financial year, the activities of the Committee included:- • Reviewing the quarterly financial result announcements of the Group prior to seeking the Board of

Directors’ approval; • Reviewing the audit strategy and plan of the External Auditors; • Reviewing External Auditors’ reports in relation to audit and accounting issues arising from the

audit, and updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board;

• Reviewing the annual financial statements of the Group and the Company; and • Reviewing the internal audit reports and the recommendations on audit findings.

6. INTERNAL AUDIT FUNCTION

The Group’s internal audit functions are outsourced to, CGRM Infocomm Sdn Bhd, an independent professional consulting firm, which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and internal controls. The Audit Committee approves the internal audit plan tabled during the Audit Committee meeting during the financial year. The scope of internal audit covers the audits on risk management, internal control, governance and compliance activities of the Group. The reviews were carried out in conformance with the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors. The costs incurred for the internal audit function for the financial year 2011 is RM65,204.75. The approach adopted by the Group is of a risk based approach to assess and review the implementation and monitoring of controls of the subsidiary companies. The audit encompasses the following activities:

• Review and assess the risk management and governance structure of the Group. • Review and appraise the soundness, adequacy and application of accounting, financial and other key

controls promoting effective control in the Group. • Ascertain the extent to which the Group’s assets are safeguarded. • Ascertain the level of compliance to the Group policy and procedures. • Recommend improvements to the existing systems of risk management, internal control and

governance.


Statement Of Internal Control1. Introduction

The Board of Directors of Kamdar Group (M) Berhad (“the Board”) is pleased to present its Internal Control Statement for financial year ended 31 December 2011, which has been prepared pursuant to paragraph 15.26(b) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements and as guided by the Statement on Internal Control: Guidance for Directors of Public Listed Companies. This statement outlines the nature and state of the internal controls of the Group during the financial year. The Malaysian Code on Corporate Governance also requires for the board of a listed company to maintain a sound system of internal control to safeguard shareholders’ investment and the Group’s assets.

2. Responsibility For Risks And Internal Controls

The Board is responsible for the system of internal control within the Group covering the financial, compliance and operational controls of the Group including its subsidiaries. The responsibility for day-to-day operations is delegated to the Executive Directors. The Board also recognizes its responsibility for reviewing the adequacy and integrity of the system of internal control to safeguard shareholders’ investment and the Group’s assets.

The system of internal control is based upon what the Board considers to be appropriate to the Group’s activities, to the materiality of the financial operational and other risks inherent in those activities and to the relative costs and benefits of implementing specific controls. It is designed to manage rather than eliminate the risk of failure to achieve the Group’s strategic objectives and, as such, provides reasonable, but not absolute, assurance against material misstatement or loss.

In accordance with Principal D II in Part 1 and Best Practice AA I in Part 2 of the Malaysian Code on Corporate Governance, the Board has reviewed the effectiveness of the system of internal control and confirms that there is an ongoing process of identifying, evaluating and managing the Group’s risks throughout the reported financial year.

Material associated and joint venture companies had not been dealt with as part of the Group for purposes of applying the above guidance as it has its own systems of internal controls in place. Nevertheless, the Board convenes regular Board and operations meetings with these companies to monitor its investments.

3. Enterprise Risk Management Framework

The Board maintains the Group’s risk management policy and framework to continually update and identify the various factors that could have a potentially significant impact on the Group’s mid to long term business objectives.

The Board is assisted by the Executive Directors in ensuring that there is an on-going and systematic risk management process undertaken by management to identify, assess and evaluate principal risks. The Executive Directors ensure that appropriate risk treatments are in place to mitigate those risks affecting the achievement of the Group’s business objectives.

The Board has regularly reviewed this process. The Board also, throughout the reported financial year, has identified, evaluated and managed the significant risks faced by the Group through monitoring of the Group’s operational efficiency and profitability at its Board Meetings.

4. Internal Audit Function

The Group has outsourced its internal audit function to CGRM Infocomm Sdn Bhd (“CGRM”). CGRM, an independent professional firm, was appointed to support the Audit Committee, and by extension, the Board, by providing an independent assurance on the effectiveness of the Group’s system of internal control.


In particular, CGRM appraises and contributes towards improving the Group’s risk management and control systems

and reports to the Audit Committee on a quarterly basis. In assessing the adequacy and effectiveness of the system of internal control and financial control procedures of the Group, the Audit Committee reports to the Board on its activities, significant audit results or findings and the necessary recommendations or actions needed to be taken by management to rectify those issues.

The internal audit work plan reflects the risk profile of the Group’s major business segments identified by the Executive Directors in their day-to-day business conduct. This plan is reviewed and approved by the Audit Committee. The scope of CGRM’s function covered the audit and review of governance, risk assessment, compliance, operational and financial control across all business units except those of the joint venture and associate companies.

In performing the internal audit reviews, CGRM refers to and is guided by The International Professional Practices Framework (IPPF) that includes the Definition of Internal Auditing, the Code of Ethics and the International Standards for the Professional Practice of Internal Auditing (Standards) issued by The Institute of Internal Auditors.

5. Key Process

The Board confirms that there was an on-going process for identifying, evaluating and managing significant risks of the Group for the financial year under review. The Board has assigned to the Audit Committee the duty of reviewing and monitoring the effectiveness of the Group’s internal control system.

The embedded control system is designed to facilitate achievement of the Group’s business objectives. It comprises the underlying control environment, control process, communication and monitoring systems.

The Group’s key internal control processes were assessed based on the principles of Committee of Sponsoring

Organisation of the Treadway Commission (COSO) Internal Controls – Integrated Framework as follows:

Control Environment• The Group has established clear organization structures with reporting lines of responsibilities clearly indicated

throughout its outlets nationwide. There is adequate upper level managerial support wherein, the Executive Directors are directly and actively involved in business operations.

• Management also made regular visits to its branches and other operating units to obtain first-hand knowledge and to better understand individual branch environment.

Risk Assessment • The Board has been consistent in maintaining its overall responsibility to ensure that systems are in place to

effectively monitor and manage the Group’s business risk and to continually update and identify the various and continuously changing risk factors that could have a potentially significant impact on profitability and long term business objectives.

• Adequate insurance and physical safeguards on major assets are in place to ensure assets of the Group are sufficiently covered and protected.

Control Activities• The documented Group-wide Standard Operating Policies and Procedures on key business processes have been

communicated to all branches and other operating units, where relevant, for implementation. These policies and procedures are subject to regular review and improvement to meet changing business, operational and statutory requirements and needs.

• Procurement and warehousing functions are co-ordinated within the Group to leverage on economies of scale that aim for timely distribution and delivery.

Statement Of Internal Control (Cont’d)


Statement Of Internal Control (Cont’d)

Information and Communication• The Board meets on a quarterly basis and and has a formal agenda on matters for discussion and approval.

Presentation and deliberations of board papers, comprehensive explanation and feedback from the board members are the prerequisites to arriving at a decision.

• The Audit Committee meetings also have been constantly convened on a quarterly basis to ensure that the internal and external audit functions are properly conducted and that audit recommendations are carried out effectively by Management.

• Management promotes good working relationship at all levels by ensuring information and communication channels are open and sinuous with the needs of the organization. Discussions are also frequently done via phone, skype, fax and emails.

• Regular branch operation meetings are held as a formal platform for Branch Managers to communicate operational directives obtained from headquarters and to discuss matters relating to their respective branch’s performances. Where necessary, internal memorandums are issued to all outlets as a form of communicating and enforcement of new directives from Management.

Monitoring• Management, together with internal audit, constantly monitors the gaps and highlighted concerns through the

conduct of follow-up audits and had showed its commitment to improve on current processes and internal controls.• At board level, the Audit Committee reviews internal control issues identified by the internal audit concerning the

Group’s control environment, risks and governance on regular basis.

6. Conclusion

A number of internal control weaknesses were identified during the financial year ended 31 December 2011. The control weaknesses identified have been, or are being, addressed to ensure the integrity of internal controls. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require mention in the Group’s Annual Report. It should be appreciated that the system of internal control only provide reasonable assurance in managing business risks rather than eliminating them and there is no absolute assurance towards material misstatement or loss.

Management will continue to take measures and maintain an on-going commitment to strengthen the Group’s application of policies, processes and activities related to control environment, internal control, governance and risk management.

Pursuant to paragraph 15.23 of Bursa Securities Listing Requirements, the External Auditors have reviewed this Internal Control Statement for the inclusion in the annual report for the year ended 31 December 2011 and reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal controls.

This statement was made in accordance with a resolution of the Board dated 25 April 2012.


Other Disclosure Requirements Pursuant To The Listing Requirements Of Bursa Securities

1. UTILISATION OF PROCEEDS FROM CORPORATE EXERCISE The Company did not undertake any corporate exercise during the financial year, hence no proceeds were raised

therefrom.

2. SHARE BUY-BACKS There were no share buy-back arrangements during the financial year.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES There were no options and warrants exercised in respect of the financial year.

4. DEPOSITORY RECEIPTS PROGRAMME The Company did not sponsor any depository receipts programme during the financial year.

5. IMPOSITION OF SANCTIONS / PENALTIES There were no public imposition of sanctions or penalties imposed on the Company and its subsidiaries, directors or

management by the regulatory bodies during the financial year.

6. NON-AUDIT FEES There was no non-audit fees paid to the external auditors by the Group for the financial year ended 31 December 2011.

7. PROFIT ESTIMATE, FORECAST OR PROJECTION The Company did not undertake any profit estimate, forecast or projection for the financial year. 8. PROFIT GUARANTEE The Company did not give any form of profit guarantee to any parties during the financial year.

9. MATERIAL CONTRACTS AND CONTRACTS RELATING TO LOANS There were no contracts relating to loan and material contracts of the Company and its subsidiaries involving the

Directors and substantial shareholders since the end of the previous financial year. 10. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE The recurrent related party transaction of the Company during the year amounted to RM1,296,000 with details as stated

in Note 32 to the financial statements.

11. REVALUATION POLICY ON LANDED PROPERTIES The Group does not adopt a policy on regular revaluation to its landed properties.

12. CORPORATE SOCIAL RESPONSIBILITY The Group continues to undertake responsible corporate practices and empower our many stakeholders through

impactful corporate social responsibilities initiatives.

During the year, the Group continued to work together with various charitable organizations to raise funds through the Group’s extensive retail network and the Group has donated extensively to the following:

i) Majlis Perbandaran Kuantan;ii) Sambhi Distributors Sdn Bhd; andiii) Persatuan Kebajikan Pendidikan Pelajar Miskin K.K.Sabah.


Directors’ Report

Company No: 577740 A

4

KAMDAR GROUP (M) BERHAD (Incorporated in Malaysia)

DIRECTORS’ REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011. PRINCIPAL ACTIVITIES The principal activity of the Company is investment holding. The principal activities of its subsidiary companies and associate company are disclosed in Note 7 and 8 to the Financial Statements. There have been no significant changes in the nature of these activities of the Company, its subsidiary companies and associate company during the financial year. FINANCIAL RESULTS Group Company RM

RM

Profit for the financial year/Attributable to owner of the parent

14,290,789

11,922,771

DIVIDENDS No dividends have been declared or paid by the Company since the end of the previous financial year. Subsequent to the end of the reporting period, a first and final single tier dividend in respect of the financial year ended 31 December 2011 of 4 cents per share amounting to 7,919,600 will be proposed for shareholders’ approval at the upcoming annual general meeting. This proposed dividend is not reflected in the current year’s financial statements. Such dividend, if approved by the shareholders will be accounted for in shareholders’ equity as appropriation of retained earnings in the financial year ending 31 December 2012. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year except as disclosed in the financial statements.



5

DIRECTORS The Directors in office since the date of the last report are:- Bipinchandra A/L Balvantrai Kamal Kumar Kishorchandra Kamdar Datuk Emam Mohd Haniff bin Emam Mohd Hussain Ong Liang Beng (appointed on 15.9.2011) Hamendra A/L B.M. Kamdar Rajnikant A/L B.M. Kamdar (alternate to Paresh R. Kamdar) (ceased as alternate director on 28.6.2011) Harjeet Singh A/L Sardara Singh (resigned on 18.5.2011) Liang Ah Wah @ Frank Liang (appointed on 18.5.2011) Rajesh Kumar A/L Gejinder Nath (appointed on 18.5.2011) Jayesh R Kamdar A/L Rajnikant (retired on 28.6.2011) Paresh R. Kamdar (resigned on 28.6.2011) Dato’ Dr. Shanmughanathan A/L Vellanthura (retired on 28.6.2011) Chia Lee Hoon (resigned on 18.5.2011) According to the Register of Directors’ shareholdings, the beneficial interests of those who were Directors in office at the end of the financial year in shares, of the Company and its related corporations were as follows:- Ordinary shares of RM1 each Company Direct Interest

At 1.1.2011

Bought

Sold

At 31.12.2011

Bipinchandra A/L Balvantrai 56,278,884 - - 56,278,884 Hamendra A/L B.M. Kamdar 14,704,714 2,125,700 - 16,830,414 Kamal Kumar Kishorchandra Kamdar 24,738,715 1,800,000 - 26,538,715 Deemed Interest Bipinchandra A/L Balvantrai 955,171 - - 955,171 Hamendra A/L B.M. Kamdar 1,868,610 - - 1,868,610 By virtue of the Directors’ interests in the shares of the Company, Directors having interest in the shares of the Company are also deemed interested in the shares of its related corporations to the extent that the Company has an interest under Section 6A of the Companies Act, 1965. No other Directors held any shares or had any interest in shares of the Company and its related corporations during the financial year.

Directors’ Report (Cont’d)



6

DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (except as disclosed in the Notes to the Financial Statements) by reason of a contract made by the Company or related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest. ISSUE OF SHARES AND DEBENTURES During the financial year, the Company did not issue any shares or debentures of the Company. OTHER STATUTORY INFORMATION Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps:- (a) to ascertain that action had been taken in relation to the writing off of bad debts and the

making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate provision had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of

business including their values as shown in the accounting records of the Group and of the Company have been written down to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:- (a) which would render the amounts written off for bad debts or the amount of the provision for

doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the

Group and of the Company misleading; or (c) which have arisen which render adherence to the existing method of valuation of assets or

liabilities of the Group and of the Company misleading or inappropriate; or (d) not otherwise dealt with in this report or the financial statements which would render any

amount stated in the financial statements misleading.




7

OTHER STATUTORY INFORMATION (CONT’D) At the date of this report, there does not exist:- (a) any charge on the assets of the Group and of the Company which have arisen since the end

of the financial year which secure the liability of any other person; or (b) any contingent liability of the Group and of the Company which have arisen since the end of

the financial year. In the opinion of the Directors:- (a) no contingent or other liability has become enforceable or is likely to become enforceable

within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due;

(b) the results of operations of the Group and of the Company during the financial year were not

substantially affected by any item, transaction or event of a material and unusual nature; and (c) there has not arisen in the interval between the end of the financial year and the date of this

report any item, transaction or event of a material and unusual nature likely to affect substantially the results of operations of the Group and of the Company for the current financial year in which this report is made.

SINGNIFICANT EVENT AFTER THE FINANCIAL YEAR The significant event after the financial year is disclosed in Note 38 to the Financial Statements.




8

AUDITORS The Auditors, Messrs SJ Grant Thornton have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors. ...................................................................... ) BIPINCHANDRA A/L BALVANTRAI ) ) ) ) ) ) ) DIRECTORS ) ) ) ) ) ) ............................................…...................... ) KAMAL KUMAR KISHORCHANDRA ) KAMDAR )

Kuala Lumpur 25 April 2012




9


STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 13 to 70 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended. The supplementary information as set out in Note 40, page 71 is prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirement, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

.................................................................... ..................................................................... BIPINCHANDRA A/L BALVANTRAI KAMAL KUMAR KISHORCHANDRA

KAMDAR Kuala Lumpur 25 April 2012

STATUTORY DECLARATION I, Chia Lee Hoon, being the official primarily responsible for the financial management of Kamdar Group (M) Berhad., do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 13 to 71 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by ) the abovenamed at Kuala Lumpur in ) the Federal Territory this day of ) 25 April 2012 ) .............................................................................. CHIA LEE HOON Before me: Commissioner for Oaths


9


STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 13 to 70 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended. The supplementary information as set out in Note 40, page 71 is prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirement, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

.................................................................... ..................................................................... BIPINCHANDRA A/L BALVANTRAI KAMAL KUMAR KISHORCHANDRA

KAMDAR Kuala Lumpur 25 April 2012

STATUTORY DECLARATION I, Chia Lee Hoon, being the official primarily responsible for the financial management of Kamdar Group (M) Berhad., do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 13 to 71 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by ) the abovenamed at Kuala Lumpur in ) the Federal Territory this day of ) 25 April 2012 ) .............................................................................. CHIA LEE HOON Before me: Commissioner for Oaths

Statement by Directors

Statutory Declaration

32 90

32

90

89


Independent Auditors’ Report To The Members Of Kamdar Group (M) Berhad


10

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KAMDAR GROUP (M) BERHAD (Incorporated in Malaysia) Company No: 577740 A

Report on the Financial Statements We have audited the financial statements of Kamdar Group (M) Berhad, which comprise the statements of financial position of the Group and of the Company as at 31 December 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes as enumerated in Note 1 to 39 and set out on pages 13 to 70. Directors’ Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

32 89



11

Company No: 577740 A Report on the Financial Statements (cont’d) Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:- (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the

Company and its subsidiary companies have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiary companies that have been consolidated

with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The auditors’ reports on the financial statements of the subsidiary companies did not contain any

qualification or any adverse comment made under Section 174 (3) of the Act. Other Reporting Responsibilities The supplementary information set out in Note 40 on pages 71 to the Financial Statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matters No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Persuant to Bursa Malaysian Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Independent Auditors’ Report To The Members Of Kamdar Group (M) Berhad (Cont’d)

90



12

Company No: 577740 A Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON JOHN LAU TIANG HUA, DJN (NO. AF: 0737) CHARTERED ACCOUNTANT

CHARTERED ACCOUNTANTS (NO: 1107/03/14(J)) PARTNER Kuala Lumpur 25 April 2012

Independent Auditors’ Report To The Members Of Kamdar Group (M) Berhad (Cont’d)



KAMDAR GROUP (M) BERHAD(Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

Note 2011 2010 2011 2010RM RM RM RM

ASSETSNon-current assetsProperty, plant and equipment 4 143,488,160 149,182,142 - -Investment properties 5 1,496,765 1,515,403 - -Prepaid land lease payments 6 6,362,522 6,439,494 - -Investment in subsidiary companies 7 - - 256,430,002 256,430,002 Investment in associate company 8 490,810 498,865 - -Goodwill 9 373,506 373,506 - -

Total non-current assets 152,211,763 158,009,410 256,430,002 256,430,002

Current assetsInventories 10 108,201,605 99,929,710 - -Trade receivables 11 9,190,434 8,548,905 - -Other receivables 12 4,718,158 4,352,064 9,714 9,708 Amount due from subsidiary companies 13 - - 2,946,799 -Amount due from an associate company 14 75,078 75,078 - -Tax recoverables 400,941 702,359 48,351 29,050 Fixed deposits with licensed banks 15 7,391,377 9,884,742 - -Cash and bank balances 16 13,688,550 14,490,655 621,912 392,275

143,666,143 137,983,513 3,626,776 431,033

Non-current assets held for sale 17 2,216,000 437,953 - -

Total current assets 145,882,143 138,421,466 3,626,776 431,033

TOTAL ASSETS 298,093,906 296,430,876 260,056,778 256,861,035

EQUITY AND LIABILITIESEQUITYEquity attributable to owners of the parent:-

Company Group

Share capital 18 197,990,002 197,990,002 197,990,002 197,990,002 Reserves 19 (2,562,924) (16,858,227) 19,928,334 8,005,563

Total equity 195,427,078 181,131,775 217,918,336 205,995,565

LIABILITIESNon-current liabilitiesLong term borrowings 20 34,347,985 36,731,615 16,900,054 21,201,133 Deferred tax liabilities 21 3,057,675 3,210,707 - -Finance lease liabilities 22 814,913 1,245,886 - -

Total non-current liabilities 38,220,573 41,188,208 16,900,054 21,201,133

Current liabilitiesTrade payables 23 5,423,225 5,202,990 - - Other payables 24 5,163,972 5,649,032 49,121 33,445 Amount due to subsidiary companies 14 - - 20,903,551 21,385,375 Short term borrowings 20 53,289,121 58,039,800 4,285,716 4,285,716 Dividend payables - 3,959,801 - 3,959,801 Finance lease liabilities 22 361,692 370,930 - - Tax payables 208,245 888,340 - -Total current liabilities 64,446,255 74,110,893 25,238,388 29,664,337

TOTAL LIABILITIES 102,666,828 115,299,101 42,138,442 50,865,470

TOTAL EQUITY AND LIABILITIES 298,093,906 296,430,876 260,056,778 256,861,035

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

Statements of Financial Position As At 31 December 2011



Statements of Comprehensive Income for theFinancial Year Ended 31 December 2011


KAMDAR GROUP (M) BERHAD(Incorporated in Malaysia)

STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

Note Company2011 2010 2011 2010RM RM RM RM

Revenue 25 214,729,622 207,727,542 17,741,898 17,167,500

Cost of sales (131,394,068) (127,413,289) - -

Gross profit 83,335,554 80,314,253 17,741,898 17,167,500

Other income 26 4,377,747 2,181,005 595,000 1,235,000

Selling and distribution expenses (6,199,145) (4,624,803) - -

Administration expenses (54,693,266) (53,803,977) (461,263) (388,157)

Other expenses (3,232,944) (924,930) - -

Finance costs 27 (3,137,056) (3,062,121) (1,439,192) (1,544,402)

Share of loss of associate company (8,055) (122,513) - -

Profit before tax 28 20,442,835 19,956,914 16,436,443 16,469,941

Tax expense 29 (6,152,046) (6,406,110) (4,513,672) (4,374,255)

Profit for the financial year 14,290,789 13,550,804 11,922,771 12,095,686

Other comprehensive income, net of tax

Exchange translation differences 4,514 (3,684) - -

Total comprehensive income for the financial year 14,295,303 13,547,120 11,922,771 12,095,686

Profit for the financial year attributable to:-Owners of the parent 14,290,789 13,550,804 11,922,771 12,095,686

Total comprehensive income attributable to:-Owners of the parent 14,295,303 13,547,120 11,922,771 12,095,686

Earnings per share attributable to the owners of the parent (sen)- Basic 30 7.2 6.8

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Statements of Cash Flows for the Financial Year Ended 31 December 2011


KAMDAR GROUP (M) BERHAD

CompanyNote 2011 2010 2011 2010

RM RM RM RM

OPERATING ACTIVITIES Profit before tax 20,442,835 19,956,914 16,436,443 16,469,941

Adjustments for:-Amortisation 76,972 76,970 - -Bad debts written off 1,412,940 9,463 - -

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011

Group

Depreciation on property, plant and equipment 4,447,974 4,835,284 - -Depreciation on investment properties 18,638 18,891 - -Dividend income - - (17,741,898) (17,167,500) Net loss on disposal of property, plant and equipment and prepaid land lease payments 13,329 (338,756) - -Gain on disposal of investment properties - (20,114) - -Gain on disposal of assets held for sale (42,047) (20,114) - -Gain on deconsolidation of subsidiary company (2,286,132) - -Impairment loss on receivables 48,388 101,344 - -Impairment loss on receivables no longer required (17,785) (29,784) - -Interest expense 3,137,056 3,062,121 1,439,192 1,544,402 Interest income (164,756) (110,678) - -Inventories written off - 3,808,667 - -Inventories written down 3,555,145 - - -Property, plant and equipment written off 1,168,730 875,598 - -Share of loss of investment in associate company 8,055 122,513 - -

Operating profit before working capital changes 31,819,342 32,348,319 133,737 846,843

Changes in working capital:- Inventories (11,827,040) (6,051,580) - - Payables (318,736) (2,810,541) 15,676 (1,127,779) Receivables (2,451,166) (402,853) (6) (9,708) Subsidiary companies - - (3,428,623) (5,045,625) Associate company - 638,304 - -

Cash from/(used in) operations 17,222,400 23,721,649 (3,279,216) (5,336,269) Tax refund 167,143 115,130 - - Tax paid (6,850,898) (5,898,841) (97,499) (87,708) Net cash from/(used in) operating activities 10,538,645 17,937,938 (3,376,715) (5,423,977)

INVESTING ACTIVITIES Dividend received - - 13,306,424 12,875,625 Deconsolidation of subsidiary company, net of cash 7 2,339,167 - - - Interest income - 110,678 - -Interest received 164,756 - - - Investment in associate company - (621,378) - - Proceeds from disposal of property, plant and equipment 381,400 - - - and prepaid land lease payments - 1,259,891 - - Proceeds from disposal of investment properties - 182,500 - - Proceeds from disposal of assets held for sale 480,000 182,500 - - Purchase of property, plant and equipment A (2,323,451) (2,673,158) - -

Net cash (used in)/from investing activities 1,041,872 (1,558,967) 13,306,424 12,875,625

-



Statements of Cash Flows for the Financial Year Ended 31 December 2011 (Cont’d)


KAMDAR GROUP (M) BERHAD

CompanyNote 2011 2010 2011 2010

RM RM RM RM

FINANCING ACTIVITIES Repayment to directors - (3,192,409) - (2,902,409) Bankers' acceptances (2,872,000) 9,033,000 - - Drawdown of term loans 5,000,000 2,474,722 - - Dividend paid (3,959,801) - (3,959,801) - Interest paid (3,137,056) (3,062,121) (1,439,192) (1,544,402) Repayment of finance lease liabilities (650,211) (468,337) - - Repayment of term loans (7,785,226) (8,375,147) (4,301,079) (4,286,865)

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011 (CONT'D)

Group

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS

Revolving credits - (4,200,000) - - Trust receipts (16,020) 16,764 - -

Net cash used in financing activities (13,420,314) (7,773,528) (9,700,072) (8,733,676)

CASH AND CASH EQUIVALENTS Net changes (1,839,797) 8,605,443 229,637 (1,282,028) Brought forward 20,800,376 12,194,933 392,275 1,674,303

Carried forward B 18,960,579 20,800,376 621,912 392,275

NOTES TO STATEMENTS OF CASH FLOWS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENTS

B. CASH AND CASH EQUIVALENTS COMPRISE :-

Company2011 2010 2011 2010RM RM RM RM

Fixed deposits with licensed banks (Note 16) 7,391,377 9,884,742 - -Bank overdrafts (2,119,348) (3,580,411) - -Cash and bank balances 13,688,550 14,490,655 621,912 392,275 Effect of exchange rate changes - 5,390 -

18,960,579 20,800,376 621,912 392,275

The Group acquired property, plant and equipment with an aggregate cost of RM2,533,451 (2010: RM3,981,758) of which RM210,000 (2010: RM1,308,000) wereacquired by means of hire purchase. Cash payments of RM2,323,451 (2010: RM2,673,158) were made to purchase the property, plant and equipment.

Group

-


Notes To The Financial Statements-31 December 2011


18


NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur. The principal place of business of the Company is located at 113, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur. The principal activity of the Company is investment holding. The principal activities of its subsidiary companies and associate company are disclosed in Note 7 and 8 to the Financial Statements.

There have been no significant changes in the nature of these activities of the Company, its subsidiary companies and associate company during the financial year. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 25 April 2012.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the Companies Act, 1965 in Malaysia and Financial Reporting Standards issued by the Malaysian Accounting Standards Board (“MASB”). At the beginning of the current financial year, the Group and the Company adopted new and revised FRSs which are mandatory for financial period beginning on or after 1 January 2011 as described fully in Note 2.4.1 to the Financial Statements.

2.2 Basis of Measurement

The financial statements of the Group and of the Company are prepared under the

historical cost convention, unless otherwise indicated in the summary of significant accounting policies.

2.3 Functional and Presentation Currency

The financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional currency and all values are rounded to the nearest RM except when otherwise stated.



19

2. BASIS OF PREPARATION (CONT’D) 2.4 Financial Reporting Standards 2.4.1 Adoption of New or Revised Financial Reporting Standards (“FRSs”)

The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial year except for the following new and revised FRSs and IC Interpretations (“IC Int”): Effective for accounting period beginning on or after 1 March 2010

Amendments to FRS 132 - Financial Instruments: Presentation

Effective for accounting period beginning on or after 1 July 2010

FRS 1 - First-time Adoption of Financial Reporting

Standard (Revised) FRS 3 - Business Combinations (Revised) FRS 127 - Consolidated and Separate Financial Statements

(Revised) Amendments to FRS 2 - Share-based Payment

Amendments to FRS 5 - Non-current Assets Held for Sale and

Discontinued Operations Amendments to FRS 138 - Intangible Assets Amendments to IC Int 9 - Reassessment of Embedded Derivatives IC Int 12 - Service Concession Arrangements

IC Int 16 - Hedges of a Net Investment in a Foreign

Operation IC Int 17 - Distributions of Non-cash Assets to Owners

Improvements to FRSs issued in 2009

Effective for accounting period beginning on or after 30 August 2010 Amendment to IC Int 15 - Agreements for the Construction of Real Estate

Effective for accounting period beginning on or after 1 January 2011

Amendment to FRS 1 - Limited Exemption from Comparative FRS 7

Disclosures for First-time Adopters Amendments to FRS 1 - Additional Exemptions for First-time Adopters

- Accounting policy changes in the year of adoption - Revaluation basis as deemed cost - Use of deemed cost for operations subject to rate regulation

Notes To The Financial Statements-31 December 2011(Cont’d)



20

2. BASIS OF PREPARATION (CONT’D) 2.4 Financial Reporting Standards (cont’d) 2.4.1 Adoption of New or Revised Financial Reporting Standards (“FRSs”) (cont’d)

The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial year except for the following new and revised FRSs and IC Interpretations (“IC Int”) (cont’d): Effective for accounting period beginning on or after 1 January 2011 (cont’d) Amendments to FRS 2 - Group Cash-settled Share-based Payments

Transactions Amendments to FRS 3 - Business Combinations. Measurement of

non-controlling interests and un-replaced and voluntarily replaced share-based payments awards

Amendments to FRS 7 - Financial Instruments: Disclosures.

Improving Disclosures about Financial Instruments - Clarification of disclosures

- Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS

Amendments to FRS 101 - Presentation of Financial Statements.

Clarification of statement of changes in equity Amendments to FRS 121 - The Effect of Changes in Foreign Exchange Rates.

Transition requirements for amendments arising as a result of FRS 127 Consolidated and Separate Financial Statements

Amendments to FRS 128 - Investments in Associates. Transition requirements

for amendments arising as a result of FRS 127 Consolidated and Separate Financial Statements

Amendments to FRS 131 - Interests in Joint Ventures. Transition requirements

for amendment arising as a result of FRS 127 Consolidated and Separate Financial Statements

Amendments to FRS 132 - Financial Instruments: Presentation.

Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS

Amendments to FRS 134 - Interim Financial Reporting. Significant events and

transactions




21

2. BASIS OF PREPARATION (CONT’D) 2.4 Financial Reporting Standards (cont’d) 2.4.1 Adoption of New or Revised Financial Reporting Standards (“FRSs”) (cont’d)

The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial year except for the following new and revised FRSs and IC Interpretations (“IC Int”) (cont’d):

Effective for accounting period beginning on or after 1 January 2011 (cont’d) Amendments to FRS 139 - Financial Instruments: Recognition and

Measurement. Transition requirements for contingent consideration from a business combination that occurred before the effective date of the revised FRS

IC Int 4 - Determining Whether an Arrangement Contains a

Lease Amendments to IC Int 13 - Customer Loyalty Programmes. Fair value of award

credits IC Int 18 * - Transfers of Assets from Customers * During the financial year, MASB approved and issued IC Interpretation 18 -

Transfers of Assets from Customers and requires the interpretation to be applied prospectively to all transfers of assets from customers received on or after 1 January 2011.

Amendment to FRS 2, 131, IC Int 4, 12, 13, 14, 15, 16, 18, 19 and all the Amendment to IC Int are not relevant to the Group’s operations and FRS 3, Amendment to FRS 2, 3, 5, 131, 134, 138, IC Int 4, 12, 13, 14, 15, 16, 18, 19 and all the Amendment to IC Int are not relevant to the Company’s operations.

Initial application the adoption of the above new/revised FRS, amendments to FRS and IC Int did not have any material impact on the financial statements of the Group and of the Company in the period for initial application except for those discussed below:- FRS 127 Consolidated and Separate Financial Statements

The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting treatment when control is lost. Any remaining interest in the entity is remeasured to fair value, and a gain or loss is recognised in profit or loss. Losses are required to be allocated to non-controlling interests, even if it results in the non-controlling interest to be in a deficit position.




22

2. BASIS OF PREPARATION (CONT’D) 2.4 Financial Reporting Standards (cont’d)

2.4.1 Adoption of New or Revised Financial Reporting Standards (“FRSs”) (cont’d)

IC Interpretation 17 Distributions of Non-cash Assets to Owners

This interpretation provides guidance on accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or as dividends. The Company should measure the dividend payable at the fair value of the assets to be distributed when the dividend is appropriately authorised and is no longer at the discretion of the Company. On settlement of the dividend, the difference between the dividend paid and the carrying amount of the assets distributed is recognised in profit or loss. If the dividend remains unpaid at the end of the financial year end, the carrying amounts of dividend payable is reviewed with any changes recognised in equity.

2.4.2 Standards Issued But Not Yet Effective

New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards

To converge with International Financial Reporting Standards (“IFRSs”) in 2012, the MASB had on 19 November 2011, issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRSs”), which are mandatory for annual financial periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate, including its parent, significant investor and venture (“Transitioning Entities”).

Transitioning Entities will be allowed to defer adoption of the new MFRSs for an additional one year. Consequently, adoption of the MFRSs by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013. However, the Group and the Company do not qualify as Transitioning Entities and are therefore required to adopt the MFRSs for the financial period beginning on or after 1 January 2012. The Group and the Company have not early adopted the MFRS Framework. In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained earnings.

The Group and the Company have not completed its quantification of the financial effects of the differences between Financial Reporting Standards (“FRS”) and accounting standards under the MFRS Framework and are in the process of assessing the financial effects of the differences. Accordingly, the consolidated financial performance and financial position as disclosed in these financial statements for the financial year ended 31 December 2011 could be different if prepared under the MFRS Framework.




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2. BASIS OF PREPARATION (CONT’D) 2.4 Financial Reporting Standards (cont’d)

2.4.2 Standards Issued But Not Yet Effective (cont’d)

New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards (cont’d)

The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2012.

2.5 Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company's accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management.

Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.

2.5.1 Estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:- Useful lives of depreciable assets Management estimates the useful lives of the property, plant and equipment to be within 2 to 70 years and reviews the useful lives of depreciable assets at each reporting date. At 31 December 2011, management assesses that the useful lives represent the expected utility of the assets to the Group. The carrying amounts are analysed in Note 4 to the Financial Statements. Actual results, however, may vary due to change in the expected level of usage and technological developments, which may result in an adjustment to the Group’s assets.

Management expects that the expected useful lives of the property, plant and equipment would not have material difference from the management’ estimates hence it would not result in material variance in the Group’s profit for the financial year.




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2. BASIS OF PREPARATION (CONT’D)

2.5 Significant accounting estimates and judgements (cont’d)

2.5.1 Estimation uncertainty Impairment of property, plant and equipment, investment properties and prepaid land lease payments The Group carried out the impairment test based on a variety of estimation including the value-in-use of the cash-generating unit to which the property, plant and equipment, investment properties and prepaid land lease payments are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from cash-generated unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Impairment of goodwill An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the Financial Statements. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the Financial Statements. Inventories Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to economical and technology changes which may cause selling prices to change rapidly, and the Group’s profit to change.


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2.5.1 Estimation uncertainty Impairment of property, plant and equipment, investment properties and prepaid land lease payments The Group carried out the impairment test based on a variety of estimation including the value-in-use of the cash-generating unit to which the property, plant and equipment, investment properties and prepaid land lease payments are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from cash-generated unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

Impairment of goodwill An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the Financial Statements. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the Financial Statements. Inventories Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to economical and technology changes which may cause selling prices to change rapidly, and the Group’s profit to change.




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2.5.1 Estimation uncertainty (cont’d)

Inventories (cont’d) The management review inventories to identify damaged, obsolete and slow-moving inventories which require judgement and changes in such estimate could result in revision to valuation of inventories.

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

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics.

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

Assumptions about generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future production and sales volume, operating costs, capital expenditure, dividends and other capital management transactions. Judgement is also required about application of income tax legislation. These judgements and assumptions are subject to risks and uncertainty; hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets recognised in the statements of financial position and the amount of unrecognised tax losses and unrecognised temporary differences




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2.5.1 Estimation uncertainty (cont’d) Fair value of financial instruments Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. Details of the assumptions used are given in the notes regarding financial assets and liabilities. In applying the valuation techniques, management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

2.5.2 Significant management judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements. Classification between investment properties and owner-occupied properties The Group determine whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by 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 service or for administrative purpose. The Group accounts for the portions separately if the portions if the could be sold separately (or leased out separately under a finance lease). If the portions could not be 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 individuals property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.





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2.5.2 Significant management judgement Deferred tax assets

The assessment of the probability of future taxable income in which deferred tax assets can be utilised is based on the Group's latest approved budget forecast, which is adjusted for significant non-taxable income and expenses and specific limits to the use of any unused tax loss or credit. The tax rules in the numerous jurisdictions in which the Group operates are also carefully taken into consideration. If a positive forecast of taxable income indicates the probable use of a deferred tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that are subject to certain legal or economic limits or uncertainties is assessed individually by management based on the specific facts and circumstances.

3. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are set out below:- 3.1 Basis of consolidation

The consolidated financial statements comprises the financial statements of the

Company and its subsidiary companies as at the reporting date. The financial statements of the subsidiary companies are prepared for the same reporting date as the Company. Acquisition of subsidiary companies are accounted for using the purchase method except for Kamdar (South) Sdn. Bhd., Kamdar Sdn. Bhd., Pusat Membeli-Belah Kamdar Sdn. Bhd., Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd. and Kesar Sdn. Bhd. which are consolidated using merger method of accounting. Under the purchase method of accounting, the results of subsidiary companies acquired are included in the consolidated profit or loss from the date on which the control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued, plus any cost directly attributable to the acquisition (for all acquisition took place before 1 January 2011). All the subsidiary companies within the Group are acquired before 1 January 2011. Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represent goodwill. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

(cont’d)



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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The principal accounting policies adopted are set out below:- 3.1 Basis of consolidation (cont’d)

Under the merger method of accounting, the results of the subsidiary companies are

accounted on a full year basis irrespective of the date of merger. The difference between the nominal value of shares issued as consideration for the merger and the nominal value of the shares received will be adjusted against reserves.

In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gain or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for the like transaction and events in similar circumstances.

3.2 Subsidiary companies Subsidiary companies are entities over which the Group or the Company has the

ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

In the Company’s separate financial statements, investments in subsidiary companies are stated at cost less impairment losses. Where an indication of impairment exists, the carrying amount of the subsidiary company is assessed and written down immediately to its recoverable amount. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is charged or credited to profit or loss.




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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The principal accounting policies adopted are set out below (cont’d):-

3.3 Associate company

An associate company is a company in which the Group or the Company has a long term equity interest of between 20 to 50 percent and is in the position to exercise significant influence over its financial and operating policies through management participation but not to exert control over those policies.

Investment in associate companies are accounted for in the consolidated financial statements using equity accounting which involves recognising in profit or loss the Group’s share of the results of associate company based on audited or management financial statements of the associate company. The Group’s investments in associate company are carried in the statements of financial position at an amount that reflects its share of the net assets of the associate company. Equity accounting is discontinued when the carrying amount of the investment in an associate company reaches zero, unless the Group has incurred obligations or guaranteed obligations in respect of the associate company.

Investment in associate company is stated at cost in the Group’s statement of financial position. Where an indication of impairment exists, the carrying amount of the associate company is assessed and written down immediately to their recoverable amount.

3.4 Property, plant and equipment

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

The policy for the recognition and measurement of impairment loss is in accordance

with Note 3.8 to the Financial Statements. Freehold land is not depreciated. All other property, plant and equipment are

depreciated over their estimated useful lives to write off the cost of each property, plant and equipment. The principal annual rates of depreciation used are as follows:-

Long term/short term leasehold buildings Buildings Plant and machinery Equipment, furniture, fittings and renovation Motor vehicles

over remaining lease period 2%

10% 5% – 50%

10% – 20%




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3.4 Property, plant and equipment (cont’d) Restoration cost relating to an item of property, plant and equipment is capitalised only if such expenditure is expected to increase the future benefits from the existing property, plant and equipment beyond its previously assessed standard of performance. Property, plant and equipment are written down to recoverable amount if, in the opinion of the Directors, it is less than their carrying value. Recoverable amount is the net selling price of the property, plant and equipment i.e. the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

The residual values, useful life and depreciation method are reviewed at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and expected pattern of consumption of future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss.

3.5 Investment properties

Investment properties consist of land and buildings held for capital appreciation or rental purpose and not occupied or only an insignificant portion is occupied for use or in the operations of the Group. Investment properties are treated as long-term investment and are measured initially at cost, including transaction costs less any accumulated depreciation and impairment losses. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property.

Investment properties are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged to the profit or loss on a reducing balance basis over the estimated useful life as below:- Freehold buildings 2% Leasehold buildings Over 99 years

Freehold land with an infinite life is not amortised.




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3.5 Investment properties (cont’d) Investment properties are derecognised when either they are disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the financial year of retirement or disposal. The policy for the recognition and measurement of impairment loss is in accordance with Note 3.8.

3.6 Financial instruments

Financial assets and financial liabilities are recognised when the Group and the Company become a party to the contractual provisions of the financial instrument. Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below.

Financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:- a) loans and receivables; b) financial assets at fair value through profit or loss; c) held to maturity investments; and d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognised in profit or loss or in other comprehensive income. All financial assets except for those at fair value through profit or loss are subject to review for impairment at least once at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below. A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired or when the financial assets and all substantial risks and rewards are transferred.




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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The principal accounting policies adopted are set out below (cont’d):- 3.6 Financial instruments (cont’d)

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

At the reporting date, the Group and the Company have not designated any financial assets at fair value through profit or loss, held to maturity investments and available-for-sale financial assets. The Group and the Company carry only loans and receivables on their statements of financial position.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognitions, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial in subsequent measurement. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company's cash and cash equivalents, amount due from an associate company, amount due from subsidiary company, trade and most other receivables fall into this category of financial instruments. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

Financial liabilities

After the initial recognition, financial liability is classified as financial liability at fair value through profit or loss or other financial liabilities measured at amortised cost using the effective interest method. A financial liability is derecognised when the obligation under the liability is extinguished, discharged, cancelled or expired, or through amortisation process. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amount is recognised in profit or loss.




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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The principal accounting policies adopted are set out below (cont’d):- 3.6 Financial instruments (cont’d) Financial liabilities

At the reporting date, the Group and the Company have not designated any financial liabilities at fair value through profit or loss. The Group and the Company carry only other financial liabilities on their statements of financial position. Other financial liabilities The Group’s and the Company's financial liabilities include borrowings, amount due to subsidiary companies, trade and other payables. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

3.7 Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. Trade and other receivables and other financial assets carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets had been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

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

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




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3.7 Impairment of financial assets (cont’d) Trade and other receivables and other financial assets carried at amortised cost (cont’d) If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

3.8 Impairment of non-financial assets

At each reporting date, the Group and the Company review carrying amounts of its non-financial assets to determine whether there is any indication of impairment. Non-financial assets is tested for impairment at least once annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount is estimated and an impairment loss is recognised whenever the recoverable amount of the asset or a cash-generating unit is less than its carrying amount. Recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

In assessing value in use, estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset. An impairment loss is recognised as an expense in profit or loss immediately, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previously recognised revaluation surplus for the same asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses for an asset may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.




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3.8 Impairment of non-financial assets (cont’d) All reversals of impairment losses are recognised as income immediately in profit or loss unless the asset is carried at revalued amount, in which case the reversal in excess of impairment loss previously recognised through profit or loss is treated as revaluation increase. After such a reversal, depreciation charge is adjusted in future periods to allocate the revised carrying amount of the asset, less any residual value, on a systematic basis over its remaining useful life.

3.9 Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount is

recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the carrying amounts of the assets

are measured in accordance with the applicable FRSs. Upon classification as held for sale, non-current assets are measured at the lower of carrying amount and fair value less costs to sell and is not depreciated. Any differences are recognised in profit or loss.

3.10 Goodwill

Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary company at the date of acquisition. Goodwill arising on the acquisition of subsidiary companies is presented separately in the statements of financial position.

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying values may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination. A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated are tested for impairment annually and, whenever there is an indication that the unit may be impaired, by comparing the carrying amount of the unit, including goodwill, with the recoverable amount of the unit. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognised.




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3.10 Goodwill (cont’d)

An impairment loss recognised for goodwill should not be reversed in subsequent period. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operations within that unit is disposed off, the goodwill associated with the operations disposed off is included in the carrying amount of the operations when determining the gain or loss on disposal of the operations. Goodwill disposed off in these circumstances are measured based on the relative values of the operations disposed off and portion of the cash-generating unit retained.

3.11 Inventories

Inventories, which consist of textile and textile based products, are stated at the lower of cost and net realisable value after adequate specific allowance has been made by Directors for deteriorated, obsolete and slow-moving inventories. The cost of inventories comprises the original cost of purchase price and incidental costs incurred in bringing the inventories to their present location and condition. Cost is generally determined on a first-in-first-out basis.

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

3.12 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, bank balances, short term demand deposits, bank overdrafts, fixed deposits with licensed banks and highly liquid investments which are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown in current liabilities in the statements of financial position. For the purpose of the financial position, cash and cash equivalents restricted to be used to settle a liability of 12 months or more after the reporting date is classified as non-current assets.




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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The principal accounting policies adopted are set out below (cont’d):- 3.13 Equity, reserves and dividend payments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Any transaction cases associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. Foreign currency translation difference arising on the translation of the Group’s foreign entities are included in the exchange translation reserve. Retained earnings include all current and prior period retained earnings.

Final dividends proposed by the Directors are not accounted for in shareholders’ equity as an appropriation of retained earnings, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability. Interim dividends are simultaneously proposed and declared, because the articles of association of the Company grant the Directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared. The distribution of non-cash assets to owners is recognised as dividend payable when the dividend was approved by shareholders. The dividend payable is measured at the fair value of the shares to be distributed. At the end of the financial year and on the settlement date, the Group reviews the carrying amount of the dividend payable recognised in equity. When the Group settles the dividend payable, the difference between the carrying amount of the dividend distributed and the carrying amount of the dividend payables is recognised as a separate line item in profit or loss. All transactions with owners of the parent are recorded separately within equity.

3.14 Provisions

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.




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3.14 Provisions (cont’d) Any reimbursement that the Group and the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of the time of money is material, provision are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.15 Assets acquired under lease agreements

Finance leases

Lease of property, plant and equipment acquired under finance lease arrangements which transfer substantially all the risks and rewards of ownership to the Group are capitalised. The depreciation policy on these assets is similar to that of the Group’s property, plant and equipment depreciation policy.

Outstanding obligation due under finance lease arrangements after deducting finance expenses are included as liabilities in the financial statements. Finance charges on finance lease arrangements are allocated to profit or loss over the period of the respective agreements.

Prepaid land lease payments Leasehold land that normally has an indefinite economic life and where the lease does not transfer substantially all the risk and rewards incidental to ownership is treated as an operating lease. The payment made on entering into or acquiring the leasehold land is accounted as prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided except for leasehold land that would otherwise meet the definition of an investment property.

3.16 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.




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3.16 Borrowing costs (cont’d) Other borrowing costs are expensed in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

3.17 Revenue recognition Revenue is recognised when it is probable that the economic benefits associated

with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable.

(i) Sale of goods

Revenue relating to sale of goods is recognised net of sales returns and discounts upon the transfer of risks and rewards.

(ii) Rental income

Revenue from property investment is recognised based on rental received and receivable from letting of properties.

(iii) Interest income

Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.

(iv) Dividend income

Dividend income is recognised when the right to receive payment has been established and no significant uncertainty existed with regard to its receipt.

3.18 Foreign currency conversion and translation

The consolidated financial statements are presented in Malaysia Ringgit, which is also the functional currency of the parent company. Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items at year-end exchange rates, whether realised or unrealised, are recognised in profit or loss except for exchange differences arising from monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity.




40


The principal accounting policies adopted are set out below (cont’d):- 3.18 Foreign currency conversion and translation (cont’d)

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction (not retranslated). Non-monetary items measured at fair value are translated using the exchange rates at the date when fair value was determined. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profits or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the RM (the Group’s presentation currency) are translated into RM upon consolidation. The functional currency of the entities in the Group have remained unchanged during the reporting period.

On consolidation, assets and liabilities have been translated into RM at the closing rate at the reporting date. Income and expenses have been translated into the Group’s presentation currency at the average rate over the reporting period. Exchange differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. Goodwill and fair value adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated into RM at the closing rate.

On disposal of a foreign operation which resulted a loss of control, the cumulative

translation differences recognised in equity (the exchange translation reserve) are reclassified to profit or loss and recognised as part of the gain or loss on disposal. On partial disposal of a foreign operation, the proportionate share of the cumulative translation differences recognised in equity shall be re-attributed to the non-controlling interests in that foreign operation.

3.19 Income tax

Current tax

Current tax expense is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted or substantively enacted by the reporting date. Current tax for current and prior periods is recognised in financial position as liability (or asset) to the extent that it is unpaid (or refundable). Current tax is recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.




41



3.19 Income tax (cont’d)

Deferred tax

Deferred tax liabilities and assets are provided for under the liability method in respect of all temporary differences at the reporting date between the carrying amount of an asset or liability in the financial position and its tax base including unused tax losses and capital allowances.

Deferred tax liabilities are recognised for all temporary differences, except:- - where the deferred tax liability arises from the initial recognition of goodwill or

of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investment in

subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

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

- in respect of deductible temporary differences associated with investments in

subsidiaries and associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

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




42



3.19 Income tax (cont’d)

Deferred tax Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

3.20 Employee benefits

(i) Short term employee benefits

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

(ii) Defined contribution plan

Defined contribution plans are post-employment benefit plans under which

the Group and the Company pay fixed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years.

Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”). Foreign subsidiary company is also make contribution to its country’s statutory pension scheme.




43

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) The principal accounting policies adopted are set out below (cont’d):-

3.21 Segment reporting Operating segments are reported in a manner consistent with the internal reporting

provided to the Board of Directors. The Board of Directors, who are responsible for allocating resources and assessing performance of the operating segments, has been identified to make strategic decisions. Additional disclosures on each of these segments are shown in Note 33.

3.22 Contingencies A contingent liability is a possible obligation that arises from past events and whose

existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group and of the Company. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow or economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a chance in the probability of an outflow occurs such that outflow is probable and can be measured reliably, they will then be recognised as a provision.



Not

es T

o Th

e Fi

nanc

ial S

tate

men

ts-3

1 D

ecem

ber 2

011

(Con

t’d)

4.

PR

OPE

RT

Y, P

LA

NT

AN

D E

QU

IPM

EN

T

Gro

up

Fr

eeho

ld la

nd

Fr

eeho

ld

build

ings

Long

term

le

aseh

old

build

ings

Shor

t ter

m

leas

ehol

d bu

ildin

gs

Pl

ant a

nd

mac

hine

ry

M

otor

veh

icle

s

Equi

pmen

t, fu

rnitu

re, f

ittin

gs

and

reno

vatio

n

To

tal

R

M

RM

R

M

RM

R

M

RM

R

M

RM

C

ost

A

t 1 J

anua

ry 2

010

51,4

21,7

85

78,8

23,5

63

12,2

04,2

44

5,80

1,82

3 2,

343,

604

4,97

5,39

7 33

,505

,644

18

9,07

6,06

0 A

dditi

ons

-

- -

- 18

2,87

7 1,

828,

342

1,97

0,53

9 3,

981,

758

Dis

posa

ls

(236

,679

) -

- -

(62,

000)

(1

,577

,259

) (2

16,7

97)

(2,0

92,7

35)

Writ

ten

off

- -

- -

(173

,774

) (2

7,45

7)

(1,2

56,8

28)

(1,4

58,0

59)

Rec

lass

ified

as

held

for s

ale

- (5

63,2

50)

- -

- -

- (5

63,2

50)

Exch

ange

diff

eren

ce

- -

- -

- (6

04)

(12,

521)

(1

3,12

5)

A

t 31

Dec

embe

r 201

0 51

,185

,106

78

,260

,313

12

,204

,244

5,

801,

823

2,29

0,70

7 5,

198,

419

33,9

90,0

37

188,

930,

649

Add

ition

s

- -

- -

333,

654

482,

357

1,71

7,44

0 2,

533,

451

Dis

posa

ls

- -

- -

- (6

31,0

54)

(6,2

40)

(637

,294

) W

ritte

n of

f -

- -

- (1

,018

,746

) (5

50)

(1,4

43,2

11)

(2,4

62,5

07)

Rec

lass

ified

as

held

for s

ale

(1,7

66,0

00)

(500

,000

) -

- -

- -

(2,2

66,0

00)

A

t 31

Dec

embe

r 201

1 49

,419

,106

77

,760

,313

12

,204

,244

5,

801,

823

1,60

5,61

5 5,

049,

172

34,2

58,0

26

186,

098,

299

A

ccum

ulat

ed d

epre

ciat

ion

At 1

Jan

uary

201

0 -

12,5

00,4

22

967,

752

1,39

2,43

4 1,

240,

130

2,84

2,56

5 17

,849

,783

36

,793

,086

C

harg

e fo

r the

fina

ncia

l yea

r -

1,80

8,94

7 17

1,86

7 11

6,03

9 13

8,09

7 63

5,88

3 1,

964,

451

4,83

5,28

4 D

ispo

sals

-

- -

- (5

8,37

8)

(983

,782

) (1

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40)

(1,1

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00)

Writ

ten

off

- -

- -

(101

,099

) (5

,263

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(582

,461

) R

ecla

ssifi

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ld fo

r sal

e -

(125

,297

) -

- -

- -

(125

,297

) Ex

chan

ge d

iffer

ence

-

- -

- -

(24)

(4

81)

(505

)

At 3

1 D

ecem

ber 2

010

- 14

,184

,072

1,

139,

619

1,50

8,47

3 1,

218,

750

2,48

9,37

9 19

,208

,214

39

,748

,507

C

harg

e fo

r the

fina

ncia

l yea

r -

1,79

5,89

9 17

1,82

5 11

6,03

6 96

,776

55

7,15

1 1,

710,

287

4,44

7,97

4 D

ispo

sals

-

- -

- -

(241

,114

) (1

,451

) (2

42,5

65)

Writ

ten

off

- -

- -

(537

,468

) (1

54)

(756

,155

) (1

,293

,777

) R

ecla

ssifi

ed a

s he

ld fo

r sal

e -

(50,

000)

-

- -

- -

(50,

000)

At 3

1 D

ecem

ber 2

011

- 15

,929

,971

1,

311,

444

1,62

4,50

9 77

8,05

8 2,

805,

262

20,1

60,8

95

42,6

10,1

39

N

et c

arry

ing

amou

nt

31 D

ecem

ber 2

011

49,4

19,1

06

61,8

30,3

42

10,8

92,8

00

4,17

7,31

4 82

7,55

7 2,

243,

910

14,0

97,1

31

143,

488,

160

31

Dec

embe

r 201

0 51

,185

,106

64

,076

,241

11

,064

,625

4,

293,

350

1,07

1,95

7 2,

709,

040

14,7

81,8

23

149,

182,

142



45

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

(i) Net carrying amount of certain land and buildings of the subsidiary companies amounting to RM84,692,136 (2010: RM85,649,752) are charged to licensed banks as security for banking facilities granted to the subsidiary companies.

(ii) The strata title deeds of land and building of a subsidiary company costing

RM14,739,111 (2010: RM14,739,111) are yet to be issued by relevant authorities.

(iii) Assets held under finance lease Group 2011 2010 RM RM Details of assets under finance lease are:- Motor vehicles - additions during the financial year 236,729 1,702,702 - net carrying amount at 31 December 1,393,700 1,876,822

5. INVESTMENT PROPERTIES

Group

2011 2010 Cost RM RM At beginning of financial year 1,626,556 1,809,868 Disposal - (183,312) At end of financial year 1,626,556 1,626,556 Accumulated depreciation At beginning of financial year 111,153 113,188 Charge for the financial year 18,638 18,891 Disposal - (20,926) At end of financial year 129,791 111,153 Net carrying amount 1,496,765 1,515,403 Analysed as:- Freehold buildings 277,820 283,490 Leasehold buildings 1,218,945 1,231,913

1,496,765

1,515,403

Fair value 2,925,000 2,545,000




46

5. INVESTMENT PROPERTIES (CONT’D)

The following are recognised in profit or loss in respect of investments properties:-

Group 2011 2010 RM RM

Rental income 132,600 133,250 Direct operating expenses 4,523 5,230

The fair value of investment properties, which consist of freehold land and buildings and leasehold building, are estimated by reference made to the information provided by certified independent valuer. Fair value is defined as the estimated amount for which the property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeable, prudently and without compulsion.

6. PREPAID LAND LEASE PAYMENTS

Long term leasehold land with net carrying amount of RM5,787,239 (2010: RM5,855,978) are pledged as securities for borrowings facilities granted to the subsidiary companies.

Group Cost

2011 RM

2010 RM

At beginning/end of financial year 7,056,562 7,056,562 Accumulated amortisation

At beginning of financial year 617,068 540,098 Amortisation charged to profit or loss 76,972 76,970 At end of financial year 694,040 617,068 Net carrying amount

Analysed as:- Long term leasehold land 6,362,522 6,439,494




47

7. INVESTMENT IN SUBSIDIARY COMPANIES

Company 2011

RM 2010

RM Unquoted shares, in Malaysia At cost 256,430,002 256,430,002

A detailed list of subsidiary companies are as follows:-

Name of company

% effective equity interest

Principal activities

Country of incorporation

2011 2010 Kamdar Sdn. Bhd. 100 100 Retail of textile and textile-based products Malaysia Pusat Membeli-Belah Kamdar Sdn. Bhd.

100 100 Retail of textile and textile-based products Malaysia

Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd.

100 100 Retail of textile and textile-based products Malaysia

Kamdar (South) Sdn. Bhd. 100 100 Retail of textile and textile-based products Malaysia Kesar Sdn. Bhd. 100 100 Importers, exporters, retailer and wholesaler

of textile and textile-based products Malaysia

Kamdar Holdings Sdn. Bhd. 100 100 Letting out of properties Malaysia Kamdar Stores Sdn. Bhd. 100 100 Letting out of properties Malaysia Mint Saga (M) Sdn. Bhd. 100 100 Letting out of properties Malaysia Kamdar (B) Sdn. Bhd. 100 100 Dormant Malaysia

Held by Pusat Membeli-Belah Kamdar Sdn. Bhd.

Beauty Gallant Sdn. Bhd. 100 100 Letting out of properties Malaysia Held by Kesar Sdn. Bhd.

Orisea Trade Sdn. Bhd. 100 100 Letting moveable and immovable assets Malaysia Held by Kamdar (B) Sdn. Bhd.

Kamdar (Bru) Sdn. Bhd. * - 70 Dormant Brunei * Company not audited by SJ Grant Thornton

During the financial year, the Group has written off its 70% investment in Kamdar (Bru) Sdn. Bhd., a company incorporated in Brunei Darulsalam that has ceased operations.




48

7. INVESTMENT IN SUBSIDIARY COMPANIES (CONT’D)

The effect of the deconsolidation of Kamdar (Bru) Sdn. Bhd. on the financial position of the Group as at the date of written off was as follows: 2011 RM Trade and other receivables 183,635 Cash and bank balances 53,035 Trade and other payables (2,522,801) Net liabilities (2,286,131) Investment written off (1) (2,286,132) Less: Cash and bank balances (53,035) Deconsolidation of subsidiary company, net of cash (2,339,167)

8. INVESTMENT IN ASSOCIATE COMPANY

Group 2011

RM 2010

RM Unquoted shares, at cost 715,237 93,859 Addition during the financial year - 621,378 715,237 715,237 Less: Share of post acquisition result (224,427) (216,372)

490,810

498,865

Represented by:- Share of net assets

435,533

444,409




49

8. INVESTMENT IN ASSOCIATE COMPANY (CONT’D)

Summarised financial information of associate company is as follows:-

Revenue 2,149,771 2,194,503 (Loss)/Profit for the financial year (17,900) 48,682

Details of associate company are as follows:-

Held by Kamdar (South) Sdn. Bhd.

Name of company

% effective equity interest

Principal activities

Country of

incorporation 2011 2010

Mayfair Fabrics and Linen

(Proprietary) Limited * 45 45 Retail of textile and textile-

based products South Africa

* Company not audited by SJ Grant Thornton 9. GOODWILL

Group 2011

RM 2010

RM At beginning/end of financial year 373,506 373,506

Goodwill represents the excess of the cost of business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. For purpose of impairment testing, the above goodwill is allocated to the Group’s operation which represents the lowest level within the Group at which the goodwill is monitored for internal management purposes.

2011 2010 RM RM Assets and liabilities Current assets 1,356,585 1,655,180 Non-current assets 337,600 455,263 Total assets 1,694,185 2,110,443 Current liabilities/Total liabilities (882,953) (1,122,868)




50

9. GOODWILL (CONT’D)

The recoverable amount for the goodwill was based on its value in use. Value in use was determined by discounting the future cash flows generated from the continuing operation of business acquired and was based on the following key assumptions:- (i) cash flows were projected based on actual operating results and a five-year business

plan. (ii) revenue was projected to increase by 3% per annum from 2011 onwards. (iii) expenses were projected at annual increase of approximately 2% per annum.

A pre-tax discount rate of 6% was applied in determining the recoverable amount of the unit. The discount rate was estimated based on the Group’s existing rate of borrowing. The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on external and internal sources. A reasonably possible change in a key assumption does not have any significant difference to the recoverable amount.

10. INVENTORIES Group

Inventories consist of textiles and textile-based products for sale.

2011 RM

2010 RM

At cost: Inventories 102,920,397 99,929,710 At net realisable value: 5,281,208 - Inventories 108,201,605 99,929,710

Recognised in profit or loss:- Inventories recognised as cost of sales 180,040,561 177,235,982 Inventories written down 3,555,145 - Inventories written off - 3,808,667




51

11. TRADE RECEIVABLES

Group 2011

RM

2010 RM

Trade receivables 9,362,391 8,688,301 Allowance for impairment Balance brought forward (139,396) (69,794) Recognised (48,388) (99,386) Reversed 15,827 29,784 Balance carried forward (171,957) (139,396) 9,190,434 8,548,905

Trade receivables comprise amounts receivable for sales of goods. Trade receivables are unsecured, non-interest bearing and the normal credit terms granted by the Group to the trade receivables ranges from 30 days to 120 days (2010: 30 days to 120 days).

An allowance of RM171,957 (2010: RM139,396) has been made for estimated irrecoverable amounts from sales of goods. This allowance has been determined by reference to past default experience.

12. OTHER RECEIVABLES

Group Company 2011 2010 2011 2010 RM RM RM RM Non-trade receivables 1,088,823 500,894 - - Deposits 3,114,009 3,076,142 - - Prepayments 515,326 776,986 9,714 9,708 4,718,158 4,354,022 9,714 9,708 Allowance for impairment

Balance brought forward

(1,958)

-

-

-

Recognised - (1,958) - - Reversed 1,958 - - - Balance carried forward

-

(1,958)

-

-

4,718,158 4,352,064 9,714 9,708

13. AMOUNT DUE FROM/TO SUBSIDIARY COMPANIES The amount due from/to subsidiary companies are unsecured, non-interest bearing and

repayable on demand.




52

14. AMOUNT DUE FROM AN ASSOCIATE COMPANY

Group 2011

RM

2010 RM

Amount due from an associate company - trade 75,078 75,078

15. FIXED DEPOSITS WITH LICENSED BANKS Group

Included in the fixed deposits with licensed banks is an amount of RM4,822,746 (2010:RM 4,714,742) which is pledged to licensed banks as security for banking facilities granted to a subsidiary company. The interest rates for fixed deposits with licensed banks of the Group ranged from 1.80% to 3.15% (2010: 1.55% to 2.80%) per annum.

16. CASH AND BANK BALANCES Currency profile of cash and cash equivalents denominated in currencies other than the

Company’s functional currency is as follows:-

Group 2011

RM 2010

RM Brunei Dollar - 50,036

17. NON-CURRENT ASSETS HELD FOR SALE

Group 2011 2010 RM RM At beginning of financial year 437,953 162,386 Transfer from property, plant and equipment 2,216,000 437,953 Disposals (437,953) (162,386) At end of financial year 2,216,000 437,953

On 29 November 2010, a subsidiary company had entered into a sale and purchase agreement to dispose off a freehold building for a total cash consideration of RM480,000. The transaction has been completed as at the reporting date.

During the financial year, a subsidiary company is the negotiation to dispose off two units of freehold land and buildings for a total cash consideration of RM3,500,000.




53

18. SHARE CAPITAL

Group and Company 2011

RM 2010

RM Authorised:- Ordinary shares of RM1 each 500,000,000 shares at beginning/end of financial

year

500,000,000

500,000,000 Issued and fully paid:- Ordinary shares of RM1 each 197,990,002 at beginning/end of financial year 197,990,002 197,990,002

The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company. An ordinary share carries one vote per share without restrictions and rank equally with regard to the Company residual assets.

19. RESERVES

Group Company 2011 2010 2011 2010 RM RM RM RM Share premium 110,000 110,000 - - Merger reserve (176,580,000) (176,580,000) - - Capital reserve 2,290,014 2,290,014 - - Translation reserve - (4,514) - - Total non-distributable

(174,179,986)

(174,184,500)

-

-

Retained earnings

171,617,062

157,326,273

19,928,334

8,005,563

(2,562,924) (16,858,227) 19,928,334 8,005,563

The Company has elected the irrevocable option to disregard Section 108 balance in prior

year. As a result, there is no longer any restriction on the Company to frank the payment of dividend out of its entire retained earnings as at the reporting date under the single tier system.




54

20. BORROWINGS

Short term borrowings Group Company

2011 2010 2011 2010 RM RM RM RM Secured:- Bankers’ acceptance 43,734,000 46,606,000 - - Bank overdrafts 2,119,348 3,580,411 - - Revolving credit 200,000 200,000 - - Term loans 7,194,657 7,596,253 4,285,716 4,285,716 Trust receipts 41,116 57,136 - -

53,289,121

58,039,800

4,285,716

4,285,716

Long term borrowings Secured:- Term loans 34,347,985 36,731,615 16,900,054 21,201,133

Total borrowings Bankers’ acceptance 43,734,000 46,606,000 - - Bank overdrafts 2,119,348 3,580,411 - - Revolving credit 200,000 200,000 - - Term loans 41,542,642 44,327,868 21,185,770 25,486,849 Trust receipts 41,116 57,136 - -

87,637,106 94,771,415

21,185,770

25,486,849

Maturity of borrowings:- Within one year 53,289,121 58,039,800 4,285,716 4,285,716 More than 1 year and less than 5 years

23,071,091

24,726,649

16,900,054

17,142,864

After 5 years 11,276,894 12,004,966 - 4,058,269

87,637,106 94,771,415

21,185,770

25,486,849

The bankers’ acceptance, bank overdrafts, revolving credit and trust receipts of the Group

are secured by:-

(a) fixed charge over certain subsidiary companies’ landed properties; (b) negative pledge over the assets of certain subsidiary companies; (c) a pledge of fixed deposits of a subsidiary company; (d) joint and several guarantees by the Directors; and

(e) corporate guarantee by the Company and its subsidiary company. The secured term loans of the Group are secured by:-

(a) legal charge on certain subsidiary companies’ landed properties; (b) assignment of rental proceeds over the abovementioned properties; (c) joint and several guarantees by the Directors; and (d) corporate guarantee by the Company.

The secured term loan of the Company is secured by legal charge on certain subsidiary companies’ landed properties.

The borrowings bear interest rate ranging from 2.00% to 8.55% (2010: 2.92% to 8.55%) per annum.




55

21. DEFERRED TAX LIABILITIES

Group 2011

RM 2010

RM At beginning of financial year 3,210,707 2,503,707 Recognised in profit or loss (Note 29) (246,032) 641,000 Underprovision in prior financial years (Note 29) 93,000 66,000 At end of financial year 3,057,675 3,210,707

The components of deferred tax liabilities during the financial year are as follows:-

Group 2011

RM 2010

RM

Fair value adjustment in acquisition of subsidiary companies 468,371 635,400 Excess of property, plant and equipment’s carrying amounts over its tax base

2,699,057

2,597,307

Receivables Inventories

- (109,753)

(22,000) -

3,057,675 3,210,707

22. FINANCE LEASE LIABILITIES

Group 2011

RM 2010

RM Payable within 1 year 420,569 474,814 Payable after 1 year but not later than 5 years 886,944 1,357,439 1,307,513 1,832,253 Less: Interest in suspense (130,908) (215,437) 1,176,605 1,616,816 Present value of finance lease liabilities - within 1 year 361,692 370,930 - after 1 year but not later than 5 years 814,913 1,245,886 1,176,605 1,616,816

The effective interest rate during the financial year is 3.80% to 7.07% (2010: 3.80% to 7.07%).




56

23. TRADE PAYABLES

Trade payables are unsecured, non-interest bearing and with normal credit terms granted ranges from 14 days to 120 days (2010: 14 days to 120 days).

24. OTHER PAYABLES

Group Company 2011 2010 2011 2010 RM RM RM RM Non-trade payables 296,808 1,295,391 5,618 13,905 Accruals of expenses 3,781,059 3,879,893 43,503 19,540 Deposits 1,086,105 473,748 - - 5,163,972 5,649,032 49,121 33,445

25. REVENUE

Group Company 2011 2010 2011 2010 RM RM RM RM Sales of goods 214,729,622 207,727,542 - - Dividend income - - 17,741,898 17,167,500 214,729,622 207,727,542 17,741,898 17,167,500

26. OTHER INCOME

Group Company 2011

RM 2010

RM 2011

RM 2010

RM - - - Bad debts recovery 7,220 - - - Gain on deconsolidation

of a subsidiary company

2,286,132

-

-

- Gain on disposal of

property, plant and equipment and prepaid land lease payments

30,060

338,756

-


assets held for sale

42,047

20,114

-


investment properties

-

20,114

-

- Impairment loss on

receivables no longer required

17,785

29,784

-

-

Interest income 164,756 110,678 - - Insurance claim 256,026 82,794 - - Machine collection 2,093 2,299 - -




57

26. OTHER INCOME (CONT’D)

Group Company 2011

RM 2010

RM 2011

RM 2010

RM

Management fee - - 595,000 580,000 Other income 4,972 676,423 - 655,000 Realised gain on foreign exchange

54,159

50,441

-

-

Rental Income 1,472,124 849,602 - - Sundry Income 25,819 - - - Miscellaneous 14,554 - - -

4,377,747 2,181,005 595,000 1,235,000 27. FINANCE COSTS

Group Company 2011

RM 2010

RM 2011

RM 2010

RM Interest expense:- - ICULS - 2,270 - 2,270 - term loans 2,610,644 2,577,918 1,439,192 1,542,132 - bank overdrafts and

revolving credits

395,325

384,302

-

- - finance payable 88,441 59,326 - - - bankers’ acceptance 42,646 38,305 - - 3,137,056 3,062,121 1,439,192 1,544,402

28. PROFIT BEFORE TAX

Profit before tax has been determined after charging/(crediting) amongst other items the following:-

Group Company 2011

RM 2010

RM 2011

RM 2010

RM Amortisation 76,972 76,970 - - Auditors’ remuneration - Company’s auditors - statutory audit 178,800 165,900 25,000 22,000 - others 6,000 6,000 6,000 6,000 -over provided in prior year (3,786) (10,514) - - - other external auditor - 15,345 - - Bad debts written off 1,412,940 9,463 - - Depreciation on property, plant and equipment

4,447,974

4,835,284

-

-




58

28. PROFIT BEFORE TAX (CONT’D)

Profit before tax has been determined after charging/(crediting) amongst other items the following (cont’d):- Group Company

2011 RM

2010 RM

2011 RM

2010 RM

Depreciation on investment properties

18,638

18,891

-

-

Inventories written down 3,555,145 - - - Impairment loss on receivables

48,388

101,344

-

-

Inventories written off - 3,808,667 - - Loss on disposal property, plant and equipment

43,389

-

-

- Rental expenses Rental expenses 8,638,922 8,568,594 - - Property, plant and equipment written off

1,168,730

875,598

-

-

The details of Directors’ remunerations of the Group and of the Company are as follows:- Group Company

2011 RM

2010 RM

2011 RM

2010 RM

(i) Directors of the Group Executive Directors - Salary & Bonus 2,110,815 3,220,157 - - - Fees 80,000 75,000 - - - Contribution to

defined benefit plan

246,935

377,160

-

- - Meeting allowance 14,500 14,000 14,850 14,000 Non Executive Directors

- Fees 186,008 162,000 186,008 162,000 - Meeting allowance 14,500 8,500 14,150 8,500 2,652,758 3,856,817 215,008 184,500

The estimated monetary value of benefits provided to the Directors of the Group during the financial year amounted to RM117,311 (2010: RM112,750).




59

29. TAX EXPENSE

Group Company

2011 RM

2010 RM

2011 RM

2010 RM

Income tax:- Provision for current financial

year

6,296,910

6,364,514

4,505,339

4,380,500

Under/(Over) provision in prior financial years

8,168

(665,404)

8,333

(6,245)

6,305,078 5,699,110 4,513,672 4,374,255

Deferred tax:- Relating to origination and reversal of temporary

differences (Note 21)

(79,003)

641,000

-

- Relating to crystallisation of deferred taxation depreciation of revalued assets (Note 21)

(167,029)

-

-

- Under provision in prior financial years (Note 21)

93,000

66,000

-

-

(153,032) 707,000 - - 6,152,046 6,406,110 4,513,672 4,374,255 A reconciliation of income tax expense applicable to profit before tax at the statutory tax rate to income tax expense at the effective tax rate of the Group and of the Company is as follows:- Group Company

2011 RM

2010 RM

2011 RM

2010 RM

Profit before taxation

20,442,835

19,956,914

16,436,443

16,469,941

Taxation at Malaysian statutory rate of 25%

5,110,709

4,989,229

4,109,111

4,117,485

Tax effect in respect of :- Non-allowable expenses 1,564,332 2,108,249 396,228 426,765 Non-taxable income (457,134) (238,964) - (163,750) Current financial year tax expense

6,217,907

6,858,514

4,505,339

4,380,500

Relating to crystallisation of deferred taxation revalued assets

(167,029)

-

-

- (Over)/under provision of tax in prior financial year

8,168

(665,404)

8,333

(6,245)

Underprovision of deferred tax in prior financial year

93,000

213,000

-

-

6,152,046 6,406,110 4,513,672 4,374,255




60

30. EARNINGS PER SHARE

Group (a) The basic earnings per share has been calculated by dividing profit for the financial

year attributable to ordinary equity holders of the Company of RM14,290,789 (2010: RM13,550,804) to the weighted average number of shares issued during the financial year of 197,990,002 (2010: 197,990,002), excluding treasury shares held by the Company.

(b) There is no diluted earnings per share as the Company does not have any convertible financial instruments as at reporting date.

31. EMPLOYEE BENEFITS EXPENSE

Group 2011 2010 RM RM Salaries, wages and bonus 23,072,348 22,124,017 Contribution to defined contribution plan 2,529,869 2,162,627 Other benefits 2,513,039 1,889,209 28,115,256 26,175,853

32. SIGNIFICANT RELATED PARTY TRANSACTIONS Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Group has a related party relationship with its subsidiary companies (Note 7), associate company (Note 8), Directors and other key management personnel. Related party transactions The following transactions were carried out with related parties:-

2011

RM 2010

RM Group Transactions with company in which a Director, Bipinchandra A/L Balvantrai has interest:-

Rental expenses paid to Kamdar Properties Sdn. Bhd. 1,296,000 1,296,000




61

32. SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)

Related party transactions (cont’d) The following transactions were carried out with related parties (cont’d):-

2011

RM 2010

RM

Company Management fees received/receivable from subsidiary companies

595,000

580,000

17,741,898

17,167,500 Dividend received/receivable from subsidiary companies

The Directors are of the opinion that the above transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties.

Transactions with Key Management Personnel Key Management Personnel Compensation The remuneration of Directors and other members of key management personnel during the financial year are as follows:-

Group

2011 RM

2010 RM

Salaries and other short-term employee benefits 2,405,823 3,479,657 Post-employment benefits:- Defined contribution plan 246,935 377,160

2,652,758

3,856,817

No other members of key management personnel other than the Directors of the Group, having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly.

Company The remuneration of key management personnel is same with the Directors’ remuneration as disclosed in Note 28 to the financial statements. The Company has no other members of key management personnel apart from the Board of Directors.

33. SEGMENTAL REPORTING No segment reporting is prepared as the principal activities of the Group are predominantly

carried out in Malaysia and are engaged in a single business segment of retailing textile and textile based products within the retailing industry.

The Group does not have any revenue from a single external customer which represents

10% or more of the Group’s revenue.




62

34. CAPITAL COMMITMENTS

Group

2011 RM

2010 RM

Capital expenditure Authorised but not contracted for:- - Property, plant and equipment

5,580,000

135,000

35. CONTINGENT LIABILITIES

Company

2011 RM

2010 RM

Unsecured:- Corporate guarantee given to licensed banks for credit facilities granted to the subsidiary companies

131,470,000

120,780,000 36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial risks

The Group is exposed to financial risks arising from their operations and the use of financial instruments. Financial risk management policy is established to ensure that adequate resources are available for the development of the Group’s business whilst managing its credit risk, liquidity risk, foreign currency risk and interest rate risk. The Group operates within clearly defined policies and procedures that are approved by the Board of Directors to ensure the effectiveness of the risk management process. The Group does not actively engage in the trading of financial assets for speculative purpose nor does it write options. The Group and the Company do not apply hedge accounting.

The main areas of financial risks faced by the Group and the policy in respect of the major areas of treasury activity are set out as follows:-

(a) Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. It is the Group’s policy to enter into financial instrument with a diversity of creditworthy counterparties. The Group does not expect to incur material credit losses of its financial assets or other financial instruments. Concentration of credit risk exists when changes in economic, industry and geographical factors similarly affect the group of counterparties whose aggregate credit exposure is significant in relation to the Group’s total credit exposure. The Group’s transactions are entered into with diverse creditworthy counterparties, thereby mitigate any significant concentration of credit risk.




63

36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Financial risks (cont’d)

(a) Credit risk (cont’d) It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedure. The Group does not offer credit terms without the approval of the head of credit control. Following are the areas where the Group are exposed to credit risk:- Receivables

The net carrying amount of receivables is considered a reasonable approximate of fair value. As at reporting date, the maximum exposure to credit risk arising from receivables is limited to the carrying amounts in the statements of financial position. With a credit policy in place to ensure the credit risk is monitored on an ongoing basis, management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses aging analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than credit terms granted are deemed to have higher credit risk, and are monitored individually. Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year. As at 31 December 2011, trade receivables of RM5,263,136 (RM4,918,485) were past but not impaired. These relate to a number of independent customers for whom there is no recent history of default.

The ageing analysis of trade receivables is as follows:-

Allowance for impairment loss Group

Gross

Individually impaired

Collectively impaired

Total

Net

RM RM RM RM RM 2011 Within credit terms 3,927,298 - - - 3,927,298 Past due 1-30 days but not impaired 1,782,447 - - - 1,782,447 Past due 31-120 days but not impaired

2,906,989

-

-

-

2,906,989

Past due more than 120 days but impaired

573,700

-

-

-

573,700

Past due more than 120 days and impaired

171,957

(171,957)

-

(171,957)

-

9,362,391 (171,957) - (171,957) 9,190,434




64

36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D) Financial risks (cont’d)

(a) Credit risk (cont’d)

The ageing analysis of trade receivables is as follows:-

Allowance for impairment loss Group

Gross

Individually impaired

Collectively impaired

Total

Net

RM RM RM RM RM

2010 Within credit terms 3,630,420 - - - 3,630,420 Past due 1-30 days but not impaired 1,272,127 - - - 1,272,127 Past due 31-120 days but not impaired

2,345,127

-

-

-

2,345,127

Past due more than 120 days but impaired

1,301,231

-

-

-

1,301,231

Past due more than 120 days and impaired

139,396

(139,396)

-

(139,396)

-

8,688,301 (139,396) - (139,396) 8,548,905 Financial assets that are neither past due nor impaired and neither past due or impaired are disclosed above. Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty.

Financial guarantee/Corporate guarantee

The maximum exposure to credit risk amounts to RM66,445,057 (RM69,284,566) representing the outstanding banking facilities of the subsidiary companies as at end of the reporting period.

The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiary companies. The Company monitors on an ongoing basis the results of the subsidiary companies and repayments made by the subsidiary companies. As at end of the reporting period, there was no indication that any subsidiary companies would default on repayment.

Cash and cash equivalents

The credit risk for cash and cash equivalents and short term placements is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.




65

36. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

Financial risks (cont’d) (b) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due as a result of shortage of funds.

In managing its exposures to liquidity risk, the Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due. The Group aims at maintaining a balance of sufficient cash and deposits and flexibility in funding by keeping diverse sources of committed and uncommitted credit facilities from various banks.

The liquidity risks arise principally from its payables and borrowings. The summary of the maturity profile based on contractual undiscounted repayment obligations are as below:-

Maturity Current Non-current Group

On demand/ less than

1 year

1 to 2 years

2 to 5 years

More than

5 years

Total contractual cash flows

RM RM RM RM RM 2011 Non-derivative financial liabilities

Secured:- Bank overdrafts 2,119,348 - - - 2,119,348 Bankers’ acceptance 43,734,000 - - - 43,734,000 Term loans 7,519,265 6,388,756 18,549,201 9,464,280 41,921,502 Trust receipt 41,116 - - - 41,116 Revolving credit 200,000 - - - 200,000 Finance lease liabilities 420,569 714,171 172,773 - 1,307,513

Unsecured:- Trade payables 5,423,225 - - - 5,423,225 Other payables 5,163,972 - - - 5,163,972 Total undiscounted financial liabilities

64,621,495

7,102,927

18,721,974

9,464,280

99,910,676




66


Financial risks (cont’d)

(b) Liquidity risk (cont’d)

The summary of the maturity profile based on contractual undiscounted repayment obligations are as below (cont’d):-

Current Non-current Company


1 year

1 to 2 years

2 to 5 years

More than

5 years



Secured:- Term loan 4,376,324 4,377,110 12,779,394 - 21,532,828 Unsecured:- Other payables 49,121 - - - 49,121 Amount due to subsidiary

companies

20,903,551

-

-

-

20,903,551 Total undiscounted financial liabilities

25,328,996

4,377,110

12,779,394

-

42,485,500

Maturity Current Non-current Group


1 year

1 to 2 years

2 to 5 years

More than

5 years



Secured:- Bank overdrafts 3,580,411 - - - 3,580,411 Bankers’ acceptance 46,606,000 - - - 46,606,000 Term loans 8,525,870 7,794,173 19,250,410 13,017,533 48,587,986 Trust receipt 57,136 - - - 57,136 Revolving credit 200,000 - - - 200,000 Finance lease liabilities 474,814 661,260 696,179 - 1,832,253 Unsecured:- Trade payables 5,202,990 - - - 5,202,990 Other payables 5,649,032 - - - 5,649,032 Dividend payables 3,959,801 - - - 3,959,801 Total undiscounted financial liabilities

74,256,054

8,455,433

19,946,589

13,017,533

115,675,609




67



(b) Liquidity risk (cont’d)

The summary of the maturity profile based on contractual undiscounted repayment obligations are as below (cont’d):-

Current Non-current Company


1 year

1 to 2 years

2 to 5 years

More than

5 years



Secured:- Term loan 4,285,716 4,285,716 12,857,148 4,285,716 25,714,296 Unsecured:- Other payables 33,445 - - - 33,445 Dividend payables 3,959,801 - - - 3,959,801 Amount due to subsidiary

companies

21,385,375

-

-

-

21,385,375 Total undiscounted financial liabilities

29,664,337

4,285,716

12,857,148

4,285,716

51,092,917

The above amounts reflect the contractual undiscounted cash flows, which may differ from the carrying values of financial liabilities at the reporting date.

(c) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to foreign currency risk is insignificant as at the financial year end.

(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s investments in fixed rate debt securities and its fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short term receivables and payables are not significantly exposed to interest rate risk.




68



(d) Interest rate risk (cont’d)

Interest rate sensitivity

The Group’s and the Company’s interest rate management objective is to manage the interest expenses consistent with maintaining an acceptable level of exposure to interest rate fluctuation. In order to achieve this objective, the Group and the Company targets a mix of fixed and floating debt based on assessment of its existing exposure and desired interest rate profile. The interest rate profile of the Group’s and of the Company’s significant interest-bearing financial instruments, based on carrying amounts as at end of the reporting date were as follows:-

Group Company 2011 2010 2011 2010 RM RM RM RM

Fixed rate instruments Financial asset -Fixed deposits with licensed

bank

7,391,377

9,884,742

-

- Financial liabilities -Bankers’ acceptance 43,734,000 46,606,000 - - -Trust receipts 41,116 57,136 - - -Finance lease liabilities 1,226,605 1,616,816 - -

45,001,721

48,279,952

-

- Net financial liabilities (37,610,344) (38,395,210) - -


Floating rate instruments Financial liabilities -Bank overdrafts 2,119,348 3,580,411 - - -Revolving credit 200,000 200,000 - - -Term loans 41,542,642 44,327,868 21,185,770 25,486,849

43,861,990

48,108,279

21,185,770

25,486,849 Net financial liabilities 43,861,990 48,108,279 21,185,770 25,486,849

The following table illustrates the sensitivity of profit to a reasonably possible change in interest rates of +/- 50 basis points (“bp”). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.




69



(d) Interest rate risk (cont’d)

Group Company Effect on profit for the year Effect on profit for the year +50 bp -50 bp +50 bp -50 bp RM RM RM RM 31 December 2011 (219,310) 219,310 (105,929) 105,929 31 December 2010 (240,541) 240,541 (127,434) 127,434

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss and do not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.

Fair value of financial instruments The carrying amounts of short term receivables and payable, cash and cash equivalents and short term borrowings approximate their fair value due to the relatively short term nature of these financial instruments and insignificant impact of discounting. It was not practicable to estimate the fair value of the Group’s investment in unquoted shares due to the lack of comparable quoted prices in active market. In addition, it is impracticable to use valuation technique to estimate the fair value reliably as a result of significant variability in the inputs of the valuation technique. The Group does not intend to dispose of these investments in the near future. The fair values of financial assets that are quoted in an active market are determined by reference to their quoted closing bid price at the reporting date.

37. COMPARATIVE INFORMATION

Certain comparative figures in the financial statements have been reclassified on the face of the statements of the financial position and statements of cash flows to conform with the current year presentation due to changes in related companies:-

As reclassified

As previously Reported

RM RM Statement of financial position Non-current assets Fixed deposits with licensed banks - 4,714,742 Current assets Fixed deposits with licensed banks 9,884,742 5,170,000 Statements of cash flows Placement of fixed deposits - 76,011




70

38. SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

Subsequent to the end of the reporting period, a first and final single tier dividend in respect of the financial year ended 31 December 2011 of 4 cents per share amounting to 7,919,600 will be proposed for shareholders’ approval at the upcoming annual general meeting. This proposed dividend is not reflected in the current year’s financial statements. Such dividend, if approved by the shareholders will be accounted for in shareholders’ equity as appropriation of retained profits in the financial year ending 31 December 2012.

39. CAPITAL MANAGEMENT

The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Directors monitor and determine to maintain an optimal gearing ratio that complies with debt covenants and regulatory requirements.

The Group monitors capital using a gearing ratio, which are the total interest bearing borrowings over owners’ equity. The Group’s policy is to keep the gearing ratio below 1. The borrowings include hire purchase creditors, term loan and other loan while owners’ equity refers to the equity attributable to the owners of the parent company.

Group 2011 2010

RM RM Total borrowings

- Finance lease liabilities 1,176,605 1,616,816 - Long term borrowings 34,347,985 36,731,615 - Short term borrowings 53,289,121 58,039,800 88,813,711 96,388,231 Less: Cash and cash equivalents (18,960,579) (16,085,634) 69,853,132 80,302,597 Owners’ equity 195,427,078 181,131,775 Debt-to-equity ratio 0.36 0.44

There were no changes in the Group’s approach to capital management during the year.

Under the requirement of Bursa Malaysia Practice Note No. 17/2010, the Company is required to maintain a consolidated shareholders’ equity equal to or not less than 25% of the issued and paid-up-capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.




71

40. DISCLOSURE OF REALISED AND UNREALISED PROFITS

With the purpose of improving transparency, Bursa Malaysia Securities Berhad has on 25 March 2011, and subsequently on 20 December 2011, issued directives which require all listed corporations to disclose the breakdown of retained earnings or accumulated losses into realised and unrealised on group and company basis in the annual audited financial statements. The breakdown of retained earnings as at the reporting date prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No.1 – Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants are as follows:-


Total retained earnings of the Company and its subsidiaries:-

-Realised 194,558,628 178,558,665 19,928,334 8,005,563

-Unrealised (2,699,050) (2,575,300) - -

191,859,578 175,983,505

19,928,334

8,005,563

Total accumulated losses from associate company

-Realised (224,427) (216,372) - - 191,635,151 175,767,133 19,928,334 8,005,563 Consolidation adjustments (20,018,089) (18,440,860) - - 171,617,062 157,326,273 19,928,334 8,005,563



Group’s Landed Properties

Registered Owner/ Postal Address

Title/Lot No. Brief Description/ Existing Use

Audited NBV as at 31.12.11

Date of acquisition/ * Date of Certificate of Fitness Issued

Land Area

Built up Area

Tenure Approximate Age of Building

RM Sq ft Sq ft

1.

KSB Unit No. B3-7-25A, Taman Puteri (Venice Hill Condominium And Golf Resort) 43200 Cheras, Selangor

Parent Title No: CT 23206, Geran 47895 (formerly CT 23207) and 44134 (formerly CT23209)

Lot No: 4380, 4381 and 4383, Mukim of Ulu Langat, District of Ulu Langat, State of Selangor

Brief Description: Three (3) bedroom apartment

Existing Use: Unoccupied

96,617 27.05.1993 1,327.219

(Parent Lot)

1,538 Freehold 14years

2.

KSB Unit No. B3-10-22B, Taman Puteri (Venice Hill Condominium And Golf Resort) 43200 Cheras, Selangor

Parent Title No: CT23206, Geran 47895 (formerly CT23207) and 44134 (formerly CT23209)

Lot No: 4380, 4381 and 4383, Mukim of Ulu Langat, District of Ulu Langat, State of Selangor

Brief Description: Three (3) bedroom condominium

Existing Use: Unoccupied

90.523 27.05.1993 1,327,219 (Parent Lot)

1,399 Freehold 14years

3.

PMBK No 4-6, Jalan Raja Musa Aziz 30300 Ipoh, Perak

Title No: Geran 22783, 8373 and 22784

Lot No: 1313N, 1314N and 8683U, Town of Ipoh, District of Kinta, State of Perak

Brief Description: 5 ½ storey detached building with a basement floor

Existing Use: Retail and storage purposes

2,955,111 01.03.1991 5,908 36,882 Freehold 29 years

4.

PMBK No. 68 Jalan Langgar, 05460 Alor Setar, Kedah3

Title No: 4(GRN 32748, 5(GRN 32749) and 6(GRN 32750)

Lot No: 4, 5, and 6, Section 19, Mukim of Kota Setar, Daerah Kota Setar, Kedah

Brief Description: Renovated intermediate three (3) adjoining units of three (3) storey terrace shop office with mezzanine floor


1,367,287

05.9.1990 6,000 15,240 Freehold 46 years

5..

PMBK No. 15 and 16 Kompleks Seri Temin, Jalan Ibrahim, 08000 Sungai Petani, Kedah3

Title No: P.N. 370 and 371

Lot No: 20 and 21, and Section 46, Mukim and town of Sungai Petani, Kedah

Brief Description: Two (2) adjoining units of four (4) storey-terrace shop offices

Existing Use: Retail and storage purposes.

1,237,820 *7.08.1986 2,800 11,200 Leasehold 99 years, expiring 4 October 2080

25 years






Land Area

Built up Area


RM Sq ft Sq ft

6.

PMBK 761, 1463 and 1481, Off Jalan Muthu-palaniappa, 14000 Bukit Mertajam, Pulau Pinang

Title No: Geran 26220, H.S. (D) 12064 (previously known as H.S. (D) 227) and H.S.(D) 12078 (previously known as H.S.(D) 245)

Lot No: 761, 1463 and 1481, Section 3, Town of Bukit Mertajam, District of Seberang Perai Tengah, Pulau Pinang

Brief Description: Commercial development land

Existing Use: Rented to two (2) third parties (individuals) for commercial use purposes

378,524 23.06.2000 11,117 Nil Freehold Not applicable

7.

PMBK (Penang) No. 3-12-8 Pangsapuri Pelangi, Lintang Macallum 2, George Town, 10300 Pulau Pinang

Strata Title No: Pajakan Negeri HBM50/M2/12/ 323, Section 11E, George Town, North-East District, Pulau Pinang.

Parent Title No: 12-8, HS(D)258

Lot No: 321 (Previously known as PT No. 282) Seksyen 11E, North- East District, Pulau Pinang.

Brief Description: An intermediate unit two (2) bedroom low medium cost flat

Existing Use: Occupied by company staff for residential use

61,086 08.07.1993 160,312 (Parent lot)

573 Leasehold for 99 years, expiring on 13 October 2091

17 years

8.

PMBK (Penang) No 135, 137, 139, 141, 143, 145 and 147, Persiaran Bunga Raya, Langkawi Mall, Jalan Kelibang 07000 Kuah Langkawi, Kedah

Parent Title No: Grant 6787

Lot No: 1598 Mukim of Kuah District of Langkawi, State of Kedah.

Brief Description: Seven (7) adjoining units of 3-storey terrace shop offices


3,648,898 01.11.1998 8,899 26,697 Freehold 11 years

9.

PMBK (Penang) Premise No.14, Jalan Burma, 10050 Pulau Pinang

Title No: Geran 12418

Lot No: 118, Section 15, Georgetown North-East District, Pulau Pinang

Brief Description: An intermediate five (5) storey commercial building


2,877,376 11.06.1992 7,255 26,571 Freehold 34 years

Group’s Landed Properties (Cont’d)







Land Area

Built up Area


RM Sq ft Sq ft

10. Kesar Flat Unit Nos: a) 3-17-2 and b) 3-17-3 Pangsapuri Pelangi, Lintang Macallum 2, George Town, 10300 Pulau Pinang

Strata Title Nos: Pajakan Negeri HBM 50/M2/17/377 and HBM50/M2/17/376

Lot No: P.T.282 Section 11E Township of Georgetown, North-East District, Pulau Pinang

Brief Description: Two (2) adjacent intermediate units, two (2) bedroom low cost medium cost flats

Existing Use: Rented to third parties for residential use

131,004 *8.10.1994 160,312 (Parent Lot)

573 sq ft per unit

Leasehold for 99 years, expiring 13 October 2091

17 years

11. Kesar

No.10 Jalan Pjs, Bandar Sunway, 41650 Petaling Jaya, Selangor

Title No: 4.5.(0)137518

Lot No: 109, Bandar Sunway, Petaling Jaya, Selangor.

Brief Description: Three(3) Storey Mid Terraced Shop/Office

Existing Use: Rented to Third Parties

1,218,944 23.11.2005

2,605 7,556 Leasehold expiring on 29 May 2099

14 years

12. Kesar Apt unit Nos: a) 98-19-19 and b) 98-19-20, 19th

Floor Sinar Bukit Dumbar, Jalan Faraday, 11600 Pulau Pinang

Parent Title No: Grant 63288

Lot No: 730 as subdivided from the amalgamation of Lot No: 79,80, 81, 85, 87 and part of Lot No: 144, Section 4 Town of Jelutong, North-East District, Pulau Pinang held under Parent Lot Title No: Geran 63288

Brief Description: A corner and its adjacent intermediate unit of three (3) bedroom medium cost apartments (2 units)

Existing Use: For apt unit No:98-19-19, the unit is rented to third party for residential use. For apt unit No:98-19-20, the unit is rented to staff for residential use

277,821 *23.11.1999 119,386 (Parent Lot)

700 sq ft per unit

Freehold 12 years






Land Area

Built up Area


13. BGallant

Gedung Kamdar No.1763, Jalan Muthupalania-ppa14000 Bukit Mertajam, Seberang Prai Tengah, Pulau Pinang

Title No: H.S.(D) 23036 to H.S.(D) 23050, (formerly known as HS(D) 361-365)

Lot No: 1464 to Lot No. 1471 and Lot No. 1474 to 1480, Section 3, Town of Bukit Mertajam, District of Seberang Perai Tengah, Pulau Pinang

Brief Description: Five (5) storey shopping complex complete with sub basement car park

Existing Use: Retail, commercial and storage purposes. Rooftop space of building rented to third party.

5,814,300 23.06.2000 15,716 105,138 Freehold 18 years

14.

BGallant

No. 1 Persiaran PM 2/1 Pusat Bandar, Seri Manjung Seksyen 2, 32000 Seri Manjung, Perak

Title No:

HSD 18502 to HSD 18505

Lot No:

PT 25954 to PT 25957, Mukim Setiawan, Daerah Manjung, Negeri Perak

Brief Description: Five (5) storey shopping complex complete with sub basement car park

Existing Use: Retail, commercial and storage purposes. Rooftop space of building rented to third party.

5,458,932 *22.04.2005 11,000 44,000 Freehold 7 years

15.

BGallant

No. 24-32, Medan Stesen 19/7 Station 18, 31650 Ipoh , Perak

Title No:

Lot No:

221173,221174, 221175, 221176, 221177

Brief Description: Five (5) nos double storey shop office

Existing Use:

2,558,952 *29.07.2008 9,521 17,820 Leasehold for 99 years

3 years








Land Area

Built up Area


RM Sq ft Sq ft

16. Orisea

Factory Premise No. Plot 31, Hilir Sungai Keluang 1, Bayan Lepas Industrial Park (Phase IV), Bayan Lepas, 11900 Pulau Pinang

Title No:

No H.S.(D) 18976 (Previously H.S.(D) 8701)

Lot No: PT 2842 (also known as Lot No: 31, Bayan Lepas, Industrial Park, Phase IV), Mukim 12, District of Barat Daya, Pulau Pinang

Brief Description: Four (4) storey detached factory

Existing Use: Rented to Kesar for industrial use at RM720,000 per annum

4,474,452 *21.11.1997 43,563 72,107 Leasehold for 60 years, expiring on 15 December 2054

15 years

17. KStores No. 113, Jalan Tuanku Abdul Rahman, 50100, Kuala Lumpur

Title No: Geran 5561 & 10270

Lot No: 93 & 94, Section 36, Town of Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan, Kuala Lumpur

Brief Description: 7 ½ storey commercial building erected on two (2) contiguous plots of commercial land.

Existing Use: Rented to KSB for retail use at RM3.6 million per annum

29,021,664 *10.06*2002 9,483

70,110 Freehold 29 years

18.

KStores No. 1 Jln Tun Fatimah, Bachang Utama, 75350 Melaka

HS(D) 51286 PT 5968 HS(D) 51287 PT 5969

Lot 6915 Melaka Tengah Mukim Bachang

Brief Description: 2 storey commercial building .

Existing Use: Rented to Ksouth for retail use at RM0.6 million

4,041,277 *23.09.2006 5,435 18,500 Freehold 5 years

19.

KH No. 429, 431, 433 and 435, Jalan Tuanku Abdul Rahman, 50100, Kuala Lumpur

Title No: Geran 1029, 1030, 43326 (formerly known as Geran 34879), & 43327 (formerly known as Geran 34878) Lot No: 710, 711, 2382 & 2383, Section 41, Town of Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan, Kuala Lumpur

Brief Description: 6 ½ storey commercial building erected on four (4) contiguous plots of commercial land Existing Use: Rented to KSB for retail use at RM1.2 million per annum

6,835,685

*10.06.2002

7,750

53,975

Freehold

13 years







Land Area

Built up Area


RM Sq ft Sq ft 20.

KH No. 171-173, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur

Title No: Geran 29507 Lot No: 148, Section 37, Town of Kuala Lumpur, District of Kuala Lumpur, State of Wilayah Persekutuan, Kuala Lumpur

Brief Description: 7 storey commercial building Existing Use: Rented to KSB for retail use at RM1.2 million per annum

19,268,000

*30.6.2004

4,413

27,655

Freehold

14 years

21.

KH No. 1-888A, 1-888B (1st Floor), 2-888A , 2-888B (2nd Floor), 3-888A and 3-888B (3rd Floor), Kompleks Bukit Jambul, Jalan Rumbia, Off Jalan Dr. Awang, 11900 Pulau Pinang

Title No: Master Titles GM1730, GM349, GM350, GM542, GM543, GM544, GM429 and GM430 Lot No. 1859, 1860, 1861, 4562, 4563, 4564, 624 and 625, in Mukim 13, District of Timur Laut, Pulau Pinang

Brief Description: 6 units of retail space Existing Use: Rented to PMBK (Penang) for retail use at RM960,000 per annum

9,061,913

11.7.2002

1,098,247 (Parent lot)

105,745

Interest-in-perpetuity

14 years

22.

KH No.3 Jln diplomatic 2/2, 62050 Precinct 15, Putrajaya, Wilayah Persekutuan Putrajaya.

Lot No. D3-20 Design Type Tropics

Brief Description : 3 Storey Shop

1,373,000

*22.11.2006

3,507

6.335

Freehold

5 years

23.

KH No.5 Jln diplomatic 2/2, 62050 Precinct 15, Putrajaya, Wilayah Persekutuan Putrajaya.

Lot No. D3-21 Design Type Tropics

Brief Description : 3 Storey Shop

843,000

*22.11.2006

2,357

3,895

Freehold

5 years







Land Area

Built up Area


RM Sq ft Sq ft 24.

KH E52-GA, E44-GB to E53-GB, E44-1A to E53-1A,E44-1B TO E53-1B, TAMAN PRIMA SAUJANA, 43000 Kajang, Selangor

Master Title Geran 30570, Lot 1779, Mukim of Kajang, District of Ulu Langat, State of Selangor

3 Sotrey Building Existing Use: Rented to KSB for retail use at RM240.000 per annum

3,515,893

*25.10.2005

27,222 (Parcel Area)

29,740

Freehold

7 years

25.

MS No.1, Jalan 241, Section 51A, 46100 Petaling Jaya, Selangor Darul Ehsan

Title No: PN 6645 Lot No: 405, Section 32, Town of Petaling Jaya, District of Petaling, State of Selangor

Brief Description: Four (4)-storey office/ industrial building. Existing Use: Rented to KSB for industrial use at RM540,000 per annum

7,064,140

*10.06.2002

41,228

99,076

Leasehold for 99 years, expiring 6 August 2072

31 years


Analysis of Shareholdings as at 30 April 2012

ANALYSIS OF SHAREHOLDINGS AS AT 30 APRIL 2012 Authorized Share Capital : RM500,000,000.00 Issued and Fully Paid-Up Share Capital : RM197,990,002.00 Class of Shares : Ordinary Shares of RM1.00 Each Voting Rights : One Vote Per Ordinary Share No. of Shareholders : 2,859 DISTRIBUTION OF SHAREHOLDINGS AS AT 30 APRIL 2012 Category No. of Shareholders No. of Shares Percentage Less than 100 52 1,632 0.00 100 – 1,000 2,213 563,428 0.29 1,001 – 10,000 394 1,822,600 0.92 10,001 – 100,000 134 4,159,142 2.10 100,001 – less than 5% of issued shares 61 86,321,231 43.60 5% and above of issued shares 5 105,121,969 53.09 Total 2,859 197,990,002 100.00 LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 30 APRIL 2012 Direct Indirect No. Names No. of Shares % No. of Shares % 1. Bipinchandra A/L Balvantrai 56,278,884 28.43 955,171 0.48 (a) 2. Mehta Trupti Ratilal 955,171 0.48 56,278,884 28.43 (b) 3. Kamal Kumar Kishorchandra Kamdar 26,538,715 13.40 - - 4. Hamendra A/L B.M. Kamdar 16,830,414 8.50 1,868,610 0.94 (c) 5. Ila Hemendra Kamdar 1,868,610 0.94 16,830,414 8.50 (d) 6. Rajnikant A/L B.M Kamdar 15,267,401 7.71 955,171 0.48 (e) 7. Baby @ Sudhakumari A/P Amartlal 955,171 0.48 15,267,401 7.71 (f) DIRECTORS’ INTERESTS IN SHARES AS AT 30 APRIL 2012 Direct Indirect No. Names No. of Shares % No. of Shares % 1. Bipinchandra A/L Balvantrai 56,278,884 28.43 955,171 0.48 (a) 2. Kamal Kumar Kishorchandra Kamdar 26,538,715 13.40 - - 3. Hamendra A/L B.M. Kamdar 16,830,414 8.50 1,868,610 0.94 (c) 4. Datuk Emam Mohd Haniff Bin Emam

Mohd Hussain - - - -

5. Liang Ah Wah @ Frank Liang - - - - 6. Rajesh Kumar A/L Gejinder Nath - - - - 7. Ong Liang Beng - - - - Note: (a) Indirect Interest by virtue of his wife’s (Mehta Trupti Ratilal) shareholding in the Company. (b) Indirect Interest by virtue of her husband’s (Bipinchandra A/L Balvantrai) shareholding in the Company. (c) Indirect Interest by virtue of his wife’s (Ila Hemendra Kamdar) shareholding in the Company. (d) Indirect Interest by virtue of her husband’s (Hamendra A/L B.M. Kamdar) shareholding in the Company. (e) Indirect Interest by virtue of his wife’s (Baby @ Sudhakumari A/P Amartlal) shareholding in the Company. (f) Indirect Interest by virtue of her husband’s (Rajnikant A/L B.M Kamdar) shareholding in the Company.


Analysis of Shareholdings as at 30 April 2012 (Cont’d)

LIST OF TOP 30 SHAREHOLDERS/DEPOSITORS AS AT 30 APRIL 2012 Name No. of Shares Held Percentage 1. BIPINCHANDRA A/L BALVANTRAI 37,611,178 19.00 2. BIPINCHANDRA A/L BALVANTRAI 18,667,706 9.43 3. HAMENDRA A/L B.M. KAMDAR 16,830,414 8.50 4. KAMAL KUMAR KISHORCHANDRA KAMDAR 16,745,270 8.46 5. RAJNIKANT A/L B.M KAMDAR 15,267,401 7.71 6. CARTABAN NOMINEES (ASING) SDN BHD

- EXEMPT AN FOR CREDIT AGRICOLE (SUISSE) SA 8,386,600 4.24 7. AMSEC NOMINEES (TEMPATAN) SDN BHD

- KAMAL KUMAR KISHORCHANDRA KAMDAR (9562-3101) 7,913,445 4.00 8. GAUTAM KAMDAR A/L BIPINCHANDRA 7,889,500 3.98 9. ANSUYA A/P SHANTILAL RUPANI 5,922,955 2.99 10. AMSEC NOMINEES (TEMPATAN) SDN BHD

- PRAGNA A/P K M KAMDAR (9964-1101) 5,549,100 2.80 11. AMSEC NOMINEES (ASING) SDN BHD

- ANSUYA A/P SHANTILAL RUPANI (9562-3102) 5,456,500 2.76 12. PATEL VISHAKHA CHANDRAKANT 4,889,714 2.47 13. M.I.T NOMINEES (TEMPATAN) SDN BHD

- PLEDGED SECURITIES ACCOUNT FOR YAP KIM HONG (MI1292-003) 3,886,620 1.96

14. KHEW SIEW KEOW 3,621,072 1.83 15. SHARDA A/P NARAN DASS 3,405,156 1.72 16. PRAGNA A/P K M KAMDAR 2,335,956 1.18 17. AMSEC NOMINEES (TEMPATAN) SDN BHD

- KAMAL KUMAR KISHORCHANDRA KAMDAR (9562-1101) 1,880,000 0.95 18. ILA HEMENDRA KAMDAR 1,868,610 0.94 19. SANGEETA KAUR SIDHU 1,856,900 0.94 20. SAW PAIK PENG 1,468,200 0.74 21. JAIKISHIN A/L SHEWANDAS 1,395,100 0.70 22. SONAL DOMADIA 1,219,656 0.62 23. RHB NOMINEES (TEMPATAN) SDN BHD

- PLEDGED SECURITIES ACCOUNT FOR VIJAY KUMAR A/L MOHINDER LAL DUA 1,159,000 0.59

24. ALPA YASHESH PATEL 1,062,491 0.54 25. CIMSEC NOMINEES (TWMPATAN) SDN BHD

- CIMB BANK FOR NG WAI YUAN (MY0867) 1,011,900 0.51 26. MEHTA TRUPTI RATILAL 955,171 0.48 27. BABY @ SUDHAKUMARI A/P AMARTLAL 955,171 0.48 28. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD

- PLEDGED SECURITIES ACCOUNT FOR INBANAMAY A/P M J ARUMANAYAGAM (8061712) 950,000 0.48

29. M.I.T NOMINEES (TEMPATAN) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR CHEONG MAY YEE (MI1301-003) 833,900 0.42

30. MAYBANK NOMINEES (TEMPATAN) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR YUSOFF BIN MD SHAH 786,700 0.40

Total 181,781,386 91.82

KAMDAR GROUP (M) BERHAD (Company No: 577740 A) (Incorporated in Malaysia)

FORM OF PROXY (Before completing this form please refer to the notes below) I/We _________________________________________ I.C No./Co.No./CDS No.: ___________________________ (Full name in block letters) of _______________________________________________________________________________________________

(Full address) being a member/members of KAMDAR GROUP (M) BERHAD hereby appoint the following person(s):- Name of proxy, NRIC No. & Address No. of shares to be

represented by proxy 1. 2. or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Ninth Annual General Meeting of the Company to be held at Dynasty Hotel Kuala Lumpur, Function Room 2 & 3, Level 4, 218 Jalan Ipoh, 51200 Kuala Lumpur on Friday, 15 June 2012 at 10.00 a.m.. My/our proxy/proxies is/are to vote as indicated below:-

RESOLUTIONS RELATING TO :-

FIRST PROXY SECOND PROXY

For Against For Against

Ordinary Resolution 1 – To approve the payment of a first and final single tier dividend

Ordinary Resolution 2 – To approve Directors’ Fees

Ordinary Resolution 3 – Re-election of Director, Hamendra A/L B.M. Kamdar

Ordinary Resolution 4 – Re-election of Director, Kamal Kumar Kishorchandra Kamdar

Ordinary Resolution 5 – Re-election of Director, Ong Liang Beng

Ordinary Resolution 6 – To re-appoint the retiring auditors, SJ Grant Thornton

Ordinary Resolution 7 – Authority to issue shares

(Please indicate with a “√” or “X” in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy/proxies may vote or abstain from voting at his/her/their discretion). The first named proxy shall be entitled to vote on a show of hands on my/our behalf. Dated this …....….. day of ……….………..…… 2012 …………………………. Signature/Common Seal

Notes 1. For the purpose of determining a member who shall be entitled to attend and vote at the Annual General Meeting, the Company shall be

requesting the Record of Depositors as at 8 June 2012. Only a depositor whose name appears on the Record of Depositors as at 8 June 2012 shall be entitled to attend the said meeting or appoint proxies to attend and vote on his/her stead.

2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint up to two proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(a) & (b) of the Companies Act, 1965 shall not apply.

3. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. A member who is an exempt authorized nominee is entitled to appoint multiple proxies for each omnibus account it holds.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

6. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

No. of ordinary shares held

Tenth

Signature/Common Seal

………………………………………………………………………………………………………………………

Affix Stamp

The Secretary KAMDAR GROUP (M) BERHAD (577740 A) Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur.

………………………………………………………………………………………………………………………

kamdar annualreport2011 (2.1mb)

Documents

banking facilities granted

venice hill condominium

ong liang beng

seberang perai tengah

depository receipts programme

sj grant thornton

jalan sultan ismail

unabsorbed capital allowances