Carton Company

Contents
2 5 5 6 8 12 13 14 20 21 22 25 27 71 74 Enclosed Notice of Twenty-Seventh Annual General Meeting Notice of Dividend Entitlement and Payment Statement Accompanying Notice of Twenty-Seventh Annual General Meeting Corporate Information Profile of Directors Five-year financial highlights Chairmans Statement Corporate Governance Statement Other Compliance Information Audit Committee Report Terms of Reference of the Audit Committee Statement on Internal Control Financial Statements Analysis of Shareholdings List of properties Form of Proxy
Notice of Twenty-Seventh Annual General Meeting
NOTICE IS HEREBY GIVEN that the Twenty-Seventh Annual General Meeting of UNITED KOTAK BERHAD will be held at Mutiara Room, Level 2, The Puteri Pacific Johor Bahru, Jalan Abdullah Ibrahim, 80730 Johor Bahru, Johor on Tuesday, 11 August 2009 at 9.30 a.m. for the following purposes:-
ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 March 2009 together with the Reports of the Directors and Auditors thereon. 2. To approve the payment of a final tax exempt dividend of 3 sen per ordinary share of RM1.00 each for the financial year ended 31 March 2009. 3. To approve the payment of Directors fees totalling RM211,000 for the financial year ended 31 March 2009. 4. To re-elect the following Directors retiring in accordance with the Articles of Association of the Company: (a) Mr Soh Man Tong - Article 99 (b) Mr Ng Poey Tiong - Article 99 (c) Mr Lim Dau Joong - Article 104 5. To re-appoint the retiring Auditors, Messrs KPMG as Auditors and to authorise the Directors to fix their remuneration.
RESOLUTION 1
RESOLUTION 2
RESOLUTION 3
RESOLUTION 4 RESOLUTION 5 RESOLUTION 6
RESOLUTION 7
SPECIAL BUSINESS To consider and, if thought fit, to pass the following Ordinary Resolutions: 6. ORDINARY RESOLUTION Proposed Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 THAT, subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company from time to time and 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 for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.
RESOLUTION 8
7. ORDINARY RESOLUTION Proposed Authority to Issue Shares Pursuant to the Employee Share Option Scheme (ESOS) THAT, pursuant to the Companys ESOS and Bye-Laws approved at the Extraordinary General Meeting held on 18 May 2005, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company at any time and in accordance with the terms and conditions of the Scheme and that the Directors are also empowered to obtain the approval of the listing and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad.
RESOLUTION 9
02
U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009
(Contd)
8. ORDINARY RESOLUTION Proposed Renewal of Shareholders Approval for Share Buy-Back THAT, subject to compliance with the Companies Act, 1965, the Memorandum and Ar ticles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) and all other applicable laws, regulations and guidelines of all relevant governmental and/or regulatory authorities, the Company be and is hereby authorised to allocate an amount not exceeding the total audited share premium and retained profits of the Company for the purpose of and to purchase such amount of ordinary shares of RM1.00 each (Shares) in the Company as may be determined by the Directors of the Company from time to time through the Bursa Securities as the Directors may deem fit in the interest of the Company provided that the aggregate number of shares purchased and/or held pursuant to this resolution does not exceed ten percent (10%) of the total issued and paid-up share capital of the Company. AND THAT upon completion of the purchase by the Company of its own shares, the Directors are authorised to retain the Shares as treasury shares or cancel the Shares or retain part of the Shares so purchased as treasury shares and cancel the remainder. The Directors are further authorised to resell the treasury shares on the Bursa Securities or distribute the Shares as dividends to the Companys shareholders or subsequently cancel the treasury shares or any combination of the three. AND THAT the Directors be and are hereby empowered to carry out the above immediately upon the passing of this resolution and from the date of the passing of this resolution until: i. the conclusion of the next Annual General Meeting of the Company at which time it shall lapse unless by an ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or
ii. the expiration of the period within which the next Annual General Meeting after that is required by law to be held; or iii. revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting; whichever is the earliest but not so as to prejudice the completion of purchase of own shares by the Company before the aforesaid expiry date and to take all steps as are necessary and/or to do all such acts and things as the Directors deem fit, necessary or expedient in the interest of the Company to give full effect to the Proposed Share Buy-Back with full power to assent to any condition, modification, revaluation, variation and/or amendment (if any) as may be imposed or permitted by the relevant RESOLUTION 10 authorities. 9. To transact any other business for which due notice shall have been given.
By Order of the Board
ANG MUI KIOW Secretary Johor Bahru 20 July 2009
UNITED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9
03
(Contd)
NOTES: 1. Form of Proxy i. A member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
ii. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. iii. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. iv. All forms of proxy must be deposited at the Registered Office of the Company situated at Suite 7E, Level 7, Menara Ansar, 65, Jalan Trus, 80000 Johor Bahru, Johor, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. 2. Explanatory Notes on Special Business i. Proposed authority to issue shares pursuant to Section 132D of the Companies Act, 1965 The proposed Resolution No. 8, if passed, will give the Directors of the Company, from the date of the above Annual General Meeting, authority to issue and allot shares from the unissued capital of the Company up to an amount not exceeding in total ten percent (10%) of the issued and paid-up share capital of the Company for such purposes and to such person or persons as the Directors in their absolute discretion consider to be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company. ii. Proposed authority to Issue Shares Pursuant to the Employee Share Option Scheme (ESOS) The proposed Resolution No. 9, if passed, will renew the authority given to the Directors of the Company at the Annual General Meeting held on 28 August 2008 to issue and allot shares in accordance with the terms and conditions of the ESOS. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company. iii. Proposed Renewal of Shareholders Approval for Share Buy-Back The proposed Resolution No. 10, if passed, will empower the Company to purchase and/or hold up to ten percent (10%) of the issued and paid-up share capital of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company. For further information on the Proposed Share Buy-Back, please refer to the Share Buy-Back Statement dated 20 July 2009 accompanying the Companys 2009 Annual Report. 3. 2009 Annual Report The Company issues to the shareholders the 2009 Annual Report in CD-ROM format. The 2009 Annual Report in hard copy form shall be provided to the shareholders within four (4) market days from the date of receipt of the verbal or written request. Shareholders who wish to receive the 2009 Annual Report in hard copy form and who require assistance in viewing the CD-ROM, kindly contact Mr Ong Tiam Hua, (email : thong@ukb.com.my) at Tel. No. 07 - 236 2572. Alternatively, you may fax the duly completed request form for a hard copy of the 2009 Annual Repor t to Fax. No. 07 - 236 2575 or send the duly completed request form to the Companys address at No. 5, Jalan Tahana, Tampoi Industrial Estate, 80350 Johor Bahru, Johor. The 2009 Annual report is available on Bursa Malaysia Securities Berhads website at www.bursamalaysia.com under Company Announcements.
04
Notice of Dividend Entitlement and Payment
Subject to the approval of the shareholders at the Twenty-Seventh Annual General Meeting, a final tax exempt dividend of 3 sen per ordinary share of RM1.00 each for the financial year ended 31 March 2009, will be paid on 9 September 2009 to those registered in the Record of Depositors at the close of business on 18 August 2009. A depositor shall qualify for entitlement to dividend only in respect of: a. Shares transferred into the Depositors Securities Account before 4.00 p.m. on 18 August 2009 in respect of ordinary transfers; and b. Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.
Statement Accompanying Notice of Twenty-Seventh Annual General Meeting

Pursuant to Paragraph 8.28(2) of the Bursa Malaysia Securities Berhad Listing Requirements 1. The Directors standing for re-election at the Twenty-Seventh Annual General Meeting of the Company are: (a) Mr Soh Man Tong - Article 99 (b) Mr Ng Poey Tiong - Article 99 (c) Mr Lim Dau Joong - Article 104 (Resolution 4) (Resolution 5) (Resolution 6)
2. Further details of the above named Directors are set out in the profile of Directors on pages 8, 9 and 11 of the 2009 Annual Report.
UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9
05
Corporate Information
BOARD OF DIRECTORS Soh Man Tong - EXECUTIVE CHAIRMAN Tan Soo Siang - MANAGING DIRECTOR Soh Choon Wai - EXECUTIVE DIRECTOR Ng Poey Tiong - NON-EXECUTIVE DIRECTOR Kek Kok Swee - INDEPENDENT NON-EXECUTIVE DIRECTOR Rithauddin Hussein Jamalatiff Bin Jamaluddin - SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR Lim Dau Joong (Appointed on 1.12.2008) - INDEPENDENT NON-EXECUTIVE DIRECTOR AUDIT COMMITTEE (established on 9 January 2002) Rithauddin Hussein Jamalatiff Bin Jamaluddin (Chairman) Kek Kok Swee Soh Man Tong (Resigned on 1.12.2008) Lim Dau Joong (Appointed on 1.12.2008) NOMINATION COMMITTEE (established on 20 May 2002) Rithauddin Hussein Jamalatiff Bin Jamaluddin (Chairman) Kek Kok Swee Soh Man Tong REMUNERATION COMMITTEE (established on 20 May 2002) Kek Kok Swee (Chairman) Rithauddin Hussein Jamalatiff Bin Jamaluddin Soh Man Tong
COMPANY SECRETARY Ang Mui Kiow (LS 0001886) PRINCIPAL PLACE OF BUSINESS No. 5, Jalan Tahana, Tampoi Industrial Estate 80350 Johor Bahru, Johor Tel : 07-236 2572 Fax : 07-236 2575 E-mail : enquiries@ukb.com.my REGISTERED OFFICE Suite 7E, Level 7, Menara Ansar 65, Jalan Trus 80000 Johor Bahru, Johor Tel : 07-224 1035 Fax : 07-221 0891 REGISTRAR Tenaga Koperat Sdn. Bhd. (Co. No. 118401 V) Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 03-2264 3883 Fax : 03-2282 1886 E-mail : is.enquiry@my.tricorglobal.com
AUDITORS KPMG Chartered Accountants Level 14, Menara Ansar 65, Jalan Trus 80000 Johor Bahru, Johor
06
U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009
Corporate Information
(Contd)
SUBSIDIARY & ASSOCIATE COMPANIES UK Packaging Industries Sdn. Bhd. (Co. No. 258525 W) (Incorporated in Malaysia) No. 4, Jalan S/S 19A Taman Industri Sri Sulong 83020 Batu Pahat, Johor Tel : 07-410 2020 Fax : 07-410 2121 UK Bioproducts Sdn. Bhd. (Co. No. 613761 - K) (Incorporated in Malaysia) No. 5, Jalan Tahana, Tampoi Industrial Estate 80350 Johor Bahru, Johor Tel : 07-236 2572 Fax : 07-236 2575 UKB International Pte. Ltd. (Co. No. 200505006D) (Incorporated in Singapore) 64 Cecil Street #03-02 IOB Building Singapore 049711 Tel : 02-6323 2777 Fax : 02-6323 2555 Richbox Paper Products (M) Sdn. Bhd. (Co. No. 229387 - P) (Incorporated in Malaysia) No. 49, Jalan Perdagangan 16 Taman Universiti Industrial Park 81300 Skudai, Johor Tel : 07-520 6725 Fax : 07-520 6723 UK Wellness Sdn. Bhd. (Co. No. 821850 W) (Incorporated in Malaysia) No. 5, Jalan Tahana, Tampoi Industrial Estate 80350 Johor Bahru, Johor Tel : 07-236 2572 Fax : 07-236 2575 Oriental Coast Sdn. Bhd. (Co. No. 717705 - D) (Incorporated in Malaysia) No. 9, Jalan Kebudayaan 1A Taman Universiti 81300 Skudai, Johor Tel : 07-521 5535 Fax : 07-521 5535
PRINCIPAL BANKERS HSBC Bank Malaysia Berhad, Johor Bahru RHB Bank Berhad, Johor Bahru United Overseas Bank (Malaysia) Berhad, Johor Bahru Hong Leong Bank Berhad, Johor Bahru
DATE OF INCORPORATION 5 December 1981
DATE OF LISTING 18 March 2002
STOCK EXCHANGE LISTING Second Board of Bursa Malaysia Securities Berhad
UNI TED K OTAK B ER HAD ( 7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9
07
Profile of Directors
Mr Soh Man Tong, Malaysian, Aged 57 Executive Chairman, Non-Independent

Mr Soh Man Tong was appointed to the Board since 5 December 1981 and appointed as the Executive Chairman on 21 December 2001. He is also a member of the Remuneration Committee and Nomination Committee. Mr Soh has vast experiences of over 30 years in the corrugated cartons and boards industry. His involvement in the industry started in 1975 when he was employed by a converter in Johor. In 1977, he started his own converting business, known as United Enterprise, with a small capital and operated as a sole proprietorship. Mr Soh subsequently incorporated the Company under the name United Kotak Sdn Bhd in 1981 to take over the business of United Enterprise. With many years of dedication and hard work, he managed to guide the business to become one of the successful corrugated carton box manufacturers in the Southern Region. Mr Soh also sits on the Board of several other private limited companies. He has no directorship in other public companies. Mr Soh, by virtue of his substantial shareholdings (direct and indirect) in the Company as disclosed in page 73, he is deemed to have interest in the ordinary shares held by the Company in its subsidiary companies. Mr Sohs spouse, Madam Soon Pick Lan is a shareholder of the Company and his son. Mr Soh Choon Wai is an Executive Director of the Company. Mr Soh is deemed interested in the transactions entered into by the Company in the ordinary course of business with companies in which he and his close family members have substantial financial interest as disclosed in note 25 to the financial statements. He has not been convicted of any offences within the past ten (10) years.
Mr Tan Soo Siang, Malaysian, Aged 58 Managing Director, Non-Independent

Mr Tan Soo Siang was appointed as the Managing Director of the Company on 1 March 1992. Mr Tan has many years of experience in the corrugated cartons and boards industry. He started off his career with Paper Products (M) Bhd (PPB) for 15 years since 1970s and spent the first 6 years in production planning and the remaining 9 years in the marketing department as a marketing manager. Subsequently, he jointly set up KYM Industries Sdn Bhd, which is a subsidiary of KYM Holdings Berhad and held the post of Managing Director till 1992. He then sold off his shares in KYM Industries Sdn Bhd in 1994 to KYM Holdings Berhad. In 1992, he joined United Kotak Sdn Bhd as the managing director and had since then been actively involved in the management and the operations of the business. Mr Tan also sits on the Board of several other private limited companies. He has no directorship in other public companies. Mr Tans equity interest in the Company is disclosed in page 73 and he does not have any direct equity interest in the Companys subsidiaries. Mr Tan does not have any family relationship with any director or major shareholder of the Company, nor does he have any conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.
08
(Contd)
Mr Soh Choon Wai, Malaysian, Aged 30 Executive Director, Non-Independent

Mr Soh Choon Wai was appointed as the Executive Director on 23 November 2007. Mr Soh holds a double degree in Mechanical and Electronics and Computer Science from the University of Melbourne, Australia. He joined the Company as an Engineer since year 2004 and oversees the engineering aspect of the Companys production operations. He also involved in the setting up of the Companys raw material, production and shipping tracking system. He has no directorship in other public companies. Mr Soh Choon Wai and his spouse, Madam Koh Shee Pey do not have any equity interest in the Company or the subsidiary companies. Mr Soh Choon Wai is the son of Mr Soh Man Tong, who is the Executive Chairman and a substantial shareholder of the Company. Mr Soh is deemed interested in the transactions entered into by the Company in the ordinary course of business with companies in which his father, Mr Soh Man Tong and his close family members have substantial financial interest as disclosed in note 25 to the financial statements. Other than the above, he does not have any conflict of interest with the Company. He has not been convicted of any offence within the past ten (10) years.
Mr Ng Poey Tiong, Singaporean, Aged 69 Non-Independent Non-Executive Director

Mr Ng Poey Tiong was appointed as the Non-Independent Non-Executive Director on 13 October 1992. Mr Ng has over 30 years of experience in the corrugated cartons and boards industry, especially in the trading of corrugated cartons and boards. He was the Sales Manager of Paper Products (M) Pte Ltd from 1968 to 1985. He is also a director of a private company in Singapore. He has no directorship in other public companies. Mr Ngs equity interest in the Company is disclosed in page 73 and he does not have any direct equity interest in the Companys subsidiaries. Mr Ng does not have any family relationship with any director or major shareholder of the Company, nor does he have any conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.
09
(Contd)
Independent Non-Executive Director
Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin, Malaysian, Aged 44
Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin was appointed as the Senior Independent Non-Executive Director on 18 August 2004. Encik Rithauddin is the Chairman of the Audit Committee and Nomination Committee. He is also a member of the Remuneration Committee. Encik Rithauddin is a lawyer by profession. He obtained his Bachelor of Law (L.L.B., Honours) degree from the University of Buckingham, United Kingdom and his Certificate of Legal Practice from University of Malaya in 1989 and 1990 respectively. He was called to the Malaysian Bar in 1991. He is the co-founder of Rithauddin and Azlin, a legal firm in Kuala Lumpur since May 1992. Encik Rithauddins area of expertise is in banking and litigation. He was appointed as an Independent NonExecutive Director of Biosis Group Berhad and ES Ceramics Technology Bhd on 1 March 2008 and 4 March 2008 respectively. Encik Rithauddin does not have any equity interest in the Company or the subsidiary companies. Encik Rithauddin does not have any family relationship with any director or major shareholder of the Company, nor does he have any conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.
Mr Kek Kok Swee, Malaysian, Aged 55

Independent Non-Executive Director Mr Kek Kok Swee was appointed as the Independent Non-Executive Director on 21 December 2001. Mr Kek is a member of the Audit Committee and Nomination Committee and the Chairman of the Remuneration Committee. Mr Kek holds a degree in Commerce and Administration from the Victoria University of Wellington, New Zealand. He is also a member of the Malaysian Institute of Accountants. He has vast experience and exposure in the field of accounting, finance and consulting in various countries, namely New Zealand, Singapore, China and Cambodia. Mr Kek also sits on the Board of one private limited company. He has no directorship in other public companies. Mr Kek does not have any equity interest in the Company or the subsidiary companies. Mr Kek does not have any family relationship with any director or major shareholder of the Company, nor does he have any conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.
10
(Contd)
Mr Lim Dau Joong, Malaysian, Aged 54 Independent Non-Executive Director

Mr Lim Dau Joong was appointed as the Independent Non-Executive Director on 1 December 2008. Mr Lim is also a member of the Audit Committee. Mr Lim is a Member of Institute Bank Malaysia and an Associate Member of Financial Planning Association, Malaysia. Mr Lim is currently a remisier with Inter-Pacific Securities Sdn Bhd and also managing a small unit trust agency with Public Mutual Berhad. Mr Lim has vast experiences in banking field and he was an executive officer with Bank Negara Malaysia from 1974 to 1985 and Branch Manager with CIMB Bank Berhad before he joined Inter-Pacific Securities Sdn Bhd in 1995. He also conducted training programmes for educational groups and corporate entitles. He has no directorship in other public companies. Mr Lim does not have any equity interest in the Company or the subsidiary companies. Mr Lim does not have any family relationship with any director or major shareholder of the Company, nor does he have any conflict of interest with the Company. He has not been convicted of any offences within the past ten (10) years.
11
Five-year Financial Highlights
2009 RM000 For the year ended 31 March Revenue Profit before tax Profit after tax (before minority interest) As at 31 March Net tangible assets Net assets per share (RM) 58,992 1.31 78,115 2,242 1,729
2008 RM000
2007 RM000
2006 RM000
2005 RM000
71,071 51 503
72,338 2,231 2,361
66,323 2,450 2,204
64,567 1,380 747
58,014 1.28
59,463 1.28
57,949 1.24
57,129 1.43
90,000 80,000 70,000 60,000 50,000 64,567 66,323
3,000
78,115
72,338 71,071 2,500
2,450 2,231
2,242
2,000
1,500 40,000 30,000 20,000 500 10,000 1,000
1,380
51 0 2005 2006 2007 2008 2009 0 2005 2006 2007 2008 2009
Revenue
Profit before tax
2,500 2,204
2,361
60,000 59,500 59,463
2,000
1,729
59,000 58,500
58,992
1,500
58,000 57,500
57,949
58,014
1,000 747
57,129
57,000
500
503
56,500 56,000
0
2005 2006 2007 2008 2009
55,500 2005 2006 2007 2008 2009
Profit after tax (before minority interest)
Net tangible assets
12
Chairmans Statement
Dear Shareholders, On behalf of the Board of Directors of United Kotak Berhad, I am pleased to present to you the Annual Report and Financial Statements of the Company and of the Group for the financial year ended 31 March 2009.
Performance Review For the financial year under review, the Group registered a 10% increase in revenue of RM78.11 million as compared to RM71.07 million attained in financial year 2008. Profit before tax increased by 4,292% to RM2.24 million from RM0.051 million recorded in financial year 2008 mainly attributed to higher revenue, decrease in average manufacturing costs and gain on disposal of a portion of land arising from government compulsory acquisition.
Dividends To reward our shareholders, the Board is pleased to recommend a final tax exempt dividend of 3 sen per ordinary share of RM1.00 each in respect of the financial year ended 31 March 2009 for shareholders approval at the forthcoming Annual General Meeting.
Outlook and Prospects The financial year ending 31 March 2010 is expected to be another challenging year for the Group. The Board reckons that the performance of the Group for the financial year ending 31 March 2010 will continue to be affected by the current economic climate and uncertainties ahead. However, the Group will continue to explore growth/diversification opportunities, pursue efficient manufacturing practices and aggressive marketing strategy to fur ther enhance its competitiveness.
Appreciation On behalf of the Board, I wish to express my sincere and heartfelt appreciation to all our employees, government authorities, valued customers, business partners, suppliers, financiers and bankers for their continued support, trust and confidence in us through the years. I also wish to take this opportunity to extend my special thanks to my fellow members of the Board and our shareholders for their invaluable contribution and support.
SOH MAN TONG Executive Chairman
13
Corporate Governance Statement
The Board of Directors is committed to exercise good corporate governance by supporting and applying the Principles and Best Practices of the Malaysian Code on Corporate Governance (the Code) to protect and enhance shareholders value. The Board is pleased to provide the following statement on how the Group has applied the principles and best practices set out in Part 1 and 2 of the Code. Unless otherwise stated, the Board has throughout the financial year ended 31 March 2009 complied with the best practices indicated in the Code.
A. BOARD OF DIRECTORS 1. Boards Responsibilities The Board recognises the need for good corporate governance to build and enhance long term shareholders value in addition to its main responsibilities for the overall performance of the Group and focuses mainly on strategic direction, establishing goals, monitoring performance and critical business issues. The Board has a formal schedule of decision making matters, includes the overall Group strategy and direction, acquisition and divestment policy, approval of major capital expenditure and significant financial matters. 2. Board Balance and Composition The independent status of the Directors adopted by the Board is according to Paragraph 1.01 of the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities). The Board is satisfied that the number of members was sufficient and effective in meeting the Groups needs and requirements during the financial year ended 31 March 2009. As at the date of this statement, the Board consists of seven (7) Directors as listed below: One (1) Executive Chairman Three (3) Independent Non-Executive Directors One (1) Non Executive Director One (1) Managing Director One (1) Executive Director Premised on the above Board balance, the Board has complied with Paragraph 15.02 of the Bursa Securities Listing Requirements to have at least two (2) directors or one-third of the Board, whichever is higher, to be Independent Directors. A brief profile of each Director is presented on pages 8 to 11 of this annual report. The Directors are equipped with a wide range of business and financial experience for effective direction and management of the Groups business. All members participate fully in the key issues involving the Group. The roles of the Executive Chairman and Managing Director are distinct and separated, each with clearly defined responsibilities to ensure a balance of power and authority. The primary responsibilities of the Executive Chairman, among others, are providing overall leadership to the Board and ensuring that the Groups corporate objectives are met. The Managing Director, in addition to his responsibilities for making and implementing operational decisions and managing the Groups day-to-day operations, he is also principally responsible for the marketing and sales functions of the Company. The roles and contribution of Independent and Non-Executive Directors also provide an element of objectivity, independent and check and balance on the Board. The Board has appointed Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin as the Senior Independent Non-Executive Director to whom concerns may be conveyed. He is also the Chairman of the Audit Committee. The Board is satisfied that the current Board composition reflects the interest of minority shareholders of the Company.
14
(Contd)
3. Board Meetings The Board meets at least four (4) times a year at quarterly intervals with additional meetings convened as required when any urgent and important decisions need to be taken between the scheduled meetings. During the financial year ended 31 March 2009, the Board held four (4) meetings, where it deliberated upon a variety of issues including the Groups financial results and operational issues. The Board receives Board papers on the matters requiring its consideration prior to and in advance of each meeting. The Board papers are comprehensive and all proceedings are minuted and signed by the Chairman. Details of each existing Directors meeting attendances are as follows: Name Mr Soh Man Tong Mr Tan Soo Siang Mr Soh Choon Wai Mr Ng Poey Tiong Mr Kek Kok Swee Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin Mr Lim Dau Joong (Appointed on 1.12.2008) Attendance 4/4 4/4 4/4 4/4 4/4 4/4 1/1
4. Board Committees The Board, in discharging its fiduciary duties, is assisted by the following Board Committees, each entrusted with specific tasks. The terms of reference of each Committee have been approved by the Board and where applicable, comply with the best practices recommended by the Code:Board Committees Audit Committee Nomination Committee Remuneration Committee Key Functions Explained on pages 21 to 24 Explained on pages 16 to 17 Explained on pages 17 to 18
5. Supply of Information Scheduled Board meetings are structured with a pre-set agenda. The Chairman is responsible that all Directors have full and timely access to Board papers containing information relevant to the business of the meeting. All Directors have access to the advice and services of the company secretary in carrying out their duties. The Board has also established procedure for Directors, whether as a Board or in their individual capacity, to obtain independent professional advice in furtherance of their duties at the Companys expense, if required. Directors may also consult the Executive Chairman and other Board members prior to seeking any independent professional advice.
15
(Contd)
6. Appointment to the Board The appointment of any additional Director will be made as and when it is deemed necessary by the existing Board with due consideration given to the mix of expertise and experience required for an effective Board. The Nomination Committee assists the Board in recommending appointment of new directors and accessing the effectiveness of the Board. The members of the Nomination Committee are as follows: Chairman: Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin - Senior Independent Non-Executive Director Members: Mr Soh Man Tong - Executive Chairman Mr Kek Kok Swee - Independent Non-Executive Director The Nomination Committee consists of majority but not exclusively Non-Executive Directors as recommended by the Code. The Company does not comply with the recommended composition as the Board is of the opinion that the Executive Chairman, Mr Soh Man Tong should serve on the Committee as he is able to advise on the suitability and assess the required mix of expertise and experience of the candidate for new appointment due to his extensive knowledge and experience in the Companys business and the industry. The majority of the Nomination Committee Members are Independent Non-Executive Directors. Appointment Process The terms of reference of the Nomination Committee were approved and adopted by the Board. The Board through the Nomination Committee identify, assess and propose new nominees for the Board and Board Committees. The Committee also confirms that the succession planning framework has been established. During the financial year ended 31 March 2009, the Nomination Committee has reviewed the Board size, structure and composition and is satisfied that the current members bring to the Board the required mix of skills and expertise for the Board to effectively discharge its duties.
7. Directors Training All Directors have attended the Mandatory Accreditation Programme within the period stipulated and met the requirements of Continuing Education Programme (CEP) as prescribed by Practice Note No. 15/2003 of Bursa Securities. The Directors recognise the need to continue to attend the relevant training programmes to stay abreast with the various issues arising from the ever-changing business environment, regulatory and corporate governance development to further enhance their skill and knowledge to effectively discharge their duties and obligations. There is a familiarisation programme in place for new Directors, which include visit to the factory, CD presentation on the production processes and meeting with the senior management as appropriate, to facilitate their understanding of the Companys business and operations. During the financial year, all Directors have attended relevant training programme conducted by the relevant regulatory authorities and professional bodies to update themselves on the challenges of economic slowdown, risk management and Audit Committees roles and responsibilities to better enable them to fulfill their responsibilities.
16
(Contd)
8. Re-election Article 99 of the Companys Article of Association provide that at least one-third of the Board is subject to retirement by rotation at each Annual General Meeting. The Directors to retire at each year are the Directors who have been longest in office since their appointment or re-election. The Articles of Association also provide that all Directors shall retire from office at least once in three years and submit themselves for re-election. A retiring Director is eligible for re-election. The election of each Director is voted on separately. To assist shareholders in their decision, sufficient information such as personal profile, meetings attendance and the shareholdings in the Company of each Director standing for re-election are furnished in the Annual Report.
B. DIRECTORS REMUNERATION 1. Remuneration Committee The Companys policy on Directors remuneration is to attract and retain the Directors of caliber needed to manage the business of the Company and to align the interest of the Directors to those of the shareholders. The Remuneration Committee consists mainly of Non-Executive Directors. The members of the Remuneration Committee are as follows:Chairman: Mr Kek Kok Swee - Independent Non-Executive Director Members: Mr Soh Man Tong - Executive Chairman Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin - Senior Independent Non-Executive Director During the financial year ended 31 March 2009, the Remuneration Committee has reviewed and made recommendation to the Board on the remuneration package for executive directors and senior management. The remuneration packages are linked to the overall performance of the Company. None of the executive Director shall participate in any way in determining their individual remuneration. The Board as a whole shall determine the remuneration of non-executive Directors with individual Directors abstaining from decisions in respect of their individual remuneration.
17
(Contd)
2. Details of the Directors Remuneration Details of the nature and amount of the Directors remuneration for the financial year ended 31 March 2009 are as follows: Executive Directors RM 1,464,750 13,000 99,642 43,500 95,333 1,716,225 Non-Executive Directors RM 115,667 21,750 137,417
Basic Salary Bonus EPF (Employers Contribution) Benefits-in-kind Fees Allowances Total
The number of Directors of the Company whose remuneration fall within the following bands are: Number of Directors Range of Remuneration Below RM 50,000 RM 100,001 to RM 150,000 RM 600,001 to RM 650,000 RM 950,001 to RM1,000,000 Executive 1 1 1 Non-Executive 4 -
The Board is of the view that the disclosure of the remuneration bands of the Companys Directors is sufficient.
C. SHAREHOLDERS The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Company. In addition to various announcements made, the timely release of financial results on a quarterly basis provides shareholders with an overview of the Company business and operations. The Company uses the Annual General Meeting as means of communicating with shareholders. Members of the Board will answer questions raised at the meeting. The Board encourages full participation by the shareholders at every Annual General Meeting and every opportunity is given to the shareholders to ask question and seek clarification in the business and performance of the Company. Shareholders who are unable to attend the General Meeting have the rights to appoint proxies to attend and vote on their behalf.
D. ACCOUNTABILITY AND AUDIT 1. Financial Reporting In presenting the annual financial statements and quarterly announcement of results to shareholders as well as the Chairmans statement in the annual report, the Directors aimed to present a balanced and understandable assessment of the Companys position and prospects. The Audit Committee assists the Board in scrutinizing information for disclosure to ensure adequacy.
18
(Contd)
2. Directors Responsibilities Statement in respect of the preparation of the Audited Financial Statements The Board is responsible for ensuring that the financial statements of the Group and of the Company give a true and fair view of the state of affairs of the Group and the Company as at the end of the accounting period and of their income statement and cash flows for the year then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied. In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgments and estimates. 3. State of Internal Control The Statement on Internal Control furnished on pages 25 to 26 of the annual report provides an overview of the Groups state of internal control. 4. Relationship with the Auditors The external auditors, Messrs KPMG have continued to report their findings which are included as part of the Companys financial reports with respect to each years audit on the statutory financial statements. The Board and the Audit Committee have always maintained a professional relationship with the auditors and also meet the auditors whenever necessary. From time to time, the auditors will highlight to the Audit Committee and the Board on matters that require the Boards attention. The Audit Committee members (excluding the Executive Chairman, Mr Soh Man Tong) have met and discussed with the external Auditors twice during the financial year ended 31 March 2009.
E.
CORPORATE SOCIAL RESPONSIBILITY (CSR) In pursuing the Groups business objectives, the Group also mindful to play its role as a caring corporate citizen. During the financial year, the Group has donated in the form of cash or kind to various organisation, eg. Pusat Dialisis Dan Kesihatan Majlis Bandar Baru UDA (Johor Bahru), Persatuan Akhbar Cina Johor Selatan, Yayasan Penyelidikan Dan Pendidikan Perakaunan Malaysia, blood donation campaign organised by Ministry of Health . The Company has certain measures in place in its factory such as waste control, yearly monitoring on air, noise and water pollution. The Company also encourages its employees to reduce wastage of paper and energy such as all paper waste and plastic waste are collected for recycling purpose etc. The Company had set up a Health & Safety Committee to develop policies and guidelines in order to provide a safe and healthy working place for the employees. The Group is committed to increase its effort in CSR and complying with the environmental laws and regulation.
19
Other Compliance Information
1. Material Contracts Other than the related party transactions entered into by the Company in the ordinary course of business with companies in which the Executive Chairman, Mr Soh Man Tong and his close family member have substantial financial interest disclosed in note 25 to the financial statements, there are no other material contracts entered into by the Company involving directors and major shareholders interests, either still subsisting at the end of the financial year ended 31 March 2009 or entered into since the end of the previous financial year. 2. Non-Audit Fees During the financial year ended 31 March 2009, non-audit fees paid and payable to the external auditors of the Company amounted to RM41,000.00. 3. Sanctions and / or penalties imposed There were no material sanction or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. 4. Status of utilisation of proceeds Out of the proceeds raised from rights issue and public issue totaling RM11.363 million (IPO Proceeds), the Company has utilised RM4 million in respect of its listing expenses and the acquisition of one unit of four colours in-line printer. On 5 July 2007, the Company has obtained approval from the Securities Commission for a revision in the utilisation of the remaining IPO Proceeds of RM7.363 million and waiver from seeking the approval from shareholders for the said revision. 5. Share buy-back Details of share repurchased during the financial year ended 31 March 2009 are as follows: No. of shares repurchased 131,400 22,000 153,400 Lowest price paid (RM) 0.430 0.480 Highest price paid (RM) 0.580 0.540 Average price paid (RM) 0.483 0.515 Total consideration paid (RM) 63,521.69 11,333.68 74,855.37
Month April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 Total
As at the end of the financial year, a total of 2,892,900 repurchased shares are being held as treasury shares and carried at cost.
20
Audit Committee Report
Membership The Audit Committee (the Committee) is made up of the following members: Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin Mr Kek Kok Swee Mr Soh Man Tong (Resigned on 1.12.2008) Mr Lim Dau Joong (Appointed on 1.12.2008) Terms of reference The Committee was established on 9 January 2002 and adopted the revised terms of reference on 24 March 2008 as set out on page 22 to 24 of the annual report. Meetings During the financial year ended 31 March 2009, the Committee convened four meetings and were attended by all members. The meetings were appropriately structured through the use of agendas, which were distributed to members prior to the meeting. The Executive Directors, Company Secretary and the representatives of the external auditors, Messrs KPMG were present by invitation. Details of the attendance are listed below: Name Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin Mr Kek Kok Swee Mr Soh Man Tong Mr Lim Dau Joong Attendance 4/4 4/4 3/3 1/1 Chairman, Senior Independent Non-Executive Director Independent Non-Executive Director Executive Chairman Independent Non-Executive Director
Summary of activities of the Committee for the financial year ended 31 March 2009 The main activities undertaken by the Committee were as follows:i. Reviewed the quarterly unaudited financial statements and recommended the same to the Board for approval before release to Bursa Malaysia Securities Berhad. ii. Reviewed with the external auditors the annual financial statements for the financial year ended 31 March 2008. iii. Reviewed audit report and observations highlighted by the external auditors on the audited financial statements that require appropriate management actions and reported the same to the Board. iv. Reviewed the external auditors scope of work and audit plan for the year. v. Reviewed the audit fees payable to the external auditors and made recommendation to the Board for approval. Internal audit function During the financial year, the Group did not maintain a formal internal audit function as the present control mechanisms are well managed and deemed sufficient for the size of the Group. On 13 February 2009, the Group has engaged an external professional firm as its internal auditors. This professional firm will commence the functions of the internal audit of the Group on a periodic basis from the financial year ending 31 March 2010 onwards to provide independent and objective reports to the Committee. The role of the internal audit function is totally independent from the Groups external auditors. The internal audit will include review of the system of internal control, identifying, evaluating and managing significant risks, ensuring that instituted controls are appropriate and effectively applied and the risks exposures are consistent with the Groups risk management policy.
UNIT ED K OTAK B ER HAD ( 7 8 8 0 6 - V ) A N N UA L RE P O RT 2 0 0 9
21
Terms of Reference of the Audit Committee
1. Objectives The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to accounting and reporting practices of the Company and its subsidiary(s). In addition, the Audit Committee shall:a. b. Oversee and appraise the quality of the audits conducted both by the Groups internal and external auditors; Maintain open lines of communication between the Board of Directors, the internal auditors and the external auditors for the exchange of views and information, as well as to confirm their respective authority and responsibilities; and Determine the adequacy of the Groups administrative, operating and accounting controls.
c.
2. Composition The Audit Committee shall be appointed by the Directors from among their number (pursuant to a resolution of the Board of Directors) which fulfills the following requirements:a. b. c. The audit committee must be composed of no fewer than 3 members; A majority of the audit committee must be independent directors; and At least one member of the audit committee:i. ii. must be a member of the Malaysian Institute of Accountants; or if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years working experience and: he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967; or he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or
iii. fulfills such other requirements as prescribed or approved by the Exchange. The members of the Audit Committee shall elect a chairman from among their number who shall be an independent director. In the event of any vacancy in the Audit Committee resulting in the non-compliance of item 2(a) to (c) above, the vacancy must be filled within 3 months of that event. The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at least once every 3 years to determine whether the Audit Committee and members have carried out their duties in accordance with the terms of reference.
22
(Contd)
3. Functions The functions of the Audit Committee are as follows:a. To review the following and report the same to the Board of Directors: with the external auditors, the audit plan; with the external auditors, his evaluation of the system of internal controls; with the external auditors, his audit report; the assistance given by the Companys employees to the external auditors; and any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity.
b. c.
To consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal; To discuss with the external auditors before the audit commences, the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved; To review the quarterly results and year-end financial statements of the company and its subsidiary(s), focusing particularly on: Any changes in accounting policies and practices; Significant adjustments arising from the audit; The going concern assumption; and Compliance with accounting standards and other legal requirements.
d.
e.
To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management where necessary); To review the external auditors management letter and managements response; To do the following : Review the adequacy of the scope, competency, functions and resources of the internal audit function, and that it has the necessary authority to carry out its work; Review the internal audit programme and results of the internal audit process and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function; Review any appraisal or assessment of the performance of members of the internal audit function; Approve any appointments or termination of senior staff members of the internal audit function; Inform itself of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.
f. g.
h. i.
To consider the major findings of internal investigations and managements response; and To consider other areas as defined by the Board.
23
(Contd)
4. Rights of the Audit Committee The Audit Committee shall, wherever necessary and reasonable for the Company to perform of its duties, in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company:a. b. c. d. have authority to investigate any matter within its terms of reference; have the resources which are required to perform its duties; have full and unrestricted access to any information pertaining to the Company; have direct communication channels with the internal and external auditors and person(s) carrying out the internal audit function or activity; be able to obtain independent professional or other advice; and be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.
e. f.
5. Meetings The Audit Committee shall meet at least 4 times a year and such additional meetings as the Chairman shall decide in order to fulfill its duties. However, at least twice a year, the Audit Committee shall meet with the external auditors without executive Board members present. In addition, the Chairman may call a meeting of the Audit Committee if a request is made by any committee member, the Companys Chief Executive, or the internal or external auditors. The Company Secretary or other appropriate senior official shall act as secretary of the Audit Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory documentation to committee members prior to each meeting. The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating them to committee members and to the other members of the Board of Directors. A quorum shall consist of a majority of independent directors. By invitation of the Audit Committee, the Company must ensure that the other directors and employees attend any particular committee meeting specific to the relevant meeting.
24
Statement on Internal Control
Paragraph 15.27(b) of the Bursa Malaysia Securities Berhad Listing Requirement requires the Board of Directors of public listed companies to include in its annual reports a Statement about the state of internal control as listed issuer as a group. The Board is committed to maintaining a sound system of internal control in the Group and is pleased to provide the following statement, which outlines the nature and scope of internal control of the Group during the year. In providing the Statement on Internal Control for the Group, pursuant to Para 46 of the Statement on Internal Control Guidance for Directors of Public Listed Companies (the Guidance), the Board wishes to inform that it has excluded the assessment of controls on associated company i.e. Oriental Coast Sdn Bhd where the assurance on internal control of this company is obtained through the Companys representation on the board.
Board of Directors Responsibilities The Board of Directors (the Board) is ultimately responsible for United Kotak Berhad and its subsidiaries (the Group) system of internal control, including the establishment of an appropriate control environment and framework as well as reviewing its adequacy and integrity. The Groups system of internal control is designed to manage, rather than eliminate the risk of failure to achieve business objectives. It must be recognized that it can only provide reasonable and not absolute assurance against misstatement or loss. The internal control framework covers inter alia, financial, organizational, operational, compliance controls and risk management procedures.
Enterprise Risk Management Framework The Group has established a risk management framework of which including ongoing process for identification, evaluation and managing significant risks faced by the Group. The management also reviews and monitors the high risks areas regularly in order to enhance the control system and minimize the risks. As part of the risk management framework and in line with meeting the MS : ISO 14001 : 2004 requirement, an Emergency Response Preparedness (ERP) Committee has been formed to implement, maintain and improve the Groups environmental management system. The management also reviews and evaluates the Companys quality and environmental policies and objectives during the Management Review Meeting yearly. Respective departments are required to provide action plans for improving the Companys policies and objectives on annual basis.
System of Internal Control The Board recognizes the increasing importance of maintaining a sound system of internal control to safeguard the shareholders investment and the Groups assets. However, the Group did not maintain a formal internal audit function todate because the Board is of the view that the present control mechanisms, including operational, financial and compliance nature are well managed and sufficient for the size of the Group. During the year, the Groups Executive Directors direct involvement in the business operations and regular reviews of the operational data including production, marketing and financial data contributed to high level controls in the Group. In addition, the Executive Directors also manage and monitor the Groups direction, operational effectiveness and efficiency and adherence to the Groups policies and procedures. These actions, together with the managements adoption of the external auditors recommendation for improvement on internal controls noted during the annual audits, provide reasonable assurance that control procedures are in place.
25
Statement on Internal Control
(Contd)
Other Control Processes Structured Hierarchy Reporting Lines A management structure including the line of responsibilities and level of authorities were established. The Board periodically reviews the lines of responsibilities. A process of hierarchical reporting established to facilitate for a documented and auditable trail of accountability. Annual Budget The Board reviews and approves annual budget. The budgeting process takes into consideration the internal and external factors affecting the financial performance of the Group. Quarterly monitoring of results against budget and major variance will be evaluated by the management. The Independent Directors contributes their opinion and the management will take necessary actions to improve the performance of the Group. Quality Control The Group has an in-house quality control led by the Executive Chairman or Managing Director, equipped with the necessary expertise of the industry. The quality and control department serves to boost productivity and ensures that quality of the products as imposed by ISO 9001: 2000. Quality Control Checklist were developed which sets out the various controls and process requirement.
The Board of Directors United Kotak Berhad
26
Financial Statements
28 32 32 33 35 36 37 38 41 Directors Report Statement by Directors Statutory Declaration Independent Auditors Report Balance Sheets Income Statements Statement of Changes In Equity Cash Flow Statements Notes to the Financial Statements
Directors Report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 31 March 2009. Principal activities The principal activities of the Company consist of the manufacturing and sale of corrugated cartons and board. The principal activities of its subsidiaries are disclosed in Note 7 to the financial statements. There has been no significant change in the nature of these activities during the financial year. Results Group RM Profit for the year Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year under review. Dividends Since the end of the previous financial year, the Company paid a final dividend of 1.5 sen tax exempt per ordinary share totalling RM676,939 based on 45,129,100 ordinary shares in respect of the financial year ended 31 March 2008 on 30 September 2008. The Directors proposed a final dividend of 3 sen tax exempt per ordinary share totalling RM1,353,213 based on 45,107,100 ordinary shares in respect of the year ended 31 March 2009 subject to the approval of the shareholders at the forthcoming Annual General Meeting. These financial statements do not reflect this proposed final dividend, which will be accounted for in shareholders equity as an appropriation of retained profits in the year ending 31 March 2010. Directors of the Company Directors who served since the date of the last report are: Mr. Soh Man Tong Mr. Tan Soo Siang Mr. Ng Poey Tiong Mr. Kek Kok Swee En. Rithauddin Hussein Jamalatiff bin Jamaluddin Mr. Soh Choon Wai Mr. Lim Dau Joong (appointed on 1 December 2008) 1,729,264 Company RM 1,808,721
28
Directors Report
(Contd)
Directors interests The interests and deemed interests in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors Shareholdings are as follows: Number of ordinary shares of RM1.00 each At 1 April 2008 At 31 March 2009
Name of Directors Company Mr. Soh Man Tong Mr. Tan Soo Siang Mr. Ng Poey Tiong Subsidiaries Mr. Soh Man Tong - Richbox Paper Products (M) Sdn. Bhd. - UK Packaging Industries Sdn. Bhd.
Interest
Bought
Sold
Direct Deemed Direct Direct
12,380,431 1,768,052 5,111,311 1,601,379
--320,000 --
-----
12,380,431 1,768,052 5,431,311 1,601,379
Deemed Deemed
777,000 140,000
---
---
777,000 140,000
By virtue of his substantial shareholdings in the Company, Mr. Soh Man Tong is deemed to have interests in the ordinary shares of all the wholly-owned subsidiaries of the Company as disclosed in Note 7 to the financial statements. None of the other Directors holding office at 31 March 2009 had any interest in the ordinary shares of the Company and of its related corporations during the year. Directors benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a 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 other than as disclosed in Note 25 to the financial statements. There were no arrangements during and at the end of the financial year which had the object 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. Issue of shares and debentures There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. There were no debentures issued during the financial year.
29
Directors Report
(Contd)
Options granted over unissued shares At an Extraordinary General Meeting held on 18 May 2005, the Companys shareholders approved the establishment of an Employees Share Option Scheme (ESOS) of not more than 15% of the issued and paid up capital of the Company to eligible Directors and employees of the Group. However, no options have been granted since 18 May 2005. No options were granted to any person to take up unissued shares of the Company during the financial year. Other statutory information Before the balance sheets and income statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision has been made for doubtful debts, and
ii) all current assets have been stated at the lower of cost and net realisable value. At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or iii) 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 iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year. No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, the results of the operations of the Group and of the Company for the year ended 31 March 2009 have not been substantially affected by any item, transaction or event of a material and unusual nature, nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.
30
Directors Report
(Contd)
Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Soh Man Tong
Tan Soo Siang
Johor Bahru, Date: 26 June 2009
31
Statement by Directors
pursuant to Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 35 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 at 31 March 2009 and of their financial performance and cash flows for the financial year then ended. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Soh Man Tong
Tan Soo Siang
Johor Bahru, Date: 26 June 2009
Statutory Declaration
pursuant to Section 169(16) of the Companies Act, 1965
I, Ong Tiam Hua, the officer primarily responsible for the financial management of UNITED KOTAK BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 35 to 70 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed in Johor Bahru in the State of Johor on 26 June 2009.
Ong Tiam Hua
Before me: K. Amudalingam PLP, PIS, PPN Commissioner For Oaths No: J-133
32
Independent Auditors Report

to the members of United Kotak Berhad
Report on the Financial Statements We have audited the financial statements of United Kotak Berhad, which comprise the balance sheets as at 31 March 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 35 to 70.
Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves per forming procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys 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.
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 of 31 March 2009 and of their financial performance and cash flows for the year then ended.
33
Independent Auditors Report

to the members of United Kotak Berhad (Contd)
Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. b) We have considered the accounts and the auditors reports of the subsidiary of which we have not acted as auditors, which are indicated in Note 7 to the financial statements. c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 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.
KPMG Firm Number: AF 0758 Chartered Accountants
Wee Beng Chuan Approval Number: 2677/12/10 (J) Chartered Accountant
Johor Bahru Date : 26 June 2009
34
Balance Sheets
At 31 March 2009
Group Note Assets Property, plant and equipment Biological assets Prepaid lease payments Investment properties Investments in subsidiaries Investment in an associate Investments in equity securities Loan to a subsidiary Total non-current assets Inventories Trade and other receivables Due from an associate Due from subsidiaries Tax recoverable Cash and cash equivalents Total current assets Total assets Equity Share capital Reserves Total equity attributable to equity holders of the Company/ Total equity Liabilities Deferred tax liabilities Loans and borrowings Total non-current liabilities Trade and other payables Loans and borrowings Taxation Total current liabilities Total liabilities Total equity and liabilities 18 17 11 12 13 14 2009 RM 2008 RM 2009 RM
Company 2008 RM
3 4 5 6 7 8 9 10
21,630,486 676,510 9,766,015 25,038,178 1,348,000 444,374 58,903,563 6,260,101 19,595,292 116,440 181,693 3,703,158 29,856,684 88,760,247
21,299,983 610,970 10,129,491 24,998,163 1,922,426 382,305 59,343,338 9,665,543 18,516,751 77,840 663,397 4,398,847 33,322,378 92,665,716
18,386,354 676,510 9,766,015 16,672,700 7 1,348,000 444,374 6,979,891 54,273,851 6,094,358 17,866,659 3,441,892 181,693 3,506,943 31,091,545 85,365,396
17,876,177 610,970 10,129,491 16,590,457 5 1,922,000 382,305 7,168,611 54,680,016 9,459,047 16,219,864 2,806,753 663,397 4,122,367 33,271,428 87,951,444
15 15
48,000,000 10,991,811
48,000,000 10,014,259
48,000,000 10,928,750
48,000,000 9,871,741
58,991,811
58,014,259
58,928,750
57,871,741
16 17
3,408,000 4,487,362 7,895,362 7,098,330 14,665,715 109,029 21,873,074 29,768,436 88,760,247
3,338,000 4,681,239 8,019,239 7,203,604 19,326,553 102,061 26,632,218 34,651,457 92,665,716
3,355,000 3,980,365 7,335,365 6,737,821 12,363,460 19,101,281 26,436,646 85,365,396
3,294,000 4,114,572 7,408,572 6,808,271 15,862,860 22,671,131 30,079,703 87,951,444
The accompanying notes form an integral part of the financial statements.
35
Income Statements
For the year ended 31 March 2009
Group Note Revenue Goods sold Cost of goods sold Gross profit Other income Distribution expenses Administrative expenses Other expenses Results from operating activities Interest income Finance costs Operating profit/(loss) Share of loss in an associate Profit/(Loss) before tax Tax (expense)/income Profit for the year Attributable to: Equity holders of the Company/ Profit for the year Basic earnings and diluted per ordinary share (sen) 20 19 2009 RM 2008 RM 2009 RM
Company 2008 RM
78,114,863 71,071,203 (66,409,858) (61,599,936) 11,705,005 785,610 (3,325,494) (4,867,246) (663,222) 3,634,653 69,985 (1,119,208) 2,585,430 (343,150) 2,242,280 (513,016) 1,729,264 9,471,267 141,302 (3,149,591) (5,380,806) (171,108) 911,064 206,068 (1,025,263) 91,869 (41,000) 50,869 451,912 502,781
74,276,442 67,700,412 (64,479,089) (59,618,816) 9,797,353 1,176,360 (2,870,601) (4,342,172) (896,338) 2,864,602 67,339 (691,914) 2,240,027 2,240,027 (431,306) 1,808,721 8,081,596 142,252 (2,660,068) (4,754,174) (454,025) 355,581 200,313 (621,979) (66,085) (66,085) 454,834 388,749
1,729,264
502,781
1,808,721
388,749
21
3.83
1.11
36
Statement of Changes In Equity

Note Group At 1 April 2007 Treasury shares acquired Dividends to shareholders Profit for the year At 31 March 2008 Treasury shares acquired Dividends to shareholders Profit for the year At 31 March 2009
Attributable to equity holders of the Company Non-distributable Distributable Retained Treasury Share Revaluation Share earnings shares reserves capital premium RM RM RM RM RM
Total equity RM
22
48,000,000 48,000,000 48,000,000
176,757 176,757 176,757
2,256,322 2,256,322 2,256,322
(1,175,829) (817,356) (1,993,185) (74,773) (2,067,958)
10,206,048 59,463,298 (817,356) (1,134,464) (1,134,464) 502,781 502,781 9,574,365 58,014,259 (74,773) (676,939) (676,939) 1,729,264 1,729,264 10,626,690 58,991,811
22
Company At 1 April 2007 Treasury shares acquired Dividends to shareholders Profit for the year At 31 March 2008 Treasury shares acquired Dividends to shareholders Profit for the year At 31 March 2009 48,000,000 48,000,000 48,000,000 176,757 176,757 176,757 2,256,322 2,256,322 2,256,322 (1,175,829) (817,356) (1,993,185) (74,773) (2,067,958) 10,177,562 59,434,812 (817,356) (1,134,464) (1,134,464) 388,749 388,749 9,431,847 57,871,741 (74,773) (676,939) (676,939) 1,808,721 1,808,721 10,563,629 58,928,750
22
22
37
Cash Flow Statements
Group 2009 RM Cash flows from operating activities Profit/(Loss) before tax Adjustments for:Depreciation and amortisation: - Property, plant and equipment - Investment properties - Biological assets - Prepaid lease payments Finance costs Share of loss in an associate Loss/(Gain) in disposal of: - Property, plant and equipment - Investment properties - Quoted shares Dividend income from quoted investments Interest income Impairment losses on: - Goodwill on consolidation - Investments in subsidiaries - Investment in an associate Allowance for diminution in value of investments in quoted shares Biological asset written off Reversal of allowance for doubtful debts in subsidiaries Operating profit before changes in working capital Changes in working capital: Inventories Trade and other receivables Trade and other payables Due from subsidiaries Due from an associate Cash generated from/(used in) operations Interest paid Tax refunded Net cash from/(used in) operating activities 2008 RM 2009 RM
Company 2008 RM
2,242,280
50,869
2,240,027
(66,085)
2,714,117 74,143 25,523 363,476 1,119,208 343,150 33,967 (250,558) (5,250) (69,985) 231,276 118,030 5,937 -
2,852,097 60,299 19,790 363,476 1,025,263 41,000 (5,280) (39,829) (6,660) (206,068) 20,000 67,580 -
2,419,891 14,595 25,523 363,476 691,914 (74,906) (250,558) (5,250) (67,339) 574,000 118,030 5,937 (349,000)
2,524,569 14,504 19,790 363,476 621,979 18,633 (39,829) (6,660) (200,313) 20,000 41,426 67,580 -
6,945,314 3,405,442 (1,078,541) (105,274) (38,600)
4,242,537 (625,600) (2,354,212) (4,845,952) (20,246)
5,706,340 3,364,689 (1,646,794) (70,450) (286,140) -
3,379,070 (766,899) (2,492,100) (4,856,422) (27,901) -
9,128,341 (1,119,208) 45,656
(3,603,473) (1,025,263) 151,964
7,067,645 (691,914) 111,396
(4,764,252) (621,979) 199,068
8,054,789
(4,476,772)
6,487,127
(5,187,163)
38
For the year ended 31 March 2009 (Contd)
Group 2009 RM 2008 RM 2009 RM
Company 2008 RM
Cash flows from investing activities Acquisition of: - Property, plant and equipment - Investment properties - Quoted shares - Biological assets Purchase of additional shares in a subsidiary Proceeds from disposal of: - Property, plant and equipment - Investment properties - Quoted shares Dividends received from quoted investments Interest received Loan to subsidiaries Decrease/(Increase) in pledged deposits placed with a licensed bank Net cash used in investing activities Cash flows from financing activities Proceeds from/(Repayment of): - Term loan - Other borrowings Repayment of term loans Payment of finance lease liabilities Dividends paid to shareholders of the Company Purchase of treasury shares Net cash (used in)/from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at 1 April Cash and cash equivalents at 31 March
(3,300,174) (158,600) (180,099) (97,000) 221,587 295,000 5,250 69,985 161,305 (2,982,746)
(1,619,213) (7,259,367) (279,546) (325,000) (20,000) 192,849 220,549 6,660 206,068 (161,305) (9,038,305)
(3,185,622) (141,280) (180,099) (97,000) 330,460 295,000 5,250 67,339 188,720 (2,717,232)
(1,596,005) (20,499) (279,546) (325,000) (20,000) 61,000 220,549 6,660 200,313 (7,168,611) (8,921,139)
1,039,350 (4,594,000) (812,445) (90,358) (676,939) (74,773) (5,209,165)
5,000,000 4,910,000 (338,721) (490,189) (1,134,464) (817,356) 7,129,270
1,039,350 (3,724,000) (827,105) (47,492) (676,939) (74,773) (4,310,959)
5,000,000 5,062,000 (260,420) (142,503) (1,134,464) (817,356) 7,707,257
(137,122) 3,497,591
(6,385,807) 9,883,398
(541,064) 4,048,007
(6,401,045) 10,449,052
3,360,469
3,497,591
3,506,943
4,048,007
39
For the year ended 31 March 2009 (Contd)
Cash and cash equivalents included in the cash flow statements comprise the following balance sheet amounts: Group 2009 RM 2008 RM 2009 RM Company 2008 RM
Cash and bank balances Deposits with licensed banks Bank overdrafts
3,703,158 (342,689) 3,360,469
2,237,542 2,000,000 (739,951) 3,497,591
3,506,943 3,506,943
2,122,367 2,000,000 (74,360) 4,048,007
40
Notes to the Financial Statements
United Kotak Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Second Board of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows: Principal place of business 5, Jalan Tahana Tampoi Industrial Estate 80350 Johor Bahru Johor Malaysia Registered office Suite 7E, Level 7 Menara Ansar 65, Jalan Trus 80000 Johor Bahru Johor Malaysia The consolidated financial statements of the Company as at and for the year ended 31 March 2009 comprise the Company and its subsidiaries and the Groups interest in an associate. The financial statements of the Company as at and for the year ended 31 March 2009 do not include other entities. The principal activities of the Company consist of the manufacturing and sale of corrugated cartons and board. The principal activities of its subsidiaries are disclosed in Note 7. The financial statements were approved by the Board of Directors on 26 June 2009. 1. Basis of preparation (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards (FRS), the Companies Act, 1965 and accounting principles generally accepted in Malaysia. The Group and the Company have not applied the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective: FRSs / Interpretations Amendments to FRS 1, First-time Adoption of Financial Reporting Standards and FRS 127, Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to FRS 2, Share-based Payment: Vesting Conditions and Cancellations FRS 4, Insurance Contracts FRS 7, Financial Instruments: Disclosures FRS 8, Operating Segments FRS 123, Borrowing Costs FRS 139, Financial Instruments: Recognition and Measurement IC Interpretation 9, Reassessment of Embedded Derivatives Effective date 1 January 2010
1 January 2010 1 January 2010 1 January 2010 1 July 2009 1 January 2010 1 January 2010 1 January 2010
41

(Contd)
1. Basis of preparation (Contd) (a) Statement of compliance (Contd) FRSs / Interpretations IC Interpretation 10, Interim Financial Reporting and Impairment IC Interpretation 11, FRS 2 - Group and Treasury Share Transactions IC Interpretation 13, Customer Loyalty Programmes IC Interpretation 14, FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction Effective date 1 January 2010 1 January 2010 1 January 2010 1 January 2010
The Group and the Company plan to apply the abovementioned standards, amendments and interpretations from the annual period beginning 1 April 2010. The impact of applying FRS 4, FRS 7 and FRS 139 on the financial statements upon first adoption as required by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed by virtue of the exemptions given in the respective FRSs. The initial application of the other standards, amendments and interpretations is not expected to have any material impact on the financial statements or any material change in accounting policy. (b) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in Note 2(c). (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Companys functional currency. All financial information are presented in RM, unless otherwise stated. (d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements. 2. Significant accounting policies The accounting policies set out below have been applied consistently to the periods presented in these financial statements. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated using the purchase method of accounting.
42
(Contd)
2. Significant accounting policies (Contd) (a) Basis of consolidation (Contd) (i) Subsidiaries (Contd) Under the purchase method of accounting, the financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Investments in subsidiaries are stated in the Companys balance sheet at cost less any impairment losses, unless the investment is classified as held for sale. (ii) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Associates are accounted for in the consolidated financial statements using the equity method unless it is classified as held for sale. The consolidated financial statements include the Groups share of the profit or loss of the equity accounted associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Groups share of losses exceeds its interest in an equity accounted associate, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Investments in associates are stated in the Companys balance sheet at cost less any impairment losses, unless the investment is classified as held for sale. (iii) Minority interest Minority interest at the balance sheet date, being the portion of the net identifiable assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet and statement of changes in equity within equity, separately from equity attributable to the equity shareholders of the Company. Minority interest in the results of the Group are presented on the face of the consolidated income statement as an allocation of the total profit or loss for the year between minority interest and the equity shareholders of the Company. Where losses applicable to the minority exceed the minoritys interest in the equity of a subsidiary, the excess, and any further losses applicable to the minority, are charged against the Groups interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Groups interest is allocated all such profits until the minoritys share of losses previously absorbed by the Group has been recovered. (iv) Changes in Group composition Where a subsidiary issues new equity shares to minority interests for cash consideration and the issue price has been established at fair value, the reduction in the Groups interests in the subsidiary is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in the income statements. When a group purchases a subsidiarys equity shares from minority interests for cash consideration and the purchase price has been established at fair value, the accretion of the Groups interests in the subsidiary is accounted for as a purchase of equity interest for which the acquisition method of accounting is applied.
43

(Contd)
2. Significant accounting policies (Contd) (a) Basis of consolidation (Contd) (iv) Changes in Group composition (Contd) The Group treats all other changes in group composition as equity transactions between the Group and its minority shareholders. Any difference between the Groups share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves. (v) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Groups interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are translated at exchange rates at the dates of the transactions except for those that are measured at fair value, which are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in the income statements. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the balance sheet date. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions. The income and expenses of operations in functional currencies other than RM are translated to RM at exchange rates at the dates of the transactions. Foreign currency differences are recognised in translation reserve. On disposal, accumulated translation differences are recognised in the consolidated income statement as part of the gain or loss on sale. (c) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are stated at cost or valuation less any accumulated depreciation and any accumulated impairment losses. Property, plant and equipment under the revaluation model The Group revalues its property comprising land and building every five years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially from their carrying value. Surpluses arising from revaluation are dealt with in the property revaluation reserve account. Any deficit arising is offset against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a decrease in carrying amount is charged to the income statements.
44
(Contd)
2. Significant accounting policies (Contd) (c) Property, plant and equipment (Contd) (i) Recognition and measurement (Contd) Revalued property, plant and equipment where no revaluation policy is adopted Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within other income or other expenses respectively in the income statements. When revalued assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings. (ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of those parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred. (iii) Depreciation Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The buildings and condominium are depreciated over their remaining useful lives of 28, 33 and 50 years respectively. Freehold land is not depreciated. The estimated useful lives for the current and comparative periods are as follows: Plant and machinery Motor vehicles Office equipment, furniture and fittings Computers and software 10 10 5 - 10 2.5 years years years years
Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.
45

(Contd)
2. Significant accounting policies (Contd) (d) Biological assets Biological assets are stated at cost less any accumulated depreciation and any accumulated impairment losses. Biological assets comprise the original purchase price of Arowana fish (Arowana broodstocks). The Arowana broodstocks are depreciated over 25 years based on their economic egg-laying lives and tested for impairment annually and whenever there is indication that they may be impaired. (e) Leased assets (i) Finance lease Leases in terms of which the Group or the Company assume substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. (ii) Operating lease Leases, where the Group does not assume substantially all the risks and rewards of the ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the Groups balance sheet. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property. Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as prepaid lease payments. Leasehold land is amortised in equal instalments over the respective unexpired lease periods of 34 years. Payments made under operating leases are recognised in the income statements on a straight-line basis over the term of the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. (f) Intangible assets (i) Goodwill Goodwill arises on business combinations and is measured at cost less any accumulated impairment losses. With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of the acquisition over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquiree. Any excess of the Groups interest in the net fair value of acquirees identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in income statements. (ii) Amortisation Goodwill with indefinite useful lives are tested for impairment annually and whenever there is an indication that they may be impaired.
46
(Contd)
2. Significant accounting policies (Contd) (g) Investment properties (i) Investment property carried at cost Investment properties are properties which are owned to earn rental income or for capital appreciation or for both. These include land (other than leasehold land) held for a currently undetermined future use. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less any accumulated depreciation and any accumulated impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy Note 2(c). Depreciation is charged to income statement on a straight line basis over the estimated useful lives of 50 years and 99 years for buildings and condominium respectively. Freehold land is not depreciated. (ii) Determination of fair value An external, independent valuation firm, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Groups investment property portfolio annually. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. In the absence of current prices in an active market, the valuations are prepared by considering the aggregate of the estimated cash flows expected to be received from renting out the property. A yield that reflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows to arrive at the property valuation. Valuations reflect, where appropriate: the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting vacant accommodation, and the markets general perception of their creditworthiness; the allocation of maintenance and insurance responsibilities between the Group and the lessee; and the remaining economic life of the property. When rent reviews or lease renewals are pending with anticipated reversionary increases, it is assumed that all notices and where appropriate counter-notices have been served validly and within the appropriate time. (h) Investments in equity securities Investments in equity securities are recognised initially at fair value plus attributable transaction costs. Subsequent to initial recognition, investments in non-current equity securities other than investments in subsidiaries and associates, are stated at cost less allowance for diminution in value. All current investments are carried at the lower of cost and market value, determined on an individual investment basis by category of investments. Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current equity securities, other than investments in subsidiaries and associates, the allowance for diminution in value is recognised as an expense in the financial year in which the decline is identified. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statements.
47

(Contd)
2. Significant accounting policies (Contd) (h) Investments in equity securities (Contd) All investments in debt and equity securities are accounted for using settlement date accounting. Settlement date accounting refers to: a) b) the recognition of an asset on the day it is received by the entity, and the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered.
(i) Inventories Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the weighted average cost and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. (j) Receivables Receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established. Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts. Receivables are not held for the purpose of trading. (k) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments which have an insignificant risk of changes in value. For the purpose of the cash flow statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits, if any. (l) Payables Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual obligation to deliver cash or another financial asset to another entity. (m) Impairment of assets The carrying amounts of assets except for financial assets (other than investment in subsidiaries and associates), inventories, deferred tax assets and biological assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. For goodwill that have indefinite useful lives, the recoverable amount is estimated usually at each reporting date. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.
48
(Contd)
2. Significant accounting policies (Contd) (m) Impairment of assets (Contd) An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. Impairment losses are recognised in the income statements. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to the income statements in the year in which the reversals are recognised, unless it reverses an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where an impairment loss on the same revalued asset was previously recognised in the income statements, a reversal of that impairment loss is also recognised in the income statements. (n) Equity Instruments All equity instruments are stated at cost on initial recognition and are not re-measured subsequently. (i) Issue expenses Incremental costs directly attributable to issue of equity instruments are recognised as a deduction from equity. (ii) Repurchase of share capital When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a deduction from equity and is not re-valued for subsequent changes in the fair value or market price of shares. Repurchased shares that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both. Where treasury shares are reissued by re-sale in the open market, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity. (o) Loans and borrowings Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statements over the period of the loans and borrowings using the effective interest method.
49

(Contd)
2. Significant accounting policies (Contd) (p) Tax expense Tax expense comprises current and deferred tax. Tax expense is recognised in the income statements except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit (tax loss). Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax liability is recognised for all taxable temporary differences. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (q) Interest income and borrowing costs Interest income is recognised as it accrues, using the effective interest method. All borrowing costs are recognised in the income statements using the effective interest method, in the period in which they are incurred. (r) Revenue recognition (i) Goods sold Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods. (ii) Rental income Rental income from investment property is recognised in the income statements on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
50
(Contd)
2. Significant accounting policies (Contd) (s) Employee benefits Short term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. The Groups contribution to statutory pension funds are charged to the income statements in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations. (t) Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees. (u) Segment reporting A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.
51

(Contd)
3. Property, plant and equipment Office equipment, furniture and fittings and computers RM
Land and buildings RM Group At cost/valuation At 1 April 2007 Additions Disposals/Written off At 31 March 2008/1 April 2008 Additions Disposals/Written off At 31 March 2009 Representing items at: Cost Directors valuation - 2006
Plant and machinery RM
Motor vehicles RM
Total RM
8,889,909 20,500 8,910,409 21,280 8,931,689
32,741,232 1,433,761 (620,056) 33,554,937 3,116,734 (685,594) 35,986,077
3,267,573 130,000 (408,104) 2,989,469 93,934 (398,000) 2,685,403
1,684,420 34,952 1,719,372 68,226 1,787,598
46,583,134 1,619,213 (1,028,160) 47,174,187 3,300,174 (1,083,594) 49,390,767
4,051,689 4,880,000 8,931,689
35,986,077 35,986,077
2,685,403 2,685,403
1,787,598 1,787,598
44,510,767 4,880,000 49,390,767
Accumulated depreciation At 1 April 2007 Depreciation charge Disposals/Written off At 31 March 2008/1 April 2008 Depreciation charge Disposals/Written off At 31 March 2009 Carrying amounts At 31 March 2009 At 31 March 2008
295,856 259,693 555,549 259,785 815,334
20,448,106 2,182,359 (538,989) 22,091,476 2,154,395 (607,007) 23,638,864
1,829,686 280,329 (301,602) 1,808,413 208,491 (221,033) 1,795,871
1,289,050 129,716 1,418,766 91,446 1,510,212
23,862,698 2,852,097 (840,591) 25,874,204 2,714,117 (828,040) 27,760,281
8,116,355 8,354,860
12,347,213 11,463,461
889,532 1,181,056
277,386 300,606
21,630,486 21,299,983
52
(Contd)
3. Property, plant and equipment (Contd) Office equipment, furniture and fittings and computers RM
Land and buildings RM Company At cost/valuation At 1 April 2007 Additions Disposals At 31 March 2008/1 April 2008 Additions Disposals At 31 March 2009 Representing items at: Cost Directors valuation - 2006
Plant and machinery RM
Motor vehicles RM
Total RM
6,649,825 6,649,825 6,649,825
30,221,851 1,433,541 (216,500) 31,438,892 3,031,957 (685,594) 33,785,255
2,700,946 130,000 (134,000) 2,696,946 93,934 (398,000) 2,392,880
1,408,436 32,464 1,440,900 59,731 1,500,631
40,981,058 1,596,005 (350,500) 42,226,563 3,185,622 (1,083,594) 44,328,591
2,239,825 4,410,000 6,649,825
33,785,255 33,785,255
2,392,880 2,392,880
1,500,631 1,500,631
39,918,591 4,410,000 44,328,591
Accumulated depreciation At 1 April 2007 Depreciation charge Disposals At 31 March 2008/1 April 2008 Depreciation charge Disposals At 31 March 2009 Carrying amounts At 31 March 2009 At 31 March 2008
151,091 218,961 370,052 218,962 589,014
19,321,846 1,969,412 (136,867) 21,154,391 1,951,103 (607,007) 22,498,487
1,521,110 226,178 (134,000) 1,613,288 179,238 (221,033) 1,571,493
1,102,637 110,018 1,212,655 70,588 1,283,243
22,096,684 2,524,569 (270,867) 24,350,386 2,419,891 (828,040) 25,942,237
6,060,811 6,279,773
11,286,768 10,284,501
821,387 1,083,658
217,388 228,245
18,386,354 17,876,177
53

(Contd)
3. Property, plant and equipment (Contd) Group 2009 RM Carrying amounts of land and buildings At valuation Freehold land Buildings 2008 RM 2009 RM Company 2008 RM
225,600 4,459,759 4,685,359
225,600 4,347,174 4,572,774
3,956,733 3,956,733
4,107,818 4,107,818
At cost Freehold land Buildings
768,763 2,662,233 3,430,996 8,116,355
768,763 3,013,323 3,782,086 8,354,860
2,104,078 2,104,078 6,060,811
2,171,955 2,171,955 6,279,773
Revaluation Certain land and buildings are stated at Directors valuation based on independent professional valuation on the open market value based on comparison method and on an existing use basis in May 2006. Had the land and building been carried at cost, their carrying amounts would have been as follows: Group 2009 RM Freehold land Buildings 315,531 1,090,556 1,406,087 2008 RM 315,531 1,146,041 1,461,572 2009 RM 877,057 877,057 Company 2008 RM 917,391 917,391
Leased plant and machinery Included in property, plant and equipment of the Group and of the Company are plant and motor vehicles acquired by means of finance lease agreement with carrying amount of NIL (2008: RM829,185) and NIL (2008: RM352,292) respectively. The leased assets secure lease obligations (see Note 17). Security The freehold land and building of the Group with carrying amount of RM1,392,334 (2008: RM1,427,073) is charged to a bank for banking facilities granted to a subsidiary (see Note 17).
54
(Contd)
4. Biological assets Group/Company 2008 2009 RM RM At cost At 1 April Additions Write off At 31 March Accumulated depreciation At 1 April Depreciation charge Write off At 31 March Carrying amounts At 31 March 643,500 97,000 (6,500) 734,000 318,500 325,000 -643,500
32,530 25,523 (563) 57,490
12,740 19,790 -32,530
676,510
610,970
5. Prepaid lease payments Group/Company 2008 2009 RM RM At cost At 1 April/31 March Accumulated amortisation At 1 April Amortisation charge At 31 March Carrying amounts At 31 March
10,793,312
10,793,312
663,821 363,476 1,027,297
300,345 363,476 663,821
9,766,015
10,129,491
The prepaid lease payments of the Group and of the Company have an unexpired lease period of less than 50 years.
55

(Contd)
6. Investment properties Freehold land RM Buildings RM Condominium RM Total RM
Group At cost At 1 April 2007 Additions At 31 March 2008/1 April 2008 Additions Disposals Reclassification At 31 March 2009 Accumulated depreciation At 1 April 2007 Depreciation charge At 31 March 2008/1 April 2008 Depreciation charge At 31 March 2009 Carrying amounts At 31 March 2009 At 31 March 2008 Fair value At 31 March 2009 At 31 March 2008 Company At cost At 1 April 2007 Addition At 31 March 2008/1 April 2008 Addition Disposal At 31 March 2009 Accumulated depreciation At 1 April 2007 Depreciation charge At 31 March 2008/1 April 2008 Depreciation charge At 31 March 2009 Accumulated impairment losses At 1 April 2007/31 March 2008 At 1 April 2008/31 March 2009 Carrying amounts At 31 March 2009 At 31 March 2008 Fair value At 31 March 2009 At 31 March 2008
16,616,573 3,000,000 19,616,573 120,000 (44,442) (192,594) 19,499,537
594,770 4,259,367 4,854,137 38,600 192,594 5,085,331
800,000 800,000 800,000
18,011,343 7,259,367 25,270,710 158,600 (44,442) 25,384,868
84,588 51,788 136,376 65,632 202,008
127,660 8,511 136,171 8,511 144,682
212,248 60,299 272,547 74,143 346,690
19,499,537 19,616,573
4,883,323 4,717,761
655,318 663,829
25,038,178 24,998,163
25,470,000 25,190,000
15,777,204 15,777,204 120,000 (44,442) 15,852,762
287,268 20,499 307,767 21,280 329,047
800,000 800,000 800,000
16,864,472 20,499 16,884,971 141,280 (44,442) 16,981,809
47,358 5,993 53,351 6,084 59,435
127,660 8,511 136,171 8,511 144,682
175,018 14,504 189,522 14,595 204,117
89,931 89,931
15,061 15,061
104,992 104,992
15,762,831 15,687,273
254,551 239,355
655,318 663,829
16,672,700 16,590,457
16,705,000 16,610,000
56
(Contd)
6. Investment properties (Contd) Investment properties comprise a number of freehold land and commercial properties that are leased to a subsidiary or third parties. Three pieces of the freehold land and condominium are currently vacant. Subsequent renewals are negotiated with the lessee and no contingent rents are charged. The fair value is derived based on independent professional valuation on open market value based on comparison method and or an existing use basis. The following are recognised in the income statement in respect of investment properties: Group 2009 RM Rental income Direct operating expenses: - Income generating investment properties - Non-income generating investment properties Security At 31 March 2009, land and buildings of the Group with carrying amount of RM1,662,017 (2008: RM1,641,690) are charged to bank for term loan facilities granted to a subsidiary. Others One of the freehold land and building of a subsidiary with carrying amount of RM495,155 (2008: RM502,545) is held in trust by a director and a shareholder of that subsidiary. 514,350 2008 RM 213,250 2009 RM 36,000 Company 2008 RM 36,000
242,684 13,458
170,650 39,379
26,450 6,953
35,996 6,953
7. Investments in subsidiaries Company 2009 RM Unquoted shares at cost Less: Impairment losses 1,070,007 (1,070,000) 7 2008 RM 1,070,005 (1,070,000) 5
57

(Contd)
7. Investments in subsidiaries (Contd) The principal activities of the subsidiaries, their places of incorporation and the Companys interest in the subsidiaries are as follows: Country of incorporation Effective ownership interest 2009 2008 % % 70 70
Name of subsidiaries
Principal activities
UK Packaging Industries Sdn. Bhd.
Trading and manufacturing of cartons and paper products Relating to letting of property and collection and sales of bird nest Manufacturing and trading of carton boxes Dormant Dormant
Malaysia
UK Bioproducts Sdn. Bhd.
Malaysia
100
100
Richbox Paper Products (M) Sdn. Bhd.@
Malaysia
70
70
UKB International Pte. Ltd.* UK Wellness Sdn. Bhd. * @
Singapore Malaysia
100 100
100 -
Audited by another firm of accountants. The auditors report of the subsidiary is modified with an emphasis of matter on the going concern basis of preparation.
8. Investment in an associate Group 2009 RM Unquoted shares, at cost Share of post acquisition loss Impairment losses 2,500,000 (920,724) (231,276) 1,348,000 2008 RM 2,500,000 (577,574) 1,922,426 2009 RM 2,500,000 (1,152,000) 1,348,000 Company 2008 RM 2,500,000 (578,000) 1,922,000
Summary financial information on the associate are as follows: Effective ownership interest (%)
Name of associate
Country incorporation
Revenue (100%) RM000 505
Loss (100%) RM000 (652)
Total assets (100%) RM000 1,826
Total liabilities (100%) RM000 (891)
2009 Oriental Coast Sdn. Bhd. 2008 Oriental Coast Sdn. Bhd.
Malaysia
50
Malaysia
50
675
(139)
2,429
(841)
58
(Contd)
9. Investments in equity securities Group/Company 2009 2008 RM RM Investments in Malaysia, at cost: Quoted shares Market value of investments
444,374 455,840
382,305 382,240
10. Loan to a subsidiary Loan to a subsidiar y is unsecured, has no fixed term of repayment and interest is charged based on 4.75% (2008: 4.75%) per annum on an amount of RM4,739,580 (2008: RM4,739,580).
11. Inventories Group 2009 RM Raw materials Work-in-progress Finished goods 5,167,045 267,344 825,712 6,260,101 2008 RM 8,549,696 223,429 892,418 9,665,543 2009 RM 5,090,953 242,003 761,402 6,094,358 Company 2008 RM 8,458,343 216,244 784,460 9,459,047
12. Trade and other receivables Group 2009 RM Trade receivables Other receivables, deposits and prepayments 18,527,864 1,067,428 19,595,292 2008 RM 16,958,605 1,558,146 18,516,751 2009 RM 16,882,251 984,408 17,866,659 Company 2008 RM 14,842,077 1,377,787 16,219,864
Trade receivables denominated in currencies other than the functional currency comprise RM683,083 (2008: RM780,397) of trade receivables denominated in US Dollar and RM280,268 (2008: RM184,536) of trade receivables denominated in SGD.
13. Due from subsidiaries Company The amounts due from subsidiaries are trade in nature, unsecured, interest free and have no fixed terms of repayment. Included in amount due from subsidiaries are allowance for doubtful debts of RM2,125,358 (2008: RM2,474,358). Allowance for doubtful debts is made for subsidiaries that are in negative shareholders fund position.
59

(Contd)
14. Cash and cash equivalents Group 2009 RM Cash and bank balances Deposits are placed with licensed banks 3,703,158 3,703,158 2008 RM 2,237,542 2,161,305 4,398,847 2009 RM 3,506,943 3,506,943 Company 2008 RM 2,122,367 2,000,000 4,122,367
Included in deposits placed with licensed banks of the Group is an amount of NIL (2008: RM161,305) pledged for bank facilities granted to a subsidiary and placed under the name of the subsidiarys director. Cash and bank balances denominated in currencies other than the functional currency comprise RM511,260 (2008: RM239,912) denominated in US Dollar and RM138,900 (2008: RM32,833) denominated in SGD.
15. Share capital and reserves Share capital Group/Company 2009 RM Ordinary shares of RM1.00 each: Authorised Issued and fully paid Reserves Group 2009 RM Non-distributable Share premium Revaluation reserves Treasury shares Distributable Retained earnings 176,757 2,256,322 (2,067,958) 2008 RM 176,757 2,256,322 (1,993,185) 2009 RM 176,757 2,256,322 (2,067,958) Company 2008 RM 176,757 2,256,322 (1,993,185) 2008 RM Group/Company Number of ordinary shares 2009 2008 RM RM 100,000,000 100,000,000 48,000,000 48,000,000
100,000,000 100,000,000 48,000,000 48,000,000
10,626,690 10,991,811
9,574,365 10,014,259
10,563,629 10,928,750
9,431,847 9,871,741
Treasury shares At an Extraordinary General Meeting held on 28 August 2008, the Companys shareholders renewed the scheme to repurchase its own shares. During the financial year, the Company repurchased in the open market a total of 153,400 of its issued ordinary shares. The average repurchase price was RM0.49 per ordinary share. The total consideration paid including transaction costs was RM74,773.
60
(Contd)
15. Share capital and reserves (Contd) Treasury shares (Contd) The repurchase transactions were financed by internally generated funds and the repurchased shares are being held as treasury shares and carried at cost. The number of outstanding shares in issue after deducting treasury shares held at the financial year end is 45,107,100 ordinary shares of RM1.00 each. Treasury shares have no rights to voting, dividends and participation in any other distribution. Treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of shares in the Company for any purposes including substantial shareholding, take-overs, notices, the requisition of meeting, the quorum for a meeting and the result of a vote on a resolution at a meeting. None of the treasury shares has been resold or distributed as share dividends during the financial year. Section 108 tax credit and tax exempt account Subject to agreement by the Inland Revenue Board, the Company has sufficient Section 108 tax credit and tax exempt account to frank the payment of dividends out of its entire retained earnings at 31 March 2009. The Finance Act, 2007 introduced a single tier company income tax system with effect from year of assessment 2008. As such, the Section 108 tax credit as at 31 December 2007 will be available to the Company until such time the credit is fully utilised or upon expiry of the six-year transitional period on 31 December 2013, whichever is earlier.
16. Deferred tax liabilities Recognised deferred tax assets and liabilities Deferred tax asset and liabilities are attributable to the following: Group 2009 RM Property, plant and equipment - capital allowances - revaluation Unabsorbed capital allowances Others 2008 RM 2009 RM Company 2008 RM
1,769,000 1,802,000 (80,000) (83,000) 3,408,000
1,817,000 1,738,000 (123,000) (94,000) 3,338,000
1,760,000 1,758,000 (80,000) (83,000) 3,355,000
1,817,000 1,694,000 (123,000) (94,000) 3,294,000
61

(Contd)
16. Deferred tax liabilities (Contd) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Group 2009 RM000 Unabsorbed capital allowances Unutilised tax losses Property, plant and equipment - Capital allowance (555) (2,271) 821 (2,005) 2008 RM000 (1,201) (2,324) 1,177 (2,348)
The unabsorbed capital allowances and unutilised tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits there from.
17. Loans and borrowings Group 2009 RM Non-current Term loans - unsecured - secured Current Secured Term loans Bankers acceptances Finance lease liabilities Bank overdraft Unsecured Term loans Bankers acceptances Bank overdraft 2008 RM 2009 RM Company 2008 RM
3,980,365 506,997 4,487,362
4,114,572 566,667 4,681,239
3,980,365 3,980,365
4,114,572 4,114,572
129,566 1,830,000 342,689 2,302,255 971,460 11,392,000 12,363,460 14,665,715 19,153,077
55,236 2,700,000 90,358 665,591 3,511,185 625,008 15,116,000 74,360 15,815,368 19,326,553 24,007,792
971,460 11,392,000 12,363,460 12,363,460 16,343,825
47,492 47,492 625,008 15,116,000 74,360 15,815,368 15,862,860 19,977,432
62
(Contd)
17. Loans and borrowings (Contd) The term loans, bankers acceptances and bank overdraft of the Group are secured by first and second fixed legal charge over the freehold land and building of a subsidiary and joint and several guarantee by the director and a shareholder of that subsidiary. Terms and debt repayment schedule Year of maturity Carrying amount RM 5,588,388 13,222,000 342,689 19,153,077 Under 1 year RM 1,101,026 13,222,000 342,689 14,665,715 1-2 years RM 1,037,075 1,037,075 2-5 years RM 2,244,697 2,244,697 More than 5 years RM 1,205,590 1,205,590
Group 2009 Term loans Bankers acceptances Bank overdrafts
2010 - 2018 2010 -
2008 Term loans Bankers acceptances Finance lease liabilities Bank overdrafts
2009 - 2018 2009 2009 -
5,361,483 17,816,000 90,358 739,951 24,007,792
680,244 17,816,000 90,358 739,951 19,326,553
684,332 684,332
2,084,968 2,084,968
1,911,939 1,911,939
Company 2009 Term loans Bankers acceptances 2010 - 2016 2010 4,951,825 11,392,000 16,343,825 971,460 11,392,000 12,363,460 971,460 971,460 2,019,373 2,019,373 989,532 989,532
2008 Term loans Bankers acceptances Finance lease liabilities Bank overdrafts
2009 - 2016 2008 2009 -
4,739,580 15,116,000 47,492 74,360 19,977,432
625,008 15,116,000 47,492 74,360 15,862,860
625,008 625,008
1,875,024 1,875,024
1,614,540 1,614,540
18. Trade and other payables Group 2009 RM Trade payables Other payables and accrued expenses 5,318,700 1,779,630 7,098,330 2008 RM 5,986,999 1,216,605 7,203,604 2009 RM 5,203,238 1,534,583 6,737,821 Company 2008 RM 5,832,008 976,263 6,808,271
Trade payables denominated in currencies other than the functional currency comprise of RM167,259 (2008: RM59,031) denominated in US Dollar.
63

(Contd)
19. Operating profit/(loss) Group 2009 RM Operating profit/(loss) is arrived at after charging/(crediting) Audit fees Allowance/(reversal) for doubtful debts: - Third parties - Subsidiaries Depreciation and amortisation: - Property, plant and equipment - Investment properties - Biological assets - Prepaid lease payments Impairment losses on: - Goodwill on consolidation - Investments in subsidiaries - Investment in an associate Personnel expenses (including key management personnel): - Contributions to Employees Provident Fund - Wages, salaries and others Rental of premises Rental of machinery Allowance for diminution in value of investment in quoted shares (Recovered)/Written off: - Bad debts - Biological assets Loss/(Gain) on disposal of: - Property, plant and equipment - Investment properties - Quoted shares Inventories written off Realised (gain)/loss on foreign exchange Dividend income from quoted investments Rental income Waiver of loan from previous director of a subsidiary Key management personnel compensation Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel includes all the Directors of the Group, and certain members of senior management of the Group. 2008 RM 2009 RM Company 2008 RM
67,500
67,610
48,000
48,000
155,527 2,714,117 74,143 25,523 363,476 231,276
11,589 2,852,097 60,299 19,790 363,476 20,000 -
96,763 (349,000) 2,419,891 14,595 25,523 363,476 574,000
272,000 2,524,569 14,504 19,790 363,476 20,000 41,426
693,563 8,656,198 154,800 50,994 118,030 (1,145) 5,937 33,967 (250,558) 17,698 (331,067) (5,250) (514,350) (90,000)
735,314 8,825,858 153,800 57,159 67,580 (110,471) (5,280) (39,829) 81,276 (6,660) (213,250) -
622,405 7,736,747 99,600 46,800 118,030 (3,211) 5,937 (74,906) (250,558) (328,404) (5,250) (36,000) -
663,299 7,906,851 99,600 53,070 67,580 18,633 (39,829) 81,166 (6,660) (36,000) -
64
(Contd)
19. Operating profit/(loss) (Contd) Key management personnel compensation are as follows: Group 2009 RM Directors - Fees - Remuneration Other short term employee benefits (including estimated monetary value of benefits-in-kind) Total short-term employee benefits Other key management personnel: - Contributions to Employees Provident Fund - Wages, salaries and others 211,000 1,599,142 2008 RM 201,000 1,995,770 2009 RM 211,000 1,599,142 Company 2008 RM 201,000 1,995,770
43,500 1,853,642
47,033 2,243,803
43,500 1,853,642
47,033 2,243,803
53,644 560,316 613,960 2,467,602
51,623 474,293 525,916 2,769,719
42,124 464,316 506,440 2,360,082
40,103 378,293 418,396 2,662,199
Other key management personnel comprises persons other than the Directors of Group entities, having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.
20. Tax expense/(income) Group 2009 RM Tax expense - Current year - Under/(Over) provided in prior years Deferred tax expense/(income) - Origination and reversal of temporary differences - Under/(Over) provided in prior years 445,536 6,480 452,016 2008 RM 124,922 (74,834) 50,088 2009 RM 377,000 (6,694) 370,306 Company 2008 RM 122,000 (74,834) 47,166
(40,000) 101,000 61,000 513,016
(294,000) (208,000) (502,000) (451,912)
(40,000) 101,000 61,000 431,306
(294,000) (208,000) (502,000) (454,834)
65

(Contd)
20. Tax expense/(income) (Contd) Group 2009 RM000 Reconciliation of effective tax expense/(income) Profit/(Loss) before tax Tax at Malaysian tax rate Non deductible expenses Effect of deferred tax asset not recognised Tax incentives Non taxable income Effect of change in tax rate 2008 RM000 2009 RM000 Company 2008 RM000
2,242 561 276 (86) (312) (33) 406 107 513
51 13 243 (86) (173) (24) (142) (169) (283) (452)
2,240 560 99 (312) (10) 337 94 431
(66) (17) 184 (173) (24) (142) (172) (283) (455)
Under/(Over) provided in prior years Tax expense/(income)
21. Earnings per ordinary share Basic earnings per ordinary share The calculation of basic earnings per ordinary share at 31 March 2009 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding calculated as follows: Group 2009 RM Profit attributable to ordinary shareholders Weighted average numbers of ordinary shares are determined as follows: Group 2009 Issued ordinary shares at beginning of the year Effect of shares repurchased 48,000,000 (2,832,400) 45,167,600 3.83 2008 48,000,000 (2,522,000) 45,478,000 1.11 1,729,264 2008 RM 502,781
Earnings per ordinary share (sen) Diluted earnings per ordinary share There are no dilutive potential ordinary shares.
66
(Contd)
22. Dividends Dividends recognised in the current year by the Company are: Sen per share 2009 2008 - Final, tax exempt 2008 2007 - Final, tax exempt Total amount RM 676,939 Date of payment 30 September 2008
1.50
2.50
1,134,464
20 September 2007
After the balance sheet date the following dividend was proposed by the Directors. This dividend will be recognised in subsequent financial reports upon approval by the shareholders at the forthcoming Annual General Meeting. Sen per share Total amount RM 1,353,213
2009 - Final, tax exempt
3.00
23. Segment information There is no segment information presented as the Group is primarily engaged in the manufacture and sale of carton boxes and board and operates principally in Malaysia.
24. Financial instruments Exposure to credit, currency and interest rate risk arises in the normal course of the Groups and the Companys business. The Group and the Company have written risk management policies and guidelines which sets out their overall business strategies, their tolerance to risk and their general risk management philosophy. Such policies are reviewed annually by the Board of Directors to ensure that the Groups and the Companys policy guidelines are adhered to. Credit risk Management has an informal credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Trade receivables are monitored on an ongoing basis via Group management reporting procedures. At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk for the Group and the Company are represented by the carrying amount of each financial assets. Foreign currency risk The Group and Company is exposed to foreign currency risk on sales that are denominated in a currency other than the respective functional currencies of Group entities. The currencies giving rise to this risk are primarily US Dollars and Singapore Dollars. Interest rate risk The Groups and Companys bank borrowings are exposed to changes in market interest rate. There is no formal hedging policy with respect to interest rate exposure. Exposure to interest rate risk is monitored on an ongoing basis and the Group and the Company endeavour to keep the exposure at an acceptable level.
67

(Contd)
24. Financial instruments (Contd) Effective interest rates and repricing analysis In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at the balance sheet date and the periods in which they mature, or if earlier, reprice. Average effective interest rate %
Group 2009
Total RM000
Less than 1 year RM000
Floating rate instruments Bank overdrafts Term loans Fixed rate instruments Bankers acceptances 2008 Fixed rate instruments Fixed deposits placed with licensed banks Finance lease liabilities Bankers acceptances Floating rate instruments Bank overdrafts Term loans
6.55 5.73 - 6.80
343 5,588 5,931 13,222
343 5,588 5,931 13,222
2.30 - 4.38
3.70 3.00 - 5.00 4.09 - 5.58
2,161 (90) (17,816) (15,745) (740) (5,362) (6,102)
2,161 (90) (17,816) (15,745) (740) (5,362) (6,102)
6.75 - 8.50 4.75 - 8.50
Company 2009 Floating rate instruments Term loans Fixed rate instruments Bankers acceptances 2008 Fixed rate instruments Fixed deposits placed with licensed banks Finance lease liabilities Bankers acceptances Floating rate instruments Bank overdrafts Term loans
5.73
4,952
4,952
2.77 - 4.38
11,392
11,392
3.70 3.00 4.09 - 4.53
2,000 (47) (15,116) (13,163) (74) (4,740) (4,814)
2,000 (47) (15,116) (13,163) (74) (4,740) (4,814)
4.75
68
(Contd)
24. Financial instruments (Contd) Fair values Recognised financial instruments The carrying amounts of financial assets and liabilities approximate their fair values due to the relatively short term nature of these financial instruments. The carrying amount of the term loan approximate its fair value as its effective interest rate changes according to movements in the market interest rate. The aggregate fair values of the other financial assets carried on the balance sheet as at 31 March are shown below: 2009 Group/Company Financial assets Quoted shares Carrying amount RM000 444 Fair value RM000 456 Carrying amount RM000 382 2008 Fair value RM000 382
25. Related parties For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company 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 or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The significant related party transactions of the Group and the Company are as follows: Company 2009 RM000 Transactions Subsidiaries Sales of paper boards Rental income from factory Purchase of motor vehicles Sale of plant and machinery 2008 RM000
(4,578) (36) (206) Group
(5,838) (36) 130 -
A company in which a Directors close family member has substantial financial interest Transportation services Companies in which a Director and his close family members have substantial financial interests Commission receivable on insurance premium Warehouse rental expense
1,979
1,825
(91) 46
(90) 46
69

(Contd)
25. Related parties (Contd) 2009 RM000 Key management personnel Remuneration paid to key management staff who are close family members of a Director Close family members of a Director Rental expenses A Director Rental expenses Transactions entered by a subsidiary with: An associate Rental income 2008 RM000
325
296
12
20
17
17
(28)
(30)
70
Analysis of Shareholdings
as at 22 June 2009
Authorised Share Capital Issued and Fully Paid-Up Capital Class of Shares Voting Rights No. of Shareholders Distribution of Shareholdings
: : : : :
RM100,000,000 RM48,000,000 Ordinary Shares of RM1.00 each One vote per Ordinary Share 1,255
Range of Shares 1 - 99 100 - 1,000 1,001 - 10,000 10,001 - 100,000 100,001 - 2,399,999 2,400,000 and above Total
No. of Shareholders 14 330 663 204 40 4 1,255
Percentage (%) 1.11 26.29 52.83 16.26 3.19 0.32 100.00
No. of Shares 693 63,680 2,744,449 6,047,035 20,622,010 18,522,133 48,000,000
Percentage (%) 0.00 0.13 5.72 12.60 42.96 38.59 100.00
List of Top 30 Shareholders as at 22 June 2009 (as shown in the Record of Depositors) No. Name of Shareholders 1. Soh Man Tong 2. Tan Soo Siang 3. EB Nominees (Tempatan) Sendirian Berhad Pledged Securities Account For Soh Man Tong 4. United Kotak Berhad Share Buy Back Account 5. Tey Moi Chan 6. EB Nominees (Tempatan) Sendirian Berhad Pledged Securities Account For Ker Boon Kee 7. Strong Box Integrated Sdn Bhd 8. Ng Poey Tiong 9. Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Yeo Guik Hiang (JBU/AAA) 10. Lee Chai Eng 11. Soh Man Tong 12. Macro Avenue Sdn Bhd 13. Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Ker Meng Oi 14. Alliancegroup Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Soh Man Tong (100436) 15. Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Soh Man Tong (JBU/AAA) 16. Ang Gim Kee @ Ang Kim Kee 17. Public Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Ker Min Choo (E-JBU) 18. Koh Boh Hay 19. CIMSEC Nominees (Tempatan) Sdn Bhd Exempt An For CIMB-GK Securities Pte Ltd (Remisiers Account) No. of Shares Held 5,465,208 5,431,311 4,555,014 3,070,600 2,017,298 1,765,900 1,728,452 1,601,379 1,453,000 1,329,300 1,197,009 1,152,591 664,420 619,200 544,000 522,999 442,000 347,391 335,952 Percentage (%) 11.38 11.32 9.49 6.40 4.20 3.68 3.60 3.34 3.03 2.77 2.49 2.40 1.38 1.29 1.13 1.09 0.92 0.72 0.70
71
as at 22 June 2009
(Contd)
List of Top 30 Shareholders as at 22 June 2009 (Contd) (as shown in the Record of Depositors) No. Name of Shareholders 20. CIMSEC Nominees (Tempatan) Sdn Bhd Exempt An For CIMB-GK Securities Pte Ltd (Retail Clients) 21. Soh Ah Mok 22. Ng Sing Hock 23. Soh Ping Chew 24. Lew Ping Yew 25. HLB Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Ker Boon Kee 26. Teo Poh Boon 27. Seet Cheng Hong 28. Tan Soo Yong 29. Tan Poh Hwa 30. Ang Gim Seng @ Hong Kee Sing No. of Shares Held 322,112 319,897 313,297 311,980 272,400 233,000 224,800 216,000 207,257 206,700 204,939 Percentage (%) 0.67 0.67 0.65 0.65 0.57 0.49 0.47 0.45 0.43 0.43 0.43
Total
37,075,406
77.24
72
as at 22 June 2009 (Contd)
List of Substantial Shareholders as at 22 June 2009 (as shown in the Register of Substantial Shareholders) Interests in Shares Deemed Direct 12,380,431 39,600 5,431,311 1,768,052 14,108,883 Percentage (%) 31.49 31.49 12.09
No. Name of Substantial Shareholders 1. Soh Man Tong 2. Soon Pick Lan 3. Tan Soo Siang Directors Interests in Shares as at 22 June 2009 Name of Directors A. In the Company Soh Man Tong Tan Soo Siang Ng Poey Tiong Soh Choon Wai Rithauddin Hussein Jamalatiff Bin Jamaluddin Kek Kok Swee Lim Dau Joong B. In Related Corporations Interest of Soh Man Tong in Subsidiaries, (i) UK Packaging Industries Sdn Bhd (No. of Ordinary shares of RM1.00 each)
Note (a) (b)
Interests in Shares Deemed Direct
Note
Percentage (%)
12,380,431 5,431,311 1,601,379 -
1,768,052 -
(a)
31.49 12.09 3.56 -
140,000
(c)
70.00
(ii) UK Bioproducts Sdn. Bhd. (No. of Ordinary shares of RM1.00 each) (iii) Richbox Paper Products (M) Sdn Bhd (No. of Ordinary shares of RM1.00 each) (iii) UK Wellness Sdn Bhd (No. of Ordinary shares of RM1.00 each) Note: (a) (b) (c) (d)
300,000
(c)
100.00
777,000
(c)
70.00
(c)
100.00
By virtue of his interest in Strong Box Integrated Sdn Bhd and the shareholdings of his spouse, Madam Soon Pick Lan. By virtue of the shareholdings of her spouse, Mr Soh Man Tong and his interest in Strong Box Integrated Sdn Bhd. By virtue of his interest in United Kotak Berhad. The percentage is computed based on the total number of shares in issue of 48,000,000 and after deducting a total of 3,070,600 shares bought back and retained as treasury shares as at 22.06.2009.
73
74 Description Tenure Land area / Floor area Approximate age of building(s) (years) Date of last Net Book Value as at 31.03.2009 revaluation (R) / acquisition (A) (RM) as at 31 March 2009
Beneficial Owner
Location
UKB Land : 4 acres 15 to 22 11,655,171 29.05.2006 (R)
List of properties
Lot TLO 7124, Title HS(D) 14571, Township & District of Johor Bahru, Johor Factory No. 5, Jalan Tahana, Tampoi Industrial Estate, 80350 Johor Bahru, Johor Floor area : 2,849 square feet 13 655,318 29.05.2006 (R)
3 blocks of detached factory buildings store and 3 storey office building
Leasehold 60 years expiring on 13.05.2035
Lot 20779 (Old PTB 17871), PN 3692 (old HS(D) 151610) Township & District of Johor Bahru, Johor No. 18S-01, Level 18 South Tower, Indah Samudera Condominium Penthouse unit 1 storey detached factory Freehold Land : 26,294 square feet 13 480,152
PTD 4074, HS(M) 3060 Mukim of Simpang Kiri Daerah Batu Pahat, Johor No. 4, Jalan Sri Sulong 19/A, Taman Industri Sri Sulong, 83020 Batu Pahat Condominium Unit Freehold Floor area : 1,418 square feet 16
29.05.2006 (R)
Master Lot 329, Geran No. 1902, Pekan Klebang Seksyen III, Daerah Melaka Tengah, Melaka No. 6-3-12, Storey No. 6 Condominium Legenda Klebang Besar Industrial land Freehold Land : 8.33 acres
110,526
29.05.2006 (R)
Geran 45308, Lot 5629 Mukim of SenaiKulai District of Johor Bahru Johor Industrial land Freehold
N/A
4,118,296
29.05.2006 (R) Land : 19,015.164 square metres N/A 9,726,218 25.10.2004 (A)
PTD 156643, HS(D) 302877, Mukim of Plentong, District of Johor Bahru
Geran No. 69363, Lot No. 45096 Mukim of Pulai District of Johor Bahru
Vacant Land
Freehold
Land : 0.7837 hectares
N/A
1,692,716
29.12.2005 (A)
Beneficial Owner Description Tenure
Location
Land area / Floor area
Approximate Net Book Value Date of last age of building(s) as at 31.03.2009 revaluation (R) / (RM) acquisition (A) (years)
UKB Land : 1.6187 hectares 17 4,061,129 05.10.2006 (A)
PTB 7125, Title HS(D) 46131, Township & District of Johor Bahru, Johor Factory No. 7A, Jalan Tahana, Tampoi Industrial Estate, 80350 Johor Bahru, Johor Freehold Land : 13,538 square feet 17 1,392,334 09.05.2006 (R)
Single storey detached factory building and double storey office building
Richbox
HS(D) 160485 PTD 44783, Mukim of Pulai, 1 storey semidetached factory District of Johor Bahru, Johor No. 49, Jalan Perdagangan 16, Taman Universiti, 81300 Skudai, Johor Double storey shop office Freehold Land : 2,869 square feet 7 495,154
HS(D) 330124 PTD 116901, Mukim of Pulai, District of Johor Bahru, Johor No. 9, Jalan Kebudayaan 1A, Taman Universiti, 81300 Skudai, Johor Double storey shop office Freehold Land : 1,408 square feet 7
09.05.2006 (R)
HS(D) 330132 PTD 116909, Mukim of Pulai, District of Johor Bahru, Johor No. 27, Jalan Kebudayaan 1A, Taman Universiti, 81300 Skudai, Johor Double storey shop office Freehold Land : 1,408 square feet
379,459
09.05.2006 (R)
HS(D) 330133 PTD 116910, Mukim of Pulai, District of Johor Bahru, Johor No. 29, Jalan Kebudayaan 1A, Taman Universiti, 81300 Skudai, Johor Freehold
379,459
09.05.2006 (R)
GM 27, Lot 396, Mukim of Pengkalan Raja, Agricultural land District of Pontian, Johor 1 storey detached factory building
Land : 4.89375 acres Freehold Land : 9810 square feet
N/A
407,944
09.05.2006 (R) 6 7,183,613 14.09.2007 (A)
List of properties
as at 31 March 2009 (Contd)
UK Bio
PTD 75285, HS(D) 215995 Mukim of Plentong District of Johor Bahru PTD 75285 Jalan Masai Off Jalan Pasir Gudang Highway 81750 Masai, Johor Bahru, Johor
75
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76
77
78
UNITED KOTAK BERHAD
(78806-V)
Form of Proxy
I/We, of UNITED KOTAK BERHAD (the Company) do hereby appoint (NRIC No. of or failing him/her, of or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us on my/our behalf at the Twenty-Seventh Annual General Meeting of the Company to be held at Mutiara Room, Level 2, The Puteri Pacific Johor Bahru, Jalan Abdullah Ibrahim, 80730 Johor Bahru, Johor on Tuesday, 11 August 2009 at 9.30 a.m. and at any adjournment thereof. Please indicate clearly with an X where appropriate against each resolution how you wish your proxy to vote. If no specific direction to voting is given, the proxy will vote or abstain at his/her discretion. NO. 1 2 3 4 5 6 7 8 9 10 RESOLUTIONS Receive Audited Financial Statements for the financial year ended 31 March 2009 together with the Directors and Auditors reports thereon Approval of final tax exempt dividend of 3 sen per ordinary share of RM1.00 each Approval of Directors fees Re-election of Mr Soh Man Tong retiring in accordance with Article 99 of the Companys Articles of Association Re-election of Mr Ng Poey Tiong retiring in accordance with Article 99 of the Companys Articles of Association Re-election of Mr Lim Dau Joong retiring in accordance with Article 104 of the Companys Articles of Association Re-appointment of KPMG as Auditors and authorise the Directors to fix their remuneration Authorise directors to issue shares pursuant to Section 132D of the Companies Act, 1965 Authorise directors to issue shares pursuant to the Employee Share Option Scheme (ESOS) Renewal of Shareholders approval for Share Buy-Back day of 2009 FOR AGAINST (NRIC No. ) ) (NRIC No. ) being a member/members of
Signed this
Number of ordinary shares held
Signature of Member(s)
NOTES: 1. A member of the Company entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. 2. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. 3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under Seal or under the hand of an officer or attorney duly authorised. 4. All forms of proxy must be deposited at the Registered Office of the Company situated at Suite 7E, Level 7, Menara Ansar, 65, Jalan Trus, 80000 Johor Bahru, Johor, Malaysia not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.
Fold this flap for sealing
AFFIX STAMP HERE
The Company Secretary
UNITED KOTAK BERHAD (78806-V)

Suite 7E, Level 7 Menara Ansar 65 Jalan Trus 80000 Johor Bahru Johor, Malaysia
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Contents

Notice of Twenty-Seventh Annual General Meeting

RESOLUTION 4 RESOLUTION 5 RESOLUTION 6

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

Notice of Twenty-Seventh Annual General Meeting

By Order of the Board

ANG MUI KIOW Secretary Johor Bahru 20 July 2009

UNITED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Notice of Twenty-Seventh Annual General Meeting

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

Notice of Dividend Entitlement and Payment

Statement Accompanying Notice of Twenty-Seventh Annual General Meeting

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009

DATE OF INCORPORATION 5 December 1981

DATE OF LISTING 18 March 2002

STOCK EXCHANGE LISTING Second Board of Bursa Malaysia Securities Berhad

UNI TED K OTAK B ER HAD ( 7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Mr Soh Man Tong, Malaysian, Aged 57 Executive Chairman, Non-Independent

Mr Tan Soo Siang, Malaysian, Aged 58 Managing Director, Non-Independent

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009

Mr Soh Choon Wai, Malaysian, Aged 30 Executive Director, Non-Independent

Mr Ng Poey Tiong, Singaporean, Aged 69 Non-Independent Non-Executive Director

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Independent Non-Executive Director

Encik Rithauddin Hussein Jamalatiff Bin Jamaluddin, Malaysian, Aged 44

Mr Kek Kok Swee, Malaysian, Aged 55

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009

Mr Lim Dau Joong, Malaysian, Aged 54 Independent Non-Executive Director

UNITED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Five-year Financial Highlights

72,338 2,231 2,361

66,323 2,450 2,204

64,567 1,380 747

90,000 80,000 70,000 60,000 50,000 64,567 66,323

1,500 40,000 30,000 20,000 500 10,000 1,000

Profit before tax

60,000 59,500 59,463

55,500 2005 2006 2007 2008 2009

Profit after tax (before minority interest)

Net tangible assets

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

SOH MAN TONG Executive Chairman

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Corporate Governance Statement

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009

Corporate Governance Statement

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Corporate Governance Statement

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

Corporate Governance Statement

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Corporate Governance Statement

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

Corporate Governance Statement

UNI TED K OTAK B ER HAD (7 8 8 0 6 - V ) A N N U A L RE P O RT 2 0 0 9

Other Compliance Information

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL RE P O RT 2009

Audit Committee Report

UNIT ED K OTAK B ER HAD ( 7 8 8 0 6 - V ) A N N UA L RE P O RT 2 0 0 9

Terms of Reference of the Audit Committee

U NITED KOTAK BERHAD (7 8 8 0 6 -V) ANNU AL REP O RT 2009

Terms of Reference of the Audit Committee