Professional Documents
Culture Documents
REPORT
2015
MOVING
FORWARD
RATIONALE
KAREX BERHAD IS MAKING ITS MARK
ACROSS THE GLOBE WITH HIGH QUALITY
AND INNOVATIVE PRODUCTS. FROM
HUMBLE BEGINNINGS AS A FAMILY
BUSINESS, KAREX HAS GROWN FROM
STRENGTH TO STRENGTH AND TODAY IS
THE LARGEST CONDOM MANUFACTURER
IN THE WORLD. WE HAVE PRODUCTION
CAPACITY OF 4 BILLION PIECES AND FAST
MOVING TOWARDS 5 BILLION PIECES OF
CONDOMS PER ANNUM. WE SUPPLY OUR
CONDOMS TO REGIONS ACROSS ASIA,
AFRICA, AMERICA AND EUROPE. OUR
PRODUCTS ARE MADE TO STRINGENT
STANDARDS AND CONTINUE TO MEET THE
CHANGING NEEDS OF CONSUMERS TODAY.
w w w. k a r e x . c o m . m y
WHATS
INSIDE
006 Corporate Information
010 Financial Highlights
016 Chairmans Statement
024 CEOs Statement
038 Board of Directors
040 Profile of Board of Directors
049 CEOs Profile
052 Statement on Corporate Governance
057 Additional Compliance Information
059 Audit Committee Report
063 Statement of Directors Responsibility
066 Statement on Risk Management and Internal Control
070 Financial Statements
128 List of Properties
130 Analysis of Shareholdings
132 Thirty Largest Shareholders
134 Notice of Annual General Meeting
136 Statement Accompanying Notice of Annual General Meeting
Form of Proxy
016
024
040
070
CHAIRMANS
STATEMENT
CEOS
STATEMENT
PROFILE
OF BODS
FINANCIAL
STATEMENTS
CORPORATE
INFORMATION
BOARD OF DIRECTORS
AUDIT COMMITTEE
NOMINATION COMMITTEE
MANAGEMENT OFFICE
REMUNERATION COMMITTEE
TAN SRI DATO SERI UTAMA ARSHAD BIN AYUB
CHAIRMAN
INDEPENDENT NON-EXECUTIVE DIRECTOR
LAW NGEE SONG
MEMBER
INDEPENDENT NON-EXECUTIVE DIRECTOR
GOH YEN YEN
MEMBER
EXECUTIVE DIRECTOR
COMPANY SECRETARIES
LIM LEE KUAN
(MAICSA 7017753)
ANNA LEE AI LENG
(LS 0009729)
REGISTERED OFFICE
10TH FLOOR, MENARA HAP SENG,
NO. 1 & 3, JALAN P. RAMLEE,
50250 KUALA LUMPUR, MALAYSIA
TEL : +603-2382 4288
FAX : +603-2382 4170
SHARE REGISTRAR
SYMPHONY SHARE REGISTRARS SDN. BHD. (378993-D)
LEVEL 6, SYMPHONY HOUSE,
PUSAT DAGANGAN DANA 1,
JALAN PJU 1A/46,
47301 PETALING JAYA,
SELANGOR DARUL EHSAN, MALAYSIA
TEL : +603-7841 8000
FAX : +603-7841 8151/8152
AUDITORS
MESSRS. KPMG [AF 0758]
CHARTERED ACCOUNTANTS
LEVEL 14, MENARA ANSAR,
65, JALAN TRUS,
80000 JOHOR BAHRU,
JOHOR DARUL TAKZIM, MALAYSIA
TEL : +607-224 2870
FAX : +607-224 8055
BANKERS
BANGKOK BANK PUBLIC COMPANY LIMITED
HONG LEONG BANK BERHAD
HSBC BANK MALAYSIA BERHAD
RHB BANK BERHAD
UNITED OVERSEAS BANK (MALAYSIA) BHD
TOGETHER
WE ARE ONE
FINANCIAL
2012
(a)
188,751
14,530
12,016
231,389
36,144
29,028
285,332
54,428
45,168
298,094
73,282
59,553
163,947
79,094
117,457
223,406
108,397
146,678
289,864
223,332
203,549
473,306
431,597
343,885
91,569
57,375
79,094
99,010
57,375
108,397
51,664
101,250
223,332
51,241
167,063
431,597
2.33
0.34
516,375
229,500
5.62
0.47
516,375
229,500
7.85
0.55
575,544
405,000
9.51
0.65
625,975
668,250
(b)
PER SHARE
(i) Basic earning (sen)*
(ii) Net assets (RM)**
* Based on weighted average number of shares issued (000)
** Based on number of shares issued (000)
FINANCIAL RATIOS
(i) Return on total tangible assets (%)
(ii) Return on shareholders funds (%)
(iii) Current ratio (times)
(iv) Gearing ratio (times)
(v) Gearing ratio net of cash (times)
7%
15%
1.28
0.46
0.35
(c)
(c)
13%
27%
1.48
0.47
0.09
16%
20%
3.94
0.10
N/A
(c)
(d)
13%
14%
6.71
0.05
N/A
(d)
(a) The figures as stated above for the financial years ended 30 June 2012 to 2013 are consistent with the proforma consolidated
financial information as disclosed in our Prospectus dated 11 October 2013. The proforma consolidation financial information
have been prepared based on the assumption that the acquisition of subsidiaries have been in existence since the financial
year 2012 and before the completion of Initial Public Oer and Bonus Issue (as detailed in note 24 of the audited financial
statements). The accounting principles and bases applied are consistent with those adopted by Karex Group for the financial
year ended 30 June 2015.
(b) The figures for financial year 2014 as stated above are based on a complete years basis, whereas the audited financial
statements reflect the financial results from the eective date of acquisition i.e., 23 September 2013 (refer page 081, Statement
of Profit or Loss).
(c) Restated to reflect the retrospective adjustments arising from the bonus issue completed in the financial year ended 30 June
2014 and 30 June 2015 in accordance with MFRS 133, Earnings per Share.
(d) No disclosure of gearing ratio net of cash (times) as the Group is in a net positive cash flow position.
HIGHLIGHTS
9,=,5<,94
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298,094
796-0;(;;90)<;,;66>5,9:
6-;/,*647(5@94
59,553
73,282
)(:0*,(9505.:7,9:/(9,:,5
9.51
5,;(::,;94
0.65
5,;(::,;7,9:/(9,94
431,597
ONE DREAM,
ONE VISION,
ONE DESTINATION
KAREX ANNUAL REPORT 2015 | 015
CHAIRMANS
STATEMENT
016 | KAREX ANNUAL REPORT 2015
RM298.1
MILLION
REVENUE
CHAIRMANS STATEMENT
RM207.7
MILLION
FROM RM85.6 MILLION THE YEAR BEFORE
ENTHUSIASM
IS THE FUEL
THAT KEEPS
PASSION ALIVE
106%
PROFIT AF TER TA X GROW TH
CEOS
STATEMENT
KAREX ANNUAL REPORT 2015 | 025
CEOS STATEMENT
INDUSTRY REVIEW
The global condom market for 2015 has been estimated at
27 billion pieces. With the continued threat of HIV / AIDS
showing no signs of abating, and the ever growing world
population, industry experts are confi dent that their earlier
estimation of 9% compounded annual growth rate (CAGR)
could be surpassed in the next few years.
According to UNAIDS, in 2014 another 2 million people
globally are newly infected with HIV and 1.2 million people
died from AIDS-related illnesses. Moreover sexually
transmitted infections (STI) are posing a growing health
threat to todays population globally, further driving the
growth of condom usage. Over 1 million people globally are
infected with STI every day.
Governments around the world continue to be the major
buyers of condoms, which is the most eective method of
contraceptives. Unwanted pregnancies continue to aect
millions of lives annually, and if women around the world
could have access to a simple and modern contraception
such as condoms, hundreds of thousands of womens lives
could be saved every year.
OPERATIONS REVIEW
The RM / USD exchange rate continued to move in our favour.
The rate improved by 6.8% from an average of RM3.24 / USD1
in FYE 2014 to RM3.46 / USD1 in FYE 2015.
<:+4@9790*,46=,4,5;-69;/,-@,
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CEOS STATEMENT
FINANCIAL REVIEW
Karex reported another record year with revenue posting RM298.1 million and profit after tax of RM59.7 million. Notwithstanding
revenue grew 4.5% year-on-year, profit after tax grew 32.2% on favourable business environment. We are proud to report that
since listing in 2013, revenue has grown 28.8% while profit after tax has grown 106%. Our Condoms remained the top revenue
contributor for FYE 2015 at 92%. Catheters (5%), Probe Covers and Lubricating Jelly (3%) also remained stable in their contribution
over the same period.
9,=,5<,944033065
796-0;),-69,;(?944033065
73.3
298.1
2013
2014
Condoms
2015
Catheters
In terms of market segments, it is divided into commercial market where we manufacture for other brands owners (OEM),
government orders/tender market and our own brand manufacturing (OBM) market.
OEM remained the top contributor of our condom sales at 50%. However, the overall contribution from OEM moderated slightly
from FYE 2014 (54%). The reason for the moderation is mainly due to the increased sales from our tender market which rose from
42% (FYE 2014) to 43% (FYE 2015). OBM market also increased over the same period from 4% (FYE 2014) to 7% (FYE 2015). This
is largely due to inclusion of the ONE brand in our OBM as we completed the acquisition in October 2014. Moving forward, we see
our OBM market to grow further with the balance being shared equally between commercial and tender markets.
4
36
42
2013
Commercial Market
43
2014
2015
Tender Market
OBM
In terms of geographical breakdown, Africa (37%) emerged as the biggest export market of our products in FYE 2015, followed by
Asia (31%), America (24%) and Europe (8%). This is in line with the increased government orders in FYE 2015.
2013
2014
Asia
Africa
2015
America
Europe
CEOS STATEMENT
SUSTAINABILITY
AS A RESPONSIBLE MANUFACTURER, WE CARE
A LOT FOR THE ENVIRONMENT. JUST LAST YEAR,
ALL OUR CONDOM MANUFACTURING PLANTS
HAVE NOW BEEN ACCREDITED WITH ISO 14001,
WHICH IS THE ENVIRONMENTAL MANAGEMENT
SYSTEM. IN FACT OUR HATYAI FACTORY IS NOW
IN THE PROCESS OF OBTAINING ISO 50001
CERTIFICATION THAT LOOKS INTO THE ENERGY
MANAGEMENT SYSTEM.
As we continue to grow in size, our aim is to only build environmentally
friendly buildings equipped with energy ecient machines. We design
our work environment to optimize performance and eciency while
reducing energy consumption, waste and pollution. This is evident by
our new plant in Hatyai, which is currently undergoing LEED (Leadership
in Energy & Environmental Design) certification by the US Green
Building Council. In the mean time, our new plant in Pontian, Malaysia
upon completion will also seek LEED and GBI (Green Building Index)
certifications.
STRATEGIES
Since listing, we have continued to refine our strategic initiatives to better position the Group in the longer term. While we
acknowledge the favourable business environment that we are currently operating in, we remain cautious and focused on our goal
to grow Karex to a sustainable platform and deliver premium value to our shareholders. With that in mind, I am pleased to share
with you our 4 key strategic initiatives:(i)
RESEARCH
& DEVELOPMENT
032 | KAREX ANNUAL REPORT 2015
CEOS STATEMENT
WE WILL ALSO CONTINUE OUR INNOVATION DRIVE WITHIN THE GROUP. INNOVATION
HAS ALWAYS BEEN AT THE FOREFRONT OF OUR MANUFACTURING SUCCESS. HENCE,
WE BELIEVE THAT INNOVATION WILL CONTINUE TO PROVIDE US WITH THE COMPETITIVE
EDGE AGAINST THE RAPIDLY CHANGING CONSUMER DEMAND OF CONDOMS. OUR
CHALLENGE IS TO CREATE NEW PRODUCTS AND MAKE EXISTING PRODUCTS BETTER,
MORE ATTRACTIVE, MORE EFFECTIVE EVERY SINGLE YEAR.
(iii) Innovations
In Karex, our drive towards innovations does not just stop
at making the condom better, in fact, our focus is also in
the packaging. With our in-house machine design and
manufacturing capabilities, we have created history with the
many new innovative products we have put into the market,
such as the ONE condom circular foils and its innovative
packaging in tins and plastic canisters. We have won
numerous design awards in the USA in recognition of our
eort.
Innovation has always been at the forefront of our
manufacturing success. Hence, we believe that innovation
will continue to provide us with the competitive edge against
the rapidly changing consumer demands. Our challenge is
to create new products, make existing products better, and
more eective.
CEOS STATEMENT
BRANDS
(iv) Branding
APPRECIATION
X
TE
NDOMS
CO
EMIUM L
PR
A
Thank you.
QUALITY
IS KEY
036 | KAREX ANNUAL REPORT 2015
BOARD OF
DIRECTORS
038 | KAREX ANNUAL REPORT 2015
PROFILE OF
BOARD OF
DIRECTORS
040 | KAREX ANNUAL REPORT 2015
PROFILE OF
BOARD OF
DIRECTORS
GOH SIANG
MALAYSIAN, AGED 65
SENIOR EXECUTIVE DIRECTOR
Goh Siang was appointed to the Board on 30 November 2012 as our Senior Executive Director. He
has over 35 years of experience in the rubber and latex industry.
Goh Siang has gained substantial amount of experience since 1976 via his engagement with the
General Rubber Goods Division in Dunlop Ltd, Manchester, UK, for two (2) years. After his stint in
the UK, Goh Siang joined Ban Seng Hong Sdn Bhd as a General Manager in 1978, where he was in
charge of overseeing the production of Standard Malaysian Rubber and marketing function of the
company.
Since 1990, Goh Siang has been with our Group. He is involved in the planning, organising and
charting our Groups direction in the manufacturing, sales and marketing of condoms and other
medical disposable products worldwide; the marketing and logistic of international business
transactions; and the planning and organising of latex condom and catheter manufacturing plants.
Goh Siang graduated with a Bachelor of Science Degree with Honours in Chemical Engineering and
a Master of Science in Polymer Technology from the Loughborough University of Technology, UK in
1975.
He has attended all the Board Meetings held during the financial year ended 30 June 2015. Goh
Leng Kian, Goh Yen Yen and Lam Jiuan Jiuan are his siblings. He has no conflict of interest with
the Company and has not been convicted of any oences within the past 10 years other than trac
oences, if any.
The details of his interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
Goh Leng Kian was appointed to the Board on 27 September 2012 as our Executive Director in
Technical and Research and Development (R&D). His specialist experience in the condom and
latex dipping industries spans over 20 years.
Goh Leng Kians experience includes the establishment of the condom and catheter manufacturing
plants, exposing him to a wide spectrum of roles including the supervision and management for the
detail design, construction, installation, commissioning and testing of all related equipment, systems
as well as the facilities of the projects. He also has over 30 years of experience in the rubber and
latex industry.
Goh Leng Kians career started in 1980 with Ban Seng Hong Sdn Bhd as a Mechanical Engineer,
where he is in charge of the engineering unit for the companys rubber processing facilities. He joined
our Group in 1988. He is currently responsible for overseeing our Groups manufacturing facilities,
including production and technical matters. This includes the construction and development of our
condom dipping lines, electronic testing and foiling machines, R&D activities such as improving the
dipping process, new automation to improve production eciency and product quality and overall
yield of the factories as well as sourcing of new packaging machinery.
Goh Leng Kian graduated with a Bachelor of Science Degree with Honours in Mechanical Engineering
from the Loughborough University of Technology, UK in 1979.
He has attended all the Board Meetings held during the financial year ended 30 June 2015. Goh
Siang, Goh Yen Yen and Lam Jiuan Jiuan are his siblings. He has no conflict of interest with the
Company and has not been convicted of any oences within the past 10 years other than trac
oences, if any.
The details of his interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
PROFILE OF
BOARD OF
DIRECTORS
KAREX ANNUAL REPORT 2015 | 043
PROFILE OF
BOARD OF
DIRECTORS
GOH YEN YEN
MALAYSIAN, AGED 72
EXECUTIVE DIRECTOR, ADMINISTRATION
Goh Yen Yen was appointed to the Board on 30 November 2012 as our Executive Director
in Administration with over 20 years of experience in handling human resource, finance and
administration system, internal quality auditing and also hands-on experience in budget, control and
overhead cost and capital expenditure. She is a member of the Remuneration Committee.
She graduated with a Bachelor Degree of Art in Geography with Honours from the University of
Malaya in 1969. Prior to joining Karex in 1996, she was a teacher in various secondary schools in
Johor for 26 years.
She has attended all the Board Meetings held during the financial year ended 30 June 2015. Goh
Siang, Goh Leng Kian and Lam Jiuan Jiuan are her siblings. She has no conflict of interest with the
Company and has not been convicted of any oences within the past 10 years other than trac
oences, if any.
The details of her interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
Lam Jiuan Jiuan was appointed to the Board on 30 November 2012 as our Non-Independent NonExecutive Director. She is the Chairperson of the Risk Management Committee and a member of
the Nomination Committee. She brings with her, a vast 35 years of experience from the financial and
corporate management industry.
Lam Jiuan Jiuan started out in 1976, where she joined the Commercial Banking Company of Sydney,
as a management trainee, where she gained a wide spectrum of retail banking experience before
moving on to join Tricontinental Australia Limited in 1978. In 1979, she moved to Hong Kong and
joined Toronto Dominion Bank in its Asia and Australasia Division as a Regional Credit Manager,
responsible for credit approvals of banks/corporate and monitoring country limits. In 1986, she
joined the Canadian Imperial Bank of Commerce for three (3) years as the Corporate Marketing
Manager in charge of major public listed companies and as well as corporate company accounts.
She joined Barclays Bank PLC in 1989, which she held various posts throughout her tenure and had
recently resigned as a senior banker in the Banks international private banking division. She now
works in a private family oce of one of the leading property developers in Hong Kong.
She graduated with a Bachelor of Economics majoring in Accounting and Commercial Laws from the
University of Sydney, Australia in 1976. She is also a Fellow of Certified Public Accountant (CPA),
Australia as well as a member of the Hong Kong Registered Financial Planners.
She has attended four out of five Board Meetings held during the financial year ended 30 June 2015.
Goh Siang, Goh Yen Yen and Goh Leng Kian are her siblings. She has no conflict of interest with
the Company and has not been convicted of any oences within the past 10 years other than trac
oences, if any.
The details of her interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
PROFILE OF
BOARD OF
DIRECTORS
KAREX ANNUAL REPORT 2015 | 045
PROFILE OF
BOARD OF
DIRECTORS
WONG YIEN KIM
MALAYSIAN, AGED 61
INDEPENDENT NON-EXECUTIVE DIRECTOR
Wong Yien Kim was appointed to the Board on 30 November 2012 as our Independent Non-Executive
Director. He is the Chairman of the Audit Committee and a member of the Nomination Committee.
He has retired from his role as Senior General Manager Finance of Kumpulan Perangsang Selangor
Berhad (KPS). He was also the Vice President, Finance of Kumpulan Darul Ehsan Berhad from 1
January 2000 to 9 May 2011. In addition, between 2007 to 2013, he served as a member of the Board,
the audit committee and the investment committee of Taliworks Corporation Berhad.
Wong Yien Kim has been a member of the Malaysian Institute of Accountants and the Institute of
Chartered Accountants England and Wales since 1982.
He has attended all the Board Meetings held during the financial year ended 30 June 2015. He does
not have any family relationship with any Director and/or Major Shareholder of the Company and has
no conflict of interest with the Company. He has not been convicted of any oences within the past
10 years other than trac oences, if any.
The details of his interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
Dato Dr. Ong Eng Long was appointed to the Board on 29 July 2013 as our Senior Independent
Non-Executive Director and also a member of the Audit Committee and Risk Management
Committee. He graduated from University of Malaya with a Bachelor of Science (Hons) Degree in
1969 and obtained a PhD from Queen Mary College, London in 1973.
He started o at the Rubber Research Institute of Malaysia (RRIM) as a Senior Research Ocer
in 1973. He has held dierent positions in RRIM up to 1998 when it merged with two (2) other
organisations to form the Malaysian Rubber Board.
He was the former Deputy Director General of the Malaysian Rubber Board from 1998 to May 2001
and the former Deputy CEO of Malaysian Rubber Export Promotion Council from 2001 to 2008.
Dato Dr. Ong Eng Long has been the Technical Adviser for Kossan Rubber Industries Bhd since July
2008, the Chairman of ISO/TC 157 Non-Systemic Contraceptives and STI Barrier Prophylactics since
2007 and the Chairman of ISO/TC 45 SC4 Rubber Products Other Than Hoses since 2005. ISO/TC 157
is the technical committee that is responsible for, amongst others, the international condom standards
while ISO/TC 45 is responsible for, also amongst others, international rubber glove standards. He has
been involved with standards development for the past two (2) decades. Dato Dr. Ong Eng Long has
more than 150 publications in areas of rubber physics and latex dipped products.
Dato Dr. Ong Eng Long is the President of both Institute of Chemistry, Malaysia and the Malaysian
Rubber Product Manufacturers Association.
He has attended all the Board Meetings held during the financial year ended 30 June 2015. He does
not have any family relationship with any Director and/or Major Shareholder of the Company and has
no conflict of interest with the Company. He has not been convicted of any oences within the past
10 years other than trac oences, if any.
The details of his interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
PROFILE OF
BOARD OF
DIRECTORS
KAREX ANNUAL REPORT 2015 | 047
PROFILE OF
BOARD OF
DIRECTORS
LAW NGEE SONG
MALAYSIAN, AGED 49
INDEPENDENT NON-EXECUTIVE DIRECTOR
Law Ngee Song was appointed to the Board on 30 November 2012 as our Independent Non-Executive
Director. He is the Chairman of the Nomination Committee, a member of the Audit Committee and
Remuneration Committee.
He graduated from Australia National University with a Bachelor of Commerce degree and Bachelor
of Laws degree in 1987 and 1989 respectively. He was admitted as Advocate and Solicitor, High
Court of Malaya in 1991.
Law Ngee Song practiced as a legal assistant in Allen & Gledhill from 1991 to 1995 and was
subsequently promoted to partner of the firm in 1995. He joined Nik, Saghir & Ismail in 1996 and has
been a partner since.
Law Ngee Song has been on the board of directors of Evergreen Fibreboard Berhad since 2007 and
has been serving as the chairman of the board since 2010. He is also a non-executive independent
director of Anglo-Eastern Plantations PLC, a company listed on the London Stock Exchange.
He has attended four out of five Board Meetings held during the financial year ended 30 June 2015.
He does not have any family relationship with any Director and/or Major Shareholder of the Company
and has no conflict of interest with the Company. He has not been convicted of any oences within
the past 10 years other than trac oences, if any.
The details of his interest in the securities of the Company is set out in the Analysis of Shareholdings
of page 131 of the Annual Report.
CEOS
PROFILE
GOH MIAH KIAT
MALAYSIAN, AGED 37
CHIEF EXECUTIVE OFFICER
STATEMENT
ON CORPORATE
GOVERNANCE
THE BOARD OF DIRECTORS (THE BOARD) OF KAREX BERHAD (KAREX OR THE
COMPANY) HAS ADOPTED THE PRINCIPLES AND THE BEST PRACTICES PRESCRIBED
IN THE MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012 (THE CODE) IN
MANAGING AND DIRECTING THE BOARD MATTERS AND BUSINESS OF THE GROUP.
THE BOARD BELIEVES THAT GOOD CORPORATE GOVERNANCE WOULD RESULT IN
SUSTAINABLE LONG TERM GROWTH, STRONGER SAFEGUARD OF THE INTEREST OF
ALL STAKEHOLDERS, AND ENHANCEMENT OF SHAREHOLDERS VALUE AS WELL AS
THE GROUPS FINANCIAL PERFORMANCE.
BOARD OF DIRECTORS
It is the overall governance responsibilities of the Board to lead
and control the Group. The Board plans the strategic direction,
development and control of the Group and has embraced
the responsibilities listed in the Code for eective discharge
of the Boards stewardship and fiduciary responsibilities. The
Executive Directors and Chief Executive Ocer (CEO) are
responsible for making and implementing operational and
corporate decisions while the Non-Executive Directors balance
the board accountability by providing their independent views,
advice and judgment in safeguarding the interests of the
shareholders.
There is a clear division of responsibilities between the
Chairman, Executive Directors and CEO to ensure that there is
a continuance balance of power and authority. The Chairman
position is held by an Independent Non-Executive Director.
The Chairman is responsible for the board eectiveness
and conduct whilst the Executive Directors and CEO have
the overall responsibilities over the Groups operating units,
organisational eectiveness and implementation of Board
policies and decisions.
The Board has set the management authority limit and retained
its authority of approval on significant matters. The Board has
also formalised its responsibilities and functions as well as
the division of responsibilities and powers between the Board
and Management and the Board Committees in its Board
:
:
:
RE-ELECTION OF DIRECTORS
Chairman
Member
Member
:
:
:
SUPPLY OF INFORMATION
BOARD COMMITMENT
The agenda for Board meetings and the relevant reports and
information for the Boards consideration are forwarded to all
members prior to the Board meetings. Management is invited
to provide further information and clarification on issues raised
by the Board Members during the Board deliberations and
decision makings in the meetings.
BOARD INDEPENDENCE
Independence is important for ensuring objectivity and fairness
in boards decision making. All Independent Directors of the
Board comply with the criteria of independent directors as
prescribed in MMLR.
The roles and responsibilities of the Chairman and Executive
Directors are separated and the Chairman of the Board is an
Independent Director.
The Board had identified Dato Dr. Ong Eng Long @ Ong
Siew Chuan as the Senior Independent Director to provide
shareholders with an alternative to convey their concerns and
seek clarifications from the Board.
Going forward, in order to uphold independence of Independent
Directors, the Board has adopted the following policies:i.
TRAINING ATTENDED
DIRECTOR
TRAINING ATTENDED
Goh Siang
DIRECTORS REMUNERATION
Executive Directors are remunerated based on the Groups
performance, market conditions and their responsibilities whilst
the remuneration of the Non-Executive Directors is determined
in accordance with their experience and level of responsibilities
assumed in committees and the board.
The aggregate remuneration of the Directors of the Company
for the year ended 30 June 2015 is as follows:-
Salaries, Bonus,
EPF, Others
Fees
Other Emoluments
Total
EXECUTIVE
DIRECTOR
(RM000)
NON-EXECUTIVE
DIRECTOR
(RM000)
1,426
380
65
1,491
380
NON-EXECUTIVE
DIRECTOR
50,000 to 100,000
300,000 to 400,000
500,000 to 600,000
REMUNERATION BAND
FINANCIAL REPORTING
The Board is responsible to ensure that the quarterly financial
reporting and announcements of the Company presents a
true and fair view and assessment of the Groups financial
position, performance and prospects. The Board ensures that
the Groups financial statements are drawn up in accordance
with the provisions of the Companies Act, 1965 and applicable
approved accounting standards. The Board is assisted by the
Audit Committee in reviewing and scrutinising the information
disclosed and ensuring the Groups financial statements
comply with applicable financial reporting standards.
RISK MANAGEMENT
The Board acknowledges that a sound risk management
framework is an integral part of good management practices.
Risk is inherent in all business activities. The risk management
objective of the Board is to ensure that there are structural
means to identify, prioritize and manage the risks involved in
all the Groups activities and to balance between the cost of
managing and treating risks, and the anticipated benefits that
will be derived from.
Management meetings are called and used by the Executive
Directors and CEO as a mean of communication and feedback
channel which facilitate whistleblowing apart from reviewing,
monitoring and deciding on the business development,
changes and actions to ensure businesses are under control,
at these meetings.
The Board has established an internal audit function which is
currently outsourced to a professional firm. Functionally, the
Internal Auditors report to the Audit Committee directly and they
are responsible for conducting reviews and appraisals of the
eectiveness of the governance, risk management and internal
controls and processes within the Group. Further details of the
Groups state of risk management and internal control systems
are reported in the Statement on Risk Management and Internal
Control on pages 066 to 067.
CORPORATE DISCLOSURE
Corporate disclosure and information are important for investors
and shareholders. The Board is advised by the management,
the Company Secretaries and the External and Internal Auditors
on the contents and timing of disclosure requirements of the
MMLR on the financial results and various announcements.
The management is invited to attend the Board and Audit
Committee meetings and to provide explanations to the Board
on the operations of the Group.
SUSTAINABILITY
Promoting sustainability is the corporate responsibilities of
the Group. The Board requires its business units to promote
appropriate environmentally friendly practices in the Group
within business, industry and regulatory environment in which
the Groups businesses operate in. The Group is currently
constructing the first largest green condom manufacturing
facility in the world. The Group has completed various CSR
programmes and campaigns as disclosed in CEO statement
on page 029.
SHAREHOLDERS RIGHT
Transparency and accountability are important in
communication of the Groups performance and major
developments with the Companys shareholders, stakeholders
and investors. Accordingly, the Board ensures that there is
timely release of quarterly financial results, circulars, Annual
Reports, corporate announcement and press releases. In
addition to the various announcements made during the
period, information on the Company is available on the
Companys website at www.karex.com.my. The Board would
also respond to meetings with institutional shareholders,
analysts and members of the press to convey information
regarding the Groups performance and strategic direction as
and when requested.
General meeting is an important avenue through which
shareholders can exercise their rights. The Board would ensure
suitability of venue and timing, eective publicity of general
meeting event, the quality of the annual report as well as timely
mailing of the Notice of Meeting of the AGM. Shareholders
are reminded that they have the right to demand a poll vote
at general meetings. Also, poll voting is mandated for related
party transactions that require specific shareholders approval.
COMPLIANCE STATEMENT
The Board has taken steps to ensure that the Group
has implemented as far as possible the Principles and
Recommendations of the MCCG 2012 in all material aspects,
save as disclosed therein.
This statement is issued in accordance with a resolution of the
Board dated 28 September 2015.
ADDITIONAL
COMPLIANCE
INFORMATION
The following information is provided in accordance with Paragraph 9.25 of the Main Market Listing Requirements (MMLR) of
Bursa Malaysia Securities Berhad as set out in Appendix 9C for the financial year ended 30 June 2015 (financial year), unless
otherwise stated:
1. UTILISATION OF PROCEEDS
Public Issue
The gross proceeds raised from the Public Issue amounting to RM74.93 million. As at 30 September 2015, the status of the
utilisation of the proceeds raised from the Public Issue are as follows:
PURPOSES
PROPOSED
UTILISATION
RM000
ACTUAL
UTILISATION DEVIATIONS
RM000
RM000
BALANCE
RM000
4,000
41,750
13,675
10,000
5,500
(4,000)
(22,786)
(6,547)
(10,000)
(6,228 )
(728) (2)
728 (2)
18,964
6,400
74,925
(49,561)
25,364
INTENDED
TIMEFRAME
FOR
UTILISATION
Within 36 months
Within 36 months
Within 36 months
Within 6 months
Within 6 months
NOTE:
The proposed utilisation of proceeds as disclosed above should be read in conjunction with the Prospectus dated 11
October 2013.
(2)
Actual listing expenses incurred were more than the estimated listing expenses by approximately RM0.7 million mainly
due to higher professional fee charges as well as other incidental costs incurred in connection to the listing exercise. In
accordance to the Prospectus dated 11 October 2013, the excess of listing expenses shall be funded out of the portion
allocated for working capital purposes.
(1)
Private Issue
The Private Placement (PP) involved 40.5 million ordinary shares at an issue price of RM3.90. The gross proceeds raised from
the Private Placement amounting to RM158.0 million and the status of the utilisation of the proceeds as at 30 September 2015
are as follows:
PROPOSED
UTILISATION
RM000
ACTUAL
UTILISATION
RM000
DEVIATIONS
RM000
110,000
44,450
3,500
(17,899)
(9,088)
(2,760)
740
(740)
157,950
(29,747)
PURPOSES
BALANCE
RM000
(2)
(2)
92,101
36,102
INTENDED
TIMEFRAME
FOR
UTILISATION
Within 12 months
Within 12 months
Upon completion of PP
128,203
NOTE:
(1)
(2)
The proposed utilisation of proceeds as disclosed above should be read in conjunction with the announcement of the CIMB on
26 February 2015.
Actual listing expenses incurred were less than the estimated listing expenses by approximately RM0.7 million mainly due to
lower professional fee charges as well as other incidental costs incurred in connection to the private placement. In accordance
to the Proposal announced on 26 February 2015, the excess are allocated for working capital purposes.
2. SHARE BUY-BACK
The Company did not have a scheme to buy back its own shares during the financial year.
6. NON-AUDIT FEES
The amount of non-audit fees paid to external auditors by the Group and the Company respectively for the financial year are as
follows:GROUP/COMPANY
RM000
515
Services rendered by KPMG are not prohibited by regulatory and other professional requirements, and are based on globally
practiced guidelines on auditors independence.
7. VARIATION OF RESULTS
The audited financial results for the financial period ended 30 June 2015 did not dier by 10% or more from the unaudited full
financial periods results previously announced on 25 August 2015 to Bursa Securities.
8. PROFIT GUARANTEE
The Company did not make any arrangement during the financial year which requires profit guarantee.
AUDIT
COMMITTEE
REPORT
The Board of Directors of Karex Berhad (the Board) is pleased
to present the Audit Committee Report for the financial year
ended 30 June 2015.
COMPOSITION AND MEETINGS
As at the date of this Annual Report, the Audit Committee (AC)
comprises four (4) Directors as follows:
Chairman
Wong Yien Kim - Independent Non-Executive Director
Members
Tan Sri Dato Seri Utama Arshad bin Ayub - Independent NonExecutive Director
Dato Dr. Ong Eng Long @ Ong Siew Chuan Senior Independent
Non-Executive Director
Law Ngee Song - Independent Non-Executive Director
The AC met five (5) times during the financial year ended 30 June
2015 and the details of their attendance are as follows:
NAME OF DIRECTOR
ATTENDANCE
5/5
5/5
5/5
4/5
b. Financial Reporting
i. Review the quarterly results and annual financial
statements before recommendation to the Board for
approval for release to Bursa Securities, focusing
particularly on:
Any changes in or implementation of accounting
policies and practices;
Significant or material adjustments with financial
impact arising from the audit;
Significant unusual events or exceptional
activities;
Financial decision-making with the presumptions
of significant judgments;
The going concern assumptions; and
The appropriateness of managements selection of
accounting policies and disclosures in compliance
with approved accounting standards, stock
exchange and other regulatory requirements.
ii. Propose best practices on disclosure in financial
results and annual reports of the Company in line
with the principles set out in the Malaysian Code of
Corporate Governance, other applicable laws, rules,
directives and guidelines.
c. External Audit
i. Recommend the appointment or re-appointment of
the external auditors and audit fee to the Board, after
reviewing the suitability, resources, competency and
independence of external auditors and the accounting
firm.
ii. Make appropriate recommendations to the Board on
matters of resignation, dismissal or cessation of oce
of the external auditors and secure the reason of such
resignation, dismissal or cessation of oce.
iii. Review and discuss the nature and scope of the
external audit strategy and plan for the year.
iv. Review and discuss issues arising from external
auditors interim and final letters of recommendation
to management, including management responses
and the external auditors evaluation of the system
of internal control and any other matters the external
auditor may wish to discuss (in the absence of
management, if required).
d. Internal Audit
i. Review the adequacy of the scope, functions,
competency, resources and authority of the internal
audit function in carrying out its work.
ii. Review the internal audit plans and programmes.
iii. Ensure co-ordination between the internal and
external auditors.
iv. Review the major findings reported by internal audit
and follow up on managements implementation of
the recommended actions.
v. Annually assess performance of services provided by
the internal audit function.
e. Significant Related Party Transactions
Review and recommend to the Board for matters
regarding Significant Related Party Transactions
including disclosures, values of mandates and situations
involving potential conflict of interest that may arise within
the Company, including any transaction, procedure or
course of conduct that raises questions on management
integrity.
f. Other Matters
i. To report to Bursa Securities, if the AC views that a
matter resulting in a breach of the MMLR reported
by the AC to the Board has not been satisfactorily
resolved by the Board.
ii. To highlight such matters as the AC considers
appropriate or as defined by the Board from time to
time.
iii. To announce to Bursa Securities, if there is any related
party transactions which exceed the Shareholder
Mandate and provide full reason and detailed
explanations.
4. Rights
The AC is accorded with the following rights in the
performance of its duties and responsibilities:(a) has the explicit authority to investigate any matter within
its terms of reference;
(b) has full and unrestricted access to any information and
resources which are required to perform its duties;
(d) the audit plan of the external auditors in terms of their scope
of audit prior to their commencement of their annual audit;
STATEMENT OF
DIRECTORS
RESPONSIBILITY
THE DIRECTORS ARE REQUIRED TO PREPARE THE FINANCIAL STATEMENTS WHICH
GIVE A TRUE AND FAIR VIEW OF THE STATE OF AFFAIRS OF THE COMPANY AND GROUP
AS AT END OF THE FINANCIAL YEAR AND OF THEIR RESULTS AND CASH FLOWS FOR
THE FINANCIAL YEAR THEN ENDED.
In preparing the financial statements for the year ended 30 June 2015, the Directors have:
The Directors have responsibility to ensure that proper and adequate accounting records are kept which disclose with reasonable
accuracy the financial position of the Company and Group, and which enable them to ensure that the financial statements comply
with the provisions of the Companies Act, 1965.
The Directors have general responsibility for taking such reasonable steps to safeguard the assets of the Company and Group so
as to prevent and detect fraud and other irregularities.
STATEMENT
ON RISK
MANAGEMENT
AND INTERNAL
CONTROL
The Board of Directors (the Board) is pleased to present
its Statement on Risk Management and Internal Control for
the financial year ended 30 June 2015. This Statement is
prepared pursuant to paragraph 15.26(b) of the Main Market
Listing Requirements and is guided by the Statement on Risk
Management and Internal Control Guidelines for Directors of
Listed Issuers (the Guideline) endorsed by Bursa Malaysia
Securities Berhad (Bursa Securities).
BOARDS RESPONSIBILITY
Review
risk
management
framework,
processes,
responsibilities and assessing whether the present policies
and systems provide reasonable assurance that risk is
managed appropriately.
The Board has received assurance from the CEO and Chief
Financial Ocer that to the best of their knowledge that the
Groups risk management and internal control systems are
operating adequately and eectively, in all material aspects.
BOARD ASSURANCE AND LIMITATION
FINANCIAL
STATEMENTS
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2015
The Directors have pleasure in presenting their report and the audited financial statements of the Group and of the Company for
the financial year ended 30 June 2015.
PRINCIPAL ACTIVITIES
The principal activity of the Company consists of investment holding. The principal activities of the subsidiaries are disclosed in
Note 4 to the financial statements. There has been no significant change in the nature of these activities during the financial year.
RESULTS
Profit for the year attributable to:
Owners of the Company
Non-controlling interests
GROUP
RM000
COMPANY
RM000
59,553
177
22,715
59,730
22,715
NAME OF DIRECTORS
INTEREST
Company
Tan Sri Dato Seri Utama
Arshad bin Ayub
Direct
150,000
75,000
225,000
Direct
150,000
75,000
225,000
Direct
Deemed (1)
10,508,379
141,750,000
5,254,189
70,875,000
15,762,568
212,625,000
Direct
Deemed (1)
16,208,385
141,750,000
8,104,192
70,875,000
24,312,577
212,625,000
Direct
Deemed (1)
11,333,314
141,750,000
5,666,657
70,875,000
16,999,971
212,625,000
Direct
Deemed (2)
8,483,314
147,450,000
4,241,657
73,725,000
12,724,971
221,175,000
Direct
100,000
(100,000)
Direct
150,000
75,000
(52,500)
172,500
*
(1)
(2)
Bonus issue credited as fully paid up shares on the basis of 1 Bonus Share for every 2 shares held by the Companys
shareholders
Deemed interested by virtue of his/her equity interest in Karex One Limited
Deemed interested by virtue of her equity interest in AJNA Holdings Limited and Karex One Limited
By virtue of their substantial interests in the shares of the Company, Mr. Goh Siang, Mr. Goh Leng Kian, Ms. Goh Yen Yen and
Ms. Lam Jiuan Jiuan are also deemed interested in the ordinary shares of the wholly-owned subsidiaries during the financial year
to the extent that Karex Berhad has an interest.
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 or the fixed salary of a full time employee of the Company or of related corporations) 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 certain Directors who have significant financial
interest in companies which traded with certain companies in the Group in the ordinary course of business as disclosed in
Note 23 of 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.
DIRECTORS REPORT
FOR THE YEAR ENDED 30 JUNE 2015
ISSUE OF SHARES
During the financial year, the Company issued:
a)
40,500,000 new ordinary shares of RM0.25 each at RM3.90 per ordinary share via a private placement to eligible investors for
a total cash consideration of RM157,950,000; and
b)
Bonus issue of 222,750,000 new ordinary shares of RM0.25 each (Bonus Share) credited as fully paid up on the basis of one
(1) bonus share for every two (2) shares held by the shareholders of the Company.
There were no other changes in the authorised, issued and paid-up capital of the Company during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
OTHER STATUTORY INFORMATION
Before the financial 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)
any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount
which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
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 financial performance of the Group and of the Company for the financial year ended 30 June
2015 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.
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:
Johor Bahru
Date: 28 September 2015
STATEMENT BY DIRECTORS
In the opinion of the Directors, the financial statements set out on pages 080 to 126 are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of 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 30 June 2015 and of their
financial performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out in Note 26 on page 127 to the financial statements has been compiled in
accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of
Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants,
and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Johor Bahru
Date: 28 September 2015
STATUTORY DECLARATION
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
I, GOH CHOK SIANG, the officer primarily responsible for the financial management of KAREX BERHAD, do solemnly and
sincerely declare that the financial statements set out on pages 080 to 127 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 above named in Johor Bahru in the State of Johor on 28 September 2015.
Before me:
NORANI BT HJ KHALID
Commissioner For Oaths
J-140
KPMG
Firm Number: AF 0758
Chartered Accountants
Johor Bahru
Date: 28 September 2015
GROUP
2015
RM000
3
4
5
6
129,295
25,067
126
86,173
142
124,028
124,028
154,488
86,315
124,028
124,028
51,031
85,136
207,718
40,470
77,487
85,592
72,592
177,167
32,357
49,534
343,885
203,549
249,759
81,891
Total assets
498,373
289,864
373,787
205,919
167,063
264,534
101,250
122,082
167,063
206,367
101,250
104,400
431,597
223,332
373,430
205,650
793
432,390
223,332
373,430
205,650
9,391
5,351
10,380
4,488
14,742
14,868
35,889
13,491
1,861
38,887
11,214
1,563
280
77
173
96
51,241
51,664
357
269
Total liabilities
65,983
66,532
357
269
498,373
289,864
373,787
205,919
ASSETS
Property, plant and equipment
Investments in subsidiaries
Intangible assets
Deferred tax assets
Total non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Equity
Share capital
Reserves
7
8
9
10
10
11
6
12
11
2014
RM000
COMPANY
2015
2014
RM000
RM000
NOTE
NOTE
Revenue
Goods sold
Dividend income
2015
RM000
GROUP
2014 (1)
RM000
COMPANY
2015
2014
RM000
RM000
298,094
219,927
14,000
17,371
298,094
(200,307)
219,927
(155,952)
14,000
17,371
97,787
63,975
14,000
17,371
10,420
(14,969)
(21,563)
(548)
365
(9,125)
(9,926)
(3,519)
5,566
(1,038)
(454)
(865)
(1,961)
71,127
41,770
18,074
14,545
Finance income
Finance costs
3,329
(1,174)
1,332
(1,561)
4,996
1,565
2,155
(229)
4,996
1,565
73,282
(13,552)
41,541
(6,956)
23,070
(355)
16,110
(129)
59,730
34,585
22,715
15,981
59,553
177
34,585
22,715
15,981
59,730
34,585
22,715
15,981
9.51
7.57
(1)
13
14
15
As the Acquisitions (as detailed in note 24(b)(i)) were completed on 23 September 2013, the Group did not consolidate the
financial performance of these subsidiaries from 23 September 2013 to 30 September 2013 due to impracticability of an
accounting cut-off date other than month end and the effect is not significant to the results for financial year ended 30 June
2014. The Group has consolidated the results from 1 October 2013 onwards. If the Group has existed since the last financial
year, management estimate that the consolidated results would be as disclosed in note 24(b)(ii).
2014 (1)
RM000
COMPANY
2015
2014
RM000
RM000
59,730
34,585
22,715
15,981
3,767
(922)
63,497
33,663
22,715
15,981
63,200
297
33,663
22,715
15,981
63,497
33,663
22,715
15,981
2015
RM000
(1)
GROUP
As the Acquisitions (as detailed in note 24(b)(i)) were completed on 23 September 2013, the Group did not consolidate the
financial performance of these subsidiaries from 23 September 2013 to 30 September 2013 due to impracticability of an
accounting cut-off date other than month end and the effect is not significant to the results for financial year ended 30 June
2014. The Group has consolidated the results from 1 October 2013 onwards. If the Group has existed since the last financial
year, management estimate that the consolidated results would be as disclosed in note 24(b)(ii).
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
NOTE
Group
At 1 July 2013
SHARE
CAPITAL
RM000
NONCONTROLLING
TOTAL
INTEREST
RM000
RM000
TOTAL
EQUITY
RM000
(632)
(632)
(632)
57,375
10,125
33,750
64,800
(5,510)
(33,750)
63,511
120,886
74,925
(5,510)
120,886
74,925
(5,510)
101,250
25,540
63,511
190,301
190,301
(922)
34,585
(922)
34,585
(922)
34,585
(922)
718
34,585
(718)
33,663
33,663
101,250
25,540
63,511
(922)
718
33,235
223,332
223,332
At 30 June 2014
24(b)(i)
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
NOTE
Group
At 1 July 2014
SHARE
CAPITAL
RM000
NONCONTROLLING
TOTAL
INTEREST
RM000
RM000
TOTAL
EQUITY
RM000
101,250
25,540
63,511
(922)
718
33,235
223,332
223,332
10,125
55,688
147,825
(2,760)
(55,688)
(10,125)
157,950
(2,760)
(10,125)
496
496
157,950
(2,760)
(10,125)
65,813
89,377
(10,125)
145,065
496
145,561
3,647
59,553
3,647
59,553
120
177
3,767
59,730
Total comprehensive
income for the year
3,647
59,553
63,200
297
63,497
167,063
114,917
63,511
2,725
718
82,663
431,597
793
432,390
At 30 June 2015
24(a)(i)
16
NOTE
Company
At 1 July 2013
TOTAL
EQUITY
RM000
(632)
(632)
57,375
10,125
33,750
64,800
(5,510)
(33,750)
63,511
120,886
74,925
(5,510)
101,250
25,540
63,511
190,301
15,981
15,981
101,250
25,540
63,511
15,349
205,650
10,125
55,688
147,825
(2,760)
(55,688)
(10,125)
157,950
(2,760)
(10,125)
65,813
89,377
(10,125)
145,065
22,715
22,715
167,063
114,917
63,511
27,939
373,430
24(b)(i)
16
2014
RM000
COMPANY
2015
2014
RM000
RM000
73,282
41,541
23,070
16,110
7,669
547
1,174
(4)
(3,329)
(101)
(1)
(6,685)
5,132
72
1,561
(93)
(1,332)
2,006
720
328
(4,996)
(5,566)
(1,565)
72,552
(2,340)
(3,619)
(8,948)
49,935
5,322
(19,239)
(2,903)
12,508
(34,778)
216
14,545
(34,109)
(1,404)
57,645
33,115
(22,054)
(20,968)
Tax paid
(12,375)
(7,539)
(374)
(33)
45,270
25,576
(22,428)
(21,001)
(46,315)
(20,870)
107
3,329
(9,914)
19,151
129
1,332
4,996
**
1,120
(63,749)
10,698
4,996
1,120
NOTE
17
24
**
Represent RM4.00
2015
RM000
GROUP
NOTE
2015
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
(1,427)
(1,796)
(2,772)
(1,033)
(717)
1,602
(2,116)
(1,476)
(24,487)
2,246
157,950
(2,760)
8,175
(10,125)
74,925
(5,510)
(827)
157,950
(2,760)
(10,125)
74,925
(5,510)
148,893
40,959
145,065
69,415
(113)
(53)
130,301
77,180
127,633
49,534
77,180
207,481
*
77,180
49,534
177,167
*
49,534
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts:
Cash and bank balances
Fixed deposits with licensed banks
Deposits with other corporation
22,689
2,988
182,041
29,237
11,343
45,012
1,223
2,026
173,918
2,407
2,115
45,012
207,718
(237)
85,592
(8,412)
177,167
49,534
207,481
77,180
177,167
49,534
Represent RM2.00
NOTES TO THE
FINANCIAL STATEMENTS
Karex Berhad is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market 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
Lot 594, Persiaran Raja Lumu
Pandamaran Industrial Estate
42000 Port Klang
Selangor Darul Ehsan
Malaysia
Registered office
10th Floor, Menara Hap Seng
No. 1 & 3, Jalan P. Ramlee
50250 Kuala Lumpur
Malaysia
The consolidated financial statements of the Company as at and for the year ended 30 June 2015 comprise the Company and its
subsidiaries (together referred to as the Group and individually referred to as Group entities). The financial statements of the
Company as at and for the financial year ended 30 June 2015 do not include other entities.
The principal activity of the Company consists of investment holding. The principal activities of the subsidiaries are disclosed in
Note 4.
These financial statements were authorised for issue by the Board of Directors on 28 September 2015.
1.
BASIS OF PREPARATION
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial
Reporting Standards (MFRS), International Financial Reporting Standards and the requirements of the Companies Act,
1965 in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by the Malaysian
Accounting Standards Board (MASB) but have not been adopted by the Group and the Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016
Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements
2012-2014 Cycle)
Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle)
Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint
Ventures Sale or Contribution of Assets between an Investor and its Associate or Joint Venture
Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and
MFRS 128, Investments in Associates and Joint Ventures Investment Entities: Applying the Consolidation Exception
Amendments to MFRS 11, Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations
MFRS 14, Regulatory Deferral Accounts
Amendments to MFRS 101, Presentation of Financial Statements Disclosure Initiative
Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets Clarification of
Acceptable Methods of Depreciation and Amortisation
Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture Agriculture: Bearer Plants
Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle)
Amendments to MFRS 127, Separate Financial Statements Equity Method in Separate Financial Statements
Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)
1.
BASIS OF PREPARATION
(a) Statement of compliance
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018
The Group and the Company plan to apply the abovementioned standards, amendments and interpretations in the
respective financial year when the above standards, amendments and interpretations become effective.
The initial application of these standards, amendments and interpretations are not expected to have any material financial
impacts to the current and prior periods financial statements of the Group and of the Company upon their first adoption
except as mentioned below:
(i) MFRS 15, Revenue from Contracts with Customers
MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13,
Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation
18, Transfers of Assets from Customers and IC Interpretation 131, Revenue - Barter Transactions Involving
Advertising Services.
The Group and the Company are currently assessing the financial impact that may arise from the adoption of
MFRS 15.
(ii) MFRS 9, Financial Instruments
MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification
and measurement of financial assets and financial liabilities, and on hedge accounting.
The Group and the Company are currently assessing the financial impact that may arise from the adoption of
MFRS 9.
(b) Basis of measurement
These financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (RM), which is the Companys functional currency. All
financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with MFRSs 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 estimates are 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 other than those disclosed in Note 5 measurement of the recoverable amounts of cash-generating units.
NOTES TO THE
FINANCIAL STATEMENTS
2.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree
either at fair value or at the proportionate share of the acquirees identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in
connection with a business combination are expensed as incurred.
(iii) Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as
equity transactions between the Group and its non-controlling interest holders. 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.
2.
NOTES TO THE
FINANCIAL STATEMENTS
2.
2.
NOTES TO THE
FINANCIAL STATEMENTS
2.
2.
62 years
48 - 50 years
20 - 50 years
10 - 20 years
5 - 10 years
4 - 10 years
Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted as
appropriate.
(e) Leased assets
(i) Finance lease
Leases in terms of which the Group or the Company assumes 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.
NOTES TO THE
FINANCIAL STATEMENTS
2.
Brand
Brand that are acquired by the Group, which have infinite useful lives, is measured at cost less any accumulated
impairment losses.
15 years
Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted,
if appropriate.
2.
Impairment
(i)
Financial assets
All financial assets (except for financial assets categorised as fair value through profit or loss and investments in
subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result
of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result
of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or
prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence
exists, then the impairment loss of the financial asset is estimated.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or
loss and is measured as the difference between the assets carrying amount and the present value of estimated
future cash flows discounted at the assets original effective interest rate. The carrying amount of the asset is reduced
through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as
the difference between the assets acquisition cost (net of any principal repayment and amortisation) and the assets
current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-forsale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive
income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and
is measured as the difference between the financial assets carrying amount and the present value of estimated future
cash flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available for sale is
not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an
event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent
that the assets carrying amount does not exceed what the carrying amount would have been had the impairment not
been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
NOTES TO THE
FINANCIAL STATEMENTS
2.
Impairment (continued)
(ii) Other assets (continued)
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 cash-generating
units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment testing, cash-generating
units to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed
reflects the lowest level at which goodwill is monitored for internal reporting purposes. The goodwill acquired in a
business combination, for the purpose of impairment testing, is allocated to a cash-generating unit or a group of cashgenerating units that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs
of disposal. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its
estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units
are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit (group of cashgenerating units) and then to reduce the carrying amount of the other assets in the cash-generating unit (groups of
cash-generating 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 the end of each reporting period 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 since the last impairment loss was recognised. 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 profit or loss in the financial year in which the reversals are recognised.
Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity.
2.
Goods sold
Revenue from the sale of goods in the course of ordinary activities 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
persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of
ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and
possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and
the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be
measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
NOTES TO THE
FINANCIAL STATEMENTS
2.
2.
quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the
measurement date.
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly.
unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in
circumstances that caused the transfers.
NOTES TO THE
FINANCIAL STATEMENTS
3.
PLANT
AND
MACHINERY
RM000
EQUIPMENT,
FURNITURE
AND
FITTINGS
RM000
MOTOR
VEHICLES
RM000
ELECTRICAL
INSTALLATION
AND
RENOVATION
RM000
CONSTRUCTIONIN-PROGRESS
RM000
TOTAL
RM000
Group
At cost
At 1 July 2013
Acquisitions (see Note 24(b)(i))
Additions (see Note 17)
Disposals
Transfers
Translation differences
26,581
303
3,444
(162)
77,800
3,749
(177)
3,045
(748)
6,029
1,380
314
(32)
4,962
187
(418)
(26)
10,298
424
84
(82)
5,855
6,509
(6,887)
(106)
131,525
12,552
(595)
(1,156)
30,166
14,800
726
83,669
4,555
(439)
2,885
2,844
7,691
485
881
196
4,705
118
1,373
(284)
108
10,724
410
1,355
1,104
418
5,371
24,538
(3,989)
1,161
142,326
1,013
47,502
(723)
5,453
At 30 June 2015
45,692
93,514
9,253
6,020
14,011
27,081
195,571
Accumulated depreciation
At 1 July 2013
Acquisitions (see Note 24(b)(i))
Depreciation charge
Disposals
Translation differences
2,655
377
(52)
36,053
3,363
(171)
(514)
3,381
476
(18)
2,871
414
(388)
(11)
7,232
502
(17)
52,192
5,132
(559)
(612)
2,980
536
208
38,731
4,961
(376)
1,800
3,839
485
704
149
2,886
67
571
(244)
57
7,717
226
862
117
56,153
778
7,634
(620)
2,331
At 30 June 2015
3,724
45,116
5,177
3,337
8,922
66,276
Carrying amounts
At 30 June 2014/1 July 2014
27,186
44,938
3,852
1,819
3,007
5,371
86,173
41,968
48,398
4,076
2,683
5,089
27,081
129,295
At 30 June 2015
3.
Land
- Freehold land
- Long term leasehold land
- Short term leasehold land
Buildings
GROUP
2014
RM000
18,774
4,058
321
18,815
12,213
2,313
329
12,331
41,968
27,186
Security
The land and buildings and plant and machineries of the Group with a carrying amount of RM29,818,530 (2014: RM32,392,902)
are charged to licensed banks as security for banking facilities granted as disclosed in Note 11.
Leased plant and machinery and motor vehicles
At 30 June, the net carrying amounts of leased assets are as follows:
2015
RM000
GROUP
2014
RM000
2,291
2,045
5,033
1,291
4,336
6,324
Others
Included in property of the Group is finance cost capitalised of RM253,032 (2014: RM235,061) at 7.85% (2014: 7.85%) per
annum.
4.
INVESTMENTS IN SUBSIDIARIES
COMPANY
2015
2014
RM000
RM000
124,028
124,028
NOTES TO THE
FINANCIAL STATEMENTS
4.
NAME OF ENTITY
PRINCIPAL ACTIVITIES
COUNTRY OF
INCORPORATION
EFFECTIVE
OWNERSHIP INTEREST
AND VOTING INTEREST
2015
2014
%
%
Direct subsidiaries
Karex Industries Sdn. Bhd.
Malaysia
100
100
Malaysia
100
100
Malaysia
100
100
Thailand
100
100
Investment holding
Hong Kong
100
Malaysia
100
100
United States
of America
55
Spain
100
Dormant
*
Audited by other member firm of KPMG International.
# Not audited by member firm of KPMG International.
## The subsidiary was incorporated on 9 December 2014 and remain dormant. The financial statements of the subsidiary
was not included in consolidated financial statements as the result and financial position are not material to the Group.
There is no disclosure for non-controlling interest in a subsidiary as the balance is not material to the Group.
5.
INTANGIBLE ASSETS
GROUP
BRAND
RM000
PATENTS
AND
TRADEMARKS
RM000
TOTAL
RM000
At cost
At 1 July 2014
Acquisition (see Note 24(a)(i))
Effect of movements in exchange rates
20,928
3,288
799
220
21,727
3,508
At 30 June 2015
24,216
1,019
25,235
Accumulated amortisation
At 1 July 2014
Acquisition (see Note 24(a)(i))
Amortisation for the year
Effect of movements in exchange rates
113
35
20
113
35
20
At 30 June 2015
168
168
Carrying amounts
At 1 July 2014
24,216
851
25,067
At 30 June 2015
5.
INTANGIBLE ASSETS
Amortisation
The amortisation of patents and trademarks is recognised and charged to the administration expenses.
Impairment testing for cash-generating units containing intangible assets
For the purpose of impairment testing, intangible asset with indefinite useful life is allocated to the Groups operating line
which represent the lowest level within the Group at which the intangible asset is monitored for internal management purpose.
The aggregate carrying amount of the brand is as follows:2015
RM000
24,216
The recoverable amount for the above was based on its value in use, determined by discounting the future cash flows to be
generated from the ONE brand manufacturing and distribution unit and was based on the following key assumptions:
i)
ii)
iii)
iv)
v)
The value assigned to the key assumptions represents managements assessment of future trends in the industry and are
based on both internal and external sources.
Based on the management assessment, no impairment is required as the recoverable amount was higher than carrying
amount.
6.
GROUP
2014
RM000
126
(5,351)
142
(4,488)
(5,225)
(4,346)
Deferred tax liabilities and assets are offset above where there is a legally enforceable right to set off current tax assets
against current tax liabilities and where the deferred taxes relate to the same taxation authority.
NOTES TO THE
FINANCIAL STATEMENTS
6.
GROUP
2014
RM000
(6,218)
481
94
418
(5,448)
400
652
50
(5,225)
(4,346)
RECOGNISED
IN PROFIT
OR LOSS
(NOTE 14)
RM000
AT
30 JUNE
2015
RM000
GROUP
AT
1 JULY
2014
RM000
(5,448)
400
652
50
(770)
81
(558)
368
(6,218)
481
94
418
(4,346)
(879)
(5,225)
GROUP
7.
AT
1 JULY
2013
RM000
ARISING
FROM THE
ACQUISITIONS
(NOTE
24(b)(i))
RM000
RECOGNISED
IN PROFIT
OR LOSS
(NOTE 14)
RM000
AT
30 JUNE
2014
RM000
(6,527)
87
352
1,728
32
1,079
313
300
(1,728)
18
(5,448)
400
652
50
(4,328)
(18)
(4,346)
INVENTORIES
2015
RM000
Raw materials
Work-in-progress
Finished goods
Chemicals and factory supplies
Recognised in profit or loss:
- Inventories recognised as cost of goods sold
GROUP
2014
RM000
18,311
15,015
15,350
2,355
14,305
7,744
15,810
2,611
51,031
40,470
200,307
155,952
8.
Trade
Trade receivables
Due from related parties
Non-trade
Other receivables, deposits and prepayments
Due from subsidiaries
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
70,353
48
70,754
84
70,401
70,838
14,735
6,649
220
72,372
13
32,344
14,735
6,649
72,592
32,357
85,136
77,487
72,592
32,357
The amounts due from related parties are subject to normal trade terms.
The amounts due from subsidiaries includes NIL (2014: RM10,000,000) of dividends receivable, while the remaining balance
are unsecured, subject to interest at 5% (2014: 5%) per annum and repayable upon demand.
9.
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
22,689
2,988
182,041
29,237
11,343
45,012
1,223
2,026
173,918
2,407
2,115
45,012
207,718
85,592
177,167
49,534
Deposits with licensed banks of the Group of RM236,730 (2014: RM8,412,000) are pledged to bank as security for banking
facilities granted to the Group as disclosed in Note 11.
Deposits with licensed banks of the Group of NIL (2014: RM540,485) are held in trust by Directors of the Company/a subsidiary
for the Group.
10. CAPITAL AND RESERVES
SHARE CAPITAL
GROUP/COMPANY
2015
2014
GROUP/COMPANY
2015
2014
NUMBER OF
ORDINARY SHARES
RM000
RM000
500,000
101,250
10,125
55,688
*
57,375
10,125
33,750
405,000,000
40,500,000
222,750,000
8
229,499,992
40,500,000
135,000,000
167,063
101,250
668,250,000
405,000,000
* Represent RM2.00
NOTES TO THE
FINANCIAL STATEMENTS
10. CAPITAL AND RESERVES (CONTINUED)
2015
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
Distributable
Retained earnings
82,663
33,235
27,939
15,349
Non-distributable
Share premium
Merger reserve
Translation reserve
Other reserve
114,917
63,511
2,725
718
25,540
63,511
(922)
718
114,917
63,511
25,540
63,511
264,534
122,082
206,367
104,400
RESERVES
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per
share at meetings of the Company.
Share premium
Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the
shares.
Merger reserve
The merger reserve comprises of the differences between the cost of acquisition and the nominal value of shares acquired
together with any other reserves of the combining entities during the restructuring among common shareholders as stated in
the accounting policy Note 2(a)(iv).
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of
foreign operations.
Other reserve
Based on Thailand Law, the other reserve comprises of reserve fund allocated at each distribution of dividend, being at least
5% of the profit until it reaches 10% of the registered capital of a foreign subsidiary, and claimable upon disposal or liquidation
of the foreign subsidiary by the Group. The legal reserve is not available for dividend distribution.
11. LOANS AND BORROWINGS (SECURED)
2015
RM000
Non-current
Term loans
Finance lease liabilities
Current
Term loans
Bankers acceptances
Finance lease liabilities
GROUP
2014
RM000
7,776
1,615
8,678
1,702
9,391
10,380
3,259
9,251
981
3,527
6,694
993
13,491
11,214
22,882
21,594
Significant covenants
The borrowings of a subsidiary of the Group, Karex Industries Sdn. Bhd. is subject to the following covenants:
a.
Maintain gearing ratios of not more than 1.5 times or 2.0 times or 3.5 times as defined by the respective financial institutions.
b.
Net tangible worth of the said subsidiary shall not be less than RM40,000,000.
c.
The said subsidiary shall not without the banks prior written consent, incur or assume additional indebtedness or
guarantee any indebtedness (except in the ordinary course of business), alter the present ownership structure and extend
loans and advances to the Directors of the Company and its related companies.
d.
The said subsidiary shall not without the banks prior written consent, declare and pay dividend exceeding 50% of the
profit after tax of each financial year.
Group
Less than one year
Between one and five years
2014
FUTURE
MINIMUM
LEASE
PAYMENTS
RM000
INTEREST
RM000
PRESENT
VALUE OF
MINIMUM
LEASE
PAYMENTS
RM000
1,094
1,701
113
86
981
1,615
1,137
1,814
144
112
993
1,702
2,795
199
2,596
2,951
256
2,695
FUTURE
MINIMUM
LEASE
PAYMENTS
RM000
INTEREST
RM000
PRESENT
VALUE OF
MINIMUM
LEASE
PAYMENTS
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
Trade
Trade payables
17,680
22,636
Non-trade
Other payables and accrued expenses
Due to related parties
17,662
12,694
3,485
280
173
17,662
547
16,179
72
280
173
35,889
38,887
280
173
The amounts due to related parties are unsecured, interest free and repayable upon demand.
NOTES TO THE
FINANCIAL STATEMENTS
13. PROFIT BEFORE TAX
2015
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
189
113
176
175
70
35
30
515
11
7,669
547
5,132
72
(3,382)
(6,685)
(4)
409
328
(93)
454
(5,566)
2,281
50,753
(101)
(1)
2,277
1,147
33,152
2,006
720
1,005
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
Directors:
- Fees
- Remunerations
- Benefits
380
1,426
65
275
985
55
380
275
1,871
1,315
380
275
1,609
24
1,043
28
1,633
1,071
3,504
2,386
380
275
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.
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
13,492
(819)
6,938
312
43
129
12,673
6,938
355
129
899
(20)
18
879
18
13,552
6,956
355
129
73,282
41,541
23,070
16,110
18,321
820
(2,384)
(446)
(1,920)
10,385
1,604
(217)
(1,944)
(2,646)
(226)
5,768
390
(5,846)
4,028
661
(4,560)
14,391
(839)
6,956
312
43
129
13,552
6,956
355
129
* The Malaysian Budget 2014 announced the reduction of corporate tax rate to 24% with effect from year of assessment 2016.
Consequently, deferred tax assets and liabilities which are expected to reverse in 2016 and beyond are measured using the
tax rate of 24%.
15. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share at 30 June 2015 was based on the profit attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
2015
RM000
GROUP
2014
RM000
59,553
34,585
625,975
456,708
9.51
7.57
The weighted average number of ordinary shares of the previous year were restated to reflect the retrospective adjustments arising
from the bonus issue completed on 21 April 2015 in accordance with MFRS 133, Earning per share.
Diluted earnings per ordinary share
The diluted earnings per share is the same as basic earnings per share as there are no dilutive potential ordinary shares outstanding.
NOTES TO THE
FINANCIAL STATEMENTS
16. DIVIDENDS
Dividends recognised by the Company are:
2014
2014 - Final, single tier
SEN PER
SHARE
TOTAL
AMOUNT
RM000
DATE OF
PAYMENT
2.5
10,125
22 December 2014
After the reporting period, the following dividend was proposed by the Directors. The dividend will be recognised in subsequent
financial period upon approval by the owners of the Company.
SEN PER
SHARE
TOTAL
AMOUNT
RM000
2.5
16,706
GROUP
2014
RM000
47,502
12,552
(934)
(253)
(2,403)
(235)
46,315
9,914
CONDOMS
RM000
2015
Segment profit
PROBE
COVERS,
LUBRICATING
JELLY
CATHETERS AND OTHERS
RM000
RM000
TOTAL
RM000
59,834
2,745
4,873
67,452
274,845
13,347
9,902
298,094
101
(7,412)
1
(228)
(29)
101
(7,669)
1
(1,173)
3,326
(1)
3
(1,174)
3,329
304,885
10,269
5,824
320,978
47,290
212
47,502
2014
Segment profit
40,305
868
3,422
44,595
205,327
6,419
8,181
219,927
(2,006)
(4,920)
(720)
(170)
(42)
(2,006)
(5,132)
(720)
(1,535)
1,329
(26)
3
(1,561)
1,332
229,277
7,841
3,199
240,317
12,048
342
162
12,552
Segment assets
Segment assets
Not included in the measure of segment assets are:
Additions to non-current assets other than financial
instruments and deferred tax assets
NOTES TO THE
FINANCIAL STATEMENTS
18. OPERATING SEGMENTS (CONTINUED)
Reconciliations of reportable segment revenues, profit or loss, assets and other material items:
2015
RM000
GROUP
2014
RM000
Profit or loss
Total profit for reportable segments
Finance costs
Finance income
Unallocated items:
- Corporate expenses
- Others
67,452
(1,174)
3,329
44,595
(1,561)
1,332
(1,891)
5,566
(2,825)
73,282
41,541
320,978
177,395
240,317
49,547
498,373
289,864
Total assets
Major customers
Revenue from one customer exceeding 10% of the Groups revenue is approximately RM33.9 million (2014: RM26.3 million).
19. FINANCIAL INSTRUMENTS
19.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (L&R);
(b) Financial liabilities measured at amortised cost (FL); and
(c) Derivatives used for hedging.
Group
2015
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables, including derivatives
Loans and borrowings
DERIVATIVES
USED FOR
FL
HEDGING
RM000
RM000
CARRYING
AMOUNT
RM000
L&R
RM000
85,136
207,718
85,136
207,718
292,854
292,854
(35,889)
(22,882)
(35,342)
(22,882)
(547)
(58,771)
(58,224)
(547)
Group
2014
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables, including derivatives
Loan and borrowings
Company
2015
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
2014
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
DERIVATIVES
USED FOR
FL
HEDGING
RM000
RM000
CARRYING
AMOUNT
RM000
L&R
RM000
77,487
85,592
77,487
85,592
163,079
163,079
(38,887)
(21,594)
(38,815)
(21,594)
(72)
(60,481)
(60,409)
(72)
72,592
177,167
72,592
177,167
249,759
249,759
(280)
(280)
32,357
49,534
32,357
49,534
81,891
81,891
(173)
(173)
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
(547)
13,397
(1,174)
(72)
(125)
(1,561)
10,108
1,565
11,676
(1,758)
10,108
1,565
Credit risk
Liquidity risk
Market risk
NOTES TO THE
FINANCIAL STATEMENTS
19. FINANCIAL INSTRUMENTS (CONTINUED)
19.4 Credit risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations. The Groups and the Companys exposure to credit risk arises principally from its receivables
from customers, amounts due from subsidiaries and related parties.
Receivables
Risk management objectives, policies and processes for managing the risk
The Board of Directors is of the view that the exposure to credit risk which is managed through the direct involvement of
Executive Directors who are monitoring on an on-going basis is deemed sufficient.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the
carrying amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured
at their realisable values. A significant portion of these receivables are regular customers that have been transacting
with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having
significant balances past due more than 60 days, which are deemed to have higher credit risk, are monitored individually.
Impairment losses
The Group maintains an ageing analysis in respect of trade receivables and related parties only. The ageing of trade
receivables as at the end of the reporting period was:
GROUP
INDIVIDUAL
GROSS IMPAIRMENT
RM000
RM000
NET
RM000
47,771
11,099
10,550
1,363
(382)
47,771
11,099
10,550
981
70,783
(382)
70,401
51,891
9,995
2,946
8,197
(2,191)
51,891
9,995
2,946
6,006
73,029
(2,191)
70,838
2015
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due more than 60 days
2014
Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due more than 60 days
Included in the past due more than 60 days of the Group is amount receivables from related parties of NIL (2014:
RM5,754). In determining whether additional allowance is required to be made, the Group considers financial background
of the customers and related parties, past transactions and other specific reasons causing these balances to be past
due more than 60 days. The customers and related parties are regular customers that have been transacting with the
Group. The Group do not consider it necessary to impair further the receivable amount and is satisfied that the amount
net of allowance can be recovered.
116 | KAREX ANNUAL REPORT 2015
At 1 July/Acquisitions
Impairment loss (reverse)/recognised
Impairment loss written off
Exchange difference
At 30 June
GROUP
2014
RM000
2,191
(1)
(1,998)
190
1,438
720
33
382
2,191
The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfied
that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.
Inter-company balances
Risk management objectives, policies and processes for managing the risk
The Companys exposure to credit risk arose from unsecured advances provided to its subsidiaries.
The Company monitors the financial positions of subsidiaries in assessing its credit risk.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in
the statement of financial position.
Impairment losses
As at the end of the reporting period, there was no indication that the amounts due from subsidiaries are not recoverable.
Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to subsidiaries.
The Company monitors on an ongoing basis the results of its subsidiaries and repayments made by its subsidiaries.
Exposure to credit risk, credit quality and collateral
The maximum exposure to credit risk amounts to RM4,138,523 (2014: RM5,950,411) representing the outstanding
banking facilities of its subsidiaries as at the end of the reporting period.
As at the end of the reporting period, there was no indication that these subsidiaries would default on repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not material.
NOTES TO THE
FINANCIAL STATEMENTS
19. FINANCIAL INSTRUMENTS (CONTINUED)
19.5 Liquidity risk
Liquidity risk is the risk that the Group and the Company will not be able to meet its financial obligations as they fall
due. The Groups and the Companys exposure to liquidity risk arises principally from its various payables, loans and
borrowings.
The Group and the Company maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they fall due.
Maturity analysis
The table below summarises the maturity profile of the Groups and of the Companys financial liabilities as at the end of
the reporting period based on undiscounted contractual payments:
CARRYING
AMOUNT
RM000
CONTRACTUAL
INTEREST
RATE/
COUPON
%
CONTRACTUAL
CASH
FLOWS
RM000
UNDER
1 YEAR
RM000
1-2
YEARS
RM000
2-5
YEARS
RM000
MORE
THAN
5 YEARS
RM000
35,342
11,035
5.62 - 8.10
35,342
12,922
35,342
3,862
5,978
1,047
2,035
2,596
4.41 - 7.03
2,795
1,094
1,459
242
9,251
1.43 - 4.75
9,251
9,251
60,310
49,549
7,437
1,289
2,035
27,319
(26,772)
27,319
(26,772)
60,857
50,096
7,437
1,289
2,035
Group
2015
Non-derivative
financial liabilities
Trade and other payables
Secured term loans
Secured finance lease
liabilities
Secured bankers
acceptance
Derivative financial
liabilities
Forward exchange
contracts
(gross settled):
Outflow
Inflow
58,224
547
58,771
2014
Non-derivative
financial liabilities
Trade and other payables
Secured term loans
Secured finance lease
liabilities
Secured bankers
acceptance
Derivative financial
liabilities
Forward exchange
contracts
(gross settled):
Outflow
Inflow
38,815
12,205
5.75 - 7.85
38,815
14,379
38,815
4,176
5,387
2,445
2,371
2,695
3.78 - 7.03
2,886
1,094
1,570
222
6,694
2.20 - 4.88
6,694
6,694
62,774
50,779
6,957
2,667
2,371
22,876
(22,804)
22,876
(22,804)
62,846
50,851
6,957
2,667
2,371
60,409
72
60,481
Company
2015
Non-derivative
financial liabilities
Trade and other payables
Financial guarantee*
2014
Non-derivative
financial liabilities
Trade and other payables
Financial guarantee*
CARRYING
AMOUNT
RM000
CONTRACTUAL
INTEREST
RATE/
COUPON
%
CONTRACTUAL
CASH
FLOWS
RM000
UNDER
1 YEAR
RM000
1-2
YEARS
RM000
2-5
YEARS
RM000
MORE
THAN
5 YEARS
RM000
280
280
4,139
280
4,139
280
4,419
4,419
173
173
5,950
173
5,950
6,123
6,123
173
* The amount represents the outstanding banking facilities of the subsidiaries at the end of the reporting period.
19.6 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates that will affect the
Groups and the Companys financial position or cash flows.
Currency risk
The Group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than
the functional currency of the Group. The currencies giving rise to this risk are primarily US Dollar (USD), Euro Dollar
(EUR) and Great Britain Pound (GBP).
Risk management objectives, policies and processes for managing the risk
The Group uses forward exchange contracts to hedge its foreign currency risk from time to time. Most of the forward
exchange contracts have maturities of less than one year after the end of the reporting period. Where necessary, the
forward exchange contracts are rolled over at maturity.
NOTES TO THE
FINANCIAL STATEMENTS
19. FINANCIAL INSTRUMENTS (CONTINUED)
19.6 Market risk (continued)
Currency risk (continued)
Exposure to foreign currency risk
The Groups exposure to foreign currency (a currency which is other than the functional currency of the Company) risk,
based on carrying amounts as at the end of the reporting period was:
GROUP
DENOMINATED IN
USD
EUR
RM000
RM000
GBP
RM000
2015
Trade receivables
Other receivables
Cash and cash equivalents
Trade payables
Other payables
Loans and borrowings
Forward exchange contracts
62,376
2,549
12,188
(5,172)
(5,596)
(4,139)
(26,772)
972
760
1,918
116
Net exposure
35,434
3,650
116
2014
Trade receivables
Other receivables
Cash and cash equivalents
Trade payables
Other payables
Forward exchange contracts
69,949
116
8,825
(11,761)
(1,550)
(5,170)
605
798
(134)
162
(9)
(17,633)
Net exposure
60,409
1,269
(17,480)
DENOMINATED IN
USD
EUR
RM000
RM000
GBP
RM000
2015
Profit or loss
(2,658)
(274)
(9)
2014
Profit or loss
(4,531)
(95)
1,311
A 10% (2014: 10%) weakening of the RM against the above currencies at the end of the reporting period would have
had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables
remain constant.
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
185,029
(11,847)
56,355
(9,389)
175,944
47,127
173,182
46,966
175,944
47,127
(11,035)
(12,205)
NOTES TO THE
FINANCIAL STATEMENTS
19. FINANCIAL INSTRUMENTS (CONTINUED)
19.7 Fair value information (continued)
The table below analyses financial instruments carried at fair value for which fair value is disclosed, together with their
fair values and carrying amounts shown in the statement of financial position.
FAIR VALUE
OF FINANCIAL
INSTRUMENTS
CARRIED
AT FAIR VALUE
LEVEL 2
RM000
TOTAL
FAIR
VALUE
RM000
CARRYING
AMOUNT
RM000
2015
Financial liabilities
Forward exchange contracts
547
547
547
2014
Financial liabilities
Forward exchange contracts
72
72
72
GROUP
Total equity
GROUP
2014
RM000
22,882
(207,718)
21,594
(85,592)
(184,836)
(63,998)
432,823
223,332
No disclosure is made for debt-to-equity ratio as the Group is in a net positive cash flow position as at 30 June 2015.
There were no changes in the Groups approach to capital management during the financial year.
GROUP
2014
RM000
9,020
597
1,577
GROUP
2014
RM000
1,446
2,798
3,440
93
371
1,686
7,684
2,150
The Group leases a number of properties being used for its office, factory and warehouse under operating leases. The lease
typically run for a period between 3 and 30 years (2014: 20 and 30 years). The Group has an option to renew the lease upon
the expiry of the lease. Lease payments are of the amount and increasing rate stated in the lease agreements.
23. RELATED PARTIES
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Company
has the ability, directly or indirectly, to control or jointly 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.
Related parties also include key management personnel 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
include all the Directors of the Group, and certain members of senior management of the Group.
The Group has related party relationship with its subsidiaries and key management personnel.
Significant related party transactions
The significant related party transactions of the Group and the Company, other than key management personnel compensation
(see Note 13) and acquisitions (see Note 24), are as follows:
2015
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
A. Subsidiary
Dividend income
Interest income
14,000
2,160
17,371
445
271
603
NOTES TO THE
FINANCIAL STATEMENTS
24. ACQUISITION OF SUBSIDIARIES
(a) For the financial year ended 30 June 2015
(i)
Acquisition of a subsidiary
The Group has via a newly set up subsidiary, Karex Global Limited, acquired 55% of the issued and paid-up share
capital of Global Protection Corporation (GPC) for a total cash consideration of USD 6.6 million, equivalent to
RM21.5 million on 3 October 2014. GPC is a condom and lubricant distributor of the ONE brand products and
other trademarked brand names products.
RM000
235
21,614
8,120
4,248
669
(9,577)
(3,274)
(496)
21,539
21,539
(669)
20,870
(ii)
Acquisition of a subsidiary
In the nine months to 30 June 2015, GPC contributed revenue of RM25,490,000 and profit of RM394,000. The
management is of the view that the estimated consolidated revenue and consolidated profit for the financial year will
not be materially different from the reported amount in the financial statements had the acquisition occurred on 1
July 2014.
(iii)
Acquisition-related costs
The Group incurred acquisition-related costs of RM672,700 related to external legal fees and due diligence costs.
The legal fees and due diligence costs have been included in administrative expenses in the Groups consolidated
statement of profit or loss and other comprehensive income.
The acquisitions of Karex Industries Sdn. Bhd. (KISB), Innolatex (Thailand) Limited (ITL), Innolatex Sdn. Bhd.
(ISB) and Hevea Medical Sdn. Bhd. (HMSB) by the Company and Uro Technology Sdn. Bhd. (UTSB) by KISB,
for an aggregated consideration of approximately RM57.4 million were settled via the issuance of 229.5 million
shares of the Company to their respective shareholders on 23 September 2013. Details of the acquisitions are as
follows:
(a) The Company acquired the entire issued and paid-up share capital of KISB for a purchase consideration of
RM35,474,998 satisfied via the issuance of 141,899,992 shares of the Company;
(b) The Company acquired the entire issued and paid-up share capital of ITL for a purchase consideration of
RM12,500,000 satisfied via the issuance of 50,000,000 shares of the Company;
(c) The Company acquired the entire issued and paid-up share capital of ISB for a purchase consideration of
RM4,750,000 satisfied via the issuance of 19,000,000 shares of the Company;
(d) The Company acquired the entire issued and paid-up share capital of HMSB for a purchase consideration of
RM3,300,000 satisfied via the issuance of 13,200,000 shares of the Company; and
(e) KISB acquired the remaining 40% equity interest in UTSB not already owned by KISB for a purchase consideration
of RM1,350,000 satisfied via the issuance of 5,400,000 shares of the Company.
(the above transactions are collectively refer to as Acquisitions)
The Acquisitions were completed on 23 September 2013.
RM000
79,333
706
47,798
58,676
131
26,736
(45,024)
(5,034)
(40,141)
(2,295)
120,886
(63,511)
57,375
26,736
(7,585)
19,151
NOTES TO THE
FINANCIAL STATEMENTS
24. ACQUISITION OF SUBSIDIARIES (CONTINUED)
(b) For the financial year ended 30 June 2014 (continued)
(ii)
As the Acquisitions were completed on 23 September 2013, the Group did not consolidate the financial performance
of these subsidiaries from 23 September 2013 to 30 September 2013 due to impracticability of an accounting cut-off
date other than month end and the effect is not significant to the results for the financial year ended 30 June 2015.
The Group has consolidated the results from 1 October 2013 onwards.
If the Group has existed since the last financial year, management estimate that the consolidated results would have
been as follows:
2014
RM000
Revenue
Cost of goods sold
285,332
(203,703)
Gross profit
Other income
Distribution expenses
Administrative expenses
Other expenses
81,629
758
(11,558)
(12,488)
(3,111)
55,230
Finance income
Finance costs
Net finance costs
1,332
(2,134)
(802)
54,428
(9,260)
45,168
26. SUPPLEMENTARY FINANCIAL INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS
OR LOSSES
The breakdown of the retained earnings of the Group and of the Company as at 30 June, into realised and unrealised profits
or losses, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:
2015
RM000
GROUP
2014
RM000
COMPANY
2015
2014
RM000
RM000
80,171
5,241
35,427
(418)
22,373
5,566
15,349
85,412
(2,749)
35,009
(1,774)
27,939
15,349
82,663
33,235
27,939
15,349
The determination of realised and unrealised profits or losses is based on the Guidance of Special Matter No. 1, Determination
of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad
Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.
LIST OF
PROPERTIES
NO. ADDRESS
LAND AREA/
BUILT UP AREA
(SQ. FT.)
43,560/47,473
DESCRIPTION/
EXISTING USE
DATE OF
ACQUISITION
TENURE
APPROXIMATE
AGE OF
BUILDINGS
(YEARS)
NET
BOOK
VALUE
AT
30 JUNE
2015
(RM000)
September
2074
27
2,657
YEAR OF
EXPIRY
1.
2.
9,354/5,460
1 storey 05/04/2000
semi-detached
building which
we use as
office, factory
and warehouse
Freehold
22
522
3.
10,807/5,460
1 storey 05/04/2000
semi-detached
building which
we use as
office, factory
and warehouse
Freehold
22
522
4.
225,418/
Freehold
813
5.
9,720/5,460
1 storey 22/02/2005
semi-detached
building which
we use
as warehouse
Freehold
22
614
6.
Freehold
7.
18,241/7,798
Single storey
semi-detached
building which
we use as
office, factory
and warehouse
27/07/2015 Leasehold
99
years
October
2063
22
682
8.
54,450/21,385
Single storey
semi-detached
building which
we use as
office, factory
and warehouse
27/07/2015 Leasehold
99
years
October
2063
22
2,036
21/10/2010
10,508
NO. ADDRESS
9.
LAND AREA/
BUILT UP AREA
(SQ. FT.)
39,204/6,439
DESCRIPTION/
EXISTING USE
Single storey
semi-detached
building which
we use as
office, factory
and warehouse
199,477/
Single storey
128,808 semi-detached
building which
we use as
office, factory
and warehouse
DATE OF
ACQUISITION
APPROXIMATE
AGE OF
BUILDINGS
(YEARS)
NET
BOOK
VALUE
AT
30 JUNE
2015
(RM000)
October
2063
22
1,466
Freehold
22
8,855
TENURE
27/07/2015 Leasehold
99
years
27/07/2015
YEAR OF
EXPIRY
37,598
Vacant Land
27/07/2015 Agriculture
Freehold
376
101,549
Vacant Land
27/07/2015 Agriculture
Freehold
1,015
37,026
Vacant Land
27/07/2015 Agriculture
Freehold
370
43,560/28,908
14. Lot 591, Persiaran Raja
Lumu Pandamaran
Industrial Estate,
42000 Port Klang, Selangor
Darul Ehsan
September
2074
24
6,350
61,680/
November
2056
831
45,047/41,925
April
2033
10
1,239
45,047/29,891
February
2036
10
1,077
45,047/57,307
01/11/2012 Leasehold
30
years
October
2042
2,035
Single storey
building which
we use
as warehouse
ANALYSIS OF SHAREHOLDINGS
AS AT 9 OCTOBER 2015
Class of Shares
Voting Rights
Number of Shareholders
3,643
DISTRIBUTION OF SHAREHOLDINGS
NO. OF
SHAREHOLDERS
% OF
SHAREHOLDERS
NO. OF
SHARES
% OF ISSUED
SHARE CAPITAL
124
3.40
4,887
0.00
100 - 1,000
648
17.79
448,417
0.07
1,986
54.52
8,125,179
1.22
10,001 - 100,000
639
17.54
19,195,286
2.87
244
6.70
384,976,260
57.61
0.05
255,499,971
38.23
3,643
100.00
668,250,000
100.00
SIZE OF SHAREHOLDINGS
1,001 - 10,000
The following are the substantial shareholders of the Company according to the Register of Substantial Shareholders.
DIRECT INTEREST
NAME OF SHAREHOLDERS
INDIRECT INTEREST
NO OF SHARES
NO OF SHARES
212,625,000
31.82
42,874,971
6.42
8,550,000(*)
1.28
Deemed interested by virtue of his interest in AJNA Holdings Limited pursuant to Section 6A of the Companies Act 1965
DIRECTORS SHAREHOLDINGS
DIRECT INTEREST
NAME OF DIRECTORS
INDIRECT INTEREST
NO OF SHARES
NO OF SHARES
225,000
0.03
225,000
0.03
Goh Siang
15,762,568
2.36
212,625,000(1)
31.82
24,312,577
3.64
212,625,000(1)
31.82
16,999,971
2.54
212,625,000
(1)
31.82
12,724,971
1.90
221,175,000
(2)
33.10
172,500
0.03
Notes:
Deemed interested by virtue of his/her equity interest in Karex One Limited pursuant to Section 6A of the Companies Act 1965
(2)
Deemed interested by virtue of her equity interest in Karex One Limited and AJNA Holdings Limited pursuant to Section 6A of
the Companies Act, 1965
(1)
NO. OF
SHARES
212,625,000
31.82
42,874,971
6.42
23,363,250
3.50
17,224,980
2.58
17,000,065
2.54
16,999,971
2.54
GOH AI NOI
16,774,971
2.51
15,312,577
2.29
13,488,550
2.02
10
12,724,971
1.90
11
11,812,568
1.77
12
10,681,225
1.60
13
10,299,900
1.54
14
9,000,000
1.35
15
9,000,000
1.35
16
8,550,000
1.28
17
7,552,800
1.13
18
7,500,000
1.12
19
6,688,625
1.00
20
5,826,550
0.87
21
5,564,150
0.83
22
5,555,550
0.83
NO.
NAME OF SHAREHOLDERS
NO. OF
SHARES
5,373,800
0.80
24
5,040,650
0.75
25
4,682,600
0.70
26
4,500,000
0.67
27
4,216,950
0.63
28
3,938,800
0.59
29
3,789,600
0.57
30
3,569,875
0.53
521,532,949
78.04
NO.
NAME OF SHAREHOLDERS
23
TOTAL
NOTICE OF
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Third Annual General Meeting (3RD AGM) of Karex
Berhad (Karex or Company) will be held at Setia City Convention Centre, No. 1, Jalan Setia
Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Monday,
30 November 2015 at 10.00 a.m. for the purpose of considering the following businesses:AGENDA
SPECIAL BUSINESS
Ordinary Business
1.
2.
(Ordinary Resolution 1)
(Ordinary Resolution 2)
(Ordinary Resolution 5)
Notes:
1.
2.
The Form of Proxy shall be in writing under the hand of the appointer or of
his/her attorney duly authorised in writing. If the appointer is a corporation,
it must be executed under its common seal or under the hand of its officer
or its attorney duly authorised on its behalf.
3.
A member may appoint two or more proxies to attend and vote at the
general meeting of the Company. Where a member appoints two or more
proxies, the appointment of such proxies shall not be valid unless the
Member specifies the proportion of his/her shareholding to be represented
by each such proxy.
4.
The Form of Proxy, together with the power of attorney (if any) under which
it is signed or a duly notarial certified copy thereof, must be deposited at
the registered office of the Company at 10th Floor, Menara Hap Seng, No.
1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur, Wilayah Persekutuan not less
than forty-eight (48) hours before the time for holding this meeting or any
adjournment thereof.
5.
6.
FORM OF PROXY
KAREX BERHAD (1018579-U)
NUMBER OF SHARES HELD
CDS ACCOUNT NO.
* I/We
NRIC No./Passport No./Company No.
of
being a Member(s) of KAREX BERHAD (1018579-U), hereby appoint
#THE CHAIRMAN OF THE MEETING or
NRIC No./Passport No.
of
or failing him/her
NRIC No./Passport No
of
as *my/our proxy to vote for
*me/us on *my/our behalf at the Third Annual General Meeting of the Company to be held at Setia City Convention Centre, No.
1, Jalan Setia Dagang AG U13/AG, Setia Alam, Seksyen U13, 40170 Shah Alam, Selangor Darul Ehsan on Monday, 30 November
2015 at 10.00 a.m. or at any adjournment thereof and to vote as indicated below:
ORDINARY RESOLUTIONS
FOR
To approve the payment of Directors fees of RM380,000.00 for the financial year ended 30 June
2015.
To approve the payment of Directors fees of not more than RM500,000.00 per annum for the
financial years subsequent to the financial year ended 30 June 2015.
AGAINST
10 SPECIAL BUSINESS
Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965
Mark either box if you wish to direct the proxy how to vote. If no mark is made the proxy may vote on the resolution or abstain from
voting as the proxy thinks fit. If you appoint two proxies and wish them to vote differently this should be specified.
#
*
If you wish to appoint other person(s) to be your proxy/proxies, kindly delete the words The Chairman of the Meeting and
insert the name(s) of the person(s) desired.
Delete if not applicable.
Signed this
day of
2015
Signature / Common Seal of Shareholder
Notes:
1. A member entitled to attend and vote at this meeting is entitled to appoint a proxy or in the case of a corporation, to appoint a duly authorised representative
to attend and vote in his/her place. 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.
The Form of Proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing. If the appointer is a corporation, it must be
executed under its common seal or under the hand of its officer or its attorney duly authorised on its behalf.
3.
A member may appoint two or more proxies to attend and vote at the general meeting of the Company. Where a member appoints two or more proxies, the
appointment of such proxies shall not be valid unless the Member specifies the proportion of his/her shareholding to be represented by each such proxy.
4.
The Form of Proxy, together with the power of attorney (if any) under which it is signed or a duly notarial certified copy thereof, must be deposited at the
registered office of the Company at 10th Floor, Menara Hap Seng, No. 1 & 3 Jalan P. Ramlee, 50250 Kuala Lumpur, Wilayah Persekutuan not less than forty-eight
(48) hours before the time for holding this meeting or any adjournment thereof.
5.
Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities
account (Omnibus Account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account
it holds.
6.
Depositors whose name appear in the Record of Depositors as at 23 November 2015 shall be regarded as members of the Company entitled to attend the AGM
or appoint proxies to attend and vote on his/her behalf in accordance with Articles 55(5)and 55(6) of the Companys Articles of Association.
FOLD HERE
AFFIX STAMP
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