CONTENTS 2010. 10. 6. · CONTENTS Corporate Information 2 Corporate Structure 3 Chairman’s Statement 4 Product Review 6 Distribution Network 8 Notice of Annual General Meeting 9

CONTENTSCorporate Information 2 Corporate Structure 3 Chairman’s Statement 4 Product Review 6Distribution Network 8 Notice of Annual General Meeting 9 Profile of Directors of Komarkcorp Berhad 13Statement on Corporate Governance 16 Statement on Internal Control 25 Audit Committee Report 27Other Information 31 Financial Statements 33 Analysis of Shareholdings 76 List of Properties 79Proxy Form 81

Management Team

Ong Ann Boon (Director)General Labels & Labelling Pte. Ltd.

Tan Quok Eow(Group Financial Controller)

Leonard Tan Chee Leong(Deputy General Manager)

General Labels & Labelling (M) Sdn BhdKomark International (M) Sdn Bhd

Yoong Chee Wah(Operational Manager)

General Labels & Labelling (M) Sdn BhdKomark International (M) Sdn Bhd

Raymond Lim Fook Heng (Deputy General Manager)

General Labels & Labelling (M) Sdn Bhd

Registered Office

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

Principal Place Of Business(Headquarters)Lot 132, Jalan 16/1Kawasan Perindustrian Cheras Jaya43200 Balakong Selangor Darul EhsanTel : 03-9080 3333 Fax : 03-9080 5233

Koh Hong Muan @ Koh Gak Siong (Group Chairman/Chief Executive Officer)

Koh Chie Jooi (Executive Director)

Koh Chee Mian (Executive Director)

Datuk Ng Peng Hong @ Ng Peng Hay (Independent Non-Executive Director)

Chew Chee Chek (Independent Non-Executive Director)

Ihsan bin Ismail (Independent Non-Executive Director)

DIRECTORS

CORPORATEINFORMATION

Komarkcorp Berhad (374265-A)2

Audit Committee

Datuk Ng Peng Hong @ Ng Peng Hay Chairman (Independent Non-Executive Director)

Chew Chee ChekMember of the Committee (Independent Non-Executive Director)

Ihsan bin IsmailMember of the Committee (Independent Non-Executive Director)

Remuneration Committee

Datuk Ng Peng Hong @ Ng Peng HayChairman (Independent Non-Executive Director)


Koh Hong Muan @ Koh Gak SiongMember of the Committee(Executive Director)

Nomination Committee

Datuk Ng Peng Hong @ Ng Peng HayChairman (Independent Non-Executive Director)


Koh Hong Muan @ Koh Gak SiongMember of the Committee (Executive Director)

AuditorsOng & WongChartered AccountantsUnit C-20-5, Block C20th Floor Megan Avenue II12, Jalan Yap Kwan Seng50450 Kuala Lumpur

Registrars

Tricor Investor Services Sdn Bhd(Company No. 118401-V)

Level 17, The Gardens North TowerMid Valley City Lingkaran Syed Putra59200 Kuala LumpurTel : 03-2264 3883 Fax : 03-2282 1886

Principal Bankers

EON Bank Bhd (Co No. 92351-V)

Hong Leong Bank Bhd (Co No. 97141-X)

DBS Bank Ltd (Co No. 196800306-E)

Malayan Banking Bhd (Co No. 3813-K)

HSBC Bank Malaysia Bhd(Co No.127776-V)

Kuwait Finance House(Malaysia) Bhd (Co no.672174 T)

Company Secretaries

Liew Irene (MAICSA 7022609)Tai Yit Chan (MAICSA 7009143)

Stock Exchange Listing

Bursa Malaysia Securities Berhad(Co No. 635998-W)Main Market

CORPORATESTRUCTURE

Annual Report 2010 3

100%

70%

8.4%

50%

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

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

GENERAL LABELS & LABELLINGPTE. LTD. (198300123C)

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

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

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

90%

91.6%

50%

100%

100%

100%

100%

100%

100%

100%

100%

100%

49%

99%

1%

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

KOMARK AUSTRALASIAPTY. LTD. (087852793)

KOMARK INVESTMENTHOLDINGS LTD. (440077)

KOMARK CHINA LTD. (CR-109965)

PT KOMARK LABELSAND LABELLINGINDONESIA

KOMARK ENTERPRISECO. LTD. (5053)

SHANGHAI KOMARKLABELS & LABELLINGCO. LTD. (020411)

GUANGZHOU KOMARKLABELS & LABELLINGCO. LTD. (100286)

KOMARK HONG KONGCO. LTD. (754596)

CHAIRMAN’SSTATEMENT


PERFORMANCE REVIEW

The Financial Year 2010 has been a very challenging year for the Group. The Groupstarted the financial year facing an unprecedented global financial crisis, whichoriginated from the sub-prime lending in the developed economies. Despite theaforesaid global financial crisis, the Group recorded a marginal decrease in turnoverof RM112.00 million for the financial year ended 30 April 2010 compared to RM117.75 million recorded in the previous financial year with the following analysis:

Financial Year Ended Differences

30 April 2010 30 April 2009RM’000 RM’000 RM’000 %

Turnover 111,998 117,757 (5,759) (4.89)

Profit before taxation 2,900 875 2,025 231.43

Profit after taxation 2,020 347 1,673 482.13

The Multinational Customers continued to contribute substantially to the Group’sturnover. The Group recorded a profit before tax of RM2.9 million for the financialyear ended 30 April 2010, representing an increase of more than two (2) timescompared to RM0.875 million achieved in the previous financial year. For the financialyear ended 30 April 2010, the Group posted a profit after tax and minority interestof RM2.020 million compared to RM0.347 million achieved in the previous financialyear. The substantial increase is mainly attributable to various cost cutting measuresimplemented by the Group. The Group will continue to implement aggressivemarketing strategies for both the domestic and foreign market to increase theturnover for the coming financial year.

Dear Shareholders,With great pleasure and on behalf of the Board of Directors, Ipresent to you the Annual Report of Komarkcorp Berhad andits subsidiary companies (“Group”) for the financial year ended30 April 2010 (“Financial Year 2010” or “FYE 2010”).

CHAIRMAN’SSTATEMENT


MARKET OUTLOOK

The Malaysia economy is expected to register a economic growth at 6.5%compared to the negative Gross Domestic Product (“GDP”) growth of -1.7%achieved in 2009. The gradual global economy recoveries coupled with sustaineddomestic demand and better global trade conditions are contributory factors tothe GDP growth for 2010. East Asia’s growth is expected to grow to 6.7% in2010, up from 4.1% a year earlier, largely because of the effects of thegovernment stimulus packages that boosted domestic demand and easedunemployment.

Though economic situations differ from country to country, East Asia will remainthe fastest growing region in the world. With the Group’s diversification ofmarkets in terms of different countries (mainly Malaysia, China, Singapore,Thailand, Indonesia, India and Philippine), the impact of economy slowdown inany of these countries shall be minimised and being cushioned off by the positivegrowth in other countries and thus; the risk of dependent on a single market ismanageable. The prospect of the Group’s operations in China is extremely brightgiven their population of approximately 1.3 billion and their projected economygrowth of 8.8% for 2010 would create huge demand for labels and relatedproducts. We will continue to capitalise on the Group’s established brandname,product quality, efficient service and wide network to strengthen its marketposition locally and abroad. In addition, the Group will continue to explorepotential foreign markets for its products. The Group expects the performanceand market outlook of Asia Pacific region in the coming years to be moreencouraging.

DIVIDENDThe immediate priority for the Group is to reduce its bank borrowings, whicharises from past business expansion and thus; the internally generated fundwould be channeled towards the repayment of bank borrowings. After takinginto consideration of the above, the Board of Directors is not recommending anydividend payment for the financial year ended 30 April 2010.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I wish to express our sincere appreciation tothe Management and staff of the Komarkcorp Group for their continueddedication, commitment and loyalty to the Group. Given the joint commitmentof the Board of Directors, Management and staff, as well as the co-operationand support of customers and shareholders. I also wish to express our sincereappreciation to our valued shareholders, customers, business associates,government authorities and bankers for their continued support and cooperation.

Koh Gak SiongChairman

PRODUCTREVIEW


9. Four Label Applicator Heads for 2Sides & Non-Stop Labelling WithStepper MotorDrive System

10. Pressure Sensitive Label High SpeedRotary Labelling Machine

11. Pressure Sensitive Label Dispenser

-- TIGER SERIES --12. Pressure Sensitive Label Applicator

With Servo Motor Drive System -Double Side Labelling (Tiger Series)

13. Pressure Sensitive Label Applicator For Tube Labelling

14. Automatic Label Dispenser WithHot Printer

-- LION SERIES --15. Pressure Sensitive Label Applicator

With Fully Synchronised StepperMotor Drive System - 2 Sides Labelling With WraparoundStation (Lion Series)

16. Fully Customisation LabellingSystem For PharmaceuticalsIndustry

17. High Speed Labels Inspection Machine (LIM380)

-- K3000 SERIES --18. Pressure Sensitive Label Applicator

With Clutch And Brake DriveSystem - Wraparound Labelling

19. Semi Automatic Labelling Machine

20. Pressure Sensitive Labels InspectionMachine (PIM300S)

-- PUMA SERIES --

LABELLING & LABELS SOLUTION

PACKAGING SOLUTION

1. Pressure Sensitive Labels

In Reel / Sheet

2. PP Roll-Fed Labels

3. Heat Shrink Sleeves

4. RFID Smart Labels

5. Multiform (Booklet) Labels

6. In-Mould Labels

7. Barcode & Computer Labels

8. Fabric Labels

1 2 3

4 5 6

7 8

9 10 11

12 13 14

15 16 17

18 19 20

PRODUCTREVIEW


RETAILING & BARCODING SYSTEM SOLUTION

21. Pricing Labeller - Single Liner

22. Pricing Labeller - Double Liner

23. Pricing Labeller - Three Liner

24. Tag Guns & Pins

25. Digital Computing Scale

26. Barcode Scanner / Printer

27. Barcode Labels Printer cumApplicator

28. Barcoding System Software

29. Scale Labels, Pricing Labels & Tag

30. Rotary Press (1 - 2 Colours)

31. Labels Rewinder for Pricing Labels With or Without Slitter

32. Mini Slitter for Labels

33. Axon Automatic Heat Shrink Band and Sleeve Applicator &Heat Tunnel

34. Komark Automatic Heat ShrinkBand and Sleeve Applicator andHeat Tunnel

35. Cocito Rotary Labelling Machine“Etina” for Roll-Fed Label

36. Cocito Pressure Sensitive Label Rotary High Speed LabellingMachine

37. Cocito Rotary Cold Glue / HotMett Labelling Machine

38. Styrotech PE Stretch SleeveLabel Applicator

OEM & AGENCY PRODUCTS

21 22 23

24 25 26

27 28 29

30 31 32

33 34 35

36 37 38

DISTRIBUTIONNETWORK


Singapore Thailand Indonesia

Shanghai Langfang GuangZhou

Penang Ipoh Johor Bahru

MALAYSIA HEADQUATERS

KUALA LUMPUR

NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN THAT the Fourteenth Annual General Meeting of the Company will be convened and held atLangkawi Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 28 October2010 at 2.30 p.m. to transact the following businesses:-

AGENDAAs Ordinary Business

1. To receive and adopt the Audited Financial Statements for the financial year ended 30 April2010 together with the Directors’ and Auditors’ Reports thereon.

2. To approve the Directors’ Fees for the financial year ended 30 April 2010.

3. To re-elect the following Directors who are retiring under Article 93.1 of the Articles ofAssociation of the Company:-

(i) Datuk Ng Peng Hong @ Ng Peng Hay(ii) Mr Koh Chee Mian

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

As Special Business

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

5. Proposed Renewal of Share Buy-Back Mandate

“THAT, subject to the Companies Act, 1965 (“Act”), the Articles of Association of theCompany, Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad(“Bursa Securities”) and any other relevant authorities, the Company be and is herebyauthorised to purchase such number of ordinary shares of RM1.00 each in the Company(“Shares”) (“Proposed Share Buy-Back”) as may be determined by the Directors of theCompany from time to time through Bursa Securities upon such terms and conditions as theDirectors may deem fit in the interest of the Company provided that the aggregate numberof Shares purchased pursuant to this resolution does not exceed ten percent (10%) of thetotal issued and paid-up share capital of the Company and that an amount not exceeding theCompany’s share premium account of RM15.3 million as at 30 April 2010, would be allocatedby the Company for the Proposed Share Buy-Back. The unaudited share premium account ofthe Company as at 31 July 2010 was RM15.3 million.

THAT the authority conferred by this resolution will commence immediately upon the passingof this resolution and will continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company followingthe Fourteenth AGM at which this ordinary resolution was passed at which time it willlapse unless by ordinary resolution passed at that meeting, the authority is renewed, eitherunconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM after that date is required by lawto be held; or

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company ingeneral meeting,

whichever occurs first.

Ordinary Resolution 1


Ordinary Resolution 3Ordinary Resolution 4


NOTICE OF ANNUAL GENERAL MEETING (cont’d)


THAT the Directors be and are hereby authorised to take all steps necessary to implement,finalise and to give full effect to the Proposed Share Buy-Back and further THAT authority beand is hereby given to the Directors to decide in their absolute discretion to either retain theShares purchased by the Company as treasury shares, to be either subsequently cancelled ordistributed as share dividends and/or re-sold on the Bursa Securities, or to cancel the Sharesso purchased or a combination of both.”

6. Proposed Renewal of General Mandate for Recurrent Related Party Transactions

“THAT the Proposed Renewal of General Mandate pursuant to Paragraph 10.09 of the MMLRof Bursa Securities, authorising the subsidiaries of the Company to enter into recurrenttransactions of a revenue or trading nature as set out in paragraph 3.2.1 of the Circular toShareholders dated 6 October 2010 with the related parties mentioned therein which arenecessary for the Komarkcorp group’s day-to-day operations, be and is hereby approvedprovided that:-

(i) the transactions are in the ordinary course of business and on normal commercial termswhich are not more favourable to the related parties than those generally available to thepublic and are not to the detriment of the minority shareholders of the Company; and

(ii) in making the disclosure of the aggregate value of recurrent transactions conductedpursuant to the General Mandate in the Annual Report, the Company will provide abreakdown of the aggregate value of the recurrent transactions made during the financialyear, amongst others, based on the following information:

• the type of the recurrent transactions made; and

• the names of the related parties involved in each type of the recurrent transactionsmade and their relationship with the listed issuer.

THAT the authority conferred by such mandate shall continue to be in force until:-

(i) the conclusion of the next AGM of the Company following the forthcoming AGM atwhich the Proposed Renewal of General Mandate for Recurrent Related Party Transactionsis approved, at which time it will lapse, unless by a resolution passed at the AGM, themandate is again renewed;

(ii) the expiration of the period within which the next AGM of the Company after theforthcoming AGM is required to be held pursuant to Section 143(1) of the CompaniesAct, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section143(2) of the Companies Act, 1965); or

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

whichever is earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and doall such acts and things as they may consider expedient or necessary to give effect to theProposed Renewal of General Mandate for Recurrent Related Party Transactions.”




NOTES

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead.A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply tothe Company.

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

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

4. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified oroffice copy of such power or authority, must be deposited at the Company’s Share Registrars’ office at Level 17, The Gardens North Tower, MidValley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournmentthereof.


7. Authority under Section 132D of the Companies Act, 1965 for the Directors to issueshares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are herebyauthorised to issue shares in the Company at any time until the conclusion of the next AGMupon such terms and conditions and for such purposes as the Directors may, in their absolutediscretion, deem fit provided that the aggregate number of shares to be issued does not exceed10 per centum of the issued share capital of the Company for the time being, subject alwaysto the approval of all relevant regulatory bodies being obtained for such allotment and issue.”

BY ORDER OF THE BOARDLIEW IRENE (MAICSA 7022609)TAI YIT CHAN (MAICSA 7009143)Secretaries

Selangor Darul EhsanDate: 6 October 2010


EXPLANATORY NOTES TO THE SPECIAL BUSINESS

5. Ordinary Resolution 6, if passed, will give the Directors of the Company authority to take all such steps as are necessary or expedient to implement,finalise, complete and/or to effect the purchase(s) of ordinary shares by the Company as the Directors may deem fit and expedient in the bestinterest of the Company. The authority will, unless revoked or varied by the Company in general meeting, continue to be in force until theconclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting ofthe Company following the Fourteenth Annual General Meeting is required by law to be held.

6. Ordinary Resolution 7, if passed, will allow Komarkcorp Group to enter into recurrent related party transactions in the ordinary course of businessand the necessity to convene separate general meetings from time to time to seek shareholders’ approval as and when such recurrent relatedparty transactions occur would not arise. This would reduce the expenses associated therewith, improve administrative efficiency and allowhuman resources and time to be channelled towards attaining corporate objectives. The shareholders’ mandate is subject to renewal on anannual basis.

7. The Company had, during its Thirteenth AGM held on 29 October 2009, obtained its shareholders’ approval for the general mandate for issuanceof shares pursuant to Section 132D of the Companies Act, 1965 (“the Act”). The Company did not issue any shares pursuant to this mandateobtained.

The Ordinary Resolution 8 proposed under item 7 of the Agenda is a renewal of the general mandate for issuance of shares by the Companyunder Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issuenew shares speedily in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for purpose offunding the working capital, business expansion or strategic development of the Group. This would eliminate any delay arising from and costinvolved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revoked orvaried by the Company at a general meeting, will expire at the next AGM.

At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is sought,the Company will make an announcement in respect thereof.



PROFILE OF DIRECTORS OF KOMARKCORP BERHAD

Koh Hong Muan @ Koh Gak SiongAge : 62Nationality : MalaysianQualification : Malaysian Certificate of EducationOccupation : Group Chairman and Chief Executive OfficerPosition : Executive DirectorOther Directorships of Public Companies : NoneThe Date He Was First Appointed to the Board :16 June 1997

The Details of Any Board Committee to Which HeBelongs : Remuneration Committee and NominationCommittee of Komarkcorp Berhad

Securities Holding in the Company :Direct :6,010,300 ordinary shares

Indirect:10,906,889 ordinary shares

Securities Holding in the Subsidiaries :Deemed to have interests in shares of all the subsidiaries tothe extent Komarkcorp Berhad has an interest.

Family Relationship With Any Director and / or MajorShareholders of the Company :Parent to Mr. Koh Chie Jooi and Mr. Koh Chee Mian

Conflict of Interest : None

List of Convictions for Offences Within the Past 10 YearsOther Than Traffic Offences : None

Working Experience :

Mr. Koh is the founder of the Komarkcorp Group ofCompanies and is currently the Group Chairman and ChiefExecutive Officer of Komarkcorp Group. Mr. Koh isresponsible for formulating the overall business developmentand corporate strategies for the Group. Mr. Koh has beenengaged in the manufacturing of pressure sensitive labels andautomatic labelling systems for over 30 years during whichhe gained wide experience in product development andcorporate management. He co-invented two sets of patentedfeeding mechanism in hand-held labellers and precisionproducts feeding device with pneumatic logistic controlsystems in automatic labelling machines, respectively. Mr.Koh’s efforts were recognised by the Malaysian Governmentwhen General Labels & Labelling (M) Sdn Bhd and KomarkInternational (M) Sdn Bhd, wholly-owned subsidiaries ofKomarkcorp Berhad, were granted Pioneer Status for themanufacturing of automatic labelling machines andhand-held labellers by Malaysia Industrial DevelopmentAuthority (MIDA), Malaysia in 1991 and 1997, respectively.Mr. Koh is a member of The Institute of Printing of the UnitedKingdom.

The Number of Board Meetings Attended in the Financial Year : 4 out of 4


Koh Chie Jooi Age : 32Nationality :MalaysianQualification : Degree in Bachelor of CommerceOccupation : Company DirectorPosition : Executive DirectorOther Directorships of Public Companies : NoneThe Date He Was First Appointed to the Board :27 June 2002

The Details of Any Board Committee to Which HeBelongs : Nil

Securities Holding in the Company :Indirect:16,917,189 ordinary shares

Securities Holding in the Subsidiaries : Deemed to have interests in shares of all the subsidiaries tothe extent Komarkcorp Berhad has an interest.

Family Relationship With Any Director and / or MajorShareholders of the Company :Child of Mr. Koh Hong Muan @ Koh Gak Siong and brotherof Mr. Koh Chee Mian




He is an Executive Director and was appointed to the Boardof Komarkcorp Berhad on 27 June 2002. He graduated fromthe University of Sydney, Australia with a degree in Bachelorof Commerce. Prior to joining Komarkcorp in December 2001as Assistant Accounts Manager, he was attached to KPMGfrom February 2001 to November 2001, with his last heldposition as Audit Assistant.

He is currently assisting the Chairman and Chief ExecutiveOfficer of Komark Group to oversee the overall operation andfinancial matters and in formulating the businessdevelopment and corporate strategies for the Group.

The Number of Board Meetings Attended in the Financial Year : 4 out of 4

PROFILE OF DIRECTORS OF KOMARKCORP BERHAD (cont’d)


Koh Chee Mian Age : 30Nationality :MalaysianQualification : Degree in Bachelor of EngineeringOccupation : Technical ManagerPosition : Executive DirectorOther Directorships of Public Companies : NoneThe Date He Was First Appointed to the Board :15 December 2003

The Details of Any Board Committee to Which HeBelongs : Nil

Securities Holding in the Company : Indirect:16,917,189 ordinary shares

Securities Holding in the Subsidiaries : Deemed to have interests in shares of all the subsidiaries tothe extent Komarkcorp Berhad has an interest.

Family Relationship With Any Director and / or MajorShareholders of the Company :Child of Mr. Koh Hong Muan @ Koh Gak Siong and brotherof Mr. Koh Chie Jooi




He is an Executive Director and was appointed to the Boardof Komarkcorp Berhad on 15 December 2003. He graduatedfrom the King’s College London, United Kingdom with adegree in Bachelor of Engineering. He has been appointed asTechnical Manager for the China operations of Komarkcorp.

Currently, he is the person-in-charge of the overall operationsfor China.

The Number of Board Meetings Attended in theFinancial Year : 3 out of 4

Datuk Ng Peng Hong @ Ng Peng Hay D.M.SM., D.SM., P.J.K.Age : 58Nationality : MalaysianQualification :Malaysian Certificate of EducationOccupation : Company DirectorPosition : Independent Non-Executive DirectorOther Directorships of Public Companies : Bonia Corporation BerhadFarm’s Best Berhd Ta Win Holdings BerhadWellcall Holdings BerhadICapital.Biz BerhadThe Date He Was First Appointed to the Board :16 June 1997

The Details of Any Board Committee to Which HeBelongs : Audit Committee, Remuneration Committee andNomination Committee of Komarkcorp Berhad

Securities Holding in the Company : Nil

Securities Holding in the Subsidiaries : Nil

Family Relationship With Any Director and / or MajorShareholders of the Company : Nil




He was appointed to the Board of Komarkcorp Berhad on 16June 1997. He was the State Assemblyman for TengkeraConstituency under Barisan Nasional between 1982 and1986. He then served as a Senator in the MalaysianParliament from 1987 to 1993. His first involvement in socialactivities was upon completing his secondary education. Hehas been appointed as the Investment Co-ordinator of theMalacca State Development Corporation to handle directinvestments in the State of Melaka since 1988. Together withhis team of officials and his excellent public relations, he hashelped in attracting numerous Taiwanese, Singaporean andChinese investors into the State of Melaka. In recognition ofhis efforts and dedication, he was conferred the Darjah MuliaSeri Melaka by his Excellency, the Governor of Melaka in1992. On 17 July 1999, the Taiwanese Government awardedhim the Economic Medal. He was the Chairman of MCA, 7thBranch Melaka since 1982. He was also appointed as ViceChairman of Melaka State Malaysia Crime PreventionFoundation (MCPF) since 1997 and is a Board Member ofMalaysian Industrial Development Authority (MIDA).


PROFILE OF DIRECTORS OF KOMARKCORP BERHAD (cont’d)


Chew Chee Chek Age : 40Nationality :MalaysianQualification : Diploma In Commerce (Financial

Accounting),Kolej Tunku Abdul Rahman The Association of Chartered Certified Accountants

Occupation : Company DirectorPosition : Independent Non-Executive DirectorOther Directorships of Public Companies :Wellcall Holdings Berhad

The Date He Was First Appointed to the Board :15 April 2003

The Details of Any Board Committee to Which HeBelongs : Audit Committee, Remuneration Committee andNomination Committee of Komarkcorp Berhad







He was appointed to the Board of Komarkcorp Berhad on 15April 2003. He is a Fellow of the Association of CharteredCertified Accountants, UK. He started his career as an AuditAssistant in BDO Binder, Kuala Lumpur, a public accountingfirm, from 1994 to 1995. In 1995, he joinedPricewaterhouseCoopers (then known as Coopers & Lybrand)as Audit Semi Senior and subsequently promoted to AuditSenior. In 1996, he joined Alliance Merchant Bank Berhad(then known as Amanah Merchant Bank Berhad) as aCorporate Finance Executive where he acquired extensiveexperience in corporate restructuring exercise involving initialpublic offer, merger and acquisition, reverse takeover, backdoor listing, debt restructuring, rights issue, private placementand bonus issue. Subsequently, he was promoted to theposition of Corporate Finance Assistant Manager. In 2000, hejoined Komarkcorp Berhad as the Group Financial Controller.He resigned from Komarkcorp Berhad in the same year andadvanced his career by jointly setting up WCL Consulting SdnBhd, a management consultancy firm, with various partnerswhere he was appointed as Director and later resigned inAugust 2006. In April 2006, he was appointed as theExecutive Director of Wellcall Holdings Berhad. He also sits onthe board of directors of two private limited companies.


Ihsan bin IsmailAge : 47Nationality :MalaysianQualification :Master Degree in Business Administration

California State University, School of BusinessAdministration, Bachelor of Science inBusiness AdministrationOregon State University, School of BusinessAdministration

Occupation : Company DirectorPosition : Independent Non-Executive DirectorOther Directorships of Public Companies : None

The Date He Was First Appointed to the Board :1 January 2009

The Details of Any Board Committee to Which HeBelongs : Audit Committee of Komarkcorp Berhad







He was appointed to the Board of Komarkcorp Berhad on 1 January 2009. He joined Lembaga Tabung Haji as aninvestment officer after graduating from Califonia StateUniversity, USA in 1987 with a Master degree in BusinessAdministration. He was attached to Lembaga Tabung Haji for9 years from 1987 to 1996 and he was a special assistant toDeputy Director General in Investment and an assistantdirector of corporate affair prior to setting up his ownbusiness. He also represented Tabung Haji in severalcompanies namely Peladang Tabung Haji Sdn Bhd for 7 yearsfrom 1989 to 1996 and Syarikat Times Offset Malaysia SdnBhd for 15 years from 1992 to 2007. He has wide experiencein investment management and project evaluations.


The Board of Directors appreciates the importance of adopting high standards of corporate governance within the Group.The Board views corporate governance as synonymous with three key concepts: namely transparency, accountability andcorporate performance.

As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form. TheBoard is thus fully committed to the maintenance of high standards of corporate governance by supporting and implementingthe prescriptions of the principles and best practices set out in Parts 1 and 2 of the Malaysian Code on Corporate Governance(“Code”) respectively.

The Board is pleased to provide the following statement, which outlines the main corporate governance practices that werein place throughout the financial year, unless otherwise stated.

Principles Statement

The following statement sets out how the Group has applied the principles in Part 1 of the Code. The Principles are dealt withunder the following headings: Board of Directors, Directors’ Remuneration, Shareholders and Accountability and Audit.

A. Board of DirectorsBoard Responsibilities

The Group acknowledges the pivotal role of the Board of Directors in the stewardship of its direction and operations, andultimately the enhancement of long-term shareholder value. To fulfil this role, the Board is responsible for the overallcorporate governance of the Group, including its strategic direction, establishing goals for management and monitoringthe achievement of these goals. The role and function of the Board, as well as the differing roles of executive directorsand non-executive directors are clearly delineated and defined.

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

Meetings

The Board ordinarily meets at least four (4) times a year at quarterly intervals with additional meetings convened whenurgent and important decisions need to be taken. During the financial year ended 30 April 2010, the Board met on four(4) occasions; where it deliberated upon and considered a variety of matters including the Group’s financial results, majorinvestments and strategic decisions, the business plan, corporate finance and developments and directions of the Group.

Prior to each Board meeting, Directors are furnished with comprehensive information on matters requiring theirdeliberation. The Board papers encompass both quantitative and qualitative factors which enable informeddecision-making. All proceedings, deliberations and resolutions passed at the Board meetings are minuted by the CompanySecretary and confirmed by the Chairman of the meeting.

Details of each Director’s attendance at the Board meetings held during the financial year ended 30 April2010 are as follows:-

Name of Director Attendance %

Koh Hong Muan @ Koh Gak Siong 4/4 100Datuk Ng Peng Hong @ Ng Peng Hay 4/4 100Koh Chie Jooi 4/4 100Chew Chee Chek 4/4 100Koh Chee Mian 3/4 75Ihsan bin Ismail 4/4 100

STATEMENT ON CORPORATE GOVERNANCE


STATEMENT ON CORPORATE GOVERNANCE (cont’d)

A. Board of Directors (cont’d)Board Committees

To assist the Board in carrying out its fiduciary duties and to enhance business and operational efficiency, the Board ofDirectors delegates certain duties to its committees, namely the Audit Committee, Nomination Committee andRemuneration Committee.

All committees have written terms of reference and the Board receives reports of their proceedings and deliberations.The Chairman of the various committees will report to the Board the outcome of the Committee meetings which will berecorded in the minutes of the Board meeting.

Board Balance

As at the date of this statement, the Board consists of six (6) members; comprising three (3) independent non-executivedirectors and three (3) executive directors. A brief profile of each director is presented on pages 13 to 15 of the AnnualReport.

The concept of independence adopted by the Board is in tandem with the definition of an independent director inparagraph 1.01 of the Bursa Securities Main Market Listing Requirements (“MMLR”) and the Practice Note 13 issuedpursuant to the MMLR. The key element for fulfilling the criteria is the appointment of an independent director who isnot a member of management and who is free of any relationship which could interfere with the exercise of independentjudgement or the ability to act in the best interest of the Company. The Board’s composition complies with paragraph15.02 of the MMLR which requires that at least two (2) directors or one-third of the Board of the Company, whichever isthe higher, are independent directors.

The directors with their different backgrounds and specialisation, collectively bring with them a wide range of experienceand expertise in areas such as finance, corporate affairs, marketing and operations. The executive directors are responsiblefor implementing the policies and decisions of the Board, overseeing the operations as well as co-ordinating thedevelopment and implementation of business and corporate strategies. The independent non-executive directors bringwith them objective and independent judgement to decision-making and provide a capable check and balance for theexecutive directors.

There is a clear division of responsibilities at the head of the Company to ensure a balance of authority and power. TheBoard is led by Datuk Ng Peng Hong @ Ng Peng Hay as the independent non-executive Chairman of Audit Committeeand the executive management is led by Mr Koh Hong Muan @ Koh Gak Siong, the Group Chairman/Chief ExecutiveOfficer.

The roles of Chairman of Audit Committee and the Group Chairman/Chief Executive Officer are clearly defined withineach individual position description. The Chairman is responsible for running the Board and ensuring that all directorsreceive sufficient information on financial matters to enable them to participate actively in Board deliberations anddecisions. The Group Chairman/Chief Executive Officer is responsible for the day to day management of the business aswell as implementation of the Board’s policies and decisions.

In view of the current composition of the Board, particularly the separation of the roles of the independent Chairman andGroup Chairman/Chief Executive Officer, and the presence of other independent directors, the Board does not considerit necessary to nominate a Senior Independent Non-Executive Director to whom concerns of shareholders may beconveyed.

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

Supply of Information

The Chairman ensures that all directors have full and timely access to information. Prior to the meetings of the Board andthe Board Committees, notice of agenda together with previous minutes and other relevant information were circulatedto all directors on a timely basis in order to enable the directors to be well informed and briefed before the meetings. Alldirectors also have full and free access to information within the Group and can as individuals or as a full Board seekindependent professional advice, in furtherance of their duties, at the expense of the Group.


A. Board of Directors (cont’d)Supply of Information (cont’d)

Every director also has unhindered access to the advice and services of the Company Secretary. The Board believes thatthe current Company Secretary is capable of carrying out her duties to ensure the effective functioning of the Board. Inthe event that the Company Secretary fails to fulfil her functions effectively, the terms of the appointment permits herremoval and appointment of successor which is a matter for the Board to decide.

APPOINTMENTS TO THE BOARDNomination Committee

1. Objective

The principal objective of the Nomination Committee is to assist the Board of Directors in its responsibilities in nominatingnew nominees to the Board of Directors. The Nomination Committee shall also assess the directors of the Company onan on-going basis.

2. Membership

The members of the Nomination Committee for the time being are:-

Datuk Ng Peng Hong @ Ng Peng Hay – Independent Non-Executive Director (Chairman)

Chew Chee Chek – Independent Non-Executive Director

Koh Hong Muan @ Koh Gak Siong – Executive Director

3. Composition of Members

The Board of Directors shall elect the Nomination Committee members from amongst themselves, a majority of whomare independent.

4. Chairman

The Chairman of the Nomination Committee shall be elected from amongst the Nomination Committee members andshall be an Independent Director. The Chairman of the Committee shall be approved by the Board of Directors. In theabsence of the Chairman, the other Independent Director shall be the Chairman for that meeting.

5. Secretary

The Secretary of the Nomination Committee shall be the Company Secretary of the Company.

6. Meetings

The Nomination Committee may meet together for the despatch of business, adjourn and otherwise regulate the meetingsat least once a year or more frequent as deemed necessary. The Chairman may call for additional meetings at any time atthe Chairman’s discretion.

The Secretary shall on the requisition of the members of the Nomination Committee summon a meeting of the NominationCommittee except in the case of an emergency, reasonable notice of every Nomination Committee meeting shall be givenin writing.




APPOINTMENTS TO THE BOARD (cont’d)6. Meetings (cont’d)

Details of each Nomination Committee Member’s attendance at Nomination Committee Meeting held duringthe financial year ended 30 April 2010 are as follows:-

Name of Nomination Committee Member Attendance

Datuk Ng Peng Hong @ Ng Peng Hay 1/1

Koh Hong Muan @ Koh Gak Siong 1/1

Chew Chee Chek 1/1

7. Quorum

A quorum shall consist of two (2) members, one of whom shall be an Independent Director.

8. Authority

The Nomination Committee shall in accordance with a procedure or process to be determined by the Board of Directorsand at the expense of the Company:-

8.1 shall annually review the required mix of skills and experience and other qualities, including core competencies whichnon-executive and executive directors should have;

8.2 shall assess on an annual basis, the effectiveness of the Board of Directors as a whole, the committees of the Boardand for assessing the contribution of each individual director; and

8.3 shall be entitled to the services of the Company Secretary who must ensure that all appointments are properly madethat all necessary information is obtained from the directors, both for the Company’s own records and for the purposesof meeting statutory obligations, as well as obligations arising from the MMLR or other regulatory requirements.

9. Duties and Responsibilities

The duties and responsibilities of the Nomination Committee are:-

9.1 to recommend to the Board of Directors, candidates for all directorships to be filled by the shareholders or the Boardof Directors;

9.2 to consider, in making its recommendations, candidates for directorships proposed by the Group Managing Director,and within the bounds of practicability, by any other senior executive, director or shareholder and the NominationCommittee shall consider the candidates’;

• skills, knowledge, expertise and experience;• professionalism;• integrity; and• in the case of candidates for the position of independent non-executive directors, the Nomination Committee

shall also evaluate the candidates’ ability to discharge such responsibilities/functions as are expected fromindependent non-executive directors;

9.3 to recommend to the Board of Directors, the nominees to fill the seats on the board committees;

9.4 to review annually the required mix of skills and experience of the Board, including the core competencies whichdirectors should bring to the Board;


APPOINTMENTS TO THE BOARD (cont’d)9. Duties and Responsibilities (cont’d)

9.5 to assess annually the effectiveness of the Board of Directors as a whole, the committees of the Board and thecontribution of each individual director, including the independent non-executive directors, as well as the chiefexecutive officer. All assessments and evaluations carried out by the Nomination Committee in the discharge of all itsfunctions shall be properly documented;

9.6 to act in line with the directions of the Board of Directors; and

9.7 to consider and examine such other matters as the Nomination Committee considers appropriate.

The Board and the Nomination Committee considered the appointment of an Executive Director as a member of theNomination Committee, which is a departure from the best practices of the Malaysian Code on Corporate Governance,necessary to provide the Board and the Nomination Committee with the views of the executive management.

Directors’ Training

The Group acknowledges the fact that continuous education is vital for the Board members to gain insight into the stateof economy, technological advances in our core business, latest regulatory developments and management strategies.Therefore, the Directors are encouraged to evaluate their own training needs on a continuous process and to determinethe relevant programmes, seminars and briefings that would enhance their knowledge to enable the Directors to dischargetheir responsibilities more effectively. All members of the Board have attended the Mandatory Accreditation Programmeorganised by the Bursa Securities’ approved organisations.

For the financial year ended 30 April 2010, the directors had attended various programmes and seminars as follows:

The Group Executive Director, Mr Koh Chie Jooi had attended the following courses:1) FRS workshop organised by CPA on 23 and 24 November 20092) Cani success training by Lee Jian from 20 to 22 May 2009

The Group Executive Director, Mr Koh Chee Mian had attended 3 days course on Cani success training by Lee Jian from26 to 28 March 2010.

The Independent Director, Datuk Ng Peng Hong@ Ng Peng Hay had attended a day course on risk action planning: Themissing elements in an ERM framework jointly organised by The Institute of Internal Auditors Malaysia and Bursa MalaysiaSecurities Berhad on 1 October 2009.

The Independent Director, Mr Chew Chee Chek had attended the following courses:1) Non Financial Institutions Financial Instruments: Recognition, Measurement, Presentation and Disclosure organised

by Ernst & Young Malaysia on 9 and 10 June 20092) National Conference on GST : Roadmap to Malaysia’s New Indirect Tax (Understanding the Compliance Requirement

and Implementation of Goods and Service Tax (GST) in Malaysia) organised by Institute Sultan Iskandar of UrbanHabitat and Highrise, University Technology Malaysia on 11 February 2010.

All the Directors have been briefed by the external auditors and company secretaries pertaining to the changes made tothe Malaysia Accounting Standards and Main Market Listing Requirements respectively.

Re-election

The Articles of Association of the Company provide that at least one-third of the Board is subject to retirement by rotationat each Annual General Meeting and all the Directors shall retire from office once at least in each three (3) years but shallbe eligible for re-election. The Directors to retire in each year are the Directors who have been longest in office since theirappointment or re-appointment. A retiring Director is eligible for re-appointment. This provides an opportunity for theshareholders to renew their mandates. The election of each Director is voted on separately. To assist shareholders in theirdecision, sufficient information such as personal profile, meetings attendance and the shareholdings in the Group of eachDirector standing for election are furnished in the Annual Report.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance withSection 129(6) of the Companies Act, 1965.




B. Remuneration Committee 1. Objective

The principal objective of the Remuneration Committee is to assist the Board of Directors in its responsibilities inassessing the remuneration packages of the Group Chairman and Executive Directors.

2. Membership

The members of the Remuneration Committee for the time being are:-

Datuk Ng Peng Hong @ Ng Peng Hay – Independent Non-Executive Director (Chairman)

Chew Chee Chek – Independent Non-Executive Director

Koh Hong Muan @ Koh Gak Siong – Executive Director

3. Composition of Members

The Board of Directors shall elect the Remuneration Committee members from amongst themselves, a majority ofwhom are independent.

4. Chairman

The Chairman of the Remuneration Committee shall be elected from amongst the Remuneration Committee membersand shall be an Independent Director. The Chairman of the Committee shall be approved by the Board of Directors.

5. Secretary

The secretary of the Remuneration Committee shall be the Company Secretary of the Company.

6. Meetings

The Remuneration Committee may meet together for the despatch of business, adjourn and otherwise regulate themeetings at least once a year or more frequent as deemed necessary. The Chairman may call for additional meetingsat any time at the Chairman’s discretion.

The Secretary shall on the requisition of the members of the Remuneration Committee summon a meeting of theRemuneration Committee except in the case of an emergency, reasonable notice of every Remuneration Committeemeeting shall be given in writing.

Details of each Remuneration Committee Member’s attendance at Remuneration Committee Meeting heldduring the financial year ended 30 April 2010 are as follows:-

Name of Remuneration Committee Member Attendance

Datuk Ng Peng Hong @ Ng Peng Hay 1/1

Koh Hong Muan @ Koh Gak Siong 1/1

Chew Chee Chek 1/1

7. Quorum

A quorum shall consist of two (2) members, both of whom shall be Independent Directors.

8. Authority

The Remuneration Committee shall in accordance with a procedure or process to be determined by the Board ofDirectors and at the expenses of the Company:-

8.1 shall review, assess and recommend to the Board of Directors, the remuneration packages of the executivedirectors in all forms, with other independent professional advice or outside advice as necessary; and

8.2 shall be entitled to the services of the Company Secretary who must ensure that all decisions made onremuneration packages of the executive directors be properly recorded and minuted in the minutes book.


B. Remuneration Committee (cont’d)9. Duties and Responsibilities

The duties and responsibilities of the Remuneration Committee are:-

9.1 to review and assess the remuneration packages of the Group Managing Director and Executive Directors in allforms, with or without other independent professional advice or other outside advice;

9.2 to ensure the levels of remuneration be sufficiently attractive and be able to retain directors needed to run theCompany successfully;

9.3 to structure the component parts of remuneration so as to link rewards to corporate and individual performanceand to assess the needs of the Company for talent at board level at a particular time;

9.4 to recommend to the Board of Directors the remuneration packages of the Group Managing Director andExecutive Directors;

9.5 to act in line with the directions of the Board of Directors; and

9.6 to consider and examine such other matters as the Remuneration Committee considers appropriate.

The remuneration of the Directors of Komarkcorp Berhad for the financial year ended 30 April 2010 are asfollows:-

Type Executive Directors Non-Executive Directors

Aggregate Remuneration RM’000 RM’000Directors’ Fees 80 88Salaries 1,470 -Allowance 300 -Bonuses 52 -Commission - -Benefits in kind based on an estimated money value - -

Total 1,902 88

* Inclusive of Directors’ Fees of RM13,333/- understated for the financial year ended 30 April 2009 for whichapproval is sought from the shareholders at the Fourteenth Annual General Meeting

Band (RM) No. of Directors No. of Directors

Below 50,000 - 3350,001 – 400,000 - -450,001 - 500,000 2 -950,001 – 1,000,000 1 -

Total 3 3

C. ShareholdersThe Annual General Meeting (“AGM”)

The Company recognises the importance of the accountability to its shareholders through proper communication withthem. The AGM is the principal forum for dialogue with the shareholders. Shareholders are notified of the meeting andprovided with a copy of the Company’s Annual Report before the meeting. All shareholders are encouraged to attendthe Annual General Meeting and participate in its proceedings. Every opportunity is given to the shareholders to askquestions and seek clarification on the business and performance of the Group.




C. Shareholders (cont’d)The Annual General Meeting (“AGM”) (cont’d)

The Audit Committee is available at the AGM to answer questions and consider suggestions. The external auditors arealso present to provide their professional and independent clarification on issues of concern raised by the shareholders, ifany.

Communication with Shareholders

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

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

Corporate Web-site

The Group maintains its corporate web-site at www.komark.com.my which has made available the corporate information,financial and other pertinent information to all its shareholders, at all times.

D. Accountability and AuditAudit Committee

The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to accountingand reporting practices of the Company and its subsidiary companies. In addition, the Audit Committee shall:-

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

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

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

The Audit Committee’s Report is set out on pages 27 to 30 of the Annual Report.

Financial Reporting

Through the annual financial statements as well as the Chairman’s statement and review of operations in the AnnualReport and the quarterly announcements of results to shareholders, the Board aims to provide and present a balancedand meaningful assessment of the Group’s financial performance and prospects. The Board is assisted by the AuditCommittee to oversee the Group’s financial reporting processes and quality of its financial reporting.

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

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

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

The Directors also have a general responsibility for taking such steps as are reasonably available to them to safeguard theassets of the Group and to prevent fraud and other irregularities.

Statement on Internal Control

The Statement on Internal Control furnished on pages 25 to 26 of the Annual Report provides an overview of the systemof internal controls of the Group.


D. Accountability and Audit (cont’d)Relationship with the Auditors

Key features underlying the relationship between the Audit Committee and the external auditors are included in the AuditCommittee’s Report as detailed on pages 27 to 30 of the Annual Report.

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which givea true and fair view of the state of affairs of the Company and Group as at the end of the financial year and of the resultsand cash flow of the Company and Group for the year then ended thereat.

In preparing the financial statements, the Directors are required to select appropriate accounting policies and apply themconsistently to make reasonable and prudent judgements and estimates, and to state that all accounting standards whichthey consider to be applicable have been followed. The Directors are also required to prepare the financial statements onthe going concern basis unless it is inappropriate to do so.

The Directors have responsibility for ensuring that the Group keeps proper accounting records which disclose withreasonable accuracy at any time the financial position of the Group and which enable them to ensure that the financialstatements comply with the Companies Act, 1965. The Directors also have responsibility for taking such steps that arereasonable to safeguard the assets of the Company and Group and for prevention and detection of fraud and otherirregularities.

E. CORPORATE SOCIAL RESPONSIBILITYThe Company has involved in various activities as part of its Corporate Social Responsibility (CSR) efforts:

a) Occupational Safety and Health

The Company is committed to maintain high safety and health standards at work place. A committee has been setup to monitor the compliance of the safety and health standards. A series of in-house programmes on safety andhealth are regularly conducted with the assistance of external experts and committee members. This includes trainingon handling chemical, flammable materials and machineries in work place.

b) Contribution to charitable causes

The Company has been contributing regularly to schools with an objective to provide the less for fortunate anopportunity to pursue further education.



STATEMENT ON INTERNAL CONTROL

The Board of Directors is ultimately responsible for the Group’s system of internal control and for reviewing the effectivenessof the internal control system during the year pursuant to paragraph 15.26 (b) of the Bursa Securities Main Market ListingRequirements (“MMLR”). Internal control system is primarily designed to cater for the business needs and manage the potentialbusiness risks of the Group.

The Board has overall responsibility for the Group’s system of internal control, which aims to:

• safeguard shareholders’ investments and the Group’s assets;

• ensure that proper accounting records are maintained; and

• ensure that the financial information provided within the business and for publication is reliable.

In view of the limitations that are inherent in any systems of internal control, such systems are designed to mitigate ratherthan eliminate the likelihood of fraud and error. Accordingly, these systems can provide only reasonable and not absoluteassurance against material misstatement or loss. The concept of reasonable assurance also recognises that the cost of controlprocedures should not exceed the expected benefits.

There are always opportunities to further improve the current internal control systems of the Group. A program of actions toenhance the internal control systems was undertaken in line with corporate governance compliance. The Company has on 30 March 2010 outsourced the internal audit function of the Group to another professional firm.

The Internal Auditor’s main role is to provide an independent assessment of the adequacy and integrity of such system ofinternal control established by the Management based on the audit plan approved by the Board and to make appropriaterecommendations for Management’s implementation. The Internal Auditors presents their report to the Audit Committee fordeliberation.

In seeking to achieve the objectives of the internal control systems, the following key elements will be considered:

Control Environment and ActivitiesIt is imperative that the Group should operate on a sound system of internal control. In general, the overall line ofcommunications across the business should be defined and there is an appropriate integrity in risk management.

There is also a limit on authority that clearly defines authorisation limits to ensure proper identification of accountabilities andsegregation of duties. Operation control procedures have been established according to ISO 9001 standard. This will ensurethat the business process flow is accordingly and properly executed.

Risk ManagementThe Board recognises that the management of principal risks plays an important and integral part of the Group’s dailyoperations and that the identification and the management of such risk will affect the achievement of the Group’s corporateobjectives.

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


Key Internal Control ProcessesThe following are the key processes that have been established as part of the Group’s internal control effort:

(a) A clearly defined organisation and hierarchical structure outlining line of reporting and job responsibilities with strong riskcontrol culture at the operational level.

(b) In ensuring that each operating unit is functioning efficiently, emphasis is placed on personnel employed where the integrityand competence of personnel are ensured through recruitment evaluation process.

(c) Financial reports are supplied to the Audit Committee and the Board on a quarterly basis for review and if necessarycorrective action to be taken.

(d) The Board, Audit Committee and Management meets regularly to review the internal audit reports and monitor the statusof the implementation of recommendations to address internal control weaknesses noted.

(e) Regular reporting made to the Board by the Management of corporate, legal, accounting and environmentaldevelopments.

Review of the Statement by External AuditorsThe External Auditors have reviewed this Statement on Internal Control for the inclusion in the annual report of the Companyfor the financial year ended 30 April 2010 and reported to the Board that nothing has come to their attention that causesthem to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewingthe adequacy and integrity of the system of internal controls.

This statement has been deliberated and approved by the Board dated 29 September 2010.

STATEMENT ON INTERNAL CONTROL (cont’d)


AUDIT COMMITTEE REPORT

COMPOSITIONDatuk Ng Peng Hong @ Ng Peng HayChairman/Independent Non-Executive Director

Chew Chee ChekIndependent Non-Executive Director

Ihsan bin IsmailIndependent Non-Executive Director

TERMS OF REFERENCE1. OBJECTIVE

The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to accountingand reporting practices of the Company and its subsidiary companies.

In addition, the Audit Committee shall:-

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

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

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

2. COMPOSITION

The Audit Committee shall be appointed by the Directors from among their number (pursuant to a resolution of the Boardof Directors) which fulfils the following requirements:-

a) the audit committee must be composed of no fewer than three (3) members;

b) a majority of the audit committee must be independent directors;

c) all members of the Audit Committee should be financially literate and at least one member of the audit committee:-

i) must be a member of the Malaysian Institute of Accountants; or

ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least thee (3) years’ workingexperience and:-

• he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967;or

• he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of theAccountants Act, 1967; or

iii) fulfils the requirements as may be prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Securities”)and/or other relevant authorities from time to time; and


TERMS OF REFERENCE (cont’d)2. COMPOSITION (cont’d)

d) no alternate Director shall be appointed as a member of Audit Committee.

The members of the Audit Committee shall elect a chairman from among their number who shall be an independentdirector.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of item 2 (a) to (c) above, the vacancymust be filled within three (3) months of that event.

The Board of Directors must review the term of office and performance of the Audit Committee and each of its membersat least once every three (3) years to determine whether the Audit Committee and members have carried out their dutiesin accordance with the terms of reference.

3. FUNCTIONSThe functions of the Audit Committee are as follows:-

a) review the following and report the same to the Board of Directors:-

i) with the external auditors, the audit plan;

ii) with the external auditors, his evaluation of the system of internal controls;

iii) with the external auditor, his audit report;

iv) the assistance given by the Company’s employees to the external auditors; and

v) any related party transaction and conflict of interest situation that may arise within the Company or groupincluding any transaction, procedure or course of conduct that raises questions of management integrity.

b) To consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal andthe letter of resignation from the external auditor, if applicable;

c) To discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensureco-ordination where more than one audit firm is involved;

d) To review the quarterly and year-end financial statements of the Company, focusing particularly on:-

• Any changes in accounting policies and practices;• Significant adjustments arising from the audit;• The going concern assumption;• Compliance with accounting standards and other legal requirements;

e) To discuss problems and reservations arising from the interim and final audits, and any matter the auditor may wishto discuss (in the absence of management where necessary);

f) To review the external auditor’s management letter and management’s response;

g) To do the following in relation to the internal audit function:-

• Ensure the internal audit function is independent of the activities it audits and the head of internal audit reportsdirectly to the Audit Committee. The head of internal audit will be responsible for the regular review and/orappraisal of the effectiveness of the risk management, internal control and governance processes within theCompany;

AUDIT COMMITTEE REPORT (cont’d)



TERMS OF REFERENCE (cont’d)3. FUNCTIONS (cont’d)

• Review the adequacy of the scope, functions, competency and resources of the internal audit function, and thatit has the necessary authority to carry out its work;

• Review the internal audit programme and results of the internal audit process and where necessary, ensure thatappropriate action is taken on the recommendations of the internal audit function;

• Review any appraisal or assessment of the performance of members of the internal audit function;• Approve any appointments or termination of senior staff members of the internal audit function;• Take cognisance of resignations of internal audit staff members (for in-house internal audit function) or the internal

audit service provider (for out-sourced internal audit function) and provide the resigning staff member or theinternal audit service provider an opportunity to submit his reasons for resigning

h) To consider any related party transaction that may arise within the Company and group;

i) To consider the major findings of internal investigations and management’s response;

j) To consider other areas as defined by the Board, or as may be prescribed by Bursa Securities or any other relevantauthority from time to time; and

k) To perform any other functions/responsibilities as may be required of them by Bursa Securities or such other relevantauthorities from time to time.

4. RIGHTS OF THE AUDIT COMMITTEEThe Audit Committee shall, wherever necessary and reasonable for the Company to the performance of its duties, inaccordance with a procedure to be determined by the Board of Directors and at the cost of the Company:-

a) have authority to investigate any matter within its terms of reference;

b) have the resources which are required to perform its duties;

c) have full and unrestricted access to any information pertaining to the Company;

d) have direct communication channels with the external auditors and person(s) carrying out the internal audit functionor activity;

e) be able to obtain independent professional or other advice; and

f) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance ofother directors and employees of the Company, whenever deemed necessary.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the chairman,the chief executive officer, the finance director, the head of internal audit and the external auditors in order to be keptinformed of matters affecting the Company.

5. MEETINGSThe Audit Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decidein order to fulfil its duties. However, at least twice a year the Audit Committee shall meet with the external auditorswithout the presence of executive Board members.


5. MEETINGS (cont’d)In addition, the Chairman may call a meeting of the Audit Committee if a request is made by any committee member, theCompany's Chief Executive, or the internal or external auditors.

The Company Secretary or other appropriate senior official shall act as secretary of the Audit Committee and shall beresponsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatorydocumentation to committee members prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating themto committee members and to the other members of the Board of Directors.

A quorum shall consist of a majority of independent directors.

By invitation of the Audit Committee, the Company must ensure that other directors and employees attend any particularaudit committee meeting specific to the relevant meeting.

DETAILS OF ATTENDANCE AT AUDIT COMMITTEE MEETINGS DURING THE FINANCIAL YEAR ENDED 30 APRIL 2010Number of Audit Committee Meetings held for the financial year: Four (4)Attendance of the Audit Committee members are shown below:-

Name of Audit Committee member Attendance

Datuk Ng Peng Hong @ Ng Peng Hay 4/4Chew Chee Chek 4/4Ihsan bin Ismail 4/4

HIGHLIGHTS OF ACTIVITIESDuring the financial year, the activities of the Audit Committee included:-

1. Review of the quarterly financial results prior to the release of the announcements to Bursa Securities.

2. Assessment of the external auditor’s findings in relation to audit and accounting issues arising from the audit of theGroup’s financial statements and updates on the changes in the reporting of financial statements.

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

4. Examined findings made by the internal auditors and management’s response.

INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIESThe internal audit function of the Company has been outsourced to an independent professional firm, which assists the AuditCommittee in discharging its duties and responsibilities. They act independently and with due professional care and reportdirectly to the Audit Committee.

During the financial year ended 30 April 2010, the Internal Auditors had carried out an internal audit review of the loanfacilities and procurement function of Shanghai Komark Labels & Labelling Co. Ltd and Guangzhou Komark Labels & LabellingCo. Ltd.

The professional fees incurred for the internal audit function in respect of financial year ended 30 April 2010 amounted toapproximately RM12,000.00



OTHER INFORMATION

1. Share Buy-Back

The Company had on 23 May 2001 obtained the authority of its shareholders to undertake, inter alia, a share buy backof up 10% of the issued and paid-up share capital. Subsequently, the authority for the share buy-back was renewed viathe Company’s annual general meeting. During the financial year ended 30 April 2010, the Company has purchased1,100 of its own shares. Subsequently the Company purchased another 1,000 of its own shares from the open marketuntil the month of August 2010. Details of shares bought-back and re-sold are as follows:-

Month Number Lowest Highest Average Totalof shares purchase price purchase price purchase price considerationpurchased (RM) (RM) (RM) (RM)

Purchase

May-09 - - - - -Jun-09 - - - - -Jul-09 1,000 0.230 0.230 0.230 271.07Aug-09 - - - - -Sep-09 - - - - -Oct-09 - - - - -Nov-09 - - - - -Dec-09 100 0.320 0.320 0.320 73.01Jan-10 - - - - -Feb-10 - - - - -Mar-10 - - - - -Apr-10 - - - - -May-10 - - - - -Jun-10 - - - - -Jul-10 1,000 0.235 0.235 0.235 276.08Aug-10 - - - - -

Total 2,100 620.16

2. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programmes

During the financial year, the Company did not sponsor any ADR or GDR programmes.

3. Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by therelevant regulatory bodies.

4. Non-Audit Fees

The amount of non-audit fee paid or payable to external auditors and their affiliated company for the financial year ended30 April 2010 are as follows:-

RM’000

O&W Tax Consultants Sdn Bhd 14 Er & Associates 3

17

5. Profit Estimate, Forecast or Projection

There was no variance between the results of the financial year and the unaudited results previously announced.

The Company did not release any profit estimates, forecast or projections for the financial year.


6. Profit Guarantees

During the financial year, there were no profit guarantees given or received by the Company.

7. Material Contracts

During the financial year, there were no material contracts of the Company and its subsidiaries involving Directors’ andmajor shareholders’ interest.

8. Contracts Relating to Loans

There were no material contracts relating to loans by the Company involving Directors and major shareholders.

9. Utilisation of Proceeds

The Company did not implement any fund raising exercise during the financial year.

10. Options, Warrants or Convertible Securities

There were no changes in the issued and paid up share capital of the Company during the financial year.

No options were granted to any person to take up unissued shares of the Company during the year.

The warrants issued on 30 June 2000 were suspended from trading on Bursa Malaysia Securities Berhad (“BursaSecurities”) with effect from 15 June 2010 and had expired on 30 June 2010. The warrants were removed from theOfficial List of Bursa Securities with effect from 9.00 a.m. on 1 July 2010.

11. Revaluation Policy

During the financial year, the Company and its subsidiaries do not have any revaluation policy on landed properties.

12. Disclosure of Recurrent Related Party Transactions

The details of the Recurrent Related Party Transactions (“RRPT”) of a revenue and trading nature carried out by the Groupduring the financial year ended 30 April 2010 are as follows:

Amount transacted during

Nature of Transacting Nature of the financial year transaction Company Parties Relationship (RM’000)

OTHER INFORMATION (cont’d)


Sale of labels andrelated products toKomark EnterpriseCo. Ltd (“KomarkEnterprise”)

General Labels &Labelling (M) SdnBhd, KomarkInternational SdnBhd (“KISB”)

Komark Enterprise(a 49%-ownedassociatedcompany of KISB)

Koh Hong Muan @ Koh GakSiong who is a Director andMajor Shareholder ofKomarkcorp, is also shareholderof Komark Enterprise via AimasEnterprise Sdn Bhd (“AimasEnterprise”). Koh Chie Jooi andKoh Chee Mian who areDirectors of Komarkcorp, are alsodirectors and shareholders ofAimas Enterprise and personsconnected to Koh Hong Muan @Koh Gak Siong. In addition, KohHong Muan @ Koh Gak Siong,Koh Chie Jooi, Koh Chee Mianand Aimas Enterprise have nodirect shareholdings in KomarkEnterprise other than viaKomarkcorp.

1,600

FINANCIAL STATEMENTSDirectors’s Report 34 Statement by Directors 37 Statutory Declaration 37Independent Auditors’ Report 38 Balance Sheets 40 Income Statements 41Consolidated Statement of Changes in Equity 42 Statement of Changes in Equity 43Cash Flow Statements 44 Notes to the Financial Statements 46

The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Companyfor the financial year ended 30 April 2010.

PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and provision of management services to its subsidiaries. Theprincipal activities of the subsidiaries are as set out in Note 6 to the financial statements. There have been no significantchanges in these activities during the financial year.

RESULTSGroup CompanyRM’000 RM’000

Profit/(loss) for the year 2,020 (3,314)

In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year havenot been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDNo dividend was paid nor declared since the end of the previous financial year and the directors do not recommend anydividend to be paid for the financial year.

RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year other than those disclosed in thefinancial statements.

ISSUE OF SHARESDuring the financial year, there was no issue of shares.

TREASURY SHARESDuring the financial year, the Company repurchased 1,100 ordinary shares from the open market at an average price ofapproximately RM0.31 per share. The total consideration paid for the repurchase including transaction costs was RM344and this was financed by internally generated funds.

The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of theCompanies Act, 1965, and are disclosed in Note 17 to the financial statements.

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

In prior year, the warrants issued are in registered form and constituted by a deed poll and entitle the registered holder tosubscribe for one (1) new ordinary share of RM1.00 in the Company at a price of RM1.70 per ordinary share for every warrantheld. The conversion ratio is subject to the aforesaid deed poll and can be exercised at any time during the ten (10) yearssubscription period expiring on 30 June 2010. At the end of the financial year, 39,999,990 warrants remained unexercised.

The warrants holders are not entitled to participate in any share issue of any other company.

As at 30 June 2010, none of the remaining warrants was exercised. The unexercised warrants which have expired on 30June 2010 became null and void and ceased to be valid for any purpose.

DIRECTORS’ REPORTFOR THE YEAR ENDED 30 APRIL 2010


DIRECTORS’ REPORTFOR THE YEAR ENDED 30 APRIL 2010 (cont’d)

DIRECTORSThe directors who served from the date of the last report to the date of this report are:

Koh Hong Muan @ Koh Gak Siong Datuk Ng Peng Hong @ Ng Peng HayKoh Chie JooiChew Chee ChekKoh Chee MianIhsan Bin Ismail

DIRECTORS’ INTERESTS IN SHARESAccording to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year inshares in the Company during the financial year were as follows:

Number of ordinary shares of RM1.00 eachBalance at Balance at01.05.2009 Bought Sold 30.04.2010

(Direct Interest)Koh Hong Muan @ Koh Gak Siong 6,010,300 - - 6,010,300

(Indirect Interest)Koh Hong Muan @ Koh Gak Siong 10,906,889 # - - 10,906,889#Koh Chie Jooi 16,917,189 * - - 16,917,189*Koh Chee Mian 16,917,189 * - - 16,917,189*

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

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

By virtue of their interests in the shares of the Company, Koh Hong Muan @ Koh Gak Siong, Koh Chie Jooi and Koh CheeMian are also deemed to have an interest in the shares of all the subsidiaries of the Company to the extent the Companyhas an interest.

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

DIRECTORS’ BENEFITSSince the end of the previous financial year, no director has received or become entitled to receive any benefit (other than abenefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in thefinancial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Companyor a related corporation with any director or with a firm of which the director is a member or with a company in which thedirector has a substantial financial interest except as disclosed in Note 29 to the financial statements.

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


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

Datuk Ng Peng Hong @ Ng Peng HayKoh Hong Muan @ Koh Gak Siong Chew Chee Chek

OTHER STATUTORY INFORMATIONa. Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowancefor doubtful debts; and

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

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

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

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

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

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

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

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

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

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

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

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

Signed in accordance with a resolution of the directors

KOH HONG MUAN @ KOH GAK SIONG KOH CHIE JOOIDirector Director

Dated: 26 August 2010Kuala Lumpur

DIRECTORS’ REPORTFOR THE YEAR ENDED 30 APRIL 2010 (cont’d)


STATEMENT BY DIRECTORS(PURSUANT TO SECTION 169[15] OF THE COMPANIES ACT, 1965)

We, KOH HONG MUAN @ KOH GAK SIONG and KOH CHIE JOOI, being two of the directors of KOMARKCORP BERHAD,do hereby state that, in the opinion of the directors, the financial statements set out on pages 40 to 75 are drawn up inaccordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as togive a true and fair view of the states of affairs of the Group and of the Company as at 30 April 2010 and of the results oftheir operations, changes in equity and cash flows of the Group and of the Company for the financial year ended on thatdate.

Signed in accordance with a resolution of the directors

KOH HONG MUAN @ KOH GAK SIONGDirector

KOH CHIE JOOIDirector



STATUTORY DECLARATION(PURSUANT TO SECTION 169[16] OF THE COMPANIES ACT, 1965)

I, KOH HONG MUAN @ KOH GAK SIONG, being the director primarily responsible for the financial management ofKOMARKCORP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 40 to 75 are, tothe best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be trueand by virtue of the provisions of the Statutory Declaration Act, 1960.

Subscribed and solemnly declared bythe abovenamed, at Kuala Lumpurin Wilayah Persekutuan on26 August 2010

KOH HONG MUAN @ KOH GAK SIONG

Before me,Leong See KeongNo. W494Commissioner for Oaths

Report on the Financial StatementsWe have audited the financial statements of Komarkcorp Berhad, which comprise the balance sheets as at 30 April 2010 ofthe Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of theGroup and of the Company for the financial year then ended, and a summary of significant accounting policies and otherexplanatory notes, as set out on pages 40 to 75.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements inaccordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes designing,implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements thatare free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies,and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards andthe Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of theCompany as of 30 April 2010 and of their financial performance and cash flows for the financial year then ended.

Report on Other Legal and Regulatory RequirementsIn accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

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

b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not actedas auditors, which are indicated in Note 6 to the financial statements.

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

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

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF KOMARKCORP BERHAD


INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF KOMARKCORP BERHAD (cont’d)

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

ONG & WONG ONG KONG LAIAF 0241 494/06/12(J/PH)Chartered Accountants Partner of Firm



Group CompanyNote 2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assetsProperty, plant and equipment 3 137,987 152,268 - -Prepaid lease payments on land 4 1,741 1,890 - -Investment property 5 195 200 - -Investments in subsidiaries 6 - - 31,683 31,683Investment in associate 7 - - - -Other investment 8 4 4 - -Development expenditure 9 781 1,157 - -Goodwill on consolidation 10 1,750 1,750 - -

142,458 157,269 31,683 31,683

Current assetsInventories 11 37,312 39,925 - -Receivables 12 32,846 39,427 42 42Amount due from associated company 13 1,823 1,769 - -Amount due from related companies 14 - - 46,839 48,574Tax recoverable 158 75 - -Cash and bank balances 15 6,772 5,915 10 7

78,911 87,111 46,891 48,623

TOTAL ASSETS 221,369 244,380 78,574 80,306

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company

Share capital 16 81,275 81,275 81,275 81,275Treasury shares 17 (436) (436) (436) (436)Share premium 15,289 15,289 15,289 15,289Reserves 18 20,337 21,382 (22,751) (19,437)

Total equity 116,465 117,510 73,377 76,691

Non-current liabilitiesBorrowings 19 21,650 28,974 - -Deferred tax liabilities 20 1,846 1,806 - -

23,496 30,780 - -

Current liabilitiesPayables 21 19,343 34,300 812 620Amount due to subsidiary company - - 1,400 -Borrowings 19 61,206 61,405 2,985 2,995Tax payable 859 385 - -

81,408 96,090 5,197 3,615

TOTAL LIABILITIES 104,904 126,870 5,197 3,615

TOTAL EQUITY AND LIABILITIES 221,369 244,380 78,574 80,306

BALANCE SHEETSAS AT 30 APRIL 2010


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

INCOME STATEMENTS FOR THE YEAR ENDED 30 APRIL 2010


RM’000 RM’000 RM’000 RM’000

Revenue 111,998 117,757 - -Cost of sales (57,686) (64,693) - -

Gross profit 54,312 53,064 - -

Other operating income 22 1,113 1,552 - -Depreciation and amortisation (12,257) (11,525) - -Staff costs and employee benefits (16,888) (20,017) (1,838) (2,589)Other operating expenses (17,891) (15,995) (1,250) (583)

Profit/(Loss) from operations 8,389 7,079 (3,088) (3,172)Finance costs (5,489) (6,204) (225) (249)

Profit/(Loss) before tax 23 2,900 875 (3,313) (3,421)Tax expense 24 (880) (528) (1) -

Profit/(Loss) for the year 2,020 347 (3,314) (3,421)

Attributable to:- Equity holders of the Company 2,020 347 (3,314) (3,421)- Minority interest - - - -

Profit/(Loss) for the year 2,020 347 (3,314) (3,421)

Basic earnings per share attributable to equity holders of the Company (sen) 25 2.53 0.44



Minority

Total

< ------------------------ Attributable to Equity Holders of the Company ------------------------ >

Interest

Equity

< --------- Non-distributable --------- >Distributable

Share

Treasury

Share

GeneralTranslation

Retained

Note

capital

shares

premium

reserve

reserve

profits

Total

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

At 1 May 2008

81,275

(238)

15,298

1,703

3,019

13,781

114,838

-114,838

Foreign currency translation,

representing net expense

recognised directly in equity

--

--

2,532

-2,532

-2,532

Profit for the year

--

--

-347

347

-347

Total recognised income and

expense for the year

81,275

(238)

15,298

1,703

5,551

14,128

117,717

-117,717

Treasury shares

17- repurchased

-(221)

--

--

(221)

-(221)

- disposed

-23

(9)

--

-14

-14

Total

-(198)

(9)

--

-(207)

-(207)

At 30 April 2009 / 1 May 2009

81,275

(436)

15,289

1,703

5,551

14,128

117,510

-117,510

Foreign currency translation,

representing net expense

recognised directly in equity

--

--

(3,065)

-(3,065)

-(3,065)

Profit for the year

--

--

-2,020

2,020

-2,020

Total recognised income and

expense for the year

81,275

(436)

15,289

1,703

2,486

16,148

116,465

-116,465

Treasury shares

17- repurchased

--#

--

--

--

-- disposed

--

--

--

--

-

Total

--#

--

--

--

-

At 30 April 2010

81,275

(436)

15,289

1,703

2,486

16,148

116,465

-116,465

# Amount less than 1,000.

The annexed notes form an integral part of these financial statements

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 APRIL 2010


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 APRIL 2010

Non-distributable

Share Treasury Share Accumulated TotalNote capital shares premium losses Equity

RM’000 RM’000 RM’000 RM’000 RM’000

At 1 May 2008 81,275 (238) 15,298 (16,016) 80,319Loss for the year, representing total recognised income and - - - (3,421) (3,421)expense for the yearTreasury shares 17- repurchased - (221) - - (221)- disposed - 23 (9) - 14

At 30th April 2009 / 1 May 2009 81,275 (436) 15,289 (19,437) 76,691

Loss for the year, representingtotal recognised income and - - - (3,314) (3,314)expense for the yearTreasury shares 17- repurchased - - # - - -- disposed - - - - -

At 30 April 2010 81,275 (436) 15,289 (22,751) 73,377





RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM OPERATINGACTIVITIESProfit/(Loss) before tax 2,900 875 (3,313) (3,421)Adjustments for:Amortisation of development expenditure 447 443 - -Amortisation of prepaid lease payment land 178 - - -Bad debt written off 4 - - -Net gain on disposal of property, plant and equipment (252) (42) - -Depreciation of property, plant andequipment and investment property 11,632 11,082 - -(Gain)/loss on foreign exchange, unrealised (315) 402 - -Interest expense 5,489 6,204 225 249Interest income (83) (76) - -

Operating profit/(loss) before working capital changes 20,000 18,888 (3,088) (3,172)Decrease/(increase) in inventories 2,613 (4,135) - -Decrease in receivables 6,892 3,694 1,735 4,591(Decrease)/increase in payables (14,364) 7,294 1,591 (1,032)

Cash generated from operations 15,141 25,741 238 387

Tax paid (402) (295) - -Tax refund 16 - - -Interest paid (5,489) (6,204) (225) (249)Interest received 83 76 - -

Net cash generated from operating activities 9,349 19,318 13 138

CASH FLOWS FROM INVESTINGACTIVITIESAcquisition of property, plant and equipment A (3,619) (10,431) - -Proceeds from disposal of property, plant and equipment 252 157 - -Development expenditure paid (105) (378) - -

Net cash used in investing activities (3,472) (10,652) - -

CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 APRIL 2010


CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 APRIL 2010 (cont’d)


RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM FINANCINGACTIVITIESShare bought back - (221) - (221)Proceeds from disposal of treasury shares - 14 - 14Decrease/(increase) in deposits pledged with licensed banks 252 (898) - -Repayment (to)/from associate (54) 420 - -Drawdown of term loan and other borrowings 1,239 8,102 - -Repayment of term loans and other borrowings (8,083) (9,819) - -Repayment of hire purchase and lease financing (4,570) (4,007) - -Proceeds from hire purchase and lease financing 598 10,150 - -Net change in bills payable 5,913 (11,445) - -

Net cash used in financing activities (4,705) (7,704) - (207)

Net increase/(decrease) in cash and cash equivalents 1,172 962 13 (69)Effects of exchange rate changes 676 (2,929) - -Cash and cash equivalents at beginning of year (16,643) (14,676) (2,988) (2,919)

Cash and cash equivalents at end of year B (14,795) (16,643) (2,975) (2,988)

NOTEA. ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT

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

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash 3,619 10,431 - -Hire purchase 598 - - -

4,217 10,431 - -

B. CASH AND CASH EQUIVALENTSCash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

Cash and bank balances 6,772 5,915 10 7Less: Deposits pledged with

licensed institutions (2,699) (2,951) - -Bank overdrafts (18,868) (19,607) (2,985) (2,995)

(14,795) (16,643) (2,975) (2,988)


1. GENERAL INFORMATIONThe principal activities of the Company are investment holding and provision of management services to its subsidiaries.The principal activities of the subsidiaries are as set out in Note 6.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the MainMarket of Bursa Malaysia Securities Berhad.

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

2. ACCOUNTING POLICIESThe Group and the Company have chosen not to early adopt the following FRSs and IC Interpretations (“ICs”) which arenot yet effective but are relevant to the Group and the Company:

Effective for financialFRS periods beginning on or after

FRS 8 Operating Segments 1 July 2009FRS 139 Financial Instruments: 1 January 2010

Recognition and MeasurementFRS 7 Financial Instruments: 1 January 2010

DisclosuresFRS 123 Borrowing Costs (Revised) 1 January 2010Amendments to First-time Adoption of Financial 1 January 2010FRS 1 Reporting StandardsAmendments to Financial Instruments: 1 January 2010FRS 7 DisclosuresAmendments to Consolidated and Separate Financial 1 January 2010FRS 127 Statements: Cost of an Investment

in a Subsidiary, Jointly Controlled Entity or Associate

Amendments to Financial Instruments: 1 January 2010FRS 139 Recognition and MeasurementIC Interpretation 9 Reassessment of Embedded 1 January 2010

DerivativesIC Interpretation 10 Interim Financial Reporting 1 January 2010

and ImpairmentIC Interpretation 11 FRS 2 - Group and Treasury 1 January 2010

Share Transactions

The above FRSs and ICs are expected to have no significant impact on the financial statements of the Group and of theCompany upon their initial application. The Group and the Company are not required to disclose the possible impact ofapplying FRS 7 and FRS139 on these financial statements by virtue of exemptions provided under this FRS.

The new FRSs and ICs above are expected to have no significant impact on the financial statements of the Group upontheir initial application except for the changes in disclosures arising from the adoption of FRS 8.

a. Basis of Preparation

The financial statements of the Group and of the Company have been prepared in accordance with the provisions ofthe Companies Act, 1965 and applicable FRSs. The financial statements have been prepared under the historical costconvention, except where otherwise stated in the respective accounting policies.

The financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functional currency.

NOTES TO THE FINANCIAL STATEMENTS 30 APRIL 2010


NOTES TO THE FINANCIAL STATEMENTS 30 APRIL 2010 (cont’d)

2. ACCOUNTING POLICIES (cont’d)b. Subsidiaries and Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the power, directly or indirectly, to exercise control over thefinancial and operating policies so as to obtain benefits from their activities.

In the Company’s separate financial statements, investments in subsidiaries are stated at cost less impairmentlosses, if any. On disposal of such investments, the difference between the net disposal proceeds and their carryingamounts is included in the income statement. The policy for the recognition and measurement of impairmentlosses is in accordance with Note 2(h).

(ii) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries madeup to the end of the financial year. The results of the subsidiaries are consolidated using the acquisition method.

Under the acquisition method, subsidiaries are consolidated from the date on which control is transferred to theGroup and are no longer consolidated from the date that control ceases. The cost of acquisition is measured asthe aggregate of fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, andequity instruments issued, plus any costs directly attributable to the business combination. Identifiable assetsacquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fairvalues at the acquisition date, irrespective of the extent of any minority interest. Any difference between the costof acquisition and the Group’s interest in the net fair value of the identifiable assets, liabilities and contingentliabilities acquired is recognised as goodwill or negative goodwill. The accounting policy on goodwill and negativegoodwill is disclosed in Note 2(d).

Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and theconsolidated financial statements reflect external transactions only. Unrealised losses are eliminated onconsolidation unless costs cannot be recovered. Consistent accounting policies are applied for transactions andevents in similar circumstances.

Minority interest represents the portion of profit or loss and net assets in subsidiaries not held directly or indirectlyby the Group. Minority interest is measured at the minority’s share of the fair values of the identifiable assets andliabilities at the acquisition date and the minority’s equity since then.

c. Associate

Associate is an entity in which the Group has a long term equity interest and voting rights of between 20% and 50%to exercise significant influence. Significant influence is the power to participate in the financial and operating policydecisions of the associate but not in control over those policies.

Investment in associate is accounted for in the consolidated financial statements using the equity method. The Group’sinvestment in associate is recognised in the consolidated balance sheet at cost plus the Group’s share ofpost-acquisition net results of the associate less impairment losses. The policy for the recognition and measurementof impairment losses is in accordance with Note 2(h).

The Group’s share of results of the associate is recognised in the consolidated income statement from the date thatsignificant influence commences until the date that significant influence ceases. Any unrealised gains and losses ontransactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate.When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does notrecognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Consistentaccounting policies are applied for transactions and events in similar circumstances.

Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Anyexcess of the Group’s share of the fair value of the associate’s net identifiable assets and contingent liabilities overthe cost of the investment is excluded from the carrying amount of the investment and is instead included as incomein the determination of the Group’s share of the results of the associate in the period in which the investment isacquired.


2. ACCOUNTING POLICIES (cont’d)c. Associate (cont’d)

In the Company’s separate financial statements, investment in associate is stated at cost less impairment losses, ifany. On disposal of such investments, the difference between the net disposal proceeds and their carrying amountsis included in the income statement.

d. Goodwill

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of theidentifiable assets, liabilities and contingent liabilities of the subsidiaries.

Goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is no longer amortised. Instead itis allocated to cash-generating units (“CGUs”) which are expected to benefit from the synergies of the businesscombination. Each CGU represents the lowest level at which the goodwill is monitored and is not larger than asegment based on either the Group’s primary or secondary reporting format. The carrying amount of goodwill istested annually for impairment or more frequently if events or changes in circumstances indicate that it might beimpaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entitysold.

Negative goodwill, which represents the excess of the Group’s interest in the net fair value of the identifiable assets,liabilities and contingent liabilities acquired over the cost of the acquisition of the subsidiaries, is recognised immediatelyin the income statement.

e. Foreign Currencies

The individual financial statements of each entity in the Group are measured using their respective functional currency.

(i) Foreign Currency Transactions

In preparing the individual financial statements, transactions in currencies other than the entity’s functionalcurrency (“foreign currencies”) are translated into the functional currencies using the exchange rates prevailingat the dates of the transactions. At each balance sheet date, monetary assets and liabilities denominated in foreigncurrencies are translated at the rates prevailing on the balance sheet date. Non-monetary items that are measuredin terms of historical cost in a foreign currency are translated at the exchange rate prevailing at the date of theinitial transaction. Non-monetary items measured at fair value in a foreign currency are translated at exchangerates at the date when the fair value is determined. Exchange differences arising on the settlement of monetaryitems or on translating monetary items at balance sheet date are recognised in the income statement except forthose arising on monetary items that form part of the Group’s net investment in foreign operation.

(ii) Net Investment in Foreign Operations

Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation,where that monetary item is denominated in either the functional currency of the reporting entity or the foreignoperation, are initially taken directly to the foreign currency translation reserve within the equity until the disposalof the foreign operation, at which time they are recognised in the income statement. If exchange differencesarise in a currency other than the functional currency of either the reporting entity or the foreign operation, suchitems are recognised in the income statement for the period.

Exchange differences arising on monetary items that form part of the Company’s net investment in foreignoperation, regardless of the currency of the monetary item, are recognised in the income statement of theCompany or the foreign operation, as appropriate

(iii) Foreign Operations

The results and financial position of the Group’s foreign operations are translated into presentation currency (RM)as follows:

- Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at thebalance sheet date;

- Income and expenses for each income statement are translated at average exchange rates for the year, whichapproximates the exchange rates at the dates of the transactions; and




2. ACCOUNTING POLICIES (cont’d)e. Foreign Currencies (cont’d)

(iii) Foreign Operations (cont’d)

- All resulting exchange differences are taken to a foreign currency translation reserve within equity and aresubsequently recognised in the income statement upon disposal of the foreign operations.

Goodwill and fair value adjustments arising from the acquisition of a foreign operation on or after 1 January2006 are treated as assets and liabilities of the foreign operation and are translated at the closing rate at thebalance sheet date. For acquisition prior to 1 January 2006, the exchange rates as at the date of initial acquisitionwere used.

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

2010 2009RM RM

1 United States Dollar (USD) 3.19 3.561 Singapore Dollar (SGD) 2.33 2.411 Chinese Renminbi (RMB) 0.47 0.521 Australia Dollar (AUD) 2.97 2.59100 Thailand Baht (THB) 9.87 10.09100 Hong Kong Dollar (HKD) 41.09 45.951000 Indonesia Rupiah (INR) 0.35 0.34

f. Property, Plant and Equipment and Depreciation

Freehold land and construction work-in-progress are stated at cost and are not depreciated. All other property, plantand equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognisedas a separate asset, as appropriate, only when it is probable that future economic benefits associated with the itemwill flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are charged to the income statement when they are incurred.

Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation andany impairment losses. The policy for the recognition and measurement of impairment losses is in accordance withNote 2(h).

The annual rates of depreciation used for the major groups of property, plant and equipment are as follows:

Buildings 2% and 10%Plant and machinery 5% to 10%Office equipment, furniture and fittings 5% to 20%Motor vehicles 10% to 20%Mould & die cutters 10%Renovations 10% to 33 1/3 %

The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that theamount, method and period of depreciation are consistent with previous estimates and the expected pattern ofconsumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits areexpected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carryingamount is recognised in the income statement.

g. Development Expenditure

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


2. ACCOUNTING POLICIES (cont’d)g. Development Expenditure (cont’d)

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

h. Impairment of Assets

The carrying amount of the Group’s assets, other than inventories, are reviewed at each balance sheet date todetermine whether there are any indications of impairment. If any such indications exist, the asset’s recoverableamount is estimated to determine the amount of impairment loss. The policies on impairment of assets are summarisedas follows:

(i) Goodwill

Goodwill that has an indefinite useful life is tested annually for impairment or more frequently if events or changesin circumstances indicate that it might be impaired. For impairment testing, goodwill from business combinationsis allocated to CGUs which are expected to benefit from the synergies of the business combination.

The recoverable amount is determined for each CGU based on its value in use. In assessing value in use, theestimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects currentmarket assessments of the time value of money and the risks specific to the asset. An impairment loss is recognisedin the income statement when the carrying amount of the CGU, including the goodwill, exceeds the recoverableamount of the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of goodwillallocated to the CGU and then to the other assets of the CGU on a pro-rata basis. An impairment loss on goodwillis not reversed in subsequent periods.

(ii) Other Assets

Other assets such as property, plant and equipment, investments in subsidiaries and associate are reviewed forobjective indications of impairment at each balance sheet date or whenever there is any indication that theseassets may be impaired.

Where such indications exist, impairment loss is determined as the excess of the asset’s carrying value over itsrecoverable amount (greater of value in use or fair value less costs to sell) and is recognised in the incomestatement. Any reversal of an impairment loss for these assets is recognised in the income statement. The carryingamount is increased to its revised recoverable amount, provided that the amount does not exceed the carryingamount that would have been determined (net of amortisation or depreciation) had no impairment loss beenrecognised for the asset in prior years.

If an asset is carried at a revalued amount, impairment loss is treated as a revaluation decrease to the extent ofpreviously recognised revaluation surplus for the same asset. Any subsequent reversal is treated as a revaluationincrease.

i. Inventories

Raw materials, work-in-progress and manufactured inventories are stated at the lower of cost and net realisable valuewith the weighted average cost being the main basis for cost. For work-in-progress and manufactured inventories,cost consists of materials, direct labour and an appropriate proportion of fixed and variable production overheads.

j. Financial Instruments

Financial instruments comprise financial assets, financial liabilities and off-balance sheet financial instruments. Financialinstruments are recognised in the balance sheet when the Group has become a party to the contractual provisions ofthe instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, gains and losses relating to a financial instrument classified as liability are reportedas expense or income. Distributions to holders of financial instruments classified as equity are charged directly toequity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends either tosettle on a net basis, or to realise the asset and settle the liability simultaneously.




2. ACCOUNTING POLICIES (cont’d)j. Financial Instruments (cont’d)

(i) Cash and Cash Equivalents

Cash and cash equivalents comprise bank balances, cash in hand and short term highly liquid assets that arereadily convertible to cash without significant risk of changes in value net of outstanding bank overdrafts.

(ii) Other Investment

Other investment comprises quoted shares that are acquired and held for yield or capital growth. These are statedat cost. On disposal of an investment, the difference between the net disposal proceeds and its carrying amountis recognised in the income statement.

(iii) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they areidentified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balancesheet date.

(iv) Payables and Interest Bearing Borrowings

Payables are stated at the fair value of the consideration to be paid in the future for goods and services received.

Interest bearing borrowings are stated at the amount of proceeds received, net of transaction costs. After initialrecognition, interest bearing borrowings are subsequently stated at amortised cost using the effective interestmethod.

Borrowing costs are recognised in the income statement in the period in which they are incurred.

(v) Equity Instruments

Ordinary shares are classified as equity in the balance sheet. Costs directly attributable to the issuance of newequity shares are taken to equity as a deduction from the proceeds.

Dividends on ordinary shares are accounted for as an appropriation of retained profits in the period in which theyare approved.

When the Company repurchases its own equity shares, the amount of the consideration paid, including directlyattributable costs, is recognised in equity. Shares repurchased are held as treasury shares and presented as adeduction from equity. No gain or loss is recognised in the income statement on the sale, re-issuance orcancellation of the treasury shares. When treasury shares are re-issued by resale, the difference between the salesconsideration and the carrying amount is recognised in equity.

k. Assets Held Under Hire Purchase

Assets acquired under hire purchase or finance lease agreements are stated at an amount equal to the lower of theirfair values and the present value of the minimum lease payments at the inception of the hire purchase and financeleases, less accumulated depreciation and impairment losses. These assets are depreciated in accordance with thedepreciation policy as disclosed in Note 2(f).

Outstanding obligation due under the hire purchase or finance lease agreements after deducting finance costs areincluded as liabilities in the financial statements. The finance costs of the hire purchase or finance lease are chargedto the income statement over the periods of respective agreements so as to produce a constant periodic rate ofinterest on the remaining balance of the liabilities for each period.

l. Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to theenterprise and the amount of the revenue can be measured reliably.

(i) Sales of GoodsRevenue from sales of goods is measured at the fair value of the consideration receivable and is recognised in theincome statement when the significant risks and rewards of ownership have been transferred to the customers.


2. ACCOUNTING POLICIES (cont’d)l. Revenue Recognition (cont’d)

(ii) Interest IncomeInterest is recognised on an accrual basis that reflects the effective yield on the asset.

m. Employee Benefits

(i) Short Term Benefits

Wages, salaries, bonuses and allowances are recognised as expenses in the year in which the associated servicesare rendered by employees of the Company. Short term accumulating compensated absences such as paid annualleave are recognised when services are rendered by employees that increase their entitlement to futurecompensated absences, and short term non-accumulating compensated absences such as sick leave arerecognised when the absences occur.

(ii) Defined Contribution Plans

Obligations for contributions to defined contribution plans such as the Employees Provident Fund (“E.P.F.”) arerecognised as an expense in the income statement as incurred.

n. Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amountof income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that havebeen enacted at the balance sheet date.

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date betweenthe tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred taxliabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductibletemporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profitwill be available against which the deductible temporary differences, unused tax losses and unused tax credits can beutilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or fromthe initial recognition of an asset or liability in a transaction which is not a business combination and at the time ofthe transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or theliability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.Deferred tax is recognised in the income statement, except when it arises from a transaction which is recogniseddirectly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from abusiness combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill ornegative goodwill.

o. Critical Judgments Made in Applying Accounting Policies

In the preparation of the financial statements, management has been required to make judgments, estimates andassumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, incomeand expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed onan ongoing basis. Revisions to accounting estimates are recognised in the financial statements in the period in whichthe estimate is revised and in any future periods affected.

In the process of applying the accounting policies as described above, management is of the view that there are noinstances of application of judgments which are expected to have significant effect on the amounts recognised in thefinancial statements.




3. PROPERTY, PLANT AND EQUIPMENTAs at Addition/ Disposal/ Exchange As at

01.05.2009 Transfer Write off differences 30.04.2010Group RM’000 RM’000 RM’000 RM’000 RM’000

2010

CostFreehold land 11,569 12 - - 11,581Construction work-in-progress 293 - - (9) 284Buildings 35,045 - - (1,377) 33,668Plant and machinery 148,436 3,144 (651) (7,438) 143,491Office equipment, furnitureand fittings 9,635 273 (11) (431) 9,466Motor vehicles 2,328 - (52) (107) 2,169Mould & die cutters 13,867 753 - (950) 13,670Renovations 5,544 35 - (278) 5,301

226,717 4,217 (714) (10,590) 219,630

As at Charge for Disposal/ Exchange As at01.05.2009 the year Write off differences 30.04.2010

RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated DepreciationFreehold land - - - - -Construction work-in-progress - - - - -Buildings 4,404 1,042 - (104) 5,342Plant and machinery 52,641 7,982 (404) (2,704) 57,515Office equipment, furnitureand fittings 7,470 420 (16) (400) 7,474Motor vehicles 1,781 212 (52) (93) 1,848Mould & die cutters 4,965 1,456 - (447) 5,974Renovations 3,188 515 - (213) 3,490

74,449 11,627 (472) (3,961) 81,643

As at30.04.2010

RM’000Net Book Value

Freehold land 11,581Construction work-in-progress 284Buildings 28,326Plant and machinery 85,976Office equipment, furnitureand fittings 1,992Motor vehicles 321Mould & die cutters 7,696Renovations 1,811

137,987


3. PROPERTY, PLANT AND EQUIPMENT (cont’d)As at Addition/ Disposal/ Exchange As at

01.05.2008 Transfer Write off differences 30.04.2009Group RM’000 RM’000 RM’000 RM’000 RM’000

2009

CostFreehold land 11,569 - - - 11,569Construction work-in-progress 289 - - 4 293Buildings 32,861 474 - 1,710 35,045Plant and machinery 131,584 7,417 - 9,435 148,436Office equipment, furnitureand fittings 8,072 1,080 (36) 519 9,635Motor vehicles 2,981 - (789) 136 2,328Mould & die cutters 11,595 1,106 - 1,166 13,867Renovations 4,845 354 - 345 5,544

203,796 10,431 (825) 13,315 226,717

As at Charge for Disposal/ Exchange As at01.05.2008 the year Write off differences 30.04.2009

RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated DepreciationFreehold land - - - - -Construction work-in-progress - - - - -Buildings 3,645 690 - 69 4,404Plant and machinery 42,348 7,555 - 2,738 52,641Office equipment, furnitureand fittings 6,364 662 (35) 479 7,470Motor vehicles 2,067 283 (675) 106 1,781Mould & die cutters 3,173 1,385 - 407 4,965Renovations 2,456 502 - 230 3,188

60,053 11,077 (710) 4,029 74,449

As at30.04.2009

RM’000

Net Book ValueFreehold land 11,569Construction work-in-progress 293Buildings 30,641Plant and machinery 95,795Office equipment, furnitureand fittings 2,165Motor vehicles 547Mould & die cutters 8,902Renovations 2,356

152,268




3. PROPERTY, PLANT AND EQUIPMENT (cont’d)The net book value of the building of the subsidiary, Guangzhou Komark Labels & Labelling Co., Ltd. amounting toRM1,168,000 (2009: RM1,387,000) is built on a piece of land belonging to and leased from the authority of the People’sRepublic of China. The lease term is due to expire in the year 2044.

The net book value of plant and machinery and motor vehicles of the Group acquired under hire purchase agreementsamounted to RM15,554,000 (2009: RM13,456,000) and RM324,000 (2009: RM474,000) respectively.

Freehold land, buildings and plant and machinery of the Group amounting to RM11,568,000 (2009: RM11,664,000),RM21,307,000 (2009: RM21,227,000) and RM22,335,000 (2009: RM24,934,000) respectively are charged to licensedbanks and financial institutions as security for borrowings granted to certain subsidiaries (Note 19).

4. PREPAID LEASE PAYMENTS FOR LANDGroup

2010 2009RM’000 RM’000

CostAs at beginning of year 1,890 1,890

Accumulated amortisationCharge for the year (178) -

Exchange differences 29 -

Net carrying amount 1,741 1,890

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

5. INVESTMENT PROPERTYGroup

2010 2009RM’000 RM’000

Cost

At 1 May/30 April 337 337

Accumulated depreciationAt 1 May 137 132Change for the year 5 5

At 30 April 142 137

Net carrying amount 195 200

The investment property is pledged as security to financial institution for banking facilities granted to the Group.

6. INVESTMENTS IN SUBSIDIARIESCompany

2010 2009RM’000 RM’000

Unquoted shares, at cost 31,683 31,683


6. INVESTMENTS IN SUBSIDIARIES (cont’d)The list of subsidiaries, their places of incorporation, their principal activities and the effective interest of the Companyare as follows:

Country of EffectiveName of Company incorporation Principal activities equity interest

2010 2009% %

General Labels & Malaysia Manufacturing of self adhesive 100 100Labelling (M) Sdn. Bhd. labels and automatic labelling

machines and trading of relatedtools and equipment

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

tools and equipment

*# General Labels & Labelling Malaysia Manufacturing of self adhesive 100 100(Penang) Sdn.Bhd. labels and trading of related

tools and equipment

* General Labels & Labelling Malaysia Manufacturing of self adhesive 100 100(Ipoh) Sdn.Bhd. labels and trading of related

tools and equipment

* Komark Investment British Investment holding 100 100Holdings Ltd. Virgin

Island

^ Komark Australasia Australia Dormant 100 100Pty. Ltd.

* Komark China Ltd. Caymans Dormant 100 100Island

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


2010 2009% %

* General Labels & Labelling Malaysia Manufacturing of self adhesive 100 100(JB) Sdn. Bhd. labels and trading of related

tools and equipment

* General Labels & Labelling Singapore Manufacturing of self adhesive 100 100Pte. Ltd. labels and trading of related

tools and equipment

* Komark (Thailand) Co. Ltd. Thailand Manufacturing of self adhesive 100 100labels




6. INVESTMENTS IN SUBSIDIARIES (cont’d)The subsidiaries of Komark Investment Holdings Ltd. are as follows:


2010 2009% %

*^ Shanghai Komark Labels People’s Manufacturing of self adhesive 100 100

& Labelling Co. Ltd. Republic of labels and trading of labelling

China machines

*^ Guangzhou Komark People’s Manufacturing of self adhesive 100 100

Labels & Labelling Co. Republic of labels

Ltd.China

*# Komark Hong Kong Co. Ltd. Hong Kong Dormant 100 100

The subsidiary of Komark International (M) Sdn. Bhd. is as follows:

Country of EffectiveName of Company incorporation Principal activities equity i nterest

2010 2009% %

* PT Komark Labels and Indonesia Manufacturing and trading 100 100

Labelling Indonesia of self adhesive labels

* Audited by another firm of auditors.

^ Consolidated based on management financial statements as at 30 April 2010 in which we have reviewed forconsolidation purposes.

# Subsidiary with auditor’s report that is not qualified which contained an emphasis of matter on its going concern,which is dependent upon continuous financial support of its holding or ultimate holding company.

7. INVESTMENT IN ASSOCIATE

Group 2010 2009

RM’000 RM’000

Unquoted shares, at cost 2 2

Share of post acquisition results (2) (2)

- -

Represented by:

Group’s share of net assets - -


7. INVESTMENT IN ASSOCIATE (cont’d)

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


2010 2009% %

* Komark Enterprise Co. Ltd. Thailand Trading of self adhesive 49 49labels and related toolsand equipment

* Audited by another firm of auditors.

8. OTHER INVESTMENTGroup

2010 2009RM’000 RM’000

Quoted shares in Malaysia, at cost 4 4

Quoted shares in Malaysia, at market value 3 2

9. DEVELOPMENT EXPENDITUREGroup

2010 2009RM’000 RM’000

Automatic labelling machineries

CostAt 1 May 3,132 2,754Addition during the year 105 378

At 30 April 3,237 3,132

Accumulated amortisationAt 1 May 2,373 2,040Charge for the year 338 333

At 30 April 2,711 2,373

Net book value 526 759

Roto-gravure/offset combination labels press project

CostAt 1 May 3,707 3,205Addition during the year - -Exchange difference (386) 502

At 30 April 3,321 3,707




9. DEVELOPMENT EXPENDITURE (cont’d)Group

2010 2009RM’000 RM’000

Accumulated amortisationAt 1 May 3,309 2,762Charge for the year 109 110Exchange difference (352) 437

At 30 April 3,066 3,309

Net book value 255 398

Total net book value 781 1,157

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

10. GOODWILL ON CONSOLIDATIONGroup

2010 2009RM’000 RM’000

Goodwill on consolidation

CostAt 1 May 2,413 2,413Acquisition of additional shares in subsidiary - -

At 30 April 2,413 2,413

Accumulated amortisationAt 1 May 663 663Charge for the year - -

At 30 April 663 663

Net book value 1,750 1,750

Negative goodwill amounting to RM7,195,813 has been fully amortised and recognised in the income statement in theprevious financial year.

11. INVENTORIESGroup

2010 2009RM’000 RM’000

Raw materials 14,775 17,568Work-in-progress 3,673 3,679Manufactured inventories 19,866 19,478Others 1,976 2,042

40,290 42,767Less : Allowance for slow-moving manufactured inventories (2,978) (2,842)

37,312 39,925


12. RECEIVABLESGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Trade receivables 28,267 33,561 - -Other receivables, deposits and prepayment 4,579 5,866 42 42

32,846 39,427 42 42

13. AMOUNT DUE FROM ASSOCIATED COMPANYThis balance is trade in nature and is subject to normal trade credit terms.

14. AMOUNT DUE FROM RELATED COMPANIESThese balances are unsecured, interest free and have no fixed terms of repayment.

15. CASH AND BANK BALANCESGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Deposits with licensed banks 2,735 3,033 - -Cash on hand and at bank 4,037 2,882 10 7

6,772 5,915 10 7

Included in deposits placed with licensed banks of the Group is RM2,699,000 (2009: RM2,951,000) amount pledged assecurity for borrowings granted to subsidiaries (Note 19).

16. SHARE CAPITALGroup and Company2010 2009

RM’000 RM’000

Ordinary shares of RM1.00 each

Authorised:At 1 May/30 April 500,000 500,000

Issued and fully paidAt 1 May/30 April 81,275 81,275

17. TREASURY SHARESGroup and Company2010 2009

Number of ordinary shares of RM1 eachAt 1 May 1,532,900 580,800Repurchased during the year 1,100 1,034,200Disposed during the year - (82,100)

At 30 April 1,534,000 1,532,900




17. TREASURY SHARES (cont’d)Group and Company2010 2009

RM’000 RM’000

Ordinary shares of RM1 eachAt 1 May 436 238Repurchased during the year -# 221Disposed during the year - (23)

At 30 April 436 436


During the financial year, the Company repurchased 1,100 (2009: 1,034,200) ordinary shares from the open market atan average price of RM0.31 (2009: RM0.22) per share. The total consideration paid for the repurchase was RM344 (2009:RM220,964). The repurchased transactions were financed by internally generated funds.

The Company disposed of Nil (2009: 82,100) treasury shares to the open market at an average price of approximatelyRMNil (2009: RM0.18) per share. The total consideration received from the disposal deducting transaction costs wasRMNil (2009: RM14,450).

The remaining repurchased shares are held as treasury shares in accordance with the requirement of Section 67A of theCompanies Act, 1965.

18. RESERVESGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Non-distributable

General reserveAt 1 May 1,703 1,703 - -Transfer from retained profits - - - -

At 30 April 1,703 1,703 - -

Translation reserveAt 1 May 5,551 3,019 - -Foreign currency translation (3,065) 2,532 - -

At 30 April 2,486 5,551 - -

Total non-distributable reserves 4,189 7,254 - -

Distributable

Retained profits/(Accumulated losses)At 1 May 14,128 13,781 (19,437) (16,016)Profit/(Loss) for the year 2,020 347 (3,314) (3,421)

At 30 April 16,148 14,128 (22,751) (19,437)

Total Reserves 20,337 21,382 (22,751) (19,437)


18. RESERVES (cont’d)a. General Reserve

Subsidiaries in the People’s Republic of China (“PRC”) are required to appropriate 10% of their after-tax profit (afteroffsetting prior year losses), based on the respective PRC statutory financial statements, to a general reserve funduntil the balance of the fund reaches 50% of the Company’s registered capital. Thereafter, any further appropriationcan be made at the Directors’ discretion. The general reserve fund can be utilised to offset prior year losses, or beutilised for the issuance of bonus shares on the condition that the general reserve fund shall be maintained at aminimum of 25% of the registered capital after such issuance.

In accordance with the relevant rules and regulations in the PRC, the subsidiaries may also appropriate a portion ofits after-tax profit (after offsetting prior year losses), based on the PRC statutory financial statements, to an enterpriseexpansion fund and a staff and workers’ bonus and welfare fund at the Director’s discretion. No such appropriationhas been made in the current and previous year.

b. Translation Reserve

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

19. BORROWINGSGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

CurrentBank overdrafts - secured 16,538 17,124 2,985 2,995

- unsecured 2,330 2,483 - -Bankers’ acceptances - secured 15,415 17,675 - -

- unsecured 10,091 1,633 - -Term loans - secured 2,238 2,220 - -Revolving credit - secured 500 - - -Short-term loans - secured 935 1,044 - -

- unsecured 8,491 9,662 - -Hire purchase liabilities 4,668 9,564 - -

61,206 61,405 2,985 2,995

Non-currentTerm loans - secured 10,676 17,461 - -

- unsecured 1,760 3,033 - -Hire purchase liabilities 9,214 8,480 - -

21,650 28,974 - -

82,856 90,379 2,985 2,995

a. Term loans and repayment schedule

(i) Secured term loansSecured term loans consist of 6 (2009: 6) term loans. Their repayment schedule are as follows:

Secured term loan of RM6,082,500 [equivalent to RMB13,013,478] (2009: RM10,005,000 [equivalent toRMB19,174,000]) is obtained by a foreign subsidiary from a foreign bank. This is repayable by quarterly instalmentsover a period of three (3) years commencing May 2008.




19. BORROWINGS (cont’d)a. Term loans and repayment schedule (cont’d)

(i) Secured term loans (cont’d)Secured term loan of RM515,000 [equivalent to THB5,214,000] (2009: RM649,000 [equivalent to THB6,432,742])is repayable in ten (10) half yearly instalment over a period of five (5) years commencing December 2005.

Secured term loan of RM42,000 [equivalent to THB430,000] (2009: RM693,000 [equivalent to THB6,877,424])is repayable in monthly instalments over a period of four (4) years commencing April 2008. This term loan isobtained by a foreign subsidiary from a foreign financial institution.

Secured term loan of RM3,024,000 (2009: RM4,125,000) is repayable in 60 monthly equal instalmentscommencing February 2008.

Secured term loan of RM3,251,000 (2009: RM4,209,000) is repayable in 48 monthly equal instalmentscommencing March 2009. This term loan is obtained by a local subsidiary from a local bank.

Additional secured term loan of RM934,800 [equivalent to RMB2,000,000] (2009: RMNil) is obtained by a foreignsubsidiary from a foreign bank. This is repayable by 12 consecutive quarterly installments commencing in January2010.

Secured term loan amounting to RM1,044,000 [equivalent to RMB2,000,000] as at the end of previous financialyear have been fully settled during the current financial year.

(ii) Unsecured term loansUnsecured term loans consist of 3 (2009: 3) term loans. Their repayment schedule are as follows:

Unsecured term loan of RM7,369,000 [equivalent to RMB15,766,000] (2009: RM8,512,000 [equivalent toRMB16,312,000]) has no fixed repayment period for this term loan.

Unsecured term loan of RM1,947,418 [equivalent to RMB4,166,491] (2009: RM2,618,000 [equivalent toRMB5,016,000]) is repayable in 12 monthly equal instalments, commencing March 2009. The term loan isobtained by a foreign subsidiary from a foreign bank.

Unsecured term loan of RM934,800 [equivalent to RMB2,000,000] (2009: RM1,565,000 [equivalent toRMB3,000,000]) is obtained by a foreign subsidiary from a foreign bank. This is repayable by 24 consecutivequarterly instalments commencing February 2009.

b. Significant covenants for term loans granted to a foreign subsidiary

In connection with the borrowing facilities agreements and their supplemental agreements, a foreign subsidiary hasagreed on the following significant covenants with the lenders:

i) the subsidiary shall maintain a minimum net worth of RMB60,000,000 at April 2010 and at anytime thereafter,where net worth shall include paid-up capital, related company loans and retained profits at any time;

ii) the ratio of the subsidiary’s total liabilities to net worth shall not exceed 125% at 30 April 2010 and at anytimethereafter without prior consent of the lenders;

iii) the ratio of the subsidiary’s total current assets to total current liabilities (excluding loans from related companies)shall not be below 80% as at 30 April 2010 and at anytime thereafter.

iv) not to make any advances, loans or grant any credit (save in the ordinary course of business) to or for the benefitof any other persons (including any related company) or give any guarantee or indemnity to or for the benefit ofany other person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of anyobligation of any other person without prior consent of the lenders. The foreign subsidiary shall notify the lenderson the ratio of said guarantees, if any over its net tangible assets; and


19. BORROWINGS (cont’d)b. Significant covenants for term loans granted to a foreign subsidiary (cont’d)

v) not to raise any additional financing from other financial institutions without prior consent from the lenders andsuch consent shall not be unreasonably withheld.

c. Other borrowings

The Company’s bank overdraft facility is secured by a second legal charge for RM3 million over certain land andbuilding of the Group.

The Group’s other borrowings are secured by way of fixed charges over the freehold land and buildings of therespective subsidiaries, a negative pledge over a subsidiary’s entire present and future assets, corporate guaranteesfrom the Company and fixed deposits of respective subsidiaries.

d. Hire purchase liabilities

Group 2010 2009

RM’000 RM’000

Minimum lease paymentnot later than one year 5,258 10,508later than one year and not later than five years 11,363 9,280later than five years 108 -

16,729 19,788Future finance costs (2,847) (1,744)

Present value of hire purchase liabilities 13,882 18,044

Present value of hire purchase liabilitiesnot later than one year 4,668 9,564later than one year and not later than five years 9,110 8,480later than five years 104 -

13,882 18,044

Hire purchase liabilities are subject to effective interest rate of 2.19% to 8.14% (2009: 2.19% to 8.14%).

20. DEFERRED TAXThe amounts, determined after appropriate offsetting are as follows:

Group 2010 2009

RM’000 RM’000

Deferred tax liabilitiesAt 1 May 1,806 1,691Transfer to income statement (Note 24) 40 115

At 30 April 1,846 1,806




20. DEFERRED TAX (cont’d)Group

2010 2009RM’000 RM’000

Deferred tax assetsAt 1 May - -Transfer (to)/from income statement - -

At 30 April - -

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

The net deferred tax liabilities/(assets) are in respect of the followings:

Group 2010 2009

RM’000 RM’000

Deferred tax liabilitiesTaxable temporary differences 4,720 5,014Allowances (144) (144)Unabsorbed capital allowances (2,307) (2,641)Unutilised tax losses (423) (423)

1,846 1,806

The unutilised tax losses, unabsorbed capital allowances and taxable temporary differences do not expire under currenttax legislation. Deferred tax assets have not been recognised in respect of these items as they have arisen in subsidiariesthat have a recent history of low profit and hence, it is not probable that future taxable profit will be available againstwhich the Group can utilise the benefits.

Subject to agreement by the Inland Revenue Board, the Group has unutilised reinvestment allowances of RM1,045,000(2009: RM1,045,000).

21. PAYABLESGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Trade payables 13,437 25,395 - -Other payables and accruedexpenses 5,906 8,905 812 620

19,343 34,300 812 620

Included in the payables of the Group is an amount of RM15,000 (2009: RM4,000) due to directors. This balance isunsecured, interest free and has no fixed terms of repayment.


22. OTHER OPERATING INCOMEGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Gain on disposal of property,plant and equipment 252 42 - -Gain on foreign exchange- Realised 170 958 - -- Unrealised 315 - - -Interest income 83 76 - -Rental income 122 432 - -Others 171 44 - -

1,113 1,552 - -

23. PROFIT/(LOSS) BEFORE TAXThe following items have been charged/(credited) in arriving at profit/(loss) before tax:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000Amortisation of development expenditure 447 443 - -Amortisation of lease payments on land 178 - - -Auditors’ remuneration- Current year’s provision 135 118 14 14- (Over)/underprovision in prior years (2) 2 - -Bad debts written off 4 - - -Depreciation of property, plant and equipment 11,632 11,082 - -

Directors’ remuneration- Fees 350 176 323 150- Other emoluments- Directors of the Company 1,822 2,166 1,822 2,166- Other directors of subsidiary 288 258 - -

Finance costs- Bank overdrafts 1,259 1,457 225 249- Hire purchase and finance lease 1,357 958 - -- Short term borrowings 1,008 1,241 - -- Term loans 1,842 2,272 - -- Others 23 276 - -Hiring of machinery - 203 - -Loss on foreign exchange- Realised 709 10 - -- Unrealised - 402 - -Factory Rental 266 232 - -Rental of equipment 11 19 - -Rental of premises 306 372 - -Staff costs- Salaries, allowances and others 13,782 14,069 258 271- Retirement benefits 996 1,198 134 152




24. TAX EXPENSEGroup Company

2010 2009 2010 2009RM’000 RM’000 RM’000 RM’000

Current tax expenseMalaysian- Current 648 57 1 -- (Over)/underprovision in prior year (3) 16 - -Overseas- Current 195 342 - -- Overprovision in prior years - (2) - -

840 413 1 -

Deferred tax expense (Note 20) 40 115 - -

880 528 1 -

Reconciliation of effective tax expenseProfit/(loss) before tax 2,900 875 (3,313) -

Income tax using Malaysian tax rates 778 252 (828) -Effect of concessionary tax rate (22) (135) - -Non-deductible expenses 1,577 1,117 829 -Non-taxable income (54) (36) - -Effect of capital allowance utilised (642) (409) - -Effect of changes in tax rate on opening balance on deferred tax (765) (280) - -Others 11 5 - -

883 514 1 -(Over)/underprovision in prior years (3) 14 - -

Tax expense 880 528 1 -

25. EARNINGS PER SHAREThe basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company bythe weighted average number of ordinary shares of RM1.00 each in issue during the financial year excluding the weightedaverage treasury shares held by the Company.

Group 2010 2009

RM’000 RM’000

Profit for the year attributable to equity holders of the Company 2,020 347

Number of ordinary shares in issue at 1 May 79,742 80,694Effect of shares bought back and held as treasure shares (1) (652)

79,741 80,042

Basic earnings per share (sen) 2.53 0.44

The diluted earnings per share figures are not shown as the conversion price of warrants is higher than the Company’saverage share price during the financial year.


26. SEGMENT INFORMATION Segmental information is presented in respect of the Group’s business and geographical segments based on the Groupsmanagement and internal reporting structure.

Inter-segment pricing is determined based on negotiated basis in the normal course of business.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocatedon a reasonable basis. Unallocated items mainly comprise of expenses and assets of the Company and its dormantsubsidiaries.

Business Segment

The Group comprises the following main business segments:

i) Manufacturing of self adhesive labels and stickers and trading of related products; and

ii) Manufacturing of automatic labelling machineries.

Geographical segments

Manufacturing of automatic labelling machineries is principally operated in Malaysia. Other geographical areas are involvedin the manufacturing of self adhesive labels and stickers and trading of related products.

In presenting information on the basis of geographical segments, segment revenue and segment assets are based on thegeographical location of assets.




27. SEGMENT INFORMATION (CONT’D)a. Business Segment (cont’d)

Manufacturing of self adhesive labels and Manufacturing ofstickers and trading automatic labellingof related product machineries Elimination Consolidation

RM’000 RM’000 RM’000 RM’000

2010

RevenueExternal sales 111,670 328 - 111,998Inter-segment sales - 2,179 (2,179) -

Total revenue 111,670 2,507 (2,179) 111,998

ResultsSegment results 9,291 1,073 - 10,364Unallocated expenses (3,088)Interest income 1,113

Profit from operations 8,389Finance costs (5,489)Share of loss of associate -

Profit before tax 2,900Tax expense (880)

Profit for the year 2,020Minority interest -

Profit attributable to equity holders of the Company 2,020

AssetsSegment assets 188,658 32,553 - 221,211Unallocated assets 158

Total Assets 221,369

LiabilitiesSegment liabilities 100,983 1,216 - 102,199Unallocated liabilities 2,705

Total Liabilities 104,904

Other InformationCapital expenditure (4,217) - - (4,217)Depreciation and amortisation (11,918) (339) - (12,257)Non-cash expenses other thandepreciation and amortisation (224) - - (224)


27. SEGMENT INFORMATION (CONT’D)a. Business Segment (cont’d)

Manufacturing of self adhesive labels and Manufacturing ofstickers and trading automatic labellingof related product machineries Elimination Consolidation

RM’000 RM’000 RM’000 RM’000

2009

RevenueExternal sales 112,821 4,936 - 117,757Inter-segment sales - 1,470 (1,470) -

Total revenue 112,821 6,406 (1,470) 117,757

ResultsSegment results 8,822 1,353 - 10,175Unallocated expenses (3,172)Interest income 76

Profit from operations 7,079Finance costs (6,204)Share of loss of associate -

Profit before tax 875Tax expense (528)

Profit for the year 347Minority interest -

Profit attributable to equity holders of the Company 347

AssetsSegment assets 210,764 33,541 - 244,305Unallocated assets 75

Total Assets 244,380

LiabilitiesSegment liabilities 122,641 2,038 - 124,679Unallocated liabilities 2,191

Total Liabilities 126,870

Other InformationCapital expenditure (10,431) - - (10,431)Depreciation and amortisation (11,191) (334) - (11,525)Non-cash expenses other thandepreciation and amortisation (402) - - (402)




27.SEGMENT INFORMATION (CONT’D)

b.Geographical Segment

Malaysia

China

Singapore

Thailand

Others

Elimination

Consolidation

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

2010

Revenue from

external

custom

ers by location

of customers

46,651

47,770

11,144

13,520

2,421

(9,508)

111,998

Segm

ent assets by

location of assets

231,054

85,316

5,701

19,821

30,599

(151,280)

221,211

Capital expenditure

1,864

1,695

-469

189

-4,217

2009

Revenue from

external

custom

ers by location

of customers

47,420

49,493

7,889

10,617

2,338

-117,757

Segm

ent assets by

location of assets

238,933

105,545

5,088

19,013

29,039

(153,313)

244,305

Capital expenditure

3,139

1,218

-6,063

11-

10,431

Certain com

paratives have been restated to conform with the current year’s presentation.


28. CONTINGENT LIABILITIESGroup

2010 2009RM’000 RM’000

Guarantees in respect of credit facilities granted to subsidiaries 112,854 112,854

29. SIGNIFICANT TRANSACTIONS WITH RELATED PARTIESControlling related party relationships are as follows:

i) Its subsidiaries as disclosed in Note 6.ii) A director of the Company, Koh Hong Muan @ Koh Gak Siong.

Significant related party transactions other than those disclosed elsewhere in the financials statements are as follows:

Group Company2010 2009 2010 2009

RM’000 RM’000 RM’000 RM’000

AssociateKomark Enterprise Co. Ltd.- Sales 1,600 2,426 - -

SubsidiariesKomark International (M) Sdn. Bhd. - Sales 1,260 1,242 - -General Labels & Labelling (M) Sdn. Bhd.- Sales 3,395 512 - -- Labour income - 1,167 - -- Management fee 1,268 832 - -- Rental income, premises 60 60 - -General Labels & Labelling (JB) Sdn. Bhd.- Sales 3,933 3,218 - -General Labels & Labelling (Penang) Sdn. Bhd.- Sales 369 359 - -Guangzhou Komark Labels & Labelling Co. Ltd.- Sales 347 809 - -Shanghai Komark Labels & Labelling Co. Ltd. - Sales 157 736 - -- Rental income of machinery 516 316 - -General Labels & Labelling Pte. Ltd.- Sales 35 - - -General Labels & Labelling (Ipoh) Sdn. Bhd.- Sales 2 - - -Komark (Thailand) Co. Ltd.- Sales 10 - - -




30. FINANCIAL INSTRUMENTSFinancial Risk Management Objectives and Policies

Exposure to credit, interest rate, currency and liquidity risks arises in the normal course of the Group and of the Company.The Board and management reviews and agrees policies for managing each of these risks and they are summarised below:

Credit risk

The Group’s primary exposure to credit risk arises through trade and other receivables. Exposure to credit risk is monitoredby management on an ongoing basis.

All new investment, if any, in quoted and unquoted securities need to be approved by the Board of Directors. Allinvestments in quoted securities are held for long term purposes, and therefore, any temporary diminution in value willnot have any significant impact to the Group and the Company.

At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk isrepresented by the carrying amount of each financial asset.

Interest rate risk

The Group utilises short term borrowings for working capital purposes and borrows term loans to finance capitalexpenditure. In view of the low interest rate scenario, exposure to fluctuation of interest rate risk is minimised.

Foreign currency risk

The Group incurs foreign currency risk on sales, purchases and borrowings that are denominated in currencies other thanRinggit Malaysia. Most of the foreign currency transactions are denominated in US Dollars, and only a small percentageof the foreign currency transactions are denominated in other foreign currencies. The Group does not hedge this exposureto the US dollars. The transactions in other foreign currencies are insignificant. The Group ascertains that the net exposureis kept to an acceptable level by buying and selling foreign currencies at spot rates where necessary action to minimisethe exposure of the risk.

In respect of other monetary assets and liabilities held in currencies other than Ringgit Malaysia, the Group does not hedgethis exposure as most of the monetary assets and liabilities are denominated in US Dollars or the reporting currency isused for the other monetary assets and liabilities of foreign subsidiaries in their respective countries.

The Group and the Company are also exposed to foreign currency risk in respect of their investment in foreign subsidiaries.The Group does not hedge this exposure by having foreign currency borrowings as the foreign subsidiaries operateindependently from the holding company and source of their own funding to finance their operations. However, theBoard and management will keep this policy under review and will taken the necessary action to minimise the exposureof this risk.

Liquidity risk

The Group monitors and maintains a level of cash and cash equivalents and bank facilities deemed adequate bymanagement to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

The following table shows information about the Group’s exposure to interest rate risk.


30. FINANCIAL INSTRUMENTS (CONT’D)Effective interest rates and repricing analysis

In respect of interest-earning financial asset and interest-bearing financial liabilities, the following table indicates theireffective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever is earlier.

Effectiveinterest Within

rate Total 1 year% RM’000 RM’000

Group2010Financial assetsDeposits placed with licensed banks 3.00 - 3.70 2,735 2,735

Financial liabilitiesBank overdrafts 7.05 - 8.25 18,867 18,867Bankers’ acceptance 2.24 - 7.05 25,507 25,507Term loans 5.32 - 8.25 2,238 2,238Short-term loans 5.84 - 6.81 9,426 9,426Revolving credit 5.15 - 5.25 500 500

2009Financial assetsDeposits placed with licensed banks 3.00 - 3.70 3,033 3,033

Financial liabilitiesBank overdrafts 6.75 - 8.75 17,124 17,124Bankers’ acceptance 2.17 - 8.05 19,308 19,308Term loans 7.55 - 8.10 22,714 2,220Short-term loans 5.84 - 8.71 10,706 10,706

Company2010Financial liabilitiesBank overdraft 7.55 - 7.75 2,985 2,985

2009Financial liabilitiesBank overdraft 7.55 - 8.75 2,995 2,995




30. FINANCIAL INSTRUMENTS (CONT’D)Fair values

The aggregate fair value of the long term financial asset and long term financial liabilities carried on the balance sheet asat 30 April are shown below:

2010 2009Carrying Fair Carrying Fairamount value amount valueRM’000 RM’000 RM’000 RM’000

Group

Financial AssetsQuoted shares - long term 4 2 4 2

The fair value of quoted shares is their quoted bid price at the balance sheet date.

In respect of cash and cash equivalents, trade and other receivables, trade and other payables and short term borrowings,the carrying amounts approximate fair value due to the relatively short term nature of these financial instruments.

In respect of long-term borrowings, the carrying amounts approximate fair value as they are on floating rates and repriceto market interest rates for liabilities with similar risk profiles.

31. AUTHORISATION FOR ISSUEThe financial statements of the Company for the financial year ended 30 April 2010 were authorised for issue in accordancewith a resolution of the Board of Directors on 26 August 2010.


ANALYSIS OF SHAREHOLDINGS AS AT 17 SEPTEMBER 2010Authorised share capital : RM500,000,000Issued and paid-up share capital : RM 81,275,010Class of shares : Ordinary Shares of RM1.00 eachVoting rights : One vote per share

No. of % of No. of % ofShareholders/ Shareholders/ Shares Issued

Size of Holdings Depositors Depositors held * Capital1 - 99 376 7.3309 13,844 0.0173100 - 1,000 682 13.2969 593,054 0.74371,001 - 10,000 2,982 58.1400 14,554,474 18.252410,001 - 100,000 1,014 19.7699 30,128,542 37.7835100,001 - 3,986,999 74 1.4428 23,543,207 29.52503,987,000 (5% of Issued Capital*) and above 1 0.0195 10,906,889 13.6781

TOTAL 5,129 100.0000 79,740,010 100.0000

*Excluding a total of 1,535,000 Ordinary Shares of RM1.00 each bought back by the Company and retained as treasury shares.

SUBSTANTIAL SHAREHOLDERS AS AT 17 SEPTEMBER 2010Direct Indirect

% of Issued % of IssuedNo. of Shares Capital (1) No. of Shares Capital (1)

Aimas Enterprise Sdn Bhd 10,906,889 13.6781 - -

Koh Hong Muan @ Koh Gak Siong 6,010,300 7.5374 10,906,889 (2) 13.6781

Notes:(1) Excluding a total of 1,535,000 Ordinary Shares of RM1.00 each bought-back by the Company and retained as treasury

shares.(2) Deemed interested in the shares held by Aimas Enterprise Sdn Bhd by virtue of Section 6A(4)(c) of the Companies Act,

1965.

ANALYSIS OF SHAREHOLDINGSAS AT 17 SEPTEMBER 2010


ANALYSIS OF SHAREHOLDINGSAS AT 17 SEPTEMBER 2010 (cont’d)

THIRTY LARGEST SHAREHOLDERS/DEPOSITORS AS AT 17 SEPTEMBER 2010

% of IssuedName of Shareholders/Depositors No. of Shares Capital*

1. EB Nominees (Tempatan) Sendirian Berhad 10,906,889 13.6781Pledged Securities Account for Aimas Enterprise Sdn Bhd (Jln Hang Lekiu)

2. EB Nominees (Tempatan) Sendirian Berhad 3,680,000 4.6150Pledged Securities Account for Koh Hong Muan @ Koh Gak Siong (Jln Hang Lekiu)

3. HLB Nominees (Tempatan) Sdn Bhd 2,300,000 2.8844Pledged Securities Account for Koh Hong Muan @ Koh Gak Siong (BLK 0688-8)

4. Bu Yaw Seng 1,103,300 1.38365. Leow Kay Pin 784,500 0.98386. SJ Sec Nominees (Tempatan) Sdn Bhd 780,133 0.9783

Pledged Securities Account for Lim Boon Hong (SMT)7. George Lee Sang Kian 663,000 0.83158. Ang Jwee Tong 563,678 0.70699. George Lee Sang Kian 543,600 0.681710. Tung P’ng Khai 520,200 0.652411. AmBank (M) Berhad 453,333 0.5685

Pledged Securities Account for Wong Ah Yong (SMART)12. Mayban Nominees (Tempatan) Sdn Bhd 443,000 0.5556

Pledged Securities Account for Chiah Tho Wak13. Wong Ah Yong 433,866 0.544114. TA Nominees (Tempatan) Sdn Bhd 411,000 0.5154

Pledged Securities Account for Chua Kian Lam15. Toh Beng 402,600 0.504916. Lim Koon Leong 400,900 0.502817. Hsu, Yao-Jih 400,000 0.501618. Mayban Nominees (Tempatan) Sdn Bhd 359,500 0.4508

Pledged Securities Account for Tan Swee Ung19. Citigroup Nominees (Tempatan) Sdn Bhd 338,000 0.4239

Pledged Securities Account for Ng Bieng San (472675)20. Cimsec Nominees (Tempatan) Sdn Bhd 323,800 0.4061

CIMB Bank for Teh Swee Heng (MM1118)21. HDM Nominees (Tempatan) Sdn Bhd 306,000 0.3837

Pledged Securities Account for Sim Kean Hee (M06)22. Chantika Holdings Sdn Bhd 293,232 0.367723. Lim Kok Wah & Company Sdn Berhad 280,000 0.351124. TA Nominees (Tempatan) Sdn Bhd 250,000 0.3135

Pledged Securities Account for Chow Kim Seng25. Tay How Seng 249,000 0.312326. Tan Ah Tai @ Tan Ka Cheng 230,000 0.288427. Koay Ting Hoo 224,300 0.281328. Tan Kok Chiew 221,400 0.277729. Teh Weng Kong @ Teng Weng Kong 218,100 0.273530. Su An Lee 214,700 0.2693

TOTAL 28,298,031 35.4879

Note: * Excluding a total of 1,535,000 Ordinary Shares of RM1.00 each bought-back by the Company and retained as treasury

shares.


DIRECTORS’ INTERESTS AS AT 17 SEPTEMBER 2010No. of Shares

Direct IndirectDirector’s Name Interest %(1) Interest %(1)

Koh Hong Muan @ Koh Gak Siong (2) 6,010,300 7.5374 10,906,889 (3) 13.6781Koh Chie Jooi (2) - - 16,917,189 (4) 21.2154Koh Chee Mian (2) - - 16,917,189 (4) 21.2154Datuk Ng Peng Hong @ Ng Peng Hay - - - -Chew Chee Chek - - - -Ihsan bin Ismail - - - -

Notes:(1) Excluding a total of 1,535,000 Ordinary Shares of RM1.00 each bought-back by the Company and retained as treasury

shares.

(2) By virtue of their interests in shares of the Company, the Directors are also deemed to have an interest in the shares of allthe subsidiaries of the Company to the extent the Company has an interest.

(3) Deemed interested in the shares held by Aimas Enterprise Sdn Bhd by virtue of Section 6A(4)(c) of the Companies Act,1965.

(4) Deemed interested in the shares by virtue of Section 122A(1)(a) of the Companies Act, 1965, held by his parent, namelyKoh Hong Muan @ Koh Gak Siong.

ANALYSIS OF SHAREHOLDINGSAS AT 17 SEPTEMBER 2010 (cont’d)


LIST OF PROPERTIES

Net Book Land Area/ Age of Value as atBuild Up Building Existing Expiry 30.04.2010

Owner Title No./Location Area Sq. Ft (Year) Tenure Usage Date RM (‘000)

Komark GM No. 439 Lot 132, L-370,260 7 Freehold Factory Cum - 29,486International (M) Mukim of Kajang B-150,000 OfficeSdn. Bhd. district, Hulu Langat, (HQ) ,

Selangor.

General Labels Lot 2897, Mukim 6, L-10,814 16 Freehold Factory Cum - 916& Labelling District Seberang B-6,000 Office (M) Sdn. Bhd. Prai Tengah, Penang.

General Labels H.S. (D) KA 39335 L-3,640 13 Leasehold Factory Cum 9-3-2094 193& Labelling P.T.No. 131760/23 B-2,640 Office (M) Sdn. Bhd. Hala Rapat Baru 22,

Kawasan Perindustrian Ringan Kinta Jaya

General Labels Lot PTD 112290, L-10,200 13 Freehold Factory Cum - 695& Labelling Mukim of Plentong B-5,394 Office(M) Sdn. Bhd. district, Johor Bahru

General Labels H.S.(M) 833, L-2,723 17 Freehold Factory - 200& Labelling Lot 3052, Mukim 6 B-3,330 (Penang) District of SeberangSdn.Bhd. Prai Tengah, Penang

Guangzhou Title No: 229030 L-16,501 13 Leasehold Factory Cum 9-11-2044 1,168Komark Labels Second Floor, Building B-17,416 Office& Labelling 2, Chung Yie Road Co. Ltd. Scientech Park

Economic & Technological Development Zone Guangzhou

Shanghai Komark Title No: 026381 L-89,222 3 Leasehold Factory Cum 16-8-2052 9,279Labels & No.1, Baosheng Road, B-76,751 OfficeLabelling Songjiang Industrial Co. Ltd Zone, Songjiang,

Shanghai 201600,China.


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I/We _______________________________________________________ (name of shareholder as per NRIC, in capital letters)

NRIC No./ID No./Company No. _______________________________ (new) ____________________________________ (old)

of __________________________________________________________________________________________ (full address)

being a member of KOMARKCORP BERHAD, hereby appoint ____________________________________________________

(name of proxy as per NRIC, in capital letters) NRIC No. _________________________ (new) ______________________ (old)

of __________________________________________________________________________________________ (full address)

or failing him/her __________________________________________________ (name of proxy as per NRIC, in capital letters)

NRIC No. ________________________________ (new) __________________________ (old) of _________________________

____________________________________________________________________________ (full address) or failing him/her

*the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Fourteenth Annual General Meeting of the Company to be held at Langkawi Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 28 October 2010 at 2.30 p.m. and at each and every adjournment thereof.*Please delete the words “the Chairman of the Meeting” if you wish to appoint some other person to be your proxy. My/our proxy is to vote as indicated below:t

ORDINARY RESOLUTIONS FOR AGAINST

1. Adoption of the Audited Financial Statements for the financial year Resolution 1 ended 30 April 2009 and Directors’ and Auditors’ Reports thereon

2. Approval of Directors’ Fees Resolution 2

3. Re-election of Datuk Ng Peng Hong @ Ng Peng Hay as Director Resolution 3

4. Re-election of Mr Koh Chee Mian as Director Resolution 4

5. Re-appointment of Auditors Resolution 5

6. Proposed Renewal of Share Buy-Back Mandate Resolution 6

7. Proposed Renewal of General Mandate for Recurrent Resolution 7Related Party Transactions

8. Authority under Section 132D of the Companies Resolution 8Act, 1965 for the Directors to issue shares

(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxywill vote or abstain from voting at his discretion.)

No. of shares Percentage

Proxy 1 %

Proxy 2 %

Total 100%

For appointment of two proxies, percentage ofshareholdings to be represented by the proxies:

Number of shares held:

Date:

Signature/Common Seal

PROXY FORMCDS account no. of authorised nominee

Share RegistrarsKOMARKCORP BERHAD

c/o TRICOR INVESTOR SERVICES SDN BHDLEVEL 17, THE GARDENS NORTH TOWER

MID VALLEY CITYLINGKARAN SYED PUTRA59200 KUALA LUMPUR

MALAYSIA

AFFIX

STAMP

1st fold here

Fold this flap for sealing

Then fold here

Notes:1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in hisstead. 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 shallnot apply to the Company.

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

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

4. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certifiedor office copy of such power or authority, must be deposited at the Company’s Share Registrars’ office at Level 17, The Gardens NorthTower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time set for holding the meeting orany adjournment thereof.

Documents

CONTENTS 2010. 10. 6. · CONTENTS Corporate Information 2 Corporate Structure 3 Chairman’s Statement 4 Product Review 6 Distribution Network 8 Notice of Annual General Meeting 9