TAKASO-AnnualReport2011 (1.5MB)

8/2/2019 TAKASO-AnnualReport2011 (1.5MB)

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T a k a s o R e s o u r c e s B e r h a d 4 4 0 5 0 3 - K A n n u a l R e p o r t 2 0 1 1

Contents2 Notice of Annual General Meeting

4 Statement Accompanying The Notice OfFourteenth Annual General Meeting

5 Corporate Information

6 Corporate Structure

7 Five Year Financial Highlights 8 Board of Directors

11 Additional Compliance Information

14 Audit Committee Report

18 Statement On Corporate Governance

24 Statement Of Internal Control

26 Directors Responsibility Statement

27 Executive Chairmans Statement

30 Export Markets

31 Financial Statements

112 List of Properties

113 Analysis of Shareholdings

116 Analysis Of Warrant A (Takaso-WA) Holdings

118 Analysis Of Warrant B (Takaso-WB) Holdings

Proxy Form


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the Company and the approvals of the relevant regulatory authorities, the Directors

be and are hereby empowered pursuant to Section 132D of the Companies Act,

1965, to issue new ordinary shares of RM0.25 each in the Company from time

to time and upon such terms and conditions to such persons and for such

purposes as the Directors may deem fit PROVIDED THAT the aggregate number of

new ordinary shares to be issued pursuant to this resolution does not exceed ten

percent (10%) of the total issued share capital of the Company and that such

authority shall unless revoked or varied by an ordinary resolution by the shareholders

of the Company in general meeting, commence upon the passing of this resolution

until the conclusion of the next annual genera l meeting of the Company

AND THAT the Directors are further authorised to do all such things and uponsuch terms and conditions as the Directors may deem fit and expedient in the

best interest of the Company to give effect to the issuance of new ordinary shares

under this resolution including making such applications to Bursa Malaysia

Securities Berhad for the listing of and quotation for the new ordinary shares to

be issued pursuant to this resolution. (Ordinary Resolution 6)

(Please refer Explanatory Note 2)

7. To transact any other ordinary business where due notice has been given in

accordance with the Companies Act, 1965.

By order of the Board,

TAN BEE HWEE (MAICSA 7021024)

LAM SOOK CHING (MAICSA 7006942)

Secretaries

Melaka

29 November 2011

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Forteenth Annal General Meeting of the Company will be held at the Registered Office of

the Company at K55 Jalan Kesang, Kawasan Perindstrian Tanjng Agas, 84000 Ledang, Johor Darl Taim on Wednesday, 21

December 2011, at 2.30 p.m. for the following prposes:-

AGENDA

AS ORDINARY BuSINESS:-

1. To receive the Audited Financial Statements of the Company and of the Group for

the financial year ended 31 July 2011 together with the Directors and Auditors

Reports thereon. (Please refer Explanatory Note 1)

2. To approve the payment of Directors fees of RM62,000 for the financial year

ended 31 July 2011. (Ordinary Resolution 1)

3. To approve the payment of Directors fees of not exceeding RM150,000 for thefinancial year ending 31 July 2012. (Ordinary Resolution 2)

4. To re-elect the following Directors who retire in accordance with Article 92 and

Article 98 of the Companys Articles of Association and being eligible, offered

themselves for re-election:-

(i) Tee Tze Chern, JP (Article 92) (Ordinary Resolution 3)

(ii) Wong Koon Wai (Article 98) (Ordinary Resolution 4)

5. To re-appoint Messrs. BDO as Auditors of the Company for the financial year

ending 31 July 2012 and to authorise the Board of Directors to fix their

remuneration. (Ordinary Resolution 5)

AS SPECIAL BuSINESS:-

To consider and if thought fit, to pass the following resolution with or without

modifications as an Ordinary Resolution:-

6. Proposed Issance of New Ordinary Shares of RM0.25 Each Prsant to Section

132D of the Companies Act, 1965

THAT subject always to the Companies Act, 1965, the Articles of Association of


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NOTES:

1. A member of the Company who is entitled to attend and vote at the meeting is

entitled to appoint more than two (2) proxies to attend and vote instead of him/

her. Where a member appoints two (2) or more proxies, the appointment shall be

invalid unless he/she specifies the proportion of his/her shareholdings to be

represented by each proxy. A proxy may but need not be a member of the

Company and a member may appoint any person to be his/her proxy without

limitation and the provisions of Section 149(1)(a),(b),(c) and (d) of the Companies

Act, 1965 shall not apply to the Company.

2. Where a member is an authorised nominee, it may appoint more than one (1)

proxy in respect of each securities account it holds with ordinary shares of the

Company standing to the credit of the said securities account.

3. The instrument appointing a proxy shall be in writing by the appointor or an

attorney duly authorised in writing or, if the appointor is a corporation, whetherunder its seal or by an officer or attorney duly authorised.

4. The instrument appointing a proxy and the power of attorney or other authority, if

any, under which it is signed or a notarially certified copy of that power or

authority shall be deposited at the Registered Office of the Company at K55 Jalan

Kesang, Kawasan Perindustrian Tanjung Agas, 84000 Ledang, Johor Darul Tazim

not less than forty-eight (48) hours before the time for holding the meeting or at

any adjournment thereof.

5. In respect of deposited securities, only members whose names appear in the

Record of Depositors on 14 December 2011 (General Meeting Record of

Depositors) shall be eligible to attend the meeting.

ExPLANATORY NOTES ON ORDINARY AND SPECIAL BuSINESS:-

1. Item 1 of the Agenda

This Agenda item is meant for discussion only as the provision of Section 169(1)of the Companies Act, 1965 does not require a formal approval of the shareholders

for the Audited Financial Statements. Hence, this Agenda item is not put forward

for voting.

2. Item 6 of the Agenda

Ordinary Resolution 6 proposed under item 6 of the Agenda is for the purpose of

granting a renewal of a general mandate and if passed, will give the Directors

authority to issue and allot new ordinary shares of up to an amount not exceeding

ten percent (10%) of the issued share capital of the Company for such purposes

as the Directors would consider to be in the best interest of the Company. This

authority will commence from the date of this Annual General Meeting and, unless

earlier revoked or varied by the shareholders of the Company at a subsequent

general meeting, will expire at the next annual general meeting of the Company.

The mandate will provide flexibility to the Company for the allotment of shares not

exceeding ten percent (10%) of its existing paid-up share capital to raise funds

for future investments, acquisitions and/or working capital requirements.

As at the date of this Notice, no new shares have been issued pursuant to the

mandate obtained at the last Annual General Meeting of the Company held on 27

December 2010.

2011 ANNuAL REPORT OF THE COMPANY:

The 2011 Annual Report of the Company is in CD-ROM format. A printed copy of theAnnual Report shall be provided to the shareholders within four (4) market days from

the date of receipt of the verbal or written request. Shareholders who wish to receive

the printed copy of the Annual Report and who require assistance with viewing the

CD-ROM, kindly contact Ms. Lily Tee at Tel. No. 06-9510988 or fax the request form

for a printed copy of Annual Report at Fax No. 06-9516333 or send the request form

to K55 Jalan Kesang, Kawasan Perindustrian Tanjung Agas, 84000 Ledang, Johor Darul

Tazim. You may also e-mail your request to [email protected] for a printed copy of

the Annual Report.


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Statement Accompanying The Notice Of FourteenthAnnual General Meeting1. Details of Directors Standing for Re-Election and Re-Appointment

Details of the Directors who are retiring and standing for re-election at the Fourteenth Annual General Meeting of the Company are set out in the Directors profile appearing

on pages 8 to 10 of this Annual Report.

2. Directors Standing for Re-election and Re-appointment

a. Tee Tze Chern, JP (Article 92)

b. Wong Koon Wai (Article 98)

3. Details of Attendance of Directors at Board Meetings

A total of six (6) Board of Directors Meetings were held during the financial year ended 31 July 2011, details of Directors attendance at Board meetings are set out in

the Corporate Governance Statements appearing on page 11 of this Annual Report.

4. Date, Time and Place of the Annal General Meeting

Date : Wednesday, 21 December 2011

Time : 2.30 p.m.

Place : The Registered Office of the Company

K55 Jalan Kesang

Kawasan Perindustrian Tanjung Agas

84000 Ledang, Johor Darul Tazim


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Corporate Information

REMuNERATION COMMITTEE

Chairman

Tee Te Chern, JPMember

Tan Ooi Jin

Wong Koon Wai

REGISTERED OFFICE AND

PRINCIPAL PLACE OF BuSINESS

K55 Jalan Kesang

Kawasan Perindustrian Tanjung Agas

84000 Ledang, Johor Darul Tazim

Tel : +606 9510 988

Fax : +606 9516 333

Email : [email protected]

SHARE REGISTRAR

Symphony Share Registrars Sdn Bhd

Level 6 Symphony House

Block D13 Pusat Dagangan Dana 1

Jalan PJU 1A/46, 47301 Petaling Jaya

Selangor Darul Ehsan

Tel : +603 7841 8000

Fax : +603 7841 8151

COMPANY SECRETARIES

Teo Soon Mei (MAICSA 7018590)(Resigned w.e.f. 15.04.2011)

Tan Bee Hwee (MAICSA 7021024)(Appointed w.e.f. 15.04.2011)

Lam Sook Ching (MAICSA 7006942)(Appointed w.e.f. 15.04.2011)

BOARD OF DIRECTORS

Dato Tee How Ct, PIS, DPTJ

Chairman(Resigned w.e.f. 14.12.2010)

Tee Te Chern, JP

Executive Chairman(Re-designated as Executive Chairman w.e.f. 27.12.2010)

Chin Boon Kim

Executive Director(Appointed w.e.f. 23.09.2010)

Tnk Makhlad Bin Tnk Mohamed Jamil

Independent Non-Executive Director

Tan Ooi Jin

Independent Non-Executive Director(Appointed w.e.f. 14.09.2010)

Ale Ng Khang Hi

Independent Non-Executive Director(Resigned w.e.f. 28.09.2010)

To Peng Koon

Independent Non-Executive Director(Resigned w.e.f. 08.06.2011)

Wong Koon Wai

Independent Non-Executive Director(Appointed w.e.f. 29.06.2011)

AuDIT COMMITTEE

Chairman

Wong Koon Wai

MemberTnk Makhlad Bin Tnk Mohamed Jamil

Tan Ooi Jin

NOMINATION COMMITTEE

Chairman

Tnk Makhlad Bin Tnk Mohamed Jamil

Member

Tan Ooi Jin

Wong Koon Wai

AuDITORS

BDO (AF0206)

Chartered AccountantsSuite 18-04, Level 18 Menara MAA

No. 15 Jalan Dato Abdullah Tahir

80300 Johor Bahru, Johor Darul Tazim

Tel : +607 331 9815

Fax : +607 331 9817

PRINCIPAL BANKERS

HSBC Bank Malaysia Berhad

Malayan Banking Berhad

CIMB Bank Berhad

STOCK ExCHANGE LISTINGMain Market Consumer Products

Bursa Malaysia Securities Berhad

Stock Name and Stock Code : TAKASO (7071)

: TAKASO-WA (7071WA)

: TAKASO-WB (7071WB)(Listed on the Malaysian stock exchange since 1999)

WEBSITE

www.takaso.com

INVESTOR RELATIONS

Mr. Tee Tze Chern, JP

(Executive Chairman)

Tel : +606 9510 988

Fax : +606 9516 333

Email : [email protected]


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Corporate Structure

TAKASO MARKETING SDN. BHD.(Company No. 413226-A)

TAKASO RuBBER PRODuCTS SDN. BHD.(Company No. 87327-V)

Manufacturing of rubber products and baby products and trading in babyaccessories, apparels and milk powder.

100%

100%100%

100%

100%

100%

A pioneer manufacturer and exporter of condomsand babycare accessories such as baby feedingbottle, soothers and teats in Malaysia.

JAPLO HEALTHCARE SDN. BHD.(Company No. 499674-H)

Distributing and retailing of baby products.

Dormant.

Dormant.

Trading of industrial cable support system

Marketing of rubber products and baby products.

TAKASO INTERNATIONAL SDN. BHD.(Formerly known as Secret Universal Sdn. Bhd.)

(Company No. 961749-X)

TAKASO TRADING SDN. BHD.(Formerly known as Romantic Family Planning Sdn. Bhd.)

(Company No. 499673-M)

TAKASO INDuSTRIES PTE. LTD.(Company Registration No. 201133079-W)


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Five Year Financial Highlights

07

19

,045

16

,844

08 09 10 11

Revenue(RM000)

0

6

12

18

24

30

36

28

,157

24

,523

21

,886

07

(1

,536)

(2

,163)

08 09 10 11

Loss Before Tax(RM000)

(4

,116)

(709) (

2,5

83)

07 08 09 10 11

Loss For TheFinancial Year(RM000)

07

0.

32

0.2

7

08 09 10 11

Net Tangible AssetsPer Share(RM)

0.

43

0.

41

0.

35

07 08 09 10 11

Net Loss Per ShareRM (Sen)

(1

,536)

(2

,163)

(3

,984)

(931) (

2,4

77)

(3

.73)

(5

.25)

(9

.67)

(2

.26)

(6

.01)

-20

-15

-10

-5

0

-20

-15

-10

-5

0

0

0.1

0.2

0.3

0.4

0.5

0.6

-50

-40

-30

-20

-10

0

2007 2008 2009 2010 2011

Revenue RM000 28,157 24,523 21,886 19,045 16,844

Loss Before Tax RM000 (4,166) (709) (2,583) (1,536) (2,163)

Net Loss For The Financial Year RM000 (3,984) (931) (2,477) (1,536) (2,163)

Net Tangible Assets Per Share RM 0.43 0.41 0.35 0.32 0.27

Net Loss Per Share RM(sen) (9.67) (2.26) (6.01) (3.73) (5.25)


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Board of Directors

TEE TzE CHERN, JP

Aged 46, Malaysian

Executive Chairman, Chairman of

Remuneration Committee

Mr. Tee Tze Chern, JP was appointed to

the Board as the Managing Director on 22

December 1998 and was re-designated as

Executive Chairman on 27 December

2010 following the resignation of Dato

Tee How Cut as Chairman of the Board of

Directors on 14 December 2010. Mr. Tee

is also Chairman of the RemunerationCommittee of the Company.

Mr. Tee graduated from the Rubber

Research Institute with a Diploma in

1992. He has been a member of the

Association of Overseas Technical

Scholarship Malaysia since 1990 and a

member of the Malaysian Institute of

Management since 1992. He has over 19

years of experience in the baby products

and condom industry. He has previously

been invited to sit in SIRIMs Technical

Committee on Standard Specificationsunder the ISO division in mechanical

contraceptive in 1990.

Mr. Tee Tze Chern, JP sits on the board

of several private limited companies.

Trainings attended by Mr. Tee during the

financial year ended 31 July 2011 are as

follows:-

- Sustainability Program for Corporate

Malaysia.

- Seminar Hari Harta Intelek Negara2011.

- Marketing and Branding Conference

2011.

CHIN BOON KIM

Aged 38, Malaysian

Executive Director

Mr. Chin Boon Kim was appointed to the

Board as the Executive Director on 23

September 2010. After completing his

secondary education, he began his career

with Eli Trading Co. in 1992 and his last

posting before leaving the company was

as the Operations Manager overseeing to

Eli Tradings operations and logistics.During his tenure with Eli Trading, he

contributed to the companys expansion

and was in charge of its new branch

office.

Mr. Chin started his own company in

2001 specialising in total nationwide end-

to-end logistics solutions from transportation

to manpower and warehousing and he

brings with him a wealth of operational

and management experience with a vast

networking resources in its related

industries.

He does not hold any other directorships

in public companies.

Trainings attended by Mr. Chin during the

financial year ended 31 July 2011 are asfollows:-

- Mandatory Accreditation Programme for

Directors of Public Listed Companies

conducted by Bursatra Sdn. Bhd.

- Half-day Program on the Corporate

Governance Guide: Towards Boardroom

Excellence in Mandarin.


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TuNKu MAKHLAD BIN

TuNKu MOHAMED JAMIL

Aged 66, Malaysian


Member of Audit Committee and

Chairman of Nomination Committee

Tunku Makhlad Bin Tunku Mohamed

Jamil was appointed to the Board as an

Independent Non-Executive Director on

11 February 2010. He is a member of

the Companys Audit Committee and

Chairman of the Nomination Committee.

Tunku Makhlad is a Graduate member ofthe Chartered Institute of Transport. He

has a diploma in Automobile Engineering

in Association with The Institute of Road

Transport Engineers, London (U.K.) and a

post-diploma in Transport Management

from the Willesden College of Technology,

London (U.K.).

Tunku Makhlad was a Production Executive

attached to the Associated Motor Industry

Sdn. Bhd. of the Sime Darby Group from

1976 till 1981 before joining MalaysiaAirlines Berhad (MAS) as Transport

Administrator in 1981. He was promoted

to the post of Transport Controller from

1994 until his resignation from MAS in

2000. His last employment was with

Jimah Energy Venture Sdn. Bhd. as the

Senior Executive overseeing to Public

Relations and Protocol at the Jimah Power

TAN OOI JIN

Aged 36, Malaysian


Member of Audit Committee, Nomination

Committee and Remuneration Committee

Mr. Tan Ooi Jin was appointed to the

Board as an Independent Non-Executive

Director on 14 September 2010. He is a

member o f the Company s Aud i t

Committee, Nomination Committee and

Remuneration Committee.

A former ASEAN scholar, he holds a LL.B.(Honours) from the University of Newcastle-

upon-Tyne, UK. He completed his

certificate in legal practice in 2002 and

was called to the Bar in November 2003.

He has been a member of the Bar Council

of Malaysia since 2003.

Mr. Tan is currently a partner of Messrs.

Feroz & Co., a legal entity that specialises

in corporate, commercial, cross-border

transactions and ICT matters. He started

his legal career in a medium-sized firmwith an international affiliation focusing

Plant in Port Dickson, Negeri Sembilan

prior to his retirement in December

2010.



Training attended by Tunku Makhladduring the financial year ended 31 July

2011 is as follows:-

- What Directors Should Know about the

Investor Mindset

on corporate and ICT matters. He left the

firm as a partner. While there, Mr. Tan

gained recognition and was listed in the

independent publication Asia Pacific

Legal 500 in three practice areas in

2 0 0 8 w h i c h i n c l u d e d I T a n d

telecommunications. He also advises the

Technopreneurs Association of Malaysiaand its members on legal issues.

Mr. Tan has been involved in the listing

of various companies in Malaysia, London

and Hong Kong and is familiar with the

rules and requirements of regulators. He

currently sits on the Board of Tejari

Technologies Berhad and The Media

Shoppe Berhad as well as a private

company involved in circuit manufacturing

and whose ultimate holding company is

listed on the NASDAQ, New York, America.

Training attended by Mr. Tan during the

financial year ended 31 July 2011 is as

follows:-

- Sustainability Program for Corporate

Malaysia


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Notes:-

FAMILY RELATIONSHIP

Mr. Tee Tze Chern, JP and Ms. Lily Tee are siblings. Ms. Lily Tee sits on the Board

of the following subsidiaries of the Company alongside Mr. Tee Tze Chern:-

- Takaso Rubber Products Sdn. Bhd.

- Takaso Marketing Sdn. Bhd.

- Japlo Healthcare Sdn. Bhd.

Save as disclosed above, none of the other Directors of the Company has any

relationship with any directors or substantial shareholders of the Company.

CONFLICT OF INTEREST

None of the Directors have any conflict of interest with the Company.

CONVICTION OF OFFENCES

A fine of RM100,000.00 was imposed by the Securities Commission (SC) on the

following persons for failure to comply with all the relevant requirements relating to the

mandatory offer pursuant to Practice Note 2.9.7 of the Malaysian Code on Take-Overs

and Mergers 1998 (the Code):-

a) Dato Tee How Cut, PIS, DPTJ (the former Chairman of the Company);

b) Mr. Tee Tze Chern, JP (the Executive Chairman of the Company);

c) Datin Teo Beng Ha (a former Director of the Company);

d) Madam Tee Bee Leng, PJK (a former Director of the Company); and

e) Parties acting in concert with it.

SC had on 22 December 2006 filed a civil suit against Up & Famous Sdn. Bhd.

(UFSB), the former substantial shareholder of the Company, and parties acting in

concert with it (hereinafter referred to as the Defendants) in KL High Court Originating

Motion on D1-25-27-2006, Suruhanjaya Sekuriti v Up & Famous Sdn Bhd & 6 others.

The Kuala Lumpur High Court made the following Orders on 7 August 2009:-

(i) Within 21 days of being ordered to do so, each of the Defendants, whether by

themselves or by their servants or agents, circulate the offer and compensation

Board of Directors (continued)

WONG KOON WAI

Aged 36, Malaysian


Chairman of Audit Committee, Member

of Nomination Committee and

Remuneration Committee

Mr. Wong Koon Wai was appointed to the

Board as an Independent Non-Executive

Director on 29 June 2011. He is Chairman

of the Companys Audit Committee and a

member of both the Nomination Committee

and Remuneration Committee of the

Company.

Mr. Wong Koon Wai graduated from the

Royal Melbourne Institute of Technology

(RMIT) University in Melbourne, Australia

in 1999 with a Bachelor of Business

(majoring in Accountancy). He is a

member of the Malaysian Institute of

Accountants (MIA) and CPA Australia.

He began his career in audit and assurance

in 2000. In 2003, he joined Crowe

Horwath and was promoted to Senior

Manager in 2008. During his eight (8)

years service with Crowe Horwath, he was

involved in the audit and assurance service

for a wide range of industries. He was

also involved in special audits, listingexercises, mergers and acquisitions as

well as fund-raising exercises. He is

currently the financial controller of a

private company.



Following his appointment to the Board

on 29 June 2011 till the end of the

financial year, Mr. Wong did not attend

any training but has registered himself forthe Mandatory Accreditation Programme

for Directors of Public Listed Companies

conducted by Bursatra Sdn. Bhd.


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documents in the form of Exhibit A15 attached to the Affidavit affirmed by Md

Noor Bin Abd Rahim and filed in support of the Motion dated 21 December 2006

(subject to updating of current information) to all the shareholders of TRB;

(ii) Within 21 days of the deadline imposed in the said offer and compensation

document, the Defendants pay the respective portions to all the shareholders of

TRB who are entitled to receive proceeds of the compensation scheme as listed

in Exhibit A22 attached to the Affidavit affirmed by the said Md Noor Bin Abd

Rahim;

(iii) In the event any Defendant fails to comply with the Orders referred to in

Paragraphs (i) and (ii) above within the specified period, SC be entitled to take

execution proceedings under the Rules of the High Court, 1980, and/or seek leave

of this Honourable Court to punish such Defendant for contempt of Court for

failure to comply with orders of the Court.

(iv) The costs of these proceedings shall be borne by the Defendants on the normal

basis and such costs to be taxed.

Pursuant to the Order of Kuala Lumpur High Court made on 7 August 2009, UFSB,

on behalf of itself and the parties acting in concert with it, circulated the Offer and

Compensation Document in accordance with Paragraph 1 of the court order made on

28 August 2009 to all the shareholders of the Company.

UFSB had on 18 November 2009 and 19 November 2009 respectively to complete the

acquisition of 4,500 TRB shares at the price of RM1.06 per share from the qualified

shareholders of TRB pursuant to the Restricted Unconditional Mandatory offer by UFSB

to qualified shareholders of TRB.

Other than as disclosed, none of the other Directors of the Company have been convicted

of any offences within the past ten (10) years other than traffic offences, if any.

Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Group and its subsidiaries,

Directors or management by any regulatory bodies other than those disclosed in the

conviction of offences.

Shareholding in the Company and Sbsidiaries of the Company.

The direct and indirect interest in securities in the Company and subsidiaries of the

Company of those who are directors of the Company according to the Register of

Directors shareholdings are set out on page 114 of this Annual Report.

Board Meetings

A total of six (6) Board Meetings were held during the financial year ended 31 July

2011 and the attendance of each Director is as follows:-

Total no. of Meetingsheld dring Directors

Board Member tenre in office Meetings Attended_______________________________________________________________________________

Dato Tee How Ct, PIS, DPTJ 3 3(Resigned w.e.f. 14.12.2010)

Tee Te Chern JP 6 5(Re-designated as Executive Chairman w.e.f. 27.12.2010)

Ale Ng Khang Hi 2 2(Resigned w.e.f. 28.09.2010)

To Peng Koon 5 5(Resigned w.e.f. 08.06.2011)

Tnk Makhlad Bin Tnk Mohamed Jamil 6 6

Chin Boon Kim 4 3(Appointed w.e.f. 23.09.2010)

Tan Ooi Jin 5 5(Appointed w.e.f. 14.09.2010)

Wong Koon Wai 1 1(Appointed w.e.f. 29.06.2011)_______________________________________________________________________________

Additional ComplianceInformation


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Material Contracts

There were no material contracts entered into by the Company and its subsidiaries

involving Directors and major shareholders interests still subsisting at the end of the

financial year.

Options, Warrants or Convertible Secrities

No options were issued by the Company or exercised during the financial year ended

31 July 2011.

The Company had issued a total of 5,883,992 Existing Warrants at an exercise price

of RM1.00 and as at its financial year end on 31 July 2011, none of the Existing

Warrants were exercised and 5,883,992 Existing Warrants were outstanding.

Subsequent to the Companys financial year end, the number of Existing Warrants, also

referred to as TAKASO-WA, was on 11 August 2011 adjusted to 6,529,131 at anexercise price of RM0.89 in consequent to the Rights Issue of Shares with Warrants

Exercise, more information found under Utilisation of Proceeds.

Recrrent Related Party Transaction of a Revene Natre

There were no material recurrent related party transaction of a revenue during the

financial year other than those disclosed in Note 28 to the financial statements.

Share By-Backs

The Company does not have a share buy-back programme in place.

Depository Receipt

During the financial year, the Company did not sponsor any depository receiptprogramme.

Profit Garantee

During the financial year, the Company did not provide any profit guarantee.

Variation of Reslts

There were no profit estimates, forecasts or projections or unaudited financial results

released by the Company which differed by ten percent (10%) or more from the audited

results for the financial year ended 31 July 2011.

utilisation of Proceeds

Rights Issue - 21 November 2003

A revision in the utilisation of proceeds arising from the rights issue of 5,884,000 new

TRB Shares with 5,884,000 free detachable warrants at an issue price of RM1.00 per

share has been duly passed and approved at the Extraordinary General Meeting held on

27 December 2004.

The construction of two (2) units of logistics warehouses at Tangkak, Johor costing

RM2.2 million has been revised to central region of Peninsular Malaysia. The Board ofDirectors of the Company has approved a further extension of the timeframe for

utilisation of the abovesaid proceeds until the Company can identify a suitable

warehouse located at central region of Peninsular Malaysia.

As at the financial year end on 31 July 2011, management has yet to identify a

suitable warehouse that meets the Groups current operational needs.

Rights Issue - 13 September 2011

The Company had embarked on a Rights Issue of Shares with Warrants which was

completed on 13 September 2011 following the listing and quotation for 94,033,811

Rights Shares of RM0.25 each together with 56,420,285 Warrants (these new warrants

are known as TAKASO-WB) on the Main Market of Bursa Securities Berhad on 13September 2011 (Rights Issue of Shares with Warrants Exercise). The said Rights

Issue of Shares with Warrants Exercise was approved at the Companys Extraordinary

General Meeting held on 28 April 2010.

Total proceeds raised from the Rights Issue of Shares with Warrants Exercise was

RM32.912 million and will be utilised as follows:-

Additional Compliance Information (continued)


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Manner of Utilisation RM (000)_______________________________________________________________________________

As Working Capital

- Overseas expansion 6,500- Operating expenses 11,312

- New business investment 9,500_________

27,312

Capital Expenditure 3,000

Repayment of borrowings 2,000

Expenses in relation to the Rights Issue of Shares with Warrants Exercise 600

_________

32,912__________________

Non-Adit Fees

The amount of non-audit fees paid to external auditors by the Group for the financial

year ended 31 July 2011 was RM18,000.

Corporate Social Responsibility (CSR)

The Group is committed to operate its business in a socially responsible manner

towards its employees, the wider environment, the community and the marketplace. The

following are the Groups CSR activities conducted during the financial year ended 31

July 2011:-

1) CSR in the Community

Every year in the month of March, this year being of no exception, the Group had

organised an annual blood donation campaign in collaboration with the local

Hospital Pakar Sultanah Fatimah, Muar, to boost the nations blood bank. This

yearly effort has been recognised by the Hospital and it is hoped the annualcampaign can help to foster awareness of the spirit of love, care and giving to the

community.

The Groups continued efforts to reach out to the community include supporting and

sponsoring the following programmes:-

a) Being the main sponsor for the HIV/AIDS Awareness campaign held at Dataran

Pahlawan, Melaka Megamall for the CSR Month.

b) Sponsoring the I care, do you? Health Awareness Campaign organised by the

First Aid Society of Universiti Tunku Abdul Rahman Perak Campus.

c) Supply of food aid to children welfare homes.

d) Supply of diapers to old folks public nursing homes.

2) CSR at the Workplace

Safety is our priority at work. The on-going in-house safety training is conducted for

all our employees. The Health and Safety Audit Committee performs on-going fire

hazard internal audit at every six (6) monthly intervals in our factory.

In addition, management constantly conducts various structural training and

coaching sessions to improve and upgrade the level of our employees knowledge

and competency at work.

3) CSR towards the Environment

The Groups current pursuit is to ensure that all residual schedule wastes are

properly stored and disposed of in accordance with the Akta Alam Sekeliling (1974)

(Malaysia) to reduce environment contamination. The Group also promotes

environmentally conscious work practices and our internal policy dictates strict

compliance to the environment regulations.

4) CSR in the Marketplace

The Group believes that in order to achieve sustainable business interests and to

be able to respond to the increasing demands from our customers and stakeholders,

we have to implement socially responsible business conduct that protects the

interest of our customers, shareholders, suppliers, consumers and public at large.

The Company is committed to conduct its business with integrity while in compliance

with all applicable laws. We also seek our suppliers to conform to the highest

standards of business practices in the marketplace to comply with the requirements

of our vendors. Audit will be performed by the Group on our suppliers and the audit

trail and data on material used by suppliers will be provided to the Group to ensure

that products meet the safety and other standards and requirements.

In addition, the Group has applied risk management standards on the products

based on the requirements of EN ISO 14971.


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The Audit Committee for the financial year ended 31 July 2011 comprised the following members:-

1. MEMBERS AND MEETING ATTENDANCE

Membership of the Audit Committee and details of members attendance at the five (5) meetings during the financial year ended 31 July 2011 are as follows:-

Adit Committee Member Composition Total no. of Meetings held Meetings Attended

dring Directors Tenre in Office_____________________________________________________________________________________________________________________________________________________________

To Peng Koon Chairman/Independent Non-Executive Director 4 4

(Resigned w.e.f. 08.06.2011)

Wong Koon Wai Chairman/Independent Non-Executive Director 1 1

(Appointed w.e.f. 29.06.2011)

Ale Ng Khang Hi Member/Independent Non-Executive Director 1 1

(Resigned w.e.f. 28.09.2010)

Tnk Makhlad Bin Tnk Mohamed Jamil Member/Independent Non-Executive Director 5 5

Tan Ooi Jin Member/Independent Non-Executive Director 3 3

(Appointed as Director on

14.09.2010 and as member w.e.f. 03.11.2010)_____________________________________________________________________________________________________________________________________________________________

Mr. Wong Koon Wai is a member of the Malaysian Institute of Accountants (MIA) and CPA Australia. The composition of the Audit Committee during the financial year

complied with the Terms of Reference of the Audit Committee which is, the committee shall comprise not less than three (3) members and a majority of whom shall be

independent directors and at least one (1) member of the Audit Committee has the required financial background and experience.

The Executive Chairman, Chief Financial Officer, General Manager and representatives of the external auditors are normally invited to attend Audit Committee meetings while

the internal auditors attend twice a year, at a six (6) monthly interval. Other Board members may attend the meeting upon invitation by the Audit Committee. The Minutesof the Audit Committee meetings are extended to all members of the Board of Directors and significant issues are discussed at Board meetings held subsequent to the

Audit Committee meetings.

2. MEETINGS

The Audit Committee shall meet regularly, with due notice of issues to be discussed, and shall record its conclusions in discharging its duties and responsibilities. Meetings

shall be held not less than four (4) times a year and additional meetings shall be called as the Chairman decides in order to fulfill its duties.

Audit Committee Report


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15

The Company Secretary or any person appointed by the Audit Committee shall act

as Secretary of the Audit Committee and shall be responsible, in conjunction with

the Chairman, for drawing up the agenda and other supporting explanatory

documentation for circulation to the Audit Committee members prior to each

meeting. The Secretary will also be responsible for keeping the minutes of

meetings of the Audit Committee and circulating them to the Audit Committee

members and other members of the Board of Directors.

The Chairman of the Audit Committee shall engage on a continuous basis with

senior management such as the Chairman, the Executive Director, Chief Financial

Officer, the General Manager and Head of Internal Audit and the external auditors

in order to be kept informed of matters affecting the Group. The Chairman of the

Audit Committee shall also convene a meeting of the Audit Committee to consider

any matters that the external auditors or internal auditors believe should be

brought to the attention of the Directors or shareholders. At least twice a year, the

Audit Committee shall meet with the external auditors without the presence of anyexecutive directors or employees of the Company.

3. TERMS OF REFERENCE

A summary of the key functions, roles and responsibilities as spelt out in the

Terms of Reference of the Audit Committee is as follows:-

Athority

The Audit Committee is empowered and authorised by the Board of Directors at

the cost of the Company:-

(a) to investigate any matters within its terms of reference and shall have

unrestricted access to both the internal and external auditors and to all

employees of the Group;

(b) to have the resources in order to perform its duties as set out in its terms of

reference;

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

Company and the Group;

(d) to have direct communication channels with the external auditors and internal

auditors;

(e) to obtain external legal or other independent professional advice where

necessary;

(f) to invite outsiders with relevant experience to attend its meetings, wheneverdeemed necessary; and

(g) to convene meetings with the external auditors, the internal auditors or both

excluding the attendance of other directors and employees of the Company,

whenever deemed necessary.

Notwithstanding anything contrary hereinbefore stated, the Committee does not

have executive powers and shall report to the Board of Directors on matters

pertaining to the Company and the Group that it has considered and its

recommendations thereon.

Dties

Duties of the Committee are as follow:-

a) To consider and report the same to the Board of Directors of the Company

the appointment, nomination, resignation and dismissal of external auditors

and their respective audit fees;

b) To discuss with the external auditors before the commencement of their audit,

the nature and scope of the audit, competency and resources of the external

auditors and to ensure co-ordination where more than one audit firm is

involved.

c) To discuss problems and reservations arising from the interim and final audits

and any matters the auditors may wish to discuss (in the absence of

management);

d) To do the following in relation to the internal audit function and report the

same to the Board of Directors of the Company:-

1) to review the adequacy of the scope, functions, competency and

resources of the internal audit function and whether it has the necessary

authority to carry out its work;

2) to review the internal audit processes and results of the internal audit

plan processes or investigation undertaken and where necessary, ensure


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16

that appropriate actions are taken on the recommendations of the

internal audit function;

3) to review any appraisal or assessment of the performance of members ofthe internal audit function and their respective audit fees;

4) to approve any appointment or termination of senior staff members of

the internal audit function; and

5) to take cognisance of resignations of internal audit staff members and

provide the resigning staff member an opportunity to submit his reasons

for resigning.

e) To review the effectiveness of the management information system;

f) To review the quarterly results and annual financial statements of the

Company and the Group with both the external auditors and management and

report the same to the Board of Directors of the Company focusing particularly

on:-

1) any change in or implementation of accounting policies and practices;

2) significant adjustment arising from the audit;

3) any unusual events;

4) the going concern assumption; and

5) compliance with accounting standards and other legal requirements.

g) To review the following and report the same to the Board of Directors of the

Company:-

1) with the external auditors, the audit plan;

2) with the external auditors, their evaluation of the system of internal

controls;

3) with the external auditors, their audit report; and

4) the assistance given by the employees of the Company and the Group to

the external auditors.

h) To review and discuss any management letter sent by the external auditors to

the Company and managements response to such letter;

i) To consider the report, major findings and managements response thereto on

any internal investigations carried out by the internal auditors;

j) To review all areas of significant financial risk and the arrangements in placeto contain those risks to acceptance levels;

k) To consider and review any related party transactions and potential conflict

of interest situations that may arise within the Company and the Group

including any transaction, procedure or course of conduct that raises questions

of management integrity;

l) To review and report the same to the Board of Directors of the Company

whether there is reason (supported by grounds) to believe that the Companys

external auditors are not suitable for re-appointment;

m) To review the allocation of options pursuant to the Share Issuance Scheme

and make such statement to be included in the annual report of the Company

in relation to a share issuance scheme for employees; and

n) Any such other functions as may be agreed by the Committee and the

Board.

Responsibility

Where the Committee is of the view that a matter reported by it to the Board of

Directors of the Company has not been satisfactorily resolved resulting in a breach

of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad or

any serious offence involving fraud and dishonesty committed by the Company or

the Group, the Committee has the responsibility to promptly report such matters

to Bursa Malaysia Securities Berhad or any other relevant authorities.

4. SuMMARY OF ACTIVITIES DuRING THE YEAR

During the financial year ended 31 July 2011, activities undertaken by the Audit

Committee include:-

(a) Review of the quarterly unaudited financial statements of the Group;

(b) Review of inter-company transactions and/or any related party transactions or

conflict of interest situations that arose within the Group or in the

Company;

Audit Committee Report (continued)


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17

(c) Review of the annual audited financial statements of the Group and the

Company for the financial year ended 31 July 2010;

(d) Review of the Audit Planning Memorandum by the external auditors for auditof the financial year ending 31 July 2011;

(e) Review of the external auditors report in relation to its audit and accounting

issues;

(f) Discussion with the external auditors without the presence of the Executive

Directors and employees of the Company;

(g) Review of the action plan for internal audit of the Group, the audit findings

and the follow-up internal audit reports from the internal auditor;

(h) Review of the internal auditors effectiveness, competence and independence;

(i) Review of the terms of reference of the audit committee;

(j) Discussion and consideration of the utilisation of proceeds arising from the

rights issue (2003) of 5,884,000 new TRB Shares with 5,884,000 free

detachable warrants at an issue price of RM1.00 per share;

(k) Review of the Groups latest business development and operations;

(l) Review of the Statement of Directors Responsibility for the financial year

ended 31 July 2010;

(m) Review of the Statement on Internal Control for the financial year ended 31

July 2010;

(n) Review of the Audit Committee Report for the financial year ended 31 July

2010;

(o) Review of the Statement on Corporate Governance for the financial year ended

31 July 2010.

(p) Review of the Statement on Corporate Social Responsibilities for the financial

year ended 31 July 2010;

(q) Review of the inter-companies balances for the financial year ended 31 July

2010;

(r) Review of the risk profile update and impact report from the external

consultants;

(s) Review of the litigations and claims against the subsidiaries companies of theCompany;

(t) Review of the forecast consolidated financial statements of the Company;

and

(u) Review of the proposed corporate exercise of the Company in relation to the

Rights Issue of Shares with Warrants.

5. REVIEW OF SHARE ISSuANCE SCHEME (SIS)

The SIS has expired on 26 February 2006 pursuant to Bye-Laws 17 of the SIS

thus, no review was conducted by the Audit Committee during the year.

6. INTERNAL AuDIT FuNCTION AND RISK MANAGEMENT

The Group has outsourced its internal audit function to a professional services firm

which reports directly to the Audit Committee, assisting the Committee in

discharging its duties and responsibilities.

The Statement on Internal Control is furnished on pages 24 and 25 of this Annual

Report and provides an overview of the state of internal controls within the

Group.

The scope of internal audit encompasses the examination and evaluation of the

adequacy and effectiveness of the Companys governance, system of internal

control structure and the quality of performance in carrying out assigned

responsibilities to achieve the Companys stated goals and objectives.

The internal auditors also performed ad hoc appraisals, inspection, investigations,

examinations and reviews that may be requested by the Committee or senior

management from time to time.


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Statement On Corporate Governance

The Board of Directors is pleased to report to the shareholders on the manner the

Group has applied the principles and the extent of its compliance with the Best

Practices of Corporate Governance as set out in Part I and Part II of the Malaysian

Code on Corporate Governance (the Code) pursuant to Paragraph 15.25 of the Main

Market Listing Requirements (LR) of Bursa Malaysia Securities Berhad.

The Board considers that it has, to the best of its ability and knowledge, complied with

the Best Practices on Corporate Governance as set out in Part 2 of the Malaysian Code

on Corporate Governance.

BOARD OF DIRECTORS

i. Composition and Board Balance

The Board comprises five (5) Directors, three of whom are Independent Non-

Executive Directors, a list of the entire Board is found on page 5 of this Annual

Report while their respective profiles are on pages 8 to 10.

The Independent Non-Executive Directors bring with them objective and independent

judgement to facilitate a balanced leadership and decision-making process and

also, provides for an effective check and balance to safeguard the interests of the

minority shareholders and other stakeholders and to uphold high standards of

conduct and integrity.

The Board considers the current size and composition of its Directors with a

diverse mix of experience, skills and expertise ranging from accounting, legal,

logistics and general management to be optimum and provides the Board with not

only essential commercial skills needed for sound management decisions but also,

invaluable practical and operational experience to professionally manage the

Group.

ii. Board Responsibility

The Board is responsible for the overall corporate governance of the Group. The

Board retains full and effective control of the management of the Company and

its overall responsibilities include strategic formulations, planning, succession

planning and execution of the Groups objectives as well as monitoring managements

implementation of its decisions. It is the responsibility of the Board to conscientiously

weigh and balance the interests of its shareholders and stakeholders with its own

objectives during decision making process.

The Executive Chairman and together with the Executive Director of the Company,oversee to the running of the business and implementation of the policies and

strategies adopted by the Board. The Independent Non-Executive Directors engage

proactively with management and both the external and internal auditors to address

matters concerning the management and oversight of the Groups business and

operations.

The Board has set up and delegated certain responsibilities to three (3) Board

Committees that operate within clearly defined terms of reference. The Board

Committees are the Audit Committee, the Remuneration Committee and the

Nomination Committee.

iii. Spply of Information

Board meetings for the ensuing financial year are scheduled in advance before the

end of each financial year so as to enable the Directors to plan ahead and fit the

coming years Board meetings into their schedule. Board meetings are scheduled

at quarterly intervals and additional meetings will be held if necessary. Board

meetings are conducted in accordance with a structured formal agenda which

includes, review of various aspects of the Groups operations, financial performance,

business plan, strategic decisions, any major investments, findings from both the

external and internal auditors and any other proposals or other significant matters

that require the expeditious direction of the Board.

The Board members assess the viability of business propositions and corporate

proposals and the principal risks that may have significant impact on the Groups

business or its financial position and the mitigating factors. During the year, theBoard held a total of six (6) meetings and the attendance of each Director is set

out in page 11 of this Annual Report. Board meetings are chaired by the

Executive Chairman who has the responsibility of ensuring that each agenda item

is adequately reviewed and thoroughly deliberated within a reasonable timeframe.

A full set of the Board papers for each meeting including financial reports and

notices are submitted to the Directors about a week prior to meetings to provide

them with sufficient time to evaluate the matters to be discussed and to enable

a more informed decision-making process. The Board is also aware of the decisions


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and salient issues deliberated by board committees through the minutes of these

committees.

The Directors have a duty to declare immediately to the Board should they haveany interest in transactions to be entered into directly or indirectly with the

Company or the Group. The interested Directors would serve notice to the Board

and thereupon, abstain from deliberations and decisions of the Board on the

transaction concerned. In the event a corporate proposal is required to be approved

by shareholders, the interested Directors would also abstain from voting in respect

of their shareholdings relating to that corporate proposal and would further

undertake to ensure that persons connected to them similarly abstain from voting

on the resolutions.

Senior Management as well as the internal and external auditors of the Company

may be invited to attend Board meetings to provide the Board with their views and

explanations on certain agenda being tabled to the Board and to furnish clarification

on issues that may be raised by the Directors. The Directors have direct access to

Senior Management and has complete and unimpeded access information relating

to the Group in the discharge of their duties. The Directors also have the liberty

to engage independent professional advice if necessary at the Companys

expense.

Every Board member has ready and unrestricted access to the advice and the

services of the Company Secretary in ensuring the effective functioning of the

Board. The Directors are also regularly updated and advised by the Company

Secretary on new statutory and regulatory requirements issued by regulatory

authorities, and the resultant implications to the Company and the Directors in

relation to their duties and responsibilities.

iv. Appointments to the Board

Nomination Committee

The Nomination Committee of the Company comprises entirely of Independent

Non-Executive Directors. The role of the Nomination Committee is to review and

assess the proposed appointment of Directors and thereupon, recommends to the

Board for approval. However, the Board makes all decisions on appointments after

considering those recommendations. The Nomination Committee would also ensure

that the Board has an appropriate balance of expertise and ability.

Another objective of this Committee is to assess the effectiveness of the Board as

a whole and the contribution of each individual director on an on-going basis. The

Nomination Committee will review annually the required mix of skills, experience

and other qualities including core competencies which Non-Executive Directors

should bring to the Board, identify areas for improvement and review the succession

plan for senior management in the Group.

Other responsibilities of this Committee are defined in the Terms of Reference of

the Nomination Committee.

v. Directors Training

A familiarisation programme has been put in place for new Directors which include

visits to the Groups business and meetings with senior management, where

appropriate, to facilitate better understanding of the Groups business and

operations.

The Board acknowledged that the Directors of the Company, through their varied

experience and qualifications, have provided the desired contribution and support

to the functions of the Board for the year ended 2011. The Board has empowered

the Directors of the Company to determine their own training requirements and will

evaluate and determine the training needs of its Directors on an on-going basis to

assist them in discharging their responsibilities.

During the year, all board members save for the newest member to the Board, Mr.

Wong Koon Wai, have attended seminars and briefings during the financial year as

set out in their respective profiles on pages 8 to 10 of this Annual Report.

vi. Re-election

In accordance with Companys Articles of Association, at least one-third (1/3) of

the directors for the time being shall be subject to retirement by rotation at the

Companys annual general meeting. All retiring directors shall be eligible for re-

election. In any case, each director shall submit themselves for re-election at

regular interval and at least once every three (3) years.

Directors appointed by the Board during the financial period before an annual

general meeting are subject to retirement and shall be eligible for re-election by


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the shareholders at the Companys next annual general meeting to be held

following their appointments.

Details of the retiring Directors are disclosed in the Statement Accompanying theNotice of Annual General Meeting on page 4 of this Annual Report.

COMMITTEES OF THE BOARD

The Board Committees of the Company are as follows:-

a) The Adit Committee

The Audit Committees role is to review the adequacy and competency of the

Groups internal control system including systems for compliance with applicable

laws, regulations, rules, directives and guidelines.

The Audit Committee assists and supports the Boards responsibility to oversee theGroups operations by providing a means for review of the Groups processes for

producing financial data, its internal controls, and that it is independent of the

Groups external and internal auditors. The Audit Committee will discuss with

management and the external auditors the accounting principles and standards

that were applied and their judgment of the items that may affect the financial

statements. It is the policy of the Audit Committee to meet with the external

auditors at least twice a year to discuss their audit plan, audit findings and the

Companys financial statements. These meetings are held without the presence of

the Executive Directors and staff of the Company.

The Terms of Reference of the Audit Committee are set out under the Audit

Committee Report on pages 15 and 16 of this Annual Report.

b) The Nomination Committee

The Nomination Committee held a total of five (5) meetings during the financial

year and details of members attendance at meetings are as follows:-

Total no. of Meetings

held dring Directors

Nomination Committee Member tenre in office Meetings Attended__________________________________________________________________________

To Peng Koon (Chairman) 4 4(Resigned w.e.f. 08.06.2011)

Tnk Makhlad Bin

Tnk Mohamed Jamil (Chairman) 5 5(Re-designated as Chairman of

Nomination Committee w.e.f. 29.06.2011)

Ale Ng Khang Hi (Member) 2 2(Resigned w.e.f. 28.09.2010)

Tan Ooi Jin (Member) 2 2(Appointed as Director on 14.09.2010 a

nd as member w.e.f. 03.11.2010)

Wong Koon Wai (Member) 0 0(Appointed w.e.f. 29.06.2011)__________________________________________________________________________

Statement On Corporate Governance (continued)


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c) The Remneration Committee

The Remuneration Committee has a total of three (3) members comprising two (2)

Independent Non-Executive Directors and the Executive Chairman who is alsoChairman of the Remuneration Committee.

The Remuneration Committee met once during the financial year and details of

members attendance at meetings are as follows:-

Total no. of Meetings

held dring Directors

Remneration Committee Member tenre in office Meetings Attended__________________________________________________________________________

Tee Tze Chern, JP (Chairman) 1 1

To Peng Koon (Member) 1 1

(Resigned w.e.f. 08.06.2011)

Alex Ng Khang Hui (Member) 1 1

(Resigned w.e.f. 28.09.2010)

Tan Ooi Jin (Member) 0 0(Appointed as Director on 14.09.2010 and

as member w.e.f. 03.11.2010)

Wong Koon Wai (Member)

(Appointed w.e.f. 29.06.2011) 0 0__________________________________________________________________________

The Remuneration Committee of the Company has set up a remuneration policy

framework and makes recommendations to the Board on the remuneration and

other terms of employment for the Executive Directors. The terms of reference of

the Remuneration Committee are clearly defined by the Board to its members.

The component parts of remuneration of directors of the Company are structured

so as to link rewards to corporate and individual performance in the case of

executive directors. In the case of non-executive directors, the levels of remuneration

are reflected by the experience and level of responsibilities.

The Executive Directors will abstain from participating in the discussion with

respect to their own remuneration. The determination of remuneration of Non-

Executive Directors is a matter for the Board as a whole. The individual concerned

will abstain from discussion and decision of his own remuneration.

The remuneration of non-executive directors comprises fees while the remuneration

package of executive directors comprised basic salary, fees and bonus.

The Remuneration Committee meets at least once a year to conduct the annualreview of the overall remuneration policy for Directors whereupon recommendations

are submitted to the Board for approval. The Company adopted the peer evaluation

or self-evaluation process to evaluate the performance of the Directors of the

Company.

Breakdown of the remuneration of the Directors of the Company for the financial

year ended 31 July 2011 is as follows:-

Eective Non-EectiveDirectors Directors Total

(RM000) (RM000) (RM000)__________________________________________________________________________

Salaries & Other Emoluments 271 - 271

Bonus - - -

Fees 27 35 62

Meeting/Committee Allowance 3.5 11.37 14.87__________________________________________________________________________

Total 301.50 46.37 347.87__________________________________________________________________________

The number of Directors, include those Directors who resigned during the financial

year, whose remuneration falls into the following bands are as follows:-

Nmber of DirectorsEective Non-Eective

Range of Remneration per annm Directors Directors__________________________________________________________________________

Below 50,000 0 6

RM100,001 to RM150,000 1 0

RM150,001 to RM200,000 1 0__________________________________________________________________________


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RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

One of the key elements of good corporate governance is being transparent and

accountable to all stakeholders. Underlying the transparency and accountabilityobjectives is the provision of clear, relevant, timely, comprehensive and readily

assessable information to all stakeholders.

i) Shareholders Commnication and Investor Relations

The Group values its dialogues with investors. The investor relations activities of

the Company form an important channel of communication with shareholders,

investors and the investment community broadly. The shareholders and investors

of the Company can obtain information of the Groups performance and major

developments from its Annual Reports, which is disseminated to shareholders

either in hard copy or in CD-ROM media, as well as from the Companys website

(www.takaso.com) for all announcements, press release, products information and

to make enquiries.

The Executive Chairman of the Company, Mr. Tee Tze Chern, JP, is responsible

for the Companys investor relations functions. This reflects the commitment of the

Group to maintain good investor relations and to provide views and information on

the Group that is appropriate and substantive to investors.

ii) Annal General Meeting and Etraordinary General Meeting

The main forum for dialogue with shareholders of the Company is the Companys

Annual General Meeting (the AGM) and the Extraordinary General Meeting

(EGM).

The AGM represents the primary platform for direct two-way interactions between

shareholders, Directors and senior management of the Company. During AGMs,

shareholders are encouraged to raise questions which the Directors and senior

management are at hand to address. Notice of the AGM together with the Annual

Report are sent out not less than twenty-one (21) days from the date of the

meeting and explanatory notes or statement to facilitate better understanding and

evaluation of issues involved, will accompany items under special business of the

meeting.

In between AGMs, if a transaction or decision arises that requires shareholders

approval, the Board will convene an EGM and the appropriate notice of meeting

would be issued together with a circular explaining the intended agenda and

purpose of the meeting to facilitate understanding and evaluation.

ACCOuNTABILITY AND AuDIT

i) Financial Reporting

The Board aims to present a balanced, clear and meaningful assessment of the

Groups financial position and prospects in all their reports to shareholders,

investors, and relevant Regulatory Authorities. The Board is assisted by the Audit

Committee to oversee the Groups financial reporting processes and the quality of

financial reporting. The Audit Committee also reviews the appropriateness of the

Companys and the Groups accounting policies and the changes to these

policies.

The Responsibility Statement by the Directors on the annual audited financial

statements of the Company and the Group is set out on page 26.

ii) Internal Control

The Board acknowledges its overall responsibility to maintain a sound and reliable

systems of internal control within the Group covering financial, operational and

compliance aspects of the Group. The internal control systems of individual

business units of the Group are managed by the management and operational team

of the respective business units. The system of internal controls is designed to

meet the Groups needs and to manage risks to which it is exposed. There is a

continuous process of managements risk assessment, internal controls reviews and

internal audit assessments on major subsidiaries within the Group. The purpose of

Statement On Corporate Governance (continued)


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23

this continuous process is to ensure that the Groups assets are safeguarded in the

interest of preserving the investment of shareholders.

The internal audit function is outsourced to external consultants. The outsourcedinternal auditors meet and report to the Audit Committee at least twice a year to

present their reports and to discuss their findings on the adequacy and integrity

of the internal control systems of the Group.

The Board has through the Audit Committee reviewed the adequacy and integrity

of the Groups system of internal controls and the Boards Statement of Internal

Control are on pages 24 and 25 of this Annual Report.

iii) Relationship with Aditors

The Groups independent external auditors are essential for the shareholders in

ensuring the reliability of the Groups financial statements and in providing

assurance of that reliability to users of these financial statements. The AuditCommittee will meet with the external auditors at least twice a year, or more if

deemed necessary, to discuss their audit plan, audit findings and the financial

statements of the Company without the presence of the Executive Directors and

staff of the Company. In addition, the external auditors are invited to attend the

annual general meetings of the Company and would be at hand to answer

shareholders questions on the conduct of the audit and the preparation and

content of the audit report.

An appropriate relationship is maintained with the Groups auditors through the

Audit Committee. The Audit Committee has been explicitly accorded the power to

communicate directly with both the external and internal auditors. A full Audit

Committee Report and its Terms of Reference detailing its role in relation to the

auditors, is set out on pages 14 to 17 of this Annual Report.

Terms of engagement of the services provided by the external auditors are reviewed

by the Audit Committee and approved by the Board. In reviewing the terms of

engagement for the services to be provided by the external auditors, the Audit

Committee ensures that the independence and objectivity of the external auditors

are not compromised.


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Statement Of Internal Control

The Board of Directors of the Takaso Group of Companies is committed to maintain a

sound system of internal control within the Group and is pleased to provide the

following statement, made in pursuance to paragraph 15.26(b) of the Main Market

Listing Requirements of Bursa Malaysia Securities Berhad, which outlines the natureand scope of internal control of the Group during the financial year ended 31 July

2011.

RESPONSIBILITY

The Board acknowledges its overall responsibility for the Groups system of internal

controls which includes the establishment of an appropriate control environment and

framework as well as reviewing its adequacy and integrity. The system of internal

control covers inter alia, risk management procedures, financial, operational and

compliance controls. Because of the inherent limitation in any system of internal

control, it could only provide reasonable and not absolute assurance against any

material misstatement and loss as it is designed to manage rather than eliminate the

risk of failure to achieve the policies and objectives of the Group.

The Group has had in place an on-going process for identifying, monitoring and

managing the significant risks affecting the achievement of its business objectives

throughout the period. The Board regularly reviews this process and is of the view that

the system of internal controls that has been instituted throughout the Group is sound

and adequate to safeguard shareholders investment.

KEY FEATuRES OF INTERNAL CONTROL SYSTEM

The key elements of the Groups existing system of internal control measures are

described below:-

a clearly defined organisation structure with the l ines of responsibility and

delegated authority to the management and operating units;

the Executive Directors, SeniorManagement and Head of Departments meet

regularly to discuss key risks affecting the corporate, operational, financial and

compliance aspects of the Group and the relevant actions taken to address,

manage and mitigate any risks or potential risks which have been identified

accordingly;

the Groups quarterly financial results are reviewed and approved by the Audit

Committee and the Board;

its major subsidiary, Takaso Rubber Products Sdn. Bhd., was certified with ISOStandards carrying the current version of ISO 9001:2008 and ISO 13485:2003

in its manufacturing processes. Internal quality audit was performed annually prior

to the annual surveillance audit conducted by the external certification bodies;

Management conducts an assessment of staff training needs annually to ensure

that staff is armed with the necessary skills to perform their responsibilities

diligently. A structured KPI performance appraisal has been instituted to appraise

each employees capabilities and achievements.

the existence ofa formal reporting framework for staff toreporton operational

performances and the status of control activities periodically; and

the outsourced internalauditfunction toassessthe adequacyandintegrityof theGroups system of internal controls periodically in accordance with the approved

internal audit plan.

RISK MANAGEMENT FRAMEWORK

The Enterprise Risk Management (ERM) framework contains a risk profile that is

reflective of the latest operating environment within the Group. Principal risks identified

therein are managed by the management team via routine management meeting and

operation reviews with the development and implementation of relevant strategies.


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INTERNAL AuDIT FuNCTION

The Groups internal audit function is outsourced to external consultants. The outsourced

internal auditors assist the Board and the Audit Committee in providing an independentassessment on the adequacy and integrity of the Groups internal control system.

The annual internal audit plan which reflects the risk profile of the Groups business

and operation units, is tabled for the review and approval of the Audit Committee. The

outsourced internal auditors report directly to the Audit Committee on its audit activities

and the outcome of internal audit assessments including follow-up review on the

implementation status of managements actions to address the internal audit findings

highlighted.

The effectiveness of the system of internal controls of the Company and the Group is

reviewed by the Audit Committee during its quarterly meetings. The review covers the

financial, operational and compliance controls. The Audit Committee assists the Board

in its review of the effectiveness of the internal control and risk management processesof the Group. Minutes of the Audit Committee meetings are circulated to the Directors

for notation and if necessary, action by the Board.

The cost incurred in relation to the internal audit function during the financial year

ended 31 July 2011 was RM36,000.

REVIEW OF THE STATEMENT BY ExTERNAL AuDITORS

The external auditors have reviewed this Statement of Internal Control for inclusion in

the Annual Report of the Group for the financial year ended 31 July 2011 in

accordance with Recommended Practice Guidance 5 Guidance for Auditors on the

Review of Directors Statement on Internal Control. They have reported to the Boardthat nothing has come to their attention that causes them to believe that the Statement

is inconsistent with their understanding of the processes adopted by the Board in

reviewing the adequacy and integrity of the system of internal controls.


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26

Directors Responsibility Statement

This Directors responsibility statement is issued, as required under paragraph 15.27(a)

of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, in

respect of the preparation of the audited financial statements of the Group and of the

Company for the financial year ended 31 July 2011.

The Directors are required by law to prepare financial statements for each financial year

that give a true and fair view of the state of affairs of the Group and of the Company

as at the end of the financial year and of the results and cashflow of the Group and

of the Company for the year ended.

In preparing the financial statements for the financial year ended 31 July 2011, the

Directors have:-

adopted the applicable accounting standards issued bytheMalaysian Accounting

Standards Board and applied them consistently;

madeestimatesandjudgmentswhich arereasonable and fair;

ensuredthatapplicable accountingstandardshavebeen followed; and

preparedthefinancialstatementsonthegoingconcern basis.

The Directors are responsible for keeping proper accounting records which disclose with

reasonable accuracy, at any time, the financial positions of the Group and of the

Company thus ensuring that the financial statements comply with the Companies Act,

1965. Further thereto, the Directors are also responsible for taking reasonable steps to

safeguard the assets of the Group to prevent and detect fraud and other irregularities.

The Directors confirm that they have complied with these requirements and have a

reasonable expectation that the Group has adequate resources to continue its operation

for the future and to continue to adopt a going concern basis in preparing the financialstatements. The Directors also confirmed that the annual audited financial statements

of the Company are properly drawn up to give a true and fair view of the state of affairs

of the Group for the financial year ended 31 July 2011.


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Executive Chairmans Statement

Dear Shareholders,

On behalf of the Board of

Directors of Takaso Resources

Berhad, I am pleased topresent herewith the Groups

Annual Report for the

financial year ended 31 July

2011.


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FINANCIAL RESuLTS

Group revenue for the financial year ended 31 July 2011 was RM16.8 million, 11.6%

lower than the revenue of RM19.0 million achieved the year before. The Group endedthe financial year with a loss before tax of RM2.2 million compared to the previous

years loss of RM1.5 million.

The drop in revenue was primarily because of lower exports due to reduced orders from

the Middle East countries following the political crisis besieging the region and the

customers in Europe in the wake of the financial crisis roiling the Eurozone.

In addition, cost of production has risen considerably as material costs, especially latex,

and packaging material, have been increasing incessantly. The shortage of labour has

also led to a higher rate of overtime. All these combined factors resulted in a net loss

for the year.

CORPORATE ExERCISES

During the year under review the Company had successfully undertaken the following

key corporate exercises which had received the prior approval of the members at the

Extraordinary General Meeting of the Company held on 28 April 2011:-

(i) reduction of the par value of the existing ordinary shares of RM1.00 each in the

Company to RM0.25 each which was sanctioned by the High Court on 13 July

2011.

(ii) completed the listing and quotation for 94,033,811 Rights Shares together with

56,420,285 Warrants on the Main Market of Bursa Securities Berhad on 13

September 2011.

Total proceeds raised from this special exercise was RM32.912 million, the

manner in which the proceeds is to be utilised is spelt out under Utilisation of

Proceeds on page 12.

As a consequence of the Rights Issue of Shares with Warrants, holders of the

warrants issued in 2003 and maturing on 13 November 2013 (TAKASO-WA) were

issued with an additional 645,139 bringing the total TAKASO-WA in circulation to

6,529,131 Warrants. The exercise price of TAKASO-WA was also revised downwards

from RM1.00 to RM0.89.

INDuSTRY OuTLOOK AND FuTuRE PROSPECTS OF THE GROuP

Being export orientated with major distributors based in the Middle East and Europe,

the Group foresees a challenging outlook so long as the respective political crisis and

debt crisis of its customers remained unresolved. However, steps have already started

to reduce dependency on these two major markets by venturing into Asian countries.

As a start, the Group has in August 2011 executed a Memorandum of Understanding

with Yakin Hakikat (Thailand) Ltd. Part. to secure an exclusive distribution in

Thailand.

Inflation is expected to continue trending upwards and the Group is monitoring the

situation closely and will try to increase its selling prices to sustain margins while

balancing this with ensuring its competitiveness is not compromised.

On the local front, domestic demand is expected to remain due to the Governments

push towards a high income nation. Notwithstanding this, demand for the Groups

products is affected by rising energy costs and higher food prices which if, on the

uptrend in the coming year, will see demand for the Groups products dampening.

Management expects the coming year to be an even more challenging year in the light

of natural disasters hitting the surrounding regions such as the floods in Thailand and

earthquake and tsunami in Japan, political tensions in the Middle East and North

Africa, the European debt crisis, worldwide food crisis and a slowing global economy.

Going forward, management will emphasise on the following to bring the Group back

to profitability:-

Executive Chairmans Statement (continued)


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extend my heartfelt appreciation to the shareholders, all customers, business associates

and all other stakeholders and the Government of Malaysia who have each supported

and believed in us throughout the years and I look forward to your continued support

and trust in the years ahead.

Last but not least, my gratitude goes to our dedicated employees, whose steadfast

commitment to deliver value and quality products and services which is the backbone

and growth of the Group.

TEE TzE CHERN, JP

Executive Chairman

upgrading and improving its plant and machinery inorder to achieve optimal

output and capacity.

re-structuring, revamping and beefingup its salesand marketing team andidentifying and appointing new members who have the ability and capacity to

contribute in all aspects of th Groups Operations.

identifyingandventuringinto morenewmarketsespeciallyintheAsianregion.

developing new marketingstrategiesand implementing incentive schemes for our

distributers to strive harder for the sales of our products.

sourcingfornewbusinessopportunitiesthatfitintoourbusinessmodelwhichmay

contribute to the future growth of the Group.

CORPORATE SOCIAL RESPONSIBILITY

The Group remains committed in operating its business in a socially responsible manner

in respect to its employees, the wider environment, the community and the

marketplace.

The Groups CSR towards its employees is in the form of maintaining and providing the

staff with a conducive working environment bearing in mind staff welfare and well

being. This also includes providing them with the necessary training to equip their

knowledge and to enable progression up the career path as well as to train them on

health and safety issues.

CSR activities towards the community at large during the year includes organising its

annual blood donation drive in March 2011 in collaboration with Hospital Pakar Sulit

Fatimah, Muar, reaching out to the community by supporting and sponsoring varioushealth awareness campaigns and supplying of food to children welfare homes and old

folks public nursing homes.

APPRECIATION

I wish to take this opportunity to express my sincere appreciation and thanks to my

fellow Board of Directors for their constant support and contribution. I also wish to


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1. Malaysia

2. Indonesia3. Iran

4. Phillippines

5. Greece

6. Romania

7. China

8. Oman

9. Saudi Arabia

10. Yemen

11. Taiwan

12. Singapore13. Syria

14. Spain

15. Australia

16. UAE

17. Bangladesh

18. Turkey

19. United Kingdom

20. Nigeria

21. Iraq

22. Russia23.

Documents

TAKASO-AnnualReport2011 (1.5MB)