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Contents

Notice of Seventeenth Annual General Meeting 2 4

CORPORATION BHD (384490-P)

Statement Accompanying Notice of Annual General Meeting Corporate Information Profile of Directors Chairmans Statement Audit Committee Report Statement on Risk Management and Internal Control Statement on Corporate Governance Financial Highlights Reports and Financial Statement Analysis of Shareholdings Particulars of Properties Proxy Form

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CORPORATION BHD 1 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting of the Company will be held at Congress I, Palace of the Golden Horses, Jalan Kuda Emas, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Friday, 28 June 2013 at 11:30 a.m. for the following purposes: ORDINARY BUSINESS : 1. To receive and adopt the Report of the Directors and the Audited Financial Statements for the nancial year ended 31 December 2012 and the Report of the Auditors thereon. 2. To approve the payment of a First and Final Dividend of 8% (less 25% Income Tax) in respect of the nancial year ended 31 December 2012. 3. To approve the payment of Directors Fees of RM163,000.00 for the nancial year ended 31 December 2012. 4. To re-appoint Mr. Ma Huak Huang, the Director who retires in accordance with Section 129 of the Companies Act, 1965. 5. To re-elect Mr. Chua Ngeun Seong, the Director who retires in accordance with Article 87.1 of the Company's Articles of Association. 6. To re-appoint Messrs KPMG as the Auditors of the Company for the ensuing year and to authorise the Directors to x their remuneration. AS SPECIAL BUSINESS: To consider and if thought t, pass with or without modication, the following resolutions: Ordinary Resolution 7. Proposed Retention of Independent Director THAT authority be and is hereby given to Mr. Yeo Wee Thow @ Yeo Ngo Tee who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company. 8. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 THAT pursuant to Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia Securities Berhad and other relevant governmental/ regulatory authorities where such authority shall be necessary, the Board of Directors of the Company be and are hereby authorised to issue and allot shares in the Company from time to time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Board of Directors may, in their absolute discretion, deem t provided that the aggregate number of shares to be issued shall not exceed ten per centum (10%) of the issued share capital of the Company for the time being, and that the Board of Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad. 9. Proposed renewal of Share Buy-Back Authority THAT subject always to the Companies Act, 1965 (Act), the provisions of the Memorandum and Articles of Association of the Company, the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities), and the approvals of all relevant governmental and/ or the relevant authorities, the Company be authorised, to buy-back such amount of ordinary shares of RM1.00 each in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem t and expedient in the interest of the Company provided that:(i) The aggregate number of shares bought back does not exceed 10% of the total issued and paid-up share capital of the Company at any point of time; (Resolution 8) (Resolution 7) (Resolution 6)

To refer to Explanatory Note 1 (Resolution 1) (Resolution 2) (Resolution 3) (Resolution 4) (Resolution 5)

CORPORATION BHD 2012 ANNUAL REPORT

Notice of Annual General Meeting (cont.)


(ii) The maximum amount of funds to be allocated for the share buy-back shall not exceed the aggregate of the retained prots and/or share premium of the Company; and (iii) The shares purchased are to be treated in either of the following manner:a. Cancel the purchased ordinary shares; or b. Retain the purchased ordinary shares as treasury shares held by the Company; or c. Retain part of the purchased ordinary shares as treasury shares and cancel the remainder; (hereinafter referred to as the Proposed Share Buy-Back). The treasury shares may be distributed as dividends to the shareholders and/or resold through Bursa Securities and/or subsequently cancelled; AND THAT the authority conferred by this resolution shall commence upon the passing of this resolution until:(i) the conclusion of the next annual general meeting (AGM) of UPA, unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or (ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act); or (iii) revoked or varied by ordinary resolution passed by shareholders of the Company at a general meeting of the Company, whichever occurs rst; AND THAT the Directors of the Company be and are hereby authorised to take such steps to give full effect to the Proposed Share Buy-Back with full power to assent to any conditions, modications, variations and/or amendments as may be imposed by the relevant authorities and/or to all acts and things as the Directors may deem t and expedient in the best interest of the Company. 10 To transact any other ordinary business of which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT NOTICE IS HEREBY GIVEN THAT a rst and nal dividend of 8% (less 25% income tax) for the nancial year ended 31 December 2012, if approved, will be paid on 24 July 2013 to Depositors whose names appear in the Record of Depositors at the close of business on 10 July 2013. A depositor shall qualify for the dividend entitlement only in respect of: (a) shares transferred into the Depositors Securities Account before 4.00 p.m. on 10 July 2013 in respect of ordinary transfers; or (b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad. By Order of the Board CHOK KWEE WAH (MACS 00550) TAN KEAN WAI (MAICSA 7056310) Company Secretaries Petaling Jaya 6 June 2013

CORPORATION BHD 3 2012 ANNUAL REPORT

Notice of Annual General Meeting (cont.)


Notes: 1. 2. 3. 4. 5. 6. A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and to vote in his stead. There shall be no restriction as to the qualication of the proxy. The instrument appointing a proxy shall be in writing signed by the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an ofcer or attorney duly authorised. Where the member of the Company appoints two (2) proxies, the appointment shall be invalid unless the member species the proportion of his shareholding to be represented by each proxy. Only members registered in the Record of Depositors as at 21 June 2013 shall be eligible to attend, speak and vote at this meeting or appoint proxy to attend and vote for his/her behalf. Where the member of the Company is an authorised nominee as dened under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds. Shareholders attention is hereby drawn to the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad, which allows a member of the Company which is an exempt authorised nominee, as dened under the Securities Industry (Central Depositories) Act, 1991, who holds ordinary shares in the Company for multiple benecial owners in one securities amount (omnibus account) to appoint multiple proxies in respect of each omnibus account it holds. The instrument appointing the proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certied copy thereof must be deposited at the Registered Ofce of the Company at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting.

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Explanatory Notes 8. Item 1 of the Agenda This item is meant for discussion only as the provision of Section 169 (1) of the Companies Act, 1965 does not require shareholders approval for the Audited Financial Statements. Henceforth, this item is not put forward for voting. 9. Ordinary Resolution 6 In line with Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012, the Nomination Committee has assessed the independence of Mr. Yeo Wee Thow @ Yeo Ngo Tee, who has served as Independent Non-Executive Director of the Company for a cumulative term of more than nine years, and upon its recommendation, the Board of Directors has recommended him to continue to act as an Independent Non-Executive Director of the Company based on the following justications:i) Mr. Yeo Wee Thow @ Yeo Ngo Tee has fullled the criteria under the denition of Independent Director as stated in the Listing Requirements of Bursa Malaysia Securities Berhad, and hence, he would be able to provide an element of objectivity, independent judgement and balance of the Board; ii) He performed his duty diligently and in the best interest of the Company; iii) He, having been with the Company for more than nine years, is familiar with the Groups business operations and has devoted sufcient time and attention to his professional obligations for an informed and balanced decision making process. 10. Ordinary Resolution 7 The proposed ordinary resolution No. 7, if passed, will empower the Directors of the Company to allot and issue shares up to an aggregate amount not exceeding in total 10% (ten per centum) of the issued share capital of the Company for time being and for such purposes as the Directors consider would be in the interest of the Company. In order to avoid any delay and costs involved in convening a general meeting, it is thus appropriate to seek shareholders approval. This authority unless revoked or varied by the Company in general meeting will expire at the next Annual General Meeting of the Company. The Company has not issued any new shares pursuant to Section 132D of the Companies Act 1965 under the general authority which was approved at the Sixteenth Annual General Meeting (AGM) held on 29 June 2012 and which will lapse at the conclusion of the Seventeenth AGM to be held on 28 June 2013. The authority will provide exibility to the Company for allotment of shares for any possible fund raising activities, including but not limiting to further placing of shares, for the purpose of funding future investment(s), acquisition(s) and/or working capital. 11. Special Resolution 8 The proposed ordinary resolution No. 8, if passed, will empower the Company to purchase and/or hold the Companys shares up to ten percent (10%) of the issued and paid-up share capital of the Company by utilizing the funds allocated which shall not exceed the total retained prots and/or share premium account of the Company. This authority unless renewed, revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting. Further information on the Proposed Renewal of Share Buy-Back Authority is set out in the Circular to Shareholders dated 6 June 2013 which is despatched together with the Companys 2012 Annual Report.

CORPORATION BHD 2012 ANNUAL REPORT

(Pursuant to Paragraph 8.27 ( 2 ) of the Main Market Listing Requirement of Bursa Malaysia Securities Berhad)
ELECTION OF DIRECTORS No individual is seeking election as a Director of UPA at the forthcoming Seventeenth Annual General Meeting.

Statement Accompanying Notice of Annual General Meeting

CORPORATION BHD (384490-P)

BOARD MEETINGS A total of six (6) Board Meetings were held during the nancial year and the details of attendance by each of the Directors are given as below: Name of Directors Chua Ah Lak Kok Kam Moi Chua Ngeun Lok Chua Ngeun Seong Ma Huak Huang Yeo Wee Thow @ Yeo Ngo Tee No of meetings attended 5/6 6/6 6/6 6/6 6/6 5/6

All Directors have complied with the minimum attendance at Board Meeting as stipulated in the Bursa Malaysia Listing Requirements during the nancial year.

DATE, TIME AND PLACE OF THE SEVENTEENTH ANNUAL GENERAL MEETING Date Time Place : 28 June 2013 : 11.30am : Congress I Palace of the Golden Horses, Jalan Kuda Emas, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan.

CORPORATION BHD 5 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Corporate Information
BOARD OF DIRECTORS Chua Ah Lak Kok Kam Moi Chua Ngeun Lok Chua Ngeun Seong Ma Huak Huang Chairman (Senior Independent & Non-Executive Director) Managing Director Executive Director Executive Director Non-Independent Non-Executive Director

Yeo Wee Thow @ Yeo Ngo Tee Independent & Non-Executive Director

COMPANY SECRETARIES

Chok Kwee Wah (MACS 00550) Tan Kean Wai (MAICSA 7056310)

AUDITORS

KPMG Chartered Accountant KPMG Tower 8 First Avenue, Bandar Utama 47800 Petaling Jaya Selangor Darul Ehsan Bina Management (M) Sdn Bhd (50164-V) Lot 10, The Highway Centre Jalan 51/205 46050 Petaling Jaya Selangor Darul Ehsan Tel : 03-77843922 Fax : 03-77841988 Lot 10, The Highway Centre Jalan 51/205 46050 Petaling Jaya Selangor Darul Ehsan Tel : 03-77843922 Fax : 03-77841988 Public Bank Berhad Malayan Banking Berhad CIMB Bank Berhad HSBC Bank Malaysia Berhad United Overseas Bank (M) Bhd Bursa Malaysia Securities Berhad Main Market

REGISTRAR

REGISTERED OFFICE

PRINCIPAL BANKERS

STOCK EXCHANGE

CORPORATION BHD 2012 ANNUAL REPORT

Profile of Directors
MR. CHUA AH LAK CHAIRMAN SENIOR INDEPENDENT & NON-EXECUTIVE Mr. Chua Ah Lak, Malaysian, aged 64, was appointed as Independent & Non Executive Director of UPA Corporation Bhd on 3 January 2005. He holds Honours Degree in Chemical Engineering from Adelaide University, Australia and MBA from University of Malaya, Malaysia. He retired from Nylex Group on 31 October 2004 after serving as Chief Executive Ofcer of Nylex (Malaysia) Berhad and a director of Nylexs Board. He is the Chairman of the Audit Committee, Nomination Committee as well as Remuneration Committee. MR. KOK KAM MOI MANAGING DIRECTOR Mr. Kok Kam Moi, Malaysian, aged 65, was appointed as Managing Director of UPA Corporation Bhd on 6 January 1997. He is the co-founder of the UPA Group with Mr. Chua Ngeun Lok. Mr Kok has more than 30 years of experience in printing industry. After obtaining his qualication in Commercial Art in 1971, he ventured into general printing before specializing in rebuilding of printing machinery. His vast experience in printing industry and technical knowhow has contributed to the success of the Machinery Division. The Machinery Division deals with rebuilding of Web printing machinery, Sheet fed printing machinery and book binding machinery. Under his guidance in the past 20 years, UPA Machinery Sdn Bhd, a subsidiary of the Group, has grown to be one of the biggest printing equipment rebuilding factory in South East Asia. Mr. Kok is involved in the Groups business development and oversees the machinery Division of the Group. He is a member of Remuneration Committee. MR. CHUA NGEUN LOK EXECUTIVE DIRECTOR

CORPORATION BHD (384490-P)

Mr. Chua Ngeun Lok, Malaysian, aged 62, was appointed as Executive Director of UPA Corporation Bhd on 6 January 1997. He is the co-founder of the UPA Group with Mr. Kok Kam Moi. Mr. Chua has more than 30 years experience in the printing industry. After obtaining his qualications in Commercial Art in 1972, he ventured into general printing before specializing in paper products manufacturing. His creative skills have contributed to the many innovative products manufactured by UPA. Under his guidance in the past 30 years, UPA Press Sdn Bhd, a subsidiary of the Group, has grown to be the biggest diary and notebook manufacturer in Malaysia. He had been intensively involved in the development of the Company to become one of the leading paper products manufacturers in Asia. He is currently the Vice President of Selangor and Federal Territory Chinese Printing Presses Association and Exco Member of K.L. Selangor Chinese Chamber of Commerce. Mr. Chua is involved in the Groups business development and oversees the nancial management of the Group. He is the brother of Mr. Chua Ngeun Seong, the Executive Director of UPA Corporation Berhad. Mr. Chua is a member of the Remuneration Committee.

CORPORATION BHD 7 2012 ANNUAL REPORT

Prole of Directors (cont.)

IR. CHUA NGEUN SEONG EXECUTIVE DIRECTOR Ir. Chua Ngeun Seong, Malaysian, aged 65, was appointed to the Board of UPA Corporation Bhd on 6 January 1997. Thereafter he was made Executive Director on 1st June 1998. He holds a Diploma in Mechanical Engineering from Council of Engineering Institutions UK and he is also a Registered Professional Engineer in Malaysia. He has 40 years working experience in engineering as well as general management encompassing project planning, design, installation, test and commissioning of palm oil mills, palm kernel crushing plant, palm oil renery plants, cocoa butter substitute speciality fats plant, steam boilers, power generation plants and other related machine and equipment. He also has more than 15 years of working experience in plastic sheets extrusion and calendaring. Ir. Chua sits on the Board of two of UPA Corporation Bhds subsidiaries as well as several other private limited companies. He is the Director of UPA Holdings Sdn Bhd which is the ultimate holding company and substantial shareholder of UPA Corporation Bhd and is also the brother of Mr. Chua Ngeun Lok, the Executive Director of UPA Corporation Bhd.

MR. MA HUAK HUANG NON-INDEPENDENT & NON-EXECUTIVE Mr. Ma Huak Huang, Malaysian, aged 74 was appointed to the Board of UPA Corporation Bhd on 6 January 1997. He is a self-made entrepreneur with more than 30 years experience in the eld of agriculture chemical and feedstuff. Mr. Ma is a member of Audit Committee, Remuneration Committee as well as Nomination Committee. He sits on the Board of several of UPA Corporation Bhds subsidiaries as well as other private limited companies. He is also the Director of UPA Holdings Sdn Bhd, the ultimate holding company and substantial shareholder of UPA Corporation Bhd. He is also the brother-in-law of Mr. Kok Kam Moi.

MR. YEO WEE THOW @ YEO NGO TEE INDEPENDENT & NON-EXECUTIVE Mr. Yeo Wee Thow, Malaysian, ages 64, was appointed an Independent and NonExecutive Director of UPA Corporation Bhd on 29 June 2001. He is a member of Malaysian Institute of Accountants, a fellow member of the Association of Chartered Certied Accountants (UK) and an associate member of the Institute of Chartered Secretaries and Administrators (UK). He owns a public accounting rm in Kuala Lumpur which was set up in 1979. Mr. Yeo is a member of Audit Committee, Nomination Committee as well as Remuneration Committee.

SAVE AS DISCLOSED ABOVE, NONE OF THE DIRECTORS HAS : 1) any other family relationship with any Director and/or substantial shareholder of the Company. 2) any other conict of interest with the Company. 3) any conviction of offences for the past ten years other than trafc offences. PLEASE REFER TO THE ANALYSIS OF SHAREHOLDINGS ON PAGE 68 AND 69 FOR THE DETAILS OF THE DIRECTORS SHAREHOLDINGS IN THE COMPANY

CORPORATION BHD 2012 ANNUAL REPORT

Chairmans Statement
To all our valued shareholders, I am pleased to present you the Annual Report and Audited Financial Statements of UPA Corporation Berhad for the nancial year ended 31 December 2012. BUSINESS REVIEW For the nancial year ended 31 December 2012, the Group recorded total revenue of RM122.83 million as compared to RM127.47 million recorded in the preceding nancial year. The prot before tax however increased to RM15.85 million as compared to RM12.69 million in the previous nancial year. The nancial year 2012 proved to be a very challenging year for the Group with the adverse market condition. For UPA Press Sdn. Bhd., the export market in USA had shown some encouraging recovery while the European market still remained gloomy. UPA Machinery Sdn. Bhd. on the other hand registered a better result with RM0.34 million loss as compared to RM5.02 million loss in the previous nancial year. Macro Plastic Sdn. Bhd. is set to kick-start its project in Northern Bangkok. The building of the plant had been completed and the rst production line had been installed and commissioned. PROSPECT The Management team acknowledges the need to be cautious on various factors internally as well as externally which can affect the operational efciency and protability of the Group. The implementation of minimum wage will affect the protability of the Group but it will be partially mitigated by improving the productivity of the work force. The Group had on 31 March 2013 entered into an agreement to dispose of its 35.5% equity interest in The Malaya Press Sdn. Bhd. (3379-P). The core business of The Malayan Press Sdn. Bhd. is in publishing textbooks and other reading material for SRJKC schools. The disposal would allow UPA to stay focused into its core business. The Group had also started the initial work on the 5 acre land owned by its wholly owned subsidiary company Danau Cekal Sdn. Bhd. Currently it is in the process of land conversion from agricultural to industrial as well as sub-division of the land. CORPORATE SOCIAL RESPONSIBILITY The Group had in the nancial year 2012 made donation to charitable groups and also had contributed to the numerous conference and sport activities of various organizations. The

CORPORATION BHD (384490-P)

Group will continue to promote and creating awareness among the employees on the occupational hazard and safety at the work place. DIVIDEND The Board is pleased to recommend a rst and nal dividend of 8% (less income tax) per share for the nancial year ended 31 December 2012 for the approval of the shareholders at the forthcoming annual general meeting. ACKNOWLEDGEMENT On behalf of the Board, I would like to take this opportunity to extend my sincere gratitude and appreciation to all our employees, valued shareholders, customers, suppliers and business associates for their dedication, assistance and support throughout the years. Last but not least, I would like to thank my fellow members of the Board for their advice, invaluable assistance, support and contribution extended to the Board all these years. Thank you.

CHUA AH LAK CHAIRMAN

CORPORATION BHD 9 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Audit Committee Report


b. Quorum of a meeting should be two (2) members and the majority of members present must be Independent Directors c. The internal and external auditors have the right to appear and to be heard at any of the meeting and shall appear before the Committee when required to do so by the Committee d. The Company Secretary shall be appointed as Secretary to the Committee. Duties and Responsibilities a. Review on the internal and external auditors scope of works and their audit plans b. Review with the external auditors on the result of their audit and evaluate on the accounting policies and system of internal accounting control within the Group. c. Review with the internal auditors on the ndings of their audit and evaluate on the system of internal control within the Group. d. Review with the management on the audit reports and management letters issued by the internal and external auditors and the implementation of their recommendations. e. Evaluate on the performance of the internal and external auditors and to put forward recommendation on their appointment to the Board. f. Review on the quarterly and year end nancial results and recommending for the Boards approval before releasing to the relevant authorities.

COMPOSITION The Audit Committee was established on 7 January 1997. The committee comprises of the following members as at the end of nancial year 2012: Meetings attended 1. Chua Ah Lak (CHAIRMAN) Senior Independent & Non-Executive Director 2. Yeo Wee Thow @ Yeo Ngo Tee Independent & Non-Executive Director 3. Ma Huak Huang Non-Independent & Non-Executive Director 4/4 4/4 4/4

Mr. Yeo Wee Thow @ Yeo Ngo Tee is a member of the Malaysian Institute of Accountants (MIA). The composition of the Audit Committee complies with the Bursa Malaysia Listing Requirements. TERM OF REFERENCE Composition The Committee should be appointed by the Board and the following requirements must be met : a. members of the Committee should be from among the current Boards members b. should comprise no fewer than three (3) members c. Independent Directors must form the majority d. All members of the committee should be Non-Executive Directors e. Members of the Committee should consist of at least one member who is a member of Malaysian Institute of Accountants f. Chairman of the Committee must be an Independent Director

g. Review on the Groups compliance with the accounting standards set by the Malaysian Accounting Standards Board. h. Review on the Groups compliance with the Bursa Malaysia Listing Requirements. i. Review on the Groups status of compliance with the Malaysian Code on Corporate Governance.

g. Alternate Director is not eligible to be appointed Authority Meetings a. A minimum number of four (4) meetings should be held during a nancial year The Audit Committee is empowered to : a. have authorities to investigate any matter within its term of reference

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CORPORATION BHD 2012 ANNUAL REPORT

Audit Committee Report (cont.)


b. have full access to any information in regard of the Groups activities c. have direct communication with the internal auditors, external auditors and management staff in order to seek clarication or any further information d. have the right to seek meetings with the internal as well as external auditors either with or without the attendance of any of the Executive Director e. have the right to obtain advice or other necessary services from independent professionals in regard of matters within its term of reference. SUMMARY OF ACTIVITIES The activities undertaken by the Audit Committee during the nancial year are summarized as follow : a. Review all quarterly results and annual audited nancial statement of the Group before recommending the same for the Boards approval and subsequent announcement to Bursa Malaysia. b. Review the annual external audit plan, the scope and the extent of coverage by the external auditors and to make recommendations to the Board in regard of internal control and nancial matters based on the external audit report. c. Review and approve the internal audit plan for the year and make recommendation to the Board for improvement to the signicant risk areas based on the internal audit report. d. Review on any related party transaction and conict of interest within the Group e. Monitoring the Groups continuous compliance with the Bursa Malaysia Listing Requirements, the Malaysian Accounting Standard Board guidelines, the Companies Act 1965 and the Malaysian Code of Corporate Governance f. Review the annual reports to ensure compliance to Bursa Malaysia Listing Requirements.

INTERNAL AUDIT FUNCTION The principal roles of the appointed external consultant on internal audit are to assist the Audit Committee in assessing risks faced by the Group, recommend possible measures to mitigate the identied risks, review the adequacy of effective system of controls for the operation of the Group. The major ndings of the internal audit reports will be reported directly to the Audit Committee meetings in order to formulate appropriate corrective measures.

CORPORATION BHD 11 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Statement On Risk Management and Internal Control


A formal risk policy and guidelines have been established and communicated to Risk Management Committee comprising of management personnel.

Introduction The preparation of this statement is in compliance with paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which requires the Board of Directors of public listed companies to include in its Annual Report a statement about the state of internal control of the listed issuer as a group. The Board of Directors is committed to maintaining sound internal control in the Group and is pleased to provide the following Statement on Risk Management and Internal Control for the nancial year ended 31 December 2012. Board responsibility The Board of Directors is responsible for the Groups system of internal controls covering not only nancial controls but also operational and compliance controls as well as risk management. The internal control system involves each business and key management from each business, including the Board, and is designed to meet the Groups particular needs and to manage the risks to which it is exposed. This system, by its nature, can only provide reasonable but not absolute assurance against material loss or against the Group failing to achieve its objectives. The Board has established a process for identifying, evaluating and managing signicant risks faced by the Group. This process has been in place throughout the year is reviewed by the Board and accords with Internal Control Guidelines. Risk management The Board has delegated its authority to the Management to review and determine the level of risk tolerance. The process requires management to identify and assess all types of risks in terms of likelihood and magnitude of impact as well as to identify and evaluate the adequacy and application of mechanisms in place to manage, mitigate, avoid or eliminate these risks. The Board believes that maintaining a sound system of internal control is founded on a clear understanding and appreciation of the following key elements of the Groups risk management framework : A risk management structure which outlines the lines of reporting and responsibility at the Board, Audit Committee, Risk Management Committee and management levels have been established.

Control structure and environment

In furtherance to the Boards commitment to maintain sound systems of risk management and internal control, the Board continues to maintain and implement a strong control structure and environment for the proper conduct of the Groups business operations as follows :
The Board meets at least quarterly and has set a schedule of matters which is required to be brought to its attention for discussion, thus ensuring that it maintains full and effective supervision over appropriate controls. The Executive Directors lead the presentation of board papers and provides comprehensive explanation of pertinent issues. In arriving at any decision, upon recommendation by the Management, a thorough deliberation and discussion by the Board is a prerequisite. In addition, the Board is kept updated on the Groups activities and its operations on a regular basis. An organizational structure with formally dened lines of responsibility and delegation of authority is in place. A process of hierarchical reporting has been established which provides for a documented and auditable trail of accountability. A documented delegation of authority with clear lines of accountability and responsibility serves as a tool of reference in identifying the approving authority for various transactions including matters that require Boards approval. The Groups performance is reviewed on a quarterly basis. The Groups strategic direction is also reviewed regularly taking into account changes in market conditions and signicant business risks. The Financial Guidelines dene the policies and procedures for day-to-day operations and act as guidelines as to the proper measures to be undertaken in a given set of circumstances. Internal audit function The Group has outsourced the internal audit function to a professional rm of consultants, which provides the Board with the assurance it requires regarding the adequacy and effectiveness of internal control systems. Internal audit independently reviews the control processes implemented by the management, and report to the Audit Committee. Internal audit also reviews the internal controls in the key activities of the Groups businesses on the basis of an annual internal audit

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CORPORATION BHD 2012 ANNUAL REPORT

Statement On Risk Management and Internal Control (cont.)


strategy and a detailed annual internal audit plan presented to the Audit Committee for approval. The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based on the risks facing each of the major business units of the Group. The Audit Committee considers reports from internal audit and from management, before reporting and making recommendations to the Board in strengthening the internal control systems. Review of adequacy of Risk Management and Internal Control For the nancial year under review and up to the date of this statement, the Board has received assurance from the Executive Director and Group Accountant that the Groups risk management and internal control system is operating adequately and effectively, in all material aspects, based on the Groups risk management and internal control system. There were no material losses incurred during the current nancial year as a result of weaknesses in internal control. Management will continue to review and strengthen the internal control systems of the Group. This Statement of Risk Management and Internal Control does not deal with the associated companies as the Group does not have management control over its operations. The results and assets of the associate companies are insignicant compared to the Group operations.

CORPORATION BHD 13 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Statement On Corporate Governance


DIRECTORS TRAINING All Directors had attended and completed the Mandatory Accreditation Programme conducted by the Research Institute of Investment Analysts Malaysia (RIAAM). During the nancial year 2012, the Directors attended training programmes and seminars on various areas such as nance, banking, economy and management. The Directors also attended related trade fairs all over the world to keep abreast with the latest technology and market trend in the printing as well as plastic manufacturing industries. The details of these trainings, seminars and trade fairs are given as follow: Name of Director Mr. Chua Ah Lak Trainings/Seminars/ Trade Fairs Duties of the Audit Committee Date 3 Oct. 2012

The Board of Directors of UPA values the importance of good corporate governance which it believes will be able to protect and enhance the interest of the shareholders. The Board is pleased to provide the following statement on how the Group applied the principles of good governance and the extent of compliance with the best practices as set out in the Malaysian Code on Corporate Governance. BOARD OF DIRECTORS The Group is headed by an experienced Board comprising of professionals and entrepreneurs with diverse knowledge and experience in business, nancial, management and engineering background. The Board leads the Group by providing directions and guidance to the management and staff in order to achieve its corporate goals and objectives. As at the end of nancial year 2012, the Board consists of six (6) members of which three (3) are Executive Directors while the other three (3) are Non-Executive Directors. Out of the three (3) Non-Executive Directors, two (2) are also functioning as Independent Directors. One of the Independent Directors namely Mr. Chua Ah Lak is also appointed as Senior Independent Director. The current composition satises the requirement of Listing Requirement and the Board considers its current size as adequate and capable to lead the Group through efcient and effective discussion and decision makings. The three Executive Directors are individually responsible for the Groups three main division respectively namely manufacturing of printed and paper related products; reconditioning and refurbishment of printing and printing related machinery; and manufacturing of PVC & PET rigid lms and PVC & PET shrinkable lm. The three Non-Executive Directors do not participate in the day-to-day management of the Group, instead their functions are to provide independent views, assessment and advice on various management proposals. A brief prole of each of the Directors is presented on page7 to 8. BOARD MEETINGS AND SUPPLY OF INFORMATION There were six (6) Board Meetings held during the nancial year and the details on the attendance of all the Directors at the Board Meetings are disclosed in the Statement Accompanying the Notice of Annual General Meeting in page 2. Board meetings are conducted by the guidance of pre-set agenda. The agenda and other related documents are circulated to the Directors before the meeting so as to give sufcient time to the Directors to make better preparation and to participate effectively in the meeting. The Executive Directors will each present their report on the performance of their respective divisions before the Board. Proposal for future plans concerning each of the division or the Group as a whole will be discussed, examined and evaluated by the Board. The Board had full access to all information within the Group and may further asks for further information or advices from the auditors, Company Secretary, management staff or other independent professional advisors, if necessary.

Technical Textile Innovation 22 to 24 and Application, China Oct. 2012 International Trade Fair The Audit Committees oversight role on Financial reporting Mr. Kok Kam Moi Drupa Printing Technology and Exhibition Conference, Dusseldorf Print Technology Malaysia Mr. Chua Ngeun Lok Hewlett-Packard World Conference on Digital Printing Drupa Printing Technology and Exhibition Conference, Dusseldorf 6 Nov. 2012 31 May 2012 2 Aug. 2012 29 May 2012 31 May 2012

Seminar on town planning, 12 Dec. strata Management bill, 2012 land development Mr. Chua Ngeun Seong The 26th International Exhibition on Plastic and Rubber Industries 18 Apr. 2012

24th Malaysian 19 Jul. International Machinery Fair 2012 Mr. Ma Huak Huang Mr. Yeo Wee Thow Duties of the Audit Committee Transfer pricing seminar 2012 Budget 2013, highlights on tax changes and its implication on business 3 Oct. 2012 12 Sep. 2012 31 Oct. 2012

14

CORPORATION BHD 2012 ANNUAL REPORT

Statement On Corporate Governance (cont.)


RE-ELECTION OF DIRECTORS Article 87.1 of the Companys Articles of Association provides that one-third of the Directors, or if their numbers are not three (3) or a multiple of three (3), then the number nearest to but not exceeding one-third shall retire from ofce. The Company shall ensure that all Directors shall retire from ofce once at least in each three (3) years but shall be eligible for re-election. BOARD COMMITTEES The Board had established the following committees and delegated specic tasks and responsibilities to them. These committees are to report back to the Board the outcomes and recommendations thereon for the Board to make nal decision. The main committees that were set up are : 1. Nomination Committee The Nomination Committee was set up on 8 May 2002 with the given tasks of monitoring and appointing any new Director when the need arises. It comprises of the following members : Chua Ah Lak (Chairman) Senior Independent Non-Executive Director Yeo Wee Thow @ Yeo Ngo Tee Independent Non-Executive Director Ma Huak Huang Non-Executive Director The Nomination Committee would be responsible, inter alia: to identify and recommend suitable candidates to ll seats on the Board when the need arises; to review the appropriate combination of skills, knowledge and experience among the members of the Board so as to add effectiveness to its function to ensure numbers of Directors on the Board truly reect the size of investment by the shareholders to evaluate the effectiveness of the function of various committees of the Board and also the Board itself 2. Remuneration Committee The Remuneration Committee was established on 8 May 2002. The Committee, inter alia, reviews and recommends to the Board the appropriate remuneration payable to the Directors. The committees comprised of the following members: Chua Ah Lak (Chairman) Senior Independent Non-Executive Director Yeo Wee Thow @ Yeo Ngo Tee Independent Non-Executive Director Ma Huak Huang Non-Executive Director Kok Kam Moi Managing Director Chua Ngeun Lok Executive Director 3. Audit Committee The composition, terms of reference and other related report on Audit Committee are presented on page 10 to 11. DIRECTORS REMUNERATION The details of the Directors remuneration which include benetin-kind for the nancial year 2012 are as follow: Directors Salaries Fees Bonus Benet-in Kind Total Executive Directors (RM) 540,000 330,000 90,000 37,200 997,200 Non-Executive Directors (RM) 133,000 133,000

The Directors remuneration which include the benet-in-kind for the nancial year 2012 categorised into band of RM50,000 are as follow : Range of Remuneration (RM) 50,000 and below 50,001 to 100,000 100,001 to 150,000 150,001 to 200,000 200,001 to 250,000 250,001 to 300,000 300,001 to 350,000 350,001 to 400,000 400,001 to 450,000 450,001 to 500,000 FINANCIAL REPORTING All quarterly result and year end nancial statement are rst presented to the Audit Committee and then reviewed by the Board before they are released to the Bursa Malaysia Securities Bhd. In presenting its nancial statement and quarterly results, the Directors aim to present a balanced and understandable assessment of the Groups nancial position and prospect. The Board will ensure that the Company uses appropriate accounting procedures for the preparation of the nancial statement in order to give true and fair views of the affair of the Company. The Board is assisted by the Audit Committee in the preparation of these nancial reports. RISK MANAGEMENT and INTERNAL CONTROL The Statement On Risk Management and Internal Control furnished on page 12 to 13 of the annual report provides an overview on the state of internal control within the Group. Executive Director 3 Non-Executive Director 2 1 -

CORPORATION BHD 15 2012 ANNUAL REPORT

Statement On Corporate Governance (cont.)


RELATIONSHIP WITH AUDITORS The role of the Audit Committee in relation to the external auditors is set out on page 10 and 11. RELATIONSHIP WITH SHAREHOLDERS A copy of the annual report is sent to all the shareholders and notice of General Meeting is published in major newspaper at least 21 days in advance of the actual date of meeting as to comply with the Listing Requirements. The annual report will be also made available upon request to those interested parties. The Board members, the company secretary and the external auditors are present at the Annual General Meeting in order to provide an opportunity for the shareholders to seek clarication and to have better understanding on the Groups activities. OTHER DISCLOSURE REQUIREMENTS Imposition of sanction/penalties Revaluation of landed properties There were no sanctions/penalties imposed on the Group, Directors or Management by the relevant regulatory bodies during the nancial year. Non-audit fee An amount of RM20,000 of non-audit fee was paid to the external auditors during the nancial year. Material contract Recurrent related party transactions of a revenue nature There were no material contracts on the Group or its subsidiaries entered into during the nancial year which involve Directors and major shareholders interests. Prot guarantee The Company is not subject to any requirement for prot guarantee for the whole of the nancial year. Share buy-back The Company had on 29 June 2012 sought and obtained approval from its shareholders in respect of share buy-back of up to 10% of the issued and paid up share capital of the company. During the nancial year 2012, the company had bought back from the open market 410,540 units of its issued ordinary share of RM1.00 each listed on the Main Market. A monthly breakdown of the shares bought back during the nancial year 2012 is given as below : Directors responsibility statement in respect of the audited Financial Statement The Companys nancial statements are prepared in accordance with the requirement of approved accounting standards in Malaysia and provisions of the Companies Act, 1965. The Directors take responsibility in ensuring that the annual nancial statement and the quarterly announcement of results of the Company are presented to convey a balanced, accurate and understandable assessment of the Groups nancial status and future prospects. There is no recurrent related party transaction of a revenue nature which require shareholders mandate during the nancial year. The Directors estimate the fair value of the Groups investment properties by engaging independent external valuers with appropriate recognized professional qualications and experience in the location and category of property being valued, to value the Groups investment property portfolio at a minimum of once every 5 years. The last valuation done was in the nancial year 2011. The frequency of valuation by a professional valuer shall be increased as and when deemed necessary by the Group.
Consideration No of paid shares (RM)* 90,540 122,755.36 407,941.12 Minimum Maximum Average price price price paid paid paid (RM) (RM) (RM) 1.35 1.35 1.35 1.27 1.27 1.27

Month January

December 320,000

*including transaction cost None of these purchased shares were resold or cancelled by the Company as at 9 May 2013. Option, Warrants or convertible Securities No option, warrant or convertible securities were issued by the Group during the nancial year ended 31 December 2012. American Depository Receipt (ADR) or Global Depository Receipt (GDR) programme The company did not sponsor any ADR or GDR programme during the nancial year.

16

CORPORATION BHD 2012 ANNUAL REPORT

5 Years Performance Highlights


Turnover
RM (Million) 150.0 138.3 129.3 119.1 120.0 127.5 122.8

CORPORATION BHD (384490-P)

90.0

Profit Before Tax

60.0

20.0 18.0

RM (Million) 19.1

18.6

18.7 15.8

30.0

16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 12.7

08

09

10

11 20
166.4

20

Shareholders' Fund

RM (Million) 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 149.9 157.9 169.3 177.6

20

20

20

12

08

09

10

11 20
14.1

20

Profit After Tax

40.0 20.0

RM (Million) 16.0 15.0 14.0 13.0 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 14.4 14.1 13.4

08

09

10

11

20

20

20

20

20

12

20

20

Gross Dividend Paid

RM (Sen) 11 10 9 8 7 6 8 8 (Proposed) 10 10 10

08

09

00

20

4 3 2 1

08

09

10

11

20

20

20

20

20

12

20

20

CORPORATION BHD 17 2012 ANNUAL REPORT

20

20

11

12

20
8.8

12

CORPORATION BHD (384490-P)

Directors report

for the year ended 31 December 2012

The Directors have pleasure in submitting their report and the audited nancial statements of the Group and of the Company for the nancial year ended 31 December 2012. Principal activities The Company is principally engaged in investment holding and provision of management services, whilst the principal activities of the subsidiaries are as stated in Note 27 to the nancial statements. There has been no signicant change in the nature of these activities during the nancial year. Results Group RM'000 Prot/(Loss) for the year attributable to: Owners of the Company Non-controlling interests 13,470 (26) 13,444 1,970 1,970 Company RM'000

Reserves and provisions There were no material transfers to or from reserves and provisions during the nancial year under review except as disclosed in the nancial statements. Dividends Since the end of the previous nancial year, the Company paid a rst and nal dividend of 8 sen per ordinary share less tax at 25% totalling RM4,677,000 (6 sen net per ordinary share) in respect of the year ended 31 December 2011 on 24 July 2012. The Directors recommend a rst and nal dividend of 8 sen per ordinary share less tax at 25% totalling RM4,658,000 (6 sen net per ordinary share) for the nancial year ended 31 December 2012. Directors of the Company Directors who served since the date of the last report are: Chua Ah Lak Chua Ngeun Lok Kok Kam Moi Ma Huak Huang Chua Ngeun Seong Yeo Wee Thow @ Yeo Ngo Tee

18

CORPORATION BHD 2012 ANNUAL REPORT

Directors Report (cont.)


Directors interests The interests and deemed interests in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at nancial year end (including the interests of the spouses or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors Shareholdings are as follows: Number of ordinary shares of RM1 each Holding Company - UPA Holdings Sdn. Bhd. Chua Ngeun Lok Kok Kam Moi Ma Huak Huang Chua Ngeun Seong - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest At 1-1-2012 391,290 399,666 426,670 171,199 171,199 611,352 399,666 391,290 Bought Sold At 31-12-2012 391,290 399,666 426,670 171,199 171,199 611,352 399,666 391,290

Number of Ordinary Shares of RM1 each The Company - UPA Corporation Bhd. Chua Ah Lak Chua Ngeun Lok Kok Kam Moi Ma Huak Huang Chua Ngeun Seong Yeo Wee Thow @ Yeo Ngo Tee - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest - direct interest - deemed interest At 1-1-2012 336,720 111,600 862,846 42,192,145 1,153,572 40,848,589 312,535 42,347,274 420,096 42,274,895 984,900 1,075,200 Bought 120,000 120,000 Sold 120,000 At 31-12-2012 336,720 111,600 862,846 42,192,145 1,153,572 40,848,589 312,535 42,347,274 420,096 42,394,895 984,900 1,075,200

By virtue of their interests in the shares of the Company, Chua Ngeun Lok, Kok Kam Moi, Ma Huak Huang and Chua Ngeun Seong are also deemed interested in the shares of the subsidiaries during the nancial year to the extent that UPA Corporation Bhd. has an interest.

CORPORATION BHD 19 2012 ANNUAL REPORT

Directors Report (cont.)


Directors benets Since the end of the previous nancial year, no Director of the Company has received nor become entitled to receive any benet (other than a benet included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the nancial statements or the xed salaries of full time employees of related companies) by reason of a contract made by the Company or a related corporation with the Director or with a rm of which the Director is a member, or with a company in which the Director has a substantial nancial interest. There were no arrangements during and at the end of the nancial year which had the object of enabling Directors of the Company to acquire benets by means of the acquisition of shares in or debentures of the Company or any other body corporate. Issue of shares and debentures There were no changes in the authorised issued and paid-up capital of the Company during the nancial year. There were no debentures issued during the nancial year. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the nancial year. Share buy-back On 6 June 2012, the shareholders of the Company renewed their approval for the Company to buy-back its own shares (UPA Shares). During the nancial year, the Company acquired from the open market, 410,540 of its issued ordinary shares of RM1.00 each listed on the Main Market of Bursa Malaysia at an average buy-back price of RM1.29 per ordinary shares. The total consideration paid for the share buy-back of UPA Share by the Company, during the nancial year, including transaction costs, was RM530,696 and was nanced by internally generated funds. The UPA Shares bought back are held as treasury shares in accordance with Section 67A Sub-section 3(A)(b) of the Company Act, 1965. As at 31 December 2012, the Company held 1,950,240 UPA Shares as treasury shares out of its total issued and paid-up share capital of 79,581,840 UPA Shares. Such treasury shares are held at a carrying amount of RM2,697,167. Further information is as disclosed in Note 12 to the nancial statements. Other statutory information Before the nancial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision made for doubtful debts, and ......... Chua Ngeun Lok Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the nancial statements, that would render any amount stated in the nancial statements of the Group and of the Company misleading. At the date of this report, there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the nancial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the nancial year. No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the nancial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, except for those disclosed in the nancial statements, the nancial performance of the Group and of the Company for the nancial year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that nancial year and the date of this report. Signicant events during the year The signicant event during the nancial year is as disclosed in Note 29 to the nancial statements. Signicant events subsequent to reporting date The signicant event subsequent to reporting date is as disclosed in Note 30 to the nancial statements. Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company inadequate to any substantial extent, or

......... Kok Kam Moi Kuala Lumpur, Date: 26 April 2013

ii) that would render the value attributed to the current assets in the nancial statements of the Group and of the Company misleading, or

20

CORPORATION BHD 2012 ANNUAL REPORT

Statement of Financial Position


as at 31 December 2012
GROUP 31.12.2012 31.12.2011 RM'000 RM'000 68,488 7,834 18,344 94,666 1,550 43,751 37,563 598 43,425 126,887 221,553 79,582 (2,741) 100,735 177,576 1,032 178,608 13 7 1,233 7,271 8,504 21,147 336 1,882 11,076 34,441 42,945 221,553 67,701 8,435 18,344 10 94,490 144 40,069 33,311 713 41,350 115,587 210,077 79,582 (2,209) 91,942 169,315 58 169,373 2,323 7,964 10,287 19,753 336 2,274 8,054 30,417 40,704 210,077 COMPANY 1.1.2011 31.12.2012 31.12.2011 RM'000 RM'000 RM'000 65,987 9,047 13,897 571 89,502 1,252 41,955 38,384 1,276 35,563 118,430 207,932 79,582 (2,223) 89,067 166,426 263 166,689 4,715 7,595 12,310 16,456 168 3,311 8,998 28,933 41,243 207,932 65,172 4,716 69,888 1,550 7,592 60 1,972 11,174 81,062 79,582 (2,697) 3,502 80,387 80,387 675 675 675 81,062 65,172 4,716 69,888 144 4,392 52 9,754 14,342 84,230 79,582 (2,166) 6,209 83,625 83,625 605 605 605 84,230

CORPORATION BHD (384490-P)

Note Asset Property, plant and equipment Investment in subsidiaries Investment in associates Investment properties Deferred tax assets Total non-current assets Other investments Inventories Trade and other receivables Current tax assets Cash and cash equivalents Total current assets Total assets Equity Share capital Reserves Retained earnings Equity attributable to owners of the Company Non-controlling interest Total equity Liabilities Borrowings Deferred tax liabilities Total non-current liabilities Borrowings Provision for warranty Current tax liabilities Trade and other payables Total current liabilities Total liabilities Total equity and liabilities

1.1.2011 RM'000 62,040 4,716 66,756 1,252 9,388 130 4,778 15,548 82,304 79,582 (2,166) 4,343 81,759 81,759 545 545 545 82,304

3 4 5 6 7 8 9 10

11

12

13

14

The notes on pages 27 to 62 are an integral part of these nancial statements.


CORPORATION BHD 21 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Statements of profit or loss and other comprehensive income


for the year ended 31 December 2012
Note GROUP 2012 RM'000 122,834 (103,555) 19,279 3,650 (3,288) (3,019) (1,853) 16 18 19 14,769 722 (640) 14,851 996 15,847 20 (2,403) 13,444 (1) 13,443 2011 RM'000 127,474 (111,366) 16,108 6,541 (3,020) (3,700) (3,284) 12,645 543 (656) 12,532 154 12,686 (3,911) 8,775 12 8,787 COMPANY 2012 RM'000 2,583 2,583 285 (377) 2,491 128 2,619 2,619 (649) 1,970 1,970 2011 RM'000 10,338 10,338 399 (372) 10,365 41 10,406 10,406 (2,687) 7,719 7,719

Revenue Cost of sales Gross prot Other income Selling and distribution expenses Administrative expenses Other expenses Results from operating activities Finance income Finance costs Operating prot Share of prot of equity accounted associates, net of tax Prot before tax Income tax expense Prot for the year Foreign currency translation for foreign operations Total comprehensive income for the year Prot/(Loss) for the year attributable to: Owners of the Company Non-controlling interest Prot for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interest Total comprehensive income Basic earnings per ordinary share (sen)

15

13,470 (26) 13,444

8,775 8,775

1,970 1,970

7,719 7,719

13,443 13,443 21 17.0

8,789 (2) 8,787 11.0

1,970 1,970

7,719 7,719

The notes on pages 27 to 62 are an integral part of these nancial statements.


CORPORATION BHD 2012 ANNUAL REPORT

22

Consolidated statement of changes in equity


for the year ended 31 December 2012
Reserves Non-distributable Note Share capital RM'000 Translation reserve RM'000 Treasury shares RM'000 Distributable Retained earnings RM'000 Sub-total RM'000 Non-controlling interest RM'000

CORPORATION BHD (384490-P)

Total RM'000

At 1 January 2011 Total comprehensive income for the year Cancellation of uncalled share capital by a subsidiary Changes in ownership investment in a subsidiary Dividends to owners of the Company - 2010 nal 22

79,582 -

(57) 14 -

(2,166) -

89,067 8,775 (47) (5,853)

166,426 8,789 (47) (5,853)

263 (2) (118) (85) -

166,689 8,787 (118) (132) (5,853)

At 31 December 2011 / 1 January 2012 Total comprehensive income for the year Acquisition of treasury shares Additional of share capital by a subsidiary 28 Changes in ownership investment in a subsidiary Dividends to owners of the Company - 2011 nal Share of loss of non-controlling interest At 31 December 2012 28 22 -

79,582 79,582
Note 12.1

(43) (1) (44)


Note 12.3

(2,166) (531) (2,697)


Note 12.4

91,942 13,444 (4,677) 26 100,735

169,315 13,443 (531) (4,677) 26 177,576

58 675 325 (26) 1,032

169,373 13,443 (531) 675 325 (4,677)

178,608

CORPORATION BHD 23 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Statement of changes in equity


for the year ended 31 December 2012
Non-distributable Note Share capital RM'000 Treasury shares RM'000 Distributable Retained earnings RM'000 Total RM'000

At 1 January 2011 Total comprehensive income for the year Dividends to owners of the Company - 2010 nal 22

79,582 -

(2,166) -

4,343 7,719 (5,853)

81,759 7,719 (5,853)

At 31 December 2011 / 1 January 2012 Total comprehensive income for the year Dividends to owners of the Company - 2011 nal Share buyback At 31 December 2012 22

79,582 79,582
Note 12.1

(2,166) (531) (2,697)


Note 12.4

6,209 1,970 (4,677) 3,502


Note 12.5

83,625 1,970 (4,677) (531) 80,387

The notes on pages 27 to 62 are an integral part of these nancial statements.


CORPORATION BHD 2012 ANNUAL REPORT

24

Statements of cash ows


GROUP Note
Cash ows from operating activities Prot before tax Adjustments for: Changes in fair value of investment properties Depreciation of property, plant and equipment Dividend income Finance costs Finance income Gain on fair value on investment in shares Gain on disposal of property, plant and equipment Impairment loss on investment in associates Impairment loss on property, plant and equipment Provision of warranty Share of prot of associates, net of tax Unrealised foreign exchange (gain) / loss Write-down of inventories Write-off of property, plant and equipment Operating prot before working capital changes Changes in working capital: Inventories Trade and other receivables Trade and other payables Cash generated from operations Interest received Tax paid Net cash generated from /(used in) operating activities Cash ows from investing activities Acquisition of non-controlling interest Acquisition of property, plant and equipment (Acquisition of)/Proceeds from other investments Dividends received from associate Dividends received from subsidiary Dividends received from other investments Increase in investments in subsidiaries Increase in investment in associate Proceeds from disposal of property, plant and equipment Net cash (used in)/generated from investing activities (132) (8,176) 1,133 12 (21) (7,184) (1,313) 2,130 43 860 (4,659) (3,252) 3,022 17,311 722 (3,898) 14,135 595 4,733 (944) 21,687 543 (3,455) 18,775 (3,200) 70 (2,904) 128 (658) (3,434) 6,912 (43) 640 (722) (92) (7) 114 (996) (432) 977 2 22,200 (4,447) 6,658 (12) 656 (543) (25) 680 168 (154) 341 1,291 4 17,303 (2,173) (128) (92) 226 15,847 12,686 2,619

CORPORATION BHD (384490-P)

for the year ended 31 December 2012

COMPANY 2011 RM'000 2012 RM'000 2011 RM'000


10,406 (9,918) (41) (25) 422 4,996 60 5,478 41 (2,609) 2,910 1,133 9,906 12 (3,132) 7,919

2012 RM'000

(ii)

(7,823) (1,313) 2,130 43 15 (6,948)

CORPORATION BHD 25 2012 ANNUAL REPORT

Statements of cash ows (cont.)


GROUP Note
Cash ows from nancing activities Acquisition of treasury shares Dividends paid to owners Interest paid Proceeds from other borrowings Repayment of nance lease liabilities Repayment of term loans Net cash used in nancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year (531) (4,677) (640) 3,148 (108) (2,304) (5,112) 2,075 41,350 (5,853) (656) 4,038 (99) (3,234) (5,804) 5,787 35,563 41,350 (531) (4,677) (5,208) (7,782) 9,754 1,972 (5,853) (5,853) 4,976 4,778 9,754

COMPANY 2011 RM'000 2012 RM'000 2011 RM'000

2012 RM'000

(i)

43,425

(i) Cash and cash equivalents


Cash and cash equivalents included in the statements of cash ows comprise the following statements of nancial position amounts: GROUP COMPANY

31.12.2012 31.12.2011 31.12.2012 31.12.2011 RM'000 RM'000 RM'000 RM'000


Cash and bank balances Deposits with licensed banks 21,425 22,000 43,425 16,350 25,000 41,350 1,972 1,972 4,254 5,500 9,754

(ii) Acquisition of property, plant and equipment


During the year, the Group acquired property, plant and equipment with an aggregate cost of RM7,823,000 (2011: RM8,376,000), of which Nil (2011: RM200,000) were acquired by means of nance leases.

The notes on pages 27 to 62 are an integral part of these nancial statements.


CORPORATION BHD 2012 ANNUAL REPORT

26

Notes to the financial statements


UPA Corporation Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of its registered office and principal place of business are as follows: Registered office Lot 10, Highway Centre Jalan 51/205, Petaling Jaya 46050 Selangor Darul Ehsan Principal place of business Lot 8228, 6.5 Miles Jalan Kuchai Lama 58200 Kuala Lumpur The consolidated financial statements of the Company as at and for the financial year ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the Group and individually referred to as Group entities) and the Groups investment in associates. The financial statements of the Company as at and for the year ended 31 December 2012 do not include other entities. The Company is principally engaged in investment holding and provision of management services, whilst the principal activities of the subsidiaries are as stated in Note 27 to the financial statements. The ultimate holding company during the financial year is UPA Holdings Sdn. Bhd., a company incorporated in Malaysia. These financial statements were authorised for issue by the Board of Directors on 26 April 2013. 1. Basis of preparation (a) Statement of compliance These financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (MFRSs), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. These are the Group and Companys first financial statements prepared in accordance with MFRSs and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied. In the previous financial years, the financial statements of the Group and the Company were prepared in accordance with Financial Reporting Standard (FRSs) in Malaysia. There is no financial impact to the financial statements of the Group and of the Company on the transition to MFRSs.

CORPORATION BHD (384490-P)

The Group and Company have early adopted the amendments to MFRS 101, Presentation of Financial Statements which are effective for annual periods beginning on or after 1 July 2012. The early adoption of the amendments to MFRS 101 has no impact on the financial statements other than the presentation format of the statement of profit or loss and other comprehensive income. The following are accounting standards, amendments and interpretations of the MFRS framework that have been issued by the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and the Company:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2013
MFRS 10, Consolidated Financial Statements MFRS 11, Joint Arrangements MFRS 12, Disclosure of Interests in Other Entities MFRS 13, Fair Value Measurements MFRS 119, Employee Benefits (2011) MFRS 127, Separate Financial Statements (2011) MFRS 128, Investment in Associates and Joint Ventures (2011) IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine Amendments to MFRS 7, Financial Instruments: Disclosures Offsetting Financial Assets and Financial Liabilities Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards Government Loans Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009-2011 Cycle) Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle) Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011Cycle)

CORPORATION BHD 27 2012 ANNUAL REPORT

Notes to the nancial statements


Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle) Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle) Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance Amendments to MFRS 11, Joint Arrangements: Transition Guidance Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014 Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities Amendments to MFRS 132, Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2015 MFRS 9, Financial Instruments (2009) MFRS 9, Financial Instruments (2010) Amendments to MFRS 7, Financial Instruments: Disclosures Mandatory Date of MFRS 9 and Transition Disclosures The Group and the Company plan to apply the abovementioned standards, amendments and interpretations: from the annual period beginning on 1 January 2013 for those standards, interpretations or amendments that are effective for annual periods beginning on or after 1 January 2013, except for IC Interpretation 20 which is not applicable to the Company. from the annual period beginning on 1 January 2014 for those standards, interpretations or amendments that are effective for annual periods beginning on or after 1 January 2014. from the annual period beginning on 1 January 2015 for those standards, interpretations or amendments that are effective for annual periods beginning on or after 1 January 2015. Material impacts of initial application of a standard, an amendment or an interpretation, which will be applied retrospectively, are discussed below: (i) MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities. The adoption of MFRS 9 may result in a change in accounting policy for financial assets. The Company is currently assessing the financial impact that may arise from the adoption of MFRS 9. (ii) MFRS 10, Consolidated Financial Statements MFRS 10 introduces a new single control model to determine which investees should be consolidated. MFRS 10 supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation Special Purpose Entities . There are three elements to the definition of control in MFRS 10: (i) power by investor over an investee, (ii) exposure, or rights, to variable returns from investors involvement with the investee, and (iii) investors ability to affect those returns through its power over the investee. (iii) Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 20092011 Cycle) The amendments to MFRS 116 clarify that items such as spare parts, stand-by equipment and servicing equipment shall be recognised as property, plant and equipment when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory. Currently, the Group classifies machines spare parts as inventory. Upon adoption of the amendments to MFRS 116, the Group will reclassify those spare parts that meet the definition of plant and equipment from inventory to plant and equipment. The Group will apply the amendments to MFRS 116 retrospectively. Inventory balance is expected to decrease by nil and RM221,000 as at 31 December 2011 and 31 December 2012 respectively. Plant and equipment balance as at the same will increase by the same corresponding amounts. The initial application of other standards, amendments and interpretations is not expected to have any material financial impacts to the current and prior periods financial statements upon their first adoption. (b) Basis of measurement These financial statements have been prepared on the historical cost basis other than as disclosed in Note 2 to the financial statements. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Companys functional

28

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes: Note 6 Note 7 Note 9 Note 10 - Valuation of investment properties - Recognition of deferred tax asset - Write down of inventories to net realisable value - Impairment loss on receivables and deposits When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. For each business combination, the Group elects whether it measures the noncontrolling interests in the acquiree either at fair value or at the proportionate share of the acquirees identifiable net assets at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. held for sale or distribution. The cost of investments includes transaction costs. (ii) Business combinations Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

Acquisitions on or after 1 January 2011


For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as: the fair value of the consideration transferred; plus the recognised amount of any noncontrolling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

2. Significant accounting policies The accounting policies set out below have been applied consistently to the periods presented in the financial statements and in preparing the opening MFRS statements of financial position of the Group and of the Company at 1 January 2011 (the transition date to MFRS framework), unless otherwise stated. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Control exists when the Company has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Investments in subsidiaries are measured in the Companys statement of financial position at cost less impairment losses, unless the investment is classified as

Acquisitions before 1 January 2011


As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1 January 2011 has been carried forward from the previous FRS framework as at the date of transition. (iii) Acquisitions of non-controlling interests The Group treats all changes in its ownership investment in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Groups share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group

CORPORATION BHD 29 2012 ANNUAL REPORT

Notes to the nancial statements


reserves. (iv) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Groups share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Groups share of losses exceeds its investment in an associate, the carrying amount of that interest including any longterm investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associates. When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of the entire interest in that associate, with a resulting gain or loss being recognised in profit or loss. Any retained interest in the former associate at the date when significant influence is lost is re-measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. When the Groups investment in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss. Investments in associates are measured in the Companys statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs. (v) Non-controlling interests Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company. Losses applicable to the non-controlling investment in a subsidiary are allocated to the non-controlling interest even if doing so causes the non-controlling interests to have a deficit balance. (vi) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Groups interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency (i) Foreign currency translation Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting period are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period, except for goodwill and fair value adjustments arising from business combinations before

30

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


1 January 2011 which are treated as assets and liabilities of the Company. The income and expenses of foreign operations are translated to RM at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve (FCTR) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the profit or loss on disposal. When the Group disposes of only part of its investment in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the FCTR within equity. (c) Financial instruments (i) Initial recognition and measurement A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument. A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised as fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract. (ii) Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows:

Financial assets
(a) Financial assets at fair through profit or loss

value

Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost. Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. (b) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see note 2(i)(i)).

Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are derivatives or financial liabilities that are specifically designated into this

CORPORATION BHD 31 2012 ANNUAL REPORT

Notes to the nancial statements


category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost. Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. (iii) Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision. (iv) Regular way purchase or sale of financial assets A regular way purchase or sale is a purchase or sale of a nancial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to: (a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. (v) Derecognition A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. (d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to the working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between knowledgeable willing parties in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items when available and replacement cost when appropriate. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment are determined by comparing the proceeds

32

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


from disposal with the carrying amount of property, plant and equipment and are recognised net within other income or other expenses respectively in profit or loss. (ii) Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use. The estimated useful lives for the current and comparative periods are as follows: Leasehold land Office buildings Apartment Factory buildings Motor vehicles Plant and machinery Renovation, furniture and fittings Office and factory equipment 60 - 97 years 50 years 50 years 50 years 5 years 10 years 20 years 10 years to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. Leasehold land which in substance is a finance lease is classified as property, plant and equipment. (ii) Operating lease Leases, where the Group or the Company does not assume substantially all the risks and rewards of the ownership are classified as operating leases, and the leased assets are not recognised on the statement of financial position. Payments made under operating leases are recognised in profit or loss on a straightline basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. (f) Investment properties (i) Investment properties carried at fair value Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production supply of goods or services or for administrative purposes. These include land held for a currently undetermined future use. Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in profit or loss in the period in which they arise. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of selfconstructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs. An investment property is derecognised

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate at the end of the reporting period. (e) Leased assets (i) Finance lease Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal

CORPORATION BHD 33 2012 ANNUAL REPORT

Notes to the nancial statements


on its disposal, or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the net disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the item is derecognised. (ii) Reclassification to/from investment property When an item of property, plant and equipment is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or loss. When the use of a property changes such that it is reclassified as property, plant and equipment or inventories, its fair value at the date of reclassification becomes its cost for subsequent accounting. (iii) Determination of fair value An external, independent valuation firm, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Groups investment property portfolio every two to three years. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably. (g) Inventories Inventories comprise raw materials, work-inprogress, manufactured inventories, printing and other machines held for trading which are measured at the lower of cost and net realisable value. The cost of raw materials, work-in-progress and manufactured inventories is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity. In the case of printing and other machines held for trading, cost consists of the actual value paid for each individual inventory and is determined on a specific identification basis. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. (h) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, balances and deposits with banks. (i) Impairment (i) Financial assets All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiaries and investment in associates) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the assets carrying amount and the present value of estimated future cash flows discounted at the assets original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. An impairment loss in respect of availablefor-sale financial assets is recognised in profit or loss and is measured as the difference between the assets current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale nancial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassied from equity to prot or loss. An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial assets carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available for sale is not reversed through profit or loss. If, in a subsequent period, the fair value of a

34

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the assets carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss. (ii) Other assets The carrying amounts of other assets (except for inventories, deferred tax asset and investment property that is measured at fair value) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable amount is estimated. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inows from continuing use that are largely independent of the cash inows of other assets or cash-generating units. The recoverable amount of an asset or cashgenerating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash generating unit. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversal of impairment losses is credited to profit or loss in the year in which the reversal is recognised. (j) Equity instruments Instruments classified as equity are measured at cost on initial recognition and are not re-measured subsequently. (i) Issue expenses (l) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from equity. (ii) Ordinary shares Ordinary shares are classified as equity. (iii) Repurchase, disposal and reissue of share capital (treasury shares) When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in equity. When treasury shares are distributed as share dividends, the cost of the treasury shares is applied in the reduction of the share premium account or distributable reserves, or both. When treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity, and the resulting surplus or deficit on the transaction is presented in share premium.

(k) Employee benefits (i) Short-term employee benefits Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (ii) State plans The Groups contribution to the statutory pension funds are charged to profit or loss in the year to which they relate. Once the contributions have been paid, the Group has no further payment obligations.

CORPORATION BHD 35 2012 ANNUAL REPORT

Notes to the nancial statements


obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Warranties A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities. (m) Revenue and other income (i) Goods sold Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised. (ii) Services Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at the end of the reporting period. The stage of completion is assessed by reference to services performed to date as a percentage of total services to be performed. (iii) Commission When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission made by the Group. (iv) Dividend income Dividend income is recognised in profit or loss on the date that the Groups or the Companys right to receive payment is established, which in the case of quoted securities is the exdividend date. (v) Interest income Interest income is recognised as it accrues using the effective interest method in profit Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. (o) Income tax Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years. Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs. (n) Borrowing costs

36

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


period. Where investment properties are carried at their fair value in accordance with the accounting policy set out in Note 2(f), the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying value at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the economic benefits embodied in the property over time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against which the unutilised tax incentive can be utilised. (p) Earnings per ordinary share The Group presents basic and diluted earnings per ordinary share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential ordinary shares. (q) Operating segments An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups other components. An operating segments operating results are reviewed regularly by the chief operating decision makers, which in this case is the Executive Directors of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. (r) Contingencies (i) Contingent liabilities Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is not recognised in the statement of financial position and is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or nonoccurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

CORPORATION BHD 37 2012 ANNUAL REPORT

38

3. Property, plant and equipment

Group Apartment RM'000 85 85 85 18,629 3,451 72,507 2,309 18,591 38 3,341 184 (70) (4) 69,265 3,387 (145) 1,860 449 4,462 275 (26) (6) 4,705 18,489 102 3,006 335 63,850 5,415 1,620 240 4,189 284 (11) 2,000 2,000 1,501 3,501

Leasehold land RM'000 22,907 22,907 1,944 24,851 6,854 6,809 45 6,809 -

Ofce buildings RM'000

Factory buildings RM'000

Motor vehicles RM'000

Plant and machinery RM'000

Renovation, furniture and ttings RM'000 Total RM'000

Ofce and factory equipment RM'000

Capital work-inprogress RM'000

CORPORATION BHD 2012 ANNUAL REPORT

Cost
120,955 8,376 (11) 129,320 7,823 (241) (10) 136,892

At 1 January 2011 Additions Write off

At 31 December 2011 / 1 January 2012 Additions Disposals Write off

At 31 December 2012

Accumulated depreciation and impairment loss


2,642 345 2,987 345 3,332 3,332 1,119 1,119 33 33 6,131 6,131 3,030 3,030 976 143 31 2 5,658 473 2,902 201 (69) (4) 834 142 29 2 5,189 469 2,652 250 39,904 5,052 44,956 5,328 (143) 114 50,141 114 50,255 761 95 856 114 970 970 2,957 303 (7) 3,253 306 (21) (4) 3,534 3,534 54,968 6,658 (7) 61,619 6,912 (233) (8) 114 68,290 114 68,404

At 1 January 2011 Charge for the year Write off

At 31 December 2011 / 1 January 2012 Charge for the year Disposals Write off Impairment loss

At 31 December 2012 Accumulated depreciation Accumulated impairment loss

Carrying amounts
20,265 19,920 21,519 5,735 5,833 5,975 56 54 52 13,300 12,933 12,498 354 439 421 23,946 24,309 22,252 859 1,004 1,339 1,232 1,209 1,171 2,000 3,501 65,987 67,701 68,488

At 1 January 2011

Notes to the nancial statements

At 31 December 2011 / 1 January 2012

At 31 December 2012

Notes to the nancial statements


Security
Certain factory building of the Group with a carrying amount of RM4,482,341 (31.12.2011: RM4,589,072, 1.1.2011: RM4,695,803) and certain leasehold land of the Group with a carrying amount of RM12,704,000 (31.12.2011: RM12,920,000, 1.1.2011: RM13,140,000) have been charged to licensed banks for credit facilities granted to subsidiaries as set out in Note 13.

Assets under nance lease


Included in property, plant and equipment of the Group are assets acquired under nance lease agreements with carrying amount as follows: Group 31.12.2012 RM000 Motor vehicles 4. Investments in subsidiaries Company 31.12.2012 RM000 Unquoted shares, at cost Details of the subsidiaries are shown in Note 27. 5. Investment in associate 65,172 31.12.2011 RM000 65,172 1.1.2011 RM000 62,040 201 31.12.2011 RM000 268 1.1.2011 RM000 170

5.1 Investment in associates


Group 31.12.2012 31.12.2011 RM'000 RM'000 Unquoted shares, at cost Less: Impairment loss Share of post-acquisition reserves 9,234 (4,518) 4,716 3,118 7,834 9,234 (4,518) 4,716 3,719 8,435 1.1.2011 RM'000 9,212 (4,496) 4,716 3,544 8,260 Company 31.12.2012 31.12.2011 RM'000 RM'000 5,275 (559) 4,716 4,716 5,275 (559) 4,716 4,716 1.1.2011 RM'000 5,275 (559) 4,716 4,716

5.2 Capital contribution


Group 31.12.2012 31.12.2011 RM'000 RM'000 Capital contribution Less: Impairment loss Total investment in associates 4,452 (4,452) 7,834 4,452 (4,452) 8,435 1.1.2011 RM'000 4,559 (3,772) 787 9,047 Company 31.12.2012 31.12.2011 RM'000 RM'000 4,716 4,716 1.1.2011 RM'000 4,716

The gross capital contribution amounting to RM4,452,000 (31.12.2011: RM4,452,000, 1.1.2011: RM4,559,000) was for working capital purposes.

CORPORATION BHD 39 2012 ANNUAL REPORT

Notes to the nancial statements


5.3 Summary nancial information on associates
Effective ownership interrest % 49.0 49.0 35.5 49.0 46.0 49.0 49.0 35.5 49.0 46.0 Prot/ (Loss) (100%) RM'000 10 (1) 2,280 (1,109) (491) 11 (1) 595 166 (250) Total assets (100%) RM'000 2,357 109 14,337 7,396 Total assets (100%) RM'000 2,404 105 14,298 5,485 604 2,399 107 15,679 6,925 957 Total liabilities (100%) RM'000 (321) (2) (3,064) (9,024) (1,422) (321) (2) (2,200) (9,417) (1,281)

Country of incorporation 31.12.2012 Sharp Litho Sdn. Bhd.* # Acta UPA Sdn. Bhd.* # The Malaya Press Sdn.Bhd.* Web-Tech Colors Co. Ltd. @ UPA Machinery Co. Ltd. @ 31.12.2011 Sharp Litho Sdn. Bhd.* # Acta UPA Sdn. Bhd.* # The Malaya Press Sdn. Bhd.* Web-Tech Colors Co. Ltd. @ UPA Machinery Co. Ltd. @ Malaysia Malaysia Malaysia China Thailand Country of incorporation 1.1.2011 Sharp Litho Sdn. Bhd. Acta UPA Sdn. Bhd. The Malaya Press Sdn. Bhd. Web-Tech Colors Co. Ltd. Malaysia Malaysia Malaysia China Thailand

Revenue (100%) RM'000 17,728 9,544 127 10,821 14,105 1,615

Effective ownership interrest % 49.0 49.0 35.5 49.0

Total liabilities (100%) RM'000 (328) (2) (1,436) (9,863)

Malaysia Malaysia Malaysia China

UPA Machinery Co. Ltd. Thailand 46.0 1,161 (1,237) * These associates were held directly by the Company. # Equity accounted based on unaudited management accounts for the year ended 31 December 2012 (31.12.2011: 31 December 2011). Equity accounted based on audited accounts for the period ended 31 August 2012 (31.12.2011: year ended 31 March 2011). @ Equity accounted based on audited accounts for the year ended 31 December 2012 (31.12.2011: 31 December 2011). The Group has not equity accounted for the results of Web-Tech Colors Co. Ltd., loss for the year of RM544,000 (2011: attributable prot for the year of RM166,000), UPA Machinery Co. Ltd.s loss for the year of RM170,000 (2011: RM250,000) and Acta UPA Sdn Bhd.s loss for the year of RM1,000 (2011: RM1,000). The accumulated losses not recognised as at end of the reporting period for Web-Tech Colors Co. Ltd., UPA Machinery Co. Ltd. and Acta UPA Sdn. Bhd. is RM3,818,000 (2011: RM3,274,000), RM552,000 (2011: RM382,000) and RM51,000 (2011: RM50,000) respectively since the Groups investment in the associates has been fully written down and the Group has no obligation in respect of these losses. 6. Investment properties Group 31.12.2012 RM000 Freehold land At 1 January Changes in fair value recognised in prot or loss At 31 December 18,344 18,344 31.12.2011 RM000 13,897 4,447 18,344 1.1.2011 RM000 13,897 13,897

40

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Fair value
The freehold land of the Group are stated at fair value based on Directors valuation which in turn was based on professional valuation made by independent professional qualied valuers using an open market basis conducted last year. There are two pieces of freehold land held by two subsidiaries respectively. Professional valuation was performed on one piece of freehold land held by a subsidiary whilst the fair value of the other subsidiarys piece of freehold land was valued by the Directors using the indicative valuation derived from the valuation report made by the independent professional qualied valuer on the freehold land of the rst subsidiary as both pieces of land have similar usage and are adjacent to each other. Had the freehold land of the Group been carried under the cost model, the carrying amounts that would have been included in the nancial statements at the reporting date are RM4,873,720 (31.12.2011: RM4,873,720, 1.1.2011: RM4,873,720). The following are recognised in the prot or loss in respect of investment properties: Group 31.12.2012 RM000 Direct operating expenses Non-income generating investment properties 6 31.12.2011 RM000 6 1.1.2011 RM000 6

Security
The freehold land have been charged to licensed banks for credit facilities granted to certain subsidiaries as set out in Note 13. 7. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)


Deferred tax assets and liabilities are attributable to the following: Assets Group Property, plant and equipment Allowances Fair value adjustment in business combination # Tax assets/(liabilities) Set off of tax Net tax assets/(liabilities) Liabilities Net

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000

75 104 179 (179) -

116 116 (106) 10

(13) 753 740 (169) 571

(4,742) (11) (2,697) (7,450) 179 (7,271)

(5,237) (123) (2,710) (8,070) 106 (7,964)

(5,048) (2,716) (7,764) 169 (7,595)

(4,667) 93 (2,697) (7,271) (7,271)

(5,237) (7) (2,710) (7,954) (7,954)

(5,061) 753 (2,716) (7,024) (7,024)

Unrecognised deferred tax assets


Deferred tax assets have not been recognised in respect of the following item (stated at gross) because it is not probable that future taxable prot will be available against which the Company can utilise the benets there from. 31.12.2012 RM000 Deductible temporary differences Deferred tax assets not recognised at 25% 8,023 2,006 31.12.2011 RM000 9,903 2,475 1.1.2011 RM000 5,029 1,257

CORPORATION BHD 41 2012 ANNUAL REPORT

Notes to the nancial statements


Movement in temporary differences during the year
At 1.1.2011 RM'000 (5,061) 753 (2,716) (7,024) Recognised in prot or lost (Note 20) RM'000 (176) (760) 6 (930) At 31.12.2011 RM'000 (5,237) (7) (2,710) (7,954) Recognised in prot or lost (Note 20) RM'000 570 100 13 683 At 31.12.2012 RM'000 (4,667) 93 (2,697) (7,271)

Group Property, plant and equipment Allowances Fair value adjustment in business combination #

# Relates to deferred taxation on restructuring of the UPA Group pursuant to its Restructuring and Listing Scheme in 1996. 8. Other investments Group and Company 31.12.2012 RM'000 Quoted shares In Malaysia Fair value through prot or loss Market values of quoted investment 9. Inventories Group 31.12.2012 RM'000 Raw materials Work-in-progress Manufactured inventories Printing and other machines held for trading Machine spare parts 23,992 912 8,230 10,396 221 43,751 31.12.2011 RM'000 21,404 771 7,480 10,414 40,069 1.1.2011 RM'000 16,635 1,097 9,896 14,327 41,955 1,550 1,550 144 144 1,252 1,252 31.12.2011 RM'000 1.1.2011 RM'000

Included in inventories are machines of RM1,103,000 (31.12.2011: RM2,531,113, 1.1.2011: RM3,732,992) carried at net realisable value.

42

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


10. Trade and other receivables Group Note 31.12.2012 31.12.2011 RM'000 RM'000 Trade receivables Less: Impairment loss Associates - trade Subsidiaries - non-trade Associates - non-trade Other receivables Deposits 10.3 10.2 10.1 10.2 35,383 (1,661) 33,722 1,384 35,106 13 1,371 1,073 2,457 37,563 32,420 (1,752) 30,668 2,339 33,007 13 92 199 304 33,311 1.1.2011 RM'000 36,291 (1,990) 34,301 2,811 37,112 11 1,148 113 1,272 38,384 Company 31.12.2012 31.12.2011 RM'000 RM'000 7,592 7,592 7,592 4,392 4,392 4,392 1.1.2011 RM'000 9,388 9,388 9,388

10.1 Subsidiaries
The amounts due from subsidiaries are unsecured, interest free and repayable on demand.

10.2 Associates
The amounts due from associates are unsecured, interest free and repayable on demand. The balances is net of impairment of RM2,618,000 (31.12.2011: RM2,218,000, 1.1.2011: RM1,000,000).

10.3 Deposits
Included in deposits is RM615,000 paid to acquire agriculture land(Note 28) and RM265,000 to acquire machinery by two subsidiaries. The deposits are net of impairment of Nil (31.12.2011: RM70,000, 1.1.2011: RM70,000). 11. Cash and cash equivalents Group 31.12.2012 RM'000 Cash and bank balances Deposits with licensed banks 21,425 22,000 43,425 31.12.2011 RM'000 16,350 25,000 41,350 1.1.2011 RM'000 16,563 19,000 35,563 31.12.2012 RM'000 1,972 1,972 Company 31.12.2011 RM'000 4,254 5,500 9,754 1.1.2011 RM'000 4,778 4,778

CORPORATION BHD 43 2012 ANNUAL REPORT

Notes to the nancial statements


12. Share capital and reserves

12.1 Share capital


Group and Company Amount Number Amount Number 31.12.2012 of shares 31.12.2011 of shares RM000 31.12.2012 RM000 31.12.2011 Ordinary shares of RM1 each: Authorised Issued and fully paid 100,000 79,582 100,000 79,582 100,000 79,582 100,000 79,582 Amount 1.1.2011 RM000 100,000 79,582 Number of shares 1.1.2011 100,000 79,582

12.2 Ordinary shares


The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company. In respect of the Companys treasury shares that are held by the Group (see below), all rights are suspended until those shares are reissued.

12.3 Translation reserve


The translation reserve comprises foreign currency differences arising from the translation of the nancial statements of a foreign operation.

12.4 Treasury shares


On 6 June 2012, the shareholders of the Company renewed their approval for the Company to buy-back its own shares (UPA Shares). During the nancial year, the Company acquired from the open market, 410,540 of its issued ordinary shares of RM1.00 each listed on the Main Market of Bursa Malaysia at an average buy-back price of RM1.29 per ordinary share. The total consideration paid for the share buy-back of UPA share by the Company, during the nancial year, including transaction costs, was RM530,696 and was nanced by internally generated funds. The UPA share bought back are held as treasury shares in accordance with Section 67A Sub-section 3(A)(b) of the Company Act, 1965. As at 31 December 2012, the Company held 1,950,240 (31.12.2011: 1,539,700, 1.1.2011: 1,539,700) UPA Shares as treasury shares out of its total issued and paid-up share capital of 79,581,840 UPA Shares. Such treasury shares are held at a carrying amount of RM2,697,167. None of the treasury shares held were resold or cancelled during the nancial year. While the shares are held as treasury shares, the rights attached to them as voting, dividends and participation in other distribution and otherwise are suspended.

12.5 Section 108 tax credit


Subject to agreement by the Inland Revenue Board, the Company has sufcient Section 108 tax credit and tax exempt income to fully frank its retained earnings at 31 December 2012 if paid out as dividends. The Finance Act 2007 introduced a single tier company income tax system with effect from year of assessment 2008. As such, the remaining Section 108 tax credit as at 31 December 2012 will be available to the Company until such time the credit is fully utilised or upon expiry of the six-year transitional period on 31 December 2013, whichever is earlier.

44

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


13. Borrowings Group 31.12.2012 RM'000 Non-current Fixed rate term loans - secured Finance lease liabilities - secured Current Fixed rate term loans - secured Finance lease liabilities - secured Trust receipts - unsecured 13.1 1,101 65 19,981 21,147 22,380 2,380 108 17,265 19,753 22,076 3,136 93 13,227 16,456 21,171 13.1 1,113 120 1,233 2,138 185 2,323 4,616 99 4,715 31.12.2011 RM'000 1.1.2011 RM'000

13.1 Security
The term loans are secured by way of legal charges over: (i) certain factory building (see Note 3); and (ii) the freehold land classied as investment properties (see Note 6).

13.2 Finance lease liabilities


Finance lease liabilities are payable as follows:
Present Present Future value of Future value of Future minimum minimum minimum minimum minimum lease lease lease lease lease payment Interest payments payments Interest payments payment 31.12.2012 31.12.2012 31.12.2012 31.12.2011 31.12.2011 31.12.2011 1.1.2011 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 Present value of minimum lease payments 1.1.2011 RM'000

Interest 1.1.2011 RM'000

Less than one year Between one and ve years

72 128 200

(7) (8) (15)

65 120 185

119 200 319

(11) (15) (26)

108 185 293

99 102 201

(6) (3) (9)

93 99 192

CORPORATION BHD 45 2012 ANNUAL REPORT

Notes to the nancial statements


14. Trade and other payables Group Note Trade payables Other payables Amount due to a director - non-trade Amount due to associates - trade - non-trade Accrued expenses Advanced receipts from customers 14.2 14.2 644 522 3,949 169 11,076 815 550 1,296 32 8,054 478 521 2,264 735 8,998 675 605 545 14.1
31.12.2012 RM'000 31.12.2011 RM'000 1.1.2011 RM'000 31.12.2012 RM'000

Company
31.12.2011 RM'000 1.1.2011 RM'000

3,555 2,104 133

3,462 1,772 127

2,847 1,963 190

675 -

605 -

545 -

14.1 The amount due to a director is unsecured, interest free and repayable on demand. 14.2 The amount due to associates is unsecured, interest free and repayable on demand. 15. Revenue Group 2012 RM'000 Revenue - sale of goods - serving of machineries - commission - dividends - management fees 121,147 1,634 43 10 122,834 124,558 2,362 522 12 20 127,474 2,173 410 2,583 9,918 420 10,338 2011 RM'000 Company 2012 RM'000 2011 RM'000

46

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


16. Results from operating activities Group 2012 RM'000 Results from operating activities are arrived at after charging: Auditors remuneration: Audit fees - KPMG Malaysia - Other auditors Non-audit fees - KPMG Malaysia - Local afliates of KPMG Malaysia Bad debts written off Depreciation of property, plant and equipment Impairment loss on amount due from associate Impairment loss on receivables Impairment loss on investment in associates Impairment loss on property, plant and equipment Personnel expenses - Contribution to Employees Provident Fund - Wages, salaries and others Provision for warranty Rental expense Unrealised loss on foreign exchange Write-down of inventories Write-off of property, plant and equipment and after crediting: Change in fair value of investment properties Fair value gain on other investment Gain on disposal of property, plant and equipment Gain on disposal of other investment Gross dividends received from - quoted shares - unquoted shares Realised gain on foreign exchange Rental income Reversal of impairment loss on receivables Unrealised gain on foreign exchange 20 22 178 6,912 400 451 114 1,074 16,980 218 977 2 92 7 194 43 1,606 40 364 432 16 24 6,658 1,898 139 680 1,054 17,015 168 212 341 1,291 4 4,447 25 12 535 45 377 20 6 92 194 43 2,130 16 6 25 12 9,906 2011 RM'000 Company 2012 2011 RM'000 RM'000

130 17

120 -

44 -

25 -

CORPORATION BHD 47 2012 ANNUAL REPORT

Notes to the nancial statements


17. Key management personnel compensation Group 2012 RM'000 Directors - Fees - Remuneration - Other short-term employee benets (including estimated monetary value of benets-in-kind) 463 1,383 493 1,427 163 163 2011 RM'000 Company 2012 RM'000 2011 RM'000

62 1,908

56 1,976

163

163

18. Finance income Group 2012 RM'000 Interest income of nancial assets that are not at fair value through prot or loss: Deposits with licensed banks 19. Finance costs Group 2012 RM'000 Interest expense of nancial liabilities that are not at fair value through prot or loss: - Term loans - Finance lease liabilities - Trust receipts and bankers acceptances 252 11 377 640 161 9 486 656 2011 RM'000 722 543 128 41 2011 RM'000 Company 2012 RM'000 2011 RM'000

48

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


20. Income tax expense Group 2012 RM'000 Current tax expense - current - (over)/under provision in prior years Total current tax Deferred tax expense - origination and reversal of temporary differences - (over)/under provision in prior years - reversal of deferred tax asset recognised in prior year Total deferred tax Share of tax of equity accounted associates Total income tax expense Reconciliation of effective tax expense Prot for the year Total income tax expense Prot excluding tax Income tax of Malaysian tax rate of 25% (2011: 25%) Effect of temporary differences not recognised Non-deductible expenses Non-taxable income Tax incentives Reversal of deferred tax asset recognised in prior year Under provision in prior years Tax expense 21. Earnings per ordinary share - Group 13,444 2,657 16,101 4,025 (96) 402 2 (919) 10 (767) 2,657 8,775 4,044 12,819 3,205 1,218 307 (1,112) (16) 418 24 4,044 1,970 649 2,619 655 13 (19) 649 7,719 2,687 10,406 2,601 45 41 2,687 (243) (440) (683) 2,403 254 2,657 228 284 418 930 3,911 133 4,044 649 649 2,687 2,687 3,413 (327) 3,086 3,241 (260) 2,981 668 (19) 649 2,646 41 2,687 2011 RM'000 Company 2012 RM'000 2011 RM'000

Basic earnings per ordinary share


The calculation of basic earnings per ordinary share at 31 December 2012 was based on the prot attributable to ordinary shareholders of the Company of RM13,470,000 (2011: RM8,775,000) and the weighted average number of ordinary shares outstanding calculated as follows: 2012 Issued ordinary shares at beginning of the year Effect of treasury shares held Weighted average number of ordinary shares Basic earnings per ordinary share 79,581,840 (1,650,687) 77,931,153 sen 17.0 2011 79,581,840 (1,539,700) 78,042,140 sen 11.0

Basic earnings per ordinary share is not diluted as there is no potential ordinary share in issue at the end of the reporting period.

CORPORATION BHD 49 2012 ANNUAL REPORT

Notes to the nancial statements


22. Dividends Dividends recognised in the current year by the Company are: Total Amount RM'000 4,677 5,853

Sen per share (net of tax) 2012 Final 2011 ordinary 2011 Final 2010 ordinary 6.0 7.5

Date of payment 24 July 2012 28 July 2011

After the reporting period, the following dividends were proposed by the Directors. These dividends will be recognised in subsequent nancial period upon approval by the owners of the Company at the forthcoming Annual General Meeting. Sen per share (net of tax) Final 2012 ordinary 23. Operating segments The Group has two segments, as described below, which are the Groups strategic business units. These strategic business units are managed separately due to their differences in terms of products, types of customers and market segments. For each of the strategic business units, the Groups chief operating decision makers reviews internal management reports on a quarterly basis. The following summary describes the operations of each operating segments: (a) Manufacturing (b) Machine trading Manufacturing of paper-based products and plastic products Selling, reconditioning and servicing of printing and printing related machines 6.0 Total amount RM'000 4,658

Other non-reportable segments comprise operations related to the holding of properties and trading of plastic products. Performance is measured based on prot before tax as included in the internal management reports that are reviewed by the Groups chief operating decision makers. Segment prot is used to measure performance as management believes that such information is the most relevant in evaluating the results of these segments relative to other entities that operate in within these industries. Segment assets The total of segment assets is measured based on all assets of a segment, as included in the internal management reports that are reviewed by the Groups chief operating decision makers. Segment liabilities Segment liabilities information is neither included in the internal management reports nor provided regularly to the Groups chief operating decision makers. Hence, no disclosure is made on segment liabilities. Segment capital expenditure Segment capital expenditure is the total cost incurred during the nancial period to acquire property, plant and equipment, and intangible assets other than goodwill.

50

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Manufacturing of paper and plastic products 2012 2011 RM'000 RM'000 14,246 12,019 107,968 37 (114) (6,729) 594 (265) (1,562) 150,586 100,235 49 (70) 154 (6,398) 504 (386) (777) 137,482 Machine trading 2012 2011 RM'000 RM'000 (341) (5,022) 14,175 560 (977) (245) (373) 33,343 26,633 200 (1,221) (306) (266) (464) 29,696 Total 2012 2011 RM'000 RM'000 13,905 6,997 122,143 597 (977) (114) (6,974) 594 (638) (1,562) 183,929 126,868 249 (1,291) 154 (6,704) 504 (652) (1,241) 167,178

Segment prot/(loss) Included in the measure of segment prot/(loss) are: Revenue from external customers Inter-segment revenue Write down of inventories Impairment of property, plant and equipment Share of prot of associates Depreciation of property, plant and equipment Finance income Finance costs Tax expense Segment assets

Included in the measure of segment assets are: Additions to non-current assets other than nancial instruments and deferred tax assets

4,421

8,174

103

202

4,524

8,376

Reconciliations of reportable segment prot or loss 2012 RM'000 Prot or loss Total prot or loss for reportable segments Other non-reportable segments Elimination of inter-segment (loss)/prot Share of prot of associates not included in reportable segments Consolidated prot before tax 13,905 986 (40) 996 15,847 2011 RM'000 6,997 5,358 177 154 12,686

Reconciliations of reportable segment revenues, assets and other material items Additions to non-current assets RM'000 4,524 3,503 (204) 7,823 8,376 8,376

External revenue RM'000 2012 Total reportable segments Other non-reportable segments Investment in associates Investment properties Elimination of inter-segment transactions or balances Consolidated total 2011 Total reportable segments Other non-reportable segments Investment in associates Investment properties Elimination of inter-segment transactions or balances Consolidated total 122,143 2,821 (2,130) 122,834 126,868 606 127,474

Depreciation RM'000 (6,974) (107) 169 (6,912) (6,704) (106) 152 (6,658)

Finance costs RM'000 (638) (2) (640) (652) (4) (656)

Finance income RM'000 594 128 722 504 39 543

Segment assets RM'000 183,929 16,390 7,834 18,344 (4,944) 221,553 167,178 17,261 8,435 18,344 (1,141) 210,077

CORPORATION BHD 51 2012 ANNUAL REPORT

Notes to the nancial statements


Geographical segments In presenting information on the basis of geographical segments, segment revenue is based on geographical location of customers. Segment assets are based on the geographical location of the assets. The amounts of non-current assets do not include nancial instruments (including investments in associates) and deferred tax assets. Non-current Assets RM'000 68,887 21,115 14,985 17,847 122,834 2011 Malaysia North America Europe Asia Pacic 76,220 16,799 16,979 17,476 127,474 Major customers The Group has one (2011: one) major customer within the manufacturing segment who contributes approximately 23% (2011: 20%) of the Groups total revenue. 86,045 86,045 81,331 5,502 86,833

Geographical information 2012 Malaysia North America Europe Asia Pacic

Revenue RM'000

24. Contingencies Group 31.12.2012 31.12.2011 RM'000 RM'000 Guarantee given to a nancial institution in respect of machine sales Corporate guarantee to banks in respect of banking facilities granted to subsidiaries 25. Financial instruments 25.1 Categories of nancial instruments The table below provides an analysis of nancial instruments categorised as follows: (a) Loans and receivables (L&R) (b) Fair value through prot or loss (FVTPL): - Held for trading (HFT) (c) Financial liabilities measured at amortised cost (FL) 1.1.2011 RM'000 Company 31.12.2012 31.12.2011 RM'000 RM'000 1.1.2011 RM'000

1,680

2,880

4,080

107,484

114,538

114,538

52

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Carrying amount RM'000 31.12.2012 Financial assets - Group Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial assets - Company Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial liabilities - Group Borrowings Trade and other payables, excluding advanced receipts from customers Financial liabilities - Company Trade and other payables, excluding advanced receipts from customers 31.12.2011 Financial assets - Group Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial assets - Company Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial liabilities - Group Borrowings Trade and other payables, excluding advanced receipts from customers Financial liabilities - Company Trade and other payables, excluding advanced receipts from customers 1.1.2011 Financial assets - Group Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial assets - Company Other investments Trade and other receivables, excluding prepayment Cash and cash equivalents Financial liabilities - Group Borrowings Trade and other payables, excluding advanced receipts from customers Financial liabilities - Company Trade and other payables, excluding advanced receipts from customers 1,550 37,563 43,425 82,538 1,550 7,592 1,972 11,114 (22,380) (10,907) (33,287) (675) L&R/ (FL) RM'000 37,563 43,425 80,988 7,592 1,972 9,564 (22,380) (10,907) (33,287) (675) FVTPL - HFT RM'000 1,550 1,550 1,550 1,550 -

144 33,311 41,350 74,805 144 4,392 9,754 14,290 (22,076) (8,022) (30,098) (605)

33,311 41,350 74,661 4,392 9,754 14,146 (22,076) (8,022) (30,098) (605)

144 144 144 144 -

1,252 38,384 35,563 75,199 1,252 9,388 4,778 15,418 (21,171) (8,263) (29,434) (545)

38,384 35,563 73,947 9,388 4,778 14,166 (21,171) (8,263) (29,434) (545)

1,252 1,252 1,252 1,252 -

CORPORATION BHD 53 2012 ANNUAL REPORT

Notes to the nancial statements


25.2 Net gains and losses arising from nancial instruments Group 2012 2011 RM'000 RM'000 135 37 (142) 2,692 2,685 (338) (1,241) (1,542) Company 2012 2011 RM'000 RM'000 135 37 128 263 41 78

Fair value through prot or loss - Held for trading Held to maturity investments - Loans and receivables - Financial liabilities measured at amortised cost

25.3 Financial risk management The Group has exposure to the following risks from nancial instruments: Credit risk Liquidity risk Market risk 25.4 Credit risk Credit risk is the risk of a nancial loss to the Group if a customer or counterparty to a nancial instrument fails to meet its contractual obligations. The Groups exposure to credit risk arises principally from its receivables from customers and investment securities. The Companys exposure to credit risk arise principally from its receivables from subsidiaries and investment securities. Receivables

Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored regularly. Credit evaluations are performed on certain customers requiring credit over a certain amount. The Group and the Company does not require collateral in respect of receivables.

Exposure to credit risk, credit quality and collateral


As at the end of the reporting period, the Groups maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statement of nancial position. The ve (5) largest debtors account for 28% (31.12.2011: 37%, 1.1.2011: 29%) of total trade receivables. Except for this, there were no signicant concentrations of credit risk. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their realisable values. A signicant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having signicant balances past due more than 120 days, which are deemed to have higher credit risk, are monitored individually. The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region was: Group 31.12.2012 RM'000 Domestic Others 27,608 6,114 33,722 31.12.2011 RM'000 24,310 6,358 30,668 1.1.2011 RM'000 28,027 6,274 34,301

54

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Impairment losses
The ageing of trade receivables as at the end of the reporting date was: Gross RM'000 Group 31.12.2012 Not past due Past due 0 - 30 days Past due 31 - 60 days Past due 61 - 90 days Past due 91 - 120 days Past due > 120 days 31.12.2011 Not past due Past due 0 - 30 days Past due 31 - 60 days Past due 61 - 90 days Past due 91 - 120 days Past due > 120 days 1.1.2011 Not past due Past due 0 - 30 days Past due 31 - 60 days Past due 61 - 90 days Past due 91 - 120 days Past due > 120 days 15,625 6,546 4,480 1,915 1,699 6,026 36,291 (1,990) (1,990) 15,625 6,546 4,480 1,915 1,699 4,036 34,301 13,874 5,148 7,752 1,743 938 2,965 32,420 (1,752) (1,752) 13,874 5,148 7,752 1,743 938 1,213 30,668 13,852 11,260 3,252 1,055 1,564 4,400 35,383 (1,661) (1,661) 13,852 11,260 3,252 1,055 1,564 2,739 33,722 Individual Impairment RM'000 Net RM'000

The credit period granted to trade receivables ranges from 30 to 90 days. Trade receivables are deemed past due when the counterparty failed to make payment when contractually due. Individual impairment is recognised when it is no longer probable that the amount owing from customers will be recoverable. The movements in the allowance for impairment losses of trade receivables were: Group 2012 RM'000 At 1 January Impairment loss recognised Impairment loss reversed Impairment written off At 31 December 1,752 451 (364) (178) 1,661 2011 RM'000 1,990 139 (377) 1,752

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satised that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

CORPORATION BHD 55 2012 ANNUAL REPORT

Notes to the nancial statements


Inter-company balances

Risk management objectives, policies and processes for managing risk


The Company provides unsecured advances to subsidiaries. The Company monitors on an on-going basis the results of the subsidiaries. The maximum exposure to credit risk is represented by the carrying amounts in the statement of nancial position.

Exposure to credit risk, credit quality and collateral


As at the end of the reporting period, the maximum exposure to the credit risk is represented by the carrying amounts in the statement of nancial position.

Impairment losses
As at the end of the reporting period, there was no indication that the advances to the subsidiaries are not recoverable. The Company does not specically monitor the ageing of the advances to the subsidiaries.

Financial guarantees

Risk management objectives, policies and processes for managing risk


The Company provides unsecured nancial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an on-going basis the results of the subsidiaries and repayments made by the subsidiaries.

Exposure to credit risk, credit quality and collateral


The maximum exposure to credit risk amounts to RM22,195,000 (31.12.2011: RM21,783,000, 1.1.2011: RM20,979,000) representing the outstanding banking facilities of the subsidiaries at the end of the reporting period. The nancial guarantees have not been recognised since the fair value on initial recognition was not material.

Impairment losses
At the end of the reporting period, there was no indication that any subsidiary would default on repayment. 25.5 Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its nancial obligations as they fall due. The Groups exposure to liquidity risk arises principally from its various payables and borrowings. The Group maintains a level of cash and cash equivalent and bank facilities deemed adequate by management to ensure, as far as possible, that it will have sufcient liquidity to meet its liabilities when they fall due. It is not expected that the cash ows included in the maturity analysis could occur signicantly earlier, or at signicantly different amounts.

56

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Maturity analysis The table below summarises the maturity prole of the Groups and the Companys nancial liabilities as at the end of the reporting period based on undiscounted contractual payments. Carrying amount RM'000 Group 31.12.2012 Contractual Under 1-2 2 - 5 More than cash ow 1 year years years 5 years RM'000 RM'000 RM'000 RM'000 RM'000

Contractual interest rate

Non-derivative nancial liabilities


Term loans Finance lease liabilities Trust receipts Trade and other payables 31.12.2011 2,214 185 19,981 10,907 33,287 2.61% - 7.30% 2.21% - 2.52% 1.42% - 7.45% 2,493 185 19,981 10,907 33,566 1,132 65 19,981 10,907 32,085 323 40 363 969 80 1,049 69 69

Non-derivative nancial liabilities


Term loans Finance lease liabilities Trust receipts Trade and other payables 1.1.2011 4,518 293 17,265 8,022 30,098 2.61% - 7.30% 2.21% - 2.52% 1.75% - 3.52% 5,213 319 17,265 8,022 30,819 2,533 119 17,265 8,022 27,939 1,319 72 1,391 969 128 1,097 392 392

Non-derivative nancial liabilities


Term loans Finance lease liabilities Trust receipts Trade and other payables Company 31.12.2012 7,752 192 13,227 8,263 29,434 2.61% - 7.30% 2.21% - 3.00% 1.55% - 2.05% 8,509 201 13,227 8,263 30,200 3,471 99 13,227 8,263 25,060 2,533 102 2,635 1,790 1,790 715 715

Non-derivative nancial liabilities


Trade and other payables 31.12.2011 675 675 675 -

Non-derivative nancial liabilities


Trade and other payables 1.1.2011 605 605 605 -

Non-derivative nancial liabilities


Trade and other payables 25.6 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices that will affect the Groups nancial position or cash ows. 545 545 545 -

CORPORATION BHD 57 2012 ANNUAL REPORT

Notes to the nancial statements


25.6.1 Currency risk The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are mainly U.S. Dollar (USD), Australian Dollar (AUD), Euro Dollar (EUR), Singapore Dollar (SGD), Thailand Baht (THB), Great Britain Pound (GBP) and Japanese Yen (JPY). The Group manages this risk by selectively hedging, through forward exchange contracts, its trade receivables and trade payables denominated in foreign currencies. Hedging contracts entered into is based on judgement made by the management in relation to the signicance and future trend of foreign currencies being exposed. As at the end of the reporting period, the Group does not have any material outstanding forward exchange contracts.

Exposure to foreign currency risk


The Groups exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period was: Denominated in USD RM'000 4,337 2,145 (10,022) (647) (4,187) 338 2,400 (9,417) (338) (7,017) AUD RM'000 132 (1,774) (1,642) 24 24 EUR RM'000 18 27 (2,276) (18) (2,249) 53 (2,276) (2,223) SGD RM'000 5 2,153 (74) 2,084 5 2,222 (63) 2,164 THB RM'000 414 1,400 937 (50) 2,701 1,297 (50) 1,247 Denominated in USD RM'000 1,420 1,782 (12,279) (9,077) SGD RM'000 304 2,448 (121) 2,631 THB RM'000 1,332 1,028 2,360 JPY RM'000 (24) (24) GBP RM'000 1,592 1,592 191 275 (1,458) (992) JPY RM'000 4,337 (5,764) (1,427) (6,067) (6,067)

Group (RM equivalent) 31.12.2012 Cash and bank balances Other receivables Trade receivables Trust receipts Trade and other payables Net exposure 31.12.2011 Cash and bank balances Trade receivables Trust receipts Trade payables Net exposure

Group (RM equivalent) 1.1.2011 Cash and bank balances Trade receivables Trust receipts Trade payables Net exposure

Currency risk sensitivity analysis


A 10% strengthening of the Ringgit Malaysia against the major currencies of USD, AUD, EUR, SGD, THB, GBP and JPY at the end of the reporting period would have increased prot by RM313,000 (2011: RM1,286,000). This analysis assumes that all other variables, in particular interest rates, remained constant and ignores any impact of forecasted sales and purchases. A 10% weakening of Ringgit Malaysia against the above currencies at the end of the reporting period would have had equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remained constant.

58

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


25.6.2 Interest rate risk

Risk management objectives, policies and processes for managing risk


The Groups exposure to interest rate risk arises from deposits and borrowings with licensed banks. The deposits are placed with varying interest rates and maturity dates. Similarly, various nancial products are used to borrow and these include term loan, overdraft, nance lease liabilities and trade nancing so that the Group is not fully dependent on a single class of nancial product. The Group does not hedge its exposure arising from interest rate risk.

Exposure to interest rate risk


The interest rate prole of the Groups and the Companys signicant interest-bearing nancial instruments, based on carrying amounts as at the end of the reporting period was: Group 31.12.2012 31.12.2011 RM'000 RM'000 Fixed rate instruments Financial assets Financial liabilities 22,000 (22,380) (380) 25,000 (22,076) 2,924 19,000 (21,171) (2,171) 5,500 5,500 1.1.2011 RM'000 Company 31.12.2012 31.12.2011 RM'000 RM'000 1.1.2011 RM'000

Interest rate risk sensitivity analysis


The Group is not affected by interest rate sensitivity due to: (a) the Group does not account for any xed rate nancial assets and liabilities at fair value through prot or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedged accounting model; and (b) the Group does not have nancial assets or nancial liabilities that are subject to oating interest rates. 25.6.3 Other price risk The Group is exposed to equity price risk from its investment in quoted shares. As at the end of the reporting period, the Group has only invested in domestic securities.

Other price risk sensitivity analysis


A 10% strengthening of the prices of the quoted shares at the end of the reporting period would have increased prot by RM155,000 (2011: RM14,400). A 10% weakening of the prices of the quoted shares would have had equal but opposite effect on prot or loss. 25.7 Fair values The carrying amounts of cash and cash equivalents, receivables, payables and accruals and short term borrowings approximate fair values due to the relatively short term nature of these nancial instruments. It was not practicable to estimate the fair value of the Groups investment in unquoted shares due to the lack of comparable quoted market prices and the inability to estimate fair value without incurring excessive costs. The fair values of other nancial liabilities are as follows: 31.12.2012 Group Fixed rate term loans Finance lease liabilities Carrying amount RM'000 2,214 185 Fair value RM'000 1,900 174 31.12.2011 Carrying amount RM'000 4,518 293 Fair value RM'000 3,986 275 1.1.2011 Carrying amount RM'000 7,752 192 Fair value RM'000 7,682 189

CORPORATION BHD 59 2012 ANNUAL REPORT

Notes to the nancial statements


Interest rate used to determine fair value The interest rate used to discount estimated cash ows, when applicable, are as follows: 31.12.2012 Secured xed rate term loan Finance leases 25.7.1 Fair value hierarchy The table below analyses nancial instruments carried at fair value, by valuation method. The different levels have been dened as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Level 1 RM'000 31.12.2012 Finance assets Other investments 31.12.2011 Finance assets Other investments 1.1.2011 Finance assets Other investments 26. Related parties Identity of related parties For the purposes of these nancial statements, parties are considered related to the Group if the Group or the Company has the ability, directly or indirectly, to control the party or exercise signicant inuence over the party in making nancial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common signicant inuence. Related parties may be individuals or other entities. Related parties also include key management personnel dened as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the Directors of the Group, and certain members of senior management of the Group. The Group has a related party relationship with its subsidiaries (Note 27) and associates (Note 5), Directors and key management personnel. 1,252 1,252 144 144 1,550 1,550 Level 2 RM'000 Level 3 RM'000 Total RM'000 6.6% 2.46% - 3.50% 31.12.2011 6.6% 2.51% - 3.55% 1.1.2011 6.3% 3.50% - 3.55%

60

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


Signicant related party transactions Signicant related party transactions of the Group and the Company, other than key management personnel compensation as disclosed in Note 17 to the nancial statements, are as follows: Group 31.12.2012 31.12.2011 RM'000 RM'000 Subsidiaries Dividends receivable Management fees receivable Company 31.12.2012 31.12.2011 RM'000 RM'000 (400) (9,906) (400)

1.1.2011 RM'000 Group

1.1.2011 RM'000 (11,144) (693)

2012 RM'000 Associates Dividends Sales of text book Sales of machine Purchases Management fees Other income (1,984) (79) 455 (10) (59)

2011 RM'000 (2,953) 478 (20) -

Company 2012 2011 RM'000 RM'000 (2,130) (10) (20) -

Related party transactions have been entered into in the normal course of business under normal trade terms. Information regarding outstanding balances arising from related party transactions as at 31 December 2012 is disclosed in Note 10 and Note 14. 27. Subsidiaries in the Group The principal activities of the subsidiaries in the Group and the interest of UPA Corporation Bhd. are as follows: Effective ownership interest Name of Subsidiary UPA Press Sdn. Bhd.* UPA Machinery Sdn. Bhd.* UPA Plastik Sdn. Bhd.@ Macro Plastic Sdn. Bhd.* and its subsidiary: Wangsa Seputih Sdn. Bhd.@ Sukiwa Corporation Sdn. Bhd.@ and its subsidiary: Danau Cekal Sdn. Bhd.@ UPA Products Sdn. Bhd.@ Country Acres Sdn. Bhd. @ * @ # Principal activities Manufacturing of paper products Selling, reconditioning and servicing of printing and printing related machines Marketing of plastic products Manufacturing and trading of plastic products 100 70 100 100 Property investment Dormant Dormant 100 100 100 Property investment Investment holding and property investment 100 100 100 99 99 100 100 95 100 100 95 100
31.12.2012 (%) 31.12.2011 (%) 1.1.2011 (%)

100 100 100

100 100 100

100 100 100

Macroplas Industries Co., Ltd.# Manufacturing and sale of plastic products

Subsidiary incorporated in Malaysia and audited by KPMG. Subsidiary incorporated in Malaysia and audited by another rm of accountants. Subsidiary incorporated in Thailand and audited by another rm of accountants.

CORPORATION BHD 61 2012 ANNUAL REPORT

Notes to the nancial statements


28. Acquisition of non-controlling interest In December 2012, the Group acquired two (2) ordinary shares of RM1.00 each of Country Acres Sdn. Bhd. (CASB), representing the entire issued and paid-up capital of CASB for a consideration of RM2.00. CASB is a dormant company and its authorised share capital is RM100,000 comprising of 100,000 ordinary shares of RM1.00 each. The intended principal activities of CASB are investment and agricultural activities including rubber planting. On 26 December 2012, CASB entered into two Sale and Purchase Agreements (SPAs) to acquire 52.34 acres agricultural lands for a total consideration of RM6,148,800.

29. Events during the year During the year, the Group wholly-owned subsidiary, Macro Plastic Sdn. Bhd. disposed 125,000 ordinary shares of Macroplas Industries Co. Ltd. (MICL) representing 25% of the issued and paid-up share capital of MICL for a total consideration of RM325,000. Subsequently, MICL has increased its paid-up capital from RM 1,298,750 to RM3,548,750.

30. Events subsequent to reporting date In March 2013, the Group entered into an agreement to dispose of its 35.5% equity interest in The Malaya Press Sdn. Bhd. (TMP) comprising 162,800 ordinary shares of RM1.00 each for a consideration of RM7,099,993. The proceeds from the disposal shall be used for the Group general working capital purpose.

31. Capital management The Groups objective when managing capital is to maintain a strong capital base and safeguard the Groups ability to continue as a going concern, so as to maintain investor, creditor and market condence and to sustain future development of the business. The Directors regard share capital and retained earnings as the Groups capital base and monitor the adequacy of capital on an on-going basis. Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares) and such shareholders equity is not less than RM40 million. The Company has complied with this requirement. The Directors are not aware of any non-compliance with external capital requirements that may be imposed on the Group or the Company. There were no changes in the Groups approach to capital management during the nancial year.

32. Explanation of transition to MFRSs As stated in Note 1(a), these are the rst nancial statements of the Group and of the Company prepared in accordance with MFRSs. The accounting policies set out in Note 2 have been applied in preparing the nancial statements of the Group and of the Company for the nancial year ended 31 December 2012, the comparative information presented in these nancial statements for the nancial year ended 31 December 2011 and in the preparation of the opening MFRS statement of nancial position at 1 January 2011 (the Groups date of transition to MFRSs). The transition to MFRSs does not have nancial impact to the separate nancial statements of the Company.

62

CORPORATION BHD 2012 ANNUAL REPORT

Notes to the nancial statements


33. Supplementary information on the breakdown of realised and unrealised prots or losses The breakdown of the retained earnings of the Group and of the Company as at 31 December 2012, into realised and unrealised prots, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements are as follows: Group 2012 RM'000 Total retained earnings of the Company and its subsidiaries - Realised - Unrealised Total share of retained earnings of associate - Realised - Unrealised Less: Consolidation adjustments Total retained earnings 2,591 (32) 132,978 (32,243) 100,735 1,453 116,263 (24,321) 91,942 3,502 3,502 6,209 6,209 123,311 7,108 130,419 108,481 6,329 114,810 3,410 92 3,502 6,184 25 6,209 2011 RM'000 Company 2012 RM'000 2011 RM'000

The determination of realised and unrealised prots is based on the Guidance of Special Matter No.1, Determination of Realised and Unrealised Prots or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

CORPORATION BHD 63 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Statement by Directors pursuant to


Section 169(15) of the Companies Act, 1965

In the opinion of the Directors, the nancial statements set out on pages 21 to 62 are drawn up in accordance with Malaysia Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the nancial position of the Group and of the Company as of 31 December 2012 and of their nancial performance and cash ows for the nancial year then ended. In the opinion of the Directors, the information set out in Note 33 on page 63 to the nancial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Prots or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Chua Ngeun Lok

Kok Kam Moi

Kuala Lumpur, Date: 26 April 2012

64

CORPORATION BHD 2012 ANNUAL REPORT

Statutory declaration pursuant to

CORPORATION BHD (384490-P)

Section 169(16) of the Companies Act, 1965

I, Wong Kok Wah, the ofcer primarily responsible for the nancial management of UPA Corporation Bhd., do solemnly and sincerely declare that the nancial statements set out on pages 21 to 62 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed in Kuala Lumpur on 26 April 2013.

Wong Kok Wah

Before me:

CORPORATION BHD 65 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Independent auditors report to the members of UPA Corporation Bhd.


(Company No. 384490-P) (Incorporated in Malaysia)

Report on the Financial Statements We have audited the nancial statements of UPA Corporation Bhd., which comprise the statements of nancial position as at 31 December 2012 of the Group and of the Company, and the statements of prot or loss and other comprehensive income, changes in equity and cash ows of the Group and of the Company for the year then ended, and a summary of signicant accounting policies and other explanatory information, as set out on pages 21 to 62.

Directors Responsibility for the Financial Statements


The Directors of the Company are responsible for the preparation of nancial statements so as to give a true and fair view in accordance with Malaysia Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility
Our responsibility is to express an opinion on these nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the nancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation of nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the nancial statements. We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Opinion
In our opinion, the nancial statements give a true and fair view of the nancial position of the Group and the Company as of 31 December 2012 and of its nancial performance and cash ow for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standard and the requirements of the Companies Act, 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. b) We have considered the accounts and the auditors report of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 27 to the nancial statements. c) We are satised that the accounts of the subsidiaries that have been consolidated with the Companys nancial statements are in form and content appropriate and proper for the purposes of the preparation of the nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. d) The audit reports on the accounts of the subsidiaries did not contain any qualication or any adverse comment made under Section 174(3) of the Act.

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CORPORATION BHD 2012 ANNUAL REPORT

Independent auditors' report to the members of UPA Corporation Bhd. (cont.)


Other Reporting Responsibilities Our audit was made for the purpose of forming an opinion on the nancial statements taken as a whole. The information set out in Note 33 on page 63 to the nancial statements has been compiled by the Company as required by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Prots or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Other Matters As stated in Note 1(a) to the nancial statements, UPA Corporation Bhd. and its subsidiaries adopted Malaysian Financial Reporting Standards (MFRS) and International Financial Reporting Standards (IFRS) on 1 January 2012 with a transition date of 1 January 2011. These standards were applied retrospectively by Directors to the comparative information in these nancial statements, including the statements of nancial position as at 31 December 2011 and 1 January 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash ows for the nancial year ended 31 December 2011 and related disclosures. We were not engaged to report on the comparative information that is prepared in accordance with MFRS and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the nancial statement of the Group and of the Company for the nancial year ended 31 December 2012 have, in these circumstances, included obtaining sufcient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements that materially affect the nancial position as of 31 December 2012 and nancial performance and cash ows for the year then ended. This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Firm Number: AF 0758 Chartered Accountants Petaling Jaya, Selangor Date: 26 April 2013

Siew Chin Kiang @ Seow Chin Kiang Approval Number: 2012/11/14(J) Chartered Accountant

CORPORATION BHD 67 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Analysis Of Shareholdings
as at 9 May 2013
: : : : RM 100,000,000 RM 79,581,840 (inclusive of 1,950,240 treasury shares) Ordinary share of RM 1.00 each One voting right for each ordinary share

Authorised share capital Issued and fully paid up share capital Class of share Voting right

DISTRIBUTION OF SHAREHOLDERS AS AT 9 MAY 2013 Holdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 to 100,000 100,001to less than 5% of the issued shares 5% and above of the issued shares Total 30 LARGEST SHAREHOLDERS AS AT 9 MAY 2013 Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. UPA Holdings Sdn Bhd Mastercraft Products Sdn Bhd EB Nominees (Tempatan) Sdn Bhd - Pledged securities account for Mohamed Zameel Bin Mohamed Hussain Kok Kam Moi CIMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account for Chu Soong Tau CIMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account for Raja Nong Chik B. Raja Zainal Abidin Yeo Wee Thow @ Yeo Ngo Tee CIMSEC Nominees (Tempatan) Sdn Bhd - Pledged securities account for Chua Ngeun Lok K.L. Union Trading (Papers) Sdn Bhd Malaysia Nominees (Tempatan) Sendirian Berhad - Great Eastern Life Assurance (Malaysia) Berhad (LPF) Chua Ngeun Lok Abdul Ghani bin Abdul Aziz Chu Soong Tau Lee Seow Chang Lim Seng Heng Lee Mui Kien Chang Ching Chau @ Tew King Chang Ng Seow Sing Quality Synthetics (M) Sdn Bhd No. of share 40,775,089 3,365,296 1,792,500 1,153,572 800,000 785,400 774,900 554,846 524,960 508,320 504,000 500,000 500,000 480,880 443,179 437,148 434,400 420,000 420,000 % 52.52 4.33 2.31 1.49 1.03 1.01 1.00 0.71 0.68 0.65 0.65 0.64 0.64 0.62 0.57 0.56 0.56 0.54 0.54 No. of holders 328 159 1,789 288 59 1 2,624 % 12.50 6.06 68.18 10.98 2.24 0.04 100.00 Total holdings 19,147 87,888 5,826,623 8,137,082 22,785,771 40,775,089 77,631,600 % 0.02 0.11 7.51 10.48 29.36 52.52 100.00

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CORPORATION BHD 2012 ANNUAL REPORT

Analysis of Shareholding (cont.)


20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Golden Circle Resources Sdn Bhd HLIB Nominees (Tempatan) Sdn Bhd - Pledged securities account for Mohamed Zameel Bin Mohamed Hussain Chua Ah Lak Lee Hock Seng Chu Sheng Taur Ma Huak Huang Lee Tong Choo Kee Lek Kia Mrs Nafesah Raja Nong Chik Abidin Yap San San Ng Seow Sing 386,400 368,500 336,720 331,776 320,000 312,535 307,840 292,860 273,000 273,000 235,200 0.50 0.47 0.43 0.43 0.41 0.40 0.40 0.38 0.35 0.35 0.30

SUBSTANTIAL SHAREHOLDER AS AT 9 MAY 2013 (as per Register of Substantial Shareholders) No. of ordinary shares held Direct UPA Holdings Sdn Bhd Kok Kam Moi Chua Ngeun Lok Chua Ngeun Seong Ma Huak Huang 40,775,089 1,153,572 1,058,846* 420,096** 312,535 % 52.52 1.49 1.36 0.54 0.40 Indirect 40,848,589# 42,192,145# 42,590,895# 42,346,274# % 52.62 54.35 54.86 54.55

Name 1. 2. 3. 4. 5.

Note : * ** #

including 554,846 ordinary shares held under CIMSEC Nominees (Tempatan) Sdn Bhd including 218,496 ordinary shares held under Citigroup Nominees (Tempatan) Sdn Bhd Deemed interested by virtue of Section 6A (4) and Section 122 A of the Companies Act, 1965

DIRECTORS' SHAREHOLDING AS AT 9 MAY 2013 (as per Register of Directors' shareholding) No. of ordinary shares held Direct Chua Ah Lak Kok Kam Moi Chua Ngeun Lok Chua Ngeun Seong Ma Huak Huang Yeo Wee Thow @ Yeo Ngo Tee 336,720 1,153,572 1,058,846* 420,096** 312,535 984,900 % 0.43 1.49 1.36 0.54 0.40 1.27 Indirect 131,600## 40,848,589# 42,192,145# 42,590,895# 42,346,274# 1,075,200# % 0.17 52.62 54.35 54.86 54.55 1.39

Name 1. 2. 3. 4. 5. 6.

Note : * ** # ##

including 554,846 ordinary shares held under CIMSEC Nominees (Tempatan) Sdn Bhd including 218,496 ordinary shares held under Citigroup Nominees (Tempatan) Sdn Bhd Deemed interested by virtue of Section 6A (4) and Section 122 A of the Companies Act, 1965 Deemed interested by virtue of Section 122A of the Companies Act, 1965

The analysis of sharholdings is based on the issued and paid up share capital of the company after deducting 1,950,240 ordinary shares bought back by the company and held as Treasury Shares as at 9 May 2013.

CORPORATION BHD 69 2012 ANNUAL REPORT

CORPORATION BHD (384490-P)

Particulars Of Properties
at 31 December 2012
Tenure (expiry of lease) Description of existing use Land Area / built-up area (sq. metres) Date of revaluation /acquisition Estimated Age of Building (years) Net Book Value RM

Proprietor

Location

UPA Press Sdn Bhd

Lot 27678 Mukim Of Kuala Lumpur, Sdn Bhd Wilayah Persekutuan Lot 27678, Simpang Salak South Industrial Area, Batu 5 1/2, Jalan Sungai Besi, Kuala Lumpur. Building Land Factory and 3 storey Ofce Building -/7,000 10,049/20-4-1996/20-4-1996/39 1,627,143 2,338,584

Leasehold 20- Land on which a 4-2071 factory and 3 storey ofce building was built Leasehold 3 storey shop-lot 11-11-2076 and ofce building

UPA Press Sdn Bhd

P.T. No 19514 Mukim Of Petaling. Wilayah Persekutuan 52, Jalan Mega Mandung, Batu 5, Jalan Kelang Lama, Kuala Lumpur No. 12-1A Jalan 3/116B, Kuchai Enterpreneurs Park Off Jalan Kuchai Lama, Kuala Lumpur P.T. No 3473 Mukim Of Petaling, Selangor. Lot 3, Jalan 6/1, Seri Kembangan Industrial Estate Seri Kembangan Selangor Darul Ehsan. ( Building only ) HS (D) 62387 Lot 8228 Mukim Of Petaling, Daerah Kuala Lumpur Wilayah Persekutuan. HS (D) 381 PT28165, Mukim Of Kuala Lumpur, Daerah Kuala Lumpur Wilayah Persekutuan. P.T. No 3473 Mukim Of Petaling, Selangor. Lot 3, Jalan 6/1, Seri Kembangan Industrial Estate, Seri Kembangan, Selangor Darul Ehsan. ( Land Only ) Lot 5811 Mukim Of Petaling, Selangor. Lot 5813 Mukim Of Petaling, Selangor. HS (M) 13714 P.T. No 3746 Mukim Of Petaling, Selangor. Building

126/388

20-4-1996/-

34

582,779

UPA Press Sdn Bhd UPA Press Sdn Bhd

Freehold

One unit of apartment for staff accommodation. Factory for manufacturing of plastic products

-/87

20-4-1996/-

23

52,888

Leasehold 10-1-2089

-/9,000

20-4-1996/-

18

5,766,807

Ofce -/1,486 Leasehold Land on which a 2 11-11-2065 storey factory and ofce building was built 10,445/ 8,500 20-4-1996/-/2005 14 43 998,000 8,242,919

UPA Press Sdn Bhd

UPA Press Sdn Bhd

Leasehold Factory and 2 storey 3,342/500 31-12-2065 ofce buliding

-/2005

19

5,665,549

Wangsa Seputih Sdn Bhd

Leasehold 10-1-2089

Land on which an ofce and a factory was built

16,214/-

20-4-1996/-

4,020,389

Sukiwa Corporation Sdn Bhd Danau Cekal Sdn Bhd UPA Machinery Sdn Bhd

Freehold

Vacant Land

30,882/-

30-04-2009/-

10,969,000

Freehold Leasehold 20-1-2089

Vacant Land Land on which a factory was built

20,764/10,302/-

30-04-2009/12-12-2005/-

7.375,000 4,461,578

Factory

-/5,000

26-11-2008

4,105,340

70

CORPORATION BHD 2012 ANNUAL REPORT

.............................................................................................................................................................................................................................................................................................................................................................

Proxy Form
CDS Account No.: Number of shares held:

CORPORATION BHD (384490-P)

I/We............................................................................................................................................................................................................................................................................................................................................................................................................... of ................................................................................................................................................................................................................................................................................................................................................................................................................ being a *member/ members of UPA CORPORATION BHD, hereby appoint ......................................................................................................................................................................................................
.............................................................................................................................................................................................................................................................................................................................................................................................................................................

of .......................................................................................................................................................................................................................................................................................................................................................................................... and/or failing him/ her, ................................................................................................................................................................................................................................................................................................................................................................. of ........................................................................................................................................................................................................................................................................................................................................................................................................... or the Chairman of the Meeting as *my/ our proxy to attend and vote for *me/ us on *my/ our behalf at the Seventeenth Annual General Meeting of the Company to be held at Congress I, Palace of the Golden Horses, Jalan Kuda Emas, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Friday, 28 June 2013 at 11:30 a.m. and at any adjournment thereof:No. 1. 2. 3. 4. 5. 6. 7. 8. Resolutions Declaration of First and Final Dividend Payment of Directors Fees Re-appointment of Mr. Ma Huak Huang as Director Re-election of Mr. Chua Ngeun Seong as Director Re-appointment of Auditors and authorising Directors to x their remuneration Proposed retention of Mr. Yeo Wee Thow @ Yeo Ngo Tee as Independent Director Authority to issue shares pursuant to Section 132D Proposed Renewal of Share Buy-Back Authority For Against

The proportion of *my/our holding to be represented by my/our *proxy/proxies are as follows: First Named Proxy % Second Named Proxy % 100% In case of a vote taken by show of hands, the rst named proxy shall vote on *my/our behalf.

..................................................................................................................................................................

Signature of Shareholder Telephone No. .................................................................................................................. Dated this....................................................................... day of June 2013
NOTES: i. ii. iii. iv. v. vi. vii. A member entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and to vote in his stead. There shall be no restriction as to the qualication of the proxy. The instrument appointing a proxy shall be in writing signed by the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an ofcer or attorney duly authorised. Where the member of the Company appoints two (2) proxies, the appointment shall be invalid unless the member species the proportion of his shareholding to be represented by each proxy. Only members registered in the Record of Depositors as at 21 June 2013 shall be eligible to attend, speak and vote at this meeting or appoint proxy to attend and vote for his/her behalf. Where the member of the Company is an authorised nominee as dened under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds. Shareholders attention is hereby drawn to the Main Market Listing Requirements of the Bursa Malaysia Securities Berhad, which allows a member of the Company which is an exempt authorised nominee, as dened under the Securities Industry (Central Depositories) Act, 1991, who holds ordinary shares in the Company for multiple benecial owners in one securities amount (omnibus account) to appoint multiple proxies in respect of each omnibus account it holds. The instrument appointing the proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certied copy thereof must be deposited at the Registered Ofce of the Company at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting.

.............

Postage The Company Secretary

UPA CORPORATION BHD


(384490-P)

Lot 10, The Highway Centre Jalan 51/205 46050 Petaling Jaya Selangor Darul Ehsan