contents ums holdings berhad (74125) nn reort 2012 2 expertise to serve (resolution 1) (resolution...

Notice of Annual General Meeting

Corporate Information

Corporate Governance Statement

Statement on Corporate Social Responsibility

Statement on Internal Control

Directors’ Profile

Audit Committee Report

2 6

7

8 14

15

16

17 19

20 23

C

Chairman’s Statement

Corporate Structure

Financial Statements

List of Group Properties

Analysis of Shareholdings

Proxy Form

24 25

26

27 86

87 91

92 94

ANNUAL REPORT 2012ontents

UMS HoldingS BerHad (74125-V) annual report 2012

2

e x p e r t i s e t o s e r v e

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)(Resolution 10)

notice of ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Thirty-First Annual General Meeting of

the Company will be held at Lumut 1 Room, Level 1, Vistana Hotel, No. 9 Jalan

Lumut, Off Jalan Ipoh, 50400 Kuala Lumpur on Monday, 25 March 2013 at

10:00 a.m. to transact the following business:

Agenda

Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 30 September 2012 and the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ fees amounting to RM180,000 for the financial year ended

30 September 2012 (2011 : RM134,100). 3. To declare a final dividend of 6% Gross (less Malaysian Income Tax @ 25%) for the financial year

ended 30 September 2012. 4. To declare a special dividend of 4% Gross (less Malaysian Income Tax @ 25%) for the financial year

ended 30 September 2012. 5. To consider and if thought fit, to pass the following resolution:

“That Mr. Ng Siow Hwa @ Ng Kok Hwa, who retires in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”

6. To consider and if thought fit, to pass the following resolution:

“That Mr. Ng Sing Kun @ Ng Seng Kuon, who retires in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”


“That En. Noordin Bin Mohd. Noor, who retires in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”


“That Mr. Ng Peng Huah, who retires in accordance with Section 129 (6) of the Companies Act, 1965, be and is hereby re-appointed as a Director of the Company to hold office until the conclusion of the next Annual General Meeting.”

9. To re-elect the following Directors retiring in accordance with Article 101(1) of the Company’s Articles of Association:

9.1 Mr. Ng Seng Huat 9.2 Mr. Lee Kok Wei

3



(Resolution 11)

(Resolution 12)

Notice of Annual General Meeting (continued)

10. To re-appoint Messrs. Paul Chuah & Co. as Auditors of the Company and to authorise the Directors to fix their remuneration.

Special Business

11. Ordinary Resolution – Proposed Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature which are in the Ordinary Course of Business

To consider and, if thought fit, to pass the following, with or without modifications, as an ordinary

resolution:

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Company and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given to UMS and/or its subsidiaries to enter into any of the category of recurrent related party transactions of a revenue or trading nature as set out in Part A, Section 2.3 of the Circular to Shareholders of the Company dated 1 March 2013 (“the Circular”) with the related parties mentioned therein which are necessary for UMS Group’s day-to-day operations subject further to the following:-

a) the transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public; and

b) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the Proposed Shareholder Mandate during the financial year;

AND THAT such approval shall continue to be in force until :-

a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this Annual General Meeting, at which time it will lapse, unless by a resolution passed at the said AGM, such authority is renewed;

b) the expiration of the period within which the next AGM of the Company 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

c) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is the earlier;

AND THAT authority be and is hereby given to the Board to take all such steps as necessary to implement, finalise and give full effect to and to implement the Proposed Shareholder Mandate for Recurrent Related Party Transactions with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be required or imposed by the relevant authorities from time to time and to do all such acts and things as the Board may deem fit and expedient in the best interest of the Company.”

12. Ordinary Resolution - Proposed Share Buy-Back

To consider and, if thought fit, to pass the following, with or without modifications, as an ordinary

resolution:


4


(Resolution 13)


“THAT, subject to the Companies Act, 1965, the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approval of such relevant government and/or regulatory authorities where necessary, the Company be and is hereby authorized to purchase its own ordinary shares (“Shares”) on the Bursa Securities (“Proposed Share Buy-Back”) at any time, upon such terms and conditions as the Directors shall in their discretion deem fit and expedient in the best interest of the Company provided that:-

(a) The aggregate number of Shares in the Company which may be purchased and/or held by the Company shall not exceed ten percent (10%) of the prevailing issued and paid-up share capital of the Company at the time of purchase and the compliance with the public shareholding spread requirements as stipulated in Paragraph 8.02(1) of the Listing Requirements or such other requirements as may be determined by Bursa Securities from time to time;

(b) The maximum funds to be allocated by the Company for the purpose of purchasing the Shares shall not exceed the Company’s latest audited retained profits and/or share premium accounts of the Company of RM2,934,730 and RM1,843,740 respectively as at 30 September 2012;

(c) The authority conferred by this resolution will commence after the passing of this ordinary

resolution and will continue to be in force until:- (i) the conclusion of the next Annual General Meeting (“AGM”) at which time it shall

lapse unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions; or

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

(iii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting;

whichever occurs first; and (d) Upon the purchase by the Company of its own Shares, the Board be and is hereby authorized

to:- (i) cancel all or part of the Shares purchased pursuant to the Proposed Share Buy-Back

(“Purchased Shares”); and/or (ii) retain all or part of the Purchased Shares as Treasury Shares; and/or (iii) distribute the Treasury Shares as share dividends to the Company’s shareholders for

the time being; and/or (iv) resell the Treasury Shares on Bursa Securities.

AND that authority be and is hereby given to the Board to take all such steps as necessary to implement, finalise and give full effect to and to implement the Proposed Share Buy-Back with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be required or imposed by the relevant authorities from time to time and to do all such acts and things as the Board may deem fit and expedient in the best interest of the Company.”

13. Special Resolution – Proposed Amendments to the Company’s Articles of Association (“Proposed Amendments of Articles of Association”)

To consider and, if thought fit, to pass, with or without modifications, the following as a special resolution :

5




“THAT the amendments to the Articles of Association of the Company as set out in Part C of the Circular to Shareholders dated 1 March 2013 be and is hereby approved and adopted AND THAT the Directors of the Company be and are hereby authorised to give full effect to the said amendments, alterations, modifications and deletions to the Articles of Association of the Company as may be required by any relevant authorities as they deem fit, necessary or expedient in order to give full effect to the Proposed Amendments to the Company’s Articles of Association.”

14. To transact any other business for which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT

NOTICE IS HEREBY GIVEN that subject to the approval of the shareholders at the Annual General Meeting to be held on 25 March 2013, a Final Dividend of 6% Gross (less Malaysian Income Tax @ 25%) and a Special Dividend of 4% Gross (less Malaysian Income Tax @ 25%) in respect of the financial year ended 30 September 2012 will be paid on 25 April 2013 to shareholders whose names appear in the Company’s Record of Depositors on 10 April 2013.

A Depositor shall qualify for entitlement only in respect of:

(a) Securities transferred into the Depositor’s Securities Account before 4:00 p.m. on 10 April 2013 in respect of transfers; and

(b) Securities bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

FURTHER NOTICE IS HEREBY GIVEN THAT for the purpose of determining a member who shall be entitled to attend this Thirty-First Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. (Bursa Depository) in accordance with Article 67 (3) of the Company’s Articles of Association and Section 34 (1) of the Securities Industry (Central Depositories) Act 1991 to issue a General Meeting Record of Depositors as at 18 March 2013. Only a depositor whose name appears on the Record of Depositors as at 18 March 2013 shall be entitled to attend the said meeting or appoint proxy/proxies to attend and/or vote on his behalf.

By order of the Board

HO MUN YEE (MAICSA 0877877)TAM FONG YING (MAICSA 7007857)Company Secretaries

Kuala Lumpur1 March 2013

NOTES:

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

3. The instrument appointing a proxy must be deposited at the Company’s Registered Office at 3rd Floor, No. 17 Jalan Ipoh Kecil, 50350 Kuala Lumpur not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof.

(Special Resolution 1)


6



EXPLANATORY NOTES ON SPECIAL BUSINESS

1. Proposed Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature which

are in the Ordinary Course of Business

The Ordinary Resolution, if approved, will authorise UMS Group to enter into any of the category of recurrent

related party transactions of a revenue or trading nature as set out in Section 2.3 of the Circular to Shareholders

of the Company dated 1 March 2013 (“the Circular”) provided that such transactions are in the ordinary course

of business and are on normal commercial terms which are not more favourable to the related parties than those

generally available to the public and disclosure is made in the annual report of the aggregate value of transactions

conducted pursuant to the Proposed Shareholder Mandate during the financial year. This authority, unless revoked

or varied by the Company at a general meeting, will expire at the conclusion of the next Annual General Meeting of

the Company or will subsist until the expiration of the period within which the next AGM of the Company is required

by law to be held, whichever is the earlier.

2. Proposed Share Buy-Back

The Ordinary Resolution, if passed, will provide mandate for the Company to buy-back its own shares up to a limit

of 10% of the existing issued and paid-up share capital of the Company. Further explanatory notes on Resolution

13 is set out in the Statement to Shareholders dated 1 March 2013 despatched together with the Annual Report.

3. Proposed Amendments to the Company’s Articles of Association

The proposed amendments to the Articles of Association will enable the Company to comply and to be in line with

the recent amendments to the Listing Requirements of Bursa Malaysia Securities Berhad, prevailing statutory and

regulatory requirements as well as to update the Articles of Association of the Company. Further explanatory notes

on Special Resolution 1 is set out in the Circular to Shareholders dated 1 March 2013 despatched together with the

Annual Report.

STATEMENT ACCOMPANYING THE NOTICE OF THE THIRTY-FIRST ANNUAL GENERAL MEETING

Further details of Directors who are standing for re-appointment and re-election as Directors

The profiles of the Directors who are standing for re-appointment and re-election at the Thirty-First Annual General Meeting

are set out in the Board of Directors’ Profile on pages 17 to 19 of the Annual Report. Their shareholdings in the Company

are set out in the section entitled “Analysis of Shareholdings” on page 94 of the Annual Report.

No individual other than the retiring Directors are seeking appointment and election as a Director at the Thirty-First

Annual General Meeting.

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Company Secretaries

Ho Mun Yee (f) (MAICSA 0877877)Tam Fong Ying (f) (MAICSA 7007857)

Registered Office

3rd Floor, No. 17 Jalan Ipoh Kecil 50350 Kuala LumpurTel: 603-4044 3235Fax: 603-4041 3959Email: [email protected]

Principal Place of Business

2, Jalan Segambut Pusat Segambut51200 Kuala LumpurWeb-Site: http://www.umsh.com

Share Registrar

Equiniti Services Sdn. Bhd.Level 8 Menara MIDF82 Jalan Raja Chulan50200 Kuala LumpurTel : 603-2166 0933Fax : 603-2166 0688

corporate INFORMATION

Board of Directors

Ng Siow Hwa @ Ng Kok Hwa (Chairman)

Ng Seng Kong (Managing Director)

Ng Sing Kun @ Ng Seng Kuon

Noordin Bin Mohd. Noor

Ng Sing Huat

Ng Peng Huah

Ng Seng Huat

Lee Kok Wei

Thing Hua @ Ng Thing Hua

Principal Bankers

HSBC Bank Malaysia Berhad Alliance Bank Malaysia Berhad

Malayan Banking Berhad

Auditors

Paul Chuah & Co

Chartered Accountants

2nd Floor, No 17

Jalan Ipoh Kecil

50350 Kuala Lumpur

Stock Exchange Listings

Main Market of Bursa Malaysia Securities Berhad


8


corporate GOVERNANCE STATEMENT

The Board of Directors is committed to ensuring that the highest standards of corporate

governance is practised throughout the Group as a fundamental part of discharging its

responsibilities to protect and enhance shareholders values and the financial performance of

UMS Holdings Berhad.

The Board

An effective Board leads and controls the Group. The Board meets at least four times a year with additional meetings convened as necessary. Details of Directors’ attendance at board meetings held in the financial year ended 30 September 2012 are as stated on page 9.

There is a clear division of responsibility between the Executive Chairman and Managing Director to ensure that there is a balance of power and authority.

Board Balance

The Board currently comprises of Nine Directors of which four are Executive Directors, two are Non Independent Non-Executive Director and the remaining three are Independent Non-Executive Directors. A brief description of the background of each Director is presented on pages 17 to 19.

There is balance in the Board because of the presence of independent Non-Executive Directors who have the calibre, skills and experience necessary to carry sufficient weight in Board decision. Although all the Directors have an equal responsibility for the Group’s operations, the roles of these independent Non-Executive Directors will ensure that any strategies and business plans proposed by the Executive Directors and Executive Management are fully discussed and examined, and the long term interests of the shareholders and the many communities in which the Group conducts business such as employees, customers, suppliers are taken into consideration. En. Noordin Bin Mohd. Noor acts as the senior independent Non-Executive Director to whom concerns concerning the Group may be conveyed.

Supply Of Information

All directors are issued with a Board’s report prior to the Board meeting. This is issued with sufficient time to enable the Directors to obtain further information or clarification if necessary before the meeting. The Board’s report includes financial and operational issues.

Directors have access to all information within the company and access to the advice and services of the Company Secretary in furtherance of their duties. There is also an agreed procedure for Directors to take independent professional advice at the company’s expenses, if necessary.

Directors receive further training from time to time, particularly on relevant new laws and regulations and changing commercial risks. In addition, any newly appointed Directors are given an orientation and education program.

Appointments To The Board

Currently, there is a Nomination Committee comprising exclusively of independent Non-Executive Directors with the responsibility of proposing new nominees for the Board and assessing Directors on an on going basis. The actual decision as to who shall be nominated is the responsibility of the full Board after considering the recommendations of the Nomination Committee.

9



Corporate Governance Statement (continued)

Appointments To The Board (continued)

The Nomination Committee comprises of:

Noordin Bin Mohd. Noor (Independent Non-Executive Director) - ChairmanLee Kok Wei (Independent Non-Executive Director)Ng Peng Huah (Independent Non-Executive Director)

Generally the Board through the Nomination Committee reviews annually its required mix of skills and experience and other qualities, including core competencies which Non-Executive Director should bring to the Board.

Re-Election

In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board are subject to election by shareholders at the first opportunity after their appointment. The Articles also provide at least one third of the Directors are subject to re-election by rotation at each Annual General Meeting.

In addition, in accordance with Section 129 of the Companies Act 1965, Directors of seventy years and above shall retire and are subject to re-appointment at each Annual General Meeting.

Directors’ Attendance

During the financial year ended 30 September 2012, the Board of Directors held meetings on 24 November 2011, 17 January 2012, 27 February 2012, 21 May 2012 and 28 August 2012 respectively, a total of Five (5) meetings. Details of attendance of Directors at the Board Meetings are as follows :-

Name Attendance

Ng Siow Hwa @ Ng Kok Hwa 5/5Noordin Bin Mohd. Noor 5/5Ng Seng Kong 5/5Ng Sing Kun @ Ng Seng Kuon 5/5Ng Sing Huat 5/5Ng Peng Huah 5/5Ng Seng Huat 5/5Lee Kok Wei 5/5Thing Hua @ Ng Thing Hua 5/5

Directors’ Remuneration

The Board ensures that the levels of remuneration are sufficient to attract and retain the Directors needed to run the Group successfully. In the case of Executive Directors, the component parts of remuneration link rewards to corporate and individual performance. In the case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the Non-Executive Directors.

The aggregate remuneration of the Directors of the Company in the Group categorised into the appropriate components are as follows:-

Total Total Executive Directors Non-Executive Directors

RM RM

Fees 122,584 80,000 Salaries & Other Emoluments 1,850,745 18,600 Benefits in Kind 80,175 –


10



Directors’ Remuneration (continued)

The aggregate remuneration of Directors of the Company in the Group for the financial year ended 30 September 2012,

in respective bands of RM50,000 are as follows:-

Range of Remuneration Executive Directors Non-Executive Directors

Below RM50,000 – 4 RM50,001 –– RM100,000 – – RM100,001 –– RM150,000 1 – RM150,001 –– RM200,000 – – RM200,001 –– RM250,000 – – RM250,001 –– RM300,000 – – RM300,001 –– RM350,000 1 – RM350,001 –– RM400,000 1 – RM400,001 –– RM450,000 – – RM450,001 –– RM500,000 – – RM500,001 –– RM550,000 2 – RM550,001 –– RM600,000 – –

Currently there is a Remuneration Committee comprising mainly of Non-Executive Directors with the responsibility to recommend to the Board the remuneration of Executive Directors. Remuneration Committee comprises of:

Noordin Bin Mohd. Noor (Independent Non-Executive Director) - ChairmanLee Kok Wei (Independent Non-Executive Director)Ng Peng Huah (Independent Non-Executive Director)Ng Seng Kong (Managing Director)

The determination of the remuneration packages of Non-Excecutive Directors is a matter for the board as a whole.

Training and Development of Directors

In compliance with the Listing Requirements and the relevant Practice Note issued by Bursa Securities, all Directors have attended the Mandatory Accreditation Programme (“MAP”) prescribed by Bursa Securities. The Directors are also aware of their duty to undergo appropriate training programmes from time to time to ensure that they be better equipped to carry out their duties as Directors. The Board is mindful therefore of the need to keep abreast with changes in both the regulatory and business environments as well as with new developments within the industry in which the Group operates.

During the financial year ended 30 September 2012, the seminars and training programmes attended by various members of the Board include the following:

Tax Budget Briefing 2012 MFRS/FRS Guide for Audit Committees and Internal Auditors – Adding Values Malaysia FRS Update and IFRS Convergence Seminar by KPMG Budget 2012 Highlights and Latest Tax Development Tax Strategies to consider when investing abroad IFRS/MFRS Technical Update for Management Accountants 2012 Corporate Governance Blueprint and Malaysia Code of Corporate Governance 2012 by Bursa Malaysia Blue Ocean Strategy Made Simple Empowering the Team

11




Training and Development of Directors (continued)

CIMA Strategic Score Card Tax Risk Management – Old Perspectives, New Challenges Modern Manners for today’s business world : Building a Professional Image Getting ready for GST implementation Sustainability : Taking Corporate Governance A Step Further :- a) The Shape of Things to come for Chartered Secretaries b) The Age of Integration – A New Dawn for Corporate Reporting c) Board Balance, Board Governance and Composition, Women on Boards d) Corporate Governance : The Pillar of Business Sustainability e) Asean Corporate Governance Scorecard and CG ranking of Asean PLCs f) The Continuing CG Agenda. Next Steps for Asia g) Reporting on CG Practices : What do people want to know? h) Oxford Union Style CG Debate : Motion, Independent Directors are a MYTH i) Taking Socially Responsible Investment Practices Forward j) Corporate Governance + Corporate Responsibility + Innovation : The Building Blocks for Economic Sustainability k) Risk Management & Internal Controls – are the BOARDS aware what they are up against?

Dialogue Between Companies And Investors

The Executive Chairman or Executive Managing Director hold discussions with investors as and when required. However any information that may be regarded as undisclosed material information about the Group will not be given.

Annual General Meeting

At each Annual General Meeting, the Board presents the progress and performance of the business and encourages the shareholders to participate in the question–and–answer session. The Board of Directors is available to respond to shareholders’ questions during the meeting. Where appropriate, any significant question that cannot be readily answered on the spot, the Executive Chairman, or Managing Director will undertake to provide a written answer.

Each item of special business included in the notice of the meeting will be accompanied by a full explanation of the effects of a proposed resolution.

Financial Reporting

The individual quarterly unaudited reports and the annual report that are announced to shareholders on a timely basis should present a balanced and understandable assessment of the Group’s and Company’s position and prospects.

Internal Control

The Board of Directors acknowledge their responsibility to maintain a sound system of internal controls and management

information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines,

in order to safeguard shareholders’ investments and the Group’s and Company’s assets.

The Group has an internal audit department, which reports to the Audit Committee and assists the Board of Directors in

monitoring and managing risks and internal controls.

The Audit Committee has the authority to examine a particular issue and report back to the board with its recommendation.

The role of the Audit Committee is further described on pages 20 to 23.


12


Estimated value from the Mandate

obtained at the 30th AGM in 2012

(RM)

6,000,000

100,000

10,000

200,000

Company in the UMS Group involved

UMS Corporation Sdn Bhd(UMSC)



Aggregate Value of

Transactions (RM)

5,010,716

19,385

–

158,870

Type of Transaction

Sales from UMSC to KKM , including

• Mechanical power transmission and material handling products and systems

• Industrial spare parts

Sales from UMSC to UMST, including



Sales from UMST to UMSC, including



Sales from UMSC to RKM, including



Related Party

K. K. Machinery Sdn Bhd (KKM)

UMS Transmission Pty Ltd (UMST)

Rokonma (M) Sdn Bhd(RKM)


Relationship With The Auditors

The role of the Audit Committee in relation to the external auditors is described on page 21.

Other Information

Non-audit fees

The amount of non-audit fees paid to the external auditors for the financial year ended 30 September 2012 is Nil.

Imposition of sanctions/penalties

There were no sanctions/penalties imposed on the Group, directors or management by relevant regulatory bodies.

Employees’ Share Option Scheme allocation

There were no allocation of Employees’ Share Option Scheme (ESOS) options offered by the Company during the financial

year ended 30 September 2012.

Recurrent Related Party Transactions Of A Revenue Or Trading Nature

Recurrent related party transactions of a revenue or trading nature conducted pursuant to the shareholders’ mandate

during the financial year ended 30 September 2012, are as set out below:-

13



Estimated value from the Mandate

obtained at the 30th AGM in 2012

(RM)

400,000

46,800

6,000,000

200,000

204,000

per annum

100,000

600,000

150,000

400,000

Related Party

Rokonma (M)

Sdn Bhd

(RKM)

UMS (Sarawak)

Sdn Bhd (UMSS)

MKS Sdn. Bhd.

(MKS)

[ 45.13% held by

ATU]

K. K. Machinery

Sdn Bhd (KKM)

UMS (Sarawak)

Sdn. Bhd.

(“UMSS”)

Rokonma (M)

Sdn Bhd

(RKM)

Company in the UMS Group involved

UMS Corporation

Sdn Bhd

(UMSC)

UMS Corporation

Sdn Bhd (UMSC)

UMS Corporation

Sdn Bhd (UMSC)

UMS

Manufacturing

Sdn Bhd

(UMSM)

UMS

Manufacturing

Sdn. Bhd.

(UMSM)

UMS (Sarawak)

Sdn. Bhd. (UMSS)

Aggregate Value of Transactions

(RM)

214,342

40,800

4,333,239

11,112

204,000

–

433,410

18,025

336,440

Type of Transaction

Sales from RKM to UMSC,

including

• Conveyor rollers and parts

Management fees paid or payable

by RKM to UMSC

Sales from UMSC to UMSS,

including

• Mechanical power transmission

and material handling products

and systems


Sales from UMSS to UMSC,

including




Rental paid or payable by MKS to

UMSC on a monthly basis

Sales from UMSC to MKS,

including



and systems


Sales from UMSM to KKM,

including

• Steel wire mesh

Sales from UMSM to UMSS,

including

• Steel wire mesh

Sales from RKM to UMSS,

including

• Conveyor rollers and parts



14



Recurrent Related Party Transactions Of A Revenue Or Trading Nature (continued)

Name of Related Parties Relationship

1. K. K. Machinery Sdn Bhd (KKM) KKM is 43.33% associated company of UMS and 56.67% held by Mr. Thing Hua @ Ng Thing Hua.

2. UMS Transmission Pty Ltd (UMST) UMST is 50% held by Mr. Ng Seng Teck. He is the brother of Mr. Ng Seng Kong, Mr. Ng Seng Eng and Mr. Ng Seng Huat.

3. Rokonma (M) Sdn Bhd (RKM) RKM is 60% held by Harmony Parade Sdn Bhd (HPSB), while HPSB is 40.4% held by NGTH, 17.1% held by Mr. Ng Sing Kun @ Ng Seng Kuon, 17.1% held by Mr. Ng Sing Huat, 11.6% held by Mr. Ng Siow Hwa @ Ng Kok Hwa and 11.6% held by Mr. Thing Hua @ Ng Thing Hua.

4. MKS Sdn Bhd (MKS) MKS is a 45.13% associated company of a wholly-owned subsidiary company of UMS, namely Aqua Terra Union Oildfield Supply Sdn Bhd (ATU).

5. UMS (Sarawak) Sdn Bhd (UMSS) UMSS is a 90% subsidiary company of UMS.

Directors’ Responsibilities Statement

As required by the Companies Act 1965, the Board of Directors acknowledged that they are responsible for preparing the

financial statements so as to give a true and fair view of the Group’s and Company’s state of affairs and of the results

and cashflows of the Group and Company for the financial year.

The Directors must ensure that in preparing the financial statements, they perform the followings: -

1. Select suitable accounting policies and applied them consistently;

2. Make judgements and estimates that are prudent and reasonable;

3. Prepare financial statements on the going concern basis as the Directors have reasonable expectation, having made

enquiries that the Company and the Group have adequate resources to continue in operational existence for the

foreseeable future.

The Directors are also responsible for keeping proper accounting records that disclose with reasonable accuracy at any

time the financial position of the Company and the Group and to enable them to ensure that the financial statements

comply with the Companies Act, 1965. In addition, the Directors are also taking reasonable steps to safeguard the assets

of the Company and Group and to detect and prevent any fraud as well as any other irregularities.

15



StateMent on CORPORATE SOCIAL RESPONSIBILITY

Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements provides that all listed companies (“PLCs”)

shall produce a description of the Corporate Social Responsibility (“CSR”) activities or practices undertaken. Towards this

end, Bursa Securities has provided a CSR Framework for all PLCs, about how to conduct business in socially responsible

ways. Within this framework four focal areas are identified covering Environment, Workplace, Community and Market Place.

In the context of the Group, the Board believes that the Group’s business and operating conditions shall be harmonized

with its Corporate Social Responsibility. Therefore, the management is encouraged to pursue CSR activities to ensure that

the people within and outside the Group benefit from the existence of our organisation.

At present the initiatives undertaken by the management primarily focus on improving the health and safety and workers’

welfare within the organisation. The key aspects of these CSR initiatives and its philosophy are as follows:

Safety and Health

The Group is committed to provide a safe and healthy working environment for employees in the Group under the

requirements of ISO. Enforcement is also carried out to ensure that continuous adherence to all safety measures is observed

at all times. Health and Safety matters are also scrutinised in our Internal Audit Function and recommendations made

are endorsed for the benefit of all employees.

Skill Development

The Group also provides in-house staff training to the employees to improve their technical competence, leadership

qualities, management qualities and update their respective fields of expertise. It is our hope that the employees of the

Group become respected and responsible citizens of society as well as leaders in their respective fields of specialisations.

Workers’ Welfare

The Group is a multi-racial organisation. To promote closer working relationship and foster better understanding among

the multi-racial employees, the Group organises sports club activities, annual dinner and annual trip to provide open

opportunities for all employees to associate freely with their colleagues.

Foundation for Malaysian Sporting Excellence

The Group acknowledges that in the interest of the Company and for the benefit and development of sports in Malaysia,

the Group had contributed to Yayasan Kecemerlangan Sukan Malaysia (Foundation for Malaysian Sporting Excellence)

(SportExcel) by making a financial commitment for a three-year period and became a member of SportExcel effective

from year 2012.


16


StateMent on INTERNAL CONTROL

Pursuant to paragraph 15.27 (b)of the Bursa Malaysia Securities Berhad ( “Bursa Securities”) Listing Requirements, the

Board of Directors (“the Board”) is require to include a statement of internal control in its annual report in addition to

its responsibility for preparing the annual audited accounts. The Board hereby acknowledge that they are responsible for

the Group’s system of internal controls and for reviewing its adequacy and integrity.

However, the Board noted that the internal control system is designed to manage rather than to eliminate risk to achieve

the business objective and can provide reasonable and not absolute assurance against material misstatement or loss.

The Group has an ongoing process to review the effectiveness, adequacy and integrity of the system of internal controls

and the key elements of internal control includes :

A clear define lines of responsibility and different level of delegation exists in the management structure.

Policies, procedures and standards of the company irregardless whether in accounts, sales, store, administrative or

general department have been established.

Employee Handbook clearly emphasizes ethical behavior and working environment to enhance corporate values.

Continuous compliance and maintenance of the requirements of ISO 9001-2000 since August 2005 and upgraded

to ISO 9001-2008 in August 2011. This includes continuous implementation, improvement and refinement of our

business processes in all operations of the Group in Malaysia.

The above elements is closely checked and monitored by the Internal Audit Department which reports its audit findings

to the Audit Committee of the Company and performs its duties in accordance with its annual audit plan which covers

the management, operational and system audit and risk management of the Group.

Apart from the above duties the Board also recognizes its responsibility over the risk management of the company. To

facilitate risk analysis, the Group has made use of a ‘Risk Assessment Application’ which requires the participation of all

department heads to analyze any risk that the Group may face. The management through the summary obtained may then

decide the recommendations given for any material risk analyzed. This is an ongoing process and being reviewed regularly.

With the above, the Board therefore maintains an ongoing commitment to strengthen its control and risk environment

and processes. There were no material losses suffered as a result of weaknesses in the internal control.

17



directorS’ PROFILE

Mr. Ng Siow Hwa @ Ng Kok Hwa Executive Chairman / Non-Independent

Mr. Ng Siow Hwa @ Ng Kok Hwa, Malaysian, aged 74, was appointed to the Board on 20 December 1988 and currently is the Executive Chairman of the Company. He has more than 40 years of knowledge and experience in this industry. He has through the years a good relationship with suppliers and customers both locally and overseas. He currently holds directorships in certain subsidiary companies within UMS Group as well as other private limited companies.

Mr. Ng Seng Kong Executive Managing Director / Non-Independent

Mr. Ng Seng Kong, Malaysian, aged 58, is the brother of Mr. Ng Seng Huat. He is the Managing Director of the Company and also a member of the Remuneration Committee. Mr. Ng is a Fellow member of Chartered Association of Certified Accountants from United Kingdom and also a Fellow member of the Chartered Institute of Management Accountants from United Kingdom. He is currently the Executive Director of MKS Sdn Bhd, one of the companies within the UMS Group of Companies, dealing in equipment and products for the oil and gas industry in Malaysia. He was appointed to the Board of UMS on 13 August 1981. He currently holds directorships in certain subsidiary companies within UMS Group as well as several other private limited companies.

Mr. Ng Sing Kun @ Ng Seng Kuon Executive Director / Non-Independent

Mr. Ng Sing Kun @ Ng Seng Kuon, Malaysian, aged 73, is the Finance Director of the Company since his appointment on 11 February 1988. He is mainly in charge of the financing activities of the Company as he has more than 19 years of banking experience with Malayan Banking Berhad (1960-1967) as a bank clerk and DCB Bank Berhad (formerly known as Development & Commercial Bank Berhad) (1967 – 1980) as an internal officer and was promoted to Group A officer of Petaling Jaya Branch in 1970. He also acted as a second officer in Kuantan and Sungei Wang Branches before joining UMS. With this experience, he is able to build a good relationship with local banks. He currently holds directorship in certain subsidiary companies within UMS Group as well as several other private limited companies.

Mr. Ng Seng Huat Executive Director / Non-Independent

Mr. Ng Seng Huat, Malaysian, aged 56, is the brother of Mr. Ng Seng Kong. He was appointed to the Board on 14 December 1995.

Mr. Ng joined the company in 1973 and had since then worked his way up through rank-and-files to the position as Director of Operations taking charge of the entire Sales Department. He was in Johor Bahru from 1986 to 1990 to set up UMS (JB) Sdn Bhd and expanded its operations there. He was called back to UMS Corporation Sdn Bhd, Kuala Lumpur in 1990 and promoted to the position of Director of Operations. Since then he has also helped to set up UMS Manufacturing Sdn Bhd, the wire-mesh factory which is now in operation in Rawang. He currently holds directorships in certain subsidiary companies within UMS Group as well as several other private limited companies.

Mr. Ng Sing Huat Non-Executive Director / Non-Independent

Mr. Ng Sing Huat, Malaysian, aged 66, was the Engineering Director of UMS Group. He joined the Group in 1981. He graduated in Mechanical Engineering from the University of Malaya in 1970. In the same year, Mr. Ng joined Premier Milk Sdn Bhd as an Engineer and Divisional Manager. He stayed with Premier Milk Sdn Bhd for more than 10 years. He was appointed to the Board of UMS on 20 December 1988. He currently holds directorship in subsidiary company within UMS Group as well as several other private limited companies.


18


Directors’ Profile (continued)

Encik Noordin bin Mohd. Noor Non-Executive Director / Independent

Encik Noordin bin Mohd. Noor, Malaysian, aged 72, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 14 December 1995 and is the chairman of the Audit Committee, Nomination Committee and Remuneration Committee.

En. Noordin graduated from the Royal Melbourne Institute Technology School of Accountancy in 1963 and was a member of the Australian Society of Accountants. Upon his return to Malaysia in 1964, Encik Noordin was employed by Bank Negara Malaysia. He was a Senior Administration Officer in the Investment Department before being promoted as a Branch Manager in Johor Bahru in 1974. In 1977, he was transferred to Kuantan as the Branch Manager. Encik Noordin became the Manager of the Local Currency Department in 1978 and Manager of the Accounting Department in 1982.

In 1984, he left Bank Negara Malaysia and joined Bank Utama (Malaysia) Berhad as General Manager. He was later promoted to the post of Managing Director of Utama Wardley (now known as Utama Merchant Bank Berhad) in 1986, a subsidiary of Bank Utama (Malaysia) Berhad whose principal activity is Merchant Banking. He held this post until 1991.

In 1993, Encik Noordin joined Ukay Lake Holdings Sdn Bhd to help in the rehabilitation of an abandoned housing project belonging to the company and left when the project completed.

Mr. Ng Peng Huah Non-Executive Director / Independent

Mr. Ng Peng Huah, Malaysian, aged 70, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 14 December 1995 and is a member of the Audit Committee, Nomination Committee and Remuneration Committee.

Mr. Ng is a graduate of the Western Australian Institute of Technology, Perth, Australia where he majored in Cost and Management Accounting, and is an associate member of the Institute of Chartered Secretaries and Administrators.

Upon his graduation in 1966, Mr. Ng worked for the Public Works Department of Perth, Western Australia as an accountant for a year. Upon his return to Malaysia in 1967, Mr. Ng was employed by the Associated Motor Industries (M) Sdn Bhd, a motor assembly plant for Ford vehicles as a Cost Accountant for nearly two years.

Between 1969 to 1978, Mr. Ng joined the Staedtler Group of Companies as Finance Director / Company Secretary for Staedtler (M) Berhad and Company Secretary for Staedtler Marketing Sdn Bhd and Staedtler Marketing (Singapore) Pte Ltd.

In 1978, he left the Staedtler Group of Companies to join the Harris Group of Companies. He was appointed as Finance Director / Company Secretary for Harris Semiconductor (M) Sdn Bhd, Harris Advanced Technology (M) Sdn Bhd and RCA Sdn Bhd between 1978 to 1989. All the above three companies were then wholly owned subsidiaries of Harris Corporation, Florida, USA.

In 1990, Mr. Ng left the Harris Group of Companies and joined the Franklin Group of Companies, a manufacturing group consisting of Franklin Porcelain Sdn Bhd and Franklin Mint Porcelain Mfg Sdn Bhd where he was the Finance Director and the Company Secretary for both companies for 4 years.

In 1995, Mr. Ng became a Dealers’ Representative in A. A. Anthony Securities Sdn Bhd., a stockbroking firm based in Penang, a position which he still holds to date.

19



Directors’ Profile (continued)

Mr. Lee Kok Wei Non-Executive Director / Independent

Mr. Lee Kok Wei, Malaysian, aged 53, is an Independent Non-Executive Director. He was appointed to the Board on 3 May 2001 and is a member of the Audit Committee, Nomination Committee and Remuneration Committee.

Mr. Lee Kok Wei is a Chartered Accountant (Malaysia), the founder and executive proprietor of LKW & Co., a chartered accounting firm established since 1990.

He is a member of the Malaysian Institute of Certified Public Accountants (MICPA), a member of the Malaysian Institute of Accountants (MIA), a member of CPA, Australia as well as a fellow member of the Chartered Tax Institute of Malaysia (CTIM).

Currently, he is a director of a few private limited companies.

Mr. Thing Hua @ Ng Thing Hua Non-Executive Director / Non-Independent

Mr. Thing Hua @ Ng Thing Hua, Malaysian, aged 62, is the brother of Mr. Ng Siow Hwa @ Ng Kok Hwa. He was appointed to the Board on 1 April 2011.

Mr. Ng is the Managing Director of Ng Thing Hua Holdings Sdn. Bhd. and K.K. Machinery Sdn. Bhd.. K.K. Machinery Sdn. Bhd. is one of the associate company of UMS Holdings Berhad. Mr. Ng has more than 40 years of knowledge and experience in the industry.

Currently, he also holds directorship in other private limited companies.

Notes:

1) Family Relationship

Mr. Ng Siow Hwa @ Ng Kok Hwa and Mr. Thing Hua @ Ng Thing Hua are siblings.

Mr. Ng Seng Kong and Mr. Ng Seng Huat are siblings and they are nephews to Mr. Ng Siow Hwa @ Ng Kok Hwa

and Mr. Thing Hua @ Ng Thing Hua.

Save as disclosed above, none of the Directors are related to each other.

2) Conflict of Interest

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

3) Conviction

None of the Directors has any convictions for any offences within the past 10 years.

4) Material Contracts

There were no other material contracts entered into by the Company and its subsidiary companies which involved

Directors and major shareholders interest either still subsisting at the end of the financial year ended 30 September

2012 or entered into since the end of the previous year.


20


audit COMMITTEE REPORT

The Board of Directors of UMS Holdings Berhad is pleased to present the report of the Audit

Committee of the Board for the financial year ended 30 September 2012.

The Audit Committee was established by a resolution of the Board on 1 March 1996.

MEMBERS AND MEETINGS

The Members of the Audit Committee during the financial year ended 30 September 2012 comprised the directors listed

below. For the said financial year, the Committee held meetings on 24 November 2011, 17 January 2012, 27 February

2012, 21 May 2012 and 28 August 2012 respectively, a total of Five (5) meetings.

Attendance at the Committee Meetings held during the Composition of the Audit Committee Financial Year ended 30 September 2012

Chairman Noordin Bin Mohd. Noor 5/5 (Independent Non-Executive Director)

Member Ng Peng Huah 5/5 (Independent Non-Executive Director)

Member Lee Kok Wei 5/5 (Independent Non-Executive Director)

TERMS OF REFERENCE OF THE AUDIT COMMITTEE

1. COMPOSITION

1.1 The Committee shall be appointed by the Board of Directors from amongst the Directors of the Company. The Committee shall comprise not less than three (3) members of whom:

(a) all the Committee must be non-executive directors, with majority of them being independent directors; and (b) at least one member of the Committee:- (i) must be a member of the Malaysian Institute of Accountants; or (ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working

experience and:- he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants

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

Schedule of the Accountants Act 1967. (iii) fulfills such other requirements as prescribed or approved by the Exchange. (c) No alternate Director shall be appointed as a member of the Committee.

1.2 The members of the Committee shall elect a Chairman from among their members who shall be an independent director.

1.3 In the event of any vacancy in the Committee resulting in the non-compliance of subparagraph 15.09(1) of the Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors shall, within three (3) months of that event, appoint such number of new members as may be required to make up the minimum number of three (3) members.

21



Audit Committee Report (continued)

2. QUORUM

The quorum of the Committee shall be two (2) of whom the majority of members present shall be independent Directors.

3. ATTENDANCE AND MEETINGS

The Committee may invite any member of the management, employees, other Directors and representatives of the internal and external auditors to be present at meetings of the Committee.

The Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide in order to fulfil its duties. In addition, the Chairman may call a meeting of the Committee if a request is made by any Committee member, the Company’s Managing Director, or the internal or external auditors.

4. FUNCTIONS

The Committee shall, amongst others, discharge the following functions:-

4.1 Review the following and report the same to the Board of Directors : (a) with the external auditor, the audit plan; (b) with the external auditor, his evaluation of the system of internal controls; (c) with the external auditor, his audit report; (d) the assistance given by the employees of the Company to the external auditor; (e) the adequacy of the scope, functions, competency and resources of the internal audit functions and that

it has the necessary authority to carry out its work; (f) the internal audit programme, processes, the results of the internal audit programme, processes or

investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

(g) the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on :-

(i) changes in or implementation of major accounting policy changes; (ii) significant and unusual events; and (iii) compliance with accounting standards and other legal requirements; (h) any related party transaction and conflict of interest situation that may arise within the Company or

Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(i) any letter of resignation from the external auditors of the Company; (j) whether there is reason (supported by grounds) to believe that the Company’s external auditor is not

suitable for re-appointment; (k) review of Statements of Internal Control and Corporate Governance Statements; and

4.2 Recommend the nomination of a person or persons as external auditors.

5. PROCEDURE

The Committee may regulate its own procedure, in particular:-

(a) the calling of meetings; (b) the notice to be given of such meetings; (c) the voting and proceedings of such meetings; (d) the keeping of minutes; and (e) the custody, production and inspection of such minutes.


22



6. AUDIT COMMITTEE REPORT

6.1 The Committee shall ensure that an Audit Committee Report be prepared at the end of each financial year that complies with subparagraphs (6.2) and (6.3) below.

6.2 The Committee report must be clearly set out in the annual report of the Company.

6.3 The Committee report shall include the following:- (a) the composition of the Committee, including the name, designation (indicating the chairman) and

directorship of the members (indicating whether the directors are independent or otherwise); (b) A summary of the terms of reference of the Committee or the key functions, roles and responsibilities

of the Audit Committee; (c) the number of Committee meetings held during the financial year and details of attendance of each

Committee member; (d) a summary of the activities of the Committee in the discharge of its functions and duties for that financial

year of the Company; and (e) a summary of the activities of the internal audit function or activity.

7. RIGHTS OF THE AUDIT COMMITTEE

The Committee shall, wherever necessary and reasonable for the performance of its duties in accordance with a procedure to be determined by the Board of Directors and at the cost of the Company:-

(a) have authority to investigate any matter within its terms of reference; (b) have the resources which are required to perform its duties; (c) have full and unrestricted access to any information pertaining to the Company; (d) have direct communication channels with the external auditors and person(s) carrying out the internal audit

function or activity; (e) be able to obtain independent professional or other advice; and (f) be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance

of other directors and employees of the Company, whenever deemed necessary.

8. REPORTING OF BREACHES TO BURSA SECURITIES

Where the Committee is of the view that a matter reported by it to the Board of Directors of the Company has not been satisfactorily resolved resulting in a breach of the Bursa Malaysia Securities Berhad’s (“Bursa Securities”) Listing Requirements, the Committee shall promptly report such matter to Bursa Securities.

9. REVIEW OF THE AUDIT COMMITTEE

The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every 3 years to determine whether the Committee and members have carried out their duties in accordance with their terms of reference.

10. SECRETARY

The Secretary to the Committee shall be the company secretary.

23




11. SUMMARY OF ACTIVITIES

The Audit Committee had undertaken the following activities in the financial year ended 30 September 2012:

(i) reviewed the unaudited financial results for the quarters ended 30 September 2011, 31 December 2011, 31 March 2012 and 30 June 2012 before recommending them for approval by the Board of Directors;

(ii) reviewed the audited financial statements for the financial year ended 30 September 2011 with the external auditors prior to submission to the Board of Directors for its approval;

(iii) reviewed and discussed with the external auditors their audit plan, audit approach, key audit areas, new accounting standards/interpretation/amendments that were applicable to the Group, the audit engagement team and the external auditor’s independency, the results of their annual audit, the auditors’ report and management letters together with management’s response to the findings of the external auditors, as well as new developments on accounting standards and regulatory requirements;

(iv) evaluated the adequacy of the experience and resources of the external audit firm, the persons assigned to the audit, the external audit firm’s audit engagements, the size and complexity of the group being audited and the number and experience of supervisory and professional staff assigned to the particular audit and made recommendations to the Board of Directors on their appointment;

(v) reviewed the internal audit reports which were tabled during the year, the audit recommendations made and management’s response to these recommendations where appropriate. The Committee had directed management to rectify and/or improve control and workflow procedures based on the internal auditor’s recommendations and suggestions for improvements;

(vi) reviewed the procedures and processes to monitor, track and identify Recurrent Related Party Transactions;

(vii) reviewed the Recurrent Related Party Transactions entered into by the Group and the Circular/Statement in relation to (a) Proposed Renewal of Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature and Proposed New Shareholder Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature; and (b) Proposed Share Buy-Back;

(viii) reviewed the training needs of the audit committee members;

(ix) reviewed the Group’s Risk Management Report prepared by the Internal Auditors;

(x) conducted meetings with the External Auditors to look into any matters that would be of concern to the

Committee before the commencement of audit and after the completion of audit.

12. INTERNAL AUDIT FUNCTION

The Group’s Internal Audit Department provides independent assurance on the adequacy and effectiveness of the internal control and governance processes and performs audit assignments with impartiality, proficiency and due professional care. During the financial year, the Internal Audit Department had reviewed compliance with policies, procedures and standards, relevant external rules and regulations, as well as assessed the adequacy and effectiveness of the Group’s system of internal control. The Group’s Internal Auditor regularly provides audit assurance on areas of review with audit findings to the Group’s management. The Total costs incurred for the Internal Audit during the financial year was RM150,682.01.

The Committee is supported by the Internal Audit Department in the discharge of its duties and responsibilities.


24


chairMan’S STATEMENT

On behalf of the Board of Directors,

I am pleased to present the Annual Audited

Financial Statements of the Company and

the Group for the financial year ended

30 September 2012.

FINANCIAL PERFORMANCE

For the financial year ended 30 September 2012, the Group recorded

a turnover of RM81,773,191 in comparison to RM80,903,151 for the

previous financial year, registering an increase of 1.08%.

At the Company level, the turnover for the current financial year was RM3,163,999 as compared to RM4,854,332 achieved

in the previous year, representing a decrease of 34.84%.

The pretax profit for the Group for the current financial year was RM17,074,119 as compared to the previous financial

year pretax profit of RM14,751,684, representing an increase of 15.74%.

The pretax profit at the Company level for the current financial year was RM2,775,147 as compared to the previous

financial year pretax profit of RM4,507,147, representing a decrease of 38.43%.

REVIEW OF OPERATIONS

For the financial year of the Group spanning 1 October 2011 to 30 September 2012, the Malaysian economic performance

was affected by a slowdown of demand for our primary resource commodities of palm oil, rubber and crude oil, and

manufactured electrical and electronic products, and processed timber goods from the major markets of USA, Eurozone

countries, China and Japan.

The main drivers for the growth of the Malaysian economy for 2012 ( forecasted to be around 4.5% for the year 2012) were

provided by stimulus and implementation of the Government’s Transformation Programs initiatives and the continual

vibrancy of the intra ASEAN trade.

The local economy was boosted by the Government’s encouragement of increased local consumption of consumer goods

and services, promotion of affordable housing and purchases of automobiles, through various monetary and fiscal measures.

The Group’s turnover was reflected through the demand for our prime products of industrial conveyor chains, automotive

and industrial beltings, industrial and rubber conveyor belts and industrial hardware tools to the various economic sectors

of palm oil and rubber, housing and construction, mining, automotive and oil and gas industries. Geographically our

group of companies located strategically in Kuala Lumpur, Penang, Kuantan and Johor Bahru in Peninsular Malaysia,

Kuching, Bintulu and Kota Kinabalu in East Malaysia and also in Singapore were well poised to service our customers of

these various sectors of economic activities.

25



Chairman’s Statement (continued)

FUTURE PROSPECTS

For 2013 the outlook of the global economy will be fraught with challenges. The IMF estimate for the global growth for the year 2013 is around 3.6% mainly driven by growth in the major Asian economies especially China and India.

With the potentially bruising showdowns over the next few months on spending cuts and increased taxes due to the fiscal cliff deal in the USA, its stuttering economic recovery and the unresolved Eurozone sovereign debt crises, we expect there will be a negative impact on the global economy.

Also the negative impact of various geopolitical upheavals such as those in the Middle East, Iran and North Korea’s nuclear threats on oil prices could not be discounted.

The continual implementation of quantitative easing by the US Federal Reserve will generate a wave of global inflation affecting all dollar denominated economic activities.

China is showing signs of economic recovery which will augur well for commodities exporting countries especially for the Asean economies producing palm oil, rubber and timber products.

On the local front, the Malaysian government in its effort to mitigate the negative economic impact of the global uncertainties, will adopt a continuation of its proactive growth stimulation measures, maintaining low interest regime and encourage local consumption of goods and services.

On an overall basis, the Malaysian economy in 2013 will be underpinned by the performance of the global economy as well as proactive measures taken by the Malaysian government to stimulate its various industrial sectors.

For 2013, the housing and construction sectors is expected to be stable with the implementation of various construction projects such as the Mass Rapid Transit Projects, completion of the double track railroad from North to South, and the affordable housing programmes to be implemented in 2013. This in turn will provide positive spin offs for the quarrying and building materials industries.

The palm oil industry is expected to recover from the low prices of 2012 with increase demand from expected economic recovery in China and India and the government’s decision to reduce export tariffs. Other industries such as rubber and processed timber products will also be positively impacted.

The recovery in the USA is expected to improve orders from the electrical and electronic manufacturers located in Malaysia.

The consumer and services sectors of the local economy are expected to remain stable which augurs well for local tourism and food industries as well as the automobile and automotive parts industries.

For 2013, the Board will continue to emphasize on prudent financial and risks management in order to optimise maximum value to all its stakeholders.

The Group is aware of its responsibility in the corporate and social arena and has embarked on measures to fulfil these responsibilities. However these are work in progress measures and continual improvements will be taken on a regular basis.

The Board is confident for the financial year ending 30 September 2013, the Group will have another profitable year against the backdrop of global economic uncertainties.

NG SIOW HWA @ NG KOK HWAChairman


26


90%

UMSK

UMS (Kuantan) Sdn Bhd

UMSE(S)

UMS Engineering (S) Pte Ltd

corporate STRUCTURE

UMSM

UMS ManufacturingSdn Bhd

MKS

MKS Sdn Bhd

Subsidiary Companies

Associated Companies

100%

100%

100%

100%

100%

43.33%

100%

45.13% 79.99%

UMSC

UMS Corporation Sdn Bhd

UMS(JB)

UMS (JB) Sdn Bhd

UMS(P)

UMS (Penang) Sdn Bhd

100%

ATU

Aqua Terra Union Oilfield Supply Sdn Bhd

UMS(S)

UMS (Sarawak) Sdn Bhd

MKS(EM)

MKS (EastMalaysia)Sdn Bhd

KK

K.K. Machinery Sdn Bhd

UMS HOLDINGS BERHAD (74125-V) ANNUAL REPORT 2012

26

Directors’ Report

Statements by Directors

Statutory Declaration

Independent Auditors’ Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flow

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flow

Notes to the Financial Statements

28 – 31

32

32

33 – 34

35

36

37

38 – 39

40

41

42

43

44 – 86

Financial STATEMENTS


28


directorS REPORTfor the financial year ended 30 September 2012

The directors have pleasure in submitting their report together with the audited financial statements of the Group and of

the Company for the financial year ended 30 September 2012.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are set

out in note 14 to the financial statements. There have been no significant changes in the nature of the activities of the

Company and its subsidiary companies during the financial year.

RESULTS

The Group The Company RM RM

Profit for the year 13,202,858 2,206,487

DIVIDENDS

A final dividend of 6% less income tax of 25% amounting to RM1,831,050 and a special dividend of 4% less income tax

of 25% amounting to RM1,220,700 in respect of the previous financial year as proposed in the directors’ report for that

financial year was paid on 27 April 2012.

The directors now recommend a final dividend of 6% less income tax of 25% amounting to RM1,831,050 and a special

dividend of 4% less income tax of 25%, amounting to RM1,220,700 in respect of the current financial year.

SHARE CAPITAL

The Company did not issue any shares or debenture during the financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year except as disclosed in the

financial statements.

DIRECTORS

The directors in office since the date of the last report are:

Ng Siow Hwa @ Ng Kok Hwa

Ng Seng Kong

Ng Sing Kun @ Ng Seng Kuon

Ng Seng Huat

Ng Sing Huat

Noordin Bin Mohd Noor

Ng Peng Huah

Lee Kok Wei

Thing Hua @ Ng Thing Hua

29



Directors’ Report (continued)

DIRECTORS (continued)

In accordance with the Company’s Articles of Association, Ng Seng Huat and Lee Kok Wei retire at the forthcoming Annual

General Meeting and, being eligible, offer themselves for re-election.

Ng Sing Kun @ Ng Seng Kuon, Ng Siow Hwa @ Ng Kok Hwa, Ng Peng Huah and Noordin Bin Mohd Noor retire in

accordance with Section 129 (2) of the Companies Act, 1965 and resolutions will be proposed at the forthcoming Annual

General Meeting for their re-appointments as directors of the Company pursuant to Section 129 (6) of the Act to hold

office until the conclusion of the next Annual General Meeting.

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in

shares of the Company and its related corporations were as follows:

No. of ordinary shares of RM1 each As at 1/10/2011 Acquired Sold As at 30/9/2012The Company Direct interests

Ng Siow Hwa @ Ng Kok Hwa 1,476,070 – – 1,476,070

Ng Seng Kong 629,648 26,306 – 655,954

Ng Sing Kun @ Ng Seng Kuon 500,000 – – 500,000

Ng Seng Huat 81,232 26,306 – 107,538

Ng Sing Huat 1,810,036 – – 1,810,036

Ng Peng Huah 50,000 – – 50,000

Thing Hua @ Ng Thing Hua 2,234,480 – – 2,234,480

Deemed interests

Ng Siow Hwa @ Ng Kok Hwa 422,088 – – 422,088

Ng Seng Kong 6,768,972 – – 6,768,972

Ng Sing Kun @ Ng Seng Kuon 200,000 – – 200,000

Ng Seng Huat 6,468,972 – – 6,468,972

Other than as disclosed, none of the directors in office at the end of the financial year had any interest in shares of the

Company and its related corporations during the financial year.

The above directors by virtue of their shareholdings in the Company are also deemed interested in shares of the related

corporations to the extent the Company has an interest.


30



DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than

benefits disclosed as directors’ remuneration in the financial statements) by reason of a contract made by the Company

or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a

substantial financial interest except as disclosed in note 32 of the financial statements of the Company.

Neither at the end of the financial year, nor at anytime during the financial year, did there subsist any arrangements to

which the Company is a party, being arrangements with the object or objects of enabling directors to acquire benefits by

means of the acquisition of shares in the Company or shares in, or debentures of any other body corporate.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

(a) Before the financial statements of the Group and of the Company were made out, the directors took reasonable

steps to:

(i) ascertain that proper allowance has been taken in relation to the writing off of bad debts and the making of

allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that

adequate allowance had been made for doubtful debts; and

(ii) ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business

their values as shown in the accounting records of the Group and of the Company have been written down to

amounts which they might be expected so to realise.

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

(i) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts

in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(ii) which would render the values attributed to current assets in the financial statements of the Group and of the

Company misleading; or

(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the

Group and of the Company misleading or inappropriate.

(c) As at the date of this report:

(i) there are no charges on the assets of the Group and of the Company which have arisen since the end of the

financial year to secure the liability of any other person; and

(ii) there are no contingent liabilities in the Group or in the Company which have arisen since the end of the

financial year.

31




STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in the report

or financial statements which would render any amount stated in the financial statements misleading.

(e) No contingent or other liability has become enforceable, or is likely to become enforceable, within the period of

twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially

affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

(f) In the opinion of the directors:

(i) the results of the operations of the Group and of the Company during the financial year were not substantially

affected by any item, transaction or event of a material and unusual nature.

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of

the financial year and the date of this report which is likely to affect substantially the results of the operations

of the Group and of the Company for the current financial year in which this report is made.

AUDITORS

The auditors, Messrs Paul Chuah & Co., have indicated their willingness to continue in office.

On behalf of the board

NG SENG KONG

NG SING KUN @ NG SENG KUON

Kuala Lumpur

14 January 2013


32


StateMent BY DIRECTORS

Statutory DECLARATION

In the opinion of the directors, the financial statements set out on pages 35 to 86 are drawn up in accordance with the

applicable Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true

and fair view of the financial position of the Group and of the Company as at 30 September 2012 and of the financial

performance and cash flows of the Group and of the Company for the year then ended.

Signed in accordance with a resolution of the directors

NG SENG KONG

NG SING KUN @ NG SENG KUON

Kuala Lumpur

14 January 2013

I, Ng Seng Kong, being the director responsible for the financial management of UMS Holdings Berhad, do solemnly

and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 35 to 86 are

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.

NG SENG KONG

Subscribed and solemnly declared at Kuala Lumpur, Wilayah Persekutuan on 14 January 2013

Before me:

KAPT (B) AFFANDI BIN AHMAD

Commissioner for Oaths

33



independent AUDITORS’ REPORT to the members of UMS Holdings Berhad (74125-V)(Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of UMS Holdings Berhad, which comprise the statements of financial position

as at 30 September 2012 of the Group and of the Company, and the statements of comprehensive income, statements of

changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary

of significant accounting policies and other explanatory information, as set out on pages 35 to 86.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view

in accordance with applicable Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such

internal control as the directors determine are necessary to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit

in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are

free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on our judgment, including the assessment of risk of material misstatement

of the financial statements, whether due to fraud or error. In making those risk assessments, we have considered internal

controls relevant to the Company’s preparation of financial 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 Company’s internal controls. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall

presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with applicable Financial Reporting

Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group

and of the Company as at 30 September 2012 and of its financial performance and cash flows for the year then ended.


34


Independent Auditors’ Report to the members of

UMS HOLDINGS BERHAD (continued)

Reporting 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 subsidiary companies of which we have acted as auditors have been properly kept in accordance with the

provisions of the Act.

b) We have considered the financial statements and the auditors’ report of the subsidiary company of which we have

not acted as auditors, which is indicated in note 14 to the financial statements.

c) We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the

Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation

of the financial statements of the Group and we have received satisfactory information and explanations required

by us for those purposes.

d) The audit reports on the financial statements of the subsidiary companies did not contain any qualification or any

adverse comment made under Section 174(3) of the Act.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies

Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of

this report.

Other Reporting Responsibilities

The supplementary information set out in Note 34 is disclosed to meet the requirement of Bursa Malaysia Securities

Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary

information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits

or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by

the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our

opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and

the directive of Bursa Malaysia Securities Berhad.

PAUL CHUAH & CO. CHUAH SUE YIN

No. AF 1056 No. 2540/04/14 (J)

Chartered Accountants Partner of the firm

Kuala Lumpur

14 January 2013

35



conSolidated STATEMENT OF COMPREHENSIVE INCOME for the year ended 30 September 2012

2012 2011 NOTE RM RM

REVENUE 6 81,773,191 80,903,151

COST OF SALES (48,721,035) (50,685,738) GROSS PROFIT 33,052,156 30,217,413 OTHER INCOME 4,520,399 3,481,953DISTRIBUTION COSTS (6,999,059) (6,656,484)ADMINISTRATION EXPENSES (2,429,349) (2,264,153)OTHER EXPENSES (11,698,930) (10,946,540)FINANCE COSTS (165,798) (194,632)

SHARE OF PROFITS OF ASSOCIATED COMPANIES 794,700 1,114,127

PROFIT BEFORE TAXATION 7 17,074,119 14,751,684

TAXATION 8 (3,871,261) (3,555,224) PROFIT FOR THE YEAR 13,202,858 11,196,460 OTHER COMPREHENSIVE INCOME

FOR THE YEAR NET OF TAX 57,136 113,152 TOTAL COMPREHENSIVE INCOME

FOR THE YEAR 13,259,994 11,309,612 PROFIT FOR THE YEAR ATTRIBUTABLE TO: OWNERS OF THE PARENT 13,151,540 11,119,860

NON-CONTROLLING INTEREST 51,318 76,600

13,202,858 11,196,460 TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO: OWNERS OF THE PARENT 13,208,676 11,233,012


13,259,994 11,309,612

EARNINGS PER SHARE (sen)

- basic 10 32.32 27.33

- diluted 10 32.32 27.33

The accompanying notes are an integral part of these financial statements.


36


conSolidated STATEMENT OF FINANCIAL POSITIONas at 30 September 2012

2012 2011 NOTE RM RM ASSETS NON-CURRENT ASSETS Property, plant and equipment 11 18,975,645 17,983,009Prepaid land lease payments 12 2,615,632 2,661,272Investment properties 13 16,650,846 14,038,728Associated companies 15 12,729,528 12,584,826Other investments 16 9,652,195 9,346,138

Goodwill on consolidation 17 1,045,766 1,045,766 61,669,612 57,659,739CURRENT ASSETS Inventories 18 35,446,060 32,585,243Trade and other receivables 19 23,718,775 23,671,498Tax recoverable 226,204 208,316

Cash and cash equivalents 20 17,414,247 16,790,895 76,805,286 73,255,952

TOTAL ASSETS 138,474,898 130,915,691 EQUITY AND LIABILITIES EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT Share capital 21 40,690,000 40,690,000

Reserves 22 83,949,580 73,792,654 124,639,580 114,482,654


TOTAL EQUITY 125,255,668 115,047,424 NON CURRENT LIABILITIES Term loans 23 420,975 940,770Hire purchase payables 24 67,874 86,586

Deferred taxation 25 889,065 783,591 1,377,914 1,810,947CURRENT LIABILITIES Trade and other payables 26 5,268,170 7,427,011Short term borrowings 27 5,078,940 5,520,948

Taxation 1,494,206 1,109,361 11,841,316 14,057,320

TOTAL LIABILITIES 13,219,230 15,868,267

TOTAL EQUITY AND LIABILITIES 138,474,898 130,915,691


37



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conSolidated STATEMENT OF CHANGES IN EQUITY for the year ended 30 September 2012


38


conSolidated STATEMENT OF CASH FLOWSas at 30 September 2012


CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 17,074,119 14,751,684

Adjustments for:

Gain in fair value of investment properties (2,595,000) (1,322,842)

Amortisation of prepaid land lease payments 45,640 45,640

Bad debts written off 10,293 57,142

Depreciation 1,740,997 1,790,831

Property, plant and equipment written off 34,861 65,344

Interest expense 165,799 194,632

Allowance for impairment on receivables no longer

required (60,989) (26,986)

Allowance for impairment on receivables 2,948 89,290

Profit retained in associated companies (794,700) (1,114,127)

Profit from disposal of property, plant and equipment (408,449) (649,467)

Interest income (273,250) (174,186)

Unrealised gain on foreign exchange (2,643) (549)

Dividend income from Wholesale Funds (282,636) (305,060)

Profit before changes in working capital 14,656,990 13,401,346

Working capital changes:

Inventories (2,825,697) 72,360

Trade and other receivables (732 075) (2,069,968)

Trade and other payables (1,709,531) (716,537)

Cash inflows from operations 9,389,687 10,687,201

Interest received 273,250 174,186

Interest paid (165,799) (194,632)

Tax refund 8,256 –

Tax paid (3,407,476) (2,510,441)

Net cash inflows from operating activities 6,097,918 8,156,314

39



Consolidated Statement of Cash Flows (continued)


CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received 1,149,300 1,171,724

Proceeds from disposal of property, plant and equipment 425,633 687,400

Purchase of other investment (279,500) (9,305,060)

Purchase of property, plant and equipment (2,674,300) (3,165,229)

Net cash outflows from investing activities (1,378,867) (10,611,165)

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of term loans (558,692) (570,921)

Repayment for hire purchase payables (25,320) (33,795)

(Repayment)/drawndown of bills payable (246,254) 1,995,324

Dividend paid (3,051,750) (3,051,750)

Net cash outflows from financing activities (3,882,016) (1,661,142)

NET INCREASE/(DECREASE) IN CASH AND

CASH EQUIVALENTS 837,035 (4,115,993)

EFFECTS OF CHANGES IN EXCHANGE RATE (26,720) (54,924)

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR 20 15,114,947 19,285,864

CASH AND CASH EQUIVALENTS AT END

OF YEAR 20 15,925,262 15,114,947



40


StateMent of COMPREHENSIVE INCOMEfor the year ended 30 September 2012


REVENUE 6 3,163,999 4,854,332

OTHER EXPENSES (388,852) (347,185)

PROFIT BEFORE TAXATION 7 2,775,147 4,507,147

TAXATION 8 (568,660) (958,182)

PROFIT FOR THE YEAR 2,206,487 3,548,965

OTHER COMPREHENSIVE INCOME

FOR THE YEAR NET OF TAX – –

TOTAL COMPREHENSIVE INCOME

FOR THE YEAR 2,206,487 3,548,965

PROFIT FOR THE YEAR AND TOTAL

COMPREHENSIVE INCOME ATTRIBUTABLE TO:

OWNERS OF THE PARENT 2,206,487 3,548,965


41



StateMent of FINANCIAL POSITIONas at 30 September 2012


ASSETS

NON-CURRENT ASSETS

Subsidiary companies 14 22,583,415 22,583,415

Associated companies 15 127,875 127,875

22,711,290 22,711,290

CURRENT ASSETS

Trade and other receivables 19 29,688,760 31,647,149

Tax recoverable 742,809 987,919

Cash and cash equivalents 20 325,628 45,358

30,757,197 32,680,426

TOTAL ASSETS 53,468,487 55,391,716

EQUITY AND LIABILITIES

EQUITY ATTRIBUTABLE TO

OWNERS OF THE PARENT

Share capital 21 40,690,000 40,690,000

Reserves 22 10,243,487 11,088,750

TOTAL EQUITY 50,933,487 51,778,750

NON CURRENT LIABILITIES

Deferred taxation 25 628,500 942,750

CURRENT LIABILITIES

Trade and other payables 26 1,906,500 2,670,216

TOTAL LIABILITIES 2,535,000 3,612,966

TOTAL EQUITY AND LIABILITIES 53,468,487 55,391,716



42


StateMent of CHANGES IN EQUITYfor the year ended 30 September 2012

Attributable to owners of the Parent Share Revaluation Retained Share premium-non reserve-non profits- capital distributable distributable distributable Total RM RM RM RM RM

Balance at 1 October 2010 40,690,000 1,843,740 5,465,017 3,282,778 51,281,535

Profit for the year – – – 3,548,965 3,548,965

Total comprehensive income – – – 3,548,965 3,548,965

Transactions with owners

Dividend (Note 9) – – – (3,051,750) (3,051,750)

Total transactions with owners – – – (3,051,750) (3,051,750)

Balance at 30 September 2011 40,690,000 1,843,740 5,465,017 3,779,993 51,778,750

Balance at 1 October 2011 40,690,000 1,843,740 5,465,017 3,779,993 51,778,750

Profit for the year – – – 2,206,487 2,206,487

Total comprehensive income – – – 2,206,487 2,206,487

Transactions with owners

Dividend (Note 9) – – – (3,051,750) (3,051,750)

Total transactions with owners – – – (3,051,750) (3,051,750)

Balance at 30 September 2012 40,690,000 1,843,740 5,465,017 2,934,730 50,933,487


43



StateMent of CASH FLOWfor the year ended 30 September 2012

2012 2011 NOTE RM RM CASH FLOWS FROM OPERATING ACTIVITIES

Profit before taxation 2,775,147 4,507,147

Adjustments for:

Unrealised loss on foreign exchange _ 27,188

Dividend income (3,163,999) (4,854,332) Loss before changes in working capital (388,852) (319,997) Working capital changes: Other receivables and deposits 9,750 _ Other payables and accruals 36,284 (7,684) Cash outflows from operations (342,818) (327,681) Tax paid (9,300) (9,300)Tax refunded _ 51,338 Net cash outflows from operating activities (352,118) (285,643) CASH FLOWS FROM INVESTING ACTIVITIES Dividends received 3,694,915 1,809,414Repayments from subsidiary companies 789,223 1,095,950 Net cash inflows from investing activities 4,484,138 2,905,364 CASH FLOWS FROM FINANCING ACTIVITIES Repayment to a subsidiary company (800,000) _Dividend paid (3,051,750) (3,051,750)

Net cash outflows from financing activities (3,851,750) (3,051,750) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 280,270 (432,029) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 20 45,358 477,387 CASH AND CASH EQUIVALENTS AT END OF YEAR 20 325,628 45,358



44


noteS to the FINANCIAL STATEMENTSfor the year ended 30 September 2012

1. BASIS OF PREPARATION

(a) Statement of compliance

UMS Holdings Berhad is a public listed company incorporated and domiciled in Malaysia and is listed on

Bursa Malaysia Securities Berhad.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution

of the directors on 14 January 2013.

(b) Basis of preparation

The financial statements are prepared under the historical cost convention unless otherwise indicated in the

accounting policies below. The financial statements comply with the applicable Financial Reporting Standards

(“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

The accounting policies adopted are consistent with those of previous financial year except as follows:

On 1 October 2011, the Group and the Company adopted the following new FRSs, IC Interpretations and

Amendments to published standards mandatory for annual financial periods beginning on or after 1 October

2011:

Standards/Interpretations/Amendments

IC Interpretation 4 – Determining whether an Arrangement Contains a Lease

IC Interpretation 19 – Extinguishing Financial Liabilities with Equity Instruments

Amendments to FRS 128 – Investment in Associates

Amendments to FRS 138 – Intangible Assets

Amendments to Improvement to FRSs (2010) as follows:

• Amendments to FRS 3 Business Combinations

• Amendments to FRS 121 Effect of Changes in Foreign Exchange Rate

• Amendments to FRS 134 Interim Financial Reporting

The adoption of the above FRSs, IC Interpretations and Amendments to published standards does not have

any material effect on the financial statements of the Group and the Company.

The following new Malaysian Financial Reporting Standards (“MFRS”), IC Interpretations and Amendments

to published standards have been issued and are relevant to the Group and the Company. However they are

not yet effective and are not expected to have any possible material impact on the financial statements. Hence

no further disclosure is warranted:

Standards/Interpretations/Amendments Effective date

MFRS 1 – First-time Adoption of Malaysian Financial Reporting Standards 1 January 2012

MFRS 3 – Business Combinations 1 January 2012

MFRS 7 – Financial Instruments :Disclosures 1 January 2012

45



notes To The Financial Statements (continued)

1. BASIS OF PREPARATION (continued)

(b) Basis of preparation (continued)


MFRS 8 – Operating Segments 1 January 2012

MFRS 101 – Presentation of Financial Statements 1 January 2012

MFRS 102 – Inventories 1 January 2012

MFRS 107 – Statement of Cash Flows 1 January 2012

MFRS 108 – Accounting Policies, Changes in Accounting Estimates and Errors 1 January 2012

MFRS 110 – Events after the Reporting Period 1 January 2012

MFRS 112 – Income Taxes 1 January 2012

MFRS 116 – Property, Plant and Equipment 1 January 2012

MFRS 117 – Leases 1 January 2012

MFRS 118 – Revenue 1 January 2012

MFRS 119 – Employee Benefits 1 January 2012

MFRS 121 – The Effects of changes in Foreign Exchange Rates 1 January 2012

MFRS 123 – Borrowing Costs 1 January 2012

MFRS 124 – Related Party Disclosures 1 January 2012

MFRS 127 – Consolidated and Separate Financial Statements 1 January 2012

MFRS 128 – Investments in Associates 1 January 2012

MFRS 132 – Financial Instruments: Presentation 1 January 2012

MFRS 133 – Earnings per Share 1 January 2012

MFRS 134 – Interim Financial Reporting 1 January 2012

MFRS 136 – Impairment of Assets 1 January 2012

MFRS 137 – Provisions, Contingent Liabilities and Contingent Assets 1 January 2012

MFRS 138 – Intangible Assets 1 January 2012

MFRS 139 – Financial Instruments: Recognition and Measurement 1 January 2012

MFRS 140 – Investment Property 1 January 2012

IC Interpretation 4 – Determining whether an Arrangement Contains a Lease 1 January 2012

IC Interpretation 9 – Reassessment of Embedded Derivatives 1 January 2012

IC Interpretation 10 – Interim Financial Reporting and Impairment 1 January 2012

IC Interpretation 17 – Distributions of Non-cash Assets to Owners 1 January 2012

IC Interpretation 19 – Extinguishing Financial Liabilities with Equity Instruments 1 January 2012

IC Interpretation 115 – Operating Leases - Incentives 1 January 2012


46


Notes To The Financial Statements (continued)


(b) Basis of preparation (continued)


IC Interpretation 125 – Income Taxes-Changes in the Tax Status of

an Entity or its Shareholders 1 January 2012

IC Interpretation 127 – Evaluating the Substance of Transactions involving the

Legal Form of a Lease 1 January 2012

Amendments to MFRS 101 – Presentation of Items of Other Comprehensive Income 1 July 2012

MFRS 10 – Consolidated Financial Statements 1 January 2013

MFRS 12 – Disclosure of Interests in Other Entities 1 January 2013

MFRS 13 – Fair Value Measurement 1 January 2013

MFRS 119 – Employee Benefits (IAS 19 as amended by IASB in June 2011) 1 January 2013

MFRS 127 – Separate Financial Statements (IAS 27 as amended by IASB in May 2011) 1 January 2013

MFRS 128 – Investments in Associates and Joint Ventures (IAS 28 as amended by

IASB in May 2011) 1 January 2013

Annual Improvements to MFRSs 2009 – 2011 Cycle as follows: 1 January 2013

• Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting

Standards

• Amendments to MFRS 101 Presentation of Financial Statements

• Amendments to MFRS 116 Property, Plant and Equipment

• Amendments to MFRS 132 Financial Instruments: Presentation

• Amendments to MFRS 134 Interim Financial Reporting

Amendments to MFRS 7 – Disclosures – Offsetting Financial Assets and

Financial Liabilities 1 January 2013

Amendments to MFRS 132 – Offsetting Financial Assets and Financial Liabilities 1 January 2014

MFRS 9 – Financial Instruments (IFRS 9 issued by IASB in November 2009 and

October 2010 respectively) and mandatory effective date of MFRS 9 and

transition disclosures 1 January 2015

(c) Functional and presentation currency

The financial statements are presented in Ringgit Malaysia which is the Group’s and the Company’s functional

and presentation currency, except for subsidiary company in Singapore, which the functional currency is

Singapore Dollar.

47





(d) Use of estimates and judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions

that affect the reported amounts of assets, liabilities, income and expenses, and the disclosure of contingent

liabilities at the reporting date. However uncertainty about these assumptions and estimates could result in

outcomes that could require a material adjustment to the carrying amount of the assets or liabilities affected

in the future.

Key sources of estimation uncertainty

The key assumptions concerning the future and other major sources of estimation uncertainty at the end of

the reporting period that have significant risk of resulting in material adjustment to the carrying amounts of

assets and liabilities within the next financial year are discussed below.

(i) Impairment of goodwill

Goodwill is tested for impairment annually and at other time when such indicators exist. This requires

an estimation of the value in use of the cash-generating units to which goodwill is allocated. Further

details are disclosed in note 17.

(ii) Useful lives of property, plant and equipment

The cost of property, plant and equipment are depreciated on a straight-line basis over the assets’ estimated

useful lives of 5 to 76 years. Changes in the expected level of usage and technological developments could

impact the economic useful lives and the residual values of these assets, therefore future depreciation

could be revised. The carrying amount at the reporting date is disclosed in note 11.

(iii) Revaluation of investment properties

The Company carries its investment properties at fair value, with changes in fair values being recognised

in profit or loss. Every year, the Company engages independent valuation specialist to determine fair

value. Further details is disclosed in Note 13.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as

at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated

financial statements are prepared for the same reporting date as the Company. Consistent accounting policies

are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group

transactions are eliminated in full.


48



2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(a) Basis of consolidation (continued)

Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired

and liabilities assumed in a business combination are measure as expenses in the periods in which the costs

are incurred and services received.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured

to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree

(if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate

share of the acquire net identifiable assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the

amount of non-controlling interest in the acquire (if any), and the fair value of the Group’s previously held

equity interest in the acquire (if any), over the net fair value of the acquiree’s identifiable assets and liabilities

is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out

in Note 2(d). In instances where the latter amount exceeds the former, the excess is recognised as a gain on

bargain purchase in profit or loss on the acquisition date.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,

and continue to be consolidated until the date that such control ceases.

(b) Transactions with non-controlling interest

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners

of the Company, and is presented separately in the consolidated statement of comprehensive income and

within equity in the consolidated statement of financial position, separately from equity attributable to owners

of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are

accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-

controlling interests are adjusted to reflect the changes in their relative interest in the subsidiary. Any difference

between the amount by which the non-controlling interest is adjusted and the fair value of the consideration

paid or received is recognised directly in equity and attributed to owners of the parent.

(c) Subsidiary companies

The Company regards as subsidiary companies those companies in which it holds long term equity interest of

more than 50% and/or where it is in a position to control the financial and operating policies. The existence

and effect of potential voting rights that are currently exercisable or convertibles are considered when assessing

whether the Group has such power over another entity.

Investments in subsidiary companies are stated at cost. Where an indication of impairment exists, the carrying

amount of the subsidiary company is assessed and written down immediately to its recoverable amount.

49





(d) Goodwill

Goodwill is initially measured at cost. Following the initial recognition, goodwill is measured at cost less

accumulated impairment losses, if any. Goodwill is allocated to cash generating units and is tested for

impairment annually or more frequently if event or changes in circumstances indicate that the carrying value

might be impaired. Where the recoverable amount of the cash-generating units is less than the carrying amount,

an impairment is recognised in the profit or loss. Impairment losses for goodwill are not reversed in subsequent

periods.

Gain or loss on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(e) Property, plant and equipment

All items of property, plant and equipment are initially recorded at costs.

Subsequent costs are included in the assets’ carrying amounts or recognised as separate assets, as appropriate,

only when it is probable that future economic benefits associated with the items will flow to the Group and

the costs of the items can be measured reliably. The carrying amount of the replaced part is derecognised. All

other repairs and maintenance are recognised in statement of comprehensive income as incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation

and accumulated impairment losses, if any.

Freehold land is not depreciated. Leasehold buildings are amortised over the lease periods ranging from 46

years to 76 years. Other property, plant and equipment are depreciated over their estimated useful lives on a

straight-line basis at the following annual rates:

%

Freehold buildings 2

Motor vehicles 16 – 20

Furniture, fittings and equipment 8 – 20

Tools and machinery 16

Renovation 10 – 20

The residual values, useful lives and depreciation methods are reviewed at the end of each reporting period to

ensure that the amount, method and period of depreciation are consistent with previous estimates and the

expected pattern of consumption of the future economic benefits embodied in the items of property, plant

and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits

are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net

carrying amount is recognised in the profit or loss.

Where an indication of impairment exists, the carrying amount of the asset is assessed and written down

immediately to its recoverable amount.


50




(f) Associated companies

An associate is an entity, not being a subsidiary or a joint venture, in which the Group and the Company has

significant influence. An associate is equity accounted for from the date the Group obtains significant influence

until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method,

the investment in associates is measured in the statement of financial position at cost plus post-acquisition

changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the

carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associate’s

identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the

carrying amount of the investment and is instead included as income in the determination of the Group’s

share of the associate’s profit or loss for the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does

not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional

impairment loss on the Group’s investment in its associates. The Group determines at each reporting date

whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the

Group calculates the amount of impairment as the difference between the recoverable amount of the associate

and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company as set

out in Note 15. Where necessary, adjustments are made to bring the accounting policies in line with those of

the Group.

In the Company’s separate financial statements, investments in associates are stated at cost less impairment

losses. On disposal of such investments, the difference between net disposal proceeds and their carrying

amounts is included in profit or loss.

(g) Inventories

Inventories are valued at the lower of costs and net realisable values. Costs of goods for resale and raw materials

comprise the original costs of purchase and the costs of bringing the inventories to their present locations

and conditions. Cost of finished goods and work-in-progress comprise direct materials, direct labour and an

appropriate proportion of production overheads based on normal operating capacity. Cost is determined on

the weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business

less the estimated cost necessary to make the sale.

(h) Foreign currencies

(i) Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the

primary economic environment in which the entity operates (“the functional currency”). The consolidated

financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional

currency.

51





(h) Foreign currencies (continued)

(ii) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(iii) Foreign operations

The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in the profit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.

(i) Taxes

Tax charged on the profit or loss for the year comprises current and deferred taxes. Current year tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the reporting date.

Deferred tax liabilities and assets are provided for under the liability method in respect of temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base including unused tax losses and capital allowances. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax laws that have been enacted or substantively enacted at the reporting date.


52




(i) Taxes (continued)

A deferred tax asset is recognised only to the extent that it is probable that taxable profit will be available

against which the deductible temporary differences can be utilised. The carrying amount of a deferred tax asset

is reviewed at each reporting date. If it is no longer probable that sufficient taxable profit will be available to

allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax

asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available,

such reductions will be reversed to the extent of the taxable profit.

(j) Revenue recognition

Revenue is recognised when it is probable that future economic benefits will flow to the entity and the revenue

can be measured reliably.

Revenue is measured at the fair value of the consideration received or receivable.

Revenue from sales of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyers.

Income from fixed deposit is recognised using the effective interest method.

Rental income is accounted for on a straight-line basis over the lease terms.

Dividend income is recognised when the right to receive payment has been established.

Management fee income is recognised on accrual basis.

(k) Impairment of assets

The carrying amounts of the Group’s and the Company’s assets other than investment properties at fair value,

inventories, deferred tax assets and financial assets, are reviewed at each reporting date to determine whether

there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated

and an impairment loss is recognised whenever the recoverable amount is less than the carrying amount of

the asset. The impairment loss is recognised in the profit or loss immediately. All reversals of an impairment

loss are recognised as income immediately in the statement of comprehensive income.

(l) Financial assets

The Group and the Company shall recognise a financial asset on its statement of financial position when the

entity becomes a party to the contractual provisions of the instruments.

Financial assets are derecognised when the contractual rights to the cash flows from the financial assets have

expired or have been transferred and the Group and the Company has transferred substantially all its risks

and rewards of ownership of the financial assets.

Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried

at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially

recognised at fair value and transaction costs are expensed in the profit or loss.

53





(l) Financial assets (continued)

At the time of initial recognition, financial assets are classified into the following specified categories: ‘fair

value through profit or loss, held-to-maturity investments, available-for-sale and loans and receivables’. The

classification depends on the purpose of the financial asset.

(i) Financial assets at fair value through profit or loss ( “FVTPL”)

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is

designated as at FVTPL.

A financial asset is classified as held for trading if:

- It has been acquired principally for the purpose of selling it in the near term;

- Part of a portfolio of identified financial instruments that are managed together and there are

recent actual pattern of short-term profit-taking;

- It is a derivative (except for financial guarantee contract or a designated and effective hedging

instrument).

(ii) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity dates and that the Group and the Company has positive intention and ability to hold to maturity.

(iii) Loans and receivables

Loans and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

(iv) Available- for- sale financial assets (“AFS”)

AFS are non- derivative financial assets that are designated as available- for-sale or are not classified as loans and receivables, held-to-maturity investments or FVTPL.

Investments in unquoted equity instruments whose fair value cannot be reliably measured are measured at

cost less impairment loss.

FVTPL and AFS are subsequently carried at fair value. Held-to-maturity investments and loans and receivables

are subsequently carried at amortised cost using the effective interest method.

Gains or losses arising from changes in fair value from FVTPL are recognised in profit or loss.

Gains or losses arising from changes in fair value from AFS are recognised directly in equity.

Gains or losses from financial assets carried at amortised costs are recognised through profit or loss.


54




(l) Financial assets (continued)

The Company assess at the end of each reporting period whether there is any objective evidence that a financial

asset or group of financial assets are impaired.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference

between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the

financial asset’s original effective interest rate. The carrying amount of the asset shall be reduced directly

through use of an allowance account. The amount of the loss is recognised in profit or loss. If there is reversal

of previously recognised impairment loss, it is reversed either directly or by adjusting an allowance account.

The reversal shall not result in carrying amount of the financial assets exceeding what the amortised cost would

have been had the impairment not been recognised at the date the impairment loss is reversed. The amount

of reversal is recognised in profit or loss.

For investment securities classified as available-for-sale, a significant or prolonged decline in the fair value of

the security below its cost, significant financial difficulties of issuer or obligor, and the disappearance of an

active trading market are considerations to determine whether there is objective evidence of impairment.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net

of any principal payment and amortisation) and its current fair value less any impairment loss recognised in

profit or loss, is transferred from equity to profit or loss. Impairment losses are not reversed in profit or loss

in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other

comprehensive income.

For unquoted equity instruments carried at cost, if there is objective evidence (such as significant adverse

changes in the business environment where the issuer operates, probability of insolvency or significant financial

difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the

amount of the loss is measured as the difference between the asset’s carrying amount and the present value of

estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such

impairment losses are not reversed in subsequent periods.

(m) Financial Liabilities

The Group and the Company shall recognise a financial liability on its statement of financial position when

the entity becomes a party to the contractual provisions of the instruments.

Financial liabilities are derecognised when it is extinguished i.e. when the obligation specified in the contract

is discharged or cancelled or expired.

(i) Financial liabilities at fair value through profit or loss (“FVTPL”)

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is

designated as at FVTPL.

A financial liability is classified as held for trading if:

- It has been acquired principally for the purpose of selling it in the near term;

55





(m) Financial Liabilities (continued)

(i) Financial liabilities at fair value through profit or loss (“FVTPL”) (continued)

- Part of a portfolio of identified financial instruments that are managed together and there are

recent actual pattern of short-term profit-taking;

- It is a derivative (except for financial guarantee contract or a designated and effective hedging instrument).

(ii) Other financial liabilities

Other financial liabilities are financial liabilities that are not classified as financial liabilities at FVTPL.

Other financial liabilities are initially recognised at fair value plus transactions costs. Financial liabilities carried

at fair value through profit or loss are initially recognised at fair value and transactions costs are expensed in

the profit or loss.

Other financial liabilities are subsequently carried at amortised cost using the effective interest method.

Financial liabilities at FVTPL are measured at fair value except for derivatives liability that are linked to and

must be settled by delivery of such unquoted equity instruments whose fair value cannot be reliably measured

are measured at cost.

Gains or losses arising from changes in fair value from financial liabilities classified at FVTPL are recognised in

profit or loss.

Gains or losses from other financial liabilities carried at amortised costs are recognised through profit or loss.

(n) Derivative f inancial instruments

Derivative are initially recognised at fair value on the date the derivative contract is entered into and are subsequently re-measured at their fair value at the end of each reporting period. The method of recognising gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

An embedded derivative shall be separated from the host contract and accounted for as a separate derivative if the risks and characteristics of the embedded derivative are not closely related to the economic characteristics and risks of the host contracts, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative and the hybrid instrument is not measured at fair value with changes in fair value recognised in profit or loss.

(o) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments

that are readily convertible to cash with insignificant risk of changes in value.


56




(p) Dividend

Dividends on ordinary shares are recognised as liabilities when the obligation to pay is established. The distributions of non-cash assets to owners is recognised as dividend payable when the dividend was

approved by shareholders. The dividend payable is measured at the fair value of the shares to be distributed. At the end of the financial year and on the settlement date, the Group and the Company reviews the carrying amount of the dividend payable, with any changes in the fair value of the dividend payable recognised in equity. When the Group and the Company settles the dividend payable, the difference between the carrying amount of the dividend distributed and the carrying amount of the dividend payable is recognised as a separate line item in profit or loss.

(q) Share capital

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity.

(r) Hire purchase payables

Property, plant and equipment held under hire purchase are treated as if they had been purchased at cost at the commencement of the hire purchase agreement. This cost is included under property, plant and equipment and depreciation is provided accordingly. The corresponding obligations under hire purchase are included under liabilities. The finance charge element of installments payable is charged to the statement of comprehensive income using the sum of digits method.

(s) Employee benefits

(i) Short term employee benefits

Wages, salaries, bonuses and social security contributions are recognised as expenses in the year in which the associated services are rendered by employees of the Group and Company. Short term accumulating compensated absences such as paid leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”); whereas, the company in Singapore make contributions to the Central Provident Fund (“CPF”).

(t) Leases

(i) Classifications

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. All leases that do not transfer substantially all the risks and rewards are classified as operating leases.

57





(t) Leases (continued)

(ii) Operating leases – the Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the

relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of

rental expense over the lease term on a straight-line basis.

In the case of a lease of land and buildings, the minimum lease payments or the up-front payments

made are allocated, whenever necessary, between the land and the buildings elements in proportion to

the relative fair values for leasehold interests in the land element and buildings element of the lease at

the inception of the lease. The up-front payment represents prepaid lease payments and are amortised

on a straight-line basis over the lease term.

Prepaid land lease payments are amortised over the lease periods between 46 to 76 years.

(iii) Operating leases – the Group as lessor

Assets leased out under operating leases are presented on the statement of financial position according

to the nature of the assets. Rental income from operating leases is recognised on straight-line basis over

the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating

lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over

the lease term.

(u) Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation

or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial

recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market

evidence of transaction prices for similar properties and is performed by registered independent valuers having

an appropriate recognised professional qualification and recent experience in the location and category of the

properties being valued.

When a property is transferred to investment property following a change in its use, any difference arising at

the date of transfer between carrying amount of the property immediately prior to the transfer and its fair

value is recognised directly in equity as a revaluation reserve.

Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss

in the year in which they arise, except for fair value loss on property previously recognised directly in equity, is

recognised directly against the revaluation surplus account to the extent of the surplus credited for the same

property.

A property interest under an operating lease is classified and accounted for as an investment property on a

property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any

such property interest under an operating lease classified as an investment property is carried at fair value.


58




(u) Investment properties (continued)

Investment properties are derecognised when either they have been disposed of or when the investment property

is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains

or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in

which they arise or any surplus previously recorded in equity is transferred to retained earnings.

(v) Earning per share (“EPS”)

Basis EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by

the weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by dividing the profit or loss attributable to ordinary shareholders and the weighted

average number of ordinary shares outstanding, for the effects of all dilutive potential ordinary shares.

(w) Segment reporting

For management purposes, the Group is organised into operating segments based on their geographical location which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in note 31, including the factor used to identify the reportable segments and the measurement basis of segment information.

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s operating, investing and financing activities expose the Group to foreign exchange risk, interest rate risk, market price risk, credit risk, and liquidity risk. While the Company’s operating, investing and financing activities expose the Company to foreign exchange risk, credit risk and liquidity risk. The Group’s and the Company’s overall risk management programme is to focus on minimising the potential adverse effects on the Group’s and Company’s financial performance.

(a) Market risk

(i) Foreign currency risk management

The Group is exposed to foreign exchange risk arising from various currency exposures other than the respective functional currencies of Group entities primarily, Singapore Dollar (SGD) and Japanese Yen (JPY).

During the year, there is no formal hedging policy with respect to foreign exchange risk exposure. The

Group and Company monitor their foreign exchange risk exposure on an ongoing basis and endeavour to keep the net exposure at an acceptable level.

The Group is also exposed to currency translation risk arising from its net investment in Singapore. The Group’s net investment in Singapore is not hedged as currency position in SGD are considered to be long term in nature.

59




3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(a) Market risk (continued)

(i) Foreign currency risk management (continued)

If the Ringgit Malaysia strengthened by 5% against the following currencies, this will result in a further increase/(decrease) in the Group’s and the Company’s profit and equity. This sensitivity analysis assumes that all other variables are held constant.

GROUP COMPANY SGD JPY SGD 2012 2012 2012 RM RM RM

Profit and equity (129,130) 124,917 (89,347)

(i) (ii) (i)

GROUP COMPANY USD SGD EURO SGD 2011 2011 2011 2011 RM RM RM RM

Profit and equity 129,625 162 4,742 (71,221) (iii) (iv) (v) (i)

If the Ringgit Malaysia weakened by 5% against the following currencies, this will result in a further

increase/(decrease) in the Group’s and the Company’s profit and equity. This sensitivity analysis assumes

that all other variables are held constant.

GROUP COMPANY SGD JPY SGD 2012 2012 2012 RM RM RM

Profit and equity 129,130 (124,917) 89,347 (i) (ii) (i)

GROUP COMPANY USD SGD EURO SGD 2011 2011 2011 2011 RM RM RM RM

Profit and equity (129,625) (162) (4,742) 71,221

(iii) (iv) (v) (i)

(i) This is mainly attributable to the foreign exchange exposure of outstanding SGD denominated

receivables at the end of reporting period.

(ii) This is mainly attributable to the foreign exchange exposure of outstanding JPY denominated

payables at the end of the reporting period.

(iii) This is mainly attributable to the foreign exchange exposure of outstanding USD denominated



60




(a) Market risk (continued)

(i) Foreign currency risk management (continued)

(iv) This is mainly attributable to the foreign exchange exposure of outstanding SGD denominated


(v) This is mainly attributable to the foreign exchange exposure of outstanding EURO denominated


(ii) Interest rate risk management

The Group is exposed to interest rate risk from borrowing funds at floating interest rates. Borrowings

at floating interest rate also exposed the Group to cash flow interest rate risk.

The Group monitors interest rate risk on an on-going basis and the Group endeavors to keep the exposures

at an acceptable level.

For the year ended 30 September 2012, if interest rates is 50 basis points higher, profit and equity of

the Group will decreased by RM12,275. However, if interest rates is 50 basis points lower, profit and

equity of the Group will increased by RM12,275.

This sensitivity analysis assumes that all other variables are held constant and the interest rates are

computed on all Group’s borrowings as at the end of the reporting period.

(iii) Market price risk management

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments

will fluctuate because of changes in market prices.

The Group is exposed to the changes in the net asset value of the financial instruments.

The Group’s objective is to monitor the investment returns by benchmarking against fixed deposit interest

rate returns.

(b) Credit risk management

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as

credit exposures to customers, including outstanding receivables and committed transactions.

For banks and financial institutions, only major banks are accepted. For customer, credit control assesses the

credit quality of the customer, taking into account its financial position, past experience and other factors.

Individual credit limits are set and approved by authorised personnel and credit limits are regularly monitored.

As at the reporting date, the Group has no significant concentration of credit risk. Whereas, approximately

92% of the Company’s receivables were due from a subsidiary company.

61





(c) Liquidity risk management

The Group and the Company adopts a prudent liquidity risk management to manage its exposure to liquidity risk. i.e. a balance between continuity of funding and flexibility through the use of available credit facilities granted by various banks.

Liquidity risk is the risk that the Group and the Company will not be able to meet its financial obligations as they fall due. The Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings, whereas the Company’s arises primarily from its various payables.

The Group and the Company monitor and maintain a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet their liabilities when they fall due.

The table below analyses the Group’s and the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date.

Within 2 to 5 1 year years Total RM RM RM GROUP As at 30 September 2012 Non-derivative financial liabilities

Trade and other payables 5,247,781 – 5,247,781

Term loans – 420,975 420,975

Short term borrowings 5,078,940 – 5,078,940

Within 2 to 5 1 year years Total RM RM RM

As at 30 September 2011 Non-derivative financial liabilities


Term loans – 940,770 940,770

Short term borrowings 5,520,948 _ 5,520,948

COMPANY As at 30 September 2012 Non-derivative financial liabilities


As at 30 September 2011 Non-derivative financial liabilities



62



4. CAPITAL RISK MANAGEMENT

The Group and the Company manages their capital to ensure that the Group and the Company will be able to

continue as a going concern in order to provide return to shareholders and to maintain optimal capital structure

to reduce the cost of capital.

In order to maintain capital structure, the Group and the Company may adjust the amount of dividend paid or issue

new shares.

Ordinary share capital and retained earnings are considered as Capital of the Group and Company.

The Group and the Company is not subject to any externally imposed capital requirements.

5. FINANCIAL INSTRUMENTS BY CATEGORIES AND ITS FAIR VALUE ESTIMATION

FINANCIAL INSTRUMENTS BY CATEGORIES

2012 2011 RM RM

GROUP

Financial assets

Loans and receivables

- Trade and other receivables excluding certain deposits and prepayments 23,336,378 23,448,586

- Cash and cash equivalents excluding bank overdraft 17,414,247 16,790,895

Available-for-sale financial assets

- Unquoted shares at cost 50,000 50,000

- Wholesale Funds at fair value 9,602,195 9,296,138

Financial liabilities

Other financial liabilities

- Trade and other payables 5,247,781 7,402,135

- Term loans 420,975 940,770

- Short term borrowings 5,078,940 5,520,948

COMPANY

Financial assets

Loans and receivables

- Trade and other receivables excluding certain deposits 29,688,603 31,637,399

- Cash and cash equivalents 325,628 45,358

Financial liabilities

Other financial liabilities

- Trade and other payables 1,906,500 2,670,216

63




5. FINANCIAL INSTRUMENTS BY CATEGORIES AND ITS FAIR VALUE ESTIMATION (continued)

FAIR VALUE ESTIMATION

Fair value hierarchy is as follows:

Level 1 - quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2 - inputs other than quoted prices included within level 1 that are observable for the assets or liability,

either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - inputs for the assets or liability that are not based on observable market data (unobservable inputs).

The following table presents the Group’s assets that are measured at fair value.

Carrying amounts Level 1 Level 2 Level 3 RM RM RM RM

At 30 September 2012

Available for sale financial assets:

- Wholesale Funds 9,602,195 9,602,195 – –

At 30 September 2011

Available for sale financial assets:

- Wholesale Funds 9,296,138 9,296,138 – –

Unquoted shares represents a share held in a golf club, it is not practical to determine the fair value of unquoted shares

due to lack of comparable quoted prices in active market. In addition, it is impractical to use valuation technique

to estimate the fair value reliably as a result of significant variability in the inputs of the valuation technique.

Other than wholesale funds and unquoted shares, financial assets and financial liabilities are not carried at fair value

but their carrying amounts are reasonable approximation of their fair value due to their short term nature or that

they are floating rate instruments that are repriced to market interest rates on or near the reporting date.

6. REVENUE

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM

Sale of goods 81,773,191 80,903,151 – –

Gross dividend income from

an unquoted subsidiary company – – 2,514,001 3,771,002

Gross dividend income from

an unquoted associated company – – 649,998 1,083,330

81,773,191 80,903,151 3,163,999 4,854,332


64



7. PROFIT BEFORE TAXATION

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM Profit before taxation is stated

after charging and (crediting):

Allowance for impairment of receivables 2,948 89,290 – –

Amortisation of prepaid land lease payment 45,640 45,640 – –

Auditors’ remuneration 107,347 100,383 24,000 22,000

Bad debts written off 10,293 57,142 – –

Casual wages 82,415 17,377 – –

Direct operating expenses of

investment property 241,438 249,033 – –

Depreciation 1,740,997 1,790,831 – –

Directors’ remuneration* :

fees 202,584 155,952 180,000 134,100

other emoluments ** 1,869,345 1,687,025 – –

Staff costs** 9,828,097 8,780,704 – –

Property, plant and equipment written off 34,861 65,344 – –

Interest expense:

bank overdrafts 98,094 84,542 – –

term loans 61,590 88,442 – –

hire purchase 4,346 5,018 – –

trust receipts 1,769 16,630 – –

Loss/(gain) on foreign exchange:

realised 6,105 19,753 – –

unrealised (2,643) (549) – 27,188

Operating lease-rental of premises*** 74,400 64,800 – –

Operating lease-rental of copiers# 3,840 3,840 – –

Allowance for impairment on receivables

no longer required (60,989) (26,986) – –

Bad debts recovered – (52,600) – –

Gain in fair value of investment properties (2,595,000) (1,322,842) – –

Operating lease – rental income

from premises *** (275,734) (265,500) – –

Operating lease – rental income

from investment properties (Note 13) (428,122) (472,894) – –

Profit from disposal of property,

plant and equipment (408,449) (649,467) – –

Fixed deposit interest (273,250) (174,186) – –

Dividend income from Wholesale Funds (282,636) (305,060) – –

* The monetary value of benefits-in-kind not included in the remuneration received by the directors of the Group

is RM80,175 (2011: RM82,625).

65




7. PROFIT BEFORE TAXATION (continued)

** Included in staff costs and directors’ other emoluments of the Group are amounts totalling RM1,340,934

(2011: RM1,152,632) contributed to the Employees’ Provident Fund and Singapore Central Provident Fund.

*** These are cancellable operating leases where one to three months’ notices are required for termination of these

agreements.

# These are non-cancellable operating leases and the operating lease commitment is disclosed in note 29(a) to

the financial statements.

8. TAXATION


(a) Current Malaysian taxation 3,801,251 3,422,750 900,000 302,000

Current Foreign taxation 26,169 18,100 – –

Deferred taxation (Note 25) 105,413 68,503 (314,250) 628,500 3,932,833 3,509,353 585,750 930,500 (Over)/underprovision of taxation in prior years (61,572) 45,871 (17,090) 27,682 3,871,261 3,555,224 568,660 958,182 (b) Reconciliation of tax expense and accounting profits : GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM Accounting profits 17,074,119 14,751,684 2,775,147 4,507,147

Tax at the applicable tax rate 4,209,949 3,605,991 693,787 1,126,787

Tax effect of expenses that

are not deductible in

determining taxable profit 615,187 658,199 54,462 74,546

Tax effect of income that

are not included in

determining taxable profit (919,521) (785,505) (162,499) (270,833)

Underprovision of deferred

tax liability in prior year 23,902 25,108 – –

Movement from unrecognised

deferred assets 4,743 5,799 – –

Double deduction of expenses (1,427) (239) – – Current tax expense 3,932,833 3,509,353 585,750 930,500


66



8. TAXATION (continued)

The current corporate tax rate is 25% (2011: 25%). Consequently, deferred tax liabilities in note 25 are measured

using this tax rate.

Taxation for foreign subsidiary is calculated at the rates prevailing in its respective tax jurisdiction.

(c) In accordance with the Finance Act 2007, tax on a company’s profit is a final tax and dividends distributed

to shareholders will be exempted from tax (“single tier tax system”). However there is a transitional period of

six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders

under limited circumstances. Companies with tax credit under Section 108 of the Income Tax Act, 1967 are

also given an irrevocable option to elect for the single tier tax system.

The Company did not exercise the option to elect for the single tier tax system. The Company has sufficient

tax credits under Section 108 of the Income Tax Act, 1967 to frank the payment of cash dividends out of all

its retained profits as at year-end.

(d) The Company has tax exempt income of approximately RM2,504 available for distribution by way of tax exempt

dividends. 9. DIVIDEND

GROUP AND COMPANY 2012 2011 RM RM

Paid :

Final dividend of 6% less income tax of 25% 1,831,050 1,831,050

Special dividend of 4% less income tax of 25% 1,220,700 1,220,700

3,051,750 3,051,750

Proposed :

Final dividend of 6% less income tax of 25%

(2011: Final dividend of 6% less income tax of 25%) 1,831,050 1,831,050

Special dividend of 4% less income tax of 25%

(2011: Special dividend of 4% less income tax of 25%) 1,220,700 1,220,700

3,051,750 3,051,750

Dividend per share (sen) 7.5 7.5

At the forthcoming Annual General Meeting a final dividend of 6% less income tax of 25% and a special dividend of

4% less income tax of 25% totalling RM3,051,750 (2011: RM3,051,750) will be proposed for shareholders’ approval.

67




10. EARNINGS PER SHARE

(a) Basic earnings per share

The basic earnings per share is calculated based on the consolidated profit for the year attributable to equity

holders of the Company of RM13,151,540 (2011: RM11,119,860) and the weighted average of 40,690,000

(2011: 40,690,000) ordinary shares issued and paid up during the financial year.

(b) Diluted earnings per share

The fully diluted earnings per share is calculated based on the consolidated profit for the year attributable

to equity holders of the Company of RM13,151,540 (2011: RM11,119,860) and the weighted average of

40,690,000 (2011: 40,690,000) ordinary shares issued and paid up during the financial year.

11. PROPERTY, PLANT AND EQUIPMENT Furniture, *Land and Motor fittings and Tools and buildings vehicles equipment machinery Renovation Total RM RM RM RM RM RM

2012

GROUP

At cost

At 1 October 2011 19,755,513 7,417,228 7,300,752 1,435,201 872,260 36,780,954

Exchange differences 199,420 5,085 8,249 – 2,542 215,296

Additions 720,000 1,420,752 375,463 5,740 152,345 2,674,300

Disposals – (1,037,733) (7,210) – – (1,044,943)

Written off – – (337,090) (29,069) – (366,159)

At 30 September 2012 20,674,933 7,805,332 7,340,164 1,411,872 1,027,147 38,259,448

Accumulated depreciation

At 1 October 2011 4,846,586 4,614,373 5,144,952 1,388,285 636,644 16,630,840

Exchange differences 48,664 3,287 8,162 – 1,828 61,941

Charge for the year 287,269 919,144 456,340 13,518 64,726 1,740,997

Disposals – (1,022,091) (5,668) – – (1,027,759)

Written off – – (303,002) (28,296) – (331,298)

At 30 September 2012 5,182,519 4,514,713 5,300,784 1,373,507 703,198 17,074,721

Impairment loss

At 1 October 2011 2,167,105 – – – – 2,167,105

Exchange differences 41,977 – – – – 41,977

At 30 September 2012 2,209,082 – – – – 2,209,082

Net book value

At 30 September 2012 13,283,332 3,290,619 2,039,380 38,365 323,949 18,975,645


68



11. PROPERTY, PLANT AND EQUIPMENT (continued)

* ANALYSIS OF LAND AND BUILDINGS

Freehold Long term Short term land and leasehold leasehold buildings buildings buildings Total RM RM RM RM At cost

At 1 October 2011 4,043,830 15,118,307 593,376 19,755,513 Exchange differences – 199,420 – 199,420 Addition – 720,000 – 720,000

At 30 September 2012 4,043,830 16,037,727 593,376 20,674,933 Accumulated depreciation At 1 October 2011 976,857 3,779,437 90,292 4,846,586 Exchange differences – 48,664 – 48,664 Charge for the year 65,123 209,247 12,899 287,269

At 30 September 2012 1,041,980 4,037,348 103,191 5,182,519 Impairment loss At 1 October 2011 – 2,167,105 – 2,167,105

Exchange differences – 41,977 – 41,977

At 30 September 2012 – 2,209,082 – 2,209,082 Net book value

At 30 September 2012 3,001,850 9,791,297 490,185 13,283,332

GROUP Net book value 2012 2011 RM RM Property, plant and equipment pledged with the licensed bank for

facilities granted as disclosed in notes 23 and 27 5,868,107 6,004,793

Property, plant and equipment acquired under hire purchase contracts 68,272 121,785

Furniture, *Land and Motor fittings and Tools and buildings vehicles equipment machinery Renovation Total RM RM RM RM RM RM 2011 GROUP

At cost

At 1 October 2010 19,281,811 7,332,501 6,911,825 1,435,741 866,223 35,828,101 Exchange differences 473,702 12,443 19,513 – 6,037 511,695 Additions – 2,468,920 696,309 – – 3,165,229 Disposals – (2,340,777) – – – (2,340,777) Written off – (55,859) (326,895) (540) – (383,294)

At 30 September 2011 19,755,513 7,417,228 7,300,752 1,435,201 872,260 36,780,954

69




11. PROPERTY, PLANT AND EQUIPMENT (continued)

Furniture, *Land and Motor fittings and Tools and buildings vehicles equipment machinery Renovation Total RM RM RM RM RM RM 2011 GROUP


At 1 October 2010 4,409,200 6,063,061 4,927,022 1,371,681 548,970 17,319,934 Exchange differences 110,427 7,034 19,343 – 4,066 140,870 Charge for the year 326,959 902,981 460,140 17,143 83,608 1,790,831 Disposals – (2,302,845) – – – (2,302,845) Written off – (55,858) (261,553) (539) – (317,950)

At 30 September 2011 4,846,586 4,614,373 5,144,952 1,388,285 636,644 16,630,840

Impairment loss

At 1 October 2010 2,067,392 – – – – 2,067,392 Exchange differences 99,713 – – – – 99,713

At 30 September 2011 2,167,105 – – – – 2,167,105

Net book value

At 30 September 2011 12,741,822 2,802,855 2,155,800 46,916 235,616 17,983,009

* ANALYSIS OF LAND AND BUILDINGS

Freehold Long term Short term land and leasehold leasehold buildings buildings buildings Total RM RM RM RM At cost

At 1 October 2010 4,043,830 14,644,605 593,376 19,281,811 Exchange differences – 473,702 – 473,702

At 30 September 2011 4,043,830 15,118,307 593,376 19,755,513


At 1 October 2010 911,733 3,420,074 77,393 4,409,200 Exchange differences – 110,427 – 110,427 Charge for the year 65,124 248,936 12,899 326,959

At 30 September 2011 976,857 3,779,437 90,292 4,846,586

Impairment loss

At 1 October 2010 – 2,067,392 – 2,067,392

Exchange differences – 99,713 – 99,713

At 30 September 2011 – 2,167,105 – 2,167,105

Net book value

At 30 September 2011 3,066,973 9,171,765 503,084 12,741,822


70



12. PREPAID LAND LEASE PAYMENTS

Long term Short term leasehold land leasehold land Total RM RM RM 2012 GROUP At cost At 1 October 2011 and 30 September 2012 2,871,602 254,304 3,125,906 Accumulated amortisation At 1 October 2011 425,931 38,703 464,634 Amortisation for the year 40,111 5,529 45,640

At 30 September 2012 466,042 44,232 510,274 Net carrying amount At 30 September 2012 2,405,560 210,072 2,615,632 2011 GROUP At cost At 1 October 2010 and 30 September 2011 2,871,602 254,304 3,125,906 Accumulated amortisation At 1 October 2010 385,820 33,174 418,994 Amortisation for the year 40,111 5,529 45,640

At 30 September 2011 425,931 38,703 464,634 Net carrying amount At 30 September 2011 2,445,671 215,601 2,661,272

The net book value of leasehold land of the Group pledged with licensed banks for facilities granted as disclosed in

notes 23 and 27 is RM170,625 (2011: RM174,687).

13. INVESTMENT PROPERTIES

GROUP 2012 2011 RM RM

At 1 October 14,038,728 12,677,811

Exchange differences 17,118 38,075

Gain in fair value of investment properties 2,595,000 1,322,842

At 30 September 16,650,846 14,038,728

71




13. INVESTMENT PROPERTIES (continued) GROUP 2012 2011 RM RM

Included in the above are:

Freehold land and buildings 12,370,000 9,970,000

Leasehold land and buildings 3,120,000 2,930,000

Leasehold buildings 1,160,846 1,138,728

16,650,846 14,038,728

The fair values of the investment properties are based on valuations by independent professional qualified valuers

using current market value basis and open market value on an existing use basis.

Investment properties comprise a number of commercial and residential properties that are leased to third parties

either under cancellable operating lease arrangements whereby three months’ notice is required to terminate these

agreements or non-cancellable operating lease. The non-cancellable operating lease arrangements are as disclosed

in note 29(b) to the financial statements.

Investment properties with carrying amount of RM900,846 (2011: RM883,728) is pledged to licensed bank for

facilities granted as disclosed in notes 23 and 27.

14. SUBSIDIARY COMPANIES

COMPANY 2012 2011 RM RM

Shares in unquoted corporations 22,583,415 22,583,415

The subsidiary companies which were incorporated in Malaysia are:

Group’s effective equity interests Name of company Principal activities 2012 2011 % %

UMS Corporation Sdn. Bhd. Distribution of mechanical power 100 100

transmission and material handling

products and systems and industrial

spare parts.

UMS (Kuantan) Sdn. Bhd. Distribution of mechanical power 100 100



spare parts.

UMS (Penang) Sdn. Bhd. Distribution of mechanical power 100 100



spare parts.


72



14. SUBSIDIARY COMPANIES (continued)


UMS (JB) Sdn. Bhd. Distribution of mechanical power 100 100



spare parts.

UMS (Sarawak) Sdn. Bhd. Distribution of mechanical power 90 90



spare parts.

*UMS Engineering (S) Pte. Ltd. Trading in engineering products. 100 100

Aqua Terra Union Oilfield Investment holding 100 100

Supply Sdn. Bhd.

Held by UMS Corporation Sdn. Bhd.

UMS Manufacturing Sdn. Bhd Manufacturing and trading of steel 100 100

wire mesh.

* Not audited by Paul Chuah & Co.

15. ASSOCIATED COMPANIES


Shares in unquoted corporations

at cost 842,677 842,677 127,875 127,875

Share of post acquisition profits 11,886,851 11,742,149 – –

12,729,528 12,584,826 127,875 127,875

The summarised financial information of the associated companies are as follows:


Asset and liabilities

Current assets 8,639,871 8,219,105

Non current assets 4,894,037 5,092,547

Total assets 13,533,908 13,311,652

73




15. ASSOCIATED COMPANIES (continued)


Current liabilities 1,128,506 1,178,278

Non current liabilities 20,915 19,915

Total liabilities 1,149,421 1,198,193

Results

Revenue 8,480,627 8,087,795

Profit for the year 794,700 1,114,127

The associated companies which were incorporated in Malaysia are:


K.K. Machinery Sdn. Bhd. Dealers in all kinds of machinery, parts 43.33 43.33 and accessories and property letting.

Held by Aqua Terra Union Oilfield Supply Sdn. Bhd.

MKS Sdn. Bhd. Commission agents, suppliers of 45.13 45.13 oilfield equipment and related products.

Held by MKS Sdn. Bhd.

MKS (East Malaysia) Sdn. Bhd. Trading of equipment and parts relating 36.10 36.10

to petroleum industry.

The associated companies, K.K. Machinery Sdn. Bhd., MKS Sdn. Bhd. and MKS (East Malaysia) Sdn. Bhd. have

financial year ends of 30 April, 31 December and 31 December respectively. For the purpose of equity method of

accounting, the audited financial statements for the year ended 30 April 2012 of K.K. Machinery Sdn. Bhd. and 31

December 2011 of MKS Sdn. Bhd. and MKS (East Malaysia) Sdn. Bhd. and the management accounts up to 30

September 2012 have been used.

16. OTHER INVESTMENTS


Available-for-sale financial assets:

Unquoted share at cost 50,000 50,000

Wholesale Funds at fair value 9,602,195 9,296,138

9,652,195 9,346,138

The unquoted share represents a share held in a golf club.


74



17. GOODWILL ON CONSOLIDATION


At 1 October and 30 September 1,045,766 1,045,766

Impairment testing for goodwill on consolidation

For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the

lowest level within the Group at which the goodwill is monitored for internal management purposes.

The carrying amount of goodwill is allocated to UMS Engineering (S) Pte. Ltd.

The recoverable amount for the above is determined based on value in use calculated by discounting the future cash

flows generated from the continuing use of that unit and is based on the following key assumptions:

i) Cash flows projected based on a five year business plan approved by management.

ii) Revenue projected at annual growth of 10%.

iii) Expenses projected at annual increase of 10%.

iv) A pre-tax discount rate of 5.5% which is the existing rate of borrowing of the Group.

The values assigned to the key assumptions represent management’s assessment of future trends in the industry. A

reasonably possible change in a key assumption does not have any significant difference to the recoverable amount.

18. INVENTORIES


Raw materials 246,620 245,317

Work-in-progress 15,524 27,047

Goods for resale 34,684,641 31,985,601

Finished goods 266,881 114,714

Goods in transit 232,394 212,564

35,446,060 32,585,243

Inventories written down are based on the experience and judgment of the management team on the basis that they

reflect expected selling price for such inventories. Obsolete inventories are written off.

75




19. TRADE AND OTHER RECEIVABLES


Trade receivables 23,073,985 23,042,839 – –

Allowance for impairment (88,028) (146,069) – –

22,985,957 22,896,770 – –

Dividend receivable – 216,666 1,885,501 3,044,917

Other receivables 51,470 68,886 – –

Deposits 468,216 357,293 1,158 10,908

Prepayment 213,132 131,883 – –

Amounts due from subsidiary companies

- current accounts – – 27,802,101 28,591,324

23,718,775 23,671,498 29,688,760 31,647,149

Trade receivables denominated in currencies other than the functional currency are as follows:


US Dollar 412,263 45,984

EURO 695,846 32,902

The currency exposure profile of amount due from subsidiary companies are as follows:

COMPANY 2012 2011 RM RM

Ringgit Malaysia 26,015,162 27,166,912

Singapore Dollar 1,786,939 1,424,412

27,802,101 28,591,324

Trade receivables are non-interest bearing and generally are on 30 days to 180 days terms.

Trade receivables GROUP 2012 2011 RM RM

Neither past due nor impaired 12,792,096 14,576,599

1 to 30 days past due not impaired 4,184,213 4,087,923



More than 90 days past due not impaired 1,378,264 738,453

22,985,957 22,896,770

Impaired 88,028 146,069

23,073,985 23,042,839


76



19. TRADE AND OTHER RECEIVABLES (continued)

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group and losses have occurred infrequently.

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance account used to record the impairment is as follows:

Individually impaired GROUP 2012 2011 RM RM Trade receivables - nominal amounts 88,028 146,069 Allowance for impairment (88,028) (146,069)

– –

Movement in allowance for impairment:

GROUP 2012 2011 RM RM At 1 October 2011/2010 146,069 83,765 Charge for the year 2,948 89,290 Reversal of impairment (60,989) (26,986)

At 30 September 2012/2011 88,028 146,069

Trade receivables that are individually impaired at the reporting date relates to those that are in significant financial difficulties and have defaulted on payments. Those receivables are not secured by any collateral or security.

Included in trade receivables are amounts totalling RM951,496 (2011: RM1,392,451) due from a related party with credit term ranging from 60 days to 90 days.

Other receivables are non-interest bearing and ranges from repayable upon demand or on 30 to 90 days terms.

As at 30 September 2012, no other receivables and deposits were past due nor impaired.

The amounts due from subsidiary companies are non-interest bearing and repayable upon demand. As at 30 September 2012, no amounts due from subsidiary companies are past due nor impaired.

20. CASH AND CASH EQUIVALENTS

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM Cash in hand 29,002 28,455 – – Bank balances 9,958,619 7,337,627 325,628 45,358 Fixed deposits with licensed banks 7,426,626 9,424,813 – –

17,414,247 16,790,895 325,628 45,358 Bank overdraft (Note 27) (1,488,985) (1,675,948) – –

15,925,262 15,114,947 325,628 45,358

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20. CASH AND CASH EQUIVALENTS (continued)

Deposits are neither past due nor impaired and are placed with or entered into with reputable licensed banks.

Fixed deposits are made for periods ranging from one to twelve months for the Group and earn interest at prevailing

short term deposit rates.

Cash and cash equivalents denominated in currencies other than the functional currency comprise RM82,878 in US

Dollars. (2011: RM264,267 in US Dollars).

21. SHARE CAPITAL

GROUP AND COMPANY 2012 2011 RM RM

Ordinary shares of RM1 each Authorised 50,000,000 50,000,000 Issued and fully-paid up 40,690,000 40,690,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company.

All ordinary shares carry one vote each without restriction and rank equally with regard to the distribution of the

Company’s residual assets.

22. RESERVES


Non-distributable

Share premium 1,963,740 1,963,740 1,843,740 1,843,740

Revaluation reserve 889,929 889,929 5,465,017 5,465,017

Exchange translation reserve 81,420 50,840 – –

Fair value adjustment reserve 17,634 (8,922) – –

2,952,723 2,895,587 7,308,757 7,308,757

Distributable

Retained profits 80,996,857 70,897,067 2,934,730 3,779,993

83,949,580 73,792,654 10,243,487 11,088,750


78



23. TERM LOANS

GROUP 2012 2011 RM RM Secured Term loan I at 5% per annum and repayable by 180 monthly installments of Singapore Dollar 13,200 each and 60 monthly installments of Singapore Dollar 19,019 each thereafter. 959,261 1,442,794 Term loan II at 3.75% per annum below the bank’s base lending rate for first year repayable by 12 monthly installments of RM8,176 each, at 1.5% per annum below the bank base lending rate for second year repayable by 12 monthly installments of RM8,549 each and thereafter at 0.20% per annum above the bank’s base lending rate repayable by 36 monthly installments of RM8,768 each. – 45,791

959,261 1,488,585

Repayments due:

Within one year (Note 27) 538,286 547,815

Two to five years 420,975 940,770

959,261 1,488,585 The term loans are secured as follows:

i) a fixed and floating charge over a subsidiary company’s assets; ii) legal charge over certain subsidiary companies’ leasehold properties and investment properties; iii) joint and several guarantees by certain directors; iv) facilities agreement of RM455,000 by a subsidiary company; and v) corporate guarantee by the Company.

24. HIRE PURCHASE PAYABLES

GROUP 2012 2011 RM RM Minimum lease payments: Within one year 24,653 29,129 Two to five years 82,092 104,717 106,745 133,846 Less: Future finance charges (18,482) (22,384) Present value 88,263 111,462 Repayments due: Within one year (Note 26) 20,389 24,876 Two to five years 67,874 86,586

88,263 111,462

Effective interest rate (per annum) 2.99% 2.99%

79




25. DEFERRED TAXATION

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM At 1 October 783,591 714,407 942,750 314,250 Deferred tax expenses originating and reversal of temporary differences 81,511 43,395 (314,250) 628,500 Underprovision of deferred tax liability in prior years 23,902 25,108 – – Transferred from/(to) statement of comprehensive income (Note 8) 105,413 68,503 (314,250) 628,500 Exchange differences 61 681 – –

At 30 September 889,065 783,591 628,500 942,750

The components of deferred tax liabilities and deferred tax assets that are recognised during the financial year are

as follows:


Deferred tax liabilities:

Revaluation surplus on investment property 53,190 53,190 – –

Capital allowances in excess of depreciation 835,875 730,264 – –

Others – 1,374 628,500 942,750

889,065 783,591 628,500 942,750

The amounts of deferred tax assets that are not recognised in the statement of financial position are as follows:


Unabsorbed capital allowances 1,213 2,138

Unused tax losses 11,771 5,520

12,984 7,658

26. TRADE AND OTHER PAYABLES

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM Trade payables 2,946,799 4,984,712 – – Other payables and accruals 2,300,982 2,417,423 206,500 170,216 Amount due to a subsidiary company – current account – – 1,700,000 2,500,000 Hire purchase payables (Note 24) 20,389 24,876 – – 5,268,170 7,427,011 1,906,500 2,670,216


80



26. TRADE AND OTHER PAYABLES (continued)

Trade payables denominated in currencies other than the functional currency are as follows:

GROUP 2012 2011 RM RM Euro 8,163 94,830 Ringgit Malaysia 52,235 133,060 Singapore Dollar – 3,230 US Dollar 1,282,684 2,630,990 Japanese Yen 565,063 –

Credit terms of trade payables for current and prior years range from 30 days to 180 days.

Included in trade payables are amounts totalling RM186,876 (2011: RM204,589) due to related parties with credit

terms ranging from 60 days to 90 days (2011: 60 days to 120 days).

The amount due to a subsidiary company is unsecured, interest free and repayable on demand.

27. SHORT TERM BORROWINGS


Bills payable 3,051,669 3,297,185

Bank overdraft (Note 20) 1,488,985 1,675,948

Term loans (Note 23) 538,286 547,815

5,078,940 5,520,948

Bills payable denominated in currency other than the functional currency comprise RM384,146 denominated in EURO (2011: RM89,652 denominated in US Dollars).

The bills payable and bank overdraft are secured as follows:

i) a fixed and floating charge over a subsidiary company’s assets; ii) legal charges over certain subsidiary companies’ leasehold properties and investment properties; iii) joint and several guarantees by certain directors; and iv) corporate guarantee by the Company.

Interest is charged at the bank’s base lending rate.

28. CAPITAL COMMITMENTS


Contracted but not provided for in the financial statements – 7,500

81




29. OPERATING LEASE ARRANGEMENTS

GROUP 2012 2011 RM RM (a) The future minimum lease payments payable under non-cancellable operating lease contracted for as at the reporting date but not recognised as payable are as follows: Within one year 3,270 3,840 Between two to five years 520 3,790

3,790 7,630


(b) The future minimum lease payments receivable under

non-cancellable operating lease contracted for as at the

reporting date but not recognised as receivable are as follows:

Within one year 30,000 120,000

Between two to five years – 30,000

30,000 150,000

30. CONTINGENT LIABILITIES

GROUP COMPANY 2012 2011 2012 2011 RM RM RM RM Secured Bank guarantees given to third party 57,250 45,000 – – Unsecured Corporate guarantees given to licensed banks for credit facilities granted to a subsidiary company – – – 45,791

57,250 45,000 – 45,791

The bank guarantees are secured by corporate guarantee given by the Company.

31. SEGMENT INFORMATION

Business segments

For management purpose, the Group is organised into business units based on the geographical location of the assets and has three reportable segments as follows:

(i) West Malaysia; (ii) East Malaysia; and (iii) Singapore.


82


Notes To The Financial Statements (continued) 31

. SE

GM

ENT

INFO

RM

AT

ION

(co

ntin

ued)

Th

e re

venu

e fr

om W

est M

alay

sia

and

East

Mal

aysi

a ar

e de

rived

from

dis

trib

utio

n of

mec

hani

cal p

ower

tran

smis

sion

and

mat

eria

l han

dlin

g pr

oduc

ts a

nd s

yste

ms

and

indu

stria

l spa

re p

arts

as

wel

l as

man

ufac

turin

g an

d tr

adin

g of

ste

el w

ire m

esh.

Th

e re

venu

e fr

om S

inga

pore

is d

eriv

ed fr

om tr

adin

g in

eng

inee

ring

prod

ucts

.

M

anag

emen

t mon

itors

the

oper

atin

g re

sults

of i

ts b

usin

ess u

nits

sepa

rate

ly fo

r the

pur

pose

of m

akin

g de

cisi

ons a

bout

reso

urce

allo

catio

n an

d pe

rfor

man

ce a

sses

smen

t.

Segm

ent

perf

orm

ance

is e

valu

ated

bas

ed o

n op

erat

ing

profi

t or

loss

whi

ch, i

n ce

rtai

n as

pect

s as

exp

lain

ed in

the

tab

le b

elow

, is

mea

sure

d di

ffer

ently

from

ope

ratin

g pr

ofit o

r los

s in

the

cons

olid

ated

fina

ncia

l sta

tem

ents

.

Tr

ansf

er p

rices

bet

wee

n th

e op

erat

ing

segm

ents

are

on

arm

s le

ngth

bas

is in

a m

anne

r sim

ilar t

o tr

ansa

ctio

ns w

ith th

ird p

artie

s.

A

djus

tmen

ts/

W

est M

alay

sia

Ea

st M

alay

sia

S

inga

pore

elim

inat

ions

Not

e

Con

solid

ated

2012

20

11

2012

20

11

2012

20

11

2012

20

11

20

12

2011

RM

R

M

RM

R

M

RM

R

M

RM

R

M

R

M

RM

R

EVEN

UE

AN

D E

XPEN

SES

R

even

ue

Ex

tern

al c

usto

mer

s 68

,015

,011

66

,670

,330

8,

227,

396

9,38

7,63

8 5,

530,

784

4,84

5,18

3 –

–

81,7

73,1

91

80,9

03,1

51

Inte

r-se

gmen

t 5,

395,

229

5,64

0,22

9 11

,247

45

,603

13

7,85

8 18

,006

(5

,544

,334

) (5

,703

,838

) A

–

–

Tota

l rev

enue

73

,410

,240

72

,310

,559

8,

238,

643

9,43

3,24

1 5,

668,

642

4,86

3,18

9 (5

,544

,334

) (5

,703

,838

)

81,7

73,1

91

80,9

03,1

51

R

esul

ts

Inte

rest

inco

me

(273

,250

) (1

74,1

86)

– –

– –

– –

(2

73,2

50)

(174

,186

)

Inte

rest

exp

ense

s 4,

063

3,85

3 1,

798

6,49

3 15

9,93

8 18

4,28

6 –

–

165,

799

194,

632

Dep

reci

atio

n 1,

359,

150

1,39

1,85

5 20

4,28

7 18

9,65

0 17

7,56

0 20

9,34

6 –

–

1,74

0,99

7 1,

790,

831

Amor

tisat

ion

of

pr

epai

d la

nd

le

ase

paym

ent

34,5

96

34,5

96

11,0

44

11,0

44

– –

– –

45

,640

45

,640

Mat

eria

l non

-cas

h

(in

com

e)/e

xpen

ses

(2,5

47,5

22)

(1,0

51,1

09)

624

12,8

84

– (7

2,84

3)

– –

B (2

,546

,898

) (1

,111

,068

)

Segm

ent p

rofit

s 12

,031

,378

9,

499,

586

513,

177

766,

002

180,

756

167,

659

477,

546

763,

213

C

13,2

02,8

57

11,1

96,4

60

Tota

l Ass

ets

107,

822,

317

101,

276,

820

9,97

0,11

0 9,

898,

408

9,95

1,74

5 9,

402,

503

10,7

30,7

26

10,3

37,9

60

D

138,

474,

898

130,

915,

691

Ass

ets

Addi

tions

to n

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nt a

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s

– pr

oper

ty, p

lant

an

d eq

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ent

1,34

4,89

1 3,

058,

506

1,27

0,79

7 10

3,80

9 58

,612

2,

914

– –

2,

674,

300

3,16

5,22

9

83




31. SEGMENT INFORMATION (continued)

Business segments (continued)

Notes to the nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial

statements:

(A) Inter-segment revenue are eliminated on consolidation.

(B) Other material non-cash (income)/expenses consist of the following items:


Bad debts written off 10,293 57,142

Property, plant and equipment written off 34,861 65,344

Allowances for impairment on receivables 2,948 89,290

Gain in fair value of investment properties (2,595,000) (1,322,842)

(2,546,898) (1,111,068)

(C) Reconciling items of total reportable segments’ profits to the Group’s profit for the year:


Share of profits of associated companies 794,700 1,114,127

Result of non-reportable segment (335,073) (331,087)

Inter-segment unrealised profit/(loss) 17,919 (19,824)

477,546 763,213

(D) Reconciling items of total reportable segments’ assets to the Group’s assets:


Associated companies 12,729,528 12,584,826

Goodwill on consolidation 1,045,766 1,045,766

Inter-segment unrealised profit (236,140) (254,059)

Inter-segment balance (6,331,011) (5,644,023)

Non-reportable segment’s total assets 3,522,583 2,605,450

10,730,726 10,337,960


84



31. SEGMENT INFORMATION (continued)

The Group’s non-current assets are located as follows:


Malaysia 55,043,357 51,043,032

Singapore 6,626,255 6,616,707

61,669,612 57,659,739

The Group’s revenue from external customers by location of customers:


Malaysia 76,488,194 76,057,968

Singapore 4,431,228 3,810,308

Others 853,769 1,034,875

81,773,191 80,903,151

The Group’s revenue from external customers by products:


Distribution of mechanical power transmission and material

handling products and system and industrial spare parts 75,599,490 75,528,518

Manufacturing and trading of wire mesh 642,917 529,450

Trading in engineering products 5,530,784 4,845,183

81,773,191 80,903,151

There is no single customer that contributed 10% or more of the Group’s revenue for the financial year ended 30

September 2012 and 30 September 2011.

85




32. RELATED PARTY TRANSACTIONS

GROUP 2012 2011 RM RM Associated companies: Sales of products 5,443,826 5,325,132 Rental income of premises 204,000 204,000

Related party:* Management fees income 40,800 69,600 Sales of products 158,870 118,495 Purchases of products 1,121,062 947,506 Sale of products to a company in which a major shareholder of the Company is also the director 19,385 57,476 Rental of premises paid to a director of the Company 18,000 18,000 Disposal of motor vehicle to persons connected to the directors for a consideration of 70,000 –

* Certain directors are also directors and /or shareholders of the related party.

33. COMPENSATION OF KEY MANAGEMENT PERSONNEL

The key management personnel comprises directors having authority and responsibility for planning, directing and

controlling of the financial and operating policies of the Group entities and the Company either directly or indirectly.


Directors:

Short term employee benefits 2,152,104 1,925,602 180,000 134,100


86



34. SUPPLEMENTARY INFORMATION


Total retained profits of the Company and its subsidiaries:

Realised 70,374,592 62,761,328 3,563,230 4,749,931

Unrealised 7,888,879 5,517,259 (628,500) (969,938)

78,263,471 68,278,587 2,934,730 3,779,993

Total share of retained profits from

associated companies:

Realised 11,865,936 11,722,234 – –

Unrealised 20,915 19,915 – –

11,886,851 11,742,149 – –

90,150,322 80,020,736 2,934,730 3,779,993

Consolidation adjustments (9,153,465) (9,123,669) – –

Total retained profits as per

consolidated financial statements 80,996,857 70,897,067 2,934,730 3,779,993

This supplementary information is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not

part of the financial statements. The directors are responsible for the preparation of the supplementary information

in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses

in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the

Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad.

`

87



liSt of GROUP PROPERTIES 30 September 2012

DETAILS OF THE LANDED PROPERTIES OWNED BY THE UMSH GROUPas at 30 September 2012 are set out as below:

Location/Postal Address Date of Description Tenure Land Area/ Usage Approximate Net acquisition (Built-up Area) Age of the Book (Square Meter) Building Value (Years) RM

PN No. 341 Lot 24384 24.12.1988 Leasehold land 99 years 2,639.20 Office cum 35 2,566,327

Mukim of Batu District of and a four lease warehouse

Kuala Lumpur storey building expiring

16.6.2067

No. 2, Jalan Segambut Pusat (3,449.55)

51200 Kuala Lumpur

Geran 11340 Lot 14, 24.12.1988 Freehold land Freehold 144.24 Shoplot 47 4,500,000

Section 20, Town of and a four (For rental)

Kuala Lumpur storey building

Wilayah Persekutuan

No. 45, Jalan Silang (720.91)

50050 Kuala Lumpur

Lot 9, 10 and 11 Master Title 9.4.1991 Leasehold land 66 years 719.41 Office 21 3,120,000

Deed No. HS(D) 41070 and 3 units lease factory cum

P.T. 6092, Mukim Batu three storey expiring warehouse

District of Wilayah building 9.5.2048 (For rental)

Persekutuan

Lot 29, 31 & 33 (1,557.39)

Jalan 1/57D, Segambut

51200 Kuala Lumpur

HS(D) 5261 Lot No. 442 17.2.1992 Leasehold 99 years 141.82 Resort unit 19 260,000

and HS(D) 7720 Lot No. building lease (For rental)

978, Mukim and Daerah of expiring in

Port Dickson June 2092

Negeri Sembilan

A-P-8, Bayu Beach Resort (141.82)

4 1/2 Miles, Jalan Pantai

71050 Port Dickson

Negeri Sembilan


88



Lot 18, Rawang Integrated 5.5.1992 Freehold land Freehold 6,882.16 Factory 19 5,500,000

Industrial Park and building

Lot 18, Lingkaran Taman (1,907.14)

Industri Integrasi Rawang 2

Taman Industri Integrasi

Rawang, 48000 Rawang

Selangor Darul Eshan

Lot 16465, Mukim of Batu 14.7.2004 Leasehold 99 years 987.53 Warehouse 24 1,765,115

Wilayah Persekutuan land and lease

Kuala Lumpur building expiring in

June 2067

No. 7, Jalan Segambut Pusat (791.34)

51200 Kuala Lumpur

HS(D) 70294 PTD 17142 16.10.1991 Freehold land Freehold 143.12 Office cum 22 530,000

Mukim of Tebrau and a two warehouse

District of Johor Bahru storey building (For Rental)

No. 53, Jalan Sri Bahagia (279.95)

Taman Sri Bahagia

81200 Johor Bahru

Lot No. 39562 6.6.1995 Freehold land Freehold 1,709.42 Office cum 16 1,828,783

Mukim of Tebrau and a double warehouse

District of Johor Bahru storey

detached

factory

No. 10, Jalan Dewani 4 (1,449.29)

Kawasan Perindustrian

Dewani

81100 Johor Bahru, Johor

List Of Group Properties (continued)

89




Plot 7, Lot 644 17.7.1995 Freehold land Freehold 1,026.02 Office cum 16 601,698

Mukim 11 and a one warehouse

Bukit Tengah and a half

PWC Penang storey semi-

detached light

industrial

building

1, Lorong Perusahaan (498.80)

Maju 12

Taman Perusahaan Pelangi

13600 Perai, Penang

Plot 8, Lot 644 17.7.1995 Freehold land Freehold 884.99 Office cum 16 571,371

Mukim 11 and a one warehouse

Bukit Tengah and a half

PWC Penang storey semi-

detached light

industrial

building

3, Lorong Perusahaan (498.80)

Maju 12

Taman Perusahaan Pelangi

13600 Perai, Penang

GM 7173 Lot 22749 11.5.1992 Freehold land Freehold 219.00 Office cum 21 920,000

Mukim of Kuala Kuantan and a two warehouse

District of Kuantan, Pahang storey building (For rental)

B252, Jalan Air Putih (438.00)

25300 Kuantan, Pahang

GM 7174 Lot 22750 11.5.1992 Freehold land Freehold 149.00 Office cum 21 600,000

Mukim of Kuala Kuantan and a two warehouse

District of Kuantan, Pahang storey building (For rental)

B250, Jalan Air Putih (298.00)




90



GM 7185 Lot 22761 31.3.1992 Freehold land Freehold 365.06 Single 21 320,000

Mukim of Kuantan and a single storey

District of Kuantan, Pahang storey building house

(For rental)

No. 2, Lorong Galing 61 (305.58)

Jalan Air Putih


HS(D) 18736 18.10.2004 Leasehold 66 years 972.00 Office cum 8 350,128

Lot PT. 56468 land and a lease warehouse

Cocopalm Industrial Park single storey expiring

Mukim of Kuala Kuantan building 2050

District of Kuantan, Pahang

No. 6, Jalan Industri 9/3 (446.16)

Cocopalm Industrial Park

Semambu, 25350 Kuantan

HS(D) 18737 18.10.2004 Leasehold 66 years 972.00 Office cum 8 350,128

Lot PT. 56469 land and a lease warehouse

Cocopalm Industrial Park single storey expiring

Mukim of Kuala Kuantan building 2050

District of Kuantan, Pahang

No. 8, Jalan Industri 9/3 (446.16)

Cocopalm Industrial Park

Semambu, 25350 Kuantan

Sublot 43 of Parent Lot 67 21.11.2006 Leasehold land 55 years 513.00 Office cum 12 568,750

Section 66, Kuching Town and a one and lease warehouse

Land District a half storey expiring

semi-detached 2056

light industrial

building

No. 43, Light Industrial (265.50)

Yoshi Square

Jalan Simen Raya

93450 Kuching, Sarawak


91




Sublot 44 of Parent Lot 67 29.3.2001 Leasehold land 55 years 513.00 Office cum 12 500,364Section 66, Kuching Town and a one and lease warehouseLand District a half storey expiring semi-detached 2056 light industrial building

No. 44, Light Industrial (265.50)Yoshi SquareJalan Simen Raya 93450 Kuching, Sarawak

Sublot 45 of Parent Lot 67 29.3.2001 Leasehold land 55 years 513.00 Office cum 12 500,364Section 66, Kuching Town and a one and lease warehouseLand District a half storey expiring semi-detached 2056 light industrial building

No. 45, Light Industrial (265.50) Yoshi Square Jalan Simen Raya 93450 Kuching, Sarawak

Lot 271, Sublot 6 24.10.2011 Leasehold land 5 years 642.10 Office cum 3 720,000Kemena Land District and a single lease warehouseBintulu storey building expiring 2017

No.6, Lot 271, Jalan Sibiyu (187.50) Kemena land District 97000 Bintulu, Sarawak Strata Lot No. U3898V 23.3.1984 A warehouse 60 years – Warehouse 28 900,846Mukim 23, Singapore unit on the lease (For rental) 4th floor of a expiring four storey 2041 warehouse complex

No. 5 Kaki Bukit Road 2 (246.00)#04-16, City Warehouse Singapore 417839 Lot No. 5440P, Mukim 23, 21.7.1987 Leasehold 60 years 598.30 Office cum 15 5,575,936Singapore building and lease warehouse a four storey expiring intermediate 2056 terrace factory

No 4 Kaki Bukit View (1,196.00)Kaki Bukit Techpark II Singapore 415943



92


analySiS of SHAREHOLDINGS as at 31 January 2013

Authorised Share Capital : RM50,000,000.00

Issued and Paid-up Capital : RM40,690,000.00

Class of Shares : Ordinary Shares of RM1.00 each

Voting Rights : One vote per Ordinary share

No. of Shareholders : 1,850

1. DISTRIBUTION SCHEDULE OF SHARES No. of Holders Holdings Total Holdings %

20 Less than 100 647 0.00 160 100 to 1,000 145,245 0.36 1,435 1,001 to 10,000 5,148,894 12.65 201 10,001 to 100,000 5,561,970 13.67 31 100,001 to less than 5% of issued shares 14,941,792 36.72 3 5% and above of issued shares 14,891,452 34.60

1,850 40,690,000 100.00

93



Analysis Of Shareholdings (continued)

2. LIST OF THIRTY (30) LARGEST SHAREHOLDERS Names No. of Shares Percentage (%)

1 NGT Holdings Sdn Bhd 6,468,972 15.90

2 Ang Jwee Lee 6,200,000 15.24

3 Thing Hua @ Ng Thing Hua 2,222,480 5.46

4 Ng Sing Huat 1,810,036 4.45

5 Ng Siow Hwa @ Ng Kok Hwa 1,476,070 3.63

6 Ng Swee Ing 1,436,092 3.53

7 Teo Tin Lun 1,096,600 2.70

8 DB (Malaysia) Nominee (Asing) Sdn Bhd 900,000 2.21

Exempt An For British And Malayan Trustees Limited (Yeoman 3-Rights)

9 Public Nominees (Tempatan) Sdn Bhd 800,000 1.97

Pledged Securities Account For Ang Jwee Lee (E-IMO)

10 Yeoh Kean Hua 680,000 1.67

11 Ong Kiat Eng @ Ong Geok Pin 675,894 1.66

12 Ng Siew Eng 666,000 1.64

13 Ng Siew Lan 664,400 1.63

14 Ng Seng Kong 623,954 1.53

15 Alan Ng Seng Hee 422,088 1.04

16 Ng Sing Heong 318,298 0.78

17 Ng Chun Keng 300,000 0.74

18 Ng Sing Kun @ Ng Seng Kuon 300,000 0.74

19 Ng Seng Teck 284,256 0.70

20 Ng Soo Eng 252,366 0.62

21 Maybank Nominees (Tempatan) Sdn Bhd 200,000 0.49

Pledged Securities Account For Ng Sing Kun @ Ng Seng Kuon (01456100045A)

22 HDM Nominees (Asing) Sdn Bhd 200,000 0.49

DBS Vickers Secs (S) Pte Ltd For Yeo Seng Chong

23 Public Nominees (Tempatan) Sdn Bhd 200,000 0.49

Pledged Securities Account For Teo Tin Lun (E-IMO)

24 Ng Sheng Dee @ Ng Seng Chee 193,000 0.47

25 Tay Chong Kiat 182,900 0.45

26 Ow Kock Wah 175,000 0.43

27 Cimsec Nominees (Tempatan) Sdn Bhd 164,500 0.40

CIMB Bank For Ling Yoke Tek (M52071)

28 Ow Kock Wah 153,900 0.38

29 Ong Jin Tiong 153,500 0.38

30 Chiam Eng Kuang @ Chiam Yoong Wang 151,000 0.37

Total 29,371,306 72.18


94


Analysis Of Shareholdings (continued)

3. LIST OF SUBSTANTIAL SHAREHOLDERS Names No. of Shares Percentage No. of Shares Percentage (Direct) (%) (Indirect) (%)

1 Ang Jwee Lee 7,000,000 17.20 – –2 NGT Holdings Sdn Bhd 6,468,972 15.90 – –3 Thing Hua @ Ng Thing Hua 2,234,480 5.49 – –4 Ng Seng Kong 655,954 1.61 *6,468,972 15.90 **300,000 0.745 Ng Seng Huat 107,538 0.26 *6,468,972 15.906 Ng Seng Teck 284,256 0.70 *6,468,972 15.907 Ng Seng Eng 68,812 0.17 *6,468,972 15.908 Ng Seng Hooi 44,870 0.11 *6,468,972 15.909 Corinna Ng Bee Hong 17,701 0.04 *6,468,972 15.9010 Jacqueline Ng Bee Sim 24,061 0.06 *6,468,972 15.9011 Ng Bee Wah 54,376 0.13 *6,468,972 15.90

NOTE:

* Deemed interested through NGT Holdings Sdn Bhd

** Deemed interested through his child

DIRECTOR’S INTEREST IN SHARES IN THE COMPANY AND ITS RELATED COMPANIES

Names No. of Shares Percentage No. of Shares Percentage (Direct) (%) (Indirect) (%)

1 Ng Siow Hwa @ Ng Kok Hwa 1,476,070 3.63 ** 422,088 1.042 Ng Seng Kong 655,954 1.61 * 6,468,972 15.90 **300,000 0.743 Ng Sing Kun @ Ng Seng Kuon 500,000 1.23 ** 200,000 0.49 4 Ng Sing Huat 1,810,036 4.45 – –5 Ng Seng Huat 107,538 0.26 * 6,468,972 15.906 Ng Peng Huah 50,000 0.12 – –7 Lee Kok Wei – – – –8 Noordin Bin Mohd. Noor – – – –9 Thing Hua @ Ng Thing Hua 2,234,480 5.49 - -

The above Directors by virtue of their shareholdings in the Company are also deemed interested in shares in the related

corporations to the extent the Company has an interest.

NOTES:

* Deemed interested through NGT Holdings Sdn Bhd

** Deemed interested through their spouse and/or children

proxy FORM

FOR AGAINST

Resolution 1 Reports and Audited Financial Statements

Resolution 2 Directors’ fees

Resolution 3 Declaration of Final Dividend

Resolution 4 Declaration of Special Dividend Resolution 5 Re-appointment of Mr. Ng Siow Hwa @ Ng Kok Hwa Resolution 6 Re-appointment of Mr. Ng Sing Kun @ Ng Seng Kuon Resolution 7 Re-appointment of En. Noordin Bin Mohd. Noor Resolution 8 Re-appointment of Mr. Ng Peng Huat Resolution 9 Re-election of Mr. Ng Seng Huat

Resolution 10 Re-election of Mr. Lee Kok Wei

Resolution 11 Auditors

Resolution 12 Proposed Shareholder Mandate for RRPT

Resolution 13 Proposed Share Buy-Back

Special Resolution 1 Proposed Amendments of Articles of Association

Subject to any voting instructions so given, the proxy will vote, or may abstain from voting on any resolution as he/she may think fit.

Signature(s)/Common Seal of Shareholder

Dated this day of 2013

NOTES :

1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.2. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. Where a member appoints more than one (1) proxy,

the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

3. The instrument appointing a proxy must be deposited at the Company’s Registered Office at 3rd Floor, No. 17 Jalan Ipoh Kecil, 50350 Kuala Lumpur not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof.

I/We, (NRIC No / Tel No )

of

being a member(s) of UMS HOLDINGS BERHAD, hereby appoint

of

or failing him/her

of

as my/our proxy, to vote for me/us and on my/our behalf at the Thirty-First Annual General Meeting of the Company to be held at Lumut 1 Room, Level 1, Vistana Hotel, No. 9 Jalan Lumut, Off Jalan Ipoh, 50400 Kuala Lumpur on Monday, 25 March 2013 at 10:00 a.m. or at any adjournment thereof.

The proportion of my/our shareholding to be represented by my/our proxies are as follows:-

First proxy (1)................................................................% Second proxy (2)................................................................%NRIC No.: ...................................................................... NRIC No.: ...........................................................................

Tel No.: ........................................................................... Tel No.: ................................................................................

No. of Shares Held

To: The Company Secretary UMS HOLDINGS BERHAD (74125-V)

3rd Floor, No.17 Jalan Ipoh Kecil 50350 Kuala Lumpur

AFFIXSTAMP HERE

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