the annual report for 2011.

Transcription

Pelikan International Corporation Berhad (63611-U)
Pelikan International Corporation Berhad
(Company No. 63611-U)
distinction
quality
stationery
luxury
modern
distinction
modern
passion
classic
creativity
high value
griffix®
collector’s item
griffix®
writing instruments
office
luxury
luxury
fun
quality
global brand
schools
fun
modern
high
value
stationery
global brand
high
value
quality
griffix®
luxury
german heritage
passion classic
quality
fun
griffix®
modern
luxury
luxury
modern
printer suppliers
luxury
market leader
modern
innovation
griffix®
market leader
ink pioneer colours
distinction
high value
global brand luxury
collector’s item
Pelikan For All
office
german heritage
writing instruments
ink pioneer colours
collector’s item
stationery
griffix®
creativity
creativity
office
modern
innovation griffix®
stationery
market leader
griffix®
luxury
global
brand
griffix®
german
heritage
office
creativity
stationery
quality
fun
luxury
collector’s item
arts & craft
global brand
quality
innovation
market
high
value
printer suppliers
office
creativity
leader
office
luxury
passion
classic
fun
stationery
ANNUAL REPORT 2011
T (+603) 5569 5511
F (+603) 5569 5500
www.pelikan.com
global
brand
collector’s item
office
high
value
griffix®
creativity
No. 9, Jalan Pemaju U1/15
Seksyen U1
Hicom Glenmarie Industrial Park
40150 Shah Alam
Selangor Darul Ehsan
Malaysia
fun
globa
brand
modern
passion classic
fun
stationery
passion
classic
luxury
high value
office
luxury high value
german heritage
Pelikan For All
high
value
passion
classic
griffix®
arts & craft
global
brand
stationery
passion
classic
stationery
global
brand
innovation
ink pioneer colours
modern
office
schools
luxury
griffix®
high value
luxury
passion luxury
schools
classic
printer suppliers
schools
kindergarten
passion classic
high value
quality
ANNUAL REPORT 2011
From its initial focus on ink, Pelikan has
grown through the years to embrace
the expansion in the communication
trends. Today, there is a Pelikan product
for people of all walks of life. We remain
passionate about allowing people to
express themselves. Whether in preschool, school, office, studio, the hobby
room or when engaged in the noblest
form of personal communication
writing with a high end writing
instrument – our innovative products
are your trusted companions for life.
Vision & Mission
T H E R E S U LT S
TH E REPORTS
Financial Highlights
5
Group Operations Review
29
Pelikan 2011 Year in Focus
6
Diary of Events
41
Chairman & CEO’s Statement
8
Introducing Herlitz
53
Statement on Corporate Governance
56
T H E C O R P O R AT I O N
Statement on Internal Control
64
Corporate Information
17
Statement on Internal Audit Function
65
Group Corporate Structure
18
Audit Committee Report
68
Board of Directors’ Profile
20
Group Management Team
24
Statement on Corporate Social
Responsibility
71
THE FINANCIALS
Financial Statements
77
Financial Calendar
78
Additional Compliance Information
163
Analysis of Shareholdings
165
List of Group Properties
168
Pelikan Group of Companies Directory 169
Notice of Annual General Meeting
173
Form of Proxy
CONTENTS
Vision
TE
To be globally recognised as a market-leading brand
offering a range of products that reflects the highest
standards of quality, innovation and timeless German
heritage.
AM
WO
Our Guiding Principles
RK
QU
AL
IT
Y
Mission
We create products that inspire creativity and
imagination, fulfil customers’ satisfaction and
confidence by offering the highest quality products
and services.
We accomplish our mission by:
GRIT
Y
> Establishing a strong brand presence worldwide
by building brand awareness since young from
children to adults
INTE
IN
> Accumulating in-depth knowledge of our
customers’ needs and provide the expected
solutions
NO
> Applying proven technology and tools for
developing and executing innovative ideas
VA
TIO
> Selecting and developing a network of effective
distribution channels
N
> Recruiting, training, developing, retaining
and rewarding talented and motivated people
> Ensuring the environment in which we
operate is safe, healthy and secured
CO
I
MM
T
N
ME
T
Staying true to our heritage, we are
embarking on a new phase of growth
to expand our market share.
T H E R E S U LT S
Financial Highlights
5
Pelikan 2011 Year in Focus
6
Chairman & CEO’s Statement
8
T H E R E S U LT S
5
FINANCIAL
HIGHLIGHTS
for the financial year ended 31 December
2011
2010
Restated
2009
Restated
2008
Restated
2007
1,923,368 1,786,848 1,202,494 1,288,493 1,194,949
Revenue
RM’000
Profit before tax
RM’000
(63,292)
147,986 41,566 36,715 99,799
Profit for the financial year
RM’000
(101,302)
130,791 31,057 25,119 96,170
Profit for the financial year attributable
to owners of the parent
RM’000
(88,423)
127,808 27,814 23,972 93,083
Equity attributable to owner of the parent
RM’000
714,134 811,519 558,771 530,933 488,735
Basic earning per share
sen
(17.44)
24.90 7.52 8.04 33.81
Fully diluted earning per share
sen
(17.44)
24.90 7.52 8.04 28.90
Net asset per share attributable
to owner of the parent
sen
1.39 1.58 1.63 1.55 1.70
Dividend per share – declared and paid sen Dividend per share – proposed sen – – *3.00 – 2.00 – 2.00 5.00
2.00 6.00
*The proposed 3.0 sen dividend for the financial year 2011 comprise of cash dividend 1.0 sen and share dividend 2.0 sen on
the basis of one (1) treasury share for every fifty (50) existing ordinary share of RM1.00 each held in the Company.
REVENUE
PROFIT BEFORE TAXATION
EQUITY ATTRIBUTABLE
(RM’000)
(RM’000)
(RM’000)
1,923,368
2011
2010
2011
2009
1,202,494
2008
2008
1,288,493
2007
1,194,949
147,986
99,799
NET ASSETS
(SEN)
2011
2010
2009
2008
2007
24.90
2010
2009
7.52
2008
8.04
33.81
811,519
558,771
2008
36,715
(SEN)
2011
2010
2009
41,566
BASIC EARNING PER SHARE
(17.44)
714,134
2011
2010
1,786,848
2009
2007
(63,292)
2007
530,933
2007
488,735
1.39
1.58
1.63
1.55
1.70
AN N UAL R EPORT 2011
6
PELIKAN 2011
YEAR IN FOCUS
Core Focus
for 2011
Merging PELIKAN and HERLITZ
businesses to optimise synergies
and streamline operations
Key Strategies for Long-Term Growth
Brand • Global Distribution Network • Research & Development
The best choice for you
and your loved ones!
•Teachers • Parents
•School kids • Senior adults
•Educational
•Inspiring creativity
•Ergonomic designs
•Good quality
•Rich in tradition and history
Brand
Attitude
Targets
Brand
Traits
The modern way of stationery!
•Teens • Students
• Workers • Young adults
•Fancy & Trendy Designs
•Modern and Colourful
•Inspiring Fun and Joy of Life
•Good value for money
T H E R E S U LT S
7
Revenue by Product
Group in 2011
R&D
fine writing
instruments
4.11
%
school
22.32
%
hobby, art & craft
2.16
%
office
38.76
%
printer consumables
RM20.16 million was invested in R&D and the manufacturing
of new products for 2011 as well as fixed assets, tools and new
machinery across all product groups.
82 experts in R&D together with 149 product developers worked
together with the product managers and marketing teams to
brainstorm on new and creative ideas for new products and
marketing features.
NEW PRODUCTS FOR 2011
Porsche Design writing Instruments
•
•
•
•
Porsche Design – Special Edition “Pure” Black
Porsche Design – Limited Edition “Pure” Titanium
Porsche Design – “Slim” Line Silver & Graphite
Porsche Design – Shake Pen Twist
Fine Writing Instruments
•
•
•
•
•
•
•
Limited Edition Maki-e Four-Leaf Clover
Limited Edition Raden M1000 Moonlight
Special Edition M1005 Demonstrator
Special Edition Eternal Ice
Special Edition Souverän M101N tortoiseshell brown
Special Edition Souverän M600 green o’ green
Special Edition Souverän M320 pearl
Office
20.27
%
•
•
•
•
Triangular markers and highlighters
Pelifix design glue sticks “Wizard” and “Fairy”
Liquid glue assortment
Ink pad pro No. 0 and No. 1
School
papeterie
5.31
%
other & services
•
•
•
•
•
Pelikano Black
Pelikano mechanical pencil
Gripster
Fibre tip Collorella Triangular
Finger paints 30 ml
Printer Consumables
7.07
%
•
•
•
•
45 Toner Modules
17 Inkjet Cartridges
22 Inkjet Refills
19 types of Toner Powder
8
CHAIRMAN & CEO’S
STATEMENT
Tan Sri Musa
Bin Mohamad
Chairman
Dear Shareholders,
Amidst a year of global economic
turmoil, Pelikan International
Corporation Berhad (“Pelikan
International”) made slow but steadfast
progress towards restructuring its
expanded business, while streamlining
its operations towards realising a more
sustainable business going forward.
Loo Hooi Keat
Chief Executive Officer
On behalf of the Board of Directors, we
are pleased to present the annual report
of Pelikan International for the financial
year ended 31 December 2011.
T H E R E S U LT S
9
THE GLOBAL ECONOMY 2011
(statistics sourced from the World Bank)
As the Group had anticipated since 2010, an increasingly uncertain and weakened global economic
scenario continued to hinder growth in advanced countries throughout 2011. Ongoing financial
and economic turmoil especially in Europe where debt crisis reached critical stages, as well as
unforeseen impacts of natural disasters and political unrests that swelled in several oil-producing
nations in the Middle East have contributed to lower global economic growth. For the first half
of 2011, the world economy remained strong partly because of improving financial and labour
market conditions in high-income countries and robust domestic demand growth in developing
countries, but growth moderated in the second half of 2011 as monetary and fiscal policies in these
developing countries tightened to contain capacity constraints and rise of inflation. Overall,
the global Gross Domestic Product (“GDP”) growth fell to an estimated 2.7% (2010: 3.8%).
Alongside the United States, Europe’s economy
suffered the biggest hit, as structural problems
facing the crisis-hit European economies
proved even more intractable than expected,
and the process of devising and implementing
reforms experienced complications. The Euro
Area countries progressed marginally at around
1.6% (2010: 3.0%) while developing Europe
and Central Asia countries had a sustainable
growth of 5.3% (2010: 5.2%) last year. For
Pelikan Group, Europe’s revenue declined last
year mainly due to sudden closures of several
big-chain retail customers in Europe. The
economic growth in several Eastern European
markets where the Herlitz business is more
prominent than Pelikan’s remained robust
due to favourable domestic demand and
consumption, though revenue at the recently
acquired Herlitz Group was also affected, albeit
less severely, down slightly at 2.1% from 2010.
Latin America and Caribbean countries
continued to grow at 4.2% in 2011 (2010:
5.5%). Mexico had a relatively healthy GDP
growth of 4.0% due to strong agricultural
performance and recovery growth in domestic
demand. Argentina also performed well
at 7.5% GDP growth resulting from strong
external demand, monetary and fiscal stimulus
and favourable terms of trade in the first
half of 2011. The remaining markets in Asia,
Middle East and Africa are relatively stable
and profitable markets albeit representing a
small percentage over the total sales of the
Group. Middle East and Africa’s GDP grew at
1.7% (2010: 3.6%), a growth slowdown due to
political and economic turmoil which disrupted
economic activities across the region. On the
other hand, East Asia and Pacific countries
performed well with an estimated GDP growth
of 8.2% in 2011 (2010: 9.7%).
10
CHAIRMAN & CEO’S STATEMENT
The Malaysian economy expanded at GDP growth rate
of 5.1% in 2011 (2010: 7.2%). Though external demand
declined significantly, resilient public sector consumption
grew significantly in the second half of 2011, buoyed by
supportive fiscal and government policies such as the 10th
Malaysian Plan and Economic Transformation Plan. This led
to a strengthening of Ringgit Malaysia (“RM”) against the
Group’s major trade currencies such as Euro and United
States Dollar (“USD”), resulting in lower translation of the
Group’s revenues into the reporting currency.
Amidst this challenging business environment, the Pelikan
Group remained committed to its long-term strategies for
growth and made sure and steady progress in initiating
major corporate restructuring with Herlitz which should
see Pelikan at a better footing from 2013 onwards.
FINANCIAL PERFORMANCE
For the financial year ended 2011, Pelikan International
recorded total revenue of RM1.9 billion, an increase of
7% from previous year (2010: RM1.8 billion) mainly due
to a full year consolidation of the Herlitz Group’s revenue.
However, on a full year proforma basis the revenue
for 2011 had actually declined by 5.4%. The Group
reported a loss before tax of RM63.3 million due to the
effects of decline in revenue (on a proforma year to year
comparison), cost pressures and effects of aggressive
restructuring measures taken to simplify cost structures
in response to the marked decline in turnover arising from
the global economic conditions, particularly in Europe.
In the first financial quarter, the Group’s revenue was
RM460.8 million (2010: RM272.8 million), an increase
of nearly 70% from the preceding year corresponding
quarter mainly attributed to the full consolidation of
the acquired Herlitz AG (“Herlitz”) business. The profit
before tax for the first financial quarter was RM6.8 million
(2010: RM114.2 million) as this included the negative
goodwill and provision for related expenses recognised in
connection to the acquisition of Herlitz and related assets.
The Group’s revenue for the second financial quarter
improved to RM505.1 million (2010: RM492.1 million)
despite the weakening of the Euro and USD against RM.
Higher input costs of raw materials as well as additional
operational restructuring expenses caused a slight
decrease in gross margin. In addition, there were still
some expenses incurred last year because of the logistics
and distribution integration in Falkensee, Germany as
well as other merger projects. Therefore, profit before tax
was RM19.3 million (2010: RM27.8 million), a decline of
31% from the corresponding quarter in the previous year.
However, as the “Back to School” season kicked in during
the second quarter for Europe and Latin America regions,
the Group’s revenue increased by 9.6% compared to the
first quarter because of stronger sales volume.
The third financial quarter reported RM527.5 million
revenue (2010: RM534.0 million) because of the weak
economies in the Euro Area excluding Germany. Operating
profits before tax for the third financial quarter was
RM8.0 million but was reduced by unrealised foreign
exchange losses of RM15.1 million, resulting in an
overall loss before tax position of RM7.1 million. In
the corresponding quarter of 2010, the Group had an
unrealised foreign exchange gain of RM8.5 million.
Due to the “Back to School” season in Europe and Latin
America markets, revenue continued to increase in the
third quarter.
T H E R E S U LT S
11
The Group’s revenue for the fourth financial quarter was
RM430.0 million (2010: RM488.0 million). Sales have
declined by RM97.5 million as compared to the previous
quarter resulting in a loss of margins to absorb the fixed
operating costs. A loss before tax of RM75.2 million
was incurred in the fourth financial quarter, including
negative operational effects arising from the lowest sales
performing quarter of the Group. In addition, the ongoing
restructuring exercises of the Group also resulted in
additional provisions/charges being incurred.
Overall, the Group continued the efforts of merger and
reorganization involving Herlitz to achieve synergies
and reduce operating costs. Cost controls and margins
maintenance were the major concentration in 2011
besides expanding and strengthening our markets
outside Europe, namely countries in Latin America, Asia
and Africa. The Group expects costs to be reduced after
the completion of the merger and reorganization in the
coming financial periods.
DIVIDENDS
The Board of Directors have recommended a final share
dividend on the basis of one (1) treasury share for every
fifty (50) existing ordinary shares of RM1 each held in the
Company, fractions of treasury shares to be disregarded
(“Share Dividend”) in respect of the financial year ended
31 December 2011. In addition to the Share Dividend,
the Board of Directors also proposed a final cash
dividend of one (1.0) sen per share single tier dividend
(“Cash Dividend”). Subject to the approval by the
shareholders at the forthcoming Annual General Meeting
(“AGM”) on 26 June 2012, the dividends will be paid on
24 September 2012.
SYNERGISED RESTRUCTURING
During the course of the challenging year, we continued
to adhere to our focus on synergising Pelikan and
Herlitz operations to emerge optimal benefits for both
businesses. Though we now own two of the most
significant brands in the industry through the merger,
streamlining the operations of two market leaders
requires careful planning and thorough understanding of
each strengths and weaknesses. Managing variations in
corporate, legal and distribution structures and merging
diverse management styles and business plans have taken
more time than initially estimated.
Though delayed by a year due to unforeseen intricacies
during the process, 2011 saw the Group making good
headway in successfully putting across a mutually agreed
upon plan which provides us with lots of synergy for
greater cost efficiencies and stronger distribution, the
results of which should impact our revenue within the
next two to three years.
STREAMLINING OPERATIONS
The coincidence of the Group’s restructuring phase
with the economic slowdown has provided us a timely
opportunity to reduce overheads and design a more
efficient operation. The Group is focused on enhancing its
operating cost structure to be much leaner and effective
to be able to support any future sales growth and achieve
better net margins.
12
During the year under review, the Group worked to
identify facilities that were not giving the right yield
and made plans to reduce the Group’s manufacturing
bases to ensure each plant generate reasonable turnover
with reasonable capacity utilisation. In 2011, the Group
relocated two ink plants from Switzerland and China to
a new premise in Glenmarie, Malaysia. The shift of ink
production to Malaysia will result in lower labour and
overall operating expenses although there will likely be a
one-off cost for plant closures.
At the start of 2012, the Group disposed several stationery
production and distribution operations in Europe,
namely Falken Office Products, Herlitz UK Limited, and
Delmet Prod Srl, for Euro 22.2 million. Going forward, the
supply requirements of Herlitz Group from the divested
manufacturing plants would be sourced from the external
suppliers. This move will reduce duplication of resources
and improve operating efficiency.
BRANDING
The Group has two major brands leading the market for
stationery and writing instruments. While both Pelikan
and Herlitz are brands that share similar core features –
namely, over a century old German heritage, high quality
and innovative products, a diverse range – each brand has
its own unique and distinctive characteristics that make
them different in the eyes of consumers and the trade.
Pelikan, founded in Hanover, is reputed for its traditional
expertise in making ink, paint and writing instruments
because of its strong research and development emphasis
on innovation. Herlitz on the other hand, was founded in
Berlin and is renowned for its distribution strength and
diverse offerings of stationery, especially paper based
products. When Pelikan and Herlitz came together under
one team, it was clear that both brands target the same
consumer groups but with different appeals and different
channels.
From the very beginning, it was important for the Group
to establish the right brand architecture for Pelikan and
Herlitz respectively without overlapping and cannibalising
each other in the markets. The teams from both Pelikan
and Herlitz have been working closely together since mid2011 to determine its branding and marketing strategies,
and will be launching a solid message to the consumers
through this year’s “Back to School” campaign. This marks
the beginning of a long relationship whereby synergies
of branding and marketing can be realised between two
dominant brands offering a wide range of products to
diverse consumer groups globally.
INNOVATIONS AND AWARDS
Though sales were negatively impacted in 2011, our
brand and repute for quality and excellence continued
to gain popularity and Pelikan products were recognized
by a slew of awards. These included the Le grand trophée
du Stylographe 2012 awarded from France for the Special
Edition Demonstrator M1005 fountain pen as well as
the award for Special Edition Eternal Ice by the Premier
Watches, Jewellery & Pens Award 2012 in the Middle East.
Research and Development (“R&D”) remained a core focus
in 2011 and Pelikan is pleased that many new products
in the FWI and school categories were launched for the
global market. With a strong following within the writing
instrument category, we are continuously enhancing our
various product groups to meet growing market needs.
By incorporating new ideas and innovation in product
T H E R E S U LT S
13
development, communication and marketing materials as
seen in our writing segment, we seek to achieve credible
results across our product range and subsequently deliver
on our promise to be a brand of premium distinction.
with the Maybank Group for 14 years. Drawing from her
years of experience and background, her contribution to
the Group would certainly be of value to both our growth
and presence.
CORPORATE GOVERNANCE
IN APPRECIATION
With effect from 27 April 2011, Mr. Yap Kim Swee was
re-designated from Independent Non-Executive Director
to Senior Independent Non-Executive Director of Pelikan
International. In June 2011, Haji Abdul Ghani bin Ahmad
retired from his position as an Independent and NonExecutive Director on Pelikan International’s Board of
Directors and ceased to be a member of the Audit and
Nomination Committee. On behalf of the Board of
Directors, we would like to thank him for his years of
commitment and efforts to the Group. In his place, Puan
Hajah Rozaida binti Omar, a Non-Independent and NonExecutive Director, was appointed as a member in the
Audit Committee last August, and we believe that her
extensive career in accounting and finance will contribute
greatly to the Committee.
In ushering the new financial year, we, on behalf of
the Board, would like to thank the management and
employees of Pelikan International for their unwavering
commitment to the Group and the brand. Last but not
least, we thank our shareholders, investors, business
partners and associates who have remained steadily by
our side and given us a strong anchor from which we take
courage to reach for our dreams.
As of 12 September 2011, Puan Normimy binti Mohamed
Noor was appointed as a Non-Independent and NonExecutive Director on the Group’s Board of Directors.
She is presently the General Manager in Office of Group
Managing Director and Chief Executive Officer of
Lembaga Tabung Haji, a position she has held since 2009.
Prior to that, she was the Assistant General Manager of
Bank Islam Malaysia Berhad, and the Director of Private
Banking/Financial Services, Societe Generale Bank &
Trust, Singapore. Puan Normimy has also served as the
Vice President of Private Banking/Financial Services, at
Clariden Leu, Credit Suisse Group in Singapore and was
MOVING FORWARD
(statistics sourced from the World Bank)
The global economy is projected to expand 2.5% and 3.1%
in 2012 and 2013 respectively despite facing economic
uncertainties and financial vulnerabilities this year.
Growth in European countries is expected to slowdown
due to lower capital flows and tightening domestic
policies, resulting in lower consumer spending. With
this economic backdrop in mind, the Group is focused
on growing the business outside Europe, particularly in
the Latin America and Asia regions. East Asia and Pacific
region is projected to thrive at 7.8% GDP growth whilst
Latin America and the Caribbean countries are expected
to grow by 3.6% in 2012. Middle East and Africa markets
on the other hand will likely have a moderate growth of
2.3% GDP as the region recovers from political tensions.
14
For 2012, Pelikan Group continues to focus on three key
pillars of growth: branding; research and development;
distribution channels. As both sales and marketing teams
for Pelikan and Herlitz have worked closely together last
year, each has carved out respective brand identities
in order to launch unique marketing and promotional
campaigns for the “Back to School” season. Since March
of this year, Pelikan Europe has rolled out an interesting
“Back to School” concept called the “Live Your Dream”
campaign across Europe by utilising the Pelikan website
(www.pelikan.com/kids) and social media networks such
as Facebook to advertise and inform end users about the
campaign. This is the first time Pelikan has launched a
European wide campaign whereby the same concept was
adopted and localised to suit the individual countries,
resulting so far in overwhelming response from Pelikan
users, particularly parents and children. This campaign
concept will also be used by Pelikan Americas for their
“Back to School” season across their region. Likewise,
Herlitz Group also launched a “Rock Your School” campaign
for their “Back to School” season across Europe, a fun but
edgier concept befitting the style of their customers. So
both teams collaborated to ensure that not only do they
stay true to the brand identities of Pelikan and Herlitz but
also have a friendly competition while promoting their
brands and products in their own unique way.
R&D remains a vital part of the brand identity for Pelikan
as the Group believes in developing innovative and
creative products to carry the brand forward. As a brand
with many milestones in product innovations and awards,
the Group continues to dedicate significant resources
to come up with original ideas that are functional with
ergonomic designs for Pelikan users while retaining the
high quality standards. Returning back to the core focus
of Pelikan Group which is school, there are more resources
dedicated to launch more school products this year.
The Group also reorganised the team such that
product development and product marketing worked
closer to understand the needs and insights of consumers
from a market point of view in order to create products
that are in line with consumers’ wishes be it locally,
regionally or globally.
As for the distribution channels, sales and marketing
organisations have begun cross-selling products from
Pelikan and Herlitz in their distribution channels since last
year, albeit in a small scale. The emphasis this year is to
promote all products from Herlitz as well as Susy Cards
more aggressively to existing distribution channels in
order to build a better relationship with customers, gain
better bargaining positions, attract more end users, and
achieve higher sales and brand awareness. As anticipated
with new brands and products, selling Herlitz goods have
opened up new channels for Pelikan sales teams as they
not only gained new customers but able to push Pelikan
products through these channels too. Likewise, Pelikan
products are also being sold in channels where Herlitz
have a stronger support from the trade. With two big
brands, the trade perceives the Group as an important
customer with a complete range of products for schools,
office and niche segments like FWI and hobby. Immense
opportunity lies in building the non-existent Herlitz brand
and turnover in countries beyond Europe via Pelikan’s
distribution network.
The Group will continue to work on cost controls,
margin improvements and restructuring exercises to
ensure a leaner operating cost base going forward in
anticipation of the slow growth in sales. Barring any
unforeseen circumstances, these actions will reduce the
cost base and result in improved net margins for the
Group. Completing a smooth transition of operations
worked out in mutual agreement and understanding
with Herlitz’s management will continue to be our
focus in 2012 as there are many operational synergies,
savings and strengths to be realized by achieving the
right combination of brands, distribution networks, R&D
capabilities and reputable products.
Tan Sri Musa Bin Mohamad
Chairman
Loo Hooi Keat
Chief Executive Director
Malaysia
Retaining leadership in current
product segments, we are expanding
our product range and distribution
network.
Corporate Information
17
Group Corporate Structure
18
Board of Directors’ Profile
20
Group Management Team
24
17
CORPORATE
INFORMATION
BOARD OF DIRECTORS
Tan Sri Musa bin Mohamad
Loo Hooi Keat
Chairman & Independent Non-Executive Director
President/Chief Executive Officer
Syed Hussin bin Shaikh Al Junid
Yap Kim Swee
Independent Non-Executive Director
Hajah Rozaida binti Omar
Non-Independent Non-Executive Director
Normimy Binti Mohamed Noor
(Appointed on 12 September 2011)
AUDIT COMMITTEE
COMPANY SECRETARIES
REGISTERED OFFICE
Yap Kim Swee
Ho Ming Hon (MICPA 3814)
Seksyen U1
40150 Shah Alam
Malaysia
Chairman
NOMINATION COMMITTEE
Chairman
Yap Kim Swee
REMUNERATION COMMITTEE
Chairman
Yap Kim Swee
EXECUTIVES’ SHARE OPTION
SCHEME (“ESOS”) COMMITTEE
Chairman
Loo Hooi Keat
Yap Kim Swee
Chua Siew Chuan (MAICSA 0777689)
AUDITORS
BDO (AF 0206)
Chartered Accountants
12th Floor, Menara Uni.Asia
1008 Jalan Sultan Ismail
50250 Kuala Lumpur
Malaysia
Tel: (+603) 2616 2888
Fax:(+603) 2616 3190
SHARE REGISTRAR
Tricor Investor Services Sdn Bhd
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia
Tel: (+603) 2264 3883
Fax:(+603) 2282 1886
Tel: (+603) 5569 5511
Fax:(+603) 5569 5500
PRINCIPAL BANKERS
AmBank (M) Berhad
CIMB Bank Berhad
HSBC Bank Malaysia Berhad
Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
STOCK EXCHANGE LISTING
Main Market of
Bursa Malaysia Securities Berhad,
Malaysia
Stock Name: PELIKAN
Stock Code: 5231
WEBSITE
www.pelikan.com
18
GROUP CORPORATE
STRUCTURE
2.60%
93.89%
100%
100%
Pelikan Holding AG
(SWITZERLAND)
Pelikan Production
(M) Sdn.Bhd.
(MALAYSIA)
Pelikan Hardcopy
Holding AG
(SWITZERLAND)
100%
100%
100%
25%
Pelikan Nederland B.V.
(THE NETHERLANDS)
Pelikan Italia
S.p.a.
(ITALY)
Pelikan, Inc.
(USA)
Pelikan Japan K.K.
(JAPAN)
100%
100%
100%
100%
Pelikan Austria Ges.m.b.H
(AUSTRIA)
Pelikan S.A.
(SPAIN)
100%
95%
Günther Wagner S.A.
(SWITZERLAND)
Pelikan Costa Rica S.A.
(COSTA RICA)
100%
75%
Pelikan Asia Sdn. Bhd
(MALAYSIA)
100%
Pelikan México
S.A. de C.V.
(MEXICO)
Pelikan (Schweiz) AG
(SWITZERLAND)
50.01%
100%
100%
Pelikan GmbH
(GERMANY)
Kreuzer Produktion
+ Vertrieb GmbH
(GERMANY)
100%
Pelikan Vertrieb
Verwaltungs-GmbH
(GERMANY)
100%
Pelikan Vertriebsgesellschaft
mbH & Co. KG
(GERMANY)
100%
Pelikan Taiwan Co. Ltd.
(TAIWAN)
3.24%
9.13%
90.87%
Pelikan Trading
(Shanghai) Co. Ltd.
(CHINA)
Pelikan Ofis Ve
Kirtasiye Malzemeleri
Ticaret Ltd. Sirketi
(TURKEY)
100%
Pelikan
(Thailand)
Co. Ltd.
(THAILAND)
Pelikan Hardcopy
Scotland Ltd.
(UNITED KINGDOM)
100%
Initio GmbH
(GERMANY)
99%
49%
Pelikan Hardcopy
CZ s.r.o.
(CZECH REPUBLIC)
Greif Werke GmbH
(GERMANY)
PT Pelikan Indonesia
(INDONESIA)
Pelikan Trading
India Private
Limited
(INDIA)
100%
100%
99%
40%
Pelikan Hardcopy
Production AG
(SWITZERLAND)
100%
Pelikan Polska sp.z.o.o
(POLAND)
60%
100%
100%
Pelikan
Argentina S.A.
(ARGENTINA)
Pelikan Colombia S.A.S.
(COLOMBIA)
Pelikan PBSProduktionsgesellschaft
mbH & Co. KG
(GERMANY)
Pelikan Middle East FZE
(UNITED ARAB EMIRATES)
100%
96.76%
100%
Pelikan PBS-Produktion
Verwaltungs-GmbH
(GERMANY)
100%
Pelikan Singapore Pte. Ltd.
(SINGAPORE)
49.99%
100%
Pelikan Hardcopy
Europe Ltd.
(UNITED KINGDOM)
100%
5%
Pelikan Hellas
E.P.E.
(GREECE)
Pelikan Produktions AG
(SWITZERLAND)
1%
100%
100%
Pelikan Hardcopy
European Logistics
and Services
GmbH
(GERMANY)
European
Collection
Partner
GmbH
(GERMANY)
100%
Dongguan Pelikan
Hardcopy Ltd.
(CHINA)
100%
Pelikan Hardcopy
Asia Pacific Ltd.
(HONG KONG, CHINA)
100%
Pelikan Belux N.V./S.A.
(BELGIUM)
100%
Pelikan France S.A.S.
(FRANCE)
100%
Geha GmbH
(GERMANY)
100%
Pelikan Nordic AB
(SWEDEN)
100%
ReMerch GmbH
(GERMANY)
Principal Activities
Production & Distribution
Investment/Property Holding
Dormant/Inactive
Distribution
Production
Services
19
AMERICAS
Sales & marketing organisations in
70.92%
100%
94.90%
Herlitz
Aktiengesellschaft
(GERMANY)
Ganymed Falkensee
Grundstücksverwaltungs
GmbH
(GERMANY)
Molkari
Vermietungsgesellschaft
mbH & Co. Objekt
Falkensee KG
(GERMANY)
Mexico
Colombia
Argentina
Percentage of
Group’s revenue
Manufacturing
facilities
Employees
9.5%
2 plants
672
(2010: 9.6%)
100%
100%
100%
Herlitz PBS
Aktiengesellschaft
Papier-,Büro-und
Schreibwaren
(GERMANY)
PBS Papeterie
Service GmbH
(GERMANY)
Convex
SchreibwarenHandels GmbH
(GERMANY)
eCom Logistik
Verwaltungs GmbH
(GERMANY)
100%
100%
100%
eCOM Logistik
GmbH & Co. KG
(GERMANY)
100%
Herlitz
Papierverarbeitungs
GmbH
(GERMANY)
100%
Mercoline GmbH
(GERMANY)
100%
Susy Card GmbH
(GERMANY)
100%
EUROPE
5.10%
100%
Herlitz Benelux B.V.
(THE NETHERLANDS)
Herlitz Bulgaria
EooD
(BULGARIA)
(2010: 724)
Turkey
Greece
Hungary
Poland
Italy
Austria
Sweden
Germany
Switzerland
Czech Republic
Bulgaria
Belgium
The Netherlands
France
United Kingdom
Romania
Slovakia
Hungary
Percentage
of revenue
Manufacturing
facilities
Employees
86.7%
9 plants
2,786
100%
Herlitz Hungária Kft.
(HUNGARY)
51%
Herlitz Romania srl
(ROMANIA)
(2010: 86%)
100%
Herlitz Spol s.r.o.
(CZECH REPUBLIC)
100%
Herlitz Spolka z.o.o.
(POLAND)
POS Services GmbH
(GERMANY)
40%
(2010: 4,134)
60%
Herlitz Slovakia
s.r.o.
(SLOVAKIA)
ASIA, MIDDLE EAST & AFRICA
United Arab
Emirates
India
Thailand
Malaysia
Singapore
Indonesia
Taiwan
People’s Republic
of China
Japan
Percentage
of revenue
Manufacturing
facilities
Employees
3.8%
2 plants
318
(2010: 4.4%)
(2010: 407)
20
BOARD OF
DIRECTORS
seating from left to right
standing from left to right
Tan Sri Musa Bin Mohamad
Loo Hooi Keat
Syed Hussin Bin Shaikh Al Junid
Yap Kim Swee
Hajah Rozaida Binti Omar
21
BOARD OF DIRECTORS’
PROFILE
TAN SRI MUSA BIN MOHAMAD
Chairman & Independent Non-Executive Director
Chairman of Nomination Committee
Chairman of Remuneration Committee
Chairman of ESOS Committee
Member of Audit Committee
Tan Sri Musa bin Mohamad, a Malaysian aged
69, was appointed as an Independent NonExecutive Director of Pelikan on 1 August
2005. Subsequently, he was re-designated as
Chairman of Pelikan on 14 November 2007.
He holds a Bachelor of Pharmacy Degree
from the National University of Singapore
in 1965 and obtained a Master of Science
Degree in Pharmaceutical Technology from the
University of London in 1972. He is a Fellow of
Malaysian Academy of Sciences and Malaysian
Pharmaceutical Society.
He spent over 20 years in teaching and
academic administration in Universiti Sains
Malaysia (USM). He served as the Foundation
Dean of Pharmacy at USM from 1975 to 1979
and thereafter as the Deputy Vice Chancellor
and Vice Chancellor of the same university
until he retired in 1995. He then went into
corporate life as Chairman in a number
of private limited companies and a listed
company, Poly Glass Fibre (M) Berhad. He was
the Minister of Education Malaysia from 1999
to 2004 and Chairman of Universiti Telekom
Sdn Bhd, a subsidiary of Telekom Malaysia
Berhad, which runs the Multimedia University
in Cyberjaya from 2004 until February 2009.
He is currently Chairman of the University
Council, Universiti UCSI, Kuala Lumpur under
UCSI Education Sdn Bhd. He is also the Chairman
and Director of Sri Millenium Sdn Bhd.
He does not have any family relationship with
any Director and/or major shareholder, nor
any conflict of interest with Pelikan. He has no
convictions for any offences within the past
10 years other than traffic offences, if any.
LOO HOOI KEAT
Member of ESOS Committee
Loo Hooi Keat, a Malaysian aged 57, was appointed as an Executive
Director of Pelikan on 22 April 2005 and thereafter as an Executive
Chairman on 26 April 2005. Subsequently, he was re-designated as
President/Chief Executive Officer of Pelikan on 14 November 2007.
He is a certified public accountant and a member of the Malaysian
Institute of Certified Public Accountants (MICPA). He received his
training in accountancy from a reputable international accounting firm
where he obtained his Certified Public Accountant accreditation. Since
then, he has gained experience in various international companies
in Malaysia, namely as Group Accountant for the Sime Darby group
of companies from 1982 to 1985 and Lion group of companies from
1986 to 1989. He was the Group General Manager for Business
Management of United Engineers (Malaysia) Berhad from 1990 to
1992. After that, he joined Konsortium Logistik Berhad, a logistics
service provider company as an Executive Director until 2010.
Presently, he is the President and Board member of Pelikan Holding
AG, a subsidiary of Pelikan listed on the SIX Swiss Exchange and is
also the Supervisory Board member of Herlitz AG, a subsidiary of
Pelikan listed on the Frankfurt Stock Exchange.
Except for certain recurrent related party transactions of a trading
or revenue nature which are necessary for the day-to-day operations
of the Group for which he is deemed interested, there are no other
business arrangement with the Group in which he has personal
interest.
He does not have any family relationship with any Director and/or
major shareholder, nor any conflict of interest with Pelikan. He has
no convictions for any offences within the past 10 years other than
traffic offences, if any.
22
BOARD OF DIRECTORS’ PROFILE
SYED HUSSIN BIN SHAIKH AL JUNID
Member of Nomination Committee
Member of Remuneration Committee
Syed Hussin bin Shaikh Al Junid, a Malaysian
aged 59, was appointed as an Independent
Non-Executive Director of Pelikan on
1 July 1996.
He graduated from the University of Malaya
and holds a Bachelor of Economics Degree.
He has extensive experience in the property
and construction industry and has been
involved in the development of several major
and successful townships in Klang Valley.
He was the Managing Director of Amona
Permodalan Holdings Sdn Bhd, an investment
holding company with interests in a group of
companies mainly involved in the development
of properties, project management services,
construction, property investment holdings,
trading, information technology and
multimedia business activities.
He is currently overseeing the property
development for another local group of
companies.
HAJAH ROZAIDA BINTI OMAR
Member of Audit Committee
Hajah Rozaida binti Omar, a Malaysian aged 49, was appointed
as a Non-Independent Non-Executive Director of Pelikan on
21 November 2008.
She is a Chartered Accountant of the Malaysian Institute of
Accountants (MIA) and a Fellow of the Association of Chartered
Certified Accountants (ACCA).
She started her career as a Financial Accountant at FELDA in 1986.
In 1990, she became a Credit Manager at Citibank Berhad until 1991.
She then joined Guthrie Trading Sdn Bhd as a Finance Manager until
1993. After that, she became a Finance Director of Glaxo SmithKline
Consumer Healthcare Sdn Bhd from 1994 until 2003.
Currently, she sits on the Board of BIMB Holdings Berhad and Syarikat
Takaful Malaysia Berhad. She is also the Group Chief Financial Officer
of Lembaga Tabung Haji.
She does not have any family relationship with any Director and/or
major shareholder, nor any conflict of interest with Pelikan. She has
23
YAP KIM SWEE
Chairman of Audit Committee
Member of Nomination Committee
Member of Remuneration Committee
Member of ESOS Committee
Yap Kim Swee, a Malaysian aged 65, was
appointed as an Independent Non-Executive
Director of Pelikan on 22 May 2006.
He is a Chartered Accountant of the Malaysian
Institute of Accountants (MIA) and a Fellow
of the Association of Chartered Certified
Accountants (ACCA).
He started his career in Hanafiah Raslan
Mohd & Partners in 1969. In 1972, he
joined Coopers & Lybrand, a legacy firm of
PricewaterhouseCoopers as an audit senior
and was thereafter appointed as a Director
in 1987. He was admitted as a Partner in
1991 and retired from the partnership in
PricewaterhouseCoopers in 2002. With his
many years in audit and business advisory
service, he has extensive knowledge in the
operations of companies in various industries
covering manufacturing, financial, insurance,
telecommunication, housing development
and plantation.
Currently, he is a Director of NV Multi
Corporation Berhad, a public company listed on
the Main Market of Bursa Malaysia Securities
Berhad and is also a Director of Quill Capital
Management Sdn Bhd.
NORMIMY BINTI MOHAMED NOOR
Normimy binti Mohamed Noor, a Malaysian aged 42, was appointed
as a Non-Independent Non-Executive Director of Pelikan on
12 September 2011.
She is presently the General Manager in Office of Group Managing
Director and Chief Executive Officer of Lembaga Tabung Haji, a
position she holds since 2009. Prior to that, she was the Assistant
General Manager of Bank Islam Malaysia Berhad, Director of Private
Banking/Financial Services, Societe Generale Bank & Trust, Singapore
and was responsible for the acquisition and management of High
Net Worth Individuals (HNWI) and institutional, providing advisory
services to HNWI clients in estate planning, trust and investment
services as well as providing total financial solution to HNWI in
offshore offerings.
Puan Normimy has also served as Vice President of Private Banking/
Financial Services, at Clariden Leu, Credit Suisse Group Singapore and
was with the Maybank Group for 14 years.
She does not have any family relationship with any Director and/or
major shareholder, nor any conflict of interest with Pelikan. She has
24
GROUP MANAGEMENT
TEAM
LOO HOOI KEAT
Malaysian, 57
> Certified Public Accountant
> Over 30 years of experience
> Group Accountant, Sime Darby Group of Companies (1982-1985)
> Group Accountant, Lion Group of Companies (1986-1989)
> Group General Manager, United Engineers (Malaysia) (1990-1992)
PELIKAN INTERNATIONAL
CORPORATION BERHAD
HO MING HON
THORSTEN LIFKA
LOO SEOW BENG
Malaysian, 37
Vice President Group Corporate Services/
Company Secretary
German, 46
Head of Product Development,
Production and R&D
Malaysian, 54
Head of Procurement
> Certified Public Accountant
> Practiced in a big four audit firm
> Specialized in corporate finance
in an investment bank
> Ph.D in Natural Science
> R&D Manager Agfa-Gaevert Group
(1996)
> Plant Manager (Sao Paolo, Brazil)
> Managing Director,
Pelikan Hardcopy Production AG
(2006)
> BSc in Business
with Pelikan Group
> Pelikan Singapore-Malaysia Pte Ltd
(1995)
> Pelikan Holding AG
25
HERLITZ MANAGEMENT
NG CHEONG SENG
THOMAS RADKE
Malaysian, 40
Board Member of Herlitz Group
German, 51
Board Member of Herlitz Group
> Chartered Accountant
> Masters in Financial Management
(University of London)
> Vice President, Group Corporate
Services for Pelikan International
> Joined Pelikan Holding AG in 2003
> Degree in Business Administration
(University of Manheim)
> Hold Senior Management positions in
major corporations over past 20 years
> Appointed Board Member in 2011,
responsible for sales and marketing
ARNO TELKÄMPER
TORSTEN JAHN
ELISABETH GEBLER
German, 47
Managing Director, Germany/Austria
German, 37
C.F.O. of Europe
German, 44
Head of European Marketing
> Diploma in Marketing and
Communications
> Worked for 12 years with AVERY
Dennison Zweckform Office Products
in holding senior management
positions
> Managing Director of Pelikan
Germany (2008)
> Diploma in Economics
> Certified German Tax Consultant
> Certified Valuation Analyst (CVA)
> Member of International Association
of Consultants, Valuators and
Analysts Germany
> Joined Pelikan in 2003
> Degree in Economics
(University of Hannover)
> Over 16 years experience
in stationery business
> Regional Marketing Director
of Newell Rubbermaid
PELIKAN EUROPE
26
GROUP MANAGEMENT TEAM
PELIKAN AMERICAS
CLAUDIO ESTEBAN SELEGUAN
MATHIAS SHAW
YAMIL VALENCIA
Argentinean, 50
Head of Sales and Marketing, Americas
Argentinean,36
Senior Vice President, Sales and Marketing, Americas
Colombian, 43
Managing Director, Pelikan Colombia SAS
> BA in Business Administration
with Pelikan Group
> Manager of Pelikan Costa Rica (1989)
> Chief Executive Officer, Pelikan Mexico
(1992)
> Degree in Marketing
(UCES Business School)
> Marketing Manager of Pelikan Mexico
(2002)
> Managing Director of Pelikan Argentina
(2010)
> BA in Industrial Engineering
> Diploma in International Business
(University of California at Berkeley)
> Over 10 years experience with
The Coca-Cola company in Central
America
PELIKAN ASIA, MIDDLE EAST & AFRICA
AZUMA IKEDA
WILLIAM LIU
NASSER AL ATRASH
Japanese, 58
Head of Sales and Marketing
Japan and South Korea
Chinese, 54
People’s Republic of China, Hong Kong and
Taiwan
Jordanian, 45
Middle East and Africa
> BA in Commerce
> Masters of Business Administration
> Finance Manager, Pelikan Japan K.K.
(1990)
> Managing Director, Pelikan Japan K.K.
(1995)
> Board member of Japan Imported
Pen Association
> BA in Agriculture (National Chung
Hsing University, Taiwan)
in the Taiwan consumer market
> Pelikan Taiwan Co. Ltd. (2007)
> BSc in Business Administration
(Yarmouk University)
in strategic business planning,
finance, operations, sales and
marketing
Leveraging on our strong heritage,
we are reaching out to diverse target
markets across the globe.
TH E REPORTS
Group Operations Review
29
Diary of Events
41
Introducing Herlitz
53
Statement on Corporate Governance
56
Statement on Internal Control
64
Statement on Internal Audit Function
65
Audit Committee Report
68
Statement on Corporate Social
Responsibility
71
TH E REPORTS
29
GROUP OPERATIONS
REVIEW 2011
Pelikan For All
With the acquisition of the Herlitz Group, Pelikan International now has an expanded
product range that caters to a wider market segment. From our original focus on
quality educational products with ergonomic benefits, we are now appealing to
teenagers and young adults who seek modern, trendy designs that reflect their
personality and zest for life. The theme “Pelikan for All” reflects our significant growth
in market appeal. Though exciting, it is a challenging phase for the Group as we
synergise the assets, operations, manpower and branding of two distinct market
leaders. This was the core focus for the year under review.
GROUP CORPORATE SERVICES
Corporate Planning
In June 2011, Pelikan International ended its lease at
the former office, warehouse and production facility
in Puchong, Selangor and moved to a new premise at
Hicom Glenmarie Industrial Park, Shah Alam. Pelikan
International also appointed Messrs. BDO as the
Auditors of the Company for the financial year ending
31 December 2011, as approved during the 29th Annual
General Meeting (“AGM”) held on 20 June 2011.
On 22 December 2011, Pelikan International announced
that its subsidiary, Pelikan Holding AG (“PHAG”), has
entered into an agreement to sell off shares in its
Australian associate company for a total consideration of
AUD15 million or RM48.2 million cash.
Human Resource and Employees
Pelikan Group had a total headcount of 3,776 employees
at end of 2011, as compared to 4,134 employees in
the previous year. Almost 74% of total employees are
currently based in Europe, 18% in Americas and 8% in Asia,
Middle East and Africa nations. In 2011, Pelikan Group
initiated various restructuring exercises throughout its
subsidiary companies especially in Europe wherein certain
support functions such as human resources, accounting
and finance, procurement, research and development, and
information technology (“IT”) were streamlined to reduce
headcounts. In addition, merger of sales entities such as
Poland and the removal of non-profitable product lines
have also resulted in reduced headcounts in the Group.
Pelikan Group continues to motivate its employees
through series of in-house trainings, workshops, and
seminars locally and regionally to update their skills
and knowledge levels about the company as well as
according to their professions in order to be relevant in
the present business world. To retain and attract talented
individuals, Pelikan Group strives to provide a healthy and
competitive environment in which employees can thrive
in yet the Group presents challenging and demanding
work situations that employees need to excel and perform
particularly in a global corporation like ours. As Pelikan
Group continues to expand into more functions and
markets that are increasingly important, our workforce
will be essential to the growth of the brand and company
in the coming years.
GROUP OPERATIONS REVIEW 2011
Number of Employees by Function/Departments
1,400
1,200
 Number of employees
1,000
800
600
400
200
TECHNICAL
DEPARTMENT
ADMINISTRATION
HUMAN
RESOURCE
FINANCE
SALES
MARKETING
SHIPPING/
LOGISTICS
PURCHASING
WAREHOUSE
INTERNATIONAL
PROCUREMENT
CENTRE (IPC)
PRODUCTION
PRODUCT
DEVELOPMENT
0
RESEARCH AND
DEVELOPMENT
30
Departments
GROUP PRODUCTION, PRODUCT DEVELOPMENT
AND RESEARCH AND DEVELOPMENT (“R&D”)
Group Production managed 1,275 employees globally,
with 82 more in R&D and another 149 in product
development as of end 2011. There had been several
changes within the management team last year. Mr. Cory
Holtkamp, formerly responsible for managing the plant in
Vöhrum, Germany was appointed as the manager for the
new Glenmarie manufacturing facility in Malaysia as of
September 2011. Mr. Harald Schmidt has been assigned
as the operations manager and Mr. Jens Kollecker is
responsible for finance and administration at Vöhrum,
Germany. At the plant in Turriff, Scotland, Mr. Lucio Bianco
has replaced Mr. Hicham Fadel as the technical manager.
In 2011, Group Production continued on its consolidation
plan by transfering and reallocating manufacturing
activities to the new Glenmarie plant. Following the
reallocation of the Brother inkjet production from
Dongguan, China to Malaysia in 2010, Group Production
consolidated the remaining inkjet operations and all ink
related activities to Glenmarie. Group Production also
moved the refill operations from Kijov, Czech Republic as
well as began preparing for the transfer of the textmarket
ink-making process from Vöhrum and the desktop inkmaking unit from Switzerland into the Glenmarie facility.
The plant in Glenmarie began its operations in July 2011
and now produces inkjet cartridges, refills, markers and
the Gripster writing instrument. One of the initial biggest
challenges was to transfer skills and knowledge to the
operators and staff in the Glenmarie facility, which was
done through in-house training by our engineers from
the Swiss and Czech Republic plants to ramp up the
production of refilled cartridges without disruptions.
The production of ink was also transferred and built
up in Malaysia to produce inks for inkjet cartridges and
textmarkers planned for 2012. The head of departments
in Glenmarie were trained in Vöhrum and Mönchaltorf,
Switzerland regarding chemistry for ink production.
The transfer of technology from Europe to Malaysia
has resulted in savings for the Group amidst rising raw
material and operational costs and the final transfer of
inkjet refills completed in March 2012.
Group Production also successfully executed a large
Vista-cost saving programme between the plants in
Czech Republic and Switzerland with regards to the
remanufacturing of toner modules. By expanding the
usable range of empty module types for individual
products, we managed to replace several components
for toner modules such as the toner powder, microchips
and find alternative third party suppliers, resulting in
a reduction of 10% in toner module assortments. The
overall cost saving from this project amounted to almost
Euro 2.7 million. As for raw materials and other related
costs, further negotiations and switch in suppliers have
resulted in an overall marginal cost saving despite lower
production volumes and higher packaging material costs.
The production plant in Puebla, Mexico strategized to be
more efficient with objectives to increase productivity
and reduce production costs. In the first 6 months of
2011, critical operations such as injection moulding,
extruder process for erasers and some marker assembly
machine productions were ramped up and the number of
operators was reduced to achieve optimal production lots
per shift. Production operations also improved execution
of different tasks, changed formulation of raw materials
as well as processes in order to achieve inventory and
productivity. These strategies resulted in cost savings
TH E REPORTS
31
of about USD290,000 for the plant. Investments for
new machines and moulds for new products last year
amounted to USD158,000 whilst USD107,000 was
invested to crease new products for 2012.
All of Pelikan’s production plants and locations are
certified in the ISO 9001 and ISO 14001 management
systems by the Swiss Certification Institute (“SGS”
SOCIETE GENERALE DE SURVEILLANCE SA) as a multisite
assessment. OHSAS 18001 was successfully implemented
and certified in the production plants at Malaysia, Czech
Republic, Switzerland, Scotland and China. With the
transfer of technology and production lines from Europe
to Malaysia, a big challenge would be for the Malaysian
plant to obtain approval from REACH (Registration,
Evaluation, Authorisation and Restriction of Chemicals),
a regulated body of the European Union regulation,
for re-importing inks. However, as most of the chemicals
for the ink production will come directly from Europe,
the regulation should not affect the production of inks
in Malaysia.
Research and Development
R&D remains one of our key strategic pillars for
growth and expansion. Overall, Pelikan Group invested
RM20.16 million (2010: RM29.24 million) for the R&D
and manufacturing of the new products for 2011 as
well as fixed assets, tools and new machinery across all
product groups.
Apart from developing new products with Group Product
Development team, R&D department in Switzerland
initiated a new area of business development last year:
ultraviolet (“UV”) curable inks for industrial applications.
The R&D chemists capitalized on their long term ink
expertise for the development of industrial inks for a
wide range of applications and print heads within the
graphics industry. In order to accelerate the development
process for UV curing inks, Group Production bought an
industrial multi-purpose printer used in the chemical lab.
This equipment enabled a faster development of tailored
made UV ink formulation for the emerging market of
digital packaging printing, in-house printing and curing
tests. Group Production believes in the huge potential for
UV ink based production to grow in the next few years
and will continue to invest and develop UV inks for more
industrial application uses. The industrial sales team
also focused on the production of coloured toner powder
made in Switzerland.
In Mexico, the R&D department worked on few projects
such as development of filling process and machinery
for finger paint’s formulation, process and production
for silicon water based glue, as well as formulation for
PVC and Phthalate free erasers by extrusion and injection
moulding processes. Fewer projects were made in Mexico
last year as the product development team focused on
revamping the designs of current products whilst R&D
team focused on new products for 2012.
Group Product Development
The team of product developers, marketing and product
managers gather few times a year to think of fresh
ideas for new products and marketing solutions, and
together with the technical and R&D team, go through a
detailed process of creating new products to ensure that
every party’s input and concepts are taken into account.
Furthermore, Group Product Development installed a
professional Gate Keeper Process to ensure bigger and
better projects are executed in
time and under budget plans
that allow successful market
launches. The roadmap for new
products has been optimized in
2011 and coming years.
32
NEW PRODUCTS FOR 2011!
The number of product development projects increased
last year particularly for school and fine writing
instruments (“FWI”) categories.
• School
School remains our core focus with regards to product
assortments, marketing activities and innovation
to generate brand awareness and sales especially
in emerging markets. School products contributed
RM429.4 million or around 22.3% of Group sales in
2011. In the school category, product development
team focused on upgrading and expanding its
assortment of market leading school products, such as
griffix new colour 2011 and the new Pelikano Pencil.
The three most successful products for Europe last
year were K12 paint box that performed well despite
strong efforts by competitors, ink eradicators with new
designs, and ink cartridges in trendy motifs for kids.
• Office
Office products, though a competitive and saturated
market filled with branded and non-branded products
in mass markets, remain a desirable product category
for the Group, contributing nearly 38.8% of turnover,
a total of RM745.4 million. For office products, to keep
basic assortments fresh yet functional at a good value,
the Group looked at innovative designs to maintain
market share. In 2011, we created new designs for
textmarkers and permanent markers that are both
functional and ergonomical made in Mexico. As
stamping and duplicating products account for nearly
33% of total office segment turnover, the focus is to
provide basic assortments in these categories along
with marking, writing, gluing and correcting products
by introducing new products in the core assortments.
• Fine Writing Instruments
Despite being a premium category of Pelikan, FWI
contributed only around RM79.1 million or 4.1% of total
turnover to the Group due to its niche and exclusive
distributorship. However, Pelikan is maintaining its
market share and consumer interests by launching
high value products annually along with attractive
accessories. Last year, Pelikan introduced a total of
10 new FWI models and launched 2 new ranges for
Porsche Design as well as the new Shake
Pen twist. The two most successful products
were the Demonstrator M1005 and the
M101N tortoiseshell brown, particularly
in Japan. The first was a specialty made by
Pelikan, and the second was a re-launch of a
historical model.
A special highlight in 2011 was the launch of
new writing instruments by Porsche Design
in collaboration with Pelikan’s FWI team.
Since January 2011, the existing assortment
of Porsche Design was manufactured by
Pelikan and we also launched new Porsche
Design writing instruments such as the Slim
and Pure lines which were big winners.
TH E REPORTS
33
• Printer consumables
Printer consumables achieved turnover of RM389.9
million or 20.3% of total Group sales in 2011. Due
to the weak economic situations in Europe resulting
in lower consumer spending, mass market channels
for printer consumables have suffered from lower
sales as consumers find alternatives in online
stores which offer cheaper prices and wider variety.
The change in market trend against a backdrop of
challenging business environment resulted in lower
inkjet cartridges sales for the Group. Hence, the
Group decided to re-strategise the business model
for printer consumables by targeting new customers
and products. Group Product Development focused on
completing its product assortment with new Canon and
Epson compatible cartridges, refills for some new HP
cartridges and Canon print heads and the development
of new remanufactured toner modules. The printer
consumables team also focused on developing direct
business to commercial channels with laser toner
cartridges targeting private labels customers to
generate sales. A dedicated sales team was also set up
in the Netherlands to serve the regional key account
customers.
• Hobby, art & craft, papetierie by Susy Cards
A very niche segment of Pelikan, there was no plans
to expand the business and product assortments for
many years. However, with the inclusion of Susy Cards
from Herlitz Group that produces mainly greeting cards,
party products, gift wrapping, napkins, paper bags and
more, there could be an opportunity to consolidate both
assortments under one management as both cater for
the same consumer groups through similar channels. As
of 2011, this product segment made RM143.5 million,
approximately 7.5% of Group’s turnover, which could
generate more growth with better focus and strategies
to improve product innovation and marketing approach
to consumers.
Back to School 2011
The theme for “Back to School” season last year was
“World of School” and all school relevant products were
centrally promoted and distributed throughout Europe.
Using attractive “fire engine” promotional displays, we
successfully showed the parents, teachers and trade
partners the full range of school stationery for pupils.
With a total number of over 8,000 modules placed across
Europe, we launched a new modular display system
“MaxiFlex” that allows for better and more visibility of
school and office products at point of sales. The flexible
design of the modules enables a variety of products to be
presented as modules are individually linked to one after
the other to extend into a multiple display system.
34
GROUP PROCUREMENT
The International Procurement Centre (“IPC”), which
operates out of offices in Malaysia and Germany with
12 staff, faced major challenges last year to maintain
competitiveness at a price and service level in order to
support sales and marketing organisations as well as
product development projects amidst the difficult economic
situations. In 2011, IPC focused on improving product
knowledge and turnaround time during sourcing activities,
aimed to leverage order volumes and hence mitigate its
impacts on pricing as well as improve communications
proactively according to customer requirements. There
were 59 projects involving multiple product categories from
different regions for 2011, an increase of 79% projects from
previous year (2010: 33). Due to the economic uncertainties
last year, IPC faced constant increases of raw material
prices, continous hikes in minimum wages in China, and the
appreciation of Renmimbi relative to the depreciated USD
and Euro which resulted in impacts in maintaining price
competitiveness. As a result, IPC had less active suppliers
in 2011 due to bunding of purchases and discontinued
products by the Group, hence there were no new audits
necessary for the existing suppliers. IPC also worked on
12 cost saving projects last year but those projects did not
manage to overcome the cost up in raw materials.
IPC however managed to maintain its annual sales of
USD18 million without additional headcount in a highly
volatile business environment for 2011. For 2012 and
beyond, IPC has to intergrate the sourcing and purchasing
role of Herlitz in totality, as well as overlook the freight
management for both Pelikan and Herlitz to achieve better
costs and service levels. IPC will continue to carry out
strategies that will result in better costings, short lead time,
improved supplier bundling and relationships, and equip
staff with better industry and product knowledge. There are
also plans to enhance IPC’s current processes and systems to
achieve its targets.
GROUP SUPPLY CHAIN MANAGEMENT
In 2011, Falkensee Logistics Centre in Berlin, Germany
became the main logistics and warehouse centre for
Europe providing storing, packing and distribution services
for both Pelikan and Herlitz Group. Apart from FWI
products, all products manufactured by the Group as well
as products sourced from various places in Europe were
delivered and consolidated in this location. A centralised
distribution system resulted in savings with regards to
logistics, administration and time for consolidating both
Pelikan and Herlitz products to the same destinations.
GROUP COMMUNICATIONS
Pelikan Group established several online portals
for internal and external communication with our
stakeholders to maintain constant dialogue and
flow of information. With the internet becoming a
global dominant source of information and means of
communication, the Group places high emphasis on the
world wide web to display information about the company
and products to our consumers. The Pelikan website had
about 2.06 million visits last year, an increase of 4.7%
from previous year with 11.43 million viewed pages, or
an average of 5.5 pages per visit. We are pleased to note
that the increase in pages viewed was mainly attributed
to the stylish Pelikan website for FWI (www.pelikan.com/
exclusive) that was launched at end of 2010 for Europe
and rolled out to other countries since the beginning of
2011. The results have been encouraging, a 55% jump in
page impressions to about 2.9 million views. The majority
of the visitors were from countries such as Japan, China,
and Taiwan where the website for FWI was previously
not available in their languages, and we are intrigued
by the overwhelming response coming from consumers
in Latin America such as Peru, Colombia and Argentina.
We plan to use the website to launch more marketing
and promotional activities on a regional and global
basis. In addition, we have also revamped the Pelikan
FWI newsletters sent via emails to all those who have
subscribed to them on a bi-monthly basis. The positive
reviews and requests to translate these newletters from
German and English to local languages demonstrated the
effectiveness of newsletters in communicating about FWI
products, global promotional events and marketing news
for all pen colletors of Pelikan. We hope to expand the
use of these websites as well as social media platforms to
reach more consumers in more languages across the globe.
TH E REPORTS
35
EUROPE
Germany
In 2011, Germany recorded a revenue of RM 1.19 billion,
representing 61.6% of Group’s revenue. As the leading
market for Pelikan, Pelikan Germany had to consistently
introduce innovative and interesting products in the
market along with appealing marketing strategies
and promotional activities to support the trade in
order to maintain market share and improve brand
awareness. Pelikan Germany focused on the launch
of new products including the Porsche Design writing
instruments, launched the extension of office gluing and
correcting products which sales grew by 30%, fended off
competition by competitors for the opaque paint box
market share by which Pelikan increased turnover by
2% as well as focused on the development in school and
youth writing instruments. Apart from the FWI product
range that saw growth of 6% for high value instruments
and 27% for the design writing instruments, the other
product categories faced challenges in the market. The
printer consumables industry saw more purchases by
consumers through online channels where Pelikan was
not present. School products had fierce competition
in the market as other well-known brands launched
comparable assortments such as the paint box in an
already saturated and declining school market. The good
news was that new products launched in 2011 were
well received and achieved expected results for Pelikan
Germany. Pelikan Germany also gained new customers
such as Rewe LEH owning 870 stores across Germany with
printer consumables, a new online store and e-tailers like
Notebookbilliger.de, Mercateo and Amazon via dealers.
Pelikan Germany also managed to increase turnover
with its existing drugstore channels which has good
growth potential in the coming years. The new flexible
presentation system was also implemented throughout
the channels in Germany resulting in improved visual
presence of Pelikan at point of sales.
Pelikan Austria is managed by the sales and marketing
team in Germany since 2011, and went through major
changes in its organisation structure by optimising its
resources. Pelikan Austria had a reduction in employees
with a new focus of selling Herlitz products as well as
Porsche Design FWI in the market. The management
expects Pelikan Austria to improve the branding and sales
positions of both Pelikan and Herlitz with the extensive
marketing campaigns that will be rolled out in Austria
as well as rest of Europe for the “Back to School” 2012
season.
Switzerland
Switzerland performed better than previous year despite
lower inkjet cartridge sales at RM 115.1 million in 2011.
Last year’s focus was to expand the IT distributors
and hence retail channels’ turnover of the printer
consumables, resulting in new distributor “ALSO”, a new
online customer “digitec” and improved cooperation
with existing distributor “Alltron Brack”. Focus was also
on developing the Porsche Design brand and writing
instruments as well as to develop Herlitz sales contract
with distributors, which were successfully launched into
the retail channels. Amongst the products launched in
Switzerland were the Pelikano Black as well as Herlitz
my.pen collection, school bags and satchels, and licensed
products such as Fishbone series.
36
Italy
Italy faced lower sales last year
at RM 48.2 million attributed
by the weak domestic economy,
hence mass market channels
as well as printer consumables
business were affected.
Market was increasingly more
competitive but new innovative
products launched in 2011
garnered good response and
maintained sales for Pelikan Italy. As Italian consumers
regard stylish and novelty products highly, introduction
of new FWI packaging was warmly appreciated by
consumers as it gave Pelikan a more striking appeal.
Pelikan Italy cooperated with Herlitz to introduce the
Herlitz product range to its customers to good response
and strengthened relationship with existing customers.
Pelikan Italy also focused on improving customer
service, better sales approach, continuous upgrades in IT
infrastructure, and training programmes for its employees
to further enhance the service and efficiency levels.
REST OF EUROPE
Greece
Possibly the hardest hit country by the economic crisis
in Europe, Pelikan Greece faced lower sales growth due
to slower consumer spending and demand resulting
in a decline of almost 30% in the stationery industry
with many large firms closed down from the financial
aftermath. Pelikan Greece managed to maintain same
turnover level as in 2010 despite the challenges by
focusing on school products and printer consumables.
Apart from Porsche Design writing instruments and new
paper range products, Pelikan Greece introduced all new
products into the market. Due to the extensive marketing
and promotion activities in 2011, there were positive
reactions from the trade and consumers as Pelikan
became a supportive and reliable brand and company,
which resulted in higher sales particularly for printer
consumables.
Belux
2011 started with political
instability and uncertainty
in Belgium as there was no
government installed for almost
500 days. Anticipating a serious
effect on consumer trust and
spending, Pelikan Benelux N.V.
decided to invest only on school
products at its key retailers with
an extensive presence at the
stores. Special “Back to School”
displays were developed and
installed at major retailers in
both quarter palette and in
counter size. Together with
the retailers, special themed
displays were created for off-season activities to push
the sell out to the market. During the “Back to School”
season, rebates and coupons were promoted at the point
of sales. To top it all off special promotional blister cards
were created with a benefit for the consumers in order
to incite them to purchase Pelikan. Successful products
during the “Back to School” season were Pelikano Black,
griffix, ink eradicators, paints, but also the promotional
cards of Pelikano Junior, Blanco Roller 2+1 and Glue Stick
2+1. In total, over 300 counter displays and 185 quarter
palette displays were installed in the Belgian market. The
good brand equity together with the fantastic presence
in stores led to a slight increase in turnover in an overall
decreasing market.
TH E REPORTS
37
Sweden/Nordic
Turkey
Pelikan brand name is synonymous for printer
consumables in the Nordic region, hence the focus
for Pelikan Nordic was to improve market share by
introducing relevant products and securing better
distribution. About 70% of the turnover was through
wholesalers which the company supports in their
marketing and promotional efforts. In 2011, Pelikan
Nordic changed its distributor to DESPEC to gain better
coverage and mass market channels, hence turnover
dipped last year due to a slow start. However, the general
response to the new toner modules launched last year
were fairly well received, and Pelikan Nordic aims to
continue with its focus on toner products as well as
securing good partners for school and office products
this year.
Pelikan Turkey through distributor Pensan had a good year
in 2011 with positive sales growth achievement due to
strong distribution network and pricing strategy.
A developing market for the Group, Pelikan Turkey
managed it sales and marketing activities through its
distributor. One of the key successful products in Turkey
is Peligom, a solvent free glue with strong branding
presence in the market which had an overwhelming
response from the trade. Pelikan Turkey believes that with
Peligom, the brand awareness will improve and more
quality products by Pelikan will be better accepted in the
market. Pelikan Turkey has also successfully taken over
the distribution of Porsche Design writing instruments
and participated in the fairs of many big wholesalers
and dealers to promote FWI. The distributor also set up a
corporate customer team to build up a strong FWI base
in the market. Similar fairs for school and office products
were also participated by Pelikan with attractive point
of sales materials created for the market. In the coming
years, Pelikan Turkey aims to be more active in the
marketing and promotional activities for the brand and
expects to introduce more products in the market as well
as gain more customers and channels including online
dealers through Pensan.
Spain & Portugal
Like the other countries hit by the economic crisis, Pelikan
Spain faced a shrinking stationery market as well as price
pressure on printer consumables as trade partners were
pressured to cut suppliers and reduce stock in order to
mitigate risks. Revenue fell short of budget due to loss
of the private label turnover in the major mass market
chains especially from the strong decline in Media Markt.
However, Pelikan Spain continued to focus on school
and FWI as well as office and printer consumables by
launching all new products in their market. The improved
point of sales materials and furniture in shops for FWI
had created better visibility and awareness for the brand
and garnered positive reviews and sales from consumers.
Pelikan Spain also made use of the new presentation
system “Maxiflex” across their channels and advertised
in many magazines to promote the new products
particularly during Back to School season. Furthermore,
Pelikan Spain started the introduction of Herlitz products
through their existing channels.
38
AMERICAS
2011 was for the Americas a positive year with regards
to sales and profit growth in comparison to the previous
year at RM 182.7 million. Americas, which comprises
of subsidiaries in Mexico, Colombia and Argentina
representing 9.5% of the total Group revenue, has
achieved an increase in revenue of 6.5% compared to
2010. Pelikan Americas launched new products across the
region, particularly the glitter glue product which was
successful last year. The Porsche Design range of writing
instruments was also launched in Mexico, Argentina,
Colombia and Chile with positive results.
Pelikan Mexico’s result was partially affected by the
Mexican negative development of the economy and the
devaluation of the Mexican Peso. On the other hand,
Pelikan Argentina’s performance was very positive with
a sales growth of 11%. Pelikan Americas finalized the
reorganization process in Pelikan Colombia and achieved
a profit after tax equivalent to 4.5% in relation to sales.
Two and a half years past since the Pelikan Group acquired
the company in 2009 and the turnaround was achieved
with higher sales of 45% since acquisition. Pelikan
Colombia made many changes in the administration and
also started with the renewal of the machinery in the
production plant. Pelikan Americas had an extraordinary
performance in the export markets with a consecutive
growth of over 14%. Exports from Pelikan Germany to the
U.S. market showed an increase of approximately 14%
against 2010, achieved mainly because of the launches of
the new products last year and the focus on some specific
trade channels.
One of the main highlights in 2011 was the development
of the “360°” marketing plan and the television campaign
in Disney Channel, Disney Junior and Discovery Kids for
the “Back to School” season in Mexico and throughout
the region. Apart from participating in the national
trade fairs in Mexico and Argentina, Pelikan Americas
continued its programme to visit many private and public
schools in the different countries to promote the brand
and products to teachers, pupils and parents in order to
include Pelikan in the school lists for stationery. Though
the programme is an intensive work which will take many
years more, Pelikan Americas is confident that the efforts
will bring about effective brand awareness and achieve
the results required. Pelikan Mexico started to distribute
Porsche Design in one of the two most important luxury
department stores in Mexico. In Colombia, Pelikan
Americas entered with the school and office assortment
in “El Exito”, the main supermarket chain.
In all the countries, Pelikan Americas conducted training
courses for all employees and specialized trainings for
those with need to develop their knowledge in order to
fulfill their career paths. Pelikan Americas’ strategy for
the next 3 years is defined and we will continue to focus
efforts and marketing budgets into education channels
targeting school pupils between 6 and 11 years. Pelikan
Americas is convinced that through brand loyalty, we will
gain more customers from which experience and positive
results have showed us that we are on the right track.
TH E REPORTS
39
ASIA, MIDDLE EAST & AFRICA
Japan
Pelikan Japan fared better in 2011 with a revenue
growth of 18.2% despite the economic downturn and
detrimental consequences from the March earthquake
and tsunami effects last year. Pelikan Japan focused on
building the distribution channels for Porsche Design
writing instruments since January 2011 and developed 60
points of sales for the brand with a target for 40 more in
2012. Primarily a FWI market, Pelikan Japan launched all
the new FWI models throughout 2011 with the M101N
tortoiseshell brown being the best seller of all. Pelikan
Japan also created a new Limited Edition Maki-e ‘FourLeaf Clover’ and a Raden M1000 Moonlight pen made
out of mother-of-pearls for release in 2011. With the new
Pelikan FWI website in Japanese, there was a surge of
interest by the end consumers. As always, Pelikan Japan
focused on constant improvement in the display space
and quality of presentation in all the retail and dealer
stores, organised over 40 Pelikan fairs to build up brand
image and awareness, held promotions at selected stores,
advertisements in approximately 30 magazines and
distributed newsletters and flyers to dealers to introduce
upcoming products in the market. In 2012, there will be
at least 12 new Pelikan FWI to be launched along with
accessories and new models of Porsche Design writing
instruments that Pelikan Japan will dedicate to introduce
in the market.
People’s Republic of
China
Pelikan China performed
better in 2011 with a
22% increase in sales
compared to 2010. The focus was more on developing
and retaining good partners in distribution including
those active in e-commerce as more sales for stationery
and writing instruments are being made on the internet.
Pelikan China also worked to promote more school and
stationery products to its trade partners, and developed
the contents of its website in the Mandarin language
as a platform for consumers to know more about the
Pelikan brand and products. In the Paperworld Fair last
year, Pelikan was invited to participate through their
dealer in Shanghai and managed to promote the brand
and products to more visitors and traders. Pelikan China
continued to conduct sales and products training for the
promoters in support of their dealers.
Taiwan
Taiwan had a good performing year with an increase
of almost 70% in turnover compared to 2010. Turnover
increased significantly mainly attributed to the increase
in the retail selling price for all FWI models and in general
better FWI products being launched in the market. For
example, the new metal logo for all the Souverän models
have delighted pen collectors and resulted in higher brand
image and better sales for Pelikan Taiwan. In terms of
distribution, dealers were more willing to carry stock and
place more orders. The sales from Eslite, a popular book
store chain, increased annually and last year had a 56.2%
rise in sales due to 2 new outlets with FWI sales. The FWI
business growth had been stable in Taiwan, and with
the launch of the Pelikan FWI in Mandarin, the exposure
of Pelikan brand and products have boosted sales and
attracted interests from consumers especially on new
product launches. Pelikan Taiwan also supported their
dealers by conducting product training to their promoters
on site.
40
Malaysia
Pelikan Malaysia focused its sales and marketing
strategies on school and office products, with corporate
sales team focusing on writing instruments and printer
consumables. Pelikan Malaysia continued to be active in
education related fairs and promotions, and supported
its partners with marketing activities to build brand
awareness and loyalty amongst school-going pupils.
Pelikan Malaysia also worked closely with IPC to create
products and packaging that appeal to the local as well
as regional customers, and started to distribute Herlitz
products in their channels. For 2012, Pelikan Malaysia
will launch more products, including Herlitz to provide a
large assortment of stationery in the market as well as
secure more dealers and develop a more comprehensive
distribution network.
Vietnam
As a new market for the Pelikan Group, our distributor
in Vietnam, Pelux International, has made new strides
in developing the brand and distribution network in the
two main cities of the country: Hanoi and Ho Chi Minh
City. As the population of Vietnam is dominated by school
going children and young adults, there is a high potential
for school supplies and office stationery. In 2011, our
distributor managed to secure almost 80 wholesalers and
dealers across the country and launched as many Pelikan
products as possible. Initially with pricing as a factor,
consumers are more acceptable of the higher priced
stationery products than local brands as Pelikan becomes
more renown for its high quality and functionality. As
part of its marketing strategy, Pelikan Vietnam build up
its brand awareness through participating in education
fairs targeting pupils, parents and teachers, giving out
samples of products, conducting drawing and colouring
contests and advertised on buses throughout the year.
Pelikan Vietnam conducts training for all employees on
products as well as skills set such as communication
and teamwork to improve productivity and results. The
biggest achievement in the market for last year was
the recognition and acceptance for Pelikan brand by
end consumers. Pelikan Vietnam will continue to invest
resources into the market by expanding distribution,
launching more products, organising more marketing
and promotional activities to educate consumers about
Pelikan brand and products.
Middle East & Africa
Based out of the headquarter office in Dubai, United
Arab Emirates, Pelikan Middle East & Africa (“PMEA”)
had a challenging year due to political instability and
economic crisis within the region. With the political
tensions in many Middle East markets, there had been
negative consequences on foreign direct investments and
business operations. Banks imposed high lending rates
and strict conditions making financing difficult for our
business partners as well. Furthermore, marketing and
branding activities had been limited due to the regional
crisis. Hence these uncertainties have resulted in difficult
forecasting and order planning but PMEA continued to
support their existing customers with new products
launches, marketing strategies and promotional activities
in order to generate sales. PMEA also went ahead to
launch Porsche Design writing instruments along with
other FWI models with their partners in the region.
PMEA managed to meet their sales budget by controlling
cash flow and managing a healthy inventory level with
a substantial buffer stock. Moving forward, PMEA has
targeted new markets for school and office products in
Libya, South Sudan and West
African countries. Apart
from supporting current
customers in existing
markets with product
launches, PMEA seeks
new markets and channels
for FWI as well as Herlitz
this year.
TH E REPORTS
41
DIARY OF
EVENTS
JAN UARY
PELIKAN AND PORSCHE DESIGN START LICENSE
PARTNERSHIP WITH NEW PRODUCT INNOVATIONS
(GERMANY)
On 1 January 2011, Pelikan International took over the
production and distribution of the Porsche Design writing
instruments. In the framework of the cooperation, Porsche
Design’s premium writing instruments will be designed by
both Porsche Design and Pelikan’s product development
team, and produced in Pelikan’s facility in Vöhrum,
Germany. On 20 January Pelikan and Porsche Design
presented the new P’3125 Slim line range of writing
instruments for the first time, as well as the two exclusive
fountain pens in the P’3105 Pure range.
BACK TO SCHOOL (ARGENTINA)
During the months of January, February and March, Pelikan
Argentina launched a Back to School draw for Pelikan
customers. All they had to do was fill out their personal details
on the website and answer some questions about Pelikan
products. There were some amazing prizes for the winners.
In addition, Pelikan advertised on 4 cable channels for kids:
Discovery Kids, Disney Channel, Disney XD and Playhouse Disney. The advertisements consisted of 4 spots
of 30 seconds each, promoting the main lines of products: pencils, temperas, adhesives and ball point
pens. It is hoped that these spots will create greater demand and capture new buyers. Pelikan also placed
advertisements in 3 of the most important Sunday magazines: Viva, La Nación and Rumbos, with a full page
advertisement featuring Pelikan’s main product lines.
THE 2011 SALES CONVENTION (MEXICO)
The 2011 Sales convention was held between 28 to 31 January at Port Veracruz.
Themed Super Heroes, the convention was attended by product managers,
marketing managers and sales directors.
42
DIARY OF EVENTS
FE B R UARY
PELIKAN CONGRATULATES THE “JOURNALISTS OF THE YEAR
2010” (GERMANY)
On 7 February, the awards for the journalists of the year 2010
were given to the most important German journalists. Pelikan
was a sponsor at this event, delighting each of the winners with
their own FWI Special Edition Polar Lights.
DIDACTA TRADE FAIR (GERMANY)
Pelikan has participated in Didacta Trade Fair for many years. For 2011, held in
Stuttgart, the fair attracted 846 exhibitors and more than 95,000 visitors. Pelikan booth
provided visitors with product information, teaching materials and samplings. With
the huge turn out, Pelikan not only displayed a wide range of its products, its Teachers
portal was also successfully promoted. This is inline with Pelikan’s priority at Didacta
Trade Fair – direct exchange of views and ideas with educationist.
PELIKAN INDUSTRIAL SALES TEAM AT THE REINDIA IN NEW DELHI 2011
(SWITZERLAND)
The ReIndia Exhibition was held from 25 - 26 February in the NSIC Exhibition
Centre in Okhla. The slogan of the exhibition was “India – The Future of
Business”. This was the first time that the industrial sales team was one of
the exhibitors in New Delhi. Over 1000 visitors and 75 exhibitors from the
remanufacturing business attended the exhibition and they showed strong
interest for Pelikan products.
PELIKAN PARTICIPATES IN HUMBOLDT SCHOOL’S PRO SPORT RACE (MEXICO)
Humboldt School organised sporting activities for students, teachers and parents at
the University of Tec de Monterrey campus in Santa Fe, home of the Pro Sport race.
Pelikan had a stand where workshops were conducted and all participants received
Pelikan goodie bags.
TH E REPORTS
43
MARC H
PELIKAN SCHOOL PRODUCTS ON NATIONAL GERMAN TELEVISION (GERMANY)
On 1 March, the German TV channel RTL2 broadcasted a show called “Der
Große Rechtschreibtest” (the big writing test) where the writing skills of some
celebrities, teachers and other guests are put to the test. Pelikan sponsored a
wide range of school products which where shown throughout the show.
INTERDIDACTICA FAIR (SPAIN)
On 3-5 March, Pelikan in Spain took part in an educational fair for teachers, Interdidactica Fair in Madrid.
The annual fair has been part of Pelikan Spain’s fixture for several years as it is an excellent platform to
promote Pelikan’s school products especially to teachers.
PELIKAN & PORSCHE DESIGN PRESS CONFERENCE (UAE)
The Pelikan – Porsche Design press meet was held at the Dubai Crown Plaza at the Dubai Festival City on 7 March.
In the press meet, Pelikan officially announced their joint venture with Porsche Design in the region.
PELIKAN SPONSORS AMBANK COLOURING COMPETITION
(MALAYSIA)
Pelikan was the main sponsor of AmBank’s colouring competition that was
held at Zoo Negara on 12 March. It was held in conjunction with an event
to mark AmBank’s sponsorship to Zoo Negara. The competition attracted
more than 200 children and over 50 prizes were given away to the winners.
In addition to the prizes, Pelikan also sponsored the colouring pencils used in
the contest.
44
DIARY OF EVENTS
A PR I L
PELIKAN IS EVENT PARTNER AT NURI CLUB COLOURING
COMPETITION (MALAYSIA)
On 9 April, Pelikan was the event partner for Bank Rakyat’s Nuri Club day.
Children with a Nuri Savings Account-I, an account designed especially
for children, automatically become members of the Club. 300 children
participated in the colouring contest. Pelikan had a sales booth which
received overwhelming response.
BOULEVARD EASTER CARNIVAL (MALAYSIA)
On 22 April, Pelikan participated in Boulevard Easter Carnival in Boulevard Shopping
Mall, Kuching. The carnival was held for three days, hosting many fun activities such
as face painting, mini zoo, pet adoption programme and colouring contest. Pelikan
was the main sponsor for the colouring contest.
PELIKAN PARTICIPATES IN A SOCIAL CAMPAIGN FOR THE ARTS (MEXICO)
In a social campaign for the arts, Pelikan sponsored the artist, Sebastian Hildalgo, at an exhibition entitled
“Corazoles 2011“. The sculptures were exhibited at the Complejo Cultural University in Puebla, Mexico.
CINEMAXX PROMOTION DURING THE BACK TO SCHOOL SEASON
(GERMANY)
“Cinemaxx” kids’ club organises children’s events with film previews and other fun
filled activities for kids aged 4-11 every month. From April to June, Pelikan set up
a promotional booth at 30 Cinemaxx outlets in conjunction of these events. At
the first event in April Pelikan presented griffix as the main product and organised
a painting competition. The second event that took place was the promotion of
the new Pelikano Black as the main product next to griffix during the preview
of “Kung Fu Panda 2”. Testing, sampling, information, and a competition were
activities directed at the target group of children aged 9 and above. Altogether,
Pelikan Germany estimated 2,800 kids attended the booths at the Cinemaxx
outlets with brand awareness reaching over 4 million consumers.
TH E REPORTS
45
MAY
HARDCOPY PROMOTION (ITALY)
Starting from May to August, Pelikan in Italy had a promotion for Epson D78 cartridge where every cartridge
came in a promo-pack with free Blanco Xycle. This promotion was a follow up to the earlier Epson D78
‘Chillout’ promo-pack.
FWI SHOWROOM (VIETNAM)
In May, Pelikan in Vietnam set up a showroom to promote Pelikan
FWI products. The showroom is located in Grand Plaza Shopping
Mall, a luxury shopping mall in Hanoi, taking advantage of the target
market of the mall and the increasing local market for FWI.
J U N E
GRIFFIX PROMOTION (GERMANY)
Pelikan Germany zoomed in on griffix
target market by advertising the
product in pediatric clinics from June to
August. The advertisement was done
in 4,500 clinics where griffix posters
were placed in the waiting rooms area.
It was estimated that this advertising
campaign managed to reach millions of
parents and their children.
BACK-TO-SCHOOL EXHIBITION (JORDAN)
On 4 – 6 June, a Back-to-School exhibition was organised where mainly school products were displayed.
Pelikan and Geha range were exhibited and received great response from the visitors.
46
DIARY OF EVENTS
J U N E
PELIKAN AT THE HISTORIC MOTOR SPORT CHAMPIONSHIP CLUB EVENT (ARGENTINA)
Together with Porsche Club, Porsche Argentina organised the Historic Motor Sport Championship Club
Argentina on 4 June. Pelikan sponsored 5 Mikado Mechanical Pencils for the lucky draw. 71 cars of different
makes and models participated and 180 people were in attendance. Pelikan sponsored prizes for the winners
and also distributed brochures at the event.
PAINTING & COLOURING COMPETITION (PAKISTAN)
Coloring and writing competitions were organised at various leading retail stores in Pakistan as part of instore promotions for Pelikan school & office products on 17 June.
WORKSHOP FOR TEACHERS AT SAN JUAN CITY (ARGENTINA)
2,000 teachers were given lessons on how to use Pelikan products such as markers, pencils and crayons.
5 promoters were on hand to conduct the training. A raffle draw was also organised with Pelikan products for
teachers and some products for the school as the prizes. The prizes were Pelikan products for teachers and
some products to use at the school.
J U LY
PELIKAN MALMOBIL MOBILISED! (GERMANY)
Pelikan Malmobil, a mobile ‘promotional booth’, took the centre
stage for Pelikan Germany in their Back to School season by
visiting over 20 locations in their promotion tour. The Malmobil
carries with it tables, chairs, drawing and writing materials,
brochures and catalogues, give-aways, and is handled by two
Pelikan promoters.
PELIKAN PRODUCT IN VIRGIN MEGASTORE (SAUDI ARABIA)
Pelikan and Geha products were listed in Virgin Megastore, a popular worldwide consumer store chain on
11 July 2011.
TH E REPORTS
47
J U LY
ADVERTISING CAMPAIGN IN ‘KINO NEWS’ (GERMANY)
As a follow up to Cinemaxx promotion, Pelikan partnered one of its key customers “Duo Schreib & Spiel” for
the months of July and August. Pelikan advertised in the popular McDonald’s in-store magazine “Kino News”
(Cinema News) to push the new Pelikano assortment including the new Pelikano Black. The advertisement
included a shop finder to the 450 “Duo Schreib & Spiel” shops in Germany. The monthly circulation of the
magazine is 838,000 copies which are free for all McDonald’s customers. The magazines were available in
over 1,200 McDonald’s stores across Germany.
PELIKAN SWITZERLAND DRAWING
COMPETITION (SWITZERLAND)
Pelikan Outletshop team in Wetzikon invited
the local children to a drawing competition
on 6 July. The kids were split into two groups,
4-7 years old (drawing with stencils) and 7-10
years old (drawing with any available tools).
The theme of the competition was the ‘Globi’,
one of Switzerland’s most famous cartoon
characters.
CHILDREN’S BOOK FAIR (ARGENTINA)
Pelikan Argentina participated in Children’s Book Fair from 18-21 July. Targeting children and young
teenagers, the book fair aimed to enrich their learning experience through fun and entertaining activities
including story telling, games, contests, workshops and shows.
THE ‘PREVENTION OF CRIME’ DRAWING COMPETITION (MEXICO)
Pelikan Mexico co-sponsored the 3rd ‘Prevention of Crime’ drawing competition
for children. The competition required the children to suggest, through their
drawings, ways to prevent crime from happening. Pelikan sponsored prizes for
the winners and was part of the team to select the winners of the competition.
Six other brands joined Pelikan as the sponsor.
48
DIARY OF EVENTS
AU GUST
PELIKAN & PORSCHE DESIGN DISPLAY AT INTERCONTINENTAL HOTEL (SAUDI ARABIA)
Excellent Pelikan and Porsche Design display was set up at the Intercontinental International hotel chain
during the month of Ramadan.
BOOKS AND STATIONERY FAIR (VIETNAM)
In Vietnam from 3 to 8 August, Pelikan held a ‘Books and
Stationery Fair’ for the Back to School season. The fair was a
joined promotional effort with an art centre in Hanoi. Various
school products were displayed and a painting and drawing
workshop was organised for the children.
PELIKAN PRODUCTS IN TOYS R US (SAUDI ARABIA)
As part of channel development in Saudi Arabia, Pelikan products were listed in Toys R Us, the world
renowned toy retail store chain, starting on 3 August.
PELIKAN PRODUCT & BRAND VISIBILITY (OMAN)
To improve product and brand visibility, Pelikan was listed in Emax, a popular electronics retail store chain.
Pelikan also teamed up with Pepsi for a joint retail promotion in August.
SCHOOL AND OFFICE TRADE SHOW (INDIA)
Pelikan participated in a school & office trade show that was held in India from 26 August to 24 September.
The event had high media coverage.
PELIKAN AT BOOKFEST @ MALAYSIA 2011
Pelikan participated in BookFest @ Malaysia 2011, one of the largest book fair in the country with over 600
booths on show. Held in Kuala Lumpur Convention Centre from 27 August to 4 September, the fair showcased
leading publishers and the latest most innovative stationery products. Pelikan took the opportunity to display
school, office and Geha products.
TH E REPORTS
49
S EPTEMB ER
EXPO SECRETARIAS 2011 (ARGENTINA)
On 1 September, Pelikan participated in Expo Secretarias,
which attracted over 500 visitors. Besides booths of
various companies, the expo also held training lectures
and ideas exchange session The Expo also recognised
outstanding professionals in their respective fields in
an award ceremony. With attractive Pelikan products on
show, Pelikan booth was well visited by the participants.
Many questions and suggestions were voiced out by the
participants in regards to the products.
BACK TO SCHOOL KICKS OFF (LEBANON)
Pelikan’s business partner in Lebanon installed a building wrap at their office
premises highlighting the Back to School theme from 5 September.
PELIKAN IN OFFICE DEPOT (INDIA)
As part of channel development in India, Pelikan products were listed in Office Depot,
popular office products retail store chain starting from 14 September.
PELIKAN FWI SHOP-IN-SHOP (SAUDI ARABIA)
Pelikan’s business partner in the region set up a shop-in-shop retail space dedicated for Pelikan FWI. The shop
was launched on 25 September.
GEHA TRADE SHOW – IPAS 2011 (IRAN)
Geha participated in a trade show that was held in Iran from 26 to
29 September. Being one of the biggest trade shows, IPAS managed
to attract many other top brands, making it a successful exhibition.
50
DIARY OF EVENTS
OCTOB ER
PELIKAN AT MICHAEL HAM COLLEGE’S ALUMNI FAIR (ARGENTINA)
Pelikan Argentina participated in the 7th ‘OGA’ fair, organised by Michael Ham College Alumin Association.
The fair which is held on the first Saturday of October every year in Villa Martelli gathered 100 exhibitors
showcasing attractive products for families, children, homes and gardens.
EXPOPAPELERIA 2011 (ARGENTINA)
Pelikan Argentina took part in Expopapeleria 2011 that was
held in Blue Pavilion La Rural exhibition centre in October.
The four day Expopapeleria which was declared as ‘national
interest’ by the country’s President’s office featured all the
top brands and market leaders across various industries.
Coupled that with the support of various organisations
and government agencies, the fair was a great success and
attracted more than 15,000 visitors. Apart from exhibitions,
Expopapeleria 2011 also hosted workshops and conferences
which added to the overall value of the fair.
PELIKAN FAIR IN ITOYA (JAPAN)
Pelikan Fair was held from 25 October to 8 November
in Itoya. The fair showcased Pelikan FWI display that
consists of the full FWI product range. The displays
successfully highlighted the variety of Pelikan FWI to
the customers and made them aware of the many
choices available when it comes to Pelikan FWI.
TOPPARTNER ACTIVITY (GERMANY)
In Germany, Pelikan-Print-Promoters (PPP) was held to train Pelikan sales staff for toner and ink. As a result
the turnover was increased by 500% on the promotion day. The training also yielded positive impact on
customer relationship.
TH E REPORTS
51
NOV EMB ER
THE 8TH HEART LINE PROJECT
AWARD CEREMONY (JAPAN)
Every year, Japan Imported
Pen Association organises
Heart Lion Project, an award
ceremony for Japan’s top
celebrities. For this year’s Heart
Line Project on 8 November,
another five celebrities were
chosen including Mr Okada,
the ex General Manager of
Japan national football team.
The award ceremony attracted
wide media coverage in Japan
and gave excellent exposure to
Pelikan as one of the leading
brands for FWI.
PELIKAN ITALY PARTICIPATE IN BIG BUYER
FAIR (ITALY)
From 23 to 25 November, Pelikan participated
in the “Big Buyer Fair” in Bologna, the most
important Italian fair for paper and stationery
products. The fair was visited by the biggest
traditional trade customers and buyers of mass
market chains.
52
DIARY OF EVENTS
N OV EMB ER
NEW LOOK FOR PELIKAN FWI E-NEWSLETTER (GERMANY)
The design and concept of Pelikan fine writing e-mail newsletters
was updated to keep Pelikan fine writing fans regularly informed. The
newsletter will be created by using parts of existing pages of the FWI
Internet-Presentation. New products as well as existing products are part of
the new concept. The email newsletter will be sent every two months to the
target group consumers who signed up via Pelikan FWI Internet pages.
PORSCHE FESTIVAL 2011 (ARGENTINA)
The exclusive Porsche Festival was held on 17 November. The annual festival
offered true Porsche experience to visitors with the whole product line of
Porsche brand on display. Many fun activities were held including the most
awaited driving skills test that gave visitors the chance to feel first hand the
true power of Porsche cars. Pelikan Argentina did not pass up the opportunity
to participate in the festival and made their presence felt by displaying the
Porsche Design writing tools and promoting Pelikan brand to the visitors.
DE C EMB ER
FAIR FOR PARENTS AND FAMILIES (VIETNAM)
For Christmas celebration, Pelikan in Vietnam organised ‘Fair for
Parents and Families’ where they displayed a wide range of Pelikan
products, mainly for school. They also gave away small gift packs
to children and provided free trials and samples. Earlier in June and
August, they held similar fairs for the “International Children’s Day’
and ‘Vietnam Mid-Autumn Festival for Children’.
TH E REPORTS
53
INTRODUCING
HERLITZ
HERLITZ FEATURE
Herlitz AG, founded in 1904, is headquartered in Berlin
and represents one of Europe’s leading manufacturers
and distributors of quality products in paper, office and
stationery, as well as papeterie products. The company
manages the brands “Herlitz” and “Susy Card”. The total
product range comprises approximately 15,000 articles
from pencil sharpeners to drawing pads. Herlitz also
emphasise heavily on innovative product developments
and marketing activities, of which recent successful
products include the carbon-neutral x-book exercise
book range, the design-oriented my.pen family and the
maX.file-assortment which combines features, quality,
durability and sustainability in one product. These are
complemented by consumer-driven trendy licenses such
as SmileyWorld and Pussy Deluxe that are made into
stationery products that are identifiable with trendy
school kids.
With nearly 110 years in history, Herlitz is set to conquer
the international markets by uniting with Pelikan
Group. Herlitz currently has nine sales and marketing
organisations in Europe, with several export markets
as well as manufacturing sites in Germany and Poland.
The biggest markets for Herlitz outside Germany are
Poland, Romania, Czech Republic and Russia, by which
Pelikan products and brand awareness are yet to be of
par. Hence there are many opportunities for synergies in
terms of distribution networks, partners and sales. Apart
from the sales and marketing subsidiaries, Herlitz Group
also manages the supply chain service provider eCom
Logistik GmbH & Co. KG (“eCom Logistics”) and the IT
service provider Mercoline GmbH. Herlitz products are
manufactured in Germany and Poland for paper based
ranges, such as writing pads, exercise books, wrapping
paper and greeting cards.
HERLITZ PERFORMANCE IN 2011
Sales revenues at Herlitz Group declined slightly last
year. For the financial year ended 31 December 2011,
Herlitz reported turnover of Euro 228.9 million, down
2.1% from 2010’s sales revenues. The most significant
reduction in sales was recorded in the private label
segment and affected products from the folder, paper
and mailing items range as sold by discounters and
retailers. In contrast, product groups that are strongly
differentiated from similar goods have seen positive
growth, strengthening the share of branded products
in the company’s overall sales. These products include
schoolbags, my.pen writing instruments and the
easy-orga range of filing products. Overcapacities at
manufacturers, aggressive cutthroat competition and
the associated struggles over pricing have prevented us
from passing the rising costs onto customers. Overall,
these market developments and our one-off costs for
vital human resource measures have impacted on the
company’s results and led to a negative EBIT of Euro -7
million. In view of these results from the last financial
year, Herlitz Group have plans to implement structural
changes and launch extensive marketing and sales
activities. The strategic cooperation with Pelikan will play
a key role in these developments as both companies strive
to achieve the best synergies.
MARKETING
Herlitz have been concentrating on developing and
expanding the Herlitz brand with unique and top quality
products with trendy appeal to their target consumers.
As always, Herlitz will continue to strengthen the Herlitz
brand profile with new products, marketing promotions
and communications measures that will be effective and
attractive to all consumers, especially during “Back to
School” season. Currently, Herlitz products are distributed
in supermarkets, stationers, wholesalers, department
stores, drugstores, specialised chain stores as well as mail
orders, and its biggest customers are Metro Group, Office
Depot, Lyreco and Edeka in Germany and several European
markets. Whilst Pelikan products are more popular
amongst traditionalist channels such as bookstores and
retailers, Herlitz has a good footing in the mass market
channels.
54
INTRODUCING HERLITZ
In 2011, Herlitz launched a year long promotion for the
newly launched maX.file lever arch files in Germany
and Austria. The promotion was targeted at youths and
promoted the maX.file by inserting each folder with a
Euro 10 voucher, which could be used to download music
from a specific website. A total of 4 million maX.files
contained the voucher and consumers found out about
the promotion through online portals, catalogues as well
as at the point of sales. For the “Back to School” campaign
last year, Herlitz introduced the promotion “Germany
seeks the Herlitz Monster-Treasure” through the website
www.monsterdeal.de. Many Herlitz products had a code
from which consumers could redeem them into prizes.
Furthermore, adventurous games and puzzles were
offered to kids and teens too.
SUSTAINABILITY AND CSR
Herlitz Group takes its responsibility as a manufacturer
of office and school stationery supplies seriously. The
company emphasized on ensuring responsible use of
sustainable resources, consistently high product and
process quality as well as a wide social responsibility
engagement. The idea of sustainability is the very
essence behind Herlitz`s identity, and opts for more
sustainability every year in the name of the brand.
Herlitz incorporated sustainability initiative into its
products to support the cause and make a statement on
environmentally friendly materials. For example, standard
and licensed exercise books by Herlitz have the FSC™ seal,
which is a certification of the Forest Stewardship Council
(FSC™) wood products from responsibly managed forests.
These exercise books also carry the CO2 seal, representing
the commitment to lowering CO2 emissions during the
production of exercise books. Herlitz also have a range
of products from the Green Design Series that are 100%
recyclable and marked with the environmental label Blue
Angel, which is the label for environmentally tested and
high quality products. In 2011, Herlitz launched for the
first time a new filing tray space R-Pet line that are made
from recycled bottles. Last year, Susy Card was certified by
SCS and now allowed to product and offer FSC™ certified
products like napkins, greeting cards and gift wraps.
Furthermore, Herlitz has committed to the social
responsibility initiative with the BildungsCent
incorporated society. The German based non-profit
association is committed to the long-term promotion
of the teaching and learning culture in Germany. Herlitz
received the European Employee Volunteering Award
Germany in the category of “Innovation” by participating
in the “Partners in Leadership” programme. Herlitz also
made a commitment to “Fleet Competence CO2” in
Germany to help reduce fuel consumption and hence
CO2 emissions from the fleet by using vehicles with
BlueMotion technology.
OUTLOOK
Over the past few years, the Herlitz Group has been able
to stay ahead in what remains a difficult market. The
company aims to sustainably increase its profitability
by continuing to concentrate its activities on developing
and expanding the branded business with unique topquality products, and strengthen the cooperation with
Pelikan in order to become the leading supplier of branded
goods in Europe.
TH E REPORTS
55
HERLITZ:
THE 2011 INNOVATIONS
maX.file: taken to
the maX
For pint-sized Formula
One drivers
The new Herlitz maX.
file lever arch file offers
maximum features,
maXimum quality and
maXimum durability.
Action-packed designs for budding racers,
featuring daring stunts, smoking tyres
and heavy horsepower. With a wide range
of products including pencil cases, school
bags, folders, colouring books and paper
funnels for school beginners, any child can
get into pole position on the schoolyard.
Herlitz x.book is taking the world
of stationery by storm
Style as pure as
black and white
A wide range of spiral notebooks,
stationery pads, note pads
and work pads in a variety of
formats – bright, fresh design,
eco-friendly.
p Round corners
p Bookmark ribbon and
perforated edges on business
notebooks
p Business lineation on spiral
pads and notebooks
School bags:
something for everyone
Magical Gel
The new addition to the my.pen
family is both stylish and practical.
Available in six cool colours, this
ballpoint pen writes with erasable
my.pen gel ink, or with any standard
ballpoint refill. Ergonomic rubber
grip zone improves handling.
School or day care? Flexible in
size, or ultra light weight? With
five ergonomic models and a
wide range of child-friendly
motifs, there’s a favourite
school bag for everyone in
2011.
Essential Accessories
for cool cats
Organisation made simple:
with the new maX.file ring
binders
@ Pussy Deluxe
licensed by
Young trendsetters to the front of the class with
Pussy Deluxe, licensed by Herlitz. Perfect for the
classroom and shopping trips downtown, these
brightly coloured paper products are available
in 5 different motifs – Barcelona, Hawaii, Tokyo,
Hollywood and Northpole – for making just the
right impression.
powered by
Brightly coloured, practical in size and easy
to use: that’s the new maX.file range of ring
binders. The large ring mechanism holds more
sheets of paper than you’d think. The optimised
opening mechanism makes it even easier to
open and close the rings and turn pages.
56
STATEMENT ON
CORPORATE GOVERNANCE
The Board of Directors (“Board”) of Pelikan International
Corporation Berhad (“Pelikan” or “the Company”) is
pleased to report to shareholders on the manner in which
the Pelikan group of companies (“the Group”) applies the
principles as set out in the Malaysian Code on Corporate
Governance 2007 (“the Code”) and the extent to which
the Group has complied with the best practices of the
Code and also complies with paragraph 15.25 of the Main
Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) throughout the financial year
ended 31 December 2011.
THE BOARD OF DIRECTORS
1. Composition, duties and responsibilities
The Group is led by an experienced Board under the
leadership of Independent Non-Executive Chairman,
Tan Sri Musa bin Mohamad and President/Chief
Executive Officer, Loo Hooi Keat, supported by two
(2) Independent Non-Executive Directors and two
(2) Non-Independent Non-Executive Directors. This
is in compliance with paragraph 15.02 of the Main
Market Listing Requirements of Bursa Securities
(“the Listing Requirements”) which requires at
least one-third (1/3) of the Board to comprise of
Independent Directors.
The roles of the Chairman and Chief Executive Officer
are separate and each has a clear accepted division
of responsibilities to ensure that there is a balance of
power and authority. The Chairman is responsible for
ensuring Board effectiveness and conduct whilst the
Chief Executive Officer has the overall responsibilities
over the Company’s operating units, organisational
effectiveness and implementation of Board policies
and decisions. The role of the Senior Independent
Non-Executive Director is held by Mr Yap Kim Swee to
whom concerns may be conveyed.
The Board is satisfied that its current composition
fairly reflects the investment in the Company, and
that its current size and composition are effective for
the proper functioning of the Board. The Independent
Non-Executive Directors are independent from the
management and are free from any business or other
relationships that could materially interfere with the
exercise of independent judgement. The Independent
Directors provide a broader view and an independent
and balanced assessment.
The Board has been supplied with timely information
to enable them to discharge their duties efficiently.
The Board takes full responsibility for the overall
performance of the Company and the Group. This
includes:
(a) reviewing and adopting strategic business plans
for the Group;
(b) overseeing the conduct of the Company’s
business to evaluate whether the business is
being properly managed;
(c) identifying principal risks and ensuring the
implementation of appropriate systems to
manage these risks;
(d) managing and overseeing the operations of the
Group’s businesses;
(e) developing and implementing an investor
relations programme or shareholder
communications policies for the Company; and
(f) reviewing the adequacy and integrity of
the Group’s system of internal control and
management system including systems for
compliance with applicable laws, regulations,
rules, directives and guidelines.
2. Board meetings
The Board meets at least four (4) times a year with
additional meetings being held as and when required.
During these meetings, the Board reviews the Group’s
financial statements where results are deliberated
and considered. Any other strategic issues that may
affect the businesses or performance of the Group
are also deliberated. The deliberations at the Board
meetings and the conclusions are minuted by the
Company Secretaries.
TH E REPORTS
57
During the financial year ended 31 December 2011, the Board met five (5) times, where it deliberated and considered
a variety of matters affecting the Company’s operations including the Group’s financial results, business plan and the
direction of the Group.
The Directors’ attendance for the Board meetings held in 2011 was as follows:
NO. OF MEETINGS
ATTENDED
TOTAL ATTENDANCE
(%)
5 out of 5
100
Loo Hooi Keat
5 out of 5
100
3 out of 5
60
Yap Kim Swee
5 out of 5
100
5 out of 5
100
Normimy Binti Mohamed Noor (Appointed on 12 September 2011)
1 out of 1
100
Haji Abdul Ghani bin Ahmad (Retired on 20 June 2011)
3 out of 3
100
NAME OF DIRECTORS
3. Supply of information
All Directors have access to the advice and services of
the Company Secretaries who ensure that the Board
receives appropriate and timely information for its
decision-making, the Board procedures are followed
and that the statutory and regulatory requirements
are met. The Board also has direct access to the senior
management officers on information relating to the
Company’s business and affairs in the discharge of
their duties.
In addition, the Board may further seek independent
professional advice at the Company’s expense on
specific issues to enable the Board to discharge its
duties in relation to the matters being deliberated.
4. Appointments to the Board
The Board has established a Nomination Committee
who is responsible for making recommendations
to the Board on the optimum size of the Board and
review of the effectiveness of the Board and its
committees.
The Nomination Committee had assessed the
effectiveness of the individual Directors, the Board as
a whole, the Audit Committee and the Remuneration
Committee. All the assessments have been properly
documented in compliance with the Code.
The Nomination Committee is satisfied with the size
of the Company’s Board and that there is appropriate
mix of knowledge, skills, attributes and core
competencies in the composition of the Board.
5. Re-election of Directors
In accordance with the Company’s Articles of
Association (“the Articles”), all Directors who are
appointed by the Board during a financial year are
subject to retire at the following Annual General
Meeting (“AGM”). The Articles also provide that at
least one third (1/3) of the Directors for the time
being, or if their number is not three or multiple of
three, then the number nearest to one-third (1/3)
shall retire from office provided always that all
Directors shall retire from office at least once every
three (3) years but shall be eligible for re-election.
58
STATEMENT ON CORPORATE GOVERNANCE
At the forthcoming AGM, Hajah Rozaida Binti Omar
and Yap Kim Swee are due to retire pursuant to Article
127 of the Articles and Normimy Binti Mohamed
Noor is due to retire pursuant to Article 132 of the
Articles. Hajah Rozaida Binti Omar, Yap Kim Swee
and Normimy binti Mohamed Noor have offered
themselves for re-election at the forthcoming AGM.
6. Directors’ training
All the existing Directors have attended and
completed the Mandatory Accreditation Programme
as prescribed by Bursa Securities. During the financial
year ended 31 December 2011, all Directors and
some senior management officers had attended a
training on “Amendments to Listing Requirements
2011 and Corporate Disclosure Guide” for a better
understanding on the recent amendments to Listing
Requirements in relation to disclosure and other
obligations and Corporate Disclosure Guide. The
Directors are kept abreast with general economic,
industry and technical developments by senior
management’s briefing to the Board from time
to time.
The Board will continue to evaluate and determine
the training needs of its Board members to ensure
continuing education to assist them in discharge of
their duties as Directors.
7. Board Committees
The Board has established four (4) main Board
Committees, which are Audit Committee,
Nomination Committee, Remuneration Committee
and Executives’ Share Option Scheme (“ESOS”)
Committee, to which it has delegated certain of its
responsibilities. Each Board Committee has its own
terms of reference that clearly defines their operating
procedures and authorities that have been approved
by the Board.
Each Board Committee will submit their respective
deliberations and recommendations to the Board
and all the deliberations and decisions taken will
be minuted and approved by the respective Board
Committee.
(A) Audit Committee
The terms of reference of the Audit Committee
are in compliance with the Listing Requirements
and the best practices as set out in the Code. The
report of the Audit Committee for the financial
year ended 31 December 2011 are presented on
pages 68 to 70 of this Annual Report.
(B) Nomination Committee
The Nomination Committee was set-up to ensure
business continuity of the Group by having in
place a succession plan for the Board and senior
management.
The Nomination Committee was established
on 6 June 2001 and comprises exclusively
Independent Non-Executive Directors as follows:
NAME OF NOMINATION COMMITTEE MEMBERS
Chairman, Independent Non-Executive Director
Member, Independent Non-Executive Director
Yap Kim Swee
The Nomination Committee met once during the
financial year ended 31 December 2011 and the
meeting was attended by all the members of the
Nomination Committee.
TH E REPORTS
59
The duties and responsibilities of the Nomination
Committee are as follows:
(a) to review the structure, size, and
composition of the Board;
(b) to review formal succession plan in
identifying and mentoring potential
Executive and Non-Executive Directors and
senior management personnel;
(c) to propose and recommend new
appointments of potential candidate to the
Board; and
(d) to propose and recommend to the Board,
the retirement and re-appointment of
existing Executive and Non-Executive
Directors, in accordance with the Articles.
Fundamentally, new appointments to the Board
are made by the whole Board and potential
Directors are proposed by any Director and
reviewed by the Nomination Committee before
any approach is made to the candidate.
New appointment is made by the Board only
after a recommendation from the Nomination
Committee. In view of the essential requirement
for potential Directors to understand the
nature of responsibilities of the Board and the
extensive operations of the Group, it is vital
for the Chairman to take part in the briefing
of any nominees to the Board. Accordingly,
the Nomination Committee is structured as a
sub-committee of the whole Board so that all
Directors can participate in the nomination
process.
(C) Remuneration Committee
The Group operates in a competitive environment
and it is essential that part of its strategy is to
attract, motivate and retain the highest achievers
who are able to deliver the business objectives.
The level of remuneration and benefits that
the Company offers is the key to support the
objectives and maintaining the Group’s market
position as an employer of choice. The Company
provides competitive salaries and benefits for
all its employees, consistent with its business
strategy and performance.
The Remuneration Committee was established
on 6 June 2001 and comprises exclusively
Independent Non-Executive Directors as follows:
NAME OF REMUNERATION COMMITTEE MEMBERS
Yap Kim Swee
The Remuneration Committee met once during
the financial year ended 31 December 2011 and
the meeting was attended by all the members of
the Remuneration Committee.
The duties and responsibilities of the
Remuneration Committee are as follows:
(a) to recommend to the Board, the
remuneration and compensation of the
Executive Director in all its form, drawing
from external advice where necessary; and
(b) to establish a formal procedure for
developing policy on Executive Director’s
remuneration and compensation package.
60
The Remuneration Committee recommends to
the Board the reward framework to allow the
Company to attract and retain its Executive
Director giving due regard to the financial
and commercial health of the Company. The
Remuneration Committee’s approach reflects the
Company’s overall philosophy that all employees
should be appropriately rewarded.
The Company aims to align the interests of its
Executive Director as closely as possible with
the interests of shareholders in promoting the
Group’s strategies. Total remuneration comprises
salaries, performance related bonus and benefitin-kind. Salaries and benefits are competitive and
reviewed annually. In making recommendations
on the framework for retaining and rewarding
senior management, the Remuneration
Committee reviews the total reward package,
making use of internally and externally published
information. The salaries of the Executive
Director is set by the Remuneration Committee
and reviewed annually after consideration of
the Company’s performance, market conditions,
the level of increase awarded to employees
throughout the business and the need to reward
individual performance.
(D) ESOS Committee
The ESOS Committee was set-up to ensure
the ESOS is fairly and properly administered in
accordance with its approved By-Laws and other
applicable rules and regulations.
The ESOS Committee was established on 29 April
2010 and comprises a majority of Independent
Non-Executive Directors as follows:
NAME OF ESOS COMMITTEE MEMBERS
Loo Hooi Keat
Member, President/Chief Executive Officer
Yap Kim Swee
The duties and responsibilities of the ESOS
Committee amongst others, are as follows:
(a) to determine the eligibility of the person for
participation in the ESOS;
(b) to decide on the number of shares to be
offered to eligible persons, the subscription
price for the shares and such other terms in
relation to the offer;
(c) to enter into any transactions, agreements,
deeds, documents or arrangements, and
make rules, regulations or impose terms
and conditions or delegate part of its power
relating to the ESOS subject to the provisions
of the ESOS By-Laws; and
(d) to take all other actions within the purview
of the ESOS Committee pursuant to the ESOS
By-Laws, for the necessary and effective
implementation and administration of the
ESOS.
TH E REPORTS
61
DIRECTORS’ REMUNERATION
The Directors’ remuneration is linked to experience, scope of responsibility, seniority, performance and industry information.
Directors’ fees are paid to Non-Executive Directors and these are approved by shareholders at the AGM. The details of the
Directors’ remuneration for the financial year ended 31 December 2011 are as follows:
BENEFITINKIND
(RM)
TOTAL
(RM)
FEES
(RM)
SALARIES
(RM)
DEFINED
CONTRIBUTION
PLAN
(RM)
–
1,320,000
158,400
35,200
1,513,600
120,000
–
–
–
120,000
60,000
–
–
10,000
70,000
Yap Kim Swee
70,000
–
–
–
70,000
60,000
–
–
–
60,000
(Appointed on 12 September 2011)
18,667
–
–
–
18,667
Haji Abdul Ghani bin Ahmad
(Retired on 20 June 2011)
28,333
–
–
10,000
38,333
Total
357,000
1,320,000
158,400
55,200
1,890,600
NAME OF DIRECTORS
Executive Director
Loo Hooi Keat
Non-Executive Directors
RELATIONS WITH SHAREHOLDERS AND INVESTORS
1. The Annual General Meeting
The AGM is the principal forum for dialogue with
shareholders. At the Company’s AGM, shareholders
have direct access to the Board and are given the
opportunities to ask questions. The shareholders
are encouraged to participate in the question and
answer session. The Chief Executive Officer of
the Company in the AGM often presents to the
shareholders, the Company’s operations in the
financial year and outlines the future prospects of
the Group. Further, the Group’s Company Secretaries
could provide shareholders and investors with a
channel of communication on which they can provide
feedback to the Group. Queries regarding the Group
may be conveyed to the Company Secretaries at the
Company’s registered address.
62
2. Dialogue between the Company and Investors
The Group values dialogue with shareholders and
investors as a means of effective communication that
enables the Board to convey information with regards
to the Group’s performance, corporate strategy and
other matters that affect shareholders’ interest.
The Company holds discussion with analysts and
institutional shareholders regularly. Presentations
based on permissible disclosure are made to explain
the Group’s performance and major development
plans. However, price sensitive information about the
Group is not discussed in these exchanges until after
the prescribed announcement to Bursa Securities has
been made.
ACCOUNTABILITY AND AUDIT
1. Financial reporting
The Board takes responsibility for ensuring that the
financial statements of the Group and the Company
give a true and fair view of the state of affairs of
the Group and the Company as required under
Section 169(15) of the Companies Act 1965 and the
applicable Financial Reporting Standards in Malaysia.
The Board also ensures the accurate and timely
release of the Group’s quarterly and annual financial
results to Bursa Securities.
2. Directors’ Responsibility Statement in preparing the
annual audited financial statements
The Directors are responsible for ensuring that the
annual audited financial statements of the Group
and the Company are drawn up in accordance with
the provisions of the Companies Act 1965 and the
applicable Financial Reporting Standards in Malaysia
so as to give a true and fair view of the state of affairs
of the Group and the Company at the end of the
financial year and of the results of their operations
and cash flows for the financial year.
In preparing the financial statements, the Directors
have:
(a) selected suitable accounting policies and applied
them consistently;
(b) made judgements and estimates that are
reasonable and prudent;
(c) ensured that all applicable accounting standards
have been followed; and
(d) prepared financial statements on a going
concern basis as the Directors have a reasonable
expectation having made appropriate enquiries
that the Group and the Company have adequate
resources to continue in operational existence for
the foreseeable future.
The Directors have the duty to ensure that the
Company keeps accounting records which disclose
with reasonable accuracy of the financial position
of the Group and Company and which enable
them to ensure that the financial statements are in
compliance with the Companies Act 1965.
The Board has the overall responsibility to take all
steps as are reasonably open to them to safeguard
the assets of the Group to prevent and detect frauds
and other irregularities.
3. Internal Audit function
In line with paragraph 15.27 of the Listing
Requirements, the Group has its own internal audit
function following the adoption of its Internal Audit
Charter by the Audit Committee. The internal audit
review of the Group’s operations encompassed
an independent assessment of the Group’s
compliance with its internal controls and makes
recommendations for improvements.
TH E REPORTS
63
The Group has established an Internal Audit &
Risk Management department as an independent
appraisal function. This is to provide the Audit
Committee and the management with independent
and objective advice on the effectiveness of the
Group’s business and operations. It recognises that
it is management’s responsibility to analyse the risks
and to devise and implement an effective system of
internal control. The fulfilment of the above objective
is achieved by providing reasonable assurance
through an effective and efficient programme
of independent review across the Group to the
management, the Audit Committee and the Board
on an on-going basis. This is not confined to but
includes:
(a) appraising the adequacy and integrity of the
internal control and management information
system of the Group;
(b) ascertaining the effectiveness of operating
management in identifying principal risks and to
manage such risks through appropriate system of
internal control set up by the Group;
(c) ascertaining the level of compliance with the
Group’s plan, policies, procedures and adherence
to laws and regulations;
(d) appraising the effectiveness of administrative
and financial controls applied and the reliability
and integrity of data that is produced within the
Group;
(e) ascertaining the adequacy of controls for
safeguarding the Group’s assets;
(f) conducting special reviews or investigations
requested by management or by the Audit
Committee; and
(g) consultation with management, reviewing
operations as a whole from the viewpoint of
economy and productivity with which resources
are employed and making cost effective
recommendations to management.
4. External Audit function
The Company’s independent external auditors fill an
essential role for the shareholders by enhancing the
reliability of the Company’s financial statements and
giving assurance of that reliability to users of these
financial statements.
The external auditors, Messrs. BDO have continued
to report to members of the Company on their
findings which are included as part of the Group’s
and Company’s financial reports with respect
to each year’s audit on the statutory financial
statements. In doing so, the Group and the Company
have established a transparent arrangement with
the external auditors to meet their professional
requirements. From time to time, the external
auditors highlight to the Audit Committee and the
Board on matters that require the Audit Committee’s
and the Board’s attention.
64
STATEMENT ON
INTERNAL CONTROL
BOARD RESPONSIBILITY
INTERNAL CONTROL SYSTEM
The Board of Directors (“Board”) of Pelikan International
Corporation Berhad (“Pelikan” or “the Company”) is
responsible for maintaining a sound system of internal
control and reviewing its adequacy and integrity so as to
safeguard the shareholders’ investments and the assets
of Pelikan group of companies (“the Group”). The Board
and management have implemented a control system
designed to identify and manage risks faced by the Group
in pursuit of its business objectives. This internal control
system, by its nature, can only provide reasonable and not
absolute assurance against material misstatement or loss.
The key elements of the Group’s risk management
strategies are described below:
The Group has in place an on-going process for
identifying, evaluating, monitoring and managing
significant risks faced by the Group during the financial
year. The management is responsible for the identification
and evaluation of significant risks applicable to their
respective areas of business and to formulate suitable
internal controls.
RISK MANAGEMENT FRAMEWORK
The Board has extended the responsibilities of the Audit
Committee to include the work of monitoring all internal
controls on its behalf, including identifying risk areas and
communicating these risk areas to the Board. Detailed
risk events were identified and discussed and with the
approval from the Board, appropriate measures were
taken to control and mitigate these risks.
(a) Clearly defined lines of accountability and delegated
authority;
(b) Regular and comprehensive information provided
to management, covering operating and financial
performance and key business indicators such as
resource utilisation, cash flow performance and sales
achievement;
(c) Detailed budgeting process where operating units
prepare budgets for the coming year, which are
approved at both the operating unit level and the
Board;
(d) Monthly monitoring of results against budget, with
major variances being followed up and management
action taken, where necessary;
(e) Regular visits to operating units by members of the
Board and senior management; and
(f) The Internal Audit & Risk Management department
independently reviews the control processes
implemented by the management from time to
time and periodically reports on its findings and
recommendations to the Audit Committee. The
duties and responsibilities of the Audit Committee
are detailed in the Terms of Reference of the Audit
Committee. The Audit Committee, by consideration
of both internal and external audit reports, is able to
gauge the effectiveness and adequacy of the internal
control system, for presentation of its findings to
the Board.
TH E REPORTS
65
STATEMENT ON
INTERNAL AUDIT FUNCTION
In line with Appendix 9C, paragraph 30 of the Main
Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”), the internal audit function of
Pelikan International Corporation Berhad (“the Company”)
group of companies (“the Group”) is performed inhouse, in which the Internal Audit Charter had been
formally adopted by the Audit Committee. The internal
audit review of the Group’s operations encompassed an
independent assessment of the Group’s compliance with
its internal controls and makes recommendations for
improvements.
1. PURPOSE
In accordance with the Main Market Listing
Requirements of Bursa Securities, the Group Internal
Audit & Risk Management (“IARM”) department
is established to ensure not only the effective
implementation and compliance of good corporate
governance, but also to ensure that effective system
of internal control are in place. Such examination and
evaluation of all departments’ activities serves as a
service to corporate management and it’s Board of
Directors (“Board”) across all companies under the
Group’s management control. It is an internal control
that functions by measuring and evaluating the
effectiveness of other controls.
2. TERMS OF REFERENCE
The Group IARM department is responsible for
providing the respective country’s management
with information about the adequacy and the
effectiveness of its system of internal control and
quality of operating performance when compared
with established standards. To accomplish this
responsibility, all corporate activities are subject
to audit. It is the responsibility of the Group IARM
department to serve the Group in the manner that is
consistent with the “Standards for the Professional
Practice of Internal Auditors” and the professional
standards of conduct such as the “Code of Ethics” of
the Institute of Internal Auditors.
3. POLICY GUIDELINE
3.1 Organisational Status
Whilst the Group IARM department is an
integral part of the Company and functions
in accordance with policies established by
its Senior Management and the Board, it is
essential for the Group internal auditor to
be independent of the activities audited. To
enhance and ensure this independence, it
is authorised to access all relevant records,
personnel and physical properties.
In view of the fact that its organisational
status and support accorded to it by senior
management are major determinants of its
range and value, the Group IARM department
reports to the Audit Committee, whose
authority is sufficient to ensure a broad range of
audit coverage and an adequate consideration
of effective action on internal audit findings
and recommendations.
The Group IARM department has an
independent functional responsibility to
the Audit Committee, which is made up of
Independent Non-Executive Directors of the
Company for the adequacy and effectiveness
of the system of internal control. The Head of
Group IARM department shall meet with the
Audit Committee on a quarterly basis.
66
STATEMENT ON INTERNAL AUDIT FUNCTION
3.2 Objectivity
Objectivity is essential to auditing. Thus, the
Group IARM department should not normally
develop or install accounting procedures or
controls, prepare records, or engage in activities
that its personnel would normally review
and appraise and that could reasonably be
construed to compromise its independence.
Objectivity need not be adversely affected
by the determination and recommendations
of standards and techniques of control to be
applied in developing systems and procedures
under its review nor lending its technical
assistance to management in systematic
analysis of operations or activities.
3.3 Scope
The scope of internal auditing encompass
examining and evaluating the adequacy and
the effectiveness of the Company’s system of
internal controls and the quality of operating
performance against established standards
in carrying out assigned responsibilities. The
scope of the examination and the evaluation
performed in areas of the Company includes
the review of:
(a) the reliability and integrity of financial and
operating information and the means used
to identify, measure, classify and report
information;
(b) the systems established to ensure
compliance with policies, plans, procedures,
law and regulations that could have a
significant impact on operations and
reports including determining whether the
organisation is in compliance;
(c) the means of safeguarding assets and
verifying their existence;
(d) the economy and efficiency with which
resources are utilised and employed; and
(e) operations or programmes to ascertain
whether results are consistent with
established objectives and goals and
whether the operations and programmes
are being carried out as planned.
The audit will be conducted in such a manner as
the Head of Group IARM department considers
necessary to fulfil his responsibilities and will
include such tests of transactions and of the
existence, ownership and valuation of assets
and liabilities as the Group IARM department
consider necessary. The nature and extent
of the audit tests will vary according to the
internal auditor’s assessment of the Company’s
accounting system, system of internal controls
and cover any aspect of the business operations.
The Group IARM department shall report any
significant weaknesses in or observations on,
the Company’s system which comes to its
notice and which the Group IARM department
thinks should be brought to the attention of the
Board and/or the Audit Committee.
The responsibility for the prevention
and detection of irregularities and fraud
rests with the operating management.
However, the Group IARM department shall
endeavour to plan its audit so that it has a
reasonable expectation of detecting material
misstatements in accounting and operational
records resulting from irregularities or fraud,
but its examination should not be relied upon
to disclose irregularities and frauds which
may exist.
TH E REPORTS
67
4. ADDITIONAL INFORMATION RELATING
TO THE INTERNAL AUDIT FUNCTION
4.1 Internal Audit Administration
The Head of Group IARM department is
generally responsible for the administration of
this policy and functionally directing internal
audit activities throughout the Company.
Group corporate management and operating
management are responsible for providing
the Group IARM department with relevant
and timely access to all records, personnel and
physical properties and for making sure that
appropriate actions are taken to address audit
recommendations.
4.2 Internal Audit Function Costs
The total costs incurred by the Group internal
audit function in respect of the financial year
2011 amounted to RM499,265.
68
AUDIT COMMITTEE
REPORT
The Board of Directors (“Board”) of Pelikan International Corporation Berhad (“the Company”) is pleased to present the
following report of the Audit Committee for the financial year ended 31 December 2011.
MEMBERSHIP AND MEETINGS OF AUDIT COMMITTEE
The Audit Committee comprises two (2) members who are Independent Non-Executive Directors and one (1) member
who is Non-Independent Non-Executive Director. The Chairman of the Audit Committee is an Independent Non-Executive
Director, who is also a member of the Malaysian Institute of Accountants. The Head of Internal Audit and Risk Management
and the representatives from the external auditors of the Company were also invited to attend the Audit Committee
meetings when necessary.
The Audit Committee members’ attendance record is as follows:
NO. OF MEETINGS
ATTENDED
PERCENTAGE
(%)
Yap Kim Swee
5 out of 5
100
5 out of 5
100
5 out of 5
100
NAME OF DIRECTORS
AUTHORITY
The Audit Committee shall, in accordance with a
procedure to be determined by the Board and at the
expense of the Company and the Group:
(a) have explicit authority to investigate any matter
within its terms of reference, resources to do so, and
full access to information. All employees shall be
directed to co-operate as requested by members of
the Audit Committee;
(b) have full and unrestricted access to any information,
records, properties and personnel of the Company
and of any other companies within the Group;
(c) have direct communication channels with the
external auditors and person(s) carrying out the
internal audit function or activity;
(d) obtain independent professional or other advice
and to invite outsiders with relevant experience and
expertise to attend the Audit Committee’s meetings
(if required) and to brief the Audit Committee;
(e) have right to ensure the attendance of any particular
Audit Committee meeting by other Directors and
employees of the Company shall be at the Audit
Committee’s invitation and discretion and must be
specific to the relevant meeting; and
(f) have the view that a matter reported by it to the
Board has not been satisfactorily resolved resulting
in a breach of the Bursa Malaysia Securities Berhad
(“Bursa Securities”) requirements, the Audit
Committee must promptly report such matter to the
Bursa Securities.
TH E REPORTS
69
DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Audit Committee
are as follows:
(a) to consider the appointment of the external auditors,
the audit fee and any question of resignation or
dismissal;
(b) to discuss with the external auditors before the audit
commences, the nature and scope of the audit, and
ensure co-ordination when more than one audit firm
is involved;
(c) to review with the external auditors his evaluation of
the system of internal control and his audit report;
(d) to review the quarterly and year-end financial
statements of the Company and the Group, focusing
particularly on:
(i) any change in accounting policies and practices;
(ii) significant adjustments arising from the audit;
(ii) review the internal audit programme and
results of the internal audit process and, where
necessary, ensure that appropriate actions are
taken on the recommendations of the internal
audit function;
(iii) review any appraisal or assessment of the
performance of the members of the internal
audit function;
(iv) approve an appointment or termination of senior
staff members of the internal audit function; and
(v) take cognizance of resignations of internal audit
staff members and provide the resigning staff
member an opportunity to submit his reasons for
resigning;
(h) to consider any related party transactions that may
arise within the Group including any transaction,
procedure or code of conduct that raises questions of
management integrity;
(iii) the going concern assumption; and
(i) to consider the major findings of internal
investigations and management’s response;
(iv) compliance with accounting standards and other
legal requirements;
(j) to determine the remit of the internal audit function;
(e) to discuss problems and reservations arising from
interim and final audits, and any matter the external
auditors may wish to discuss (in the absence of
management where necessary);
(f) to review the external auditor’s management letter
and management’s response;
(g) to do the following, in relation to the internal audit
function:(i) review the adequacy of the scopes, functions
and resources of the internal audit function, and
ensure that it has the necessary authority to
carry out its works;
(k) to consider other topics as defined by the Board;
(l) to report its findings on the financial and
management performance, and other material
matters to the Board; and
(m) verification on allotment of shares under Executives’
Share Option Scheme (“ESOS”) is in compliance with
the basis set out in the Listing Requirements and
ESOS by-law.
70
AUDIT COMMITTEE REPORT
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
2. External Audit
During the financial year 2011, the Audit Committee
carried out its duties as set out in the terms of reference.
Other main activities carried out by the Audit Committee
during the financial year included the following:
(a) Reviewed the external auditors’ scope of
work and audit plan for the year and made
recommendations to the Board on their
appointment and remuneration;
1. Financial Results
(b) Reviewed and discussed the external auditors’
audit report and areas of concern highlighted in
the management letter, including management’s
response to the concerns raised by the external
auditors; and
(a) Reviewed the quarterly and year-to-date
unaudited financial results of the Group before
tabling to the Board for consideration and
approval; and
(b) Reviewed the reports and the audited financial
statements of the Company and the Group
together with external auditors prior to tabling
to the Board for approval. The review was, inter
alia, to ensure compliance with:(i) Provision of the Companies Act 1965;
(ii) Main Market Listing Requirements
of Bursa Securities;
(iii) Applicable Financial Reporting Standards in
Malaysia; and
(iv) Other legal and regulatory requirements.
In the review of the annual audited financial
statements, the Audit Committee discussed
with management and the external auditors the
accounting principles and standards that were
applied and their judgement of the items that may
affect the financial statements as well as issues and
reservations arising from the statutory audit.
(c) Discussed on significant accounting and
auditing issues, impact of new or proposed
changes in accounting standards and regulatory
requirements.
3. Internal Audit
(a) Reviewed the Group internal audit plan,
resources planning requirements for the financial
year and assessed the performance of the Group
Internal Audit & Risk Management department;
(b) Reviewed the internal audit reports which
highlighted the audit issues, recommendation
and the management’s responses and directed
actions to be taken by the management to rectify
and improve the system of internal control;
(c) Monitored the implementation programme
recommended by the Group Internal Audit and
Risk Management department arising from its
audits in order to obtain assurance that all key
risks and controls have been fully dealt with; and
(d) Reviewed the performance of members of the
internal audit function.
STATEMENT ON
CORPORATE SOCIAL
RESPONSIBILITY
We at Pelikan believe that the best way to move
forward is to ensure the community we are
serving, the environment we operate in, and the
people who are our driving force, grow together
with us. It is our priority to ensure our presence
brings as many positive impacts as it is possible to
all our stakeholders.
72
STATEMENT ON CORPORATE SOCIAL REPONSIBILITY
This belief is derived from our
experiences in operating in many
parts of the world. Our strategy
and our policy underlined the need
for us to include the wellbeing of
our stakeholders in every business
activity that we do. It is our duty to
conduct our business responsibly
and it is our ongoing mission to
find the right balance in our day-today business operations to benefit
the four focal areas - community,
environment, workplace and
marketplace.
In 2011, our Corporate Social
Responsibility (“CSR”) aim remains
unchanged as with the previous
years, which is enriching the lives of
children and the environment they
live in by creating tools that will
guide and improve their potential in
school and education. As we close
one chapter of our CSR initiatives,
another chapter was opened with the
hope that we could make a bigger
impact to the four areas mentioned.
COMMUNITY
Interaction with the communities we
operate in has always been a main
concern for Pelikan. With special
focus on children and education, we
are always looking to make positive
contributions to the community.
Pelikan’s Teachers and Parents Portal
in Germany and throughout Europe,
accessible through Pelikan’s official
website, reflect how committed
we are to this cause. The portals
give guidance and suggestions to
teachers and parents for children’s
education and help them to realise
the children’s true potential. We
work closely with experts to ensure
the portals benefit all layers of the
community by acting as a source of
quality reference for everyone.
In Malaysia, we continue to focus our
efforts to help the underprivileged.
Pelikan’s tie up with Hope Worldwide
Kuala Lumpur for the “Learning with
Pelikan Activity Corner” programme
concluded with great success.
34 syllabuses were completed in the
duration of three years. A total of 112
underprivileged children benefitted
from the art and craft classes
conducted through this programme.
Pelikan Activity Corner successfully
instilled confidence and maturity in
these children, which was the main
objective of the programme.
With the conclusion of Pelikan
Activity Corner in July 2011, Pelikan
shifted its focus to a programme
called ImpART, a ‘Train the Trainer’
programme for the refugee children
of Myanmar under the UNHCR. The
objective of ImpART is to provide art
skills and apprenticeship training to
talented refugee teenagers. ImpART
does not merely provide art lessons
to the children, it looks beyond that
by aiming to empower these children
with art and craft skills that they
can utilise in their community and
beyond. With three modules - basic,
intermediate and advanced - the
children need to complete their
training in six months before going
out to teach other refugee children
in their community schools. This
way, not only do they get to equip
themselves with skills, they could
also earn some income by conducting
their own art classes.
TH E REPORTS
73
Every April, parents and staff of
University Malaya Medical Centre
(“UMMC”) organise an annual
party for the children undergoing
treatment for cancer. The carnival-like
annual party hosted many activities
for the children including a colouring
contest, with the colouring materials
and prizes sponsored by Pelikan.
Another way we help the
underprivileged is to contribute to
fundraising initiatives. For example,
Pelikan contributed stationery
products to be sold at the Hope
Worldwide Kuala Lumpur ‘Family
Carnival Charity Bazaar’. The bazaar
was organised to raise fund for
Hope Worldwide initiatives for the
underprivileged such as “Food for
the Poor” and “School Sponsorship”
programme.
In Mexico, Pelikan was involved in
a unique fundraising event where
they supplied Pelikan fine writing
pen, Souverän M800 to a Mexican
artist to create an art piece. The fine
art piece was later auctioned and
proceeds from the auction were
then donated to the Mexican Red
Cross Society. Pelikan Mexico also
conducted an art and craft workshop
for underprivileged children. These
children include children with illness
such as cancer and HIV as well as
homeless children.
In Argentina, Pelikan collaborated
with Fundación Michael Ham
for ‘Solidarity Meal’, an annual
programme to collect materials to
be donated to several education
institutions focussing to help poor
children. Pelikan also supported
Lomas Oral School to raise fund
for scholarships for deaf and mute
children.
Pelikan in United Arab Emirates
ensures participation in community
projects on a yearly basis. Pelikan
contributed school bags and
accessories to the Red Crescent
Society and later sponsored the gifts
at an annual event in a rehabilitation
center for mentally disabled children.
Pelikan in Spain is supportive of both
organisations and individuals in
their community projects. Fundación
Dalma, an organisation dedicated to
help individuals with down syndrom
and their families, received donations
from Pelikan for their art projects.
Pelikan also supported a local
optician in Vilanova de Gaia, Portugal,
who was running a campaign called
“See good to learn better”, to help the
children in the area to own proper
eyeglasses. To raise fund for the
project, Pelikan sold school material
kit for a low price and donated the
proceeds they made.
Pelikan Hellas in Greece focused
their CSR initiatives on children’s
development. They contributed to a
children’s football team, sponsored
school projects and an orphanage
called “Children’s Smile”.
ENVIRONMENT
As a stationery manufacturer and
distributor, Pelikan deals with
environmental issues in every action
it takes, and Pelikan takes the issues
surrounding the environment
seriously. The policy to reduce the
use of paper materials has been
practiced through out the Group.
The continuous improvement of
Pelikan Extranet reduces the use of
paper internally. Our premium quality
packaging material is manufactured
using a large proportion of recycling
materials.
74
STATEMENT ON CORPORATE SOCIAL REPONSIBILITY
“Reduce – Reuse – Recycle” is Pelikan’s
motto for waste reduction. The
goal is to utilise waste sensibly and
responsibly, recycling it for a new
purpose. Pelikan recycling centre in
Europe collects and recycles used
inkjets and toner cartridges within
the region. Not only will used inkjets
and toner cartridges be recycled,
but better empties management
will reduce the use of packaging
materials.
Pelikan production plants also
continuously take consecutive next
steps in ISO certifications. All our
manufacturing facilities are certified
with ISO 14001, which reinforced our
operations to be regulated by the
strict environmental management
system requirement. REACH, a system
to improve the protection of human
health and the environment, already
fulfilled and maintain by Pelikan.
Apart from manufacturing, Pelikan
also supports environmental causes
through our marketing efforts. In
May, Pelikan Malaysia joined Bio
Green to organise a charity event
called “O’ Green Earth DIY Shoe
Painting for Charity” at IOI shopping
mall. It was a shoe painting contest
where Pelikan sponsored Plaka paints
for all contestants. Targeting adults
and children, the event promoted
the importance of taking care of our
environment and raised awareness
on green earth. Pelikan staff in
Malaysia also observed Earth Hour
Day by switching off non-essential
lights and electrical appliances,
as well as making a pledged to
help reduce carbon footprints.
They were also shown environmental
documentaries during lunch hours
to increase their awareness on this
issue.
which improves the business
process also improves working
condition for Pelikan, creating a
better working environment as a
whole. Special attention is given to
Pelikan employees working in the
manufacturing plants in the form
of health maintenance programme
tailored specifically to their needs.
WORKPLACE
MARKETPLACE
The driving force of Pelikan, the
people, is valued highly as they
should. We believe investment
in human capital is crucial for
the growth and future of the
Company. Apart from being an
equal opportunity employer, Pelikan
opens up the path for any willing
employees to equip themselves
with skills and knowledge. Training
and development, knowledge and
skills transfer and many other
opportunities are provided so the
employees’ full potential could be
fulfilled.
The importance of good corporate
governance and good business ethics
has increased in today’s world. In face
of economic uncertainties, a global
brand like Pelikan has to maintain
its focus on good business practices
worldwide. We firmly believe
transparency is the key in governing
Pelikan business operations
worldwide in the areas of inventory,
logistics, purchasing, accounts
payable, sales administration and
account receivables. This is made
easier with Pelikan’s Global Best
Practice, a guide that has been drawn
up to ensure the right path for the
Company.
Employees’ wellbeing is also well
taken care of. Subsidised meals and
good medical coverage are among the
benefits afforded to the employees.
Pelikan annual health awareness
campaign promotes healthy lifestyle
and giving them access to free
medical screening and talks. Blood
donation drive is organised annually
to create awareness on health issues.
OHSAS 18001, implemented in
Pelikan’s plants since 2010, helps
to minimise occupational risk
and increases the standard of
health and safety management
system. ISO 9001 certification
From sourcing materials to
producing, from packaging to
shipping, everything has to strictly
abide to the Global Best Practice.
Code of Ethics for Pelikan Group’s
procurement, International
Procurement Centre (“IPC”),
ensures that we are not engaged in
businesses with vendors who violate
human rights such as forced and child
labour. Declaration of Conformity
ensures the raw materials purchased
for our manufacturing plants do not
contravene any protection laws.
As a global brand name, we commit
to responsible business practices that
positively meet the expectations of all
our stakeholders.
THE FINANCIALS
Financial Statements
77
Financial Calendar
78
Additional Compliance Information
163
Analysis of Shareholdings
165
List of Group Properties
168
Pelikan Group of Companies Directory 169
Notice of Annual General Meeting
Form of Proxy
173
FINANCIAL STATEMENTS
90
Consolidated Statement of Changes
In Equity
Statement by Directors
91
Statement of Changes In Equity
84
Statutory Declaration
92
Consolidated Statement of Cash Flows
85
Independent Auditors’ Report
93
Statement of Cash Flows
87
Statements of Comprehensive Income
94
Notes to the Financial Statements
88
Statements of Financial Position
78
Financial Calendar
79
Directors’ Report
84
78
FINANCIAL CALENDAR
2011
23 Feb
Board
Audit Remuneration
Nomination Reviewed and approved the financial results of the 4th quarter and year ended 31-12-2010
Reviewed the financial results of the 4th quarter and year ended 31-12-2010
Reviewed the remuneration package of the Executive Directors for year 2011
Reviewed the composition of the Board of Directors
27 Apr
Board
Audit 25 May
Board
Audit
Approved the Audited Financial Statements for the financial year ended 31-12-2010
Reviewed the statements and reports to be included in the Annual Report 2010
Reviewed and approved the financial results of the 1st quarter ended 31-03-2011
20 Jun
29th Annual
Received the Audited Financial Statements for the financial year ended 31-12-2010
General Meeting Approved the final dividend, Directors’ Fees and re-appointment of External Auditors
24 Aug
Board
Audit
23 Nov
2012
Reviewed and approved the financial results of the 2nd quarter ended 30-06-2011
Board
Audit
Reviewed and approved the financial results of the 3rd quarter ended 30-09-2011
Presentation of Audit Plan for year 2012
Discussion of Proposed Meetings Calendar for year 2012
22 Feb
Board
Audit Remuneration
Nomination Reviewed and approved the financial results of the 4th quarter and year ended 31-12-2011
Reviewed the financial results of the 4th quarter ended 31-12-2011
Reviewed the remuneration package of the Executive Directors for year 2012
Reviewed the composition of the Board of Directors
25 Apr
Board
Audit 23 May
Board
Audit
Approved the Audited Financial Statements for the financial year ended 31-12-2011
Reviewed the statements and reports to be included in the Annual Report 2011
Reviewed and approved the financial results of the 1st quarter ended 31-03-2012
26 Jun
30th Annual
Receive the Audited Financial Statements for the financial year ended 31-12-2011
General Meeting Approve the final dividend, Directors’ Fees and re-appointment of External Auditors
28 Aug
Board
Audit
21 Nov
Board
Audit
Review and approve the financial results of the 2nd quarter ended 30-06-2012
Review and approve the financial results of the 3rd quarter ended 30-09-2012
Presentation of Audit Plan for year 2013
Discussion of Proposed Meetings Calendar for year 2013
THE FINANCIALS
79
DIRECTORS’ REPORT
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2011.
PRINCIPAL ACTIVITIES
The principal activities of the Company and its subsidiaries include manufacturing and distribution of writing instruments, art,
painting and hobby products, school and office stationery, printer consumables, papeterie products, provision of computer
software and hardware products, provision of logistics services and investment holding. The Group distributes its products
through wholesalers, dealers, retailers, modern trade channels including hypermarkets, schools and specialised stores for
luxury items. There have been no significant changes in the nature of the Group’s activities during the financial year.
FINANCIAL RESULTS
Group RM’000 Company
RM’000
Loss for the financial year (101,302) (4,890)
Attributable to:
Owners of the parent Non-controlling interest (88,423) (12,879) (4,890)
–
(101,302)
(4,890)
DIVIDENDS
Since the end of the previous financial year, the Company has paid a final single tier dividend, of two (2.0) sen per
ordinary share of RM1.00 each on 14 September 2011 amounted to RM10,139,993 in respect of the financial year ended
31 December 2010.
The Board of Directors proposed a final share dividend on the basis of one (1) treasury share for every fifty (50) existing
ordinary shares of RM1.00 each held in the Company, fractions of treasury shares to be disregarded (“Share Dividend”)
in respect of the financial year ended 31 December 2011.
In addition to the Share Dividend, the Board of Directors also proposed a final single tier dividend, of one (1.0) sen per
ordinary share of RM1.00 each (“Cash Dividend”) in respect of the financial year ended 31 December 2011.
Both proposed Share Dividend and Cash Dividend are subject to the approval of shareholders at the forthcoming
Annual General Meeting of the Company.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year.
80
DIRECTORS’ REPORT
DIRECTORS
The Directors who have held office since the date of the last report are:
Loo Hooi Keat
Yap Kim Swee
Normimy binti Mohamed Noor (Appointed on 12 September 2011)
SHARE CAPITAL, DEBENTURES AND SHARE OPTIONS
Issue of shares
There were no new issues of shares or debentures during the financial year.
Treasury shares
During the financial year, the Company repurchased 1,453,800 of its issued ordinary shares from the open market at an
average price of RM0.81 per share. The total consideration paid for the repurchase including transaction costs was
RM1,181,433. The repurchase transactions were financed through internally generated funds. The shares repurchased are
being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.
As at 31 December 2011, the Company held 7,035,600 treasury shares. Such treasury shares are held at carrying amount
of RM16,750,512. Further details are disclosed in note 25(b) to the financial statements.
Executives’ Share Option Scheme
The Company’s Executives’ Share Option Scheme (“ESOS”) was approved by the shareholders at an Extraordinary General
Meeting held on 17 December 2009. The ESOS was effected on 1 March 2010 and is to be in force for a period of five (5)
years from the effective date of implementation. It may be extended or renewed for a further period of five (5) years, at the
sole and absolute discretion of the Board of Directors upon the recommendation of the Option Committee and pursuant
to the by-law, and shall not in aggregate exceed a duration of ten (10) years from the effective date of implementation.
The salient features of the ESOS are as follows:
(i)
The Board of Directors has appointed the Option Committee to administer the ESOS.
(ii) The Company may from time to time grant option to eligible employees of the Group to subscribe for new ordinary
shares of RM1.00 each.
(iii) Subject to the determination and discretion of the Option Committee, ESOS may be granted to any Director named in
the Register of Directors of the Company or any employee who is a confirmed full-time employee of the Company and/
or its eligible subsidiaries and if that person is servicing under a fixed term of contract of employment, the contract
(including any period of employment which that person has already served) should be for a duration of at least one (1)
year of continuous service.
THE FINANCIALS
81
DIRECTORS’ REPORT
SHARE CAPITAL, DEBENTURES AND SHARE OPTIONS
(cont’d)
Executives’ Share Option Scheme (cont’d)
(iv) The total number of shares to be issued under the ESOS shall not exceed five percent (5%) of the issued and paid-up
share capital of the Company at any point of time throughout the duration of the ESOS and of which not more than
fifty percent (50%) of the new Company shares available under the ESOS shall be allocated, in aggregate, to Directors
and senior management. In addition, not more than ten percent (10%) of the new Company shares available under
the ESOS shall be allocated to any individual Director or employee who, either singly or collectively through person
connected with the eligible employee, holds twenty percent (20%) or more in the issued and paid-up share capital of
the Company.
(v) The option price for each share shall be the higher of the weighted average market price of the Company’s shares,
as quoted on Bursa Malaysia Securities Berhad, for the five (5) market days immediately preceding the date of offer
of the option with a discount of not more than ten percent (10%), or the par value of the shares of the Company of
RM1.00 each.
(vi) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects
with the existing ordinary shares of the Company except that the so allotted and issued shares will not be entitled to
any dividends, rights, allotments or other distribution, where the entitlement date precedes the date of allotment of
the new shares and will be subject to the provisions of the Articles of Association of the Company relating to transfer,
transmission or otherwise of the Company’s shares.
No options were granted during the financial year.
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being any
arrangements with the objects of enabling the Directors of the Company to acquire benefits by means of the acquisition of
shares in, or debentures of, the Company or any other body corporate.
Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any
benefit 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 for the following:
(a) Directors’ fees and other emoluments as disclosed in note 9 to the financial statements;
(b) deemed benefits arising from related party transactions as disclosed in note 36 to the financial statements; and
(c) deemed benefits accruing to respective Directors who are deemed interested in the shares of the Company and of its
related corporations from the transactions among related corporations in the ordinary course of business.
82
DIRECTORS’ REPORT
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings, particulars of interests of Directors who held office at the end of the
financial year in the shares of the Company and of its related corporations are as follows:
Shares in the Company Loo Hooi Keat
- Direct - Indirect Number of ordinary shares of RM1 each
Balance
Balance
as at
as at
1.1.2011 Additions Disposals 31.12.2011
15,285,680 108,856,434 12,112,675
969,100
–
–
27,398,355
109,825,534
By virtue of Loo Hooi Keat’s direct and indirect interests in the shares of the Company, he is deemed to be interested in the
shares of all the Company’s related corporations to the extent of his interest.
Other than Loo Hooi Keat, none of the other Directors in office at the end of the financial year held any interest in the
shares in the Company and of its related corporations during the financial year.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the statements of comprehensive income and statements of financial position of the Group and of the Company
were made out, the Directors took reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance
for doubtful debts and have satisfied themselves that all known bad debts had been written off and that adequate
allowance had been made for doubtful debts; and
(ii) to 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 had been written down to an
amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(i)
which would render the amount of bad debts written off or the amount of 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 the current assets in the financial statements of the Group and of the
Company misleading; or
(iii) which have arisen which would render adherence to the existing methods of valuation of assets or liabilities of the
Group and of the Company misleading or inappropriate; or
(iv) not otherwise dealt with in this report or the financial statements which would render any amount stated in the
financial statements of the Group and of the Company misleading.
THE FINANCIALS
83
DIRECTORS’ REPORT
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
(cont’d)
At the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year
which secures the liability of any other person; or
(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial
year other than the contingent liabilities as disclosed in note 35 to the financial statements.
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.
In the opinion of the Directors:
(i) the results of the Group’s and of the Company’s operations during the financial year were not substantially affected
by any item, transaction or event of a material and unusual nature other than those disclosed in the financial
statements; and
(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature which is likely to affect substantially the results of operations of the
Group or of the Company for the financial year in which this report is made.
SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
Subsequent to the end of the reporting period, the Group disposed of three (3) indirect subsidiaries for an aggregate sales
consideration of EUR22,229,000 (RM91,482,000). Details of the said disposals are disclosed in note 39 to the financial
statements.
AUDITORS
The auditors, BDO, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution dated 25 April 2012.
TAN SRI MUSA BIN MOHAMAD Director Selangor Darul Ehsan
LOO HOOI KEAT
Director
84
STATEMENT BY DIRECTORS
pursuant to section 169(15) of the companies act, 1965
We, TAN SRI MUSA BIN MOHAMAD and LOO HOOI KEAT, being two of the Directors of PELIKAN INTERNATIONAL
CORPORATION BERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages
87 to 162 are drawn up in accordance with applicable approved 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 31 December 2011 and of the financial performance and cash flows of the Group and of the Company for the
financial year then ended.
Signed on behalf of the Board of the Directors in accordance with their resolution dated 25 April 2012.
TAN SRI MUSA BIN MOHAMAD Director LOO HOOI KEAT
Director
STATUTORY DECLARATION
pursuant to section 169(16) of the companies act, 1965
I, LOO HOOI KEAT, being the Director primarily responsible for the financial management of PELIKAN INTERNATIONAL
CORPORATION BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 87 to 162 are, to
the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be
true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
LOO HOOI KEAT
Subscribed and solemnly declared by the abovenamed LOO HOOI KEAT at Selangor Darul Ehsan on 25 April 2012.
Before me
PANJAWARANAM A/P SHANMUGAM PILLAY
Commissioner for Oaths
THE FINANCIALS
85
INDEPENDENT AUDITORS’ REPORT
to the members of Pelikan International Corporation Berhad
Report on the Financial Statements
We have audited the financial statements of Pelikan International Corporation Berhad, which comprise the statements
of financial position as at 31 December 2011 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 financial
year then ended, and a summary of significant accounting policies and other explanatory information, as set out on
pages 87 to 161.
The financial statements of the Group and of the Company as at 31 December 2010 were audited by another firm of
chartered accountants, whose report dated 27 April 2011, expressed an unqualified opinion on those statements.
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 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 judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the entity’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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation
of the 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 approved 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 31 December 2011 and of the financial performance and
cash flows of the Group and of the Company for the financial year then ended.
86
INDEPENDENT AUDITORS’ REPORT to the members of Pelikan International Corporation Berhad
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of
the Act.
(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not
acted as auditors, which are indicated in note 17 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries 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 subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in note 40 to the financial statements 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.
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.
BDO
AF: 0206
Chartered Accountants
Kuala Lumpur
25 April 2012
Ooi Thiam Poh
2495/01/14 (J)
Chartered Accountant
THE FINANCIALS
87
STATEMENTS OF COMPREHENSIVE INCOME
for the financial year ended 31 December 2011
Group Company
(Restated)
(Restated)
2011 2010 2011 2010
Note
RM’000 RM’000 RM’000 RM’000
Revenue 6
Other operating income Materials used Staff costs 7
Depreciation of property, plant and equipment
Amortisation of intangible assets Other operating expenses
1,923,368 25,600 (959,254) (558,408) (55,634)
(12,127)
(410,667)
1,786,848 185,135
(852,267) (505,667)
(51,622) (8,837) (391,774) 55,490
25,241
(53,159) (5,058) (392) –
(17,915) 59,469
42,648
(56,899)
(6,033)
(349)
–
(4,172)
(Loss)/Profit from operations 10 Share of profits of associates Finance costs 11 (47,122) 8,974
(25,144) 161,816
8,504
(22,334) 4,207
–
(9,097) 34,664
–
(6,970)
(Loss)/Profit before taxation Taxation 12 (63,292) (38,010) 147,986 (17,195)
(4,890) –
27,694
28
(101,302) 130,791
(4,890) 27,722
(Loss)/Profit for the financial year Other comprehensive income/(loss):
Net gain on available-for-sale financial assets
- gain on fair value changes
- transfer to profit or loss upon disposal
Foreign currency translations –
–
1,286 2,822
(1,943)
(47,229) –
–
–
Other comprehensive income/(loss), net of tax 1,286 (46,350)
–
2,765
(1,781)
–
984
Total comprehensive (loss)/income (100,016) 84,441
(4,890) 28,706
(Loss)/Profit attributable to:
Owners of the parent Non-controlling interests (88,423) (12,879)
127,808 2,983 (4,890) –
27,722
–
(101,302)
130,791 (4,890) 27,722
Total comprehensive (loss)/income attributable to:
Owners of the parent Non-controlling interests (86,063) (13,953) 81,084 3,357
(4,890) –
28,706
–
(100,016) 84,441
(4,890) 28,706
(17.44) 24.90
Basic (loss)/earnings per share attributable to
equity holders of the Company (sen) 13 The accompanying notes form an integral part of the financial statements.
–
–
88
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2011
<–––––––––––– Group –––––––––––––>
<––––––––––– Company –––––––––––>
(Restated) (Restated) (Restated) (Restated)
2011 2010 1.1.2010 2011 2010 1.1.2010
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
ASSETS
Non-current assets
Property, plant and equipment Intangible assets Investments in subsidiaries
Investments in associates Available-for-sale financial assets Pension Trust Fund Deferred tax assets 559,637 149,754 –
–
2,985
152,048 35,333
603,809 153,422 –
36,854 3,006 160,307 39,329 359,502 167,570 –
34,557 15,267 167,506 31,538
1,036 –
489,445 –
–
152,048
–
854
–
429,230 300
–
160,307 –
936
–
205,143
300
10,765
167,506
–
899,757 996,727 775,940
642,529
590,691
384,650
Inventories 22 Receivables, deposits and
Prepayments 23 Tax recoverable Pension Trust Fund 20 Cash and cash equivalents 24 370,272 388,200
306,934
33 74 18
406,430 1,780
19,448 100,808 395,019 5,234 21,335 109,263 317,192 5,287 25,124 62,709
242,426 293 19,448 27,493
234,017 1,672 21,335
50,377 141,625
1,365
25,124
4,032
898,738 919,051 717,246
289,693 307,475
172,164
1,798,495 1,915,778 1,493,186 932,222 898,166
556,814
15
16 17
18
19 20
21 Current assets
TOTAL ASSETS EQUITY AND LIABILITIES
Equity attributable to owners
of the parent
Share capital 25
Share premium Currency translation Available for sale reserve
Retained profits
26 Treasury shares, at cost 25(b)
512,796 74,964 (61,063)
–
204,188 (16,751) 512,796
74,964 (63,423)
–
302,751
(15,569)
343,169
59,869
(15,807)
(892) 185,087 (13,678)
512,796
74,964 –
–
25,077 (16,751) 512,796 343,169
74,964 59,869
–
–
–
(984)
40,107 22,529
(15,569) (13,678)
Non-controlling interests
714,134 22,378 811,519 36,580 557,748
23,094 596,086 –
612,298 –
410,905
–
Total equity
736,512
848,099
580,842
596,086 612,298 410,905
THE FINANCIALS
89
STATEMENTS OF FINANCIAL POSITION as at 31 December 2011 (cont’d)
<–––––––––––– Group –––––––––––––>
<––––––––––– Company –––––––––––>
(Restated) (Restated) (Restated) (Restated)
2011 2010 1.1.2010 2011 2010 1.1.2010
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Non-current liabilities
Payables Post employment benefits
obligations
27 Borrowings 30 Deferred tax liabilities 21 –
–
11,527
–
–
–
185,095
107,827 38,006 206,755 193,134 20,859
260,352 152,921 7,705 –
92,525 –
–
126,957 –
–
31,651
–
330,928 420,748 432,505 92,525 126,957
31,651
339,559 389,545
223,892 25,647 26,052 22,543
20,795 3,280 189 350,920 16,312
10,802
–
346
231,539 14,699 13,468 –
422 235,210
6,847 –
–
–
217,964 –
–
–
–
132,859 –
–
–
–
91,715
–
731,055 646,931
479,839
243,611
158,911 114,258
Total liabilities
1,061,983
1,067,679 912,344 336,136 285,868
145,909
TOTAL EQUITY AND
LIABILITIES 1,798,495 1,915,778 1,493,186 932,222
898,166 556,814
Current liabilities
Payables 31 Post employment benefits
obligations
27 Derivative liabilities 29 Provision 28 Borrowings 30 Current tax liabilities The accompanying notes form an integral part of the financial statements.
90
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
<––––––– Non-distributable –––––––––><– Distributable –>
Available- Attributable Non
Share Treasury Share Currency for-sale Retained
to owners controlling capital shares premium translation reserves
profits of the parent interests Group Note RM’000 RM’000
RM’000
RM’000 RM’000 RM’000
RM’000 RM’000 Total
equity
RM’000
At 1 January 2010 603,136
343,169 Prior year adjustment 34 Effects of adopting FRS 139 (13,678) 59,869 (27,902)
–
218,583 580,041
23,095
–
12,095
–
(892)
(21,270) (12,226) (21,270) (1,023)
– (21,270)
(1) (1,024)
23,094 580,842
–
–
–
–
–
–
343,169 (13,678)
59,869 (15,807) (892) 185,087 557,748 –
–
–
(47,616) 892 127,808
81,084 3,357 84,441
Acquisition of subsidiaries
–
Acquisition of shares in an
existing subsidiary
–
Rights issue, net of share issue
costs 25(a) 169,627 Treasury shares, at cost 25(b) –
Dividends 14 –
–
–
–
–
–
–
27,328 27,328
–
–
–
–
–
–
(16,427) (16,427)
–
(1,891) –
15,095
–
–
–
–
–
–
–
–
–
–
(10,144) 184,722
(1,891) (10,144) Total transactions with owners 169,627 (1,891) 15,095
–
–
(10,144) 172,687
10,129 182,816
At 31 December 2010 512,796 (15,569) 74,964
(63,423)
–
302,751 811,519 36,580 848,099
As restated
Total comprehensive (loss)/
income Transactions with owners:
– 184,722
–
(1,891)
(772) (10,916)
<––Non-distributable ––><– Distributable –>
Attributable Non
Share Treasury Share Currency Retained
to owners controlling capital shares premium translation profits of the parent interests Group Note RM’000 RM’000
RM’000 RM’000 RM’000
RM’000 RM’000 At 1 January 2011 Prior year adjustment 34 512,796 –
(15,569) –
74,964
–
(63,423) 335,009 –
843,777 Total
equity
RM’000
36,580 880,357
(32,258) (32,258)
–
(32,258)
(63,423) 302,751
2,360 (88,423)
811,519
(86,063)
36,580 848,099
(13,953) (100,016)
512,796 –
(15,569) –
74,964 –
–
–
(1,182) –
–
–
–
–
–
(10,140) (1,182) (10,140)
–
(1,182)
(249) (10,389)
Total transactions with owners –
(1,182) –
–
(10,140) (11,322)
(249)
(11,571)
At 31 December 2011 512,796
(16,751) 74,964 (61,063) 204,188 714,134 22,378
736,512
As restated Total comprehensive income/(loss) Transactions with owners:
Treasury shares, at cost Dividends 25(b)
14 The accompanying notes form an integral part of the financial statements.
THE FINANCIALS
91
STATEMENT OF CHANGES IN EQUITY
<–– Non-distributable –––><– Distributable –>
Available
Share Treasury Share
for-sale Retained Total
capital
shares premium reserves profits
equity
Company Note
RM’000 RM’000
RM’000 RM’000 RM’000 RM’000
At 1 January 2010 Prior year adjustment 34
Effects of adopting FRS 139 343,169
–
–
(13,678) –
–
59,869
–
–
–
–
(984)
As restated 343,169
(13,678) 59,869 (984) 22,529 410,905
Total comprehensive income
–
–
984 27,722 28,706
–
55,894 445,254
(21,270) (21,270)
(12,095) (13,079)
Transactions with owners:
Rights issue, net of share issue costs Treasury shares, at cost Dividends 25(a) 25(b) 14
169,627
–
–
–
(1,891) –
15,095 –
–
–
–
–
– 184,722
–
(1,891)
(10,144) (10,144)
Total transactions with owners 169,627
(1,891) 15,095 –
(10,144) 172,687
At 31 December 2010 512,796 (15,569) 74,964 –
40,107 612,298
<– Nondistributable –> <– Distributable –>
Share Retained premium profits
RM’000
RM’000 Total
equity
RM’000
Company Note Share capital RM’000 Treasury shares RM’000 At 1 January 2011 Prior year adjustment 34
512,796 –
(15,569) –
74,964 –
72,365 (32,258) 644,556
(32,258)
As restated 512,796 (15,569) 74,964 40,107
612,298
Total comprehensive loss
–
–
–
(4,890) (4,890)
–
–
(1,182)
–
–
–
–
(10,140) (1,182)
(10,140)
Total transactions with owners –
(1,182) –
(10,140) (11,322)
At 31 December 2011 512,796
(16,751) 74,964 25,077 596,086
Transactions with owners:
Treasury shares, at cost Dividends 25(b) 14 The accompanying notes form an integral part of the financial statements.
92
CONSOLIDATED STATEMENT OF CASH FLOWS
Note
Group
2011 RM’000 2010
RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers Cash paid to suppliers and employees 1,982,306 (1,954,169) 1,821,092
(1,764,243)
Interest received
Interest paid Taxation paid 28,137 1,500
(18,014)
(10,831)
56,849
1,976
(15,845)
(15,748)
Net cash from operating activities 792 27,232
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflow on acquisition of subsidiaries 17(c) Purchase of property, plant and equipment 15(b)
Purchase of intangible assets 16
Purchase of investments
Proceeds from disposal of property, plant and equipment Proceeds from disposal of intangible assets
Proceeds from disposal of other investments
Proceeds from disposal of investment in an associate Development expenses paid 16 Interest paid
Dividends received –
(25,802) (725) –
15,217 –
–
9,549 (7,290) (9,539) 5,093 (186,626)
(24,374)
(571)
(2,286)
3,894
38
16,944
–
(6,747)
(7,324)
7,525
Net cash used in investing activities (13,497) (199,527)
Repayment of hire purchase and lease creditors Bank borrowings, net Interest paid
Deposits uplifted/(pledged), net Repurchase of shares Rights issue, net of share issue costs
Dividends paid (919) 30,631
–
23,774 (1,182) –
(10,140) (1,185)
61,696
(99)
(31,723)
(1,891)
184,722
(10,144)
Net cash from financing activities 42,164 201,376
Net increase in cash and cash equivalents during the financial year 29,459 29,081
Currency translation (6,471) (15,954)
Cash and cash equivalents at beginning of the financial year 62,911 49,784
Cash and cash equivalents at end of the financial year 85,899
62,911
CASH FLOWS FROM FINANCING ACTIVITIES
THE FINANCIALS
93
STATEMENT OF CASH FLOWS
Note
Company
2011 2010
RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers Cash paid to suppliers and employees 52,848 (56,519) 82,964
(63,575)
Interest received Interest paid
Taxation refunded/(paid) (3,671) 687 (6,747) 1,379
19,389
1,459
(5,662)
(69)
Net cash (used in)/from operating activities (8,352) 15,117
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiaries
17(c) Additional investment in an existing subsidiary Purchase of property, plant and equipment 15(b) Purchase of investments
Proceeds from disposal of property, plant and equipment Proceeds from disposal of other investments
Advances to subsidiaries, net Dividends received –
–
(920)
–
175
–
(43,258)
5,080 (210,050)
(19,354)
(267)
(2,286)
–
23,985
(79,534)
9,597
Net cash used in investing activities (38,923) (277,909)
Repayment of hire purchase and lease creditors
Bank borrowings, net Deposits uplifted/(pledged), net Repurchase of shares Rights issue, net of share issue costs
Dividends paid (50)
35,763
23,774 (1,182) –
(10,140) (49)
136,499
(32,450)
(1,891)
184,722
(10,144)
Net cash from financing activities 48,165 276,687
Net increase in cash and cash equivalents during the financial year 890 13,895
Cash and cash equivalents at beginning of the financial year 17,512 3,617
Cash and cash equivalents at end of the financial year 18,402 17,512
CASH FLOWS FROM FINANCING ACTIVITIES
94
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND PRINCIPAL ACTIVITIES
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main
Market of Bursa Malaysia Securities Berhad.
The principal activities of the Company and its subsidiaries include manufacturing and distribution of writing
instruments, art, painting and hobby products, school and office stationery, printer consumables, papeterie products,
provision of computer software and hardware products, provision of logistics services and investment holding. The
Group distributes its products through wholesalers, dealers, retailers, modern trade channels including hypermarkets,
schools and specialised stores for luxury items. There have been no significant changes in the nature of the Group’s
activities during the financial year.
The address of the registered office and principal place of business of the Company is as follows:
No. 9, Jalan Pemaju U1/15, Seksyen U1
40150 Shah Alam
Malaysia
The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on
25 April 2012.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements of the Group and of the Company have been prepared under the historical cost convention
unless otherwise indicated in this summary of significant accounting policies and comply with the provisions of
the Companies Act, 1965 and the applicable approved Financial Reporting Standards (“FRSs”) in Malaysia.
The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Company’s functional currency.
All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.
2.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries.
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as
to obtain benefits from their activities. In assessing control, the existence and effect of potential voting rights
that are currently exercisable or convertible are taken into consideration.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances,
transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated
in full.
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.
THE FINANCIALS
NOTES TO THE FINANCIAL STATEMENTS for the financial year ended 31 December 2011
(cont’d)
2.2 Basis of consolidation (cont’d)
Acquisitions of subsidiaries are accounted for using the acquisition method of accounting. The identifiable
assets acquired and the liabilities assumed are measured at their fair values at the acquisition date. The difference
between these fair values and the fair value of the consideration (including the fair value of any pre-existing
investment in the acquiree) is goodwill or a negative goodwill. The accounting policy for goodwill is set out in
note 2.4(a) to the financial statements. Discount on acquisition which represents negative goodwill is recognised
immediately as income in the statement of comprehensive income.
Acquisition costs incurred are expensed and included in administrative expenses.
In business combinations achieved in stages, previously held equity interest in the acquiree is remeasured to
fair value at the acquisition date and any corresponding gain or loss is recognised in the statement of
comprehensive income.
For each business combination, the Group elects whether to measure the non-controlling interest in the acquiree
at the acquisition date either at fair value or at the proportionate share of the acquiree’s identifiable net assets.
Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to the
owners of the Company, and are presented separately in the consolidated statement of comprehensive income
and within equity in the consolidated statement of financial position, separately from shareholders’ equity. Losses
within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.
Changes in the Group’s equity 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 respective interests 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 shareholders’ equity.
If the Group loses control over a subsidiary, at the date the Group loses control, it:
•
•
•
•
•
•
•
Derecognises the assets (including goodwill) and liabilities of the subsidiary at their respective carrying amounts.
Derecognises the carrying amount of any non-controlling interest.
Derecognises the cumulative translation differences recorded in equity.
Recognises the fair value of the consideration or distribution received.
Recognises the fair value of any investment retained.
Recognises any surplus or deficit in the statement of comprehensive income.
Reclassifies the parent’s share of components previously recognised in other comprehensive income to profit
or loss or retained earnings, as appropriate.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any
impairment charges. Dividends received from subsidiaries are recorded as a component of other operating income
in the Company’s separate income statement.
95
96
(cont’d)
2.3 Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that
is directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the subsequent costs will flow to the Group and the cost of the item can be measured reliably.
The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the
statement of comprehensive income during the financial year in which they are incurred.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the asset and which has a different useful life, is depreciated separately.
After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and
any accumulated impairment losses.
Freehold land is not depreciated as it has an infinite life. Construction/capital work-in-progress is not
depreciated until such time when the asset is ready for their intended use. Depreciation of other property, plant
and equipment is provided for on a straight-line basis to write off the cost of each asset over their estimated
useful life, as follows:
Buildings Machinery, technical equipment and mould Office equipment, furniture and fittings Motor vehicles At the end of each reporting period, the Group and Company assesses whether there is any indication of
impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset
is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. Impairment
assessment on property, plant and equipment is carried out based on the Group and the Company’s policies as
disclosed in note 2.10 to the financial statements.
The residual values, useful lives and depreciation method 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.
If expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate.
The carrying amount of an item of property, plant and equipment is derecognised on 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 carrying amount is included in the statement of comprehensive income.
7 - 50 years
1 - 30 years
1 - 15 years
1 - 10 years
THE FINANCIALS
(cont’d)
2.4 Intangible assets
(a) Goodwill
Goodwill includes purchased goodwill and the excess of the fair value of purchase consideration of
subsidiaries and associates over the Group’s share of the net fair value of their identifiable assets, liabilities
and contingent liabilities at the date of acquisition. Goodwill is measured at cost less any accumulated
impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
Negative goodwill represents the excess of the Group’s share of the fair value of identifiable net assets
acquired over the cost of acquisition. Negative goodwill is recognised in the statement of comprehensive
income immediately.
(b) Other intangible assets
Other intangible assets are recognised only when the identifiability, control and future economic benefit
probability criteria are met.
The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquiree,
irrespective of whether the asset had been recognised by the acquiree before the business combination.
In-process research and development projects acquired in such combinations are recognised as an asset
even if subsequent expenditure is written off because the criteria specified in the policy for research and
development is not met.
Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business
combination is their fair values as at the date of acquisition.
After initial recognition, intangible assets are carried at cost less accumulated amortisation and any
accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or
indefinite. Intangible assets with finite lives are amortised on a straight line basis over their estimated
economic useful lives and are assessed for any indication that the asset may be impaired. If any such indication
exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial
year end. The amortisation expense on intangible assets with finite lives is recognised in the statement of
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors; there
is no foreseeable limit to the period over which the asset is expected to generate net cash inflows to the
Group. Intangible assets with indefinite useful lives are tested for impairment annually and wherever there
is an indication that the carrying amount may be impaired. Such intangible assets are not amortised. Their
useful lives are reviewed at each period end to determine whether events and circumstances continue
to support the indefinite useful life assessment for the asset. If they do not, the change in the useful life
assessment from indefinite to finite is accounted for as a change in accounting estimate in accordance with
FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.
97
98
(cont’d)
2.4 Intangible assets (cont’d)
(b) Other intangible assets (cont’d)
Expenditure on an intangible item that is initially recognised as an expense is not recognised as part of the
cost of an intangible asset at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from its
use. The gain or loss arising from the derecognition is determined as the difference between the net disposal
proceeds, if any, and the carrying amount of the asset and is recognised in the statement of comprehensive
income when the asset is derecognised.
Research and development
Research expenditure is recognised as an expense when incurred. Expenditure incurred on projects to
develop new products is capitalised and deferred only when the Group can demonstrate the technical
feasibility of completing the intangible asset so that it will be available for use or sale, its intention to
complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the
availability of resources to complete the project and the ability to measure reliably the expenditure during
the development. The amount initially recognised is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition criteria as listed above. Product development
expenditures which do not meet these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost less any impairment losses
and are amortised using the straight-line basis over the commercial lives of the underlying products not
exceeding 5 years. Impairment is assessed whenever there is an indication. The amortisation period and
method are also reviewed at least once at the end of each reporting period.
Trademark
Trademark relates mainly to the “Geha” brand (in printer consumables, office and presentation equipment)
and was acquired through business combinations. The management believes there is no foreseeable limit
to the period over which the brands are expected to generate net cash flows to the Group. Trademarks
are measured at cost and reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
Computer software
Computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use
specific software. These costs are amortised over their estimated useful lives (3 - 5 years).
Costs associated with developing or maintaining computer software programmes are recognised as an
expense as incurred. Costs that are directly associated with the production of identifiable and unique software
products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond
one year, are recognised as intangible assets. Direct costs include the software development, employee costs
and an appropriate portion of relevant overheads.
Computer software development costs recognised as assets are amortised over their estimated useful lives
(not exceeding 3 years).
THE FINANCIALS
(cont’d)
2.5 Associates
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an
interest in a joint venture. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.
In the Company’s separate financial statements, an investment in associate is stated at cost less accumulated
impairment losses, if any.
An investment in associate is accounted for in the consolidated financial statements using the equity method
of accounting. Under the equity method, the investment in associate in the consolidated statement of financial
position is initially recognised at cost and adjusted thereafter for the post acquisition change in the Group’s
share of net assets of the associate. The Group’s share of net profit or loss of the associate is recognised in
the consolidated statement of comprehensive income. When there has been a change recognised directly in the
equity of the associate, the Group recognises its share of such changes. In applying the equity method, unrealised
gains or losses on transactions between the Group and the associate are eliminated to the extent of the Group’s
interest in the associate. After application of the equity method, the Group determines whether it is necessary
to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The
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. Equity accounting is discontinued when the carrying amount
of the investment in an associate reaches zero, unless the Group has incurred obligations or made payments on
behalf of the associate.
Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. 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 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 in the period in which
the investment is acquired.
The most recent available audited financial statements of the associates are used by the Group in applying the
equity method of accounting. Where the dates of the audited financial statements used are not coterminuous
with those of the Group, the share of the results is arrived at from the last audited financial statements available
and management financial statements to the end of the accounting period. Uniform accounting policies are
adopted for like transactions and events in similar circumstances.
On disposal of such investments, the difference between the net disposal proceeds and their carrying amounts
is included in statement of comprehensive income.
2.6 Assets acquired under finance lease and hire purchase agreements
Leases are classified as finance lease and hire purchase whenever the terms of the lease transfer substantially all
the risk and rewards to the lessee. Assets held under finance lease are initially recognised as assets of the Group
at their fair values at the inception of the lease or, if lower, at the minimum lease payments. The corresponding
liability to the lease is included in the statement of financial position as a finance lease obligation. The capital
element of the finance lease rental and hire purchase is applied to reduce the outstanding obligations and the
interest element is charged to the statement of comprehensive income so as to give a constant periodic rate of
interest on the outstanding liability at the end of each accounting period. Assets acquired under finance leases
and hire purchases are depreciated over the useful lives of equivalent owned assets.
99
100
(cont’d)
2.7 Operating leases
Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to the statement of
comprehensive income on a straight-line basis over the lease period. When an operating lease is terminated before
the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as
an expense in the period in which the termination takes place.
2.8 Inventories
Inventories are stated at lower of cost and net realisable value.
Cost is determined using the weighted average method. The cost of raw materials comprises cost of purchase.
The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and an
appropriate proportion of production overheads (based on normal operating capacity). Net realisable value is the
estimated selling price in the ordinary course of business less the costs of completion and selling expenses.
2.9 Employee benefits
(a) Short term employee benefits
The Group recognises a liability and an expense for bonuses where it is contractually obliged or where there
is a past practice that has created a constructive obligation.
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the
period in which the associated services are rendered by employees of the Group.
(b) Defined contribution plan
The Group’s contributions to defined contribution plans are charged to the statement of comprehensive
income in the period to which they relate. Once the contributions have been paid, the Group has no further
payment obligations.
(c) Defined benefit plan
The liability in respect of a defined benefit plan is the present value of the defined benefit obligation at
the end of reporting period minus the fair value of plan assets, together with adjustments for actuarial
gains and losses and past service cost. The Group determines the present value of the defined benefit
obligation and the fair value of any plan assets with sufficient regularity such that the amounts recognised
in the financial statements do not differ materially from the amounts that would be determined at the end
of reporting period.
The defined benefit obligation, calculated using the projected unit credit method, is determined by
independent actuaries, considering the estimated future cash outflows using market yields, at end of
reporting period, of government securities which have currency and terms to maturity approximating
the terms of the related liability.
Actuarial gains and losses arise from experience adjustments and changes in actuarial assumptions. The
amount of net actuarial gains and losses recognised in the statement of comprehensive income is determined
by the corridor method.
THE FINANCIALS
(cont’d)
2.9 Employee benefits (cont’d)
(d) Termination benefits
The Group recognises termination benefits, according to the relevant laws applicable in the respective
countries, when it is demonstrably committed to either terminate the employment of current employees
according to a detailed formal plan without possibility of withdrawal or to provide termination benefits as
a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months
after reporting period are discounted to present value.
2.10 Impairment of non-financial assets
The carrying amounts of assets, other than inventories, deferred tax assets and financial assets (excluding
investments in subsidiaries and associates), are reviewed at the end of each reporting period to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is
estimated to determine the amount of impairment loss.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or
more frequently if events or changes in circumstances indicate that the goodwill or intangible assets might
be impaired.
The recoverable amount of an asset is estimated individually. Where it is not possible to estimate the recoverable
amount of the individual asset, the impairment test is carried out on the cash generating unit (“CGU”) to which
the asset belongs. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of
the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of
CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or group of units
and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
An impairment loss is recognised in the statement of comprehensive income in the period in which it arises.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other
than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than
goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying
amount (net of amortisation or depreciation) that would have been determined had no impairment loss been
recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised
in the statement of comprehensive income.
101
102
(cont’d)
2.11 Income tax
Income tax in the statement of comprehensive income for the year comprises current and deferred tax.
Current tax expense is determined according to the tax laws of each jurisdiction in which the Group operates
and includes all taxes based upon the taxable profits including withholding taxes payable by foreign subsidiaries
and associates on distributions of retained profits to companies in the Group.
Deferred tax is recognised in full using the liability method on temporary differences at the end of reporting
period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
However, deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable
profit or loss. See significant accounting estimates and judgements in note 4.2(c) to the financial statements on
deferred tax assets.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred income tax relates to the same tax authority.
Deferred tax will be recognised as income or expense and included in statement of comprehensive income for the
period unless the tax relates to items that are credited or charged, in the same or a different period, directly to
equity in which case the deferred tax will be charged or credited directly to equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively
enacted at the end of reporting period.
2.12 Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances, deposits and other short term, highly liquid
investments that are readily convertible to cash and which have an insignificant risk of changes in value. These also
include bank overdrafts that form an integral part of the Group and Company’s cash management. For the purpose
of statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
2.13 Borrowing costs
Borrowing cost that are directly attributable to the acquisition, construction or production of a qualified
asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to prepare
the asset for its intended use or sale are complete, after which such expense is charged to the statement of
comprehensive income. A qualifying asset is an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in
which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing
during the period less any investment income on the temporary investment of the borrowing.
All other borrowing costs are recognised in the statement of comprehensive income in the period in which they
are incurred.
THE FINANCIALS
(cont’d)
2.14 Revenue recognition
(a) Revenue
Revenue comprises the invoiced value for the sale of goods and services net of sales taxes, rebates and
discounts, and after eliminating sales within the Group in the consolidated statement of comprehensive
income. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the
goods are transferred to the buyer. Revenue in respect of the rendering of services is recognised when the
stage of completion at the end of the reporting period and the cost incurred can be reliably measured.
(b) Dividend income
Dividend income from investments is recognised when the shareholders’ right to receive payment have
been established.
(c) Interest income
Interest income is on accrual basis unless collectibility is in doubt.
(d) Royalties
Revenue arising from royalties is recognised on an accrual basis in accordance with the substance of the
relevant agreements entered with customers.
2.15 Share capital
(a) Classification
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares
issued, if any, are accounted for as share premium.
The Company reacquires its own equity instruments where the consideration paid, including any attributable
transaction costs, is deducted from equity as treasury shares until they are cancelled. No gain or loss is
recognised in the statement of comprehensive income on the purchase, sale, issue or cancellation of the
Company’s own equity instruments. Where such shares are issued by resale, the difference between the
sales consideration and the carrying amount is shown as a movement in equity.
(b) Share issue cost
Cost directly attributable to the issuance of new shares are deducted from share premium reserve.
(c) Dividends to shareholders of the Company
Interim dividends to shareholders are recognised in equity in the period in which they are declared. Final
dividends are recognised upon the approval of shareholders in a general meeting.
103
104
(cont’d)
2.16 Provision
A provision is recognised when there is a present legal or constructive obligation as a result of past events, and
when it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate
of the amount can be made. Where the Group expects a provision to be reimbursed (for example, under an
insurance contract), the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain.
Provision is reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed.
2.17 Warranty
The Group recognises the estimated liability to repair or replace products still under warranty at the end of
reporting period. This provision is calculated based on past history of the level of repairs and replacements.
2.18 Foreign currencies
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities 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 the Company’s
functional and presentation currency.
(b)
Foreign currency transactions and balances
Transactions in foreign currencies in Group companies are converted into RM at exchange rates at the
dates of transaction. Monetary assets and liabilities in foreign currencies at the end of reporting period are
translated into RM at exchange rates at that date. All exchange differences arising from the settlement of
foreign currency transactions and from the translation of foreign currency monetary assets and liabilities
are included in the statement of comprehensive income in the period they arise. Non-monetary items
initially denominated in foreign currencies, which are carried at historical cost are translated using the historical
rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using
the exchange rate that existed when the values were determined for presentation currency purposes.
(c) Foreign operations
The results and financial position of all the Group’s entities that have a functional currency different from
the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:
– assets and liabilities for each statement of financial position presented are translated at the closing
rate prevailing at the end of reporting period;
– income and expenses for each statement of comprehensive income are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
– foreign currencies differences are recognised in translation reserve. On disposal, accumulated translation
differences are recognised in the consolidated statement of comprehensive income as part of the gain or
loss on sale.
THE FINANCIALS
105
(cont’d)
2.18 Foreign currencies (cont’d)
(c) Foreign operations (cont’d)
Exchange differences arising on a monetary item that forms part of the net investment of the Company
in a foreign operation shall be recognised in the statement of comprehensive income in the separate
financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial
statements, such exchange differences shall be recognised initially as a separate component of equity and
recognised in the statement of comprehensive income upon disposal of the net investment.
Goodwill and fair value adjustments arising from the acquisitions of foreign operations on or after
1 January 2006 are treated as assets or liabilities of the foreign operations and are recorded in the functional
currency of the foreign operations and translated at the closing rate at the end of each financial year. Goodwill
and fair value adjustments which arose on the acquisition of foreign subsidiaries before 1 January 2006
are deemed to be assets and liabilities of the parent company and are recorded in RM at the rates prevailing
at the date of acquisition.
The principal closing rates used in translation of foreign currency amounts are as follows:
Foreign currency
EUR (EU Euro) CHF (Swiss Franc) PLN (Polish Zloty) USD (US Dollar) MXN (Mexican Peso) JPY (Japanese Yen) SGD (Singapore Dollar) TWD (New Taiwan Dollar) CNY (Chinese Yuan Renminbi)
AUD (Australian Dollar) COP (Colombian Peso in million) GBP (British Pound) CZK (Czech Koruna) HUF (Hungarian Forint) SEK (Swedish Krona) TRY (Turkish Lira) ARS (Argentine Peso) HKD (Hong Kong Dollar) THB (Thai Baht) INR (Indian Rupee)
IDR (Indonesian Rupiah in million) RON (Romanian New Lei) BGN (Bulgarian Lev) AED (Arab Emirates Dirham) NOK (Norwegian Kroner) 2011 RM 2010
RM
4.1154 3.3822 0.9286 3.1779 0.2274 0.0411 2.4471 0.1055 0.5003 3.2340
1.6470 4.9117 0.1603
0.0132 0.4612 1.6710 0.7388 0.4091 0.1007 0.0585
0.3543 0.9540 0.5113 0.8653 0.5302 4.0887
3.2801
1.0327
3.0851
0.2495
0.0378
2.3905
0.1062
0.4680
3.1354
1.5820
4.7729
0.1624
0.0147
0.4556
1.9869
0.7768
0.3964
0.1025
0.0681
0.3470
1.0485
0.4779
0.8401
0.5232
106
(cont’d)
2.19 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or
equity instrument of another enterprise.
A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive
cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or
financial liabilities with another enterprise under conditions that are potentially favourable to the Group.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to
another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another
enterprise under conditions that are potentially unfavourable to the Group.
Financial instruments are recognised on the statements of financial position when the Group has become a party
to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at
fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs
that are directly attributable to the acquisition or issuance of the financial instrument.
An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the
economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics
and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets
the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss.
(a) Financial assets
A financial asset is classified into the following four categories after initial recognition for the purpose of
subsequent measurement:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss comprise financial assets that are held for trading
(i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both,
freestanding and embedded) and financial assets that were specifically designated into this classification
upon initial recognition.
Subsequent to initial recognition, financial assets classified as fair value through profit or loss are measured
at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as fair
value through profit or loss are recognised in the statement of comprehensive income. Net gains or losses
on financial assets classified as fair value through profit or loss exclude foreign exchange gains and losses,
interest and dividend income. Such income is recognised separately in the statement of comprehensive
income as components of other income or other operating losses.
However, derivatives that are linked to and must be settled by delivery of unquoted equity instruments that
do not have a quoted market price in an active market are recognised at cost.
THE FINANCIALS
(cont’d)
2.19 Financial instruments (cont’d)
(a) Financial assets (cont’d)
Held-to-maturity investments
Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or
determinable payments and fixed maturity that the Group has the positive intention and ability to hold
to maturity.
Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised
cost using the effective interest method. Gains or losses on financial assets classified as held-to-maturity
are recognised in the statement of comprehensive income when the financial assets are derecognised or
impaired, and through the amortisation process.
Loans and receivables
Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised
cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables
are recognised in the statement of comprehensive income when the financial assets are derecognised or
impaired, and through the amortisation process.
Available-for-sale financial assets
Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated
as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial
assets at fair value through profit or loss.
Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value.
Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale
are recognised directly in other comprehensive income, except for impairment losses and foreign exchange
gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses
previously recognised in other comprehensive income are recognised in the statement of comprehensive
income. However, interest calculated using the effective interest method is recognised in the statement
of comprehensive income whilst dividends on available-for-sale equity instruments are recognised in the
statement of comprehensive income when the Group’s right to receive payment is established.
A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has
expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and
the sum of consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require
delivery of the asset within the time frame established generally by regulation or marketplace convention.
107
108
(cont’d)
2.19 Financial instruments (cont’d)
(b) Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. A financial liability is classified into the following two categories after initial
recognition for the purpose of subsequent measurement:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for
trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically
designated into this classification upon initial recognition.
Subsequent to initial recognition, financial liabilities classified as fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities
classified as fair value through profit or loss are recognised in the statement of comprehensive income.
Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign
exchange gains and losses, interest and dividend income. Such income is recognised separately in the
statement of comprehensive income as components of other income or other operating losses.
Other financial liabilities
Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that
are neither held for trading nor initially designated as at fair value through profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the
effective interest method. Gains or losses on other financial liabilities are recognised in the statement of
comprehensive income when the financial liabilities are derecognised and through the amortisation process.
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified
in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender
of debt instruments with substantially different terms are accounted for as an extinguishment of the original
financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the
terms of an existing financial liability is accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability.
The difference between the carrying amount of a financial liability extinguished or transferred to another
party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with
the original or modified terms of a debt instrument.
THE FINANCIALS
(cont’d)
2.20 Impairment of financial assets
The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of
each reporting period.
(a) Held-to-maturity investments and loans and receivables
The Group collectively considers factors such as the probability of bankruptcy or significant financial
difficulties of the debtors or investee, and default or significant delay in payments to determine whether there
is objective evidence that an impairment loss on held-to-maturity investments and loans and receivables
has occurred. Other objective evidence of impairment include historical collection rates determined on an
individual basis and observable changes in national or local economic conditions that are directly correlated
with the historical default rates of receivables.
If any such objective evidence exists, the amount of impairment loss is measured as the difference between
the financial asset’s carrying amount and the present value of estimated future cash flows discounted at
the financial asset’s original effective interest rate. The impairment loss is recognised in the statement of
The carrying amount of held-to-maturity investments is directly reduced by the impairment loss whilst
the carrying amount of loans and receivables are reduced through the use of an allowance account.
If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event
occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the
extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The
amount of impairment reversed is recognised in the statement of comprehensive income.
(b) Available-for-sale financial assets
The Group collectively considers factors such as significant or prolonged decline in fair value below cost,
significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market as
objective evidence that available-for-sale financial assets are impaired.
If any such objective evidence exists, an amount comprising the difference between the financial asset’s cost
(net of any principal payment and amortisation) and current fair value, less any impairment loss previously
recognised in the statement of comprehensive income, is transferred from equity to the statement of
Impairment losses on available-for-sale equity investments are not reversed in the statement of
comprehensive income in subsequent periods. Instead, any increase in the fair value subsequent to the
impairment loss is recognised in other comprehensive income.
Impairment losses on available-for-sale debt investments are subsequently reversed to the statement of
comprehensive income if the increase in the fair value of the investment can be objectively related to an
event occurring after the recognition of the impairment loss in the statement of comprehensive income.
109
110
(cont’d)
2.21 Contingent liabilities and contingent assets
When it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is disclosed as a contingent liability, unless the probability of an outflow of economic
benefit is remote. Possible obligation, whose existence will only be confirmed by occurrence or non occurrence
of one or more future events are also disclosed as contingent liabilities unless the probability of an outflow of
economic benefit is remote.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by
uncertain future events beyond the control of the Group. The Group does not recognise a contingent asset but
discloses its existence where inflows of economic benefits are probable, but not virtually certain.
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are
measured initially at their fair value at the acquisition date, irrespective of the extent of any non-controlling
interest.
2.22 Segment reporting
Operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Group’s other components. An operating segment’s operating results are reviewed regularly by the Group’s Chief
Executive Officer to make decisions about resources to be allocated to the segment and assess its performance,
and for which discrete financial information is available. Additional disclosures on each of these segments are
shown in note 5 to the financial statements, including the factors used to identify the reportable segments and
measurement basis of segment information.
2.23 Earnings per share
(a) Basic
Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial
year attributable to equity holders of the parent by the weighted average number of ordinary shares
outstanding during the financial year.
(b) Diluted
Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial
year attributable to equity holders of the parent by the weighted average number of ordinary shares
outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares.
THE FINANCIALS
111
3. ADOPTION OF NEW FRS s AND AMENDMENT TO FRS s
3.1 New/Revised FRSs, Amendments to FRSs and IC Interpretations adopted during the current financial year
The followings are new/revised FRSs, Amendments to FRSs and IC Interpretations adopted during the current
financial year:
New/Revised FRSs, Amendments to FRSs and IC Interpretations
Effective for financial periods
beginning on or after
Amendments to FRS 132 Financial Instruments: Presentation:
Classification of Rights Issue
IC Interpretation 12 Service Concession Arrangements FRS 1 First-time Adoption of Financial Reporting Standards (revised)
FRS 3 Business Combinations (revised)
FRS 127 Consolidated and Separate Financial
Statements (revised)
Amendments to FRS 2 Share-based Payments Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued
Operations
Amendments to FRS 138 Intangible Assets Amendments to IC
Reassessment of Embedded Derivatives Interpretation 9
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17 Distributions of Non-cash Assets to Owners Amendments to FRS 1 First-time Adoption of Financial Reporting
Standards: Limited Exemption from Comparative
FRS 7 Disclosures for First-time Adopters
Amendments to FRS 7 Improving Disclosures about Financial Instruments
Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions
IC Interpretation 4 Determining whether an Arrangement contains a Lease
IC Interpretation 18 Transfers of Assets from Customers Amendments to FRS 1 Additional Exemptions for First-time Adopters
Amendments to FRS 3 Business Combinations Amendments to FRS 7 Financial Instruments: Disclosures Amendments to FRS 101 Presentation of Financial Statements Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates
Amendments to FRS 128 Investments in Associates Amendments to FRS 131 Interests in Joint Ventures Amendments to FRS 132 Financial Instruments: Presentation Amendments to FRS 134 Interim Financial Reporting Amendments to FRS 139 Financial Instruments: Recognition and Measurement
Amendments to IC
Customer Loyalty Programmes Interpretation 13
1 March 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
Adoption of the above standards and interpretations are deemed to have no material impact to the financial
statements of the Group and the Company for the financial year.
112
3. ADOPTION OF NEW FRS s AND AMENDMENT TO FRS s (cont’d)
3.2 New Malaysian Financial Reporting Standards (“MFRSs”) that have been issued, but not yet effective and not yet
adopted, for annual periods beginning on or after 1 January 2012
On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) announced the issuance of the
new MFRS framework that is applicable to entities other than private entities.
The Group is expected to apply the MFRS framework for the financial year ending 31 December 2012.
This would result in the Group preparing an opening MFRS statement of financial position as at 1 January 2011,
which adjusts for differences between the classification and measurement bases in the existing FRS framework
versus that in the new MFRS framework. This would also result in a restatement of the annual and quarterly
financial performance for the financial year ended 31 December 2011 and quarter ended 31 March 2011 in
accordance with MFRS which would form the MFRS comparatives for the financial year ending 31 December 2012
and quarter ending 31 March 2012 respectively.
The MFRSs, Amendments to MFRSs and IC Interpretations expected to be adopted are as follows:
MFRSs, Amendments to MFRSs and IC Interpretations
MFRS 1 First-time Adoption of Financial Reporting Standards MFRS 2 Share-based Payment MFRS 3 Business Combination MFRS 4 Insurance Contracts MFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
MFRS 6 Exploration for and Evaluation of Mineral Resources MFRS 7
Financial Instruments: Disclosures MFRS 8 Operating Segments MFRS 9 Financial Instruments MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interests in Other Entities
MFRS 13 Fair Value Measurement MFRS 101 Presentation of Financial Statements
Amendments
to MFRS 101
Presentation of Items of Other Comprehensive Income
MFRS 102 Inventories MFRS 107
Statement of Cash Flows
MFRS 108
Accounting Policies, Changes in Accounting Estimates
and Errors
MFRS 110 Events After the Reporting Period MFRS 111
Construction Contacts MFRS 112
Income Taxes MFRS 116 Property, Plant and Equipment MFRS 117 Leases MFRS 118 Revenue Effective for financial periods
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2015
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2012
1 July 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
THE FINANCIALS
113
adopted, for annual periods beginning on or after 1 January 2012 (cont’d)
The MFRSs, Amendments to MFRSs and IC Interpretations expected to be adopted are as follows: (cont’d)
MFRS 119 Employee Benefits MFRS 119 Employee Benefits (revised) MFRS 120 Accounting for Government Grants and Disclosure of
Government Assistance
MFRS 121
The Effects of Changes in Foreign Exchange Rates MFRS 123 Borrowing Costs MFRS 124 Related Party Disclosures MFRS 126 Accounting and Reporting by Retirement Benefit Plans
MFRS 127 Consolidated and Separate Financial Statements MFRS 127 Separate Financial Statements (revised) MFRS 128
Investments in Associates MFRS 128 Investments in Associates and Joint Ventures (revised)
MFRS 129 Financial Reporting in Hyperinflationary Economies
MFRS 131 Interests in Joint Ventures MFRS 132 Financial Instruments: Presentation MFRS 133
Earnings Per Share
MFRS 134
Interim Financial Reporting MFRS 136
Impairment of Assets
MFRS 137 Provisions, Contingent Liabilities and Contingent Assets
MFRS 138
Intangible Assets MFRS 139 Financial Instruments: Recognition and Measurement
MFRS 140 Investment Property MFRS 141 Agriculture Improvements to MFRSs
Amendments
Disclosures - Offsetting Financial Assets and Financial Liabilities
to MFRS 7
Amendments
Offsetting Financial Assets and Financial Liabilities
to MFRS 132
Mandatory Effective Date of MFRS 9 and Transition Disclosures IC Interpretation 1
Changes in Existing Decommissioning, Restoration and
Similar Liabilities
IC Interpretation 2 Members’ Shares in Co-operative Entities and Similar
Instruments
IC Interpretation 4 Determining Whether an Arrangement Contains a Lease
IC Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration
and Environmental Rehabilitation Funds
IC Interpretation 6 Liabilities Arising from Participating in a Specific Market-Waste
Electrical and Electronic Equipment
1 January 2012
1 January 2013
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2013
1 January 2012
1 January 2013
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2013
1 January 2014
1 January 2015
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
114
adopted, for annual periods beginning on or after 1 January 2012 (cont’d)
The MFRSs, Amendments to MFRSs and IC Interpretations expected to be adopted are as follows: (cont’d)
IC Interpretation 7 Applying the Restatement Approach under MFRS 129
Financial Reporting in Hyper inflationary Economies
IC Interpretation 9 Reassessment of Embedded Derivatives IC Interpretation 10 Interim Financial Reporting and Impairment IC Interpretation 12 Service Concession Arrangements IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14 MFRS 119 - The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction
IC Interpretation 15 Agreements for the Construction of Real Estate
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17 Distributions of Non-cash Assets to Owners IC Interpretation 18 Transfers of Assets from Customers IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments
IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine
IC Interpretation 107 Introduction of the Euro IC Interpretation 110 Government Assistance - No Specific Relation to Operating
Activities
IC Interpretation 112 Consolidation - Special Purpose Entities IC Interpretation 113 Jointly Controlled Entities - Non-Monetary Contributions
by Venturers
IC Interpretation 115 Operating Leases - Incentives IC Interpretation 125 Income Taxes - Changes in the Tax Status of an Entity or its
Shareholders
IC Interpretation 129 Evaluating the Substance of Transactions Involving the Legal
Form of a Lease
IC Interpretation 131 Revenue - Barter Transactions Involving Advertising Services
IC Interpretation 132 Intangible Assets - Web Site Costs 1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2013
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
1 January 2012
Currently, the Group does not expect any material impact on its financial position and performance arising from
the adoption of the above MFRSs, Amendments to MFRSs and IC Interpretations. However, the financial impact
may change or additional impacts may be identified, prior to the completion of the Group’s first MFRS based
THE FINANCIALS
4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
4.1 Critical judgements made in applying accounting policies
Contingent liabilities
When the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies
within its Group, the Company considers these to be contingent liabilities and account for them as such. In this
respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable
that the Company will be required to make a payment under the guarantee.
The determination and treatment of other contingent liabilities are based on the Directors’ and management’s
view of the expected outcome of the contingencies, after consulting legal counsel for litigation cases and internal
and external experts to the Group for matters in the ordinary course of the business.
4.2 Key sources of estimation uncertainty
The following are the key assumptions concerning the future and other key sources of estimation uncertainty at
the end of the reporting period that have significant effect on the amounts recognised in the financial
statements:
(a) Impairment of goodwill and trademark
The Group determines whether goodwill and trademark are impaired at least on an annual basis. This requires
an estimation of the value-in-use of the CGU to which goodwill and trademark are allocated. Estimating
value-in-use amount requires management to make an estimate of the expected future cash flows from
the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
The carrying amounts and further details are disclosed in note 16 to the financial statements.
(b) Depreciation of property, plant and equipment
Changes in the expected level of usage and technological developments could impact the economic
useful lives and the residual values, therefore future depreciation charges may be revised. Estimating the
value-in-use amount requires management to make an estimate of the expected future cash flows from the
CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
The carrying amounts and further details are disclosed in note 15 to the financial statements.
(c) Deferred tax assets
Deferred tax assets are recognised for all unutilised tax losses and capital allowances to the extent that
is probable that taxable profit will be available against which the losses and capital allowances can
be utilised. Management judgement is required to determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and level of future taxable profits together with future
tax planning strategies. The total carrying amounts of unutilised tax losses is disclosed in note 21 to the
115
116
(cont’d)
4.2 Key sources of estimation uncertainty (cont’d)
(d) Impairment of receivables
The Group makes impairment of receivables based on an assessment of the recoverability of receivables.
Impairment is applied to receivables where events or changes in circumstances indicate that the carrying
amounts may not be recoverable. The management specifically analyses historical bad debts, customer
concentration, customer creditworthiness, current economic trends and changes in customer payment terms
when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations
differ from the original estimates, the differences will impact the carrying amount of receivables.
(e) Impairment of assets
The Group determines whether an asset is impaired by evaluating the extent to which the recoverable
amount of an asset is less than its carrying amount. This evaluation is subject to factors such as market
performance, economic and political situation of the country.
Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value
in use. The value in use is the net present value of the projected future cash flows derived from that asset
discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of
estimated future results and a set of assumptions to reflect its income and cash flows. Judgment has been
used to determine the discount rate for the cash flows and the future growth of the business.
(f) Write down for obsolete or slow moving inventories
The Group writes down its obsolete or slow moving inventories based on assessment of their estimated
net selling price. Inventories are written down when events or changes in circumstances indicate that the
carrying amounts may not be recoverable. The management specifically analyses sales trend and current
economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow
moving inventories. Where expectations differ from the original estimates, the differences will impact the
carrying amount of inventories.
(g) Impairment of development expenditure
Certain judgements in terms of assessing future uncertain parameters such as future economic growth,
future inflationary figures, appropriate discount rates and etc., are required to be made in order to project
the future cash flows of the development products. These judgements are based on the historical track
record and expectations of future events that are believed to be reasonable under the current circumstances.
Where expectations differ from the original estimate, the differences will impact the carrying amount of
development expenditure.
(h) Income taxes
The Group is subject to income taxes in a few jurisdictions. Significant judgement is required in determining
the capital allowances and deductibility of certain expenses during the estimation of the provision for
income taxes. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred income tax provisions in the period in
which such determination is made.
THE FINANCIALS
(cont’d)
4.2 Key sources of estimation uncertainty (cont’d)
(i) Fair value of borrowings
The fair values of borrowings are estimated by discounting future contractual cash flows at the current
market interest rates available to the Group for similar financial instruments. It is assumed that the effective
interest rates approximate the current market interest rates available to the Group based on similar size and
business risk.
(j) Defined benefit plan
The Group determines the present value of the defined benefit obligation and the fair value of any plan asset
based on calculations provided by independent actuaries using the relevant assumptions as disclosed in
note 27 to the financial statements. Where expectations differ from the original estimate, the differences
will impact the carrying amount of the post employment benefits obligations.
5. SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their geographical locations of
the assets. The management has determined the operating segments based on the reports reviewed by the Chief
Executive Officer.
The Group is organised on a worldwide basis into 6 main geographical units:
- Germany
- Switzerland
- Italy
- Rest of Europe
- Americas
- Rest of world
Segment revenue, expenses and results include transfers between operating segments. These transfers are eliminated
on consolidation.
117
118
(cont’d)
Analysis of the Group’s revenue, results and other information by geographical locations of the assets are as follows:
Germany Switzerland Italy 2011 RM’000 RM’000 RM’000
Rest of Europe Americas RM’000
RM’000
Rest of
world Elimination RM’000 RM’000 Group
RM’000
Revenue:
External customers Inter-segment 1,185,090 927,955 115,137 156,725 48,177 317 319,493 81,387 182,652 72,819 11,946 105,075 – 1,923,368
(1,283,405) –
Total revenue
2,113,045 271,862 48,494 400,880 194,598 177,894
(1,283,405) 1,923,368
Results:
Segment result
Share of profit of associates
Finance costs Taxation
(50,824) –
(22,595) (11,210) 13,790
8,864 (6,260) (13,320) (552) (18,178) –
–
(325) (10,997) (620) (2,001) (Loss)/profit for the financial year
(84,629)
3,074 (1,497) (31,176) Other segment information:
Interest income 6,432 10,896 17 Depreciation and amortisation 39,462 11,795 Other material non-cash items:
Impairment of property, plant
and equipment Impairment of intangible assets Impairment losses on receivables Inventories written down 3,466
1,485
792 6,495 28,327 13,514 –
110 (2,064) (10,912) (8,287) (2,572)
(33,199) –
28,009 –
(47,122)
8,974
(25,144)
(38,010)
17,976 140 (5,190) (101,302)
461 736 10,967
(28,009) 1,500
205 7,225 4,907
4,150 –
67,744
–
–
(28) 2,280
–
–
428 158
–
–
1,025 554 –
–
(459)
536 –
–
–
1,617
–
–
–
–
3,466
1,485
1,758
11,640
4,550 4,359 –
34,635
164,952 162,040
– 171,496
–
–
1,626,999
171,496
1,798,495
Capital expenditure 14,184 10,503 51 988 Assets:
Segment assets Pension trust fund
963,223
–
139,073 –
32,063 –
165,648 –
Liabilities:
Segment liabilities 472,178 54,329 19,602
69,867
68,210 377,797 –
1,061,983
THE FINANCIALS
119
(cont’d)
Germany Switzerland Italy 2010 RM’000 RM’000 RM’000
Rest of Europe Americas RM’000
RM’000
Rest of
Group
world Elimination (Restated)
RM’000 RM’000 RM’000
Revenue:
External customers
Inter-segment
1,057,397 747,412 103,024 221,470 54,838 225
321,197 46,350 171,434 78,958 12,336 124,594 – 1,786,848
(1,152,387) –
Total revenue
1,804,809 324,494 55,063
367,547
183,770 203,552
(1,152,387) 1,786,848
Results:
Segment result
Share of profit of associates
Finance costs Taxation
41,043
–
(20,845) (3,663)
(1,787)
8,504 (9,861) (883)
(2,284) –
(174) (1,139)
(8,483)
–
(3,241)
(2,304)
25,039 135,252 –
–
(1,927)
(8,115) (7,308) (1,898)
(26,964) –
21,829 –
161,816
8,504
(22,334)
(17,195)
Profit/ (loss) for the financial year
16,535
(4,027)
(3,597) (14,028) 15,804 125,239
(5,135) 130,791
Other segment information:
Interest income 7,964 6,943
34 276
455 8,133 Depreciation and amortisation 37,526 8,553 229
4,264 4,996
4,870 –
60,438
Other material non-cash items:
Impairment of property, plant
and equipment Impairment of intangible assets Impairment loss on receivables Inventories written down
6,375 1,993 1,441 2,666 –
–
(1,176)
907 –
–
115 429 147 –
863 253 20 –
1,559 797 –
–
391
673
–
–
–
–
6,542
1,993
3,193
5,725
3,766
5,021
–
377,844
173,423 191,004 –
–
– 181,642
–
–
–
1,697,282
36,854
181,642
1,915,778
Capital expenditure 355,707
9,060 64 4,226 Assets:
Segment assets Investment in associates
Pension trust fund 980,410 –
–
125,411
36,854 –
36,332 –
–
190,702 –
–
Liabilities:
Segment liabilities 580,643 75,977
21,073 81,340 72,144 236,502
(21,829) –
1,976
1,067,679
120
(cont’d)
Capital expenditure comprises additions to property, plant and equipment and intangible assets including those
resulting from acquisition of subsidiaries.
In 2010, a negative goodwill of RM157,001,000 is included in the segment results of rest of world.
Business segment information
Group
2011 RM’000 2010
RM’000
Sale of goods and royalties Logistics and related services Information technology and related services 1,878,900 30,327 14,141 1,747,454
25,927
13,467
1,923,368 1,786,848
6. REVENUE
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Sales of goods Royalties Services rendered 1,878,678 222 44,468 1,747,216 238
39,394 55,490 –
–
59,469
–
–
1,923,368
1,786,848
55,490 59,469
7. STAFF COSTS
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Wages, salaries and bonuses Defined contribution plan Defined benefit retirement plan Other employee related benefits 458,310 82,510 9,530 8,058 406,491 78,520 11,464 9,192 3,983
481 –
594 5,148
524
–
361
558,408 505,667 5,058 6,033
Staff costs as shown above include the remuneration of the Executive Director as disclosed in note 9 to the
THE FINANCIALS
121
8. COMPENSATION OF KEY MANAGEMENT PERSONNELS
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Wages, salaries and bonuses Defined contribution plan Defined benefit retirement plan Other employee related benefits 13,535
247 385 2,778
12,627
268 212
1,167 1,320 158 –
35 1,320
158
–
128
16,945 14,274 1,513
1,606
9. DIRECTORS’ REMUNERATION
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Non-executive Directors
Fees Estimated monetary value of benefits in kind 357
20
399 20 357
20 399
20
Executive Director
Salaries Defined contribution plan Estimated monetary value of benefits in kind
1,320 158 35 1,320 158
128 1,320 158
35 1,320
158
128
1,890 2,025 1,890
2,025
122
10. (LOSS)/PROFIT FROM OPERATIONS
(Loss)/profit from operations is arrived
at after charging/(crediting):
Auditors’ remuneration:
- statutory audit - underprovision in prior year Depreciation of property, plant and equipment Fair value adjustments on derivative liabilities
Amortisation of intangible assets Impairment of intangible assets Impairment of property, plant and equipment Impairment loss on:
- investment in subsidiaries
- investment in an associate
Property, plant and equipment written off Rental of land and buildings Rental of plant and machinery Rental of other equipment Impairment loss on receivables:
- trade - non-trade
Net (gain)/loss on foreign exchange:
- realised - unrealised Inventories written down External logistics, outward freight and packaging Research and development expenses Sales promotion Receipts from Pension Trust Fund
Dividend income Interest income
(Gain)/loss on disposal of property, plant and
equipment Gain on disposal of investment in an associate Gain on disposal other investments
Negative goodwill Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 3,843 56 55,634 3,280 12,110 1,485 3,466
3,255 60 51,622 –
8,816 1,993 6,542 126 –
392 –
–
–
–
120
–
349
–
–
–
–
–
–
690
38,496 3,061 4,739 –
–
–
44,684 2,539 5,858
2,653
300
222
173 –
102 –
–
–
67
–
76
1,758 –
2,928 265 –
–
–
265
(794) 11,420 11,640 93,549
20,159 73,676
–
(5,093)
(1,500) (4,406) (5,212) 5,725
91,039
29,242
75,736 –
(8,130) (1,976) (2,289) 12,369 –
–
2,080
–
(9,302)
(5,080) (10,638) (3,736)
(4,455)
–
–
–
–
(10,357)
(10,202)
(8,007)
(1,027) (6,397)
–
–
842 –
(2,427) (157,001) (51)
–
–
–
–
–
(5,556)
–
The cost of inventories recognised as expense during the financial year of the Group amounted to RM1,159,507,000
(2010: RM1,095,468,000).
THE FINANCIALS
123
11. FINANCE COSTS
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Interest expense on bank borrowings Factoring charges Interest - others
23,110
2,034
–
21,135 1,100
99 9,088 –
9
6,850
–
120
25,144 22,334 9,097 6,970
12. TAXATION
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 –
17,512 32 13,620
–
–
–
–
(Over)/Under-provision in prior years 17,512 (1,875) 13,652
180
–
–
–
(28)
Deferred tax (Note 21) 15,637 22,373 13,832
3,363 –
–
(28)
–
Tax expense 38,010 17,195
–
(28)
The numerical reconciliation between the average effective tax and the tax based on applicable tax rate are as follows:
Current year tax expense based on profit
for the financial year:
- Malaysian tax
- Foreign tax Group Company
(Restated)
(Restated)
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Taxation at Malaysian statutory
tax rate of 25% (2010: 25%) (15,823)
36,997
(484) 6,924
Tax effects of:
- different tax regime - share of profit of associates
- expenses not deductible for tax purposes - income not subject to tax - deferred tax assets not recognised in respect
of current year’s tax losses - utilisation of previously unrecognised
deferred tax asset - (over)/under-accrual in prior years Tax expense (1,443) –
40,479 (11,097) 4,833 (3)
30,417 (75,847) –
–
5,858 (6,669) 34,815 20,685 1,295 (7,046)
(1,875) 38,010 (67) 180
17,195 –
–
4,063
(11,487)
500
–
–
–
(28)
–
(28)
124
13. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of
the parent by the weighted average number of ordinary shares outstanding during the financial year.
The following table reflects the profit and share data used in the computation of basic earnings per share:
2011 RM’000 Group
2010
RM’000
(Loss)/profit attributable to owners of the parent (88,423) 127,808
Weighted average number of ordinary shares in issue Notional bonus shares in rights issue
Weighted average number of shares repurchased
512,796 –
(5,749) 491,593
26,667
(4,935)
507,047 513,325
Sen Sen
(17.44) 24.90
Basic (loss)/earnings per ordinary share The Group does not have any potential dilutive ordinary shares. Accordingly, the diluted earnings per share is
not presented.
14. DIVIDENDS
Group and Company
2011 Dividend
per share
sen 2.0 2010
Dividend
amount
RM’000 10,140 Dividend
per share
sen 2.0
Dividend
amount
RM’000
Dividend paid 10,144
Since the end of the previous financial year, the Company has paid a final single tier dividend of two (2.0) sen per
ordinary share of RM1.00 each on 14 September 2011 amounting to RM10,139,993 in respect of the financial
year ended 31 December 2010.
The Board of Directors proposed a final share dividend on the basis of one (1) treasury share for every fifty (50)
existing ordinary shares of RM1.00 each held in the Company, fractions of treasury shares to be disregarded
(“Share Dividend”) in respect of the financial year ended 31 December 2011.
In addition to the Share Dividend, the Board of Directors also proposed a final single tier dividend, of one (1.0) sen
per ordinary share of RM1.00 each (“Cash Dividend”) in respect of the financial year ended 31 December 2011.
Both proposed Share Dividend and Cash Dividend are subject to the approval of shareholders at the forthcoming
Annual General Meeting of the Company. The current year’s financial statements do not reflect this final dividend
which will be accrued as a liability upon approval by shareholders.
THE FINANCIALS
125
15. PROPERTY, PLANT AND EQUIPMENT
Freehold Group land Buildings RM’000
RM’000 Machinery, Office
technical equipment, Capital
equipment
furniture Motor work-inand mould and fittings vehicles progress RM’000 RM’000 RM’000 RM’000
Total
RM’000
Carrying amounts
At 1 January 2010 Acquisition of subsidiaries
Additions
Disposals
Transfers
Depreciation Impairment Currency translation
37,926 120,123
– 259,788 –
2,544 (809)
(178)
–
–
–
(10,115) –
(6,379)
(1,184) (26,999)
160,019 66,659 10,308 (1,476) 2,557 (28,734)
(12)
(23,595) 34,719 12,590
6,551 (690) 827 (12,019) (151)
(4,746)
1,638
–
517
(56) –
(754) –
27 5,077 2,103 4,454 (1,527) (3,881) –
–
(1,313)
359,502
341,140
24,374
(4,736)
(497)
(51,622)
(6,542)
(57,810)
At 31 December 2010 35,933 185,726 37,081 1,372 4,913
603,809
Carrying amounts
At 1 January 2011 Additions
Disposals Transfers
Depreciation
Impairment Write off
Currency translation 35,933 338,784 –
270
(7,293)
(1,984) –
163 –
(12,306) –
(3,466)
–
–
(504) 786 185,726 9,953
(974) 2,914 (29,509) –
(190) 800 37,081
9,299 (2,551)
192 (13,200) –
(307)
2,244
1,372 1,447 (207) –
(619) –
–
(59)
4,913
5,651 (1,181) (3,269) –
–
(193) (79) 603,809
26,620
(14,190)
–
(55,634)
(3,466)
(690)
3,188
At 31 December 2011
28,136 322,247 168,720
32,758 1,934 5,842 559,637
At 31 December 2011
Cost Accumulated depreciation
and impairment
28,136 472,431 505,780 187,058 4,088
5,842 1,203,335
(150,184) (337,060) (154,300)
(2,154) 28,136 322,247 168,720 32,758 1,934 5,842
559,637
35,933 475,003
499,233 206,180 4,409
4,913
1,225,671
–
(136,219)
(313,507) (169,099) (3,037)
–
35,933 338,784 185,726 37,081
1,372 4,913
Carrying amounts At 31 December 2010
Cost Accumulated depreciation
and impairment
Carrying amounts –
338,784 –
(643,698)
(621,862)
603,809
126
(cont’d)
Company
Machinery technical
equipment and mould RM’000 Office
equipment,
furniture and fittings RM’000 Motor
vehicles
RM’000 Total
RM’000
Carrying amount
At 1 January 2010 Additions
Depreciation 215 –
(61)
397 27 (85) 324 240 (203)
936
267
(349)
At 31 December 2010 Additions Disposals
Transfers
Depreciation Write off
154 109 –
–
(125)
–
339 122 (7) (13)
(62)
(222) 361 689 (104)
–
(205) –
854
920
(111)
(13)
(392)
(222)
At 31 December 2011 138 157 741 1,036
At 31 December 2011
Cost Accumulated depreciation and impairment
416 (278)
288 (131)
929 (188)
1,633
(597)
Carrying amounts 138 157 741 1,036
At 31 December 2010
Cost Accumulated depreciation and impairment
307 (153)
641 (302)
1,018 (657)
Carrying amounts 154 339 361
1,966
(1,112)
854
(a) The carrying amounts of property, plant and equipment pledged as security for borrowings are as follows:
Group
2011 RM’000 2010
RM’000
Freehold land Buildings Machinery and technical equipment 6,262
231,107 20,503 23,587
255,965
22,402
257,872 301,954
THE FINANCIALS
127
(cont’d)
(b) During the financial year, the Group and the Company made the following cash payments to purchase property,
plant and equipment:
Purchase of property, plant and equipment
Financed by hire purchase and finance
lease arrangements Cash payments on purchase of property,
plant and equipment Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 26,620
24,374
920 267
(818)
–
–
–
25,802 24,374
920
267
(c) The carrying amount of the Group’s and the Company’s property, plant and equipment under hire purchase and
finance lease agreements is RM1,128,000 (2010: RM1,074,000) and RM144,000 (2010: RM192,000) respectively.
16. INTANGIBLE ASSETS
Group Goodwill Trademarks RM’000 RM’000 Carrying amounts
At 1 January 2010 Acquisition of subsidiaries
Acquisition of shares in an
existing subsidiary Additions
Disposals
Amortisation
Impairment Transfers
Currency translation Development costs RM’000 Computer
software license RM’000 Total
RM’000
118,604 –
19,122
–
26,951 –
2,893 2,130 167,570
2,130
2,882
–
–
–
(769) –
(11,206) –
–
–
–
(1,011)
–
(3,179)
–
6,747 –
(6,916)
–
–
(1,250) –
571 (38) (1,900)
(213) 497 (493)
2,882
7,318
(38)
(8,816)
(1,993)
497
(16,128)
At 31 December 2010 Additions
Amortisation
Impairment Currency translation 109,511 –
–
(1,468) 996 14,932 –
–
(17)
102 25,532 7,290 (10,166)
–
774 3,447 725 (1,944) –
40 153,422
8,015
(12,110)
(1,485)
1,912
At 31 December 2011 109,039
15,017 23,430
2,268 149,754
128
(cont’d)
Development Group Goodwill Trademarks costs RM’000 RM’000 RM’000 At 31 December 2011
Cost
113,002 15,986 49,879 Accumulated amortisation and
impairment (3,963) (969) (26,449)
Carrying amounts At 31 December 2010
Cost Accumulated amortisation and
impairment Computer
software license RM’000 Total
RM’000
74,301 253,168
(72,033) (103,414)
109,039 15,017 23,430
2,268 149,754
112,293 15,882 41,829 78,153 248,157
(16,297) (74,706) (94,735)
25,532
3,447 153,422
(2,782) Carrying amounts 109,511 Impairment test for goodwill and trademarks
Allocation of goodwill and trademarks:
(950) 14,932 2011 RM’000 2010
RM’000
Goodwill
Germany Japan Taiwan Switzerland Argentina 82,916 11,849 830 2,978 10,466 83,799
11,849
839
2,889
10,135
109,039 109,511
Trademarks
Germany 15,017
14,932
Group
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow
projections based on financial budgets approved by management covering a five year period. Cash flows beyond the
five-year period are extrapolated using the estimated growth rates stated below.
THE FINANCIALS
129
(cont’d)
Key assumptions used for value-in-use calculations:
EBIT margin 2011 2010
%
%
Growth rate 2011 2010 %
%
Discount rate
2011 2010
%
%
Germany Japan
Taiwan Switzerland Argentina 2.9 16.0 14.7 1.3 11.2 1.5 2.0 2.0 2.0
10.0 6.3
5.5 4.9 5.5 18.0 EBIT -budgeted earning before interest and tax
Growth rate -weighted average growth rate used to extrapolate cash flows beyond the budget period
Discount rate - pre-tax discount rate applied to the cash flow projections
Management determined EBIT based on past performance and its expectations for the market development.
The weighted average growth rates used are consistent with the forecasts within the industry. The discount rates used
are pre-tax and reflect specific risks relating to the relevant country.
The management believes that there are no reasonably possible changes in any of the key assumptions used that
would cause the carrying amount of the CGUs to materially exceed the recoverable amounts.
5.1 19.5 7.4
3.0 11.4 1.5 2.0 2.0 1.8 13.9 5.8
4.8
6.4
4.9
22.1
17. INVESTMENTS IN SUBSIDIARIES
Company
2011 2010
RM’000 RM’000
Quoted shares, at cost Unquoted shares, at cost Less: Impairment loss 167,319 75,952
(2,653) 167,319
75,952
–
Amount due from subsidiaries (Non-trade) 240,618 248,827 243,271
185,959
489,445 429,230
Market values of quoted shares 250,635
303,040
Amount due from subsidiaries amounting to RM248,827,000 is considered to be part of the Company’s net
investments in subsidiaries, which are stated at cost less accumulated impairment losses.
The amount due from subsidiaries is unsecured and interest free except for an amount due from a subsidiary which
bears interest at 1% per annum.
130
(cont’d)
Details of the subsidiaries are as follows:
Effective Percentage
Country of
of Ownership
Name of company
Incorporation 2011
2010
Principal activities
%
%
Direct subsidiaries
Pelikan Holding AG (listed on
Switzerland 96.45 96.45 Investment holding
Swiss SIX Exchange)
Pelikan Japan K.K.* Japan 99.11 99.11 Distribution of stationery and
office products
Pelikan México S.A. de C.V. Mexico 98.23 98.23 Production and distribution of
stationery and office products
Pelikan Produktions AG* Switzerland
100.00 100.00 Dormant
Pelikan Polska Sp.z.o.o Poland 100.00 100.00
Inactive
Pelikan Middle East FZE* United Arab
100.00 100.00 Distribution of stationery and
Emirates office products
Pelikan Singapore Pte Ltd* Singapore 100.00 100.00 Distribution of stationery and
office products
Pelikan Taiwan Co Ltd* Taiwan 100.00 100.00 Distribution of stationery and
office products
Pelikan Trading (Shanghai) Co Ltd*
China 100.00 100.00 Distribution of stationery and
office products
PT Pelikan Indonesia* Indonesia 99.00 99.00 Distribution of stationery and
office products
Pelikan Production (Malaysia) Sdn Bhd
Malaysia 100.00 100.00 Production of stationery and
office products
Pelikan Hardcopy Holding AG Switzerland
100.00 100.00 Investment holding
Pelikan Trading India Private Limited*
India 100.00 100.00 Dormant
Herlitz Aktiengesellschaft (listed on
Germany
70.92 70.92 Production and distribution of
Berlin Stock Exchange and Frankfurt stationery and office products
Stock Exchange)
Molkari
Germany 98.52 98.52 Property holding
Vermietungsgesellschaft mbH
& Co. Objekt Falkensee KG
Ganymed Falkensee
Germany 100.00 100.00 Investment holding
Grundstücksverwaltungs
GmbH*
Indirect subsidiaries
Pelikan (Schweiz) AG Switzerland 96.45 96.45 Distribution of stationery and
office products
Günther Wagner SA*
Switzerland 96.45 96.45 Dormant
Pelikan GmbH Germany 96.45 96.45
Investment holding
Pelikan Vertriebsgesellschaft
Germany
mbH & Co. KG office products
THE FINANCIALS
(cont’d)
Country of
of Ownership
Name of company
Incorporation 2011
2010
%
%
Indirect subsidiaries (cont’d)
Pelikan PBS
Germany 96.45 96.45 Production and distribution of
Produktionsgesellschaft mbH stationery and office products
& Co. KG
Kreuzer Produktion Vertrieb
Germany 96.45 96.45 Dormant
GmbH*
Pelikan PBS-Produktion
Verwaltungs-GmbH*
Pelikan Vertrieb Verwaltungs-
GmbH*
ReMerch GmbH* Germany 96.45 96.45 Services
Pelikan Italia S.p.a.
Italy 96.45 96.45
Distribution of stationery and
office products
Pelikan S.A. Spain 96.45 96.45 Distribution of stationery and
office products
Pelikan Belux N.V./S.A. Belgium 96.45 96.45 Distribution of stationery and
office products
Pelikan Hellas E.P.E. Greece 96.45 96.45 Distribution of stationery and
office products
Pelikan Austria Ges.m.b.H.*
Austria
96.45 96.45 Dormant
Pelikan Nederland B.V.* Netherlands
96.45 96.45 Dormant
Pelikan, Inc.* USA 96.45 96.45
Dormant
Pelikan Asia Sdn. Bhd. Malaysia 96.45 96.45 Distribution of stationery and
office products
Pelikan Nordic AB Sweden 96.45 96.45 Distribution of stationery and
office products
Pelikan France S.A.S. France 96.45 96.45 Distribution of stationery and
office products
Pelikan Colombia S.A.S. Colombia 98.06 98.06 Production and distribution of
Pelikan Hardcopy Europe Ltd United Kingdom
100.00 100.00 Investment holding
Pelikan Hardcopy Production
Switzerland 100.00 100.00 Production and distribution of
AG office products
Pelikan Hardcopy Scotland Ltd United Kingdom 100.00 100.00 Production and distribution of
office and industrial products
Initio GmbH Germany 100.00 100.00 Dormant
Greif Werke GmbH
Germany 100.00 100.00
Property holding
Pelikan Hardcopy European
Germany 100.00 100.00
Dormant
Logistics and Services GmbH
Dongguan Pelikan Hardcopy Ltd
China 100.00 100.00 Production of stationery and
office products
131
132
(cont’d)
Country of
of Ownership
Name of company
Incorporation 2011
2010
%
%
Pelikan Hardcopy Asia Pacific Ltd*
Hong Kong 100.00 100.00 Dormant
Pelikan Hardcopy CZ s.r.o. Czech Republic 100.00 100.00 Production of office products
Geha GmbH Germany 96.45 96.45
Distribution of office products
German Hardcopy doo* Bosnia 96.45 96.45 Dormant
Pelikan Argentina S.A. Argentina 98.17 98.17 Distribution of stationery and
office products
Pelikan Ofis Ve Kirtasiye
Turkey 97.87 97.87 Distribution of stationery and
Malzemeleri Ticaret Ltd office products
Sirketi*
European Collection Partner
Germany 100.00 100.00 Services
GmbH
Herlitz PBS Aktiengesellschaft
Germany 70.92 70.92 Production and distribution of
Papier-, Büro- und stationery and office products
Schreibwaren
Susy Card GmbH Germany 70.92 70.92 Development, production and
distribution of papeterie
products
Falken Office Products GmbH Germany 70.92 70.92 Production and distribution of
Herlitz Papierverarbeitungs
GmbH
Convex Schreibwaren-Handels
Germany 70.92 70.92
GmbH office products
Mercoline GmbH Germany 70.92 70.92
Production and distribution of
software and provision of IT
services
eCom Logistik GmbH & Co.
Germany 70.92 70.92
Logistics services
KG
eCom Logistik Verwaltungs
Germany 70.92 70.92
Dormant
GmbH
Herlitz Spolka z.o.o. Poland
70.92 70.92
Production and distribution of
Herlitz Spol s.r.o. Czech Republic 70.92 70.92
office products
Herlitz Slovakia s.r.o. Slovakia 70.92 70.92
office products
Herlitz Hungária Kft. Hungary 70.92 70.92 Distribution of stationery and
office products
Herlitz România srl Romania 36.17 36.17 Distribution of stationery and
office products
THE FINANCIALS
133
(cont’d)
Country of
of Ownership
Name of company
Incorporation 2011
2010
%
%
DELMET PROD srl Romania 70.92 70.92 Production and distribution of
Herlitz UK Ltd. United Kingdom 70.92 70.92 Production and distribution of
Herlitz Bulgaria EooD Bulgaria 70.92 70.92 Distribution of stationery and
office products
Herlitz Benelux B.V. Netherlands
office products
POS Services GmbH Germany 70.92
–
Point of sale services
* Not audited by BDO or BDO member firms
(a) Investment in subsidiaries amounting to RM97,939,651 (2010: RM21,233,031) were pledged as security for
borrowings of the Company as disclosed in note 30 to the financial statements.
(b) On 7 April 2010, the Company’s subsidiary, Herlitz Aktiengesellschaft incorporated a wholly-owned subsidiary,
POS Services GmbH with a paid-up share capital of EUR25,000. There is no material financial effect to the Group
arising from the incorporation of this subsidiary.
(c) Acquisition of subsidiaries and related assets
In March 2010, the Company acquired 70.92% of Herlitz, 94.90% Molkari, 100% of Ganymed, EUR85 million
shareholder’s loans owing by Molkari and EUR15 million shareholder’s loan owing by Herlitz for a total consideration
of EUR45 million.
The effects on the acquisition are as follows:
(i) Purchase consideration
Purchase consideration
Cash consideration Expenses directly attributable to acquisition, paid in cash 2010
RM’000
191,806
18,244
Total purchase consideration Share of the fair value of net identifiable assets acquired 210,050
(367,051)
Negative goodwill (157,001)
134
(cont’d)
(c) Acquisition of subsidiaries and related assets (cont’d)
(ii) Assets and liabilities
The assets and liabilities arising from the acquisition are as follows:
Recognised Carrying
on date of amount before
acquisition combination
RM’000 RM’000
Property, plant and equipment
Intangible assets Long term receivables Deferred tax assets Inventories Receivables, deposits and prepayments Cash and cash equivalents 341,140
2,130 17,558 3,978 128,772
122,189 23,424
305,372
2,130
17,558
3,978
128,772
122,189
23,424
639,191 603,423
Payables Provision
Borrowings Deferred tax liabilities (235,114) (22) (6,956) (2,720) (235,114)
(22)
(6,956)
(216)
(244,812) (242,308)
361,115
Net identifiable assets 394,379 Less: Minority interests (27,328)
Group’s share of net identifiable assets Negative goodwill on acquisition
367,051
(157,001)
Total cost of investment 210,050
(iii) The net cash outflow on acquisition is derived as follows:
Cash consideration Less: Cash and cash equivalents of subsidiaries acquired 2010
RM’000
210,050
(23,424)
186,626
(iv) The acquired subsidiaries have contributed the following results to the Group:
2010
RM’000
Revenue Profit for the financial year 793,569
5,521
THE FINANCIALS
135
18. INVESTMENTS IN ASSOCIATES
Unquoted shares, at cost
Share of post acquisition reserves Currency translation Less: Impairment loss Group 2011 RM’000 300 (298) (2) –
2010 RM’000 14,902
18,775
3,177
–
Company
2011 2010
RM’000 RM’000
300 –
–
(300)
300
–
–
–
–
36,854 –
300
Group’s share of net assets
–
36,854
–
–
The summarised financial information of the associates are as follows:
2011 RM’000 Group
Current assets Non-current assets Current liabilities Non-current liabilities
5,117 379 (6,416) –
(920) Revenue Profit for the financial year 4,200 224 2010
RM’000
11,223
93,680
(13,090)
(63)
91,750
34,641
21,264
Country of
of Ownership
Name of company
Incorporation 2011
2010
%
%
Direct associate
Pelikan (Thailand) Co Ltd* Thailand
office supplies
Indirect associates
Columbia Pelikan PTY Limited* Australia
– 35.06 Production and distribution of
Henkel-Pelikan Office Products Ltd.* ^
Greece
– 47.26 Dormant
Artof C.A.* Venezuela 21.91 21.91
Dormant
* Not audited by BDO
^ Liquidated during the financial year
During the financial year, the Group disposed of its entire equity interest in its associated company, Columbia Pelikan
PTY Limited for a total consideration of AUD15 million (or approximately RM47.75 million).
136
19. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Group
2011 RM’000 2010
RM’000
3,029 (210) 3,010
(164)
Unquoted shares 2,819 166 2,846
160
2,985
3,006
Market value of quoted shares 2,819
2,846
Information on the fair value hierarchy is disclosed in note 37(c) to the financial statements.
Quoted shares Less: Impairment loss
20. PENSION TRUST FUND
Group and Company
(Restated)
2011 2010
RM’000 RM’000
Current Non-current 19,448 152,048 21,335
160,307
171,496 181,642
Pursuant to the acquisitions of Pelikan Holding AG group (“PHAG group”) in 2005, part of the defined benefits
retirement plans of the PHAG group in Germany (known as “Removable Pension Liabilities”) is now funded by
an external Pension Trust Fund created for this purpose, whilst the Company is assuming the balance of the said
Removable Pension Liabilities fixed in Ringgit Malaysia as at the completion date of the acquisitions of PHAG
group of RM65,087,000. If the assets in the Pension Trust Fund are capable of paying the entire Removable
Pension Liabilities, the Removable Pension Liabilities assumed by the Company will be relinquished.
2011 RM’000 2010
RM’000
Liabilities funded by Pension Trust Fund Liabilities assumed by the Company 96,043 65,087 103,188
65,087
Other post employment benefit obligations of the Group 161,130
44,760 168,275
49,282
205,890
217,557
Total post employment benefit obligations (Note 27)
Group
THE FINANCIALS
137
21. DEFERRED TAX ASSETS/(LIABILITIES)
Presented after appropriate offsetting as follows:
Group 2011 RM’000 2010 RM’000 Company
2011 2010
RM’000 RM’000
Deferred tax assets Deferred tax liabilities:
35,333 39,329
–
–
- subject to income tax - subject to capital gains tax (32,152)
(5,854) (14,791) (6,068)
–
–
–
–
(38,006) (20,859)
–
–
(2,673) 18,470
–
–
At 1 January Acquisition of subsidiaries
Credited/(charged) to statement of
comprehensive income:
18,470
–
23,833 1,258 –
–
–
–
- tax losses - property, plant and equipment
and intangibles - inventories - others (13,463)
(19,620) –
–
(20,173) (225) 11,488 (2,305) 256
18,306 –
–
–
–
–
–
Currency translation and others (22,373) 1,230 (3,363)
(3,258)
–
–
–
–
At 31 December (2,673)
18,470
–
–
Subject to income tax:
Deferred tax assets
Tax losses Others 9,153 26,180 21,620 17,709 –
–
–
–
35,333
39,329 –
–
Deferred tax liabilities
Property, plant and equipment and intangibles (32,152) (14,791) –
–
Subject to capital gains tax:
Deferred tax liabilities
Property, plant and equipment (5,854) (6,068) –
–
The tax effect of unutilised tax losses for which no deferred tax asset is recognised in the statement of financial
position is as follows:
Group Company
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Unutilised tax losses 252,970 225,201 3,651 2,356
138
22. INVENTORIES
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 62,441
41,254 198,650
73,119 45,947 216,872
33 –
–
74
–
–
At net realisable value
Raw materials Work in progress Finished goods 302,345 335,938 33 74
11,628
6,704
49,595 9,760 6,669
35,833
–
–
–
–
–
–
370,272
388,200 33
74
At cost
Raw materials Work in progress Finished goods Inventories of the Group pledged as security for borrowings amounted to RM617,000 (2010: RM613,000) as disclosed
in note 30 to the financial statements.
23. RECEIVABLES, DEPOSITS AND PREPAYMENTS
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 296,302 –
5,579
(13,371) 352,854 –
5,209
(23,398) 802 16,045 –
–
1,741
13,909
–
–
288,510 334,665 16,847 15,650
Amounts due from:
- Subsidiaries
- Others Prepayments Deposits
–
111,710 4,606 1,604 –
57,844 1,431 1,079 188,888
36,038 350 303 192,394
25,893
6
74
406,430 395,019 242,426 234,017
Trade receivables
Third parties Subsidiaries
Associates Less: Impairment loss Other receivables
Trade receivables of the Group pledged as security for borrowings amounted to RM8,017,000 (2010: RM19,350,000)
as disclosed in note 30 to the financial statements.
The fair values of receivables approximate their carrying amounts.
THE FINANCIALS
139
(cont’d)
Credit terms offered by the Group in respect of trade receivables range from 30 days to 120 days (2010: 30 days to
120 days) from date of invoices.
Amounts due from subsidiaries and associates which arose mainly from trade transactions, advances and payments
made on behalf are unsecured, interest free and are repayable on demand, except for certain amounts due from
subsidiaries which are subject to interest rate of 3.13% (2010: 3.32%) per annum and trade transactions which are
subject to normal trade credit terms.
Included in other receivables are amounts due from related parties amounting to RM5,817,000 (2010: RM16,290,300),
which represents advances and payments made on behalf, which are unsecured, interest free and repayable
on demand.
The currency exposure profile of receivables, deposits and prepayments is as follows:
2011 RM’000 2010 RM’000 Company
2011 2010
RM’000 RM’000
- RM - EUR - CHF
- GBP - CZK - HUF
- SEK
- PLN
- USD - MXN
- AUD - ARS - TRY - JPY - SGD - TWD - CNY - IDR - THB
- COP - HKD
- RON
- BGN
- AED 44,414
234,055 5,581
2,868
1,240
–
–
–
13,341 16,722
38,807 12,008 70 10,868 1,292 123
83 245
–
24,367 –
–
–
346
41,399 245,137
3,406 4,599
9,382
3,677 657
13,647 20,735 5,943 –
9,415 61 9,150 1,504 245
331 111
–
17,112
4
7,748
756
–
90,674 135,692
998
128 –
–
–
–
12,534 –
–
–
–
1,036 363
947 –
–
54 –
–
–
–
–
74,380
133,710
–
11,885
–
–
–
–
12,035
–
–
–
–
176
403
953
444
–
31
–
–
–
–
–
406,430 395,019
242,426
234,017
Group AN N UAL R EPORT 2011
140
(cont’d)
The ageing analysis of trade receivables of the Group and the Company are as follows:
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 255,489 13,098 8,228 2,713 22,353 271,820 52,875 6,141 3,088 24,139 7,723 2,374 1,571 635 4,544 5,000
3,078
1,886
1,091
4,595
Allowance for impairment 301,881
(13,371) 358,063 (23,398) 16,847 –
15,650
–
288,510
334,665 16,847 15,650
Neither past due nor impaired 0 to 30 days past due 31 to 60 days past due
61 to 90 days past due More than 90 days past due Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with
the Group and the Company. None of the trade receivables of the Group and of the Company that are neither past due
nor impaired have been renegotiated during the financial year.
Receivables that are past due but not impaired
As at 31 December 2011, the Group and Company has trade receivables amounting to RM22,067,000
(2010: RM21,954,000) and RM9,124,000 (2010:RM10,650,000) respectively that are past due at the reporting date
but not impaired. Trade receivables that are past due but not impaired relate to customers that have good track records
with the Group and Company. Based on past experience and no adverse information to date, the Directors of the Group
and Company are of the opinion that no allowance for impairment is necessary in respect of these balances as there
has not been a significant change in the credit quality and the balances are still considered to be fully recoverable.
Receivables that are past due and impaired
Trade receivables of the Group and of the Company that are past due and impaired at the end of the reporting period
are as follows:
Group
2011
Trade receivables, gross Less: Impairment loss Collectively impaired RM’000 2010
Trade receivables, gross Less: Impairment loss
10,484 37,823 (3,514)
26,466
(19,884) 64,289
(23,398)
34,309
6,582 40,891
13,467 (2,983)
Individually
Impaired RM’000 10,858
(10,388) 470 Total
RM’000
24,325
(13,371)
10,954
Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those
debtors that exhibit significant financial difficulties and have defaulted on payments.
THE FINANCIALS
141
(cont’d)
The reconciliation of movement in the impairment loss are as follows:
2011 RM’000 Group
2010
RM’000
At 1 January Charged for the financial year Acquisition of subsidiaries Written off Currency translation 23,398 1,758 –
(12,120) 335 30,576
2,928
3,956
(10,917)
(3,145)
At 31 December 13,371 23,398
24. CASH AND CASH EQUIVALENTS
Group 2011 RM’000 2010 RM’000 Company
2011 2010
RM’000 RM’000
Deposits with licensed banks Cash and bank balances 21,326 79,482 52,430
56,833 20,348 7,145 32,929
17,448
Deposits, cash and bank balances
Bank overdrafts (note 30)
100,808 (5,818) 109,263 (13,487)
27,493 –
50,377
–
Less: Deposits pledged to licensed banks 94,990 (9,091)
95,776
(32,865)
27,493 (9,091) 50,377
(32,865)
85,899
62,911 18,402 17,512
Effective interest rates per annum of deposits as at the end of reporting period are as follows:
Group 2011 %
2010 %
1.00 - 3.50 1.00 - 4.00 Company
2011 %
2.70 - 3.05 2010
%
Deposits with licensed banks The deposits of the Group and of the Company as at 31 December 2011 have maturity periods ranging between
overnight and one month (2010: between overnight and one month). Certain deposits have been pledged to
financial institutions for credit facilities.
2.70 - 3.70
142
24. CASH AND CASH EQUIVALENTS
(cont’d)
The currency exposure profile of cash and cash equivalents are as follows:
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 - RM - EUR
- CHF
- USD - GBP - CZK
- HUF
- SEK - TRY - HKD - MXN - ARS
- JPY - SGD - TWD - CNY - COP - INR - PLN - IDR - RON - BGN
- AED 26,267 30,830 1,899
22,156 375 57 –
253 37 1,122 7,464 2,901 1,279
201 818 1,255 1,624 25 815 29 –
–
1,401 26,488
30,779 2,615
28,454 3,755 248 863
347
27
288 6,837 3,744
1,069 304 515
830
113
34
1,227 15
572
139
–
12,694 743 14
13,556 –
–
–
–
–
–
–
–
486 –
–
–
–
–
–
–
–
–
–
26,442
2,627
14
21,294
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,808 109,263 27,493 50,377
25. SHARE CAPITAL
Ordinary shares of RM1.00 each:
Authorised:
As at 1 January/31 December
Group and Company
2011
2010
Number of shares
’000 Amount
RM’000 1,000,000
1,000,000
Number of shares
’000 1,000,000
Amount
RM’000
1,000,000
THE FINANCIALS
143
25. SHARE CAPITAL
(cont’d)
Group and Company
2011
Number of shares
’000 2010
Amount
RM’000 Number of shares
’000 Amount
RM’000
Ordinary shares of RM1.00 each:
Issued and fully paid:
As at 1 January
Rights issue
512,796
–
512,796 –
343,169 169,627 343,169
169,627
As at 31 December 512,796
512,796
512,796 512,796
(a) Issues of shares
There were no issue of shares during the financial year.
In the last financial year, the Company increased its issued and paid-up share capital from RM343,168,841 to
RM512,796,061 by way of a rights issue of 169,627,220 new ordinary shares of RM1.00 each at an issue price of
RM1.10 per share for cash on the basis of one (1) rights share for every two (2) existing ordinary shares held. The
newly issued shares rank pari passu in all respects with the existing ordinary shares of the Company.
(b) Treasury shares
Group and Company
2011
2010
Number of shares
’000 At cost:
As at 1 January Additions As at 31 December The shareholders of the Company granted a mandate to the Company to repurchase its own shares at the
Annual General Meeting held on 20 June 2011.
During the financial year, the Company repurchased a total of 1,453,800 (2010: 1,667,400) of its shares from
the open market for, a total consideration of RM1,181,433 (2010: RM1,890,932). The repurchase transaction
was financed through internally generated funds. The shares repurchased are being held as treasury shares in
accordance with Section 67A of the Companies Act, 1965.
None of the treasury shares held were resold or cancelled during the financial year. Treasury shares have no
rights to voting, dividends or participation in other distribution.
Amount
RM’000 Number of shares
’000 Amount
RM’000
5,582 1,454 15,569 1,182 3,914 1,668 13,678
1,891
7,036 16,751
5,582 15,569
144
26. RETAINED PROFITS
Effective from 1 January 2008, the Company is given the option to make an irrevocable election to move to a
single tier system or continue to use its tax credits under Section 108 of the Income Tax Act, 1967 for the purpose of
dividend distribution until the tax credit is fully utilised or latest by 31 December 2013.
The Company has made election to move to the single tier system and as a result, there is no additional tax liability
to be incurred upon payment of dividends out of its entire retained earnings as at the end of the reporting period.
27. POST EMPLOYMENT BENEFITS OBLIGATIONS
The Group operates both funded and unfunded defined benefits retirement plans for its employees. The latest
actuarial valuations of the plans were carried out in 2011.
Removable Pension Liabilities
Funded by Assumed
Pension by the Trust Fund Company Others RM’000 RM’000 RM’000
Group
Total
RM’000
At 31 December 2011
Current Non-current 9,582
86,461 –
65,087
11,213 33,547 20,795
185,095
96,043 65,087 44,760 205,890
At 31 December 2010
Current
Non-current 9,600
93,588 –
65,087
1,202 48,080 10,802
206,755
103,188 65,087
49,282
217,557
Pursuant to the acquisitions of Pelikan Holding AG group (“PHAG group”) in 2005, part of the defined benefits
retirement plans of the PHAG group in Germany (known as “Removable Pension Liabilities”) is now funded by an
external Pension Trust Fund created for this purpose, whilst the Company is assuming the balance of the said
Removable Pension Liabilities fixed in Ringgit Malaysia as at the completion date of the acquisitions of PHAG
group. If the assets in the Pension Trust Fund are capable of paying the entire Removable Pension Liabilities,
the Removable Pension Liabilities assumed by the Company will be relinquished.
THE FINANCIALS
145
The movements during the financial year in the amounts recognised in the consolidated statement of financial
position are as follows:
(cont’d)
Removable Pension Liabilities
Funded by Assumed
Pension by the Trust Fund Company Others RM’000 RM’000 RM’000
Group
Total
RM’000
At 1 January 2010 Expenses charged to statement of
comprehensive income
Utilised Currency translation and others 149,280 At 31 December 2010 Expenses charged to statement of
comprehensive income Utilised Currency translation and others 103,188 At 31 December 2011 96,043 The amount recognised in the consolidated statement of financial position may be analysed as follows:
9,681
(21,176)
(34,597) 9,153
(19,416) 3,118 65,087
59,453 273,820
–
–
–
11,464 (11,608)
(10,027)
21,145
(32,784)
(44,624)
65,087
49,282 217,557
9,530
(12,601) (1,451) 18,683
(32,017)
1,667
44,760
205,890
–
–
–
65,087
2011 RM’000 2010
RM’000
Present value of funded obligations
Fair value of plan assets 270,956 (207,795) 255,486
(197,560)
Status of funded plan Present value of unfunded obligations
Unrecognised actuarial loss 63,161 187,302 (44,573)
57,926
202,387
(42,756)
205,890 217,557
Group
The amount recognised in the consolidated statement of comprehensive income may be analysed as follows:
2011 RM’000 Group
Current service cost Interest cost Expected return on plan assets Actuarial gain recognised 6,228 21,582 (10,850) 1,723 5,195
23,057
(8,819)
1,712
Total included in staff costs 18,683 21,145
2010
RM’000
146
(cont’d)
The principal actuarial assumptions used in respect of the Group’s defined benefit plans were as follows:
2011 %
Group
2010
%
Discount rate Expected return on plan assets Expected rate of salary increases 2.30 - 7.75 3.00 - 7.00 2.00 - 5.00 2.60 - 9.00
4.00 - 9.00
1.00 - 5.00
Group
Warranty
RM’000
28. PROVISION
At 1 January 2010 Acquisition of subsidiaries Charged to statement of comprehensive income
Utilised
Currency translation and others 422
22
(25)
(1)
(72)
At 31 December 2010 Charged to statement of comprehensive income Utilised Currency translation and others 346
(99)
(64)
6
At 31 December 2011 189
29. DERIVATIVE LIABILITIES
Group
Interest rate swap 2011 Contract/
Notional
amount
Liabilities
EUR’000 RM’000 10,000 3,280
2010
Contract/
Notional
amount
EUR’000 Liabilities
RM’000
–
–
The Group has entered into interest rate swap contract with a total of EUR10 million resulting in an exchange of
floating for fixed interest rates from fiscal year 2012 to hedge exposure to movements in interest rate on a financing
transaction. For a period of 5 years, the variable interest rate is exchanged on the basis of the 3-month Euribor
interest at 3.15%. The fair value of interest rate swap contracts is determined by reference to market values of
similar instruments.
THE FINANCIALS
147
30. BORROWINGS
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Current
Bank overdrafts Bankers’ acceptances/Trust receipts Revolving credits Discounted bills
Hire purchase and lease payables Short term loans Term loans
5,818
17,882 182,472 37,326 617 35,026 71,779
13,487
25,377 86,441
14,176 791 33,701 57,566 –
1,352 144,710 32,891 41
–
38,970
–
14,541
63,191
9,993
50
–
45,084
350,920 231,539
217,964 132,859
Non-current
Hire purchase and lease payables
Term loans 1,006 106,821 918 192,216 –
92,525 41
126,916
107,827
193,134 92,525 126,957
Total
Bank overdrafts (note 24) Bankers’ acceptances/Trust receipts
Revolving credits Discounted bills Hire purchase and lease payables Short term loans Term loans 5,818 17,882 182,472 37,326 1,623
35,026
178,600
13,487
25,377 86,441 14,176 1,709
33,701
249,782
–
1,352 144,710 32,891 41
–
131,495 –
14,541
63,191
9,993
91
–
172,000
458,747 424,673 310,489 259,816
148
30. BORROWINGS
(cont’d)
Contractual terms of borrowings:
Effective interest Functional Group
rate currency % 2011
Secured
Bank overdrafts 7.96 - 9.40 EUR
Banker’s acceptances/Trust receipts 3.25 - 8.10 RM Revolving credits 3.42 - 3.87
USD
Revolving credits
4.80 - 5.29
RM Discounted bill 3.30 - 3.46
EUR Discounted bill
2.31 - 3.38 USD
Hire purchase and lease payables 3.75 - 5.89 EUR Hire purchase and lease payables
12.50 - 13.50 CHF
Hire purchase and lease payables 8.95 CZK Hire purchase and lease payables 6.50 USD
Hire purchase and lease payables 11.00 - 12.00 PLN Hire purchase and lease payables 3.50 - 3.65 RM Hire purchase and lease payables 3.65 SGD
Short term loans 4.00 - 4.50
EUR Short term loans 15.00 - 15.30 ARS Term loans 3.05 - 7.25 EUR Term loans 2.35 - 3.25 USD Term loans 1.66 - 2.32 CHF Term loans 4.25 - 4.60 RM Total
carrying
amount
RM’000
<––––––––––––––––––––––––– Maturity profile –––––––––––––––––––––––>
< 1 year 2nd year 3rd year 4th year 5th year > 5 years
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
5,272 16,547 47,669 27,122 549 12,021 753
465 182 35 21 114 53 31,894 2,721 34,658 128,696 5,073 2,177 5,272 16,547
47,669
27,122
549
12,021
313 102 87 19 21 58 17
31,894
2,721
30,760
36,171
–
2,177 –
–
–
–
–
–
440
106 95
16
–
16 17 –
–
1,536 35,338 3,382 –
–
–
–
–
–
–
–
112
–
–
–
16 17
–
–
716 35,338 –
–
–
–
–
–
–
–
–
115 –
–
–
16
2
–
–
638 21,849 1,691 –
–
–
–
–
–
–
–
30 –
–
–
8
–
–
–
206 –
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
802
–
–
–
Unsecured
Bank overdrafts
9.85 EUR Bank overdrafts 28.62 COP
Bankers’ acceptance 2.25 - 3.54 RM Revolving credits 9.18 EUR Revolving credits 5.80 - 5.85 MXN Revolving credits
5.30
RM Revolving credits 2.95 - 3.87 USD Revolving credits 9.43 COP Discounted bills 2.24 - 4.50
USD Discounted bills 3.25 - 4.45
EUR Discounted bills 2.60 - 3.85
JPY Short term loans 1.48 JPY Term loans 5.90 MXN
Term loans 4.25 GBP 316,022 213,520 40,946 36,199 24,311 244 802
543 543
–
–
–
–
–
3
3
–
–
–
–
–
1,335
761 10,671 16,000 76,920 3,329
14,291 10,164 301 411 6,035 1,961 1,335
761 10,671
16,000 76,920 3,329 14,291 10,164
301
411
2,435
236 –
–
–
–
–
–
–
–
–
–
2,400
236
–
–
–
–
–
–
–
–
–
–
1,200 236
–
–
–
–
–
–
–
–
–
–
–
236
–
–
–
–
–
–
–
–
–
–
–
236 –
–
–
–
–
–
–
–
–
–
–
781
142,725 137,400
2,636 1,436
236 236 781
458,747 350,920 43,582 37,635 24,547 480
1,583
THE FINANCIALS
149
30. BORROWINGS
(cont’d)
Contractual terms of borrowings (cont’d):
Effective interest Functional Group
rate currency % 2010
Secured
Bank overdrafts 1.90 - 2.15 EUR Banker’s acceptances/Trust receipts 3.53 - 7.80 RM Revolving credits 4.45 - 4.86 RM Revolving credits 2.95 USD Revolving credits 4.30 - 7.79 COP Hire purchase and lease payables 3.50 RM Hire purchase and lease payables 3.90 - 12.53 EUR
Hire purchase and lease payables 13.00 CHF Hire purchase and lease payables 6.09 USD Hire purchase and lease payables 6.02 - 8.95
CZK Hire purchase and lease payables 11.00 - 12.00 PLN Hire purchase and lease payables 6.50 COP
Hire purchase and lease payables 3.65 SGD Short term loans 4.20 - 4.40 EUR Short term loans 5.00 CZK
Short term loans 15.30 ARS
Term loans 4.25 - 4.53 RM
Term loans
2.60 - 7.23 EUR Term loans 1.66 - 2.32 CHF Term loans 2.36 - 2.95 USD Term loans 7.03 MXN Term loans
6.00 COP Total
carrying
amount
RM’000
<––––––––––––––––––––––––– Maturity profile –––––––––––––––––––––––>
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
973 25,377
27,000 12,340 2,524 91 890 56 53
266 111 175 67 30,952 14 1,223 4,753 64,940 6,560 158,436
9,219 3,779 973
25,377
27,000 12,340
2,524
50
350 56
19 81
43 175
17 30,952
14
1,223 2,583 15,599 –
34,306 2,634
2,215
–
–
–
–
–
41 335 –
19 88
68
–
17
–
–
–
1,999 32,123
–
34,306 2,634 1,564 –
–
–
–
–
–
205
–
15 97 –
–
17
–
–
–
171 817 3,280 34,306
2,634 –
–
–
–
–
–
–
–
–
–
–
–
–
16
–
–
–
–
–
–
34,306 1,317 –
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
21,212 –
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
16,401
3,280
–
–
–
Unsecured
Bank overdrafts 2.19 - 8.85
EUR
Bank overdrafts 6.56 HUF
Bank overdrafts 21.22 - 21.98 COP Revolving credits 4.42 - 5.07
RM Revolving credits
5.55
EUR Revolving credits 3.29 - 3.30
USD Revolving credits 6.98 - 8.08
MXN Discounted bills 2.30 - 3.25 EUR Discounted bills 2.36 - 4.50 USD Short term loans 1.48
JPY Term loans 4.25 GBP 349,799 158,531 73,194
41,542 35,639 21,212
19,681
9,515 2,989
10 2,936
756
30,851 10,034 6,785 7,391 1,512 2,095 9,515 2,989 10
2,936
756
30,851 10,034
6,785
7,391
1,512
229 –
–
–
–
–
–
–
–
–
–
229
–
–
–
–
–
–
–
–
–
–
229
–
–
–
–
–
–
–
–
–
–
229
–
–
–
–
–
–
–
–
–
–
229 –
–
–
–
–
–
–
–
–
–
950
74,874 73,008
229 229 229 229 950
424,673 231,539 73,423 41,771 35,868 21,441
20,631
150
30. BORROWINGS
(cont’d)
Contractual terms of borrowings (cont’d):
Company
2011
Secured
Banker’s acceptances/Trust receipts Revolving credits Revolving credits Discounted bill Discounted bill Hire purchase and lease payables Term loans Term loans Term loans Effective interest Functional rate currency % <––––––––––––––––––––––––– Maturity profile –––––––––––––––––––––––>
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
RM RM USD EUR USD RM RM EUR USD 1,352 20,122 47,669 549 12,021 41
2,177 621 128,696 1,352 20,122
47,669
549
12,021 41
2,177
621 36,171 –
–
–
–
–
–
–
–
35,338 –
–
–
–
–
–
–
–
35,338 –
–
–
–
–
–
–
–
21,849
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
213,248 120,723 35,338
35,338 21,849
–
–
Unsecured
Revolving credits Discounted bills Discounted bills Discounted bills 4.71 - 5.06 4.80 - 5.29 3.42 - 3.87 3.30 - 3.46 2.31 - 3.38 3.50 4.60 3.37 2.36 - 2.95 Total
carrying
amount
RM’000
2.95 - 3.87 3.30 - 3.46 2.31 - 4.50 2.60 - 3.85
USD EUR
USD JPY 76,920 5,729 14,291 301 76,920 5,729 14,291
301
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
97,241 97,241
–
–
–
–
–
310,489 217,964 35,338
35,338 21,849 –
–
RM RM USD RM RM EUR USD 14,541
20,000 12,340 91 4,753 8,811 158,436 14,541
20,000
12,340
50 2,583
8,195 34,306 –
–
–
41 1,999
616
34,306 –
–
–
–
171
–
34,306 –
–
–
–
–
–
34,306 –
–
–
–
–
–
21,212 –
–
–
–
–
–
–
218,972
92,015 36,962 34,477
34,306 21,212 –
USD EUR USD 30,851
2,602
7,391 30,851 2,602
7,391
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
40,844 40,844
–
–
–
–
–
259,816 132,859 36,962 34,477 34,306 21,212 –
2010
Secured
Banker’s acceptances/Trust receipts Revolving credits
Revolving credits Hire purchase and lease payables Term loans Term loans Term loans Unsecured
Revolving credits Discounted bills Discounted bills 4.53 - 7.80 4.45 - 4.86 2.95 3.50 4.25 - 4.53 2.60 2.36 - 2.95 3.29 - 3.30 3.25 2.36 - 4.50 Pelikan International Corporation Berhad
THE FINANCIALS
151
30. BORROWINGS
(cont’d)
Minimum hire purchase and lease payment:
- Not later than 1 year - Later than 1 year and not later than 5 years Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 643 1,065
825
931 47 –
56
47
Future finance charges 1,708 (85)
1,756 (47) 47 (6)
103
(12)
1,623 1,709 41 91
Present value of hire purchase and lease payables:
- Not later than 1 year - Later than 1 year and not later than 5 years 617 1,006
791
918 41
–
50
41
1,623 1,709
41 91
Discounted bills are secured over the subsidiaries’ receivables.
Short term loans and bank overdrafts are secured over the subsidiaries’ property, plant and equipment as disclosed
in note 15 to the financial statements and trade receivables as disclosed in note 23 to the financial statements.
The term loans, revolving credits and bankers’ acceptances/trust receipts are secured by legal charges over the
property, plant and equipment as disclosed in note 15 to the financial statements, investment in subsidiaries as
disclosed in note 17 to the financial statements, inventories as disclosed in note 22 to the financial statements and
deposits with licensed banks as disclosed in note 24 to the financial statements.
Hire purchase and lease payables are effectively secured as the rights to the leased assets revert to the lessor in
the event of default.
Term loans and hire purchase and lease payables which are subject to fixed interest rates amounted to
RM39,730,000 (2010: RM55,099,000) and RM1,623,000 (2010: RM1,709,000) respectively, out of which RM9,976,000
(2010: RM40,418,000) are repayable later than one (1) year.
31. PAYABLES
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 Trade payables Amounts payable to subsidiaries
Accruals:
- Staff costs - Bonus to customers - Others Employee related benefits Other payables 159,169 –
200,534 –
6,717 14,401
6,246
9,826
43,821 65,231 –
11,801 59,537 41,314
67,162 –
11,081
69,454 514 –
322
–
3,693 485
–
1,851
–
7,644
339,559 389,545 25,647 26,052
152
31. PAYABLES
(cont’d)
The fair values of payables approximate to their carrying amounts.
Credit terms of trade payables granted to the Group and to the Company range from 1 day to 120 days (2010: 1 day
to 120 days).
Amounts payable to subsidiaries which arose mainly from trade transactions, advances and payments made on
behalf are unsecured, interest free and repayable on demand except for trade transactions which are subject to
normal trade credit terms.
The currency exposure profile of payables are as follows:
Group Company
2011 2010
RM’000 RM’000
2011 RM’000 2010 RM’000 - RM - EUR - CHF - GBP - CZK - HUF - SEK - PLN - TRY - USD - MXN
- ARS - JPY - SGD - TWD - CNY - HKD - THB
- COP - IDR - RON
- BGN
- AED - NOK
9,466 249,743
17,966 4,833
6,298 –
802 246 177
16,003 10,770 6,763
3,672 1,201 60
1,530
347 –
8,375 311 –
–
903
93 10,796 269,731
21,075
10,241
8,445
1,967 1,240 6,123 37 22,273
13,042
5,934
4,055 1,156 72
1,109 904
–
8,011 259 2,977
98
–
–
1,142 18,549 –
–
–
–
–
–
–
5,831
–
–
74 30
–
–
–
21
–
–
–
–
–
–
19,790
1,285
–
–
–
–
–
–
–
4,917
–
–
60
–
–
–
–
–
–
–
–
–
–
–
339,559
389,545 25,647 26,052
THE FINANCIALS
153
32. COMMITMENTS
2011 RM’000 Group
2010
RM’000
Authorised and contracted for:
- Property, plant and equipment 342 463
Authorised but not contracted for:
- Property, plant and equipment 312
277
33. OPERATING LEASE COMMITMENTS
2011 RM’000 2010
RM’000
Minimum lease payments under operating lease commitments:
Not later than 1 year
Later than 1 year and not later than 5 years Later than 5 years 46,264
25,170 3,573 25,836
25,732
11,825
75,007 63,393
Group
34. PRIOR YEAR ADJUSTMENT
The Group changed the basis of measurement of the Pension Trust Fund to reflect the recovery of its carrying
amount during the financial year.
The adjustments to the carrying amount of the Pension Trust Fund arising from this change in measurement
basis have been effected retrospectively resulting in the comparative figures and opening retained profits of the Group
being restated.
The effects of the adjustments are summarised as follows:
Group and
Company
RM’000
Statement of Financial Position as at 31 December 2010
Cumulative decrease in Pension Trust Fund Cumulative decrease in retained profits (32,258)
(32,258)
Statement of Financial Position as at 31 December 2009
Cumulative decrease in Pension Trust Fund Cumulative decrease in retained profits (21,270)
(21,270)
154
34. PRIOR YEAR ADJUSTMENT
(cont’d)
The following comparative figures have been restated accordingly:
Group
As
previously
stated
RM’000 Effect of prior
year
adjustment
RM’000 As
restated
RM’000
Consolidated Statement of Financial Position
As at 31 December 2010
Pension Trust Fund (non-current) Retained profit 192,565 335,009 (32,258) (32,258) 160,307
302,751
185,087
Consolidated Statement of Changes in Equity
for the financial year ended
31 December 2010
Total comprehensive income Balance as at 31 December 2010 95,429 880,357 (10,988)
(32,258) 84,441
848,099
31 December 2009
Retained profit 206,357 (21,270) 185,087
Company
As
previously
stated
RM’000 Effect of prior
year
adjustment
RM’000 As
restated
RM’000
Statement of Financial Position
40,107
Pension Trust Fund (non-current) Retained profit 188,776 43,799
(21,270) (21,270) 167,506
22,529
Statement of Changes in Equity
for the financial year ended
31 December 2010
Total comprehensive income Balance as at 31 December 2010
39,694 644,556 (10,988) (32,258)
28,706
612,298
31 December 2009
Retained profit 43,799
(21,270) 22,529
THE FINANCIALS
155
35. CONTINGENT LIABILITIES
(a) In the ordinary course of business, the business of Pelikan Hardcopy Holding AG and German Hardcopy AG
groups (dealing with manufacturing and distribution of hardcopy related products and printer consumables
such as inkjet and toner cartridges, thermal transfer, office media and impact cartridges, hereinafter referred
to as the “Hardcopy business”) is involved in several lawsuits. In particular, the Group has several large legal
claims brought by Original Equipment Manufacturers (“OEM”) for perceived breach of patents with an assessed
potential maximum exposure of EUR17.7 million (RM72.7 million) (2010: EUR26.1 million or RM106.7 million). The
Group is of the view that litigation matters are an inherent part of the Hardcopy business. Historically, the Group
have been successful in defending most cases and management remains confident that the Group’s exposure to
these claims can be reduced or can be successfully defended. In the opinion of the management, the lawsuits,
claims and proceedings which are pending against the Group will not have a material effect on the Group.
(b) Based on the latest actuaries assumption as at 31 December 2011, Pelikan Hardcopy Holding AG’s (“PHH”)
wholly owned subsidiary Pelikan Hardcopy Scotland Limited’s (“PHSL”) retirement fund has GBP21.5 million
(RM105.6 million) assets to meet pension liabilities of GBP30.4 million (RM149.3 million). The Company provided
a corporate guarantee for the shortfall. An amount of GBP0.9 million (RM4.4 million) has been recognised as a
pension liability for the financial year ended 31 December 2011 in accordance with FRS 119.
The Group believes that its operational cash flow and the assets in the retirement fund of PHSL are sufficient to
meet the payouts of the retirement scheme in the foreseeable future.
(c) The Company has provided corporate guarantees to financial institutions and suppliers for financing
arrangements of certain subsidiaries amounting to RM162,902,000 (2010: RM160,888,000).
36. SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to related party disclosures mentioned elsewhere in the financial statements, significant related party
transactions entered into by the Group during the financial year are set out below. These transactions were carried
out on negotiated commercial terms.
Group Company
2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000
Sale of goods to subsidiaries
–
–
55,013 57,904
Sale of goods to associates:
- Columbia Pelikan PTY Limited
- Pelikan (Thailand) Co Ltd –
2,479 34
3,796 –
–
–
–
Sale of goods to related parties:
- KLB group - Macvantage group –
477 873
1,565 –
477 –
1,565
Purchase of logistics services from KLB group
Rental of buildings from KLB group
–
–
513
664 –
–
–
–
Konsortium Logistik Berhad and its subsidiaries (“KLB group”) are a group of companies which a Director and
substantial shareholder, Loo Hooi Keat has substantial interest. Loo Hooi Keat ceased to have substantial interest in
KLB effective from 18 October 2010.
Macvantage Sdn Bhd and its subsidiaries (“Macvantage group”) are a group of companies which a Director and
substantial shareholder, Loo Hooi Keat has substantial interest.
156
37. FINANCIAL INSTRUMENTS
(a) Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes
during the financial years ended 31 December 2011 and 31 December 2010.
The Group monitors capital using a gearing ratio, which is derived by dividing the amount of borrowings, net
of cash and bank balances over shareholders’ equity. At the reporting date, the Group’s net gearing ratio is
0.50 times (2010: 0.39 times). The Group’s policy is to keep its gearing within manageable levels.
(b) Methods and assumptions used to estimate fair value
The fair values of financial assets and financial liabilities are determined as follows:
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value
The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other
payables and borrowings, are reasonable approximation of fair value, either due to their short-term nature or
that they are floating rate instruments that are re-priced to market interest rates on or near the end of the
reporting period.
The carrying amounts of the current position of loans and borrowings are reasonable approximations of fair
values due to the insignificant impact of discounting.
The carrying values of the borrowings approximate the fair values as the borrowings are floating instruments
that are re-priced to market interest rate.
Amounts owing by subsidiaries, obligations under finance lease, fixed rate bank loans
The fair value of these financial instruments are estimated by discounting expected future cash flows at
current market interest rates available for similar financial instruments and of the same remaining maturities.
The carrying values of these financial instruments approximate their fair values.
Quoted shares
The fair value of quoted investments is determined by reference to the exchange quoted market bid prices at
the close of the business on the end of the reporting period.
Unquoted shares
The carrying values of investment in unquoted shares approximate fair values.
Derivatives
The fair value of the interest rate swap contracts is the amount that would be payable or receivable upon
termination of the position at the end of the reporting period, and is calculated as the difference between the
present value of the estimated future cash flows at the contracted rate compared to that calculated at the spot
rate as at the end of the reporting period.
THE FINANCIALS
157
37. FINANCIAL INSTRUMENTS
(cont’d)
(c) Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical
assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The Group held the following financial instruments carried at fair value on the statement of financial position:
Assets measured at fair value
2011
- Quoted shares - Unquoted shares 2010
- Quoted shares - Unquoted shares Liabilities measured at fair value
2011
Financial liabilities at fair value through
profit or loss
- Interest rate swaps Total RM’000 Level 1
RM’000 Level 2 RM’000 Level 3
RM’000
2,819 166
2,819
–
–
–
–
166
2,846 160
2,846
–
–
–
–
160
Total RM’000 Level 1
RM’000 Level 2 RM’000 Level 3
RM’000
3,280
–
3,280 –
There were no transfers between Level 1 and Level 2 fair value measurement during the financial years
Reconciliation of fair value measurements of Level 3 financial instruments
The Group carries unquoted equity shares as financial assets at fair value through profit or loss classified as
Level 3 within the fair value hierarchy.
Financial assets
held for trading
RM’000
Balance at 1 January 2011 Currency translation 160
6
Balance at 31 December 2011 166
158
38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s financial risk management policies seek to ensure that adequate financial resources are available for
the development of the Group’s businesses whilst managing their risks. Financial risk management is carried out
through risks reviews, internal controls systems and adherence to the Group’s financial risk management policies
that are approved by the Board. The use of financial instruments exposes the Group to financial risks, which are
categorised as credit risk, liquidity risk, interest rate risk and foreign currency risk. It is the Group’s policy not to engage
in speculative transactions.
The policies for controlling these risks when applicable are set out below:
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group and Company’s exposure to credit risk arises principally from its receivables.
Receivables
The Group has a credit policy in place and the exposure to credit risk is managed through the application of credit
approvals, credit limits and monitoring procedures.
The Group does not have any significant exposure to any individual customer. A significant portion of its trade
receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to
monitor the credit quality of the trade receivables. The ageing of trade receivables as at the end of the financial
year is disclosed in note 23 to the financial statements.
The Company provides unsecured loans and advances to subsidiaries. Management monitors the operating
results of its geographical units separately for the purpose of making decisions about resource allocation and
performance assessment.
The Group and Company’s maximum exposure to credit risk arising from the receivables is represented by the
carrying amounts in the statements of financial position.
Financial guarantees
The Company has provided corporate guarantees to financial institutions and suppliers for financing
arrangements of certain subsidiaries. The financial guarantees have not been recognised since the fair value
on initial recognition was negligible.
(b) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage
of funds. The Group’s exposure to liquidity risk arises primarily from its various payables, loans and borrowings.
The Group’s objective is to maintain a balance of funding and flexibility through the use of credit facilities, short
and long term borrowings.
THE FINANCIALS
159
(cont’d)
(b) Liquidity risk (cont’d)
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the
reporting period based on contractual undiscounted repayment obligations.
On demand
or within
one year
RM’000 One to five
years
RM’000
Over five
years
RM’000 Total
RM’000
Group
Financial liabilities:
Payables Borrowings Derivatives 339,559
354,515 3,280
–
114,295 –
–
1,755 –
339,559
470,565
3,280
Total undiscounted financial liabilities
697,354
114,295
1,755
813,404
Company
Payables Borrowings 25,647 222,819 –
96,393
–
–
25,647
319,212
248,466
96,393
–
344,859
Group
Payables
Borrowings 389,545 237,813 –
181,017 –
18,770 389,545
437,600
627,358
181,017
18,770
827,145
Company
Payables Borrowings 26,052
141,935 –
138,204
–
–
26,052
280,726
167,987
138,204
–
306,778
160
(cont’d)
(c) Interest rate risk
Interest rate 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 interest rates. The Group’s exposure to interest rate risk relates to interest
bearing financial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available.
Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.
The Group has entered into interest rate swap contracts to manage exposures of its borrowings to interest
rate risk. The contractual repricing allows the Group to receive interest at fixed rates and to pay interest at floating
rates on notional principal amounts.
A 10 basis points increase/decrease in interest rate as at the end of the reporting period would have
immaterial impact on the profit or loss. This assumes that all other variables remain constant.
(d) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Group is exposed to foreign currency risk as a result of its
normal trade activities when the currency denomination differs from its functional currency.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating
entities are kept to an acceptable level.
The following table illustrates the effect of changes in exchange rate on the translation of foreign currency
monetary items against the functional currency at 31 December 2011. If the major currencies weakened by 3%
at the end of the reporting period, the Group’s profit before tax will improve/(decline) by:
Major currency
2011 RM’000 2010
RM’000
Group
United States Dollar 7,880 5,971
Company
European Euro
United States Dollar (3,330)
7,780 (3,709)
5,418
A similar percentage increase in the exchange rate would have an equal but opposite effect.
The Group operates internationally and is therefore exposed to different currencies of the countries where the
Group operates. Exposure to currency risk as a whole is mitigated by the operating environment which provides
for a natural hedge. Most payments for foreign payables is matched against receivables denominated in the
same foreign currency or whenever possible, by intragroup arrangements and settlements.
(e) Market price risk
Market price risk is the risk that the fair value of future cash flows of the Group’s financial instruments will
fluctuate because of changes in market prices (other than interest or exchange rates).
The Group does not actively trade in quoted equity investments apart from certain investments by subsidiaries
in bonds/equity in relation to pension scheme investments. The value of such investments subjected to
market price risk are small and as such the effects of the market price fluctuations to the Group is not material.
THE FINANCIALS
39. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
On 29 March 2012, the Group disposed of the following indirect subsidiaries to certain third parties for a total
consideration of EUR22,229,000 (RM91,482,000):
(a) 650,000 ordinary shares of EUR1.00 each in Falken Office Products GmbH (“FOP”) representing 100% of the
equity interest in FOP.
(b) 1,681,835 ordinary shares of GBP1.00 each in Herlitz UK Limited (“Herlitz UK”) representing 100% of the
equity interest in Herlitz UK.
(c) 1,000 ordinary shares of RON10.00 each in DELMET PROD srl (“Delmet”) representing 100% of the equity
interest in Delmet.
The transaction was completed on 30 March 2012 and these companies ceased to be subsidiaries of the Group as of
that date.
161
162
40. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES
The retained profits as at the end of the reporting period may be analysed as follows:
Group Company
2011 2010 2011 2010
(Restated)
(Restated)
RM’000 RM’000 RM’000 RM’000
Total retained profits of the Company and
its subsidiaries:
- Realised profit - Unrealised (loss)/profit 214,381
(9,304) 284,407 15,678
38,115 (10,085) 37,823
2,284
205,077 300,085 28,030 40,107
Total share of accumulated losses from associates:
- Realised loss - Unrealised profit (349) 49
(1,774) 38
–
–
–
–
Less: Consolidation adjustments
(300)
(589) (1,736) 4,402 –
–
–
–
28,030
40,107
Total retained profits as per statements of
financial position 204,188 302,751 The determination of realised and unrealised profits/losses above is based on the 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 Malaysian Institute of Accountants on 20 December 2010.
THE FINANCIALS
163
ADDITIONAL COMPLIANCE INFORMATION
The information set out below is disclosed in compliance with the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”):
1.
Utilisation of proceeds raised from corporate proposals
There were no proceeds raised from corporate proposals during the financial year.
2.
Share buy-backs
The Company had at the previous Annual General Meeting of the Company held on 20 June 2011, obtained
its shareholders’ approval to continue the share buy-back exercise, to purchase up to ten percent (10%) of the total
issued and paid-up ordinary share capital of the Company at any point of time through Bursa Securities. During
the financial year under review, a total of 1,453,800 shares were repurchased as treasury shares with a total
cost of RM1,181,433.03. All shares purchased by the Company were retained as treasury shares and none of the
shares repurchased was resold or cancelled during the financial year.
The details of shares bought back during the financial year ended 31 December 2011 are shown as follows:
Monthly
No. of
breakdown of shares
shares
purchased
purchased
Minimum
price
per share
(RM)
Maximum
price
per share
(RM)
*Average
price
per share
(RM)
*Total
amount
paid
(RM)
February 2011 May 2011
June 2011
August 2011
September 2011
October 2011
November 2011
December 2011
100
137,500
77,000
100
20,000
57,100
20,000
1,142,000
1.1600
1.0170
1.0142
0.8450
0.8125
0.7943
0.7825
0.7500
1.1600
1.0729
1.0400
0.8450
0.8125
0.8000
0.7825
0.7860
1.1600
1.0546
1.0283
0.8450
0.8125
0.7963
0.7825
0.7658
145.04
145,807.73
79,616.48
125.53
16,340.13
45,721.76
15,736.43
877,939.93
Total
1,453,800
1,181,433.03
* Including brokerage, commission, clearing house fee and stamp duty.
164
ADDITIONAL COMPLIANCE INFORMATION
3.
Options or convertible securities
The shareholders of the Company had on 17 December 2009 during the Extraordinary General Meeting of the
Company approved an Executives’ Share Option Scheme (“ESOS”) for the eligible executives and Directors of the
Company. The ESOS was effective 1 March 2010 and is to be in force for a period of five (5) years from the effective
date of implementation. It may be extended or renewed for a further period of five (5) years, at the sole and absolute
discretion of the Board of Directors upon the recommendation of the Option Committee and pursuant to the by-law,
and shall not in aggregate exceed a duration of ten (10) years from the effective date of implementation. There were
no options granted after the effective date of the ESOS.
During the financial year ended 31 December 2011, the Company has not issued any options or convertible securities.
4.
Depository Receipt programme
During the financial year, the Company did not sponsor any depository receipt programme.
5.
Imposition of sanctions and/or penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management
by the relevant regulatory bodies during the financial year.
6.
Non-Audit fees
The non-audit fees paid or payable to the external auditors of the Company and its subsidiaries for the financial year
ended 31 December 2011 amounted to RM 875,000.00.
7.
Variation in results
There was no deviation of 10% or more between the unaudited financial results announced and the audited financial
results of the Company and the Group for the financial year ended 31 December 2011.
The Company did not release any profit estimate, forecast or projections during the financial year.
8.
Profit guarantee
During the financial year, there was no profit guarantee given by the Company.
9.
Material contracts
There was no material contract, not being contract entered into in the ordinary course of business of the Company
and its subsidiaries, involving the interest of the Directors and major shareholders of the Company, either still
subsisting at the end of the financial year or entered into since the end of the previous financial year.
10. Revaluation policy on landed properties
The Company does not have a revaluation policy on landed properties.
THE FINANCIALS
165
ANALYSIS OF SHAREHOLDINGS
as at 30 April 2012
Authorised Share Capital
: RM1,000,000,000
Issued and Paid-Up Share Capital : RM512,796,061
Class of Shares
: Ordinary Shares of RM1.00 each
Voting Rights
: One (1) vote per Ordinary Share
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
No. of Shareholders
%*
No. of Shares %*
1 – 99
100 – 1,000
1,001 – 10,000
10,001 – 100,000 100,001 to less than 5% of the issued shares
5% and above of issued shares 275
469
3,509
1,533
203
4
4.59
7.82
58.55
25.58
3.39
0.07
7,593
310,824
17,158,671
46,877,540
179,462,810
257,453,023
0.00
0.06
3.43
9.35
35.80
51.36
Total
5,933
100.00
501,270,461
100.00
* After netting off the 11,525,600 treasury shares of Pelikan International Corporation Berhad (“PICB”) held as at 30 April 2012.
DIRECTORS’ SHAREHOLDINGS
(Based on the Register of Directors’ Shareholdings)
Name of Directors
1. Loo Hooi Keat
Direct Interest
No. of Shares Held
%*
Indirect Interest 100,855,534(1)
%*
34,888,355
6.96
2. Syed Hussin bin Shaikh Al Junid
–
–
–
–
3. Tan Sri Musa bin Mohamad
–
–
–
–
20.12
4. Yap Kim Swee
–
–
–
–
5. Hajah Rozaida binti Omar
–
–
–
–
6. Normimy Binti Mohamed Noor
–
–
–
–
Save as disclosed above, none of the Directors of the Company has any interest, direct or indirect, in a related corporation of PICB.
Notes:
(1)Deemed
interested by virtue of his substantial shareholdings in PBS Office Supplies Holding Sdn Bhd and Mahir Agresif (M) Sdn Bhd and
deemed interested by virtue of shares held by his daughter.
* After netting off the 11,525,600 treasury shares of PICB held as at 30 April 2012.
166
ANALYSIS OF SHAREHOLDINGS as at 30 April 2012
SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS
(Based on the Register of Substantial Shareholders)
Name of Substantial Shareholders
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Loo Hooi Keat
PBS Office Supplies Holding Sdn Bhd
Marktrade Sdn Bhd
Pembinaan Redzai Sdn Bhd
Tan Sri Datuk Gnanalingam A/L Gunanathlingam
Ahmayuddin bin Ahmad
Lembaga Tabung Haji
Persada Bina Sdn Bhd
Dato’ Haji Md Yusoff @ Mohd Yusoff Bin Jaafar
Jason Yong Cher Chiat
Direct Interest
34,888,355
95,257,099
–
30,000,001
–
–
154,103,430
32,365,575
_
_
No. of Shares Held
%*
Indirect Interest 6.96
19.00
–
5.98
–
–
30.74
6.46
_
_
%*
100,719,334(1)
–
95,257,099(2)
–
30,000,001(3)
30,000,001(3)
–
372,050(4)
32,737,625(5)
32,737,625(5)
20.09
–
19.00
–
5.98
5.98
–
0.07
6.53
6.53
Notes:
(1)Deemed interested by virtue of his substantial shareholdings in PBS Office Supplies Holding Sdn Bhd and Mahir Agresif (M) Sdn Bhd.
(2)Deemed interested by virtue of its substantial shareholdings in PBS Office Supplies Holding Sdn Bhd.
(3)Deemed interested by virtue of his substantial shareholdings in Pembinaan Redzai Sdn Bhd.
(4)Deemed interested by virtue of its shareholdings in Kaypitech Sdn Bhd.
(5)Deemed interested by virtue of his shareholdings in Persada Bina Sdn Bhd.
* After netting off the 11,525,600 treasury shares of PICB held as at 30 April 2012.
LIST OF TOP THIRTY (30) SHAREHOLDERS
(Based on the Record of Depositors)
Name of Shareholders
1. Lembaga Tabung Haji
2. ECML Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for PBS Office Supplies Holding Sdn Bhd
3. Pembinaan Redzai Sdn Berhad
4. Amsec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account - Ambank (M) Bhd for PBS Office Supplies Holding Sdn Bhd
Pledged Securities Account for Persada Bina Sdn Bhd (001)
Pledged Securities Account for PBS Office Supplies Holding Sdn Bhd (001)
7. AIBB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Loo Hooi Keat
8. RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Loo Hooi Keat (CEB)
Pledged Securities Account for Persada Bina Sdn Bhd (001)
Pledged Securities Account for Mahir Agresif (M) Sdn Bhd (001)
No. of Shares %*
154,103,430 44,092,335 30.742
8.796
30,000,001 29,257,257 5.984
5.836
20,270,000 4.043
19,467,517 3.883
17,286,175 3.448
13,827,000 2.758
11,972,475 2.388
5,461,300 1.089
THE FINANCIALS
167
ANALYSIS OF SHAREHOLDINGS as at 30 April 2012
LIST OF TOP THIRTY (30) SHAREHOLDERS
(cont’d)
(Based on the Record of Depositors)
Name of Shareholders
11. ECM Libra Investment Bank Berhad
IVT-001 For ECM Libra Investment Bank Berhad (Account 1)
12. CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank for Gan Kong Hiok (M52019)
13. CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank for Chia Kwoon Meng (MM0678)
14. Citigroup Nominees (Asing) Sdn Bhd
Exempt An for Citibank NA, Singapore (Julius Baer)
15. Citigroup Nominees (Asing) Sdn Bhd
CBNY for Dimensional Emerging Markets Value Fund
16. RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Gan Kong Hiok
Pledged Securities Account For PBS Office Supplies Holding Sdn Bhd (001)
18. Public Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Gan Kong Hiok (KLC/ECM)
19. HSBC Nominees (Asing) Sdn Bhd
DZ Privatbk for Uniasiapacific
20. HDM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chia Kwoon Meng (M02)
21. PBS Office Supplies Holding Sdn Bhd 22. Citigroup Nominees (Tempatan) Sdn Bhd
Exempt An for OCBC Securities Private Limited (Client A/C-R ES)
23. Chow Song Kuang
BNY Brussels for Allchurches Investment Management Services Ltd
25. HLB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Gan Kong Hiok
Heah Sieu Lay (PCS)
BNY Brussels for E.I.O. Trustees Limited
28. Chow Chee Hin
Pledged Securities Account for Gan Kong Hiok (001)
30. Maybank Nominees (Tempatan) Sdn Bhd
Jincan Sdn BHd
Total
* After netting off the 11,525,600 treasury shares of PICB held as at 30 April 2012. No. of Shares %*
5,442,170 1.085
4,519,400 0.901
4,468,900 0.891
4,214,200 0.840
4,130,320 0.823
4,000,000 0.797
3,550,000 0.708
3,128,000 0.624
1,930,000 0.385
1,897,000 0.378
1,750,000 1,679,396 0.349
0.335
1,600,000
1,484,600 0.319
0.296
1,471,200 0.293
1,433,735 0.286
1,125,000 0.224
1,105,000 1,050,600 0.220
0.209
900,000 0.179
396,617,011
79.122
168
LIST OF GROUP PROPERTIES
Registered
Land
Existing
Built-up
Owner Location area use area 1 Pelikan GmbH
2 Pelikan Mexico
S.A. de C.V.
3 Pelikan Hardcopy
Production AG
4 Greif-Werke GmbH
5 Geha GmbH
6 Pelikan Colombia S.A.S 7 Pelikan Hardcopy
Scotland Limited
8 Falken Office
Products GmbH
9 Herlitz Spolka z.o.o. 10 Herlitz Spol. s.r.o.
11 Herlitz Romania srl 12 Molkari
Vermietungsgesellschaft Mbh & Co. Objekt
Falkensee Kg
Age of
building/
date of
acquisition Tenure
TMYR
Factory Vöhrum
68,873 sqm Production
46,373 sqm 24 years
Freehold
61,221
Pelikanstrasse 11
17/12/1973
D-31228 Peine
Germany
Carretera a Tehuacan 1033 80,109 sqm Production
17,185 sqm 32 years
Freehold
20,026
Col. Maravillas
30/4/1981
C.P. 72220
Puebla Pue
Mexico
Mönchaltdorf Plant
4,190 sqm
Production
2,420 sqm
20 years
Freehold
7,735
Mettlenbachstrasse 3
12/4/1989
CH-8617 Mönchaltorf
Switzerland
Düren Logistics Facility
20,349 sqm Logistic Centre
9,692 sqm
7 years
Freehold 17,052
Neue Strasse 19
25/6/2004
D-52382 Niederzier
Germany
Alte Heeresstrasse 27
3,703 sqm
Office building & 1,698 sqm
16 years
Freehold 4,124
D-59929 Brilon
warehouse
29/12/1999
Germany
Carrera 65B No 18A-17
4,478 sqm
Production
5,845 sqm
32 years
Freehold
9,143
Bogotá D.C.
8/1/2007
Colombia
Markethill Road
30,200 sqm Production
15,400 sqm 46 years
Freehold
2,333
Turriff, Scotland
15/1/2010
AB53 4AW
United Kingdom
Am Bahnhof 5
55,000 sqm Office building & 22,800 sqm 18 years Freehold 12,951
03185 Peitz
production
1/1/1993
Germany
ul. Szamotulska2
37,563 sqm Office building,
12,000 sqm 12 years Freehold 9,375
62081 Przezmierowo
production &
1/1/1999
Poland
warehouse
Obchodni 101
6,894 sqm
Office building 2,823 sqm 14 years Freehold 5,400
25170 Cestlice
10/1/1997
Czech Republic
Depozitelor Str. 22 861 sqm Land –
–
Freehold 53
540240 Tirgu Mures 15/3/1995
Romania
Strasse der Einheit 380,922 sqm Logistic Centre 35,008 sqm 17 years Freehold 200,970
142-148 D-14612
31/12//2001
Falkensee
Germany
350,383
THE FINANCIALS
169
PELIKAN GROUP OF COMPANIES DIRECTORY
PRODUCTION
Colombia
Carrera 65B No 19-17
Bogotá
Tel:
+571 261 1711
Fax:
+571 290 5550
Email: [email protected]
Website: www.indistripen.com.co
Czech Republic
Pelikan Hardcopy CZ s.r.o
Svatoborska 395
CZ-69701 Kyjov
Tel:
+42 0 518 699 811
Fax:
+42 0 518 699 810
Germany
Pelikan PBS-Produktionsgesellschaft mbH &
Co. KG
Factory Vöhrum
Pelikanstrasse 11
D - 31228 Peine
Tel:
+49 5171 299 0
Fax:
+49 5171 299 205
Germany
Susy Card GmbH
Straße der Einheit 142-148
14612 Falkensee
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
Email: www.herlitz.de/servicelinks/
kontakt.html
Website: www.herlitz.de
Great Britain
Switzerland
Pelikan Hardcopy Scotland Limited
Markethill Road, GB-Turriff
Aberdeenshire AB 53 4AW
Tel:
+44 1 888 564 200
Fax:
+44 1 888 562 042
Pelikan Hardcopy Production AG
Haldenstrasse 30, CH-8620 Wetzikon
Tel:
+41 44 986 1222
Fax:
+41 44 986 1252
Malaysia
Pelikan Production (Malaysia) Sdn Bhd
No. 5, Jalan Jurubina U1/18
Seksyen U1, Hicom Glenmarie
Industrial Park, 40150 Shah Alam
Tel:
+603 55670400
Fax:
+603 55670403
INVESTMENT HOLDINGS
Mexico
Pelikan Mexico, S.A. de C.V.
Carretera a Tehuacán 1033
Col. Maravillas
C.P. 72220 Puebla, Pue
Tel:
+ 52 222 309 8000
Fax:
+ 52 222 309 8049
People’s Republic of China
Dongguan Pelikan Hardcopy Ltd.
Lingtou Administrative District
Qiaotou Zhen, Dongguan
Guangdong, 523530
Tel:
+86 769 8334 6707
Fax:
+86 769 8334 2450
Poland
ul. Szamotulska 2
Baranowo k/Poznania
62081 Przezmierowo
Tel:
+48 61 6501 100
Fax: +48 61 6501 199
E-Mail: [email protected]
Website: www.herlitz.pl
Malaysia
Tel:
+603 55695511
Fax:
+603 55695500
Switzerland
Pelikan Holding AG
Chaltenbodenstrasse 8
CH-8834 Schindellegi
Tel:
+41 44 786 70 20
Fax:
+41 44 786 70 21
Germany
Herlitz AG
Am Borsigturm 100
13507 Berlin
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
kontakt.html
170
SALES
EUROPE
Austria
Pelikan Austria Gesellschaft m.b.H.
IZ NÖ Süd, Strasse 7, Objekt 58D, TOP 8
A-2355 Wiener Neudorf
Tel:
+43 2236 3010
Fax:
+43 2236 33655
Belgium
Pelikan Belux N.V./ S.A.
Stationsstraat 43
B - 1702 Groot-Bijgaarden
Tel:
+32 2 481 87 00
Fax:
+32 2 481 87 19
France
Pelikan France SAS
Les Conquérants – Imm. Annapurna
1 Av. de l’Atlantique – Z.A. Courtaboeuf
91978 Les Ulis Cedex
Tel:
+33 (0)1 69 29 88 68
Fax:
+33 (0)1 69 29 88 60
Greece
Pelikan Hellas E.P.E.
8 km of Vari-Koropi Avenue
Koropi Industrial Zone
GR-194 00 Koropi
Tel:
+30 210 6625 129
Fax:
+30 210 6626 232
Germany
Geha GmbH
Alte Heeresstraße 27
59929 Brilon
Tel:
+49 (0)2961 9747 250
Fax:
+49 (0)2961 9747 259
Website: www.geha.ag
Hungary
Herlitz Hungária Kft.
Campona u.1
(Harbor Park)
1225 Budapest
Tel:
+36 1 3052000
Fax:
+36 1 3052035
Website: www.herlitz.hu
Bulgaria
Herlitz Bulgaria EOOD
Poruchik Nedelcho Bonchev Str. 10
Lager 25-26
Industriegebiet Gara Iskar
1528 Sofia
Tel:
+359 2 9732020
Fax:
+359 2 9732151
Website: www.herlitzbg.com
Germany
Pelikan Vertriebsgesellschaft mbH &
Co. KG
Werftstrasse 9
D - 30163 Hanover
Tel:
+49 511 6969 0
Fax:
+49 511 6969 212
(domestic sales)
(international sales)
Czech Republic
Herlitz spol. s r.o.
Komerční zóna Průhonice
Obchodní 101
25170 Čestlice
okr. Praha-východ
Tel:
+420 296 544203
Fax:
+420 296 544444
Website: www.herlitz.cz
Germany
Herlitz AG/ Convex Schreibwaren Handels
GmbH
Am Borsigturm 100
13507 Berlin
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
kontakt.html
Italy
Pelikan Italia S.p.A.
Via Stephenson 43/A
I-20157 Milan
Tel:
+39 02 39016 312
Fax:
+39 02 39016 361
Poland
ul. Szamotulska 2
Baranowo k/Poznania
62081 Przezmierowo
Tel:
+48 61 6501 100
Fax:
+48 61 6501 199
Website: www.herlitz.pl
THE FINANCIALS
171
Romania
SC Herlitz Romania S.R.L.
Depozitelor Str. 22
540240 Tirgu Mures
Tel: +402 65 253722
Fax: +402 65 253582
Website: www.herlitzromania.ro
The Netherlands
Herlitz Benelux B.V.
Hoge Bergen 15
4704 Roosendaal
Tel:
+31 165 574242
Fax:
+31 165 542055
Website: www.herlitz.de/en
Slovakia
Herlitz Slovakia s.r.o.
Odborárska 52
83102 Bratislava
Tel:
+421 244 461766
Fax:
+421 244 464402
Website: www.herlitz.sk
The Netherlands
Pelikan Nederland B.V.
Jonkersbosplein 52
NL-6534 AB Nijmegen
Tel:
+31 243 556 474
Spain
Pelikan S.A.
Lleida 8, nave 1
08185 Lliçà de Vall
Barcelona
Tel:
+34 902 208 200
Fax:
+34 902 208 201
Sweden
Pelikan Nordic AB
Skeppsgatan 19
SE-211 19 Malmö
Tel:
+46 40 627 08 40
Fax:
+46 40 627 08 41
Switzerland
Pelikan (Schweiz) AG
Chaltenbodenstrasse 8
CH-8834 Schindellegi
Tel:
+41 44 786 70 20
Fax:
+41 44 786 70 21
Turkey
Pelikan Ofis Ve Kirtasiye Malzemeleri
Ticaret Ltd Sirketi
Atatürk Hava Limani Karsisi
IDTM Blokari A1 Blok Kat: 11 No: 366
34149 Yesilköy Istanbul
Tel:
+90 (0) 212 465 3960
Fax:
+90 (0)212 465 3906
AMERICAS
Argentina
Pelikan Argentina S.A.
Juan Zufriategui 627 Piso 1º
B1638CAA Vicente López
Buenos Aires
Tel:
+54 11 4118 3100
Fax:
+ 54 11 4118 3199
Colombia
Carrera 65B No 18A-17
Bogotá
Tel:
+571 261 1711
Fax:
+571 290 5550
Website: www.indistripen.com.co
Mexico
Pelikan México S.A. de C.V.
Carretera a Tehuacán 1033
Col. Maravillas
C.P. 72220 Puebla, Pue.
Tel:
+ 52 222 309 8000
Fax:
+ 52 222 309 8049
Email: direccion.general@pelikan.
com.mx
ASIA & MIDDLE EAST
India
Pelikan Trading India Private Limited
1, “Anup” Sunbeam CHS,
Juhu Dhara Complex,
New Juhu Versova Link Road,
Andheri (W),
Mumbai 400 053
Tel: +91 (11) 4155 3060
Fax: +91 (11) 4155 3068
Indonesia
PT Pelikan Indonesia
Jl. Cideng Barat No 115
Jakarta 10150
Tel: +62 21 3805 685 & 86
Fax:
+62 21 3810 317
Japan
Pelikan Japan K.K.
Nobui Bldg. 5 Floor,
1-1-12 Ueno
Taito-ku
Tokyo 110-0005
Tel:
+81 3 3836 6541
Fax:
+81 3 3836 6545
172
Malaysia
Pelikan Asia Sdn. Bhd.
Tel:
+603 55695511
Fax:
+603 55670618
Thailand
Pelikan (Thailand) Co. Ltd.
125/12-13 Moo6, Kanchana-pisek Road
Bangkae Nua, Bangkae
Bangkok 10160
Tel:
+662 804 1415-9
Fax:
+662 804 1420
People’s Republic of China
Pelikan Trading (Shanghai) Co.,Ltd.
Room 302, No 1059, Rainbow
Eslite Plaza,
Wuzhong-Road, Minhang District
Shanghai 201103
Tel:
+8621 6465 5365/6/7
Fax:
+8621 6465 5375
United Arab Emirates
Pelikan Middle East FZE
Sharjah Airport International Free Zone
Area O3 – Bldg “O”
P.O.Box 120318, Sharjah
Tel:
+9716 5574571
Fax:
+9716 5574572
Singapore
Pelikan Singapore Pte. Ltd.
18, Tannery Lane,
#01-02/03/04, Lian Tong Building
Singapore 347780
Tel:
+65 6258 5231
Fax:
+65 6258 4157
Taiwan
Pelikan Taiwan Co. Ltd.
1F, 32, Lane 21, Hwang Chi Street
Taipei, Taiwan 111
Tel:
+886 2 8866 5818
Fax:
+886 2 8866 3102
United Arab Emirates
(Rep. Office)
1100B, 11th Floor, Union House
Opp. Deira City Centre, Deira
Dubai
Tel:
+97 142948200
Fax:
+97 142959833
SERVICE
Germany
Mercoline GmbH
Am Borsigturm 100
13507 Berlin
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
Email: www.herlitz.de/servicelinks
kontakt.html
Germany
eCom Logistik GmbH & Co. KG
14612 Falkensee
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
kontakt.html
Germany
POS Servicegesellschaft GmbH
14612 Falkensee
Tel:
+49(30) 4393 0
Fax:
+49(30) 4393 3408
kontakt.html
THE FINANCIALS
173
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Thirtieth Annual General Meeting of Pelikan International Corporation
Berhad will be held at Sunway Resort Hotel & Spa, Grand Bahamas, Level 12, Persiaran Lagoon, Bandar
Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia on Tuesday, 26 June 2012 at 11.00 a.m. for the
following purposes:AS ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 December 2011
and the Reports of the Directors and Auditors thereon.
(Please refer to Note 7)
2. To approve the distribution of one (1) treasury share for every fifty (50) existing ordinary
shares of RM1.00 each held in the Company, franction of a treasury share to be
disregarded and to sanction the declaration of a single tier final dividend of one (1) sen
per ordinary share in respect of the financial year ended 31 December 2011.
(Ordinary Resolution 1)
3. To approve the payment of Directors’ fees of RM357,000.00 for the financial year ended
31 December 2011.
4. To re-elect Hajah Rozaida Binti Omar who retires pursuant to Article 127 of the Company’s
Articles of Association.
5. To re-elect Yap Kim Swee who retires pursuant to Article 127 of the Company’s Articles
of Association.
6. To re-elect Normimy binti Mohamed Noor who retires pursuant to Article 132 of the
Company’s Articles of Association.
7. To re-appoint Messrs. BDO as Auditors of the Company until the conclusion of the next
Annual General Meeting of the Company and to authorise the Directors to fix their
remuneration.
AS SPECIAL BUSINESS
To consider and if thought fit, to pass the following resolutions:
8. To approve the proposed renewal of authority for Directors to issue shares pursuant to
Section 132D of the Companies Act 1965.
“THAT, pursuant to Section 132D of the Companies Act 1965, the Articles of Association of
the Company and subject to the approvals of the relevant government and/or regulatory
authorities, the Directors be and are hereby authorised to issue shares of the Company from
time to time upon such terms and conditions for such purposes and to such person or persons
whomsoever as the Directors may, in their absolute discretion deem fit and expedient in the
best interest of the Company, provided that the aggregate number of shares to be issued
pursuant to this resolution does not exceed 10% of the total issued and paid-up share capital
of the Company for the time being; AND THAT the Directors be and are also empowered
to obtain approval for the listing of and quotation for the additional shares so issued on
Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately
and continue to be in force until the conclusion of the next Annual General Meeting of
the Company.”
174
9. To approve the proposed renewal of authority for the purchase by the Company of its own
shares (“Proposed Renewal of Share Buy-back Authority”).
“THAT subject always to the Companies Act 1965, Main Market Listing Requirements of
Bursa Malaysia Securities Berhad (“Bursa Securities”), Articles of Association of the Company,
other applicable laws, guidelines, rules and regulations, and the approvals of the relevant
government/regulatory authorities, the Company be and is hereby authorised to purchase
such number of ordinary shares of RM1.00 each in the Company as may be determined by
the Directors from time to time through Bursa Securities, upon such terms and conditions
as the Directors may deem fit in the interest of the Company provided that:
(a) the aggregate number of ordinary shares purchased and/or held by the Company as
treasury shares shall not exceed 10% of the issued and paid-up ordinary share capital of
the Company at the time of purchase; and
(b) the maximum funds to be allocated by the Company for the purpose of purchasing its own
shares shall not exceed the retained profits and share premium account of the Company
based on the audited financial statements for the financial year ended 31 December
2011 of RM 25,077,000 and RM 74,964,000 respectively at the time of purchase;
AND THAT the Directors of the Company be and are hereby authorised to deal with the
shares so purchased in their absolute discretion in the following manner:
(a) cancel the shares so purchased; or
(b) retain the shares so purchased as treasury shares, for distribution as share dividends to
the shareholders and/or resell on the market of Bursa Securities; or
(c) retain part thereof as treasury shares and cancel the remainder;
AND THAT such authority conferred by this resolution shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which
time the said authority shall lapse, unless renewed by an ordinary resolution passed by
the shareholders of the Company in a general meeting; or
(b) the expiration of the period within which the next AGM is required by law to be held; or
(c) the authority is revoked or varied by ordinary resolution passed by the shareholders of
the Company in general meeting,
whichever is the earliest;
AND THAT the Directors of the Company be and are hereby authorised to take all such steps as
are necessary or expedient to implement, finalise and give full effect to the Proposed Renewal
of Share Buy-back Authority with full powers to assent to any conditions, modifications,
variations and/or amendments (if any) as may be imposed by the relevant authorities.”
(Ordinary Resolution 8 )
THE FINANCIALS
175
10.To approve the proposed amendments to the following Articles of Association of
the Company:
“That the Amendments to the Articles of Association of the Company set out below be
hereby approved and adopted:
Article No. Existing Article
Amended Article
100(1)
A Member may appoint at least
one (1) proxy to attend on the
same occasion. A proxy may but
need not be a Member of the
Company. If the proxy is not a
Member, the proxy need not be an
advocate, an approved company
auditor or a person approved by
the Commission. If a Member
appoints up to two (2) proxies,
the appointments shall be invalid
unless he specifies the proportions
of his holding to be represented
by each proxy.
A Member may appoint at least
one (1) proxy to attend on the
same occasion. A proxy may but
need not be a Member of the
Company. If the proxy is not a
Member, the proxy need not be an
advocate, an approved company
auditor or a person approved by
the Commission. There shall be no
restriction as to the qualification
of the proxy. If a Member
appoints up to two (2) proxies,
the appointments shall be invalid
unless he specifies the proportions
of his holding to be represented
by each proxy.
100(3)
New Provision
Where a Member of the Company
is an authorised nominee defined
under the Central Depositories Act
which is exempted from compliance
with the provisions of subsection
25A(1) of the Central Depositories
Act (“exempt authorised nominee”)
and which holds ordinary shares
in the Company for multiple
beneficial owners in one securities
account (“omnibus account”), there
is no limit to the number of proxies
which the exempt authorised
nominee may appoint in respect
of each omnibus account it holds.
176
Article No. 101
Existing Article
An instrument appointing a proxy
shall be in writing, executed by or
on behalf of the appointor and shall
be in the following form (or in a
form as near to it as circumstances
allow or in any other form which is
usual or which the Directors may
approve) and shall be deemed to
include the right to demand or join
in demanding a poll.
Amended Article
An instrument appointing a proxy
shall be in writing, executed by or
on behalf of the appointor and shall
be in the following form (or in a
form as near to it as circumstances
allow or in any other form which is
usual or which the Directors may
approve) and shall be deemed to
include the right to demand or join
in demanding a poll. A proxy shall
have the same rights as members
to speak at the general meeting.
AND THAT the Directors and the Secretary of the Company be and are hereby authorised
to take all steps as are necessary and expedient in order to implement, finalise and give
full effect to the proposed amendments to the Company’s Articles of Association”
(Special Resolution 1)
11.To transact any other business for which due notice has been given in accordance with the
Articles of Association of the Company.
NOTICE OF DIVIDEND ENTITLEMENT AND DISTRIBUTION OF TREASURY SHARES
NOTICE IS ALSO HEREBY GIVEN THAT the distribution of one (1) treasury share for every fifty (50) existing ordinary shares
of RM1.00 each held in the Company and a single tier final dividend of one (1) sen per ordinary share in respect of the
financial year ended 31 December 2011, if so approved by the shareholders at the Thirtieth Annual General Meeting of
the Company, will be paid and credited on 24 September 2012 to shareholders whose names appear in the Record of
Depositors at the close of business on 27 August 2012.
A depositor shall qualify for entitlement to the aforesaid dividend only in respect of:
(a) shares transferred into the depositor’s securities account before 4.00 p.m. on 27 August 2012 in respect of ordinary
transfers; and
(b) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa
Malaysia Securities Berhad.
Remarks:
The treasury shares are expected to be credited into the entitled shareholder’s Central Depository System accounts maintained with Bursa Malaysia
Depository Sdn Bhd (“Bursa Depository”) on 24 September 2012 subject to the approval of Bursa Depository.
BY ORDER OF THE BOARD
HO MING HON (MICPA 3814)
CHUA SIEW CHUAN (MAICSA 0777689)
Company Secretaries
1 June 2012
THE FINANCIALS
NOTES:
1. A Member who is entitled to attend and vote at the meeting is entitled to appoint at least one (1) proxy to attend and vote in his stead. Where
a Member appoints up to two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his holding to be represented
by each proxy. The proxy may but need not be a Member of the Company. Notwithstanding this, a member entitled to attend and vote at the
Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting. There shall be no restriction as to the
qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the Member to speak at the Meeting.
2. Where a Member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may
appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said
Securities Account.
3. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”)
which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the
number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
4. The instrument appointing a proxy shall be in writing, executed by or on behalf of the appointor and shall be in the form as set out in the Articles of
Association of the Company (or in a form as near to it as circumstances allow or in any other form which is usual or which the Directors may approve)
and shall be deemed to include the right to demand or join in demanding a poll.
5. Only depositors whose names appear in the Record of Depositors as at 18 June 2012 shall be regarded as Member of the Company entitled to attend,
speak and vote at the Thirtieth (30th) Annual General Meeting or appoint a proxy to attend and vote on his behalf.
6. The proxy form, to be valid, must be deposited at the office of the Share Registrar, Tricor Investor Services Sdn Bhd at Level 17, The Gardens North
Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia at least forty-eight (48) hours before the time set for holding of the
meeting or any adjournment thereof.
7. This agenda item is meant for discussion only, as the provision of section 169(1) of the Companies Act, 1965 does not require a formal approval of the
shareholders for the Audited Financial Statements. Hence, this agenda is not put forward for voting.
Explanatory Notes on Special Business:
Ordinary Resolution 7
To approve the proposed renewal of authority for Directors to issue shares pursuant to Section 132D of the Companies Act, 1965.
The proposed Ordinary Resolution 7 if passed, will give powers to the Directors to issue up to a maximum 10% of the issued share capital of the Company
for the time being for such purposes as the Directors would consider in the best interest of the Company. This authority, unless revoked or varied by the
Company at a general meeting, will expire at the next Annual General Meeting of the Company.
The general mandate sought for issue of securities is a renewal to a general mandate sought in the preceding year. As of the date of this Notice, no new
shares in the Company were issued pursuant to the mandate granted to the Directors at the Twenty-Ninth Annual General Meeting held on 20 June 2011.
The renewal of the general mandate is to provide flexibility to the Company to issue new securities without the need to convene separate general meeting
to obtain its shareholders’ approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible fund raising
exercises including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital and/
or acquisitions.
Ordinary Resolution 8
To approve the proposed renewal of authority for the purchase by the Company of its own shares.
The proposed Ordinary Resolution 8 if passed, will empower the Directors to purchase the Company’s shares up to 10% of the issued and paid-up ordinary
share capital of the Company for the time being. This authority, unless revoked or varied by an ordinary resolution passed by the shareholders in general
meeting, will expire at the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting
after that date is required by the law to be held, whichever occurs first.
Special Resolution 1
To approve the proposed amendments to Articles of Association of the Company.
The proposed Special Resolution 1 is intended to streamline the Company’s Articles of Association to be aligned with the recent amendments to the
Main Market Listing Requirements of Bursa Malaysia Securities Berhad which took effect on 3 January 2012.
177
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FORM OF PROXY
Number of Shares Held
PELIKAN INTERNATIONAL CORPORATION BERHAD
(Incorporated in Malaysia)
CDS Account No.
I/We__________________________________________________________________________________________ (Full name in capital letters)
NRIC No./Company No. _____________________________________________________________________________________________
of ______________________________________________________________________________________________________ (Full address)
being a Member of PELIKAN INTERNATIONAL CORPORATION BERHAD (63611-U), hereby appoint
(Proxy A) ______________________________________________________________________________________ (Full name in capital letters)
NRIC No. ____________________________________________________________________________________________________________
of ______________________________________________________________________________________________________ (Full address)
*and/or failing him/her
(Proxy B) ______________________________________________________________________________________ (Full name in capital letters)
NRIC No. ____________________________________________________________________________________________________________
of ______________________________________________________________________________________________________ (Full address)
and/or failing him/her, *the Chairman of the Meeting as my/our proxy/proxies to attend and vote for me/us and on my/our behalf
at the Thirtieth Annual General Meeting of the Company to be held at Sunway Resort Hotel & Spa, Grand Bahamas, Level 12,
Persiaran Lagoon, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan, Malaysia on Tuesday, 26 June 2012 at 11.00 a.m.
or any adjournment thereof.
My/our proxy/proxies shall vote as follows:
(Please indicate with an “X” in the spaces provided below how you wish your votes to be cast. If you do not do so, the proxy/proxies will
vote or abstain from voting at his/her discretion.)
The proportions of my/our holding to be
NO. ORDINARY RESOLUTIONS
FOR
AGAINST
represented by my/our proxy/proxies
1. To approve the distribution of one (1) treasury share for every
are as follows:
fifty (50) existing ordinary shares of RM1.00 each held in the
Company and to sanction the payment of a single tier final
dividend of one (1) sen per share
Proxy A
Proxy B
2.
To approve the payment of the Directors’ fees
3.
To re-elect Hajah Rozaida binti Omar as Director of the
Company
4.
To re-elect Yap Kim Swee as Director of the Company
5.
To re-elect Normimy binti Mohamed Noor as Director of the
Company
6.
To re-appoint Messrs. BDO as Auditors of the Company and
to authorise the Directors to fix their remuneration
7.
To approve the proposed renewal of authority for Directors
to issue shares
8.
To approve the proposed renewal of authority for the purchase
by the Company of its own shares
NO. SPECIAL RESOLUTIONS
1.
100 %
NOTES:
1. A Member who is entitled to attend and vote at the meeting is entitled to
appoint at least one (1) proxy to attend and vote in his stead. Where a Member
appoints up to two (2) proxies, the appointments shall be invalid unless he
specifies the proportions of his holding to be represented by each proxy. The
proxy may but need not be a Member of the Company. Notwithstanding this,
a member entitled to attend and vote at the Meeting is entitled to appoint
any person as his proxy to attend and vote instead of the member at the
Meeting. There shall be no restriction as to the qualification of the proxy.
A proxy appointed to attend and vote at the Meeting shall have the same rights
as the Member to speak at the Meeting.
2. Where a Member of the Company is an authorised nominee as defined under
the Securities Industry (Central Depositories) Act, 1991, it may appoint at least
one (1) proxy in respect of each Securities Account it holds with ordinary shares
of the Company standing to the credit of the said Securities Account.
FOR
AGAINST
To approve the proposed amendments to the Articles of
Association of the Company
Signed this _____________ day of _____________ , 2012
__________________________________
Signature(s) of Member/Common Seal
* Strike out whichever not applicable
%
%
3. Where a member of the Company is an exempt authorised nominee as defined
under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which
holds ordinary shares in the Company for multiple beneficial owners in one
securities account (“omnibus account”), there is no limit to the number of
proxies which the exempt authorised nominee may appoint in respect of each
omnibus account it holds.
4. The instrument appointing a proxy shall be in writing, executed by or on behalf
of the appointor and shall be in the form as set out in the Articles of Association
of the Company (or in a form as near to it as circumstances allow or in any other
form which is usual or which the Directors may approve) and shall be deemed
to include the right to demand or join in demanding a poll.
5. Only depositors whose names appear in the Record of Depositors as at 18 June
2012 shall be regarded as Member of the Company entitled to attend, speak
and vote at the Thirtieth (30th) Annual General meeting or appoint a proxy to
attend and vote on his behalf.
6. The proxy form, to be valid, must be deposited at the office of the Share
Registrar, Tricor Investor Services Sdn Bhd at Level 17, The Gardens North
Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia
at least forty-eight (48) hours before the time set for holding of the meeting or
any adjournment thereof.
Please fold here to seal
Please fold here
STAMP
TRICOR INVESTOR SERVICES SDN BHD
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia
Please fold here

the annual report for 2011.

Transcription

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