COMPUTER FORMS (MALAYSIA) BERHAD

(Company No. 4423-H) (Incorporated in Malaysia)

 

Summary of Key matters discussed at the 56th Annual General Meeting of the Company held at Bukit Kiara Equestrian and Country Resort, Dewan Perdana, 1st Floor, Sports Complex, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur, Malaysia on Friday, 7 September 2018 at 10.30 a.m.

 

OPENING

 

There was presence of requisite quorum and the meeting started at 10:30am with a welcome address by the Chairman.

 

AGENDA ITEM 1

AUDITED FINANCIAL STATEMENTS OF THE GROUP AND THE COMPANY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2018 TOGETHER WITH the Reports OF THE Directors and Auditors THEREON                             

 

Key issues raised by shareholders in relation to Agenda item 1 at the 56th Annual General Meeting of the shareholders of the Company and the corresponding responses from the Directors on this item were as follows :

 

Question

:

What is the Group’s future plan in addressing the current business challenges faced by the Group in particular where the Group is experiencing weakening sales demand for exercise books and cheque books.

 

Response

(En Muhayuddin Bin Musa)

 

 

:

 

The Group is facing the same business situation of having reducing printing product demand like other companies in the printing industry. To address the downward trend performance of the printing business units due to the current business operational environment which is gradually moving towards e-statement/electronic solution, the Group has taken steps to venture into data printing business via joint venture arrangement with a Japanese company.

 

In August 2018, the Group closed its exercise book printing division which operated under CFM Printing & Stationery Sdn Bhd (“CPS”). Pursuant to the cessation of the exercise book operations, CPS will be concentrating on paper trading business whilst maintaining its flexible packaging business which was still quite stable.

 

 

Question

:

Any plan to develop the lands of the Group ?

 

Response

(En Muhayuddin Bin Musa)

 

:

 

In view of the current slow property market condition, the Group had yet to commence any development activities on the lands. The Board will continue to observe the property market condition and economical environment and explore the appropriate opportunity before making any proposal regarding the land.

 

Question

 

:

 

Is there any impairment loss or other losses arose from the cessation of the exercise book division’s  operations ?

 

Response

(Mr Lee Yu-Jin)

 

:

 

In February 2018, CPS undertook 1st batch of retrenchment exercise which involved a total cost of  about RM450,000. Pursuant to that and after a yearly assessment of goodwill by the Auditors, based on the Group’s budget and past financial results and the potential earnings of CPS, the Group has made a goodwill impairment of RM916,000 which was reflected on page 72 of the Annual Report 2018 Group. With that, the Group recorded a total impairment loss of about RM1.42 million in relation to CPS for the financial year ended 31 March 2018.

 

The 2nd batch of retrenchment exercise by CPS was in July 2018, involved a total cost of about RM1.7 million (Retrenchment  cost : RM1.2 million; impairment of assets : RM0.5 million) which will be reflected in the next financial statements in 2019.

 

 

 

 

 

 

 

 

 

Question

:

Is the impairment loss on investment in a subsidiary company of RM33.392 million as reflected on page 72 of the Annual Report 2018 also related to  CPS ?

 

Response

(Mr Lee Yu-Jin)

:

The impairment loss reflected at company level   Computer Forms (Malaysia) Berhad (“CFM”) was related to CPS. To recapitulate, when CFM Berhad acquired CPS in 1996, the then purchase consideration was valued based on CPS’s net tangible assets of about RM40 million (i.e. CFM’s cost of investment  in CPS). Over the years, the value of the CPS’s net assets has been depleting due to among others, weakening performance of CPS. In spite of that, there was no indication of a need for CFM to impair the cost of investment in CPS in view of the continuation of CPS’s printing operations. However, due to the continuing unfavourable financial position of CPS year-on-year and pursuant to the Auditors’ impairment test based on the budget report and potential income of CPS which suggested that there was a need for CFM to write down the cost of investment in CPS, CFM has made an impairment loss RM33.39 million in FY2018 accordingly. The  net impact on CFM level, after setting off an inter-company dividend income from CPS, was about RM23 million. 

 

Question

:

Will CPS become dormant after the cessation of its exercise book division and what are the assets of CPS ?

 

Response

(En Muhayuddin Bin Musa)

 

:

 

CPS will still be in operation, focusing particularly in trading of papers with much smaller number of workers. The assets left unused by the division will be put up for sale later. CPS also has 2 pieces of lands with total net book value of about RM1.842 million, the details of which were reflected on page 96 of the Annual Report 2018.

 

 

Question

 

:

 

Will there be any further impairment on investment cost in other subsidiaries ?

 

Response

(Mr Lee Yu-Jin)

 

:

 

Currently there is no indication of such a need.

 

 

 

CONCLUSION

 

There was no issue raised on other items of the Agenda and all the resolutions tabled at the 56th Annual General Meeting of the Company were carried.