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General Information about company and industry

BRIGHT PACKAGING INDUSTRY BERHAD


Bright Packaging Industry Berhad is an investment holding company. The Company is
engaged in the manufacturing and printing of aluminum foil packaging materials mainly for the
tobacco industry. The Company is also engaged in printing and manufacturing of packaging boxes
and materials and property investment. It offers a range of services, including lamination, coating,
slitting and sheeting. The Company's products include aluminium foil and metallised film laminate
to tissue, wood free, board and inner frame. Its list of products includes Dull Gold Foil Paper
50gsm, Dull Silver Foil Paper 70gsm, Bright Gold Foil Paper 70gsm, Dull Silver Foil Board
225gsm, Dull Silver Foil Board 275gsm, Dull Gold Foil Board 325gsm and Bright Green Foil
Paper 75gsm. The Company exports its products to various countries, including Germany, the
United Arab Emirates, Australia, Korea, India, Pakistan, China, Thailand, Indonesia, Singapore,
Philippines, Vietnam, Hong Kong and Taiwan.

MCT BERHAD
MCT Berhad is a Malaysia-based company, which is engaged in investment holding. The
Company's segments include property development, Construction activities and others. The
property development segment is engaged in property development of residential and commercial
properties. The Construction activities segment is engaged in construction, providing civil and
mechanical engineering services, as well as investment holding, operating in hoteling, fitness
center and cinema cum seminar facility. The Others segment is engaged in investment holding,
operating in hoteling, fitness center and cinema cum seminar facility, provision of utilities services
and leasing of properties. The company is headquartered in Subang Jaya, Malaysia. MCT Berhad
is a subsidiary of B&G Capital Resources Bhd. The Company's projects include The Square @
One City, Sky Park @ One City, eCity Hotel @ One City, Garden Shoppe @ One City, 1 Avenue
@ USJ, The Place @ Cyberjaya and The Place @ One City. The Company's subsidiary, MCT
Consortium Bhd, is engaged in investment holding.

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UMS HOLDINGS BERHAD

UMS Holdings Berhad is a Malaysia-based investment holding company. The Company operates
through three segments: West Malaysia, including Northern, Southern, East Coast and Central of
Peninsular Malaya; East Malaysia, and Singapore. It is engaged in the distribution of mechanical
power transmission and material handling products and systems, and industrial spare parts, as well
as trading of steel wire mesh in West Malaysia and East Malaysia. It is engaged in trading of
engineering products in Singapore. It offers products under hardware division, including air filters,
oil and fuel filter, hydraulic filters, silencers, ball bearings and roller bearings, and engineering
division, including mechanical fasteners, belt cleaners, belt splicers, other belt maintenance tools,
sealing products, mechanical seals, expansion joints, fin belts and oil resistant belts. It offers
engineering consultancy services, including feasibility studies, capital cost estimates, and planning
and scheduling.

2. The usefulness of PPE for the companies and industry and whether the companies have
PPE that are relevant and worthy.

Under the MFRS 116,Property Plant and Equipment are assets which described as long-lived,
tangible assets .Included in the classification are land, buildings and machinery ,office equipment,
vehicles, furniture and fixtures used in business. The companies listed above have been proved to
be useful as Property, Plant and Equipment. It initially recorded at cost. The cost of property, plant
and equipment is recognized if it is probable to the future economic benefits associated with the
assets will flow to the company and Group and the cost of items can be measured reliably. An item
of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. The difference between the net disposal proceeds,
if any and the net carryingamount is recognised in the profit or loss.
For Bright Packaging Industry Berhad , the property, plant and equipment are leasehold
bulidings , plant and machineries, furnitures, fittings, and office equipment and lastly motor
vehicle Plant and machineries are most important to be managed appropriately in order for
company to carry out it operations to generate profit by manufacturing and printing of aluminum
foil packaging materials mainly for the tobacco industry. Property Plant and equipment said to be
relevant and worthy because company used the item in their daily operations.

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For MCT Berhad, the property, plant and equipment are office equipment, furniture and
fittings, computer equipment, Plant and machinery, construction equipment, tools and
equipment,motor vehicles, renovation buildings, leasehold land, property, plant and equipment
under construction. Construction equipment is important because this company is major in
construction activities,so it will growth and flourish our company in generate the profit.The
property plant and equipment is relevant and worthy because the construction equipment is
generally used in the course business operation.An entity may not be able to conduct its business
operations efficiently if the number of its construction equipment is limited
For UMS Holding Berhad, the property, plant and equipment are freehold buildings, motor
vehicles, furniture, fittings and equipment, tools and machinery, and renovation. Tools and
machinery is vital that need to be managed carefully because it was use in the distribution of
mechanical power transmission and material handling products and systems and industrial spare
parts that generate the income to company.The property, plant and equipment is relevant and
worthy because tools and machinery ,well-maintained property ,plant and equipment would add
further value to the company and may help to improve its future cash flows.

3. The relevant standards and regulations applied in accounting for PPE and whether the
companies comply with the standards and regulations.

To identify the companies are comply with the standards and regulations of PPE, their PPE are
need to be tangible, which is physically existing items that can be physically touched. These items
are held for use in the production and are expected to be used during more than one period. PPE
is initially measured at its cost, subsequently measured either using a cost or revaluation model
and depreciated so that its depreciable amount is allocated on a systematic basis over its useful
life.
All three companies are comply with the PPE standards and regulations which is their PPE
are tangible items which is their item are used for the production and the accounting period for the
item are more than one period.The following listed companies that comply with the depreciation
of the PPE as follows :

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BRIGHT PACKAGING INDUSTRY BERHAD
Cost includes expenditures that are directly attributable to the acquisition of the assets and any
other costs directly attributable to bringing the asset to working condition for its intended use, cost
of replacing component parts of the assets, and the present value of the expected cost for the
decommissioning of the assets after their use. The cost of self-constructed assets also includes the
cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in
accordance with the accounting policy on borrowing costs. All other repair and maintenance costs
are recognised in profit or loss as incurred. Depreciation is recognised in the profit or loss on
straight line basis to write off the cost of each asset to its residual value over its estimated useful
life. Freehold land is not depreciated.

MCT BERHAD
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. Gain or loss arising from the disposal of an asset is determined as the difference between
the net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.
Property, plant and equipment under construction are not depreciated. Except for property, plant
and equipment and investment properties under construction, the costs of property, plant and
equipment are depreciated on a straight-line basis over the assets useful lives. The Group reviews
the remaining useful lives of property, plant and equipment and investment properties at the end
of each reporting period and ensures consistency with previous estimates and patterns of
consumptions of the economic benefits that embodies the items in these assets. Changes in useful
lives of property, plant and equipment and investment properties may result in revision of future
depreciation charges.

UMS HOLDINGS BERHAD

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other
costs directly attributable to bringing the asset to working condition for its intended
use, and the costs of dismantling and removing the items and restoring the site on which they are
located. Subsequent to recognition, property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment losses, if any.

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4. The models used by the companies to subsequently account for the PPE, whether the
models that different companies use about similar items of PPE are consistent, and
whether you agree with their choices.

All of the companies listed using historical cost model and their items are similarity are same like
others. I agree with the decision of the choice using the historical cost model because it is easy to
verify. It ensures that the reports on the financial position of the business are objective and can be
verified by independent documentary evidence, such as invoice, statement, cheque butt, receipt or
voucher. It also is a simpler and more cost effective method of asset valuation that does not require
constant work, estimating the changing current market values of assets. It also makes the
calculation of annual depreciation a far easier calculation than having to deal with constantly
changing asset values. It does not recognise or include in the accounts of the business, assets
appreciation profits that have not yet been proven or secured by an actual current market sale.
Valuation of assets by market value would open up the options for 'creative accounting'
and the possibility of management distorting the actual results of the business for personal gain.
The historical cost convention is consistent with the broad goals and purpose of accounting which
is primarily charged with accurately recording and reporting the past financial transactions of a
business. While stakeholders use the financial reports as a means of evaluating the financial
position and performance of a business and making predictions about the future, this is not
accounting's primary purpose which deals only with recording the past facts.

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5. The estimates and judgements involving PPE that are made by the companies.

BRIGHT PACKAGING INDUSTRY BERHAD


Depreciation; Plant and equipment are depreciated on the straight line method to allocate the
cost of the revalued amounts, to its residual value over its estimated useful life. Freehold land is
not depreciated.

Property, plant and equipment are depreciated based on the estimated useful lives of the assets as
follows:

Buildings 10 to 50 years
Plant and machineries 10 years
Furniture, fitting and office equipment 5 to 10 years
Motor vehicles 5 years

Impairment: Property, plant and equipment (except for inventories) are stated at cost less
accumulated depreciation and accumulated impairment losses. The policy of recognition and
measurement of impairment losses in accordance with note 3(i)(i)

Fair Value; The cost of property, plant and equipment recognised as a result of a business
combination is based on fair value at acquisition date. The fair value of property is the estimated
amount for which a property could exchange on the date of valuation between willing buyer and a
willing seller in an arm`s length transaction after proper marketing wherein the parties had each
acted knowledgeably, prudently and without compulsion. The fair value of other items of plant
and equipment is based on the quoted market prices for similar items.

MCT BERHAD
Depreciation: Freehold land has an unlimited useful life and therefore is not depreciated. Asset
under construction included in property, plant and equipment are not depreciated as these assets
are not yet available for use.

All other property, plant and equipment are depreciated on straight-line basis by allocating their
depreciable amounts over their remaining useful lives.

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Office equipment 12.5%
Furniture and fittings 10.0 - 12.5%
Computer equipment 20.0 - 33.3%
Plant and machinery 3.3 - 10.0%
Construction equipment 12.5 - 20.0%
Tools and equipment 12.5%
Motor vehicles 20.0%
Renovation 10.0%
Buildings 2.0%

Impairment: Property, plant and equipment (except for goodwill) are stated at cost less
accumulated depreciation and accumulated impairment losses. The policy of recognition and
measurement of impairment losses in accordance with note 3(properties development
activities)(ii)

UMS Holding Berhad

Depreciation: Freehold land and capital work-in-progress are not depreciated. Lease holding
building are amortised over the lease periods ranging from 46 years to 76 years. Other property,
plant and equipment are depreciated over their estimated useful lives on a straight-line basis at
the following annual rates:

Freehold buildings 2%
Motor vehicles 16 20%
Furniture, fittings and equipment 8 20%
Tools and machinery 16%
Renovation 10 20%

The residual values, useful lives and depreciation methods are reviewed at the end of each
reporting period to ensure that the amount, method and period of depreciation are consistent with
previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of property, plant and equipment.

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Impairment: Property, plant and equipment (except for goodwill) are stated at cost less
accumulated depreciation and accumulated impairment losses. The policy of recognition and
measurement of impairment losses in accordance with note 2(j)

Fair value; The Company establishes a fair value measurement hierarchy that categorises into
three levels the inputs to valuation techniques used to measure fair value. This fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets and the lowest
priority to unobservable inputs.

6. The disclosure in the notes to the account made by the companies about their PPE and
whether their disclosure provides useful information to existing and potential investors.

BRIGHT PACKAGING INDUSTRY BERHAD


Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. The cost of property, plant and equipment recognised as a result of a business
combination is based on fair value at acquisition date. Property, plant and equipment are
derecognised upon disposal or when no future economic benefits are expected from its use or
disposal. Gains or losses arising on the disposal of property, plant and equipment are determined
as the difference between the disposal proceeds and the carrying amount of the assets and are
recognised in profit or loss. Depreciation is recognised in the profit or loss on straight line basis to
write off the cost of each asset to its residual value over its estimated useful life. Freehold land is
not depreciated. The residual values, useful lives and depreciation method are reviewed at each
reporting period end to ensure that the amount, method and period of depreciation are consistent
with previous estimates.

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MCT BERHAD
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment
losses. Gain or loss arising from the disposal of an asset is determined as the difference between
the net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.
Property, plant and equipment under construction are not depreciated. Leasehold land is amortised
over the lease period. Depreciation of other property, plant and equipment is computed on the
straight-line method to write off the cost of the various property, plant and equipment over their
estimated useful lives. The residual values, estimated useful lives and depreciation method of the
property, plant and equipment are reviewed at the end of each reporting period and, if expectations
differ from previous estimates, the changes will be accounted for prospectively as a change in
accounting estimate.

UMS HOLDINGS BERHAD

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses. Subsequent costs are included in the assets carrying amount or recognised as
separate assets. The carrying amountof the replaced part is derecognised. All other repairs and
maintenance are recognised in statement of comprehensive income. Freehold land and capital
work-in-progress are not depreciated. Leasehold buildings are amortised over the lease period
ranging from 46 years to 76 years. Other property, plant and equipment are depreciated over their
estimated useful lives on straight-line basis. The residual values, useful lives and depreciation
method are reviewed at each reporting period end to ensure that the amount, method and period of
depreciation are consistent with previous estimates.

7. Voluntary disclosure are not available for Bright Packaging Industry, MCT Berhad
and UMS Holding Berhad

Voluntary disclosure of PPE is the provision of information by a companys management beyond


of Generally Accepted Accounting Principle about PPE. Therefore, there is no voluntary
disclosure available for Bright Packaging Industry, MCT Berhad and UMS Holding Berhad.

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8. Other internal factors that need to be considered by investors in evaluating the PPE
i. Book value of PPE
Measure of all of a company's assets (stocks, bonds, inventory, manufacturing equipment,
real estate, etc)
Generally only include large assets that are easily quantified.

ii. Age of capital equipment


Expected to provide operating benefits over a long period of time, usually several years or
more

9. Other external factors that need to be considered by investors in evaluating the PPE
i. Location
Properties in a great location are more likely to experience an increase in value, while poor
locations are less
Well-located properties are likely to have their high value periods last longer
Since most investors who purchase property are aiming to hold the property for a relatively
long period of time, in order to make the greatest returns possible

ii. Technology
Effects on business operation
Technology has both tangible and intangible benefits that will help you make money
Technology allows opportunities to optimize production beyond what you could produce
without it

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10. Overall opinion on the PPE of the selected companies.
In our opinion, the Property, Plant and Equipment of the selected companies is stated
accordance with the standard required by the MASB which is according to MFRS 116 Property,
Plant and Equipment. All the three companies managed to disclose their depreciation method and
estimation of the useful life of assets. The disclosure of the methods adopted and the estimated
useful lives will provides users of financial statements with information that also allows them to
review the policies selected by management and enables comparisons to be made with other
entities. The qualitative characteristics of accounting information in the conceptual framework
should be revisited, critically reviewed and considered at all times for the relevance, materiality
and faithful representations in the financial statements.

11. Recommendation on the company that should be considered as Investment Avenue.


i. Bonds offered by the Government
Bonds are another avenue that is risk free. The bonds offered by the government are risk
free because the government usually doesn't default on the payment.

ii. Fixed Deposit


Fixed Deposits or Time Deposits offer a fixed and guaranteed rate of return on your
investment. Almost all banks in Malaysia offer these types of accounts. Fixed deposits
offer significantly higher interest rates than savings accounts while minimizing the risk
associated with other high-risk investment products.

iii. Gold Investment


Gold forms another great investment avenue. It has been an asset since the beginning of
mankinds evolution and across cultures. So, it is not surprising that gold is a favoured
asset here in Malaysia as well. Gold investment can be made either in physical form or by
means of paper gold. Physical Gold investments can be made by buying gold jewellery,
gold coins, gold wafers and gold bars from jewellers. Investing in paper form is via Gold
Investment Accounts of some banks.

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12. APPENDIX

i) Bright Packaging Berhad

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ii) MCT Berhad

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iii) UMS Holding Berhad

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