(a) In the ordinary course of business, the business of PHH and GHAG 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 for perceived breach of patents
with an assessed potential maximum exposure of EUR20.3 million (RM97.9
million). The Group is of the view that litigation matters are an inherent part of
the Hardcopy business. Historically, the Group has 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’s financial statements.
(b) Based on the latest actuaries assumptions as at 30 September 2008, PHH’s wholly
owned subsidiary Pelikan Hardcopy Scotland Limited (“PHSL”)’s retirement fund
has GBP15.6 million (RM80.96 million) assets to meet pension liabilities of
GBP24.7 million (RM128.2 million). An amount of GBP1.6 million (RM8.5 million)
has been recognised as a pension liability in the financial statements of PHSL as at
31 March 2009 in accordance with the Financial Reporting Standard 119 –
Employee Benefits (“FRS 119”).
The Group believes that the operational cash flow of the Group and the assets in
the retirement fund of PHSL are sufficient to meet the payouts of the retirement
scheme in the foreseeable future.