Related Party Disclosure

Mrs. Frontliner who conducted various training programmes for the employees of Corona Berhad, is the wife of company’s Chief Executive Officer.

• True

• False

Answer explanation

Mrs. Frontliner is a related party being close family member (wife) of member of key management personnel (CEO).

Aman Kurantina Associates provides information technology services to Corona Berhad. One of the board of director members of Corona Berhad is also the partner in Aman Kuarantina Associates.

• True

• False

Answer explanation

Aman Kuarantina Associates is a related party to Corona Berhad due to association of (Partner) of one of its key management personnel (director).

PPE Berhad is the distributor of Corona Berhad’s products and has exclusive distribution rights for the province of Penang.

• True

• False

Answer explanation

PPE Bhd is not a related party as distributor cannot be treated as related party only by virtue of resulting economic dependence

Mr. Noor, a well-known management consultant was hired, to conduct a three weeks workshop on time management for the staff of Corona Berhad at a fee of RM15,000. Mr. Noor is the son of the Chief Executive Officer.

• True

• False

Answer explanation

Mr. Noor is a related party as he is son (close family member) of the CEO (member of key management personnel) of the company.

Covid Berhad is the leading supplier of Corona Berhad and supplies 60% of company’s raw materials.

• True

• False

Answer explanation

Covid Bhd is not a related party as suppliers cannot be treated as related party only by virtue of resulting economic dependence.

Corona Berhad’s gratuity fund is administered by the Trustees appointed by the company.

• True

• False

Answer explanation

Gratuity fund is a related party being post-employment benefit plan for employees of Corona Berhad.

Social Distancing Bank Berhad is the main lender of Corona Berhad. By virtue of an agreement, it has appointed a nominee director on the Board of Corona Berhad.

• True

• False

Answer explanation

Social Distancing Bank Limited is not a related party just being a lender (provider of finance) as generally nominee directors of lenders cannot exert significant influence.

Mr. Liew who supplies raw materials to Corona Berhad, is the brother of the Chief Executive Officer of the company.

• True

• False

Answer explanation

Mr. Liew can be treated as related party if he is in a position to influence his brother i.e. CEO of Corona Berhad. (Although the definition of close family member does not specifically cover brother).

Mr. Hisham is the General Manager-Marketing of Corona Berhad and is responsible for all major decisions made in respect of sales prices and discounts.

• True

• False

Answer explanation

Mr. Hisham is a related party being a member of key management personnel (is responsible for all major decisions of sales and discounts).

Three used delivery trucks of the company were sold to PKP Berhad, which supplies approximately 60% of the total raw material used by the company.

• True

• False

Answer explanation

PKP Berhad is not a related party as significant volume of business does not create related party relationship unless significant influence can be exerted