Question 1

Kaman Sdn Bhd was incorporated in Malaysia with a paid-up ordinary share capital of RM5 million. It is 80% owned by Malaysian citizens. Kaman Sdn Bhds Statement of Profit or Loss for the financial year ended 31 December 2020 is shown below:

	Note	RM000	RM000
Revenue			37,000
Cost of sales	1		(7,700)
Gross profit			29,300
Other income	2		2,000
			27,300
Less:
Staff costs	3	8,010
Travelling and entertainment expenses	4	2,100
Advertisement and promotion	5	2,200
Repair and maintenance	6	490
Professional fees	7	340
Lease rental	8	20
Cash donation to Government		1,000
Depreciation		1,530	(15,690)
Net Profit before taxation			11,610

Note:

1. Cost of sales includes:

Payment for R&D services to an approved research institution RM125,000

2. Other income comprises the following:

RM000

Gain on foreign exchange realized (non-trade) 263

Gain on foreign exchange unrealized (trade) 237

Rental received from vacant land rented out to a third party 53

Gain on disposal of property, plant and equipment 41

Interest from fixed deposit placed in a local bank in Malaysia 302

3. Staff costs included the followings:

RM000

Salaries in respect of disabled employees 126

Contribution to Employees Provident Fund (EPF)

(employers contribution at 12%) 520

Contribution to EPF in respect of disabled employees

(employers contribution at 12%) 14

Staff training (paid to a local resident) 1,125

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