Annual Report 2009

ANNUAL REPORT 2009
C O N TEN TS
2Corporate Structure
3Corporate Information
45-Year Group Financial Highlights
5Corporate Social Responsibility
6Chairmans Statement
8Group Managing Directors Message
10Directors Profile
16Senior Management
17Statement On Corporate Governance
23 Audit Committee Report
26 Syariah Panels Report
28Statement On Internal Control
30Statement Of Directors Responsibility
31Financial Statements
80Analysis Of Ordinary Shareholdings And Warrants
86Notice Of Annual General Meeting
88Statement Accompanying Notice Of Annual General Meeting
Proxy Form
C O RP O RATE S TRU C TU RE
O P ERATIN G S U B S ID IA RIES
2
Silver Bird Group Berhad
International Sdn Bhd
100%
Foods (S) Pte Ltd 100%
Marketing Sdn Bhd 100%
Bakeries Sdn Bhd 100%
Group Sdn Bhd
100%
Confectionery Sdn Bhd
100%
C O RP O RATE IN FO RM ATIO N
3
BOARD OF DIRECTORS
Dato Dr Gan Khuan Poh
(Chairman/Independent Non-Executive Director)
Dato Jackson Tan Han Kook
(Group M anaging Director)
Ching Siew Cheong
(Group Executive Director)
Lim Hock Chye
(Independent Non-Executive Director)
Richard George Azlan bin Abas
Dato Seri Talaat bin Husain
Peter John McLoghlin
(Non-Independent Non-Executive Director)
Dato Lee Kok Chuan
Adi Azuan bin Abdul Ghani
Vanda Russell Gould
(Alternate Director to Peter John M cLoghlin)
AUDIT COMMITTEE
- Chairman
Lim Hock Chye
- M ember
Dato Lee Kok Chuan
- M ember
NOMINATION COMMITTEE
Dato Dr Gan Khuan Poh
- Chairman
- M ember
- M ember
REMUNERATION COMMITTEE
Lim Hock Chye
- Chairman
Peter John McLoghlin
- M ember
- M ember
SYARIAH PANEL
Prof Dato Dr Abd Shukor bin Hj Husin
- Chairman
Datuk Hj Wan Zahidi bin Wan Teh
- M ember
Dato Hj Abdul Majid bin Omar
- M ember
- M ember
Prof Madya Chek Zaini bte Hassan
- M ember
COMPANY SECRETARY
Tan Fong Shian @ Lim Fong Shian
(MAICSA 7023187)
REGISTERED OFFICE
Silver Bird Complex
Lot 72, Persiaran Jubli Perak
Seksyen 21, 40300 Shah Alam
Selangor Darul Ehsan
Tel : 03-5192 2888
Fax : 03-5192 4293
Email : investor@stanson-
high5.com
Website: www.silverbird.com.my
AUDITORS
Crowe Horwath
Level 16, Tower C
Megan Avenue II
12 Jalan Yap Kwan Seng
50450 Kuala Lumpur
PRINCIPAL BANKERS
Malayan Banking Berhad
G-Floor, Bangunan
Yayasan Selangor
Jalan Bukit Bintang
55100 Kuala Lumpur
CIMB Bank Berhad
10th Floor, Bangunan CIMB
Jalan Semantan
Damansara Heights
50490 Kuala Lumpur
Hong Leong Bank Berhad
Wisma Hong Leong
No 18, Jalan Perak
50450 Kuala Lumpur
United Overseas
Bank (M) Berhad
Menara UOB
Jalan Raja Laut
PO Box 11212
50738 Kuala Lumpur
RHB Bank Berhad
Head Office
Tower Two & Three
RHB Centre
Jalan Tun Razak
50400 Kuala Lumpur
SHARE REGISTRAR
Berjaya Registration Services
Sdn Bhd
Lot 06-03, Level 6 (East Wing)
Berjaya Times Square
No. 1 Jalan Imbi
55100 Kuala Lumpur
Tel : 03-2145 0533
Fax : 03-2145 9702
STOCK EXCHANGE LISTING
Main Board of Bursa Securities
5 - YEA R G RO U P FIN A N C IA L H IG H L IG H TS
4
Financial Year Ended 31 October
RM000 2009 2008 2007 2006 2005
Restated
Revenue 588,890 638,563 606,484 597,991 484,712
Revenue Growth (8%) 5% 1% 23% 33%
Operating Profits 8,711 (14,431) 7,615 (26,299) 26,599
(Loss) / Profit Before Tax 1,436 (23,134) (18,397) (49,548) 17,656
(Loss) / Profit After Tax 1,433 (21,275) (16,077) (48,370) 22,151
PAT Growth 107% (32%) 67% (318%) 32%
Total Shareholders' Fund 142,399 141,810 112,612 119,665 171,027
No. of Share in Issue 314,180 314,117 235,538 210,638 210,521
Net Margin (%) 0.2 (3.3) (2.7) (8.1) 4.6
Net Assets Per Share (sen) 45.3 45.1 48.0 55.5 79.3
Gearing (net of cash) 0.88 0.99 1.34 0.90 0.88
588,890
142,399
45.3
45.1
48.0
RM000
1
,
4
3
6
C O RP O RATE
S O C IA L
RESPONSIBILITY
5
WO RLD CHILDREN S DAY
A Childrens Day celebration with focus on child
nutrition was held at High5 Bread Town on 29
O ctober 2009. M s Amanda Tan, an independent
nutritionist, gave a talk on healthy eating to media
and children from Precious Childrens Home. The
children were also given a chance to cream their
own bread.
Dato Jackson Tan (centre, back row) with the children from Precious Childrens
Home.
The boys and girls trying to decorate their own cream
roll.
Amanda Tan explaining to the children on nutrition in daily diet.
Flour price had been volatile for most of the year and
remained at an all time high in the previous year and this
trend has affected the companys input costs. Fortunately
flour price has lowered slightly and with the Groups
continued efforts at cost cutting measures it has managed
to remain competitive in the market. For the financial year
under review the Group registered a lower revenue of
RM589 million compared to RM639 million achieved in
the previous year. Despite this the Group managed to
register a profit after taxation and minority interest of
RM1.44 million compared to the previous years loss of
RM21 million. The Group was able to deliver a profitable
result after three consecutive financial year losses and this
marked a significant turning point for the Group.
O n behalf of the Board of Directors, I am
pleased to present to you the 2009 Annual
Report and the Audited Financial Statements
of Silver Bird Group Berhad for the
financial year ended 31 O ctober 2009.
C h a irm a n ' s
DATO DR GAN KHUAN POH
Chairman
Financial Highlights
The financial year 2009 has been a very
challenging year following the global
financial crisis and economic downturn.
The Malaysian economic contracted by 6.2% in the
first quarter of year 2009 while the manufacturing
sector contracted 14.8% in the first eights months of
2009 on account of sharp deterioration in exports and
domestic oriented industries. However, there are signs
that the declining trend is bottoming out. This positive
development is further reinforced by the Governments
stimulus package spending as well as better consumer
sentiment and business confidence.
C h a irm a n ' s S t a t e m e n t
7
A favourable trend of an increasing turnover is expected
to follow through into the next financial year. With this
trend there should be sales growth in daily fresh bakery
products. Coupled with the continuing cost reduction
measures these developments augur well for prospects
in the coming year.
DIVIDEND
The Board of Directors is not recommending any
dividend for the financial year under review.
OUTLOOK AND PROSPECTS
In the light of the prospects arising from the
consolidation of the bakery market, the Group will
continue to focus on its core business and will strive to
sustain and build on its current performance. In addition
with the removal of white bread from the price control
list by the Government and the continuous cost
reduction measures undertaken, the Group hopes that
this will translate into better results in the coming
financial year. The Group is also currently expanding
aggressively into institutional sales and this strategy
compliments well with the capacity expansion plan of
the Group.
The Board of Directors is cautiously optimistic that with
the commitment to improve efficiencies in operations,
efforts at cost cutting measures and marketing and
promotion the aspiration to be one of the nations
leading players in the consumer food market can be
achieved.
APPRECIATION
On behalf of the Board of Directors, I would like
to extend my sincerest appreciation to our valued
customers for their continuous support and our
business partners, bankers, regulatory authorities for
their trust, confidence and cooperation given to us.
To my fellow directors, management and staff, I would
like to express my gratitude and appreciation for their
hard work, dedication and commitment throughout the
year.
Last but not least, my heart-felt thanks to all our
valued shareholders for your patience, confidence and
continued support in Silver Bird Group Berhad.
DATO DR GAN KHUAN POH
Chairman
8
In spite of the challenging conditions
for financial year ended 31 October
2009, the Group continued to show
improved results.
FINANCIAL PERFORMANCE
Revenue dropped from RM638 million last year to RM589
million in the current financial year. This was mainly due to
lower revenue from our MultiCom Division as a result of
slowdown in the prepaid telecommunication industry.
However, the Group managed to register a profit after
taxation of RM1.44 million compared with a loss after
taxation of RM21 million in the previous year. This set of
commendable results marks the Groups turnaround from
losses amidst the backdrop of an economic recession and
global credit crunch. The significant improvement was
attributed to a combination of sales growth and lower costs
in our core business of Consumer Food Division.
We are continuously performing research and development
for new products and exploring other related business
segments. Price of flour has lowered slightly compared to
2008 and coupled with the Governments subsidy, the
Company was able to maintain its margin.
W e a ls o m a n a g e d t o s e c u re t h e
s u p p ly c o n t ra c t t o m a n u fa c t u re
h o u s e b ra n d c o n fe c t io n e ry
p ro d u c t s fo r a n o t h e r le a d in g re t a il
c h a in in S in g a p o re a t t h e e n d o f
2 0 0 9 w h ic h re s u lt s w ill o n ly b e
re fle c t e d in t h e fin a n c ia l ye a r 2 0 1 0 .
Directors Message
DATO J ACKSON TAN HAN KOOK
Group M anaging Director
G ro u p M a n a g in g D ire c t o rs M e s s a g e
9
The MultiCom Division on the other hand registered a
drop in revenue but continued to make profit contributions
to the Group.
SINGAPORES OPERATION
In this segment, we had managed to turnaround
Singapores operation and will remain committed to this
market and continue to seek innovative ways to expand
our reach.
We also managed to secure the supply contract to
manufacture house brand confectionery products for
another leading retail chain in Singapore at the end of
2009 which results will only be reflected in the financial
year 2010.
FUTURE PROSPECTS
The Malaysian economy is expected to return to positive
growth next year and this should translate to stronger
consumer spending. With the downward trend of major
material costs and the various cost reduction initiatives
undertaken by the Group, we are confident these
measures will translate into more positive results for the
forthcoming quarters.
On 31 December 2009, the Government had announced
the withdrawal of subsidy on white bread and the removal
of price control on the product. This will liberalise the
industry with the flexibility for innovation and adjustments.
We will continue to structure our approach to pursue
growth, maintaining the Groups competitiveness and
ensuring the long term growth and profitability by
expanding into similar and/or complementary businesses
whenever opportunities arise. We are cautious over the
uncertainties of fluctuation in the raw material prices
which may impact the Companys performance for the
next financial year.
The Group is expanding aggressively into institutional
sales and coupled with favourable sales growth, the
Group had planned for capacity expansion. Barring any
unforseen circumstances, the Board is confident of
achieving a much better set of results in 2010.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I would like to place
on record our sincere gratitude and appreciation to the
management team and all employees for their hard work
and commitment throughout the challenging financial
year.
I would also like to express my deepest appreciation to
all our valuable customers, business partners, bankers,
shareholders and regulatory authorities for their continued
support and trust in the Group.
O n 3 1 D e c e m b e r 2 0 0 9 , t h e G o ve rn m e n t h a d a n n o u n c e d t h e
w it h d ra w a l o f s u b s id y o n w h it e b re a d a n d t h e re m o va l o f p ric e c o n t ro l
o n t h e p ro d u c t . Th is w ill lib e ra lis e t h e in d u s t ry w it h t h e fle xib ilit y fo r
in n o va t io n a n d a d ju s t m e n t s .
DATO J ACKSON TAN HAN KOOK
Group Managing Director
10
A Malaysian aged 64, is an Independent Non-Executive
Chairman of Silver Bird Group Berhad. Dato Dr Gan was
appointed to the Board on 27 April 2006. He is also the
Chairman of the Nomination Committee. He holds a Ph.D
and M.A. in Economics from Duke University, NC, USA;
M.B.A. in Finance from Cornell University, NY, USA and
B.A. (Hons.) in Business Economics from University of
Malaya. He started his career as a Government Service
Officer in 1967 and had served in various positions
ranging from the District level, the National Institute of
Public Administration ( INTAN ) to the Prime Ministers
Department as Senior Director responsible for
Macroeconomics in the Economic Planning Unit for 31
years. He later joined Pilecon Group of Companies in
1997 as an Executive Director responsible for the Groups
Finance and Corporate Planning and the last position
he held was as Managing Director before he left the
Company in year 2000.
He currently sits on the Board of Permodalan BSN
Berhad, Time Engineering Berhad and Prudential
Assurance Malaysia Berhad.
He is not related to any director and/or major shareholders
of the Company and there is no business arrangement
with the Company in which he has a personal interest.
He has not been convicted for any offences within the
past 10 years other than traffic offences, if any.
DATO DR
GAN KHUAN POH
( Dato Dr Gan )
Directors
P ro file
DATO DR
GAN KHUAN POH
CHING SIEW CHEONG
D ire c t o rs P ro file
11
A Malaysian aged 55, is the Group Managing Director of
Silver Bird Group Berhad. He was appointed to the Board
on 5 October 1993. He is the founder of Standard
Confectionery Sdn Bhd ( Standard Confectionery ) and
the prime-mover in formulating, nurturing and
implementing Standard Confectionerys strategies since
its incorporation in 1986. His exposure and involvement
in the manufacturing and trading of bakery and
confectionery products since the 1970s assures the
Group of his experience in this field. The Group has grown
from strength to strength under his leadership, foresight
and inherent expertise, and this has earned him a
commendable standing in the local and international
business communities in the bakery and confectionery
industries. To keep abreast with business skills, he had
undergone the Harvard Business School Alumni Club of
Malaysias Senior Management Development Programme
in 1994. In his continued efforts to contribute to the
Groups expansion plans, he is at the forefront of the
Groups marketing plans for the penetration of the Groups
products into the South East Asian countries. Dato
Jackson Tan is primarily responsible for the success of
the Group and currently also holds directorships in several
private limited companies. Currently, Dato Jackson Tan is
a council member of the General Council of Malaysian
Institute of Management.
DATO JACKSON
TAN HAN KOOK
( Dato Jackson Tan )
A Malaysian aged 47, is the Group Executive Director of
Silver Bird Group Berhad. He was appointed to the Board
on 10 June 1997. He joined Standard Confectionery in
1990 as Finance and Administration Manager working
closely with Dato Jackson Tan in transforming Standard
Confectionery and other subsidiary companies into
modern organisation with proper operating systems,
budgets and controls. During his 20 years of service with
the Group, he played an important and active role in
formulating and implementing business strategies to
expand the Group. He graduated from Strathclyde
Graduate Business School with a Master in Business
Administration in 1996. He also holds directorships in
several other private limited companies.
DATO JACKSON
TAN HAN KOOK
CHING SIEW
CHEONG
Apart from the Groups business activities, his
participation in and contribution to various organisations
and charities has earned him the Young Outstanding
Malaysians Award given by Jaycees Malaysia in 1992.
Dato Jackson Tan is the spouse of Datin Ong Hooi Siang,
a substantial shareholder of the Company. Apart from the
aforesaid, he has no family relationship with any other
director and/or major shareholder of the Company and
there is no business arrangement with the Company in
which he has a personal interest.
RICHARD GEORGE
AZLAN BIN ABAS
12
Director of Silver Bird Group Berhad. He is the Chairman
of the Remuneration Committee and also a member of
the Audit Committee. He was appointed to the Board on
20 April 2002. Mr Lim is a law graduate with a LLB (Hons)
Degree from the University of London and holds a
Certificate in Legal Practice. Mr Lim was one of the
pioneer consultants with the Malaysian Minority
Watchdog Group, an initiative set up by the Ministry of
Finance in 2002 to protect the minority shareholders
interest and promoting good corporate governance and
practices. Prior to that, he was a Deputy Editor with The
Star Newspaper, where he wrote for the Business section.
In addition, he was also a panel speaker for Bursatra Sdn
Bhd. Mr Lim Hock Chye is currently the Group Director of
Strategic Planning & Corporate Affairs of HELP University
College, a position he has held since April 2008.
LIM HOCK CHYE
Director of Silver Bird Group Berhad. He is the
Chairman of the Audit Committee and also a member
of the Remuneration Committee. He was appointed to
the Board on 21 May 2004. He holds a Bachelor of
Commerce from the University of Western Australia. He
worked for Arthur Andersen & Co. from 1984 to 1989
and subsequently served Arab-Malaysian Corporation
Berhad from 1989 to 1996. From 1997 to 2002, he was
the Group Chief Executive of Yayasan Pelajaran Johor
Holdings Sdn Bhd. He is presently a partner of Azlan &
Co., Chartered Accountants. He is a Fellow of the
Institute of Chartered Accountants in Australia and a
Chartered Accountant of the Malaysian Institute of
Accountants. In 1995, he attended the Asian Institute of
Management, Management Development Program.
He is not related to any director and/or major
shareholders of the Company and there is no business
arrangement with the Company in which he has a
personal interest.
LIM HOCK CHYE
He is a director of TSM Global Berhad, Tamco Corporate
Holdings Berhad and Nylex (Malaysia) Berhad.
13
Director of Silver Bird Group Berhad. Dato Seri Talaat
was appointed to the Board on 5 March 2007 and he is a
member of the Nomination Committee. He holds a
Masters in Professional Studies from Cornell University,
USA majoring in International Planning. Dato Seri Talaat
has attended Senior Executive Program, London
Business School, United Kingdom and Advanced
Management Program, Harvard Business School, U.S.A.
He started his civil service career as an Assistant State
Secretary in Penang and had since then held several vital
posts in the Malaysian Centre for Development Studies,
Socio-Economics Research Unit, National Institute for
Public Administration, National Palace, the Ministry of
Education and as Mayor of Ipoh City, Perak.
He also held the position of the Secretary General of the
Ministry of Youth and Sports and later appointed as the
Secretary General of the Ministry of Domestic Trade and
Consumer Affairs. Whilst in the government service, he
was the Chairman of Company Commission of Malaysia
and Board Member of Malaysia Communication and
Multimedia Corporation, Sepang International Circuit and
Intellectual Property Corporation of Malaysia.
Currently, he is a director of Shell Refining Company
(Federation of Malaya) Berhad, Konsortium Logistic
Berhad and Outward Bound Trust of Malaysia.
DATO SERI TALAAT
BIN HUSAIN
DATO SERI TALAAT
BIN HUSAIN
RICHARD GEORGE
AZLAN BIN ABAS
A Malaysian aged 51, was appointed to the Board on 3
January 2008 as a Non-Independent Non-Executive
Director of Silver Bird Group Berhad and also a member
of the Audit Committee. He graduated with a Bachelor of
Economics (Accounting Major) from Monash University,
Melbourne in 1983 and is a Fellow Member of the Institute
of Chartered Accountants in Australia.
He has over 10 years of working experience in the fields
of accounting, auditing and corporate services with major
international accounting firms including Messrs Ernst &
Whinney (Kuala Lumpur) (now known as Ernst & Young),
Messrs Arthur Young (Melbourne) and subsequently
Messrs Ernst & Young (Melbourne). He joined Berjaya
Land Berhad as Senior Manager, Internal Audit in 1994
and was responsible for its internal audit functions.
He was an Executive Director of Berjaya Group Berhad
from January 2000 to September 2001.
He is currently a Director of Berjaya Capital Berhad and
MOL Accessportal Berhad. He also holds directorships in
several other private limited companies in the Berjaya
Corporation group of companies. Dato Lee Kok Chuan
is a representative of Berjaya Corporation Berhad on the
Board of Silver Bird Group Berhad.
DATO LEE
KOK CHUAN
A Malaysian aged 39, was appointed to the Board on 3
January 2008 as a Non-Independent Non-Executive
Director of Silver Bird Group Berhad. He graduated with
a BSc (Honours) Accounting from Queens University of
Belfast, United Kingdom in 1993 and Association of
Chartered Certified Accountants ( ACCA ) from Emile
Woolf College, London, United Kingdom in 1995. He is a
Fellow Member of the ACCA and also a member of the
Malaysian Institute of Accountants (MIA).
He started his professional career in the auditing and
accounting fields with Messrs PricewaterhouseCoopers,
Kuala Lumpur in year 1996. He was then promoted to the
position of Manager in year 2002 and involved in the
provision of audit and accounting services mainly to
banking and financial institutions before joining Lembaga
Tabung Haji as the Divisional Head of Group Finance
in July 2002. Presently, he is the Deputy Group Chief
Financial Officer of Lembaga Tabung Haji.
He is currently also a Director of Lityan Holdings Berhad
and Y.S.P Southeast Asia Holding Berhad. Adi Azuan Bin
Abdul Ghani is a representative of Lembaga Tabung Haji
on the Board of Silver Bird Group Berhad.
ADI AZUAN
BIN ABDUL GHANI
DATO LEE
KOK CHUAN
ADI AZUAN BIN ABDUL GHANI
14
An Australian aged 65, was appointed to the Board on 3
January 2008 as a Non-Independent Non Executive
Director of Silver Bird Group Berhad and a member of the
Remuneration Committee. He holds a Bachelor of
Engineering (Electrical) from Melbourne University,
Australia in 1966 and obtained a Master of Business
Administration from Monash University, Australia in 1973.
He has an extensive Fast Moving Consumer Goods
( FMCG ) experience with Australian and Multinational
companies including Mars Confectionary, Kimberly-Clark
Australia and the Goodman Fielder group. Prior to his
current appointment, he joined Greens Foods Limited
( Greens ) as Chief Operating Officer in May 2002 and
was Managing Director from September 2002 until July
2004. He remained as non executive director in the
Greens Board until early 2007. Peter John McLoghlin is a
representative of CVC Limited on the Board of Silver Bird
Group Berhad.
PETER JOHN
MCLOGHLIN
An Australian aged 62, was appointed as an alternate
Director to Peter John McLoghlin on 3 January 2008. He
holds a Bachelor of Commerce Degree in Accountancy
(UNSW) and Master of Commerce Degree in Accounting
and Financial Management (UNSW).
He is a fellow of The Institute of Chartered Accountants in
Australia and a Fellow of CPA, Australia. He is also an
Associate Fellow of the Australian Financial Institute of
Management and holds Australian Financial Services
Licences issued under the Financial Services Reform Act.
He commenced work as a Chartered Accountant in 1969
and worked for Messrs Ernst & Young and Greenwood
Challoner. He has established a firm of Chartered
Accountants as a sole practitioner (now known as Gould
Ralph) in May 1976. He has extensive experience in
corporate restructuring and turn-around situations with
specialised knowledge in taxation and law. He is a
Registered Liquidator and Registered Trustee. He was the
founder and executive chairman of CVC Limited ( CVC )
in 1985. CVC was one of only two venture capital
companies not associated with a major financial
institution which were awarded Australian Government
Management and Investment Companies Licenses in
1985. He had established a number of commercial
businesses and initiated more than ten successful public
company flotations, including CVC and Sunland Group
Limited.
VANDA RUSSELL
GOULD
PETER JOHN
MCLOGHLIN VANDA RUSSELL
GOULD
15
16
SENIOR
MANAGEMENT
Lai Poh Mei
General M anager
Accounts & Finance
Ong Choon Wah
General M anager
Production
George Tan
General M anager
Corporate Finance, Banking & Administration
Goh Wei Hor
Senior General M anager
Consumer Food
Edmond Tan
Head of M ultiCom Division
S TATEM EN T O N C O RP O RATE G O VERN A N C E
17
The Board of Directors ( Board ) of Silver Bird Group Berhad remains committed towards maintaining good corporate
governance practices throughout the Company and its subsidiaries ( the Group ).
The Board is pleased to report to the shareholders the manner in which the Group has applied these principles and best
practices, and where these best practices of Malaysian Code on Corporate Governance ( the Code ) were not adopted
during the financial year if any, they are explained in the relevant paragraphs.
THE BOARD OF DIRECTORS
(a) Composition and Balance
The Company is led by an effective and experienced Board, encompassing of 9 members, made up of 4
Independent Non-Executive Directors including the Chairman, 3 Non-Independent Non-Executive Directors and 2
Executive Directors. This composition satisfies the Bursa Securities Listing Requirements that requires at least 3
Directors or 1/3 of the Board whichever is higher, are Independent Directors. The profiles of the members of the
Board are set out on page 10 to page 15 of this Annual Report.
The role of the Independent Non-Executive Directors is to provide objective and independent inputs to the decision
making process of the Board so as to provide an effective check and balance. The Board composition brings
together group of extensively experienced Directors who are from diverse backgrounds and have a wide range of
skills and experiences in areas relevant to managing and directing the Groups operations.
The Executive Directors are primarily responsible for the implementation of policies and decisions of the Board,
overseeing the Groups operations and developing the Groups business strategies.
The Board did not appoint a Senior Independent Non-Executive Director to whom concerns maybe conveyed as
the Chairman of the Board encourages the active participation of each and every Board member in the decision
making process.
(b) Duties and Responsibilities
The main focus of the Board is on the overall strategic leadership, identification and management of principal risks
and development and control of the Group. The Board has delegated specific responsibilities to Board Committees,
all of which discharge the duties and responsibilities within their respective Terms of Reference.
The roles of the Chairman and Group Managing Director are clearly distinct to ensure that there is a balance of
power and authority. The Chairman is primarily responsible for the effective and efficient conduct and working of
the Board whilst the Group Managing Director is responsible for the daily management of the Groups operations
and implementation of the policies and strategies adopted by the Board.
THE BOARD OF DIRECTORS (cont`d)
(c) Board Meetings
The Board meets regularly on a quarterly basis with additional meetings being convened when necessary. In the
meetings, the Board will deliberate on and consider matters relating to the Groups financial performance, significant
investments, corporate development, strategic issues and business plan. For the financial year ended 31 October
2009 the Board met 7 times. The meeting attendance records of the Directors who held office are set out below:
No. of
meetings
Name of Director Designation attended
Dato Dr Gan Khuan Poh Independent Non-Executive Director 7/7
(Chairman)
Dato Jackson Tan Han Kook Group Managing Director 7/7
Ching Siew Cheong Group Executive Director 7/7
Lim Hock Chye Independent Non-Executive Director 7/7
Richard George Azlan Bin Abas Independent Non-Executive Director 7/7
Dato Seri Talaat Bin Husain Independent Non-Executive Director 7/7
Adi Azuan Bin Abdul Ghani Non-Independent Non-Executive Director 6/7
Dato Lee Kok Chuan Non-Independent Non-Executive Director 6/7
Peter John McLoghlin Non-Independent Non-Executive Director 6/7
Vanda Russell Gould Non-Independent Non-Executive Director
(Alternate Director to Peter John McLoghlin)
Board meetings are structured with a pre-set agenda which encompass all aspects of matters under discussion.
The Board papers are circulated to directors well in advance of the board meetings for their deliberation. All meetings
of the Board are duly recorded in the Board Minutes.
Senior management may be invited to attend these meetings to explain and clarify matters being tabled.
In furtherance of their duties, the Board has unrestricted access to any information pertaining to the Group as well
as to the advice and services of the Company Secretary and independent professional advisers whenever
appropriate at the Groups expense.
(d) Appointment and Re-election of Directors
Any new appointments to the Board will require deliberation by the full Board guided by formal recommendations
by the Nomination Committee. Board members who are appointed by the Board are subject to retirement at the
first Annual General Meeting ( AGM ) of the Company subsequent to their appointment. Article 97 of the Companys
Article of Association also provides that at least one-third (1/3) of the Directors shall retire by rotation at each AGM
and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in
accordance with Section 129(6) of the Companies Act, 1965 ( the Act ).
S t a t e m e n t O n C o rp o ra t e G o ve rn a n c e
18
19
THE BOARD OF DIRECTORS (cont`d)
(e) Directors Training
Throughout the year, the Directors have attended various conferences, seminars and programmes, including
speaking engagements, to enhance their skills and knowledge. The Board will continue to evaluate and determine
the training needs of its Directors on an ongoing basis.
For new Directors, the Nomination Committee ensures that they undergo an orientation program so that they are
familiar with the Groups operation and current business issues.
BOARD COMMITTEES
Apart from the Audit Committee, there are two other additional committees established to assist the Board in the
execution of its responsibilities. All the committees are provided with written terms of reference. Details of the Board
committees are provided overleaf.
(a) Nomination Committee
The Nomination Committee has three (3) members, all of whom are Independent Non-Executive Directors. The
members of the Nomination Committee are:
i) Chairman
Dato Dr Gan Khuan Poh - Independent Non-Executive Director
ii) Members
Richard George Azlan Bin Abas - Independent Non-Executive Director
Dato Seri Talaat Bin Husain - Independent Non-Executive Director
The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board
of Directors in their responsibilities in nominating new directors to the Board and Board Committees. The Committee
also reviews the Board of Directors composition and balance as well as considering the Board of Directors
succession planning.
Members met twice during the financial year.
The Board considers that the current mix of skills and experience of its members is sufficient for the discharge of
its duties and responsibilities effectively.
(b) Remuneration Committee
The Remuneration Committee comprises three (3) members with the majority being Independent Directors.
The Remuneration Committee is to assist the Board of Directors in their responsibilities in reviewing and assessing
the remuneration packages of the executive directors. The members of the Remuneration Committee are:
i) Chairman
Lim Hock Chye - Independent Non-Executive Director
ii) Members
Richard George Azlan Bin Abas - Independent Non-Executive Director
Peter John McLoghlin - Non-Independent Non-Executive Director
The Remuneration Committee is responsible for recommending to the Board the remuneration framework for the
remuneration package of each Executive Director.
This includes recommending remuneration packages necessary to attract, retain and motivate the Directors, and
is reflective of the Directors experience and level of responsibilities.
None of the Executive Directors participate in any way in determining their individual remuneration. The remuneration
of the Executive Directors is to be reviewed annually. The remuneration and entitlements of the Non-Executive
Directors shall be a matter to be decided by the Board as a whole.
The Remuneration Committee met once during the financial year. The meeting was attended by all its members to
discuss the remuneration package of Directors that commensurate with corporate and individual performance.
20
BOARD COMMITTEES(cont`d)
(c) Audit Committee
The Board had complied with the changes to the Code which recommends that the Audit Committee should
comprise wholly Non Executive Directors.
The detailed report of the Audit Committee is set out on pages 23 to 25.
DIRECTORS REMUNERATION
The details of the remuneration of each Director during the financial year ended 31 October 2009 are as follows:
(a) Total Remuneration
Executive Non-Executive
Directors Directors Total
RM 000 RM 000 RM 000
Basic Salary 1,478 0 1,478
Fees 0 264 264
Attendance fee 0 39 39
Benefit-in kind 26 0 26
Total 1,504 303 1,807
(b) Directors remuneration by bands
The number of Directors whose total remuneration falls within the following bands during the financial year ended
31 October 2009 is as follows:
Directors Executive Non-Executive
Remuneration Directors Directors Total
RM1 to RM50,000 - 6 6
RM50,001 to RM100,000 - 1 1
RM350,001 to RM400,000 1 - 1
RM950,001 to RM1,000,000 1 - 1
Details of individual Directors Remuneration are not disclosed in this report as the Board considers that the above
Remuneration disclosures by band and analysis between Executive and Non Executive Directors satisfies the
accountability and transparency aspects of the Code.
SHAREHOLDERS
(a) Shareholders and Investors Relations
The Board acknowledges the importance of accountability to the shareholders. Timely release of the financial results
on a quarterly basis, press releases and announcements provide an overview of the Groups performance and
operations to its shareholders.
Information disseminated to the investment community is in accordance to Bursa Malaysia disclosure rules and
regulations. The Board has taken steps to ensure that no market sensitive information is disclosed to any party prior
to making an official announcement to Bursa Securities.
The Group has also established a website at www.silverbird.com.my from which shareholders as well as members
of the public may access for the latest information on operations and activities of the Group.
During the year, the Executive Director and senior management hold regular dialogues and briefings with existing
and prospective investors and analysts to keep them updated on various announcements relating to the Groups
financial performance, major corporate proposals and pertinent issues.
21
SHAREHOLDERS (cont`d)
(b) Annual General Meeting
The Annual General Meeting ( AGM ) is the principal platform for dialogue with the shareholders. At the AGM, the
Board presents the progress and performance of the Group to provide shareholders with the opportunity to question
the business issues, concerns and operations in general. The Board will also ensure that each item of special
business is included in the notice of the AGM and will be accompanied by an explanation of the effects of the
proposed resolutions.
ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
In presenting the annual financial statements and quarterly announcements to shareholders, the Directors aim to
ensure that the financial statements and quarterly announcements are prepared in accordance with the Companies
Act, 1965 and applicable approved accounting standards so as to offer a balanced and comprehensive assessment
of the Groups financial position and prospects.
A Responsibility Statement by the Directors is set out on page 30 of this Annual Report.
(b) Internal Control
The Groups Statement on Internal Control is set out on pages 28 to 29 of the annual report to provide an
overview on the state of internal control throughout the year.
In relation to the internal audit function, having considered the Groups operational requirements, the Board is of
the view that the Group should still continue to outsource its internal audit function to external consultants.
Nevertheless, this outsourcing arrangement shall be reviewed annually to ensure that it continues to meet the
Groups requirements. The outsourced internal auditors assist the Board and the Audit Committee in providing
independent assessment of the adequacy, efficiency and effectiveness of the Groups internal control systems.
They report directly to the Audit Committee.
(c) Relationship with Auditors
The Group maintains a professional and transparent relationship with its external auditors. The external auditors will,
from time to time, highlight to the Audit Committee and the Board of Directors matters that require their attention.
The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report set
out on pages 23 to 25 of the annual report.
(d) Non-Audit Fees
There was no non-audit fees paid to external auditors by the Group for the financial year ended 31 October 2009.
OTHER INFORMATION
(a) Share Buy-Back
During the financial year, there were no share buy-backs by the Company.
(b) Options, Warrants or Convertible Securities
During the financial year, the Company had issued 62,722 new ordinary shares of RM0.50 each pursuant to the
conversion of RM42,690 nominal value of 1% Irredeemable Convertible Unsecured Loan Stocks 2004/2009 at a
conversation price of RM0.68 per new ordinary share.
(c) Material Contracts involving Directors Interests
There were no contracts involving directors interests which are or may be material, not being contracts entered into
in the ordinary course of business, which have been entered into by the Company and its subsidiary companies
since the end of the previous financial year.
(d) Recurrent Related Party Transactions
The details of the transactions with related parties undertaken by the Company during the financial period are
disclosed in note 40 on page 74 of the notes to the financial statements.
(e) American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programmes
During the financial year, the Company did not sponsor any ADR or GDR programme.
(f) Imposition of Sanctions/Penalties
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management
by the authorities during the financial year.
(g) Profit Guarantees
During the financial year, there were no profit guarantees given by the Company.
(h) Variation of Results
There were no material variations between the audited results for the financial year ended 31 October 2009 against
the unaudited results for the fourth quarter ended 31 October 2009.
(i) Utilisation of Proceeds
The Company did not implement any fund raising exercise during the financial year.
(j) Contracts Relating to Loans
There was no contract relating to loans by the Company.
(k) Revaluation of Landed Properties
The Group does not have any revaluation policy on landed properties.
22
A U D IT C O M M ITTEE REP O RT
The Board of Directors of Silver Bird Group Berhad is pleased to present the report of the Audit Committee for the
financial year ended 31 October 2009.
Composition and Meetings
The members of the Audit Committee and details of their attendance at meetings during the financial year ended 31
October 2009 are as follows:
Number Attendance
of meetings of meetings
Chairman : Richard George Azlan Bin Abas 4 4
Members : Lim Hock Chye 4 4
Dato Lee Kok Chuan 4 4
Senior Management staff and the external consultants, to whom the internal audit function was outsourced to, attended
the meetings at the invitation of the Audit Committee. The agenda of the meetings and relevant information are
distributed to its members with sufficient notice. The proceedings of the meetings are formalised in the form of meeting
minutes by the Secretary, who is appointed by the Board, during the Audit Committee meetings.
Summary of Activities of the Audit Committee
The following activities were undertaken by the Audit Committee during the financial year ended 31 October 2009:-
(a) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 October
2008, 31 January 2009, 30 April 2009 and 31 July 2009.
(b) Reviewed and approved the internal audit plan prepared by the Internal Audit Function.
(c) Reviewed the internal audit reports and ensured the implementation of the action plans are carried out by
Management on a timely basis.
(e) Reviewed the audit plan of the external auditors.
(f) Reviewed the annual audited financial statements, external auditors reports and their audit findings.
(g) Reviewed related party transactions and considered conflict of interest situation that may arise within the Group.
Summary of Activities of the Internal Audit Function
The activities of the Internal Audit Function during the financial year were as follows:
(a) develop the internal audit plan for year 2009;
(b) execution of the approved internal audit plan;
(c) presentation of the internal audit findings at the quarterly Audit Committee meetings. All findings raised by the
Internal Audit Function have been appropriately addressed by Management; and
(d) conducted follow up reviews to ensure that action plans are properly and appropriately implemented by
Management.
The internal audits conducted did not reveal weaknesses which would result in material losses, contingencies or
uncertainties that would require disclosure in the annual report.
The Internal Audit function is outsourced to external consultants and the cost incurred for the Internal Audit function in
respect of the financial year was approximately RM56,000.
23
A u d it C o m m it t e e Re p o rt
TERMS OF REFERENCE OF AUDIT COMMITTEE
1. Composition
The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members.
All the audit committee members must be non-executive directors with a majority of whom shall be independent
directors and at least one (1) member must be a member of the Malaysian Institute of Accountants or possess
such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad ( Bursa Securities ).
No alternate director shall be appointed as a member of the Audit Committee.
In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy
must be filled within three (3) months.
2. Chairman
The Chairman, who shall be elected by the Audit Committee, shall be an independent non executive director.
3. Secretary
The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the
Chairman, for drawing up the agenda and circulating it prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them
to the Committee Members.
4. Meetings
The Committee shall meet at least four (4) times in each financial year. The quorum for a meeting shall be two (2)
members, provided that the majority of members present at the meeting shall be independent.
The Committee Members may call for a meeting as and when required with reasonable notice as the Committee
Members deem fit. The Committee Members may participate in a meeting by means of conference telephone,
conference videophone or any similar or other communications equipment by means of which all persons
participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person
at such meeting.
The internal auditors and external auditors have the right to appear at any meeting of the Audit Committee and shall
appear before the Committee when required to do so by the Committee. The internal auditors and external auditors
may also request a meeting if they consider it necessary.
5. Rights
The Audit Committee shall:
(a) have authority to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information pertaining to the Group;
(d) have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
(e) have the right to obtain independent professional or other advice at the Companys expense;
(f) have the right to convene meetings with the internal auditors and external auditors, excluding the attendance
of the executive directors or employees of the Group, whenever deemed necessary;
(g) promptly report to the Bursa Securities matters which has not been satisfactorily resolved by the Board of
Directors resulting in a breach of the listing requirements;
(h) the Chairman shall call for a meeting upon the request of the internal auditors and external auditors; and
(i) have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall
have the casting vote should a tie arise.
24
A u d it C o m m it t e e Re p o rt
6. Duties
(a) To review with the external auditors on:
the audit plan, its scope and nature;
the audit report;
the results of their evaluation of the accounting policies and systems of internal accounting controls within
the Group; and
the assistance given by the officers of the Company to external auditors, including any difficulties or
disputes with Management encountered during the audit.
(b) To do the following, in relation to internal audit function:
review the adequacy of the scope, functions, competency and resources of the internal audit function, and
that it has the necessary authority to carry out its work;
review the internal audit programme and results of the internal audit process and, where necessary, ensure
that appropriate actions are taken on the recommendations of the internal audit function;
review any appraisal or assessment of the performance of members of the internal audit function;
approve any appointment or termination of senior staff members of the internal audit function; and
take cognisance of resignations of internal audit staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning.
(c) To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and risk
management practices of the Group.
(d) To review with management:
audit reports and management letter issued by the external auditors and the implementation of audit
recommendations;
interim financial information; and
the assistance given by the officers of the Company to external auditors.
(e) To monitor related party transactions entered into by the Company or the Group and to determine if such
transactions are to be undertaken on an arms length basis and normal commercial terms and on terms not more
favourable to the related parties than those generally available to the public, and to ensure that the Directors
report such transactions annually to shareholders via the annual report and to review conflict of interest that may
arise within the Company or the Group including any transaction, procedure or course of conduct that raises
questions of management integrity.
(f) To review the quarterly reports on consolidated results and annual financial statements prior to submission to
the Board of Directors, focusing particularly on:
changes in or implementation of major accounting policy and practices;
significant and/or unusual issues arising from the audit;
the going concern assumption;
compliance with accounting standards and other legal requirements; and
major judgemental areas.
(g) To consider the appointment and/or re-appointment of internal and external auditors, the audit fee and any
questions of resignation or dismissal including recommending the nomination of person or persons as auditors.
(h) To verify any allocation of options in accordance with the employees share scheme of the Company, at the end
of the financial year.
25
INTRODUCTION
The halal industry has developed rapidly as more consumers including non-muslim are aware of the halal concept that
promotes wholesome and healthy food. Silver Bird is committed to halal standards and halal certification of its products
and towards this end has initiated the formation of an independent adviser known as Syariah Panel on 1 November 2008.
The initiative is to enhance the halal integrity of its products.
a) Composition
Currently the Panel has five (5) members made up of three (3) experts in Islamic jurisdiction, a member of the Board of
Directors and an expert in food technology. The Panel is led by a prominent and experienced individual Y.Bhg Prof
Dato Dr. Abdul Shukur bin Hj Husin, Director of World Fatwa Management & Research Institute, Islamic Science
University Malaysia who is also the Chairman for National Fatwa Council. The term of service of the Panel is for two years
and they are eligible for re-appointment. The list of members is as follows:
Prof. Dato Dr Abd Shukor bin Hj Husin (Chairman)
Chairman National Fatwa Council.
Director of World Fatwa Management & Research Institute,
Islamic Science University Malaysia (USIM)
Datuk Hj Wan Zahidi bin Wan Teh(Member)
Mufti Wilayah Persekutuan Kuala Lumpur
Dato Hj Abdul Majid bin Omar (Member)
Vice Mufti Negeri Selangor Darul Ehsan
Dato Seri Talaat bin Hj Husain (Member)
Member of the Board of Directors Silver Bird Group Berhad
Prof Madya Chek Zaini bte Hassan(Member)
Prof. Madya in Food Technology, Islamic Science University Malaysia (USIM)
b) Duties & Responsibilities
The focus of the Panel is to advise the Board of Directors and management on halal matters in order to ensure
adherence to halal policy and standards by the Company. The Panel also monitors the business through inspection of
the premises in ensuring the process conforms to Syariah.
S YA RIA H PA N ELS REP O RT
26
c) Meetings
The Panel shall meet at least twice a year to deliberate on the reports by the Internal Halal Committee. The Internal
Halal Committee is made up of Muslim employees from relevant departments in the company who plays a very
important role in ensuring the halal standards are applied on a continuous basis as drawn up in the halal manual of
the company. For the financial year ended 31 October 2009, the Panel met 2 times. The meeting attendance records
of the Panel are set out below.
Name Designation No. of
meeting attended
Prof. Dato Dr Abd Shukor bin Hj Husin Independent Chairman 2/2
Datuk Hj Wan Zahidi bin Wan Teh Independent member 2/2
Dato Hj Abdul Majid bin Omar Independent member 2/2
Dato Seri Talaat bin Hj Husain Independent 2/2
Non-Executive Director
Prof. Madya Chek Zaini bte Hassan Independent member 2/2
The quorum for a meeting shall be two (2) members.
d) Secretary
The Secretary of the Panel is the Chairman of the Internal Halal Committee of the company who is responsible for
drawing up the meeting agenda with the consent of the Chairman. The secretary is responsible to keep the minutes
of the meeting of the Syariah Panel.
e) Halal Policy
Silver Bird shall always conform to the Malaysian Halal Standards MS1500:2009 in ensuring that products
produced are halal, clean and safe for consumption. The integrity of the process starts from sourcing of raw
materials to manufacturing, packing, storing and distributing of the products. Silver Bird also ensures that product
manufactured for the Group either made locally or imported conforms to Halal standards of the country of origin,
of which is also recognized by JAKIM .
f) Summary of activities
i. Reviewed the halal certificates issued by JAKIM to the company and halal certificates of the suppliers;
ii. Reviewed the report on new products manufactured by the company;
iii. Reviewed the customers complaints on the products;
iv. Reviewed the audit report on suppliers;
v. Reviewed the minutes of the Internal Halal Committee meetings;
vi. Approved the advertorial on Syariah Panel in major newspapers;
vii. Approved the pamphlet Silver Bird - Our Halal Promise for circulation to the public; and
viii. Approved the Halal Manual as guidelines and management system of halal standards adopted by the
company.
S ya ria h P a n e ls Re p o rt
27
S TATEM EN T O N IN TERN A L C O N TRO L
28
The Board of Directors ( the Board ) of Silver Bird Group Berhad is pleased to include a statement on the state of the
Groups internal controls in the annual report.
RESPONSIBILITY
The Board acknowledges that it has a responsibility to maintain a sound system of internal control to safeguard
shareholders investments and the Groups assets as well as reviewing the adequacy and integrity of the system of
internal control.
However, as there are inherent limitations in any system of internal controls, such systems put into effect by
Management can only reduce but cannot eliminate all risks that may impede the achievement of the Groups business
objectives. Therefore, the internal control system can only provide reasonable and not absolute assurance against
material misstatement or loss.
KEY FEATURES OF THE GROUPS INTERNAL CONTROL SYSTEM
1. CONTROL ENVIRONMENT
* Organisation Structure & Authorisation Procedures
The Group maintains a formal organisation structure with well-defined delegation of responsibilities and
accountability within the Groups Senior Management. It sets out the roles and responsibilities, appropriate
authority limits, review and approval procedures in order to enhance the internal control system of the Groups
various operations.
* Periodical and/or Annual Budget
Budgetary control for every operations of the Group, where actual performance is closely monitored against
budgets to identify and to address significant variances.
* Group Policies and Procedures
The Group has adequate documented policies and procedures that are regularly reviewed and updated to
ensure that it maintains its effectiveness and continues to support the Groups business activities at all times
as the Group continues to grow.
* Human Resource Policy
Comprehensive guidelines on the employment and retention of employees are in place, to ensure that the
Group has a team of employees who are well trained and equipped with all the necessary knowledge, skills and
abilities to carry out their responsibility effectively.
2. RISK MANAGEMENT FRAMEWORK
Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains
an on-going commitment to enhance the Groups control environment and processes. The key risks relating to the
Groups operations and strategic and business plans are addressed at Managements periodic meetings. Significant
risks identified are brought to the attention of the Board at their scheduled meetings.
During the financial year ended 31 October 2009, Management with the assistance of external consultants has
updated the Groups key risk profile which has been presented to the Audit Committee in June 2009. Risks identified
were prioritised in terms of likelihood of their occurrence and the impact on the achievement of the Groups business
objectives/goals. The key risk profile shall be updated on a regular basis to ensure that all key risks are identified
and adequate responses are devised and continue to be relevant in mitigating these risks.
The abovementioned practices/initiatives by Management serves as the on-going process used to identify, evaluate
and managed significant risks.
S t a t e m e n t O n In t e rn a l C o n t ro l
29
3. INTERNAL AUDIT FUNCTION
The Groups internal audit function is outsourced to external consultants. The outsourced internal auditors assist
the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and
effectiveness of the Groups internal control systems. They report directly to the Audit Committee and internal audit
plans are tabled to the Audit Committee for review and approval to ensure adequate coverage.
On a quarterly basis, the Groups internal auditors table the results of their review of the business processes of
different operating units to the Audit Committee at their scheduled meetings. The status of the implementation of
corrective actions to address control weaknesses are also followed up by the internal auditors to ensure that these
actions have been satisfactorily implemented.
During the financial year under review, identified weaknesses in internal controls have been appropriately addressed
and Senior Management will continue to ensure that appropriate action is taken to enhance and strengthen the
internal control environment.
4. INFORMATION AND COMMUNICATION
Information critical to the achievement of the Groups business objectives are communicated through established
reporting lines across the Group. This is to ensure that matters that require the Board and Senior Managements
attention are highlighted for review, deliberation and decision on a timely basis.
5. MONITORING AND REVIEW
Scheduled management meetings are held to discuss and review the business planning, budgeting, financial and
operational performances.
* Financial and Operational Review
The monthly management accounts and the quarterly financial statements containing key financial results,
operational performance results and comparisons of performance against budget are presented to the Board
for their review, consideration and approval.
* Business Planning and Budgeting Review
The Board plays an active role in discussing and reviewing the business plans, strategies, performance and risks
faced by the Group.
6. CONCLUSION
The Board is of the view that the Groups system of internal controls is adequate to safeguard shareholders
investments and the Groups assets. However, the Board is also cognizant of the fact that the Groups system of
internal control and risk management practices must continuously evolve to meet the changing and challenging
business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further
enhance the system of internal controls.
This statement was approved by the Board of Directors on 11 February 2010.
S TATEM EN T O F D IREC TO RS RES P O N S IB IL ITY
30
The Board is fully accountable to ensure that the financial statements are drawn up in accordance with Companies Act,
1965 and the applicable approved accounting standards set by Malaysian Accounting Standards Board so as to give
a true and fair view of the state of affairs of the Group and the Company as at 31 October 2009 and of the results and
cash flows of the Group and Company for the financial year ended on that date.
In the process of preparing these financial statements, and other than as disclosed in the notes to the financial
statements, the Directors have reviewed the accounting policies and practices to ensure that they were consistently
applied throughout the year. In cases where judgment and estimates were made, they were based on reasonableness
and prudence.
Additionally, the Directors have relied on the system of internal controls to ensure that the information generated for the
preparation of the financial statements from the underlying accounting records is accurate and reliable.
This statement is made in accordance with a resolution of the Board of Directors dated 11 Febuary 2010.
Fin a n c ia l
Statements
32 Directors Report
37 Statement By Directors
37 Statutory Declaration
38 Independent Auditors Report
39 Balance Sheets
41 Income Statements
42 Statements O f Changes In Equity
45 Cash Flow Statements
47 Notes To The Financial Statements
D IREC TO RS REP O RT
The directors hereby submit their report and the audited financial statements of the Group and of the Company for the
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding whilst the principal activities of the
subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of
these activities during the financial year.
RESULTS
THE GROUP THE COMPANY
RM000 RM000
Profit/(Loss) after taxation for the financial year 1,433 (2,164)
Minority interests 6 -
Profit/(Loss) attributable to equity holders of the Company 1,439 (2,164)
DIVIDENDS
No dividend was declared or paid since the end of the previous financial year and the directors do not recommend the
payment of any dividend for the current financial year.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.
ISSUES OF SHARES AND DEBENTURES
During the financial year,
(a) there were no changes in the authorised share capital of the Company.
(b) the Company increased its issued and paid-up share capital from RM157,058,717.50 to RM157,090,078.50 by the
conversion of RM42,690 nominal value of 1% Irredeemable Convertible Unsecured Loan Stocks into 62,722
ordinary shares of RM0.50 each, at a conversion price of RM0.68 per new ordinary share. The new shares issued
during the financial year rank pari passu in all respects with the existing shares of the Company; and
(c) there were no issues of debentures by the Company during the financial year.
1% IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS 2004/2009 (ICULS)
Pursuant to a Trust Deed dated 6 February 2004, the Company issued RM20,500,000 nominal value ICULS 2004/2009
as partial discharge of the purchase consideration for the acquisition of a subsidiary. The principal terms of the ICULS
are disclosed in Note 21 to the financial statements.
The movements of the ICULS during the financial year are as follows:-
NUMBER OF ICULS OF RM0.50 EACH
AT AT
1.11.2008 ISSUED CONVERTED 31.10.2009
ICULS 2004/2009 85,380 - 85,380 -
During the financial year, all the ICULS had matured and were converted into ordinary shares.
32
D ire c t o rs Re p o rt (c o n t d )
OPTIONS GRANTED OVER UNISSUED SHARES
During the financial year, no options were granted by the Company to any person to take up any unissued shares in the
Company.
BAD AND DOUBTFUL DEBTS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps
to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for
doubtful debts, and satisfied themselves that there are no known bad debts and that adequate allowance had been
made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would require the writing off of bad debts,
or the additional allowance for doubtful debts in the financial statements of the Group and of the Company.
CURRENT ASSETS
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps
to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of
business, including their value as shown in the accounting records of the Group and of the Company, have been written
down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances which would render the values attributed to
the current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence
to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
The contingent liability of the Company is disclosed in Note 41 to the financial statements. At the date of this report,
there does not exist:-
(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which
secures the liabilities of any other person; or
(ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability of the Group and of the Company has become enforceable or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors,
will or may substantially affect the ability of the Group and of the Company to meet their obligations when they fall due.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the
financial statements of the Group and of the Company which would render any amount stated in the financial statements
misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the
directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the
operations of the Group and of the Company for the financial year.
33
DIRECTORS
The directors who served since the date of the last report are as follows:-
DATO PROF. DR. GAN MIEW CHEE @ GAN KHUAN POH
DATO TAN HAN KOOK
CHING SIEW CHEONG
LIM HOCK CHYE
RICHARD GEORGE AZLAN BIN ABAS
DATO SERI TALAAT BIN HUSAIN
ADI AZUAN BIN ABDUL GHANI
DATO LEE KOK CHUAN
PETER JOHN MCLOGHLIN
VANDA RUSSELL GOULD (ALTERNATE DIRECTOR TO PETER JOHN MCLOGHLIN)
DIRECTORS INTERESTS
According to the register of directors shareholdings, the interests of directors holding office at the end of the financial
year in shares in the Company and its related corporations during the financial year are as follows:-
NUMBER OF ORDINARY SHARES OF RM0.50 EACH
AT AT
1.11.2008 BOUGHT SOLD 31.10.2009
DIRECT INTERESTS
DATO TAN HAN KOOK 46,040,866 50,000 - 46,090,866
CHING SIEW CHEONG 5,329,291 - - 5,329,291
RICHARD GEORGE AZLAN BIN ABAS 133,333 - - 133,333
INDIRECT INTERESTS
DATO TAN HAN KOOK
(1)
8,076,079 - - 8,076,079
VANDA RUSSELL GOULD
(2)
36,876,666 - - 36,876,666
(1)
Deemed interests through spouses shareholdings.
(2)
Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.
NUMBER OF WARRANTS
AT AT
1.11.2008 BOUGHT SOLD 31.10.2009
WARRANTS A - 2005/2010
DIRECT INTEREST
CHING SIEW CHEONG 155,617 - - 155,617
INDIRECT INTEREST
DATO TAN HAN KOOK
(1)
331,598 - - 331,598
34
DIRECTORS INTERESTS (CONTD)
NUMBER OF WARRANTS
AT AT
1.11.2008 BOUGHT SOLD 31.10.2009
WARRANTS B - 2009/2013
DIRECT INTERESTS
DATO TAN HAN KOOK 3,657,330 - - 3,657,330
CHING SIEW CHEONG 372,640 - - 372,640
RICHARD GEORGE AZLAN BIN ABAS 12,499 - - 12,499
INDIRECT INTERESTS
DATO TAN HAN KOOK
(2)
757,425 - - 757,425
VANDA RUSSELL GOULD
(3)
3,757,187 - (1,485,300) 2,271,887
(1)
Deemed interests through spouses shareholdings as well as through Dato Tan Han Kooks interests in Amble
Appeal Sdn. Bhd. and Tahako Sdn. Bhd. by virtue of Section 6A of the Companies Act 1965 in Malaysia.
(2)
Deemed interests through spouses shareholdings.
(3)
Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.
By virtue of his interest in shares in the Company, Dato Tan Han Kook is deemed to have interests in shares in its
related corporations to the extent of the Companys interest, in accordance with Section 6A of the Companies Act 1965
in Malaysia.
The other directors holding office at the end of the financial year did not have any interests in shares in the Company
or its related corporations during the financial year.
DIRECTORS BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other
than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown
in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made
by the Company or a related corporation with the director or with a firm of which the director is a member, or with a
company in which the director has a substantial financial interest.
Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose
object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE
The significant event subsequent to the balance sheet date is disclosed in Note 46 to the financial statements.
35
AUDITORS
The auditors, Messrs. Crowe Horwath (formerly known as Messrs. Horwath), have expressed their willingness to
continue in office.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 11 FEBRUARY 2010
Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh
Dato Tan Han Kook
36
S TATEM EN T B Y D IREC TO RS
We, Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh and Dato Tan Han Kook, being two of the directors of Silver Bird
Group Berhad, state that, in the opinion of the directors, the financial statements set out on pages 39 to 79 are drawn
up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and
fair view of the state of affairs of the Group and of the Company at 31 October 2009 and of their results and cash flows
for the financial year ended on that date.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 11 FEBRUARY 2010
Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh Dato Tan Han Kook
S TATU TO RY D EC L A RATIO N
I, Ching Siew Cheong, I/C No. 620521-10-7055, being the director primarily responsible for the financial management
of Silver Bird Group Berhad, do solemnly and sincerely declare that the financial statements set out on pages 39 to 79
are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the
same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by
Ching Siew Cheong, I/C No. 620521-10-7055,
at Kuala Lumpur in the Federal Territory
on this 11 February 2010
Ching Siew Cheong
Before me
Datin Hajah Raihela Wanchik
No: W 275
Commissioner for Oaths
37
IN D EP EN D EN T A U D ITO RS REP O RT
TO TH E M EM B ER O F S ILVER B IRD G RO U P B ERH A D
Report on the Financial Statements
We have audited the financial statements of Silver Bird Group Berhad., which comprise the balance sheets as at 31
October 2009 of the Group and of the Company, and the income statements, statements of changes in equity and
cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant
accounting policies and other explanatory notes, as set out on pages 39 to 79.
Directors Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements in
accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes
designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate
accounting policies, and making accounting estimates that are reasonable in the circumstances.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider
internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards
and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of
the Company as of 31 October 2009 and of their financial performance and cash flows for the financial year then ended.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company
and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
(b) We have considered the financial statements and the auditors report of the subsidiary of which we have not acted
as auditors, which is indicated in Note 6 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
financial statements of the Group and we have received satisfactory information and explanations required by us
for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.
Crowe Horwath Lee Kok Wai
Firm No: AF 1018 Approval No: 2760/06/10 (J)
Chartered Accountants Partner
Kuala Lumpur
11 February 2010
(IN C O RP O RATED IN M A L AYS IA )
C O M PA N Y N O : 2 7 7 9 7 7 - X
38
2009 2008 2009 2008
NOTE RM000 RM000 RM000 RM000
ASSETS
NON-CURRENT ASSETS
Investments in subsidiaries 6 - - 205,605 105,428
Property, plant and equipment 7 187,505 155,412 - -
Other receivable 8 7,546 14,842 7,546 14,842
Intangible assets 9 36,731 36,733 - -
Long-term loan to subsidiaries 10 - - 25,373 130,067
231,782 206,987 238,524 250,337
CURRENT ASSETS
Inventories 11 12,475 18,841 - -
Trade receivables 12 47,024 45,826 - -
Other receivables, deposits
and prepayments 13 10,729 35,397 481 840
Amount owing by subsidiaries 14 - - 6 816
Tax refundable 1 136 - -
Short-term deposits with a
financial institution 15 12,524 882 12,524 882
Fixed deposits with licensed banks 16 2,435 227 - -
Cash and bank balances 23,133 16,640 61 76
108,321 117,949 13,072 2,614
TOTAL ASSETS 340,103 324,936 251,596 252,951
EQUITY AND LIABILITIES
EQUITY
Share capital 17 157,090 157,059 157,090 157,059
Share premium 18 36,077 36,066 36,077 36,066
Merger deficit 19 (5,326) (5,326) - -
Capital reserve 20 277 277 - -
1% Irredeemable Convertible
Unsecured Loan Stocks ( ICULS ) 21 - 42 - 42
Warrants reserve 22 7,363 7,363 7,363 7,363
Accumulated losses (49,962) (51,401) (7,198) (5,034)
Exchange translation reserve 23 (3,120) (2,270) - -
142,399 141,810 193,332 195,496
MINORITY INTERESTS 271 277 - -
TOTAL EQUITY 142,670 142,087 193,332 195,496
B A L A N C E S H EETS
AT 3 1 O C TO B ER 2 0 0 9
39
The annexed notes form an integral part of these financial statement.
2009 2008 2009 2008
NON-CURRENT LIABILITIES
Long-term borrowing 24 7,392 1,056 - -
Bonds 25 8,576 26,373 8,576 26,373
15,968 27,429 8,576 26,373
CURRENT LIABILITIES
Trade payables 26 25,851 16,837 - -
Other payables and accruals 27 8,018 7,662 739 1,028
Amount owing to subsidiaries 14 - - 45 49
Provision for taxation 173 173 5 5
Commercial Papers 28 30,000 30,000 30,000 30,000
Short-term borrowings 29 93,016 94,782 - -
Bonds 25 18,899 - 18,899 -
Bank overdrafts 30 5,508 5,966 - -
181,465 155,420 49,688 31,082
TOTAL LIABILITIES 197,433 182,849 58,264 57,455
TOTAL EQUITY AND LIABILITIES 340,103 324,936 251,596 252,951
NET ASSETS PER SHARE 31 45.32 sen 45.14 sen
B a la n c e S h e e t s (c o n t d )
a t 3 1 O c t o b e r 2 0 0 9
40
IN C O M E S TATEM EN TS
FO R TH E FIN A N C IA L YEA R EN D ED 3 1 O C TO B ER 2 0 0 9
2009 2008 2009 2008
REVENUE 33 588,890 638,563 - -
COST OF SALES (508,303) (579,520) - -
GROSS PROFIT 80,587 59,043 - -
OTHER INCOME 2,842 4,405 5,221 6,745
83,429 63,448 5,221 6,745
ADVERTISING AND
PROMOTION EXPENSES (3,394) (3,780) - -
ADMINISTRATIVE EXPENSES (23,492) (20,485) (3,362) (3,741)
SELLING AND
DISTRIBUTION EXPENSES (43,402) (48,472) - -
OTHER EXPENSES (4,430) (5,142) - -
PROFIT/(LOSS) FROM
OPERATIONS 8,711 (14,431) 1,859 3,004
FINANCE COSTS (7,275) (8,703) (4,020) (4,974)
PROFIT/(LOSS) BEFORE
TAXATION 34 1,436 (23,134) (2,161) (1,970)
INCOME TAX EXPENSE 35 (3) 1,859 (3) 1,239
PROFIT/(LOSS) AFTER
TAXATION 1,433 (21,275) (2,164) (731)
ATTRIBUTABLE TO:-
Equity holders of the Company 1,439 (21,209) (2,164) (731)
Minority interests (6) (66) - -
1,433 (21,275) (2,164) (731)
EARNINGS/(LOSS)
PER SHARE
- Basic 36 0.5 sen (7.3sen)
- Diluted 36 N/A N/A
N/A - Not applicable
41
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44
2009 2008 2009 2008
CASH FLOWS FROM/(FOR)
OPERATING ACTIVITIES
Profit/(Loss) before taxation 1,436 (23,134) (2,161) (1,970)
Adjustments for:-
Allowance for doubtful debts 221 - - -
Amortisation of discount on bonds 1,102 1,102 1,102 1,102
Amortisation of intangible assets 2 2 - -
Bad debts written off - 94 - -
Depreciation on property, plant
and equipment 22,318 23,272 - -
Gain on disposal of plant and
equipment (24) (19) - -
Interest income (473) (1,940) (4,460) (6,730)
Interest expense 6,173 7,601 2,918 3,872
Operating profit/(loss) before
working capital changes 30,755 6,978 (2,601) (3,726)
Decrease/(Increase) in inventories 6,366 (2,210) - -
Decrease/(Increase) in trade
and other receivables 16,398 3,519 7,655 (510)
Increase/(Decrease) in trade
and other payables 9,370 (19,075) (289) (5,281)
CASH FROM/(FOR) OPERATIONS 62,889 (10,788) 4,765 (9,517)
Interest paid (6,173) (7,601) (2,918) (3,872)
Net income tax refunded/(paid) 132 1,566 (3) 1,239
NET CASH FROM/(FOR)
OPERATING ACTIVITIES/
BALANCE CARRIED FORWARD 56,848 (16,823) 1,844 (12,150)
C A S H FL O W S TATEM EN TS
45
2009 2008 2009 2008
BALANCE BROUGHT FORWARD 56,848 (16,823) 1,844 (12,150)
CASH FLOWS (FOR)/FROM
INVESTING ACTIVITIES
Purchase of plant and equipment 37 (30,729) (23,583) - -
Interest received 473 1,940 4,460 6,730
Proceeds from disposal of
plant and equipment 89 187 - -
Net repayment from/(advances to)
subsidiaries - - 5,323 (25,591)
NET CASH (FOR)/FROM
INVESTING ACTIVITIES (30,167) (21,456) 9,783 (18,861)
CASH FLOWS (FOR)/FROM
FINANCING ACTIVITIES
Proceeds from disposal of
treasury shares - 889 - 889
Treasury shares acquired - (1) - (1)
Proceeds from issuance of
ordinary shares, net of expenses - 50,997 - 50,997
(Decrease)/Increase in bills
payable (3,513) 11,153 - -
Net repayment of hire
purchase obligations (1,517) (459) - -
Repayment of bonds - (20,000) - (20,000)
NET CASH (FOR)/FROM
FINANCING ACTIVITIES (5,030) 42,579 - 31,885
NET INCREASE IN CASH AND
CASH EQUIVALENTS 21,651 4,300 11,627 874
EFFECTS OF FOREIGN EXCHANGE
TRANSLATION ON CASH AND CASH
EQUIVALENTS (850) (1,478) - -
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE
FINANCIAL YEAR 11,783 8,961 958 84
CASH AND CASH
EQUIVALENTS AT END OF
THE FINANCIAL YEAR 38 32,584 11,783 12,585 958
C a s h Flo w S t a t e m e n t s (c o n t d )
46
N O TES TO TH E FIN A N C IA L S TATEM EN TS
1. GENERAL INFORMATION
The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia.
The domicile of the Company is Malaysia. The registered office and principal place of business is at Lot 72, Persiaran
Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors dated 11 February 2010.
2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries
are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these
activities during the financial year.
3. FINANCIAL RISK MANAGEMENT POLICIES
The Groups financial risk management policy seeks to ensure that adequate financial resources are available for
the development of the Groups business whilst managing its market, credit, liquidity and cash flow risks. The Group
operates within clearly defined guidelines that are established by the Audit Committee and approved by the Board
and the policies in respect of the major areas of treasury activity are as follows:-
(a) Market Risk
(i) Foreign Currency Risk
The Group is exposed to foreign exchange risk on sales and purchases that are denominated in foreign
currencies. It manages its foreign exchange exposure by a policy of matching as far as possible receipts
and payments in each individual currency.
Surpluses of convertible currencies are either retained in foreign currency or sold for Ringgit Malaysia.
The Groups foreign currency transactions and balances are substantially denominated in Singapore Dollar
and United States ( US ) Dollar.
Foreign exchange risk is monitored closely and managed to an acceptable level.
(ii) Interest Rate Risk
The Group obtains financing through bank borrowings. Its policy is to obtain the most favourable interest
rates available.
Surplus funds are placed with licensed financial institutions at the most favourable interest rates.
(iii) Price Risk
The Group does not have any quoted investments and hence is not exposed to price risk.
(b) Credit Risk
The Groups exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The
maximum exposure to credit risk is represented by the total carrying amount of these financial assets in the
balance sheet reduced by the effects of any netting arrangements with counterparties.
The Group does not have any major concentration of credit risk related to any individual customer or
counterparty.
The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and by the
application of credit approvals, credit limits and monitoring procedures on an ongoing basis.
47
3. FINANCIAL RISK MANAGEMENT POLICIES(CONTD)
(c) Liquidity and Cash Flow Risk
The Groups exposure to liquidity and cash flow risks arises mainly from general funding and business activities.
It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability of
funding through certain committed credit facilities.
4. BASIS OF PREPARATION
The financial statements of the Group and of the Company are prepared under the historical cost convention and
modified to include other bases of valuation as disclosed in other sections under significant accounting policies,
and in compliance with Financial Reporting Standards ( FRS ) and the Companies Act 1965 in Malaysia.
The Group and the Company have not applied in advance the following accounting standards, amendments and
interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective
for the current financial year:
FRSs/IC Interpretations Effective date
Revised FRS 1 (2010) First-time Adoption of Financial Reporting Standards 1 July 2010
Revised FRS 3 (2010) Business Combinations 1 July 2010
FRS 4 Insurance Contracts 1 January 2010
FRS 7 Financial Instruments: Disclosures 1 January 2010
FRS 8 Operating Segments 1 July 2009
Revised FRS 101 (2009) Presentation of Financial Statements 1 January 2010
Revised FRS 123 (2009) Borrowing Costs 1 January 2010
Revised FRS 127 (2010) Consolidated and Separate Financial Statements 1 July 2010
Revised FRS 139 (2010) Financial Instruments: Recognition and Measurement 1 January 2010
Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, 1 January 2010
Jointly Controlled Entity or Associate
Amendments to FRS 2: Vesting Conditions and Cancellations 1 January 2010
Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 (2010) 1 July 2010
Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010
Amendments to FRS 7, FRS 139 and IC Interpretation 9 1 January 2010
Amendments to FRS 138: Consequential Amendments Arising from Revised FRS 3 (2010) 1 July 2010
IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010
IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions 1 January 2010
IC Interpretation 12 Service Concession Arrangements 1 July 2010
IC Interpretation 13 Customer Loyalty Programmes 1 January 2010
48
N o t e s To Th e Fin a n c ia l S t a t e m e n t s (c o n t d )
4. BASIS OF PREPARATION (CONTD)
FRSs/IC Interpretations Effective date
IC Interpretation 14: FRS 119 - The Limit on a Defined Benefit Asset, 1 January 2010
Minimum Funding Requirements and their Interaction
IC Interpretation 15 Agreements for the Construction of Real Estate 1 July 2010
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010
IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010
Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and Revised FRS 3 (2010) 1 July 2010
Annual Improvements to FRSs (2009) 1 January 2010
The above FRSs, IC Interpretations and amendments are not relevant to the Group and the Companys operations
except as follows:
The revised FRS 3 (2010) introduces significant changes to the accounting for business combinations, both at the
acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction costs, other
than share and debt issue costs, will be expensed as incurred. This revised standard will be applied prospectively
and therefore there will not have any financial impact on the financial statements of the Group for the current financial
year but may impact the accounting for future transactions or arrangements.
The Group considers financial guarantee contracts entered into to be insurance arrangements and accounts for
them under FRS 4. In this respect, the Group treats the guarantee contract as a contingent liability until such a time
as it becomes probable that the Group will be required to make a payment under the guarantee. The adoption of
FRS 4 is expected to have no material impact on the financial statements of the Group.
The possible impacts of FRS 7 (including the subsequent amendments) and the revised FRS 139 (2010) on the
financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these
standards.
FRS 8 replaces FRS 114
2004
Segment Reporting and requires a management approach , under which segment
information is presented on the same basis as that used for internal reporting purposes. The adoption of this
standard only impacts the form and content of disclosures presented in the financial statements of the Group. This
FRS is expected to have no material impact on the financial statements of the Group upon its initial application.
The revised FRS 101 (2009) has introduced terminology changes (including revised titles for the financial statements)
and changes in the format and content of the financial statements. In addition, a statement of financial position is
required at the beginning of the earliest comparative period following a change in accounting policy, the correction
of an error or the reclassification of items in the financial statements. The adoption of this revised standard will only
impact the form and content of the presentation of the Groups financial statements in the next financial year.
The revised FRS 127 (2010) requires accounting for changes in ownership interests by the group in a subsidiary,
while maintaining control, to be recognised as an equity transaction. When the group loses control of a subsidiary,
any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit
or loss. The revised standard also requires all losses attributable to the minority interest to be absorbed by the
minority interest instead of by the parent. The Group will apply the major changes of the revised FRS 127 (2010)
prospectively and therefore there will not have any financial impact on the financial statements of the Group for the
current financial year but may impact the accounting for future transactions or arrangements.
Amendments to FRS 1 and FRS 127 remove the definition of cost method currently set out in FRS 127, and
instead require an investor to recognise all dividend from subsidiaries, jointly controlled entities or associates as
income in its separate financial statements. In addition, FRS 127 has also been amended to deal with situations
where a parent reorganises its group by establishing a new entity as its new parent. Under this circumstance, the
new parent shall measure the cost of its investment in the original parent at the carrying amount of its share of the
equity items shown in the separate financial statements of the original parent at the reorganisation date. The
amendments will be applied prospectively and therefore there will not have any financial impact on the financial
statements of the Company for the current financial year but may impact the accounting for future transactions or
arrangements.
49
4. BASIS OF PREPARATION (CONTD)
Amendments to FRS 138 clarify the requirements under the revised FRS 3 (2010) regarding accounting for intangible
assets acquired in a business combination. These amendments are expected to have no material impact on the
financial statements of the Group upon their initial application.
IC Interpretation 9 requires embedded derivatives to be separated from the host contract and accounted for as a
derivative on the basis of the conditions that existed at the later of the date the entity first became a party to the
contract. The possible impacts of IC Interpretation 9 on the financial statements upon its initial application are not
disclosed by virtue of the exemptions given under the revised FRS 139 (2010).
IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments in
equity instruments and financial assets carried at cost to be reversed at a subsequent balance sheet date. This
interpretation is expected to have no material impact on the financial statements of the Group upon its initial
application.
IC Interpretation 16 clarifies the accounting treatment in respect of net investment hedging. This includes the fact
that net investment hedging relates to differences in functional currency not presentation currency, and hedging
instruments may be held anywhere in the group. This interpretation is expected to have no material impact on the
financial statements of the Group upon its initial application.
Amendments to IC Interpretation 9 are a consequential amendment from the revised FRS 3 (2010). These
amendments are expected to have no material impact on the financial statements of the Group upon its initial
application.
Annual Improvements to FRSs (2009) contain amendments to 21 accounting standards that result in accounting
changes for presentation, recognition or measurement purposes and terminology or editorial amendments. These
amendments are expected to have no material impact on the financial statements of the Group upon their initial
application.
5. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates And J udgements
Estimates and judgements are continually evaluated by the directors and management and are based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The estimates and judgements that affect the application of the Groups
accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying
amounts of assets, liabilities, income and expenses are discussed below:-
(i) Depreciation of Property, Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for the property, plant
and equipment are based on commercial and production factors which could change significantly as a
result of technical innovations and competitors actions in response to the market conditions.
The Group anticipates that the residual values of its plant and equipment will be insignificant. As a result,
residual values are not being taken into consideration for the computation of the depreciable amount.
Changes in the expected level of usage and technological development could impact the economic useful
lives and the residual values of these assets, therefore future depreciation charges could be revised.
(ii) Income Taxes
There are certain transactions and computations for which the ultimate tax determination is uncertain during
the ordinary course of business. The Group recognises tax liabilities based on estimates of whether
additional taxes will be due. Where the final outcome of these matters is different from the amounts that
were initially recognised, such difference will impact the income tax and deferred tax provisions in the
period in which such determination is made.
50
5. SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(a) Critical Accounting Estimates And J udgements (Contd)
(iii) Impairment of Assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the
cash-generating unit to which the asset is allocated, the management is required to make an estimate of
the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in
order to determine the present value of those cash flows.
(iv) Allowance for Doubtful Debts of Receivables
The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables.
Allowances are applied to receivables where events or changes in circumstances indicate that the carrying
amounts may not be recoverable. Management specifically analyses historical bad debt, customer
concentrations, customer creditworthiness, current economic trends and changes in customer payment
terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts of
receivables. Where the expectation is different from the original estimate, such difference will impact the
carrying value of receivables.
(v) Allowance for Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These
reviews require judgement and estimates.
Possible changes in these estimates could result in revisions to the valuation of inventories.
(vi) Fair Value Estimates for Certain Financial Assets and Liabilities
The Group carries certain financial assets and liabilities at fair value, which require extensive use of
accounting estimates and judgement. While significant components of fair value measurement were
determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group
uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect
profit and equity.
(b) Financial Instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to the
contractual provisions of the instruments.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to financial instruments classified as a liability are
reported as an expense or income. Distributions to holders of financial instruments classified as equity are
charged directly to equity.
Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle
either on a net basis or to realise the asset and settle the liability simultaneously.
Financial instruments recognised in the balance sheet are disclosed in the individual policy statement
associated with each item.
(c) Functional and Foreign Currency
(i) Functional and Presentation Currency
The functional currency of the Group and each of the Groups entity is measured using the currency of the
primary economic environment in which the Company or that entity operates.
The consolidated financial statements are presented in Ringgit Malaysia ( RM ) which is the Companys
functional and presentation currency.
51
(c) Functional and Foreign Currency (contd)
(ii) Transactions and Balances
Transactions in foreign currency are converted into the respective functional currencies on initial recognition,
using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities
at the balance sheet date are translated at the rates ruling as of that date. Non-monetary assets and
liabilities are translated using exchange rates that existed when the values were determined. All exchange
differences are taken to the income statement.
(iii) Foreign Operations
The results and financial position of the Group that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:-
(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of
the balance sheet;
(ii) income and expenses for the income statement are translated at the average exchange rates for the
year; and
(iii) all resulting exchange differences are recognised as a separate component of equity, as a foreign
currency translation reserve. On disposal, accumulated translation differences are recognised in the
consolidated income statement as part of the gain or loss on sale.
(d) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries
made up to 31 October 2009.
A subsidiary is defined as an enterprise in which the Company has the power, directly or indirectly, to exercise
control over the financial and operating policies so as to obtain benefits from its activities.
The acquisition method is used to consolidate the results of some of the subsidiaries identified in Note 6 to
the financial statements. Under this method, the results of the subsidiaries acquired or disposed of during the
financial year are included in the consolidated income statement from the date of acquisition or up to the date
of disposal.
For subsidiaries which were acquired by way of the issue of shares as identified in Note 6 to the financial
statements, and which satisfy the requirements of FRS 122 - Business Combinations, the merger method is
used to consolidate the results of these subsidiaries. The difference between the acquisition cost and the
nominal value of the share capital and reserves of the subsidiaries is taken to the merger reserve.
Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also
eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements
of subsidiaries to ensure consistency of accounting policies with those of the Group.
Minority interest is measured at the minorities share of the post acquisition fair values of the identifiable assets
and liabilities of the acquired subsidiary. Separate disclosure is made for minority interest.
Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Groups
share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is
reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the
consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent
period.
If, after reassessment, the Groups interest in the fair values of the identifiable net assets of the subsidiaries
exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated
income statement.
52
(e) Investments in Subsidiaries
Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for
impairment at the end of the financial year if events or changes in circumstances indicate that their carrying
values may not be recoverable.
On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the
carrying amount of the investments is taken to the income statement.
(f) Investments
Investments are held on a long-term basis and are stated at cost. Allowance for diminution in value is only
made if the directors are of the opinion that the diminution is permanent.
(g) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated
useful lives.
Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the
asset is fully depreciated. The principal annual rates used for this purpose are:-
Plant and machinery 5% - 10%
Gallery 10%
Motor vehicles 20%
Office equipment, furniture and fittings 10% - 20%
The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each
balance sheet date 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
the property, plant and equipment.
Capital work-in-progress represents assets under construction, and which are not ready for commercial use at
the balance sheet date. Capital work-in-progress is stated at cost, and is transferred to the relevant category
of assets and depreciated accordingly when the assets are completed and ready for commercial use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising from derecognition of the asset is included in the income
statement in the year the asset is derecognised.
(h) Impairment of Assets
The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are
reviewed at each balance sheet date for impairment when there is an indication that the assets might be
impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the assets net selling price and their value-nuse,
which is measured by reference to discounted future cash flow.
An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued
amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a
previously recognised revaluation surplus for the same asset.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the
recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of
the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have
been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal
is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal
of an impairment loss on a revalued asset is credited directly to the revaluation surplus. However, to the extent
that an impairment loss on the same revalued asset was previously recognised as an expense in the income
statement, a reversal of that impairment loss is recognised as income in the income statement.
53
(i) Trademarks
The purchased trademark is stated at cost less accumulated amortisation and impairment losses, if any. The
trademark is amortised on a straight-line basis over a period of 10 years.
Trademarks are tested for impairment annually or more frequently when indicators of impairment are identified.
(j) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis, and includes all incidentals incurred in bringing the inventories to their present location and condition.
In arriving at net realisable value, due allowance is made for all damaged, obsolete and slow-moving items.
(k) Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are
identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance
sheet date.
(l) Payables
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and
services received.
(m)Assets Under Hire Purchase
Plant and equipment acquired under hire purchase are capitalised in the financial statements and are
depreciated in accordance with the policy set out in Note 5(g) above. Each hire purchase payment is allocated
between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding.
Finance charges are allocated to the income statement over the period of the respective hire purchase
agreements.
(n) Income Taxes
Income taxes for the year comprises current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is
measured using the tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from
goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not
a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax
credits to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences, unused tax losses and unused tax credits can be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised
directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred tax is included in the resulting
goodwill or negative goodwill. The carrying amounts of deferred tax assets are reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow
all or part of the deferred tax assets to be utilised.
54
(o) Interest-bearing Borrowings
Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.
All borrowing costs are charged to the income statement as expenses in the period in which they are incurred.
(p) Equity Instruments
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
(q) 1% Irredeemable Convertible Unsecured Loan Stocks (ICULS)
ICULS give the holders the right to convert the ICULS into ordinary shares of the Company at any time during
the conversion period. ICULS that are not converted by the holders at the expiry of the conversion period shall
be mandatorily converted into shares of the Company at the conversion price. As such, ICULS are recognised
in the financial statements based on the nominal value of the loan stocks and are classified as equity.
(r) Warrants
Warrants issued by the Company are initially recognised based on proceeds received and reflected in the
financial statements as warrants reserve. Upon the exercise of the warrants to subscribe for shares in the
Company, the warrants reserve will be transferred to the share premium account.
(s) Bonds and Commercial Papers (CPs)
Bonds and CPs issued by the Company are initially recognised based on proceeds received, net of issuance
expenses incurred and are adjusted in subsequent years for amortisation of discount and/or accretion of
premium to maturity, using the effective yield method. The discount amortised and/or premium accreted is
recognised in the income statement over the period of the bonds and CPs.
(t) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with
financial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
(u) Employee Benefits
(i) Short-term Benefits
Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which
the associated services are rendered by employees of the Group and of the Company.
(ii) Defined Contribution Plans
The Group and the Companys contributions to defined contribution plans are charged to the income
statement in the period to which they relate. Once the contributions have been paid, the Group and the
Company have no further liability in respect of the defined contribution plans.
55
(v) Related Parties
For the purposes of these financial statements, a party is considered to be related if:-
(i) directly, or indirectly through one or more intermediaries, the party:-
controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries
and fellow subsidiaries);
has an interest in the entity that gives it significant influence over the entity; or
has joint control over the entity;
(ii) the party is an associate of the entity;
(iii) the party is a joint venture in which the entity is a venturer;
(iv) the party is a member of the key management personnel of the entity or its parent;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant
voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or
(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that
is a related party of the entity.
Close members of the family of an individual are those family members who may be expected to influence, or
be influenced by, that individual in their dealings with the entity.
(w) Contingent Liabilities and Contingent Assets
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group.
It can also be a present obligation arising from past events that is not recognised because it is not probable
that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change
in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.
A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the
Company.
(x) Revenue Recognition
(i) Sale of Goods and Services
Sales are recognised upon delivery of goods and customers acceptance or performance of services and
where applicable, net of returns and trade discounts.
(ii) Interest Income
Interest income is recognised on an accrual basis, based on the effective yield on the investment.
(iii) Dividend Income
Dividend income from the investment in subsidiaries is recognised upon declaration by the subsidiaries.
Dividend income from the other investment is recognised when the right to receive payment is established.
56
(y) Segmental Information
Segment revenue and expenses are those directly attributable to the segments and include any joint revenue
and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a
segment and consist principally of property, plant and equipment (net of accumulated depreciation, where
applicable), investment properties, land held for development, prepaid land lease payments, inventories,
property under development, receivables, and cash and bank balances.
Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not
include income tax assets, whilst segment liabilities do not include income tax liabilities and borrowings from
financial institutions.
Segment revenue, expenses and results include transfers between segments. The prices charged on
intersegment transactions are based on normal commercial terms. These transfers are eliminated on
consolidation.
6. INVESTMENTS IN SUBSIDIARIES
THE COMPANY
2009 2008
RM000 RM000
Unquoted shares, at cost 107,172 107,172
Accumulated impairment loss on subsidiaries (1,744) (1,744)
105,428 105,428
Long-term loan 100,177 -
205,605 105,428
Details of the subsidiaries are as follows:-
Country of
Name of Company Incorporation Equity Interest Principal Activities
2009 2008
Stanson Bakeries Malaysia 100% 100% Manufacturer of bread.
Sdn. Bhd. ( SBSB )
#
Standard Confectionery Malaysia 100% 100% Manufacturer of frozen and
Sdn. Bhd. ( SCSB )* daily fresh/shelf-stable
bakery goods.
Stanson Marketing Malaysia 100% 100% Sales and distribution of
Sdn. Bhd. ( SMSB )
#
bakery goods and
telecommunication products.
Silver Bird Foods (S) Singapore 100% 100% Sales and distribution of
Pte. Ltd. ( SBF )
#~
bakery goods.
57
6. INVESTMENTS IN SUBSIDIARIES (CONTD)
Country of
Name of Company Incorporation Equity Interest Principal Activities
2009 2008
Silver Bird International Malaysia 100% 100% Sales and distribution of
Sdn. Bhd. ( SBI )
#
bakery goods and
telecommunication products.
Inforaire Sdn. Bhd. Malaysia 51% 51% Marketing and distribution
( ISB )
#
agent for financial related
products.
Stanson Distribution Malaysia 100% 100% Dormant.
Sdn. Bhd. ( SDSB )
#
Stanson Group Malaysia 100% 100% Investment holding.
Sdn. Bhd. ( SGSB )
#
Standard Food R & D Malaysia 100% 100% Dormant.
Lab Sdn. Bhd. ( SFRD )
#
Madeleine Bakery Malaysia 100% 100% Dormant.
Sdn. Bhd. ( MBSB ) *
Madeleine Cafe Malaysia 100% 100% Dormant.
Sdn. Bhd. ( MCSB ) *
Madeleine Foods Malaysia 100% 100% Dormant.
Sdn. Bhd. ( MFSB ) *
Madeleine Property Malaysia 100% 100% Dormant.
Sdn. Bhd. ( MPSB ) *
* Subsidiaries consolidated by way of the merger method.
# Subsidiaries consolidated by way of the acquisition method.
~ Not audited by Messrs. Crowe Horwath.
The Company carried out a review of the recoverable amount of its investments in subsidiaries during the financial
year. Following the review, no impairment loss was deemed necessary. The recoverable amount was based on the
net asset value of the subsidiaries.
Long-term loan represents interest-free, unsecured advances made to subsidiaries where the repayment is neither
fixed nor likely to occur in the foreseeable future.
58
7. PROPERTY, PLANT AND EQUIPMENT
REFUR-
BISHMENT
FROM
INSURANCE
AT CLAIM DEPRECIATION AT
1.11.2008 ADDITIONS (NOTE 13) DISPOSALS CHARGE 31.10.2009
RM000 RM000 RM000 RM000 RM000 RM000
THE GROUP
NET BOOK VALUE
Plant and machinery 138,234 21,627 - (16) (17,560) 142,285
Gallery 7,679 25 - - (1,166) 6,538
Motor vehicles 1,836 - - (19) (697) 1,120
Office equipment,
furniture and fittings 7,663 894 - (30) (2,895) 5,632
Capital work-in-
progress - 17,783 14,147 - - 31,930
155,412 40,329 14,147 (65) (22,318) 187,505
AT WRITTEN DEPRECIATION AT
1.11.2007 ADDITIONS DISPOSALS OFF CHARGE 31.10.2008
RM000 RM000 RM000 RM000 RM000 RM000
THE GROUP
NET BOOK VALUE
Plant and machinery 159,939 22,990 (48) (26,830) (17,817) 138,234
Gallery 8,664 165 - - (1,150) 7,679
Motor vehicles 2,380 204 (19) - (729) 1,836
Office equipment,
furniture and fittings 11,102 409 (101) (171) (3,576) 7,663
182,085 23,768 (168) (27,001) (23,272) 155,412
ACCUMULATED
ACCUMULATED IMPAIRMENT CARRYING
COST DEPRECIATION LOSS AMOUNT
AT 31.10.2009 RM000 RM000 RM000 RM000
Plant and machinery 235,844 (82,332) (11,227) 142,285
Gallery 11,674 (5,136) - 6,538
Motor vehicles 4,650 (3,530) - 1,120
Office equipment, furniture
and fittings 21,464 (15,832) - 5,632
Capital work-in-progress 31,930 - - 31,930
305,562 (106,830) (11,227) 187,505
59
N o t e s To Th e Fin a n c ia l S t a t e m e n t s (c o n t `d )
7. PROPERTY, PLANT AND EQUIPMENT (CONTD)
ACCUMULATED
ACCUMULATED IMPAIRMENT CARRYING
COST DEPRECIATION LOSS AMOUNT
AT 31.10.2008 RM000 RM000 RM000 RM000
Plant and machinery 214,279 (64,818) (11,227) 138,234
Gallery 11,649 (3,970) - 7,679
Motor vehicles 4,801 (2,965) - 1,836
Office equipment, furniture
and fittings 22,186 (14,523) - 7,663
252,915 (86,276) (11,227) 155,412
The Company carried out a review of the recoverable amount of its property, plant and equipment during the
financial year. Following the review, no impairment loss was recognised. The recoverable amount was based on the
estimated value-in-use of the assets based on the current and estimated future revenue and cash flows from the
assets.
At the balance sheet date, the following assets were acquired under hire purchase terms:-
THE GROUP
2009 2008
RM000 RM000
CARRYING AMOUNT:-
Plant and machinery 11,806 -
Motor vehicles 1,081 1,703
8. OTHER RECEIVABLE
This represents the security deposits placed with Amanah Raya Berhad pursuant to a sale and leaseback
transaction. The amount is due and receivable after twelve months from the balance sheet date.
9. INTANGIBLE ASSETS
THE GROUP
2009 2008
RM000 RM000
AT COST:-
Goodwill on acquisition of subsidiaries: 36,730 36,730
Trademark 1 3
36,731 36,733
Trademark, at cost 20 20
Accumulated amortisation:-
At 1 November 2008/2007 (17) (15)
Charge for the financial year (2) (2)
(19) (17)
At 31 October 2009/2008 1 3
60
9. INTANGIBLE ASSETS (CONTD)
Goodwill arises from the acquisition of SGSB by the Group in 2004, is stated at cost and reviewed for impairment
annually.
Goodwill has been allocated for impairment testing to the Groups cash-generating unit ( CGU ), the Groups bakery
products manufacturing division.
During the financial year, the Group assessed the recoverable amount of the goodwill, and determined that the
goodwill is not impaired.
The recoverable amount of a CGU is determined based on the value-in-use calculations. These calculations use
post-tax cash flow projections based on financial budgets approved by management.
The key assumptions underpinning the value-in-use calculations are as follows:
Gross margin 10%
Growth rate 6%
Discount rate 7%
Management determined the budgeted gross margin based on past performance and its expectations of market
development.
10. LONG-TERM LOAN TO SUBSIDIARIES
THE COMPANY
2009 2008
RM000 RM000
Interest-free (36,916) 67,778
Interest bearing at 3.50% per annum 62,289 62,289
25,373 130,067
The long-term loan is unsecured and is not repayable within the next twelve months.
11. INVENTORIES
THE GROUP
2009 2008
RM000 RM000
AT COST:-
Raw materials 2,042 2,725
Finished goods 5,062 9,309
Packaging materials 1,611 1,702
Telecommunication products 3,760 5,105
12,475 18,841
None of the inventories is stated at net realisable value.
61
12. TRADE RECEIVABLES
THE GROUP
2009 2008
RM000 RM000
Trade receivables 48,640 47,221
Less: Allowance for doubtful debts (1,616) (1,395)
47,024 45,826
Allowance for doubtful debts:-
At 1 November 2008/2007 (1,395) (1,395)
Addition during the financial year (221) -
At 31 October 2009/2008 (1,616) (1,395)
The Groups normal trade credit terms range from 30 to 120 days. Other credit terms are assessed and approved
on a case-by-case basis.
The foreign currency exposure profile of trade receivables of the Group at the balance sheet date is as follows:-
THE GROUP
2009 2008
RM000 RM000
Singapore Dollar 96 153
United States Dollar 123 55
13. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Included in the other receivables, deposits and prepayments are the following amounts:-
THE GROUP
2009 2008
RM000 RM000
Deposits for the purchase of property, plant and equipment 2,905 2,000
Government subsidy receivable 2,082 2,461
Insurance claim recoverable - 27,001
During the current financial year, the insurance company settled the claim by way of:-
(i) a cash settlement of RM12.5 million; and
(ii) the plant and machinery refurbishment of RM14.5 million. The refurbished plant and machinery amounting to
RM14.5 million was transferred to property, plant and equipment.
62
14. AMOUNTS OWING BY/(TO) SUBSIDIARIES
The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand.
15. SHORT-TERM DEPOSITS WITH A FINANCIAL INSTITUTION
The short-term deposits with a financial institution represent cash placed in a bond debt reserve account for the
purpose of bond settlement.
The effective interest rate of the short-term deposits at the balance sheet date was 2.3% (2008 - 3.65%) per annum.
The short-term deposits have maturity periods of 4 to 6 months (2008 - 6 months).
16. FIXED DEPOSITS WITH LICENSED BANKS
The fixed deposits are pledged to licensed banks for credit facilities granted to the Group.
The weighted average effective interest rate of the fixed deposits at the balance sheet date was 1.91%
(2008 -3.25%) per annum. The maturity period of the fixed deposits at the balance sheet date was 3 months
(2008 - 3 months).
17. SHARE CAPITAL
The movements in the ordinary shares of RM0.50 each are as follows:-
THE COMPANY
2009 2008 2009 2008
NUMBER OF SHARES RM000 RM000
AUTHORISED 1,000,000,000 1,000,000,000 500,000 500,000
ISSUED AND FULLY
PAID-UP
At 1 November
2008/2007 314,117,435 235,538,101 157,059 117,769
Issuance of shares
pursuant to the:
- conversion of 1% ICULS 62,722 50,527 31 25
- rights issue - 78,528,807 - 39,265
At 31 October
2009/2008 314,180,157 314,117,435 157,090 157,059
During the financial year, the Company increased its issued and paid-up share capital from RM157,058,717.50 to
RM157,090,078.50 by the conversion of RM42,690 nominal value of 1% Irredeemable Convertible Unsecured Loan
Stocks into 62,722 ordinary shares of RM0.50 each, at a conversion price of RM0.68 per new ordinary share. The
new shares issued during the financial year rank pari passu in all respects with the existing shares of the Company.
63
18. SHARE PREMIUM
THE GROUP/THE COMPANY
2009 2008
RM000 RM000
At 1 November 2008/2007 36,066 24,325
Premium arising from:
- conversion of 1% ICULS 11 9
- rights issue - 12,564
Expenses incurred for share issuance exercises - (832)
At 31 October 2009/2008 36,077 36,066
The share premium is not distributable by way of dividends.
19. MERGER DEFICIT
The merger deficit relates to the difference between the nominal value of shares issued for the purchase of
subsidiaries and the nominal value of the shares acquired.
20. CAPITAL RESERVE
The capital reserve arose from the capitalisation of the post-acquisition profits of a subsidiary for the bonus issue
of shares in prior years. This reserve is not distributable by way of dividends.
21. 1% ICULS
2009 2008
RM000 RM000
At 1 November 2008/2007 42 76
Converted during the financial year (42) (34)
At 31 October 2009/2008 - 42
Pursuant to a Trust Deed dated 6 February 2004, the Company had on 16 February 2004 issued RM20,500,000
nominal value ICULS 2004/2009 as partial payment of the purchase consideration for the acquisition of the entire
equity interest of SGSB.
The principal terms of the ICULS were as follows:-
(a) Interest rate The ICULS bore interest at 1% per annum payable annually in arrears.
(b) Convertibility Convertible into new ordinary shares of the Company at any time during the
conversion period at the conversion price. All ICULS not converted by the
holders at the expiry of the conversion period shall be mandatorily converted
into ordinary shares.
(c) Conversion price The conversion price of the ICULS shall be RM0.68 per new ordinary share.
Conversion shall be by way of surrendering ICULS which shall be converted
into new ordinary shares of the Company at the conversion price.
(d) Conversion period The period commencing on the first anniversary of the date of listing of the
ICULS and expiring on the last day of the tenure of the ICULS.
The ICULS had a tenure of 5 years from the date of issue and matured on 16
February 2009.
64
21. 1% ICULS (CONTD)
(e) Redeemability The ICULS would not be redeemable for cash. All outstanding ICULS shall be
mandatorily converted into new ordinary shares of the Company on the date
of maturity.
(f) Securities The ICULS issued were unsecured in nature.
(g) Transferability and listing Listing on Bursa Securities was subject to a minimum of one hundred ICULS
holders ( Public Spread ). The legal ownership of the ICULS shall be
transferable in amounts of RM0.50 each or multiples thereof.
(h) Status of new shares The new ordinary shares issued pursuant to the conversion of ICULS shall
issued upon allotment and issue, rank pari passu in all respects with the existing
ordinary shares of the Company except that the new ordinary shares issued
shall not be entitled to any dividends, rights, allotments or other distributions
which may be declared, made or paid, the entitlement date of which is before
or on the relevant conversion date of ICULS.
During the financial year, all the ICULS had matured and were converted into ordinary shares.
22. WARRANTS RESERVE
The warrants reserve arose from the rights issue of Warrants A - 2005/2010 in prior years.
The principal terms of the Warrant A is as follows:-
(a) Tenure 5 years from the date of issuance of the Warrants.
(b) Exercise Period The Warrants may be exercised at any time within a period commencing from
the date of issue of the Warrants and ending on the Expiry Date. Warrants not
exercised during the exercise period shall thereafter lapse and cease to be
valid.
(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of
RM0.50 each ( Share ) in SBGB at the Exercise Price at any time during the
Exercise Period.
(d) Exercise Price RM0.78 payable in full in respect of each Share upon exercise of the Warrant
or any such price adjusted in accordance with the terms and conditions set out
in the Deed Poll governing the Warrants.
(e) Expiry Date 19 September 2010, being the date of the end of the 5th anniversary from the
date of issue of the Warrants and if that date does not fall on a Market Day,
then it shall be the immediate preceding Market Day.
(f) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments and/or
other distributions, the entitlement date of which is prior to the date of the
allotment of the new Shares in SBGB arising from the exercise of their
Warrants.
(g) Ranking of the SBGB The new SBGB Shares to be issued pursuant to the exercise of the Warrants
new Shares all, upon issue and allotment rank pari passu in all respects with existing SBGB
Shares, save and except that they shall not be entitled to any dividends, rights,
allotments and/or other distributions, the entitlement date of which is prior to
the date of the allotment of new Shares arising from the exercise of Warrants.
65
22. WARRANTS RESERVE (CONTD)
(h) Listing Approval-in-principle has been obtained from Bursa Securities on 18 May 2008
for the admission of the Warrants to the Official List of Bursa Securities and for
the listing of and quotation for the Warrants and the new SBGB Shares arising
from the exercise of the Warrants on the Main Board of Bursa Securities.
(i) Adjustment to the The exercise price of the Warrants, and the number of Warrants belonging to
Exercise Price and the the Warrant holder, may from time to time be adjusted, calculated or
number of Warrants determined by the directors in consultation with an approved merchant bank
and certified by the auditor appointed by the Company, in accordance with
the terms of the Deed Poll.
The principal terms of the Warrant B - 2009/2013 is as follows:-
(a) Tenure 5 years from the date of issuance of the Warrants.
(b) Exercise Period The Warrants may be exercised at any time within a period commencing from
the date of issue of the Warrants and ending on the Expiry Date. Warrants not
exercised during the exercise period shall thereafter lapse and cease to be
valid.
(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of
RM0.50 each ( Share ) in SBGB at the Exercise Price at any time during the
Exercise Period.
(d) Exercise Price RM0.90 payable in full in respect of each Share upon exercise of the Warrant
or any such price adjusted in accordance with the terms and conditions set out
in the Deed Poll governing the Warrants.
(e) Expiry Date 24 February 2013, being the date of the end of the 5
th
anniversary from the
date of issue of the Warrants and if that date does not fall on a Market Day,
then it shall be the immediate preceding Market Day.
(f) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments and/or
other distributions, the entitlement date of which is prior to the date of the
allotment of the new Shares in SBGB arising from the exercise of their
Warrants.
(g) Ranking of the SBGB The new SBGB Shares to be issued pursuant to the exercise of the Warrants
new Shares shall, upon issue and allotment rank pari passu in all respects with existing
SBGB Shares, save and except that they shall not be entitled to any dividends,
rights, allotments and/or other distributions, the entitlement date of which is
prior to the date of the allotment of new Shares arising from the exercise of
Warrants.
(h) Listing Approval-in-principle has been obtained from Bursa Securities on 4 January
2009 for the admission of the Warrants to the Official List of Bursa Securities
and for the listing of and quotation for the Warrants and the new SBGB Shares
arising from the exercise of the Warrants on the Main Board of Bursa
Securities.
(i) Adjustment to the The exercise price of the Warrants, and the number of Warrants belonging to
Exercise Price and the the Warrant holder, may from time to time be adjusted, calculated or number
of Warrants by the directors in consultation with an approved merchant bank and certified
by the auditor appointed by the Company, in accordance with the terms of the
Deed Poll.
66
23. EXCHANGE TRANSLATION RESERVE
The exchange translation reserve arose from the translation of a foreign incorporated subsidiarys financial
statements. The reserve is not distributable by way of dividends.
24. LONG-TERM BORROWING
THE GROUP
2009 2008
RM000 RM000
Hire purchase payables (Note 32) 7,392 1,056
25. BONDS
2009 2008
RM000 RM000
Gross amount of bonds 30,000 30,000
Discount on bonds (2,525) (3,627)
27,475 26,373
Discount on bonds
At 1 November 2008/2007 (3,627) (4,729)
Amortisation during the financial year 1,102 1,102
At 31 October 2009/2008 (2,525) (3,627)
Non-current:-
Later than one year but not later than five years 8,576 26,373
Current:-
Within one year 18,899 -
27,475 26,373
The principal terms of the bonds are as follows:-
Tenure Amount
(a) Maturity Tranche (Years) (RM Million)
A 3 20
B 4 20
C 5 20
D 6 5
E 7 5
70
(b) Coupon rate Interest at 3.5% per annum shall be payable semi-annually commencing 6
months from the date of the first issue until final maturity of the respective
tranches.
(c) Security Assignment over the Designated Account, comprising the Debt Service
Reserve Account.
67
25. BONDS (CONTD)
(d) Basis of Arrangement On a bought deal basis.
(e) Issue and Redemption The Serial Bonds shall be issued at a discount and redeemed at par on the
respective maturities.
(f) Listing The Serial Bonds will not be listed on Bursa Securities or on any other stock
exchange.
26. TRADE PAYABLES
The normal trade credit terms granted to the Group range from 30 to 90 days.
The foreign currency exposure profile of the trade payables of the Group at the balance sheet date in the previous
financial year was as follows:-
THE GROUP
2009 2008
RM000 RM000
United States Dollar - 213
27. OTHER PAYABLES AND ACCRUALS
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Other payables 4,029 4,245 286 458
Accruals 3,989 3,417 453 570
8,018 7,662 739 1,028
28. COMMERCIAL PAPERS (CPS)
2009 2008
RM000 RM000
At 1 November 2008/2007 30,000 30,000
Drawdown during the financial year 185,000 90,000
Repayment during the financial year (185,000) (90,000)
At 31 October 2009/2008 30,000 30,000
The CPs are subject to a weighted average effective interest of 4.90% (2008 - 6.41%) per annum.
68
28. COMMERCIAL PAPERS (CPS) (CONTD)
The principal terms of the CPs are as follows:-
(a) Tenure/Maturity The CPs facility is available up to 7 years from the date of execution of the
Facility Agreements with the issuance of CPs with 1 month to 12 months
maturity.
(b) Security The CPs issued are unsecured in nature.
(c) Interest rate The interest on CPs is recognised based on the difference between gross and
net proceeds received, and amortised to the income statement over the period
of the CPs.
(d) Redemption At par on the respective maturity dates.
(e) Ranking of notes The notes to be issued under the CPs Facility shall constitute direct,
unconditional and unsecured obligations of the Issuer and evidence the
obligations of the Issuer to pay to the noteholders the sums represented
thereby. The notes shall at all times rank pari passu and rateably, without
discrimination, preference or priority amongst themselves, subject to priorities
or rights preferred at law and will rank at least equally and rateably (pari passu)
in point of priority and security with all other present and future unsecured and
unsubordinated liabilities (both actual and contingent) of the Issuer.
29. SHORT-TERM BORROWINGS
THE GROUP
2009 2008
RM000 RM000
Bills payable 90,735 94,248
Hire purchase payables (Note 32) 2,281 534
93,016 94,782
The bills payable bore a weighted average effective interest rate of 2.29% (2008 - 4.50%) per annum at the balance
sheet date.
The bills payable are secured by:-
(i) a deed of debenture incorporating a first fixed charge over all the property, plant and equipment of a subsidiary,
and a floating charge over all current assets, both present and future of a subsidiary;
(ii) a lien over the fixed deposits of the Group; and
(iii) a corporate guarantee of the Company.
30. BANK OVERDRAFTS
The bank overdrafts bore a weighted average effective interest of 6.69% (2008 - 7.51%) per annum and are secured
in the same manner as the bills payable disclosed in Note 29 to the financial statements.
69
31. NET ASSETS PER SHARE
The net assets per share is calculated based on the net asset value at the balance sheet date of RM142,399,000
(2008 - RM141,810,000) divided by the enlarged number of ordinary shares in issue at the balance sheet date of
314,180,000 (2008 - 314,180,000), details of which are as follows:-
THE GROUP
2009 2008
NUMBER OF NUMBER OF
SHARES SHARES
Ordinary shares of RM0.50 each in issue at the
balance sheet date 314,180,000 314,117,000
Ordinary shares to be issued at RM0.68 per share
pursuant to the full conversion of 1% ICULS - 63,000
314,180,000 314,180,000
32. HIRE PURCHASE PAYABLES
THE GROUP
2009 2008
RM000 RM000
Minimum hire purchase payments:
- not later than one year 2,716 626
- later than one year but not later than five years 8,494 1,130
11,210 1,756
Less: Future finance charges (1,537) (166)
Present value of hire purchase payables 9,673 1,590
The net hire purchase payables are repayable as follows:-
Non-current:
Later than one year but not later than five years (Note 24) 7,392 1,056
Current:
Not later than one year (Note 29) 2,281 534
9,673 1,590
The hire purchase payables are subject to a weighted average effective interest of 7.45% per annum (2008 - 7.05%).
70
33. REVENUE
Revenue of the Group represents the invoiced value of goods sold and services rendered less discounts and returns,
as follows: -
THE GROUP
2009 2008
RM000 RM000
Bakery products 171,932 149,492
Telecommunication products 416,958 488,511
Others - 560
588,890 638,563
34. PROFIT/(LOSS) BEFORE TAXATION
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Profit/(Loss) before taxation is
arrived at after charging/(crediting):-
Audit fee:
- current year 133 181 17 19
- (over)/underprovision in
previous financial years (4) (2) (2) 4
Allowance for doubtful debts 221 - - -
Amortisation expense:
- discount on bonds 1,102 1,102 1,102 1,102
- intangible assets 2 2 - -
Bad debts written off - 94 - -
Depreciation of property,
plant and equipment 22,318 23,272 - -
Directors fee 264 246 264 246
Directors non-fee
emoluments 1,521 1,513 1,521 1,513
Interest expense 6,173 7,601 2,918 3,872
Rental of premises 7,937 7,146 - -
Rental of truck 7,804 8,076 - -
Staff costs 29,724 31,906 798 1,206
Gain on disposal of plant
and equipment (24) (19) - -
Interest income (473) (1,940) (440) (1,776)
Interest income from subsidiaries - - (4,020) (4,954)
Realised gain on foreign exchange (842) (1,826) - -
71
35. INCOME TAX EXPENSE
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Current taxation:-
- under/(over)provision in the
previous financial year 3 (1,239) 3 (1,239)
Deferred taxation:-
- for the financial year - (620) - -
3 (1,859) 3 (1,239)
During the current financial year, the statutory tax rate was reduced from 26% to 25% as announced in the
Malaysian Budget 2008.
As gazetted in the Finance Act 2009, certain subsidiaries of the Company will no longer enjoy the preferential tax
rate of 20% on their chargeable income of up to RM500,000 effective from year of assessment 2009 as the
Company has a paid-up share capital exceeding RM2,500,000.
A reconciliation of the statutory tax rate to the effective tax rate applicable to the profit/(loss) before taxation of the
Group and of the Company is as follows:-
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Profit/(Loss) before taxation 1,436 (23,134) (2,161) (1,970)
Tax at the statutory tax rate
of 25% (2008 - 26%) 359 (6,015) (540) (512)
Tax effects of:-
Non-deductible expenses 4,010 3,471 190 195
Deferred tax assets not
recognised during the
financial year 2,588 4,246 350 317
Utilisation of previously
unrecognised deferred
tax assets (6,957) (2,322) - -
Under/(Over)provision of income
tax in previous financial years 3 (1,239) 3 (1,239)
Tax for the financial year 3 (1,859) 3 (1,239)
72
36. EARNINGS/(LOSS) PER SHARE
The basic earnings/(loss) per share is arrived at by dividing the Groups profit/(loss) attributable to shareholders of
RM1,439,000 (2008 - (RM21,209,000)) by the weighted average number of ordinary shares in issue during the
financial year of approximately 314,172,000 (2008 - 288,935,000).
Diluted earnings/(loss) per share is not presented as there were no potential dilutive ordinary shares.
37. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
THE GROUP
2009 2008
RM000 RM000
Cost of property, plant and equipment purchased 40,329 23,768
Amount financed through hire purchase (9,600) (185)
Cash disbursed for purchase of property, plant and equipment 30,729 23,583
38. CASH AND CASH EQUIVALENTS
For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Short-term deposit with a
financial institution 12,524 882 12,524 882
Fixed deposits with
licensed banks 2,435 227 - -
Cash and bank balances 23,133 16,640 61 76
Bank overdrafts (5,508) (5,966) - -
32,584 11,783 12,585 958
39. DIRECTORS REMUNERATION
The aggregate amount of emoluments received and receivable by Directors of the Group and of the Company
during the financial year are as follows:-
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Executive directors:-
- basic salaries, bonus and EPF 1,478 1,478 1,478 1,478
Non-executive directors:-
- fee 264 246 264 246
- others 43 35 43 35
307 281 307 281
73
39. DIRECTORS REMUNERATION (cont`d)
The details of emoluments for the directors of the Group and of the Company received/receivable for the financial
year in bands of RM50,000 are as follows:-
2009 2008
Non- Non-
Executive Executive Executive Executive
Directors Directors Directors Directors
Below RM50,000 - 6 - 7
RM50,001 - RM100,000 - 1 - -
RM400,001 - RM450,000 1 - 1 -
RM1,050,001 - RM1,100,000 1 - 1 -
40. RELATED PARTY DISCLOSURES
(a) Identities of related parties
For the purposes of these financial statements, parties are considered to be related to the Group and the
Company if a group or a Company has the ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice versa, or where the Company and
party are subject to common control or common significant influence. Related parties may be individuals or
other entities.
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group and the Company either directly or indirectly. The key
management personnel include all the Directors of the Company, and certain members of senior management
of the Group and the Company.
(b) During the financial year, the Group and the Company carried out the following transactions with the related
parties during the financial year:-
THE COMPANY
2009 2008
RM000 RM000
Interest income from subsidiaries:-
SCSB 2,696 3,367
SMSB 1,324 1,587
Year-end balances with related parties are as follows:-
THE COMPANY
2009 2008
RM000 RM000
Long-term loan to:-
ISB (719) (719)
MBSB 1,160 1,160
MCSB 5,802 5,802
MFSB 2,545 2,545
SBI - 610
SBSB - 6,914
SCSB 16,389 110,777
SDSB 113 113
SGSB 1,400 1,400
SMSB (1,317) 1,465
25,373 130,067
74
40. RELATED PARTY DISCLOSURES (CONTD)
Year-end balances with related parties are as follows:-
THE COMPANY
2009 2008
RM000 RM000
Amounts owing by:-
SBI - 13
SCSB - 797
SGSB 6 6
6 816
Amounts owing to:-
MBSB 6 6
SBSB - 4
SMSB 39 39
45 49
Key management personnel compensation:-
2009 2008 2009 2008
RM000 RM000 RM000 RM000
Directors:-
- Fees 264 246 264 246
- Remuneration 1,478 1,478 1,478 1,478
- Others 43 35 43 35
1,785 1,759 1,785 1,759
Other key management
personnel:-
- Remuneration 798 605 246 359
2,583 2,364 2,031 2,118
The outstanding amounts of the related parties will be settled in cash. No guarantees have been given or received.
No expenses have been recognised during the financial year as bad and doubtful debts in respect of the amounts
owing by the related parties.
41. CONTINGENT LIABILITY
THE COMPANY
2009 2008
RM000 RM000
Corporate guarantees given to secure banking
facilities granted to certain subsidiaries 157,000 158,129
75
42. COMMITMENTS
Capital commitments
Authorised capital expenditure not provided for in the financial statements:-
THE GROUP
2009 2008
RM000 RM000
Approved capital commitment contracted
but not provided for 15,249 2,921
Operating lease commitments
The future minimum lease payments under the non-cancellable operating leases are as follows:-
THE GROUP
2009 2008
RM000 RM000
Not later than one year 14,591 13,700
Later than one year and not later than five years 36,324 41,686
Later than five years 15,504 23,256
66,419 78,642
43. FOREIGN EXCHANGE RATES
The applicable closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM
equivalent) for the translation of foreign currency balances at the balance sheet date are as follows:-
2009 2008
RM RM
Singapore Dollar 2.44 2.40
United States Dollar 3.41 3.48
76
44. SEGMENTAL REPORTING
(a) By business segment:-
Manufacturing Distribution of
and distribution tele-
of consumer communication
2009 food products Others Group
RM000 RM000 RM000 RM000
REVENUE
Total sales 288,831 416,958 - 705,789
Inter-segment sales (116,899) - - (116,899)
171,932 416,958 - 588,890
RESULT
Segment results 6,825 1,425 (12) 8,238
Interest income 473
Finance costs (7,275)
Profit before taxation 1,436
Income tax expense (3)
Profit after taxation 1,433
OTHER INFORMATION
Segment assets
#
314,111 5,299 20,692 340,102
Segment liabilities * 130,964 8,062 58,234 197,260
Capital expenditure 40,329 - - 40,329
Depreciation 22,309 - 9 22,318
2008
REVENUE
Total sales 258,943 488,511 47 747,501
Inter-segment sales (108,938) - - (108,938)
150,005 488,511 47 638,563
RESULT
Segment results (19,193) 2,957 (135) (16,371)
Interest income 1,940
Loss before taxation (23,134)
Income tax expense 1,859
Loss after taxation (21,275)
OTHER INFORMATION
Segment assets
#
302,940 5,105 16,755 324,800
Segment liabilities * 115,585 9,759 57,332 182,676
Capital expenditure 23,768 - - 23,768
Depreciation 23,263 - 9 23,272
77
44. SEGMENTAL REPORTING (CONTD)
(b) By geographical market:-
2009 Malaysia Singapore Group
RM000 RM000 RM000
REVENUE
Total sales 690,101 15,688 705,789
Inter-segment sales (116,899) - (116,899)
573,202 15,688 588,890
RESULT
Segment results 13,365 (5,127) 8,238
Interest income 473
Profit before taxation 1,436
Income tax expense (3)
Profit after taxation 1,433
OTHER INFORMATION
Segment assets
#
333,953 6,149 340,102
Segment liabilities * 196,628 632 197,260
Capital expenditure 40,235 94 40,329
Depreciation 21,795 523 22,318
2008
REVENUE
Total sales 733,447 14,054 747,501
Inter-segment sales (108,938) - (108,938)
624,509 14,054 638,563
RESULT
Segment results (10,901) (5,470) (16,371)
Interest income 1,940
Loss before taxation (23,134)
Income tax expense 1,859
Loss after taxation (21,275)
OTHER INFORMATION
Segment assets
#
317,723 7,077 324,800
Segment liabilities * 182,046 630 182,676
Capital expenditure 23,727 41 23,768
Depreciation 22,735 537 23,272
# - Segment assets comprise total current and non-current assets, excluding income tax assets.
* - Segment liabilities comprise total current and non-current liabilities, excluding income tax liabilities.
78
45. FAIR VALUES OF FINANCIAL INSTRUMENTS
Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction
between knowledgeable willing parties in an arms length transaction, other than in a forced sale or liquidation.
The following methods and assumptions are used to estimate the fair value of each class of financial instruments:
(a) Long-Term Bank Loans and Bonds
The fair values of the long-term bank loans and bonds are determined by discounting the relevant cash flows
using current interest rates for similar types of instruments.
(b) Short-Term Borrowings, Other Current Liabilities and Commercial Papers
The carrying amounts approximated their fair values because of the short period to maturity of these
instruments.
(c) Hire Purchase Obligations
The fair values of hire purchase payables are determined by discounting the relevant cash flows using current
interest rates for similar types of instruments.
(d) Long-Term Other Receivable
The carrying amount approximated its fair value as this is a security deposit for a sale and leaseback transaction.
(e) Cash And Cash Equivalents And Other Short-Term Receivables/Payables
The carrying amounts approximated their fair values due to the relatively short-term maturity of these
instruments.
The nominal amount and net fair value of financial instruments not recognised in the balance sheets of the
Company are as follows:
THE COMPANY
Nominal Net
Amount Fair Value
At 31 October 2009 Note RM000 RM000
Long-term loan to subsidiaries 10 25,373 15,754
Contingent liability 41 157,000 *
At 31 October 2008
Long-term loan to subsidiaries 10 130,067 73,419
Contingent liability 41 158,129 *
* The net fair value of the contingent liability is estimated to be minimal as the subsidiaries are expected to fulfill
their obligations to repay their borrowings.
46. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE
Subsequent to the balance sheet date, the Company increased its issued and paid-up share capital from
RM157,090,078.50 to RM172,778,078.50 by the allotment of 31,376,000 new ordinary shares of RM0.50 each at
an issue price of RM0.70 per share under a private placement exercise. The shares were issued for cash
consideration for the purpose of working capital.
All the new shares issued subsequent to the balance sheet date rank pari passu in all respects with the existing
shares of the Company.
79
A N A LYS IS O F O RD IN A RY S H A REH O L D IN G S A N D W A RRA N TS
A S AT 5 M A RC H 2 0 1 0
ANALYSIS OF ORDINARY SHAREHOLDINGS
A. Authorised Share Capital : RM 500, 000, 000-00
Issued and Fully Paid-Up : RM 172, 778, 078-50
Class of Shares : O rdinary shares of RM 0-50 each
Voting Right : Every member of the Company, present in person or by proxy, shall have
on a show of hands one (1) vote or on poll, one (1) vote for each share held
B. Distribution of Shareholdings
Size of Shareholdings No. of Shareholders % No. of Shares %
Less than 100 183 12.63 10, 198 0.003
100 - 1, 000 229 15.801 49, 335 0.043
1, 001 - 10, 000 755 52.11 3, 232, 460 0.935
10, 001 - 100, 000 230 15.87 6, 931, 840 2.006
100, 001 - 17, 277, 807 48 3.31 124, 949, 319 36.159
17, 277, 808 & above 4 0.28 210, 283, 005 60.854
Total 1,449 100.00 345,556,157 100.000
C. Substantial Shareholders Shareholdings
Substantial Shareholders Direct Shareholdings Indirect Shareholdings
No. of Shares % No. of Shares %
Lembaga Tabung Haji 92, 770, 606 26.85 0 0
Dato Tan Han K ook 46, 090, 866 13.34
(1)
8, 076, 079 2.34
Datin O ng Hooi Siang 8, 076, 079 2.34
(1)
46, 090, 866 13.34
Rantau Embun Sdn Bhd 37, 730, 000 10.92 0 0
Berjaya Capital Berhad 0 0
(2)
58, 330, 000 16.88
Bizurai Bijak (M ) Sdn Bhd 0 0
(3)
58, 330, 000 16.88
Juara Sejati Sdn Bhd 0 0
(4)
73, 930, 000 21.39
Berjaya Group Berhad 0 0
(4)
73, 930, 000 21.39
Berjaya Corporation Berhad 0 0
(5)
73, 930, 000 21.39
Hotel Resort Enterprise Sdn Bhd 0 0
(6)
73, 930, 000 21.39
Tan Seri Dato Seri Vincent Tan Chee Yioun 2, 670, 000 0.77
(7)
83, 475, 000 24.16
CVC Limited 36, 876, 666 10.67 0 0
Vanda Russell Gould 0 0 36, 876, 666 10.67
K operasi Permodalan Felda Berhad 29, 542, 333 8.55 0 0
(1)
Deemed interested by virtue of his/her spouses shareholding.
(2)
Deemed interested by virtue of interest in Berjaya Sompo Insurance Berhad (15,600,000 shares) and Inter-Pacific Capital Sdn
Bhd (5,000,000 shares), and 100% interest in Rantau Embun Sdn Bhd.
(3)
Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad,
Rantau Embun Sdn Bhd and Inter-Pacific Capital Sdn Bhd.
(4)
Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad,
Rantau Embun Sdn Bhd and Inter-Pacific Capital Sdn Bhd, and Berjaya Land Berhad, the holding company of Selat Makmur Sdn
Bhd (15,600,000 shares).
(5)
Deemed interested by virtue of 100% equity interest in Berjaya Group Berhad.
(6)
Deemed interested by virtue of interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya Sompo Insurance
Berhad, Rantau Embun Sdn Bhd, Selat Makmur Sdn Bhd and Inter-Pacific Capital Sdn Bhd.
(7)
Deemed interested by virtue of interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya Sompo Insurance
Berhad, Rantau Embun Sdn Bhd, Selat Makmur Sdn Bhd and Inter-Pacific Capital Sdn Bhd and HQZ Credit Sdn Bhd, the ultimate
holding company of Premier Merchandise Sdn Bhd (9,545,000 shares).
80
A n a lys is O f O rd in a ry S h a re h o ld in g s a n d W a rra n t s (c o n t `d )
a s a t 5 M a rc h 2 0 1 0
D. Directors Shareholdings
Directors Direct Shareholdings Indirect Shareholdings
No. of Shares % No. of Shares %
Dato Tan Han K ook 46, 090, 866 13.34
(1)
8, 076, 079 2.34
Ching Siew Cheong 5, 349, 29 11.54 0 0
Richard George Azlan bin Abas 133, 333 0.04 0 0
Vanda Russell Gould 0 0
(2)
36, 876, 666 10.67
(1)
Deemed interested by virtue of his spouses shareholding.
(2)
Deemed interested through CVC Limited by virtue of the Section 6A of the Companies Act, 1965.
E. Thirty (30) Largest Shareholders
No. Name of Shareholders No. of Share %
1 Lembaga Tabung Haji 92, 770, 606 26.85
2 Amanah Raya Nominees (Asing) Sdn Bhd 50, 240, 066 14.54
Exempt AN For Perkasa Normandy M anagers Sdn Bhd
3 Rantau Embun Sdn Bhd 37, 730, 000 10.92
4 K operasi Permodalan Felda Berhad 29, 542, 333 8.55
5 O SK Nominees (Tempatan) Sdn Berhad 17, 078, 664 4.94
O SK Capital Sdn Bhd For Tan Han K ook
6 CIM SEC Nominees (Tempatan) Sdn Bhd 16, 050, 000 4.64
CIM B Bank for Tan Han K ook
7 Selat M akmur Sdn Bhd 15, 600, 000 4.51
8 Berjaya Sompo Insurance Berhad 12, 048, 267 3.49
9 Premier M erchandise Sdn Bhd 9, 545, 000 2.76
10 RHB Capital Nominees (Tempatan) Sdn Bhd 7, 307, 524 2.11
Pledged Securities Account For Tan Han K ook
11 Tan Han K ook 5, 500, 000 1.59
12 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 5, 000, 000 1.45
Inter-Pacific Capital Sdn Bhd
O SK Capital Sdn Bhd For O ng Hooi Siang
15 RHB Capital Nominees (Tempatan) Sdn Bhd 3, 500, 000 1.01
Pledged Securities Account For O ng Hooi Siang
16 K urnia Insurans (M alaysia) Berhad 3, 185, 600 0.92
17 EB Nominees (Tempatan) Sendirian Berhad 2, 900, 000 0.84
Pledged Securities Account For Ching Siew Cheong
18 Ching Siew Cheong 2, 364, 827 0.68
19 Vincent Tan Chee Yioun 1, 670, 000 0.48
20 O ommen Thomas 1, 590, 000 0.46
21 HSBC Nominees (Asing) Sdn Bhd 1, 100, 000 0.32
Exempt AN for HSBC Private Bank (Suisse) S.A.
22 Abdul Radzim Bin Abdul Rahman 1, 071, 000 0.31
Pledged Securities Account For Arsam Bin Damis
Pledged Securities Account For Vincent Tan Chee Yioun
25 Alwin Thian Phaik Yeong 1, 000, 000 0.29
26 CIM SEC Nominees (Tempatan) Sdn Bhd 999, 900 0.29
Pledged Securities Account For K am K ar Cheong
27 O ng M in Hong 971, 050 0.28
28 M aureen Chong M ai Lee 959, 000 0.28
29 Wong Toon Chick 771, 073 0.22
30 David Lee Chuen Chieh 500, 000 0.14
81
a s a t 5 M a rc h 2 0 1 0
ANALYSIS OF WARRANT 2005/2010 HOLDINGS
A. No. of Warrant Issued : 109, 248, 423
No. of Warrant Exercised : 75, 000
No. of Warrant Unexercised : 109, 173, 423
Exercise Period : 20 September 2005 to 19 September 2010
Voting Right at the M eeting : Every member of the Company, present in person or by proxy, shall have
of Warrant Holders on a show of hands one (1) vote or on poll, one (1) vote for each Warrant
held in the meeting of Warrant holders.
B. Distribution of Warrant Holdings
Size of Warrant Holdings No. of Warrant Holders % No. of Warrant %
Less than 100 447 25.57 23, 115 0.021
100 - 1, 000 242 13.85 109, 116 0.100
1, 001 - 10, 000 443 25.34 2, 029, 253 1.859
10, 001 - 100, 000 504 28.83 16, 858, 088 15.442
100, 001 - 5, 458, 670 107 6.12 35, 932, 289 32.913
5, 458, 671 and above 5 0.29 54, 221, 562 49.665
Total 1,748 100.00 109,173,423 100.000
C. Directors Warrant Holdings
Directors Direct Warrant Holdings Indirect Warrant Holdings
No. of Warrant % No. of Warrant %
Dato Tan Han K ook 0 0
(1)
135, 647 0.12
Ching Siew Cheong 155, 617 0.14 0 0
(1)
82
a s a t 5 M a rc h 2 0 1 0
D. Thirty (30) Largest Warrants Holders
No. Name of Warrants Holders No. of Warrant %
2 M ayban Securities Nominees Sdn Bhd 9, 521, 562 8.72
Pledged Securities Account For Chai Yeng Sun
7 Cimsec Nominees (Tempatan) Sdn Bhd 1, 619, 300 1.48
Pledged Securities Account For K am K ar Cheong
8 Lim Tock O oi 1, 500, 000 1.37
9 Cimsec Nominees (Tempatan) Sdn Bhd 1, 500, 000 1.37
CIM B For Teh Boon M eng
10 Public Nominees (Tempatan) Sdn Bhd 1, 136, 264 1.04
Pledged Securities Account For O o Siew Chin
11 JF Apex Nominees (Tempatan) Sdn Bhd 985, 000 0.90
Pledged Securities Account For Tan Boon K eong
12 Tan Song M o 980, 458 0.90
13 AllianceGroup Nominees (Tempatan) Sdn Bhd 820, 650 0.75
Pledged Securities Account For Chay Wing Wai @ Cheah Wing Wai
14 Tan Boon Seng 700, 000 0.64
15 AIBB Nominees (Tempatan) Sdn Bhd 684, 008 0.63
Pledged Securities Account For Batu Bara Resources Corporation Sdn Bhd
16 Ng Pee M oy 622, 200 0.57
17 CIM SEC Nominees (Asing) Sdn Bhd 600, 058 0.55
ING Asia Private Bank Ltd for Regina International Limited
18 M ayban Nominees (Tempatan) Sdn Bhd 522, 900 0.48
Pledged Securities Account For Chia Yew Choong
19 Tan Hock Seng 508, 400 0.47
20 Teo K heng Teck 502, 400 0.46
21 Tee Poh Choo 500, 000 0.46
22 Chong Peck Yuen 425, 000 0.39
23 O SK Nominees (Asing) Sdn Berhad 407, 700 0.37
DM G & Partners Securities Pte Ltd For Yeap Lam Wah
24 Goh K im Choon 401, 000 0.38
25 Teh K ai Sing 400, 000 0.37
26 Yong K ah Chin 380, 900 0.35
27 Woon Yee Chong 373, 393 0.34
28 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 370, 000 0.34
Pledged Securities Account For Lim Siew Ping
29 Wong Neng Hook 367, 000 0.34
30 Tan Tiam Yee 365, 140 0.33
83
a s a t 5 M a rc h 2 0 1 0
ANALYSIS OF WARRANT 2008/2013 HOLDINGS
A. No. of Warrant Issued : 29, 448, 302
No. of Warrant Exercised : -
No. of Warrant Unexercised : 29, 448, 302
Exercise Period : 25 February 2008 to 24 February 2013
Voting Right at the M eeting : Every member of the Company, present in person or by proxy, shall have
of Warrant Holders on a show of hands one (1) vote or on poll, one (1) vote for each Warrant
held in the meeting of Warrant holders.
B. Distribution of Warrant Holdings
Size of Warrant Holdings No. of Warrant Holders % No. of Warrant %
Less than 100 166 17.37 7, 983 0.03
100 - 1, 000 445 46.55 174, 508 0.59
1, 001 - 10, 000 229 23.95 744, 869 2.53
10, 001 - 100, 000 89 9.31 2, 665, 380 9.05
100, 001 - 1, 472, 414 22 2.30 7, 791, 841 26.46
1, 472, 415 and above 5 0.52 18, 063, 721 61.34
Total 956 100.00 29,448,302 100.00
C. Directors Warrant Holdings
Directors Direct Warrant Holdings Indirect Warrant Holdings
No. of Warrant % No. of Warrant %
Dato Tan Han K ook 3, 657, 330 12.42
(1)
757, 425 2.57
Ching Siew Cheong 372, 640 1.27 0 0
Richard George Azlan bin Abas 12, 499 0.04 0 0
Vanda Russell Gould 0 0
(2)
1, 390, 900 4.72
(1)
(2)
Deemed interested through CVC Limited by virtue of the Section 6A of the Companies Act, 1965.
84
a s a t 5 M a rc h 2 0 1 0
D. Thirty (30) Largest Warrants Holders
No. Name of Shareholders No. of Warrant %
1 Lembaga Tabung Haji 6, 956, 391 23.62
2 O SK Nominees (Tempatan) Sdn Bhd 3, 657, 330 12.42
O SK Capital Sdn Bhd For Tan Han K ook
6 Amanah Raya Nominees (Asing) Sdn Bhd 1, 390, 900 4.72
Exempt AN For Perkasa Normandy M anagers Sdn Bhd
8 O SK Nominees (Tempatan) Sdn Berhad 757, 425 2.57
O SK Capital Sdn Bhd For O ng Hooi Siang
9 RHB Capital Nominees (Tempatan) Sdn Bhd 533, 500 1.85
Pledged Securities Account For Tan Seow Than
10 Rajendran A/L K aruppiah 450, 000 1.53
11 Tan Boon Siew 400, 000 1.36
12 Ching Siew Cheong 367, 641 1.25
13 Berjaya Sompo Insurance Berhad 332, 974 1.13
14 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 300, 000 1.02
15 Woon Yee Chong 286, 000 0.97
16 Vincent Tan Chee Yioun 250, 000 0.85
17 Lim Poh Hock 237, 900 0.81
18 HDM Nominees (Tempatan) Sdn Bhd 200, 000 0.68
Pledged Securities Account For Ganesh K umar Bangah
19 RHB Capital Nominees (Tempatan) Sdn Bhd 200, 000 0.68
Pledged Securities Account For Ng Thiew K im
20 Nor Ashikin Binti K hamis 145, 200 0.49
21 M aureen Chong M ai Lee 125, 000 0.42
22 M ayban Securities Nominees (Tempatan) Sdn Bhd 125, 000 0.42
Pledged Securities Account For M usadik Ahmad Bin K amarudeen
23 Lim K wang Jeow 124, 400 0.42
24 Public Nominees (Tempatan) Sdn Bhd 121, 800 0.41
Pledged Securities Account For Hew Choong Hee
25 Yong Ai K iew 108, 400 0.36
26 Tiong Nieng Chiong 108, 300 0.36
27 Low Siang Tim 100, 375 0.34
28 Bala Subramaniam A/L E. K andasamy 100, 000 0.34
29 Siti Ezatul Azura Binti Zakariya 100, 000 0.34
30 Lai Poh Sung 100, 000 0.34
85
N O TIC E O F A N N U A L G EN ERA L M EETIN G
NOTICE IS HEREBY GIVENthat the Sixteenth Annual General Meeting of SILVER BIRD
GROUP BERHAD will be held at High5 Breadtown, Silver Bird Complex, Lot 72 Persiaran Jubli
Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan on Thursday, 29 April 2010 at 10.00
a.m. for the following purposes:
AGENDA
1. To receive the Audited Financial Statements for the financial year ended 31 October 2009
together with the Reports of the Directors and Auditors thereon.
2. To re-elect the following Directors who are retiring under Article 97 of the Articles of Association
of the Company:
2.1 Mr Ching Siew Cheong
2.2 Encik Richard George Azlan Bin Abas
2.3 Dato Seri Talaat Bin Husain
3. To approve the sum of RM264,000.00 (2008: RM246,000.00) being the directors fees for the
4. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to hold office until the
conclusion of the next Annual General Meeting and to authorise the Directors to fix their
remuneration.
SPECIAL BUSINESS
To consider and if thought fit, pass the following resolutions:
5. AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES
ACT, 1965
THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby
empowered to allot and issue shares in the Company, at any time, at such price, upon such
terms and conditions, for such purpose and to such person or persons whomsoever as the
Directors may in their absolute discretion deem fit provided that the aggregate number of
shares to be issued does not exceed ten per centum (10%) of the issued share capital of the
Company at the time of issue and THAT the Directors be and are hereby also empowered to
obtain the approval for the listing of and quotation for the additional shares so issued on the
Bursa Malaysia Securities Berhad and THAT such authority shall continue to be in force until
the conclusion of the next Annual General Meeting of the Company.
6. PROPOSED RENEWAL OF AUTHORITY TO PURCHASE THE COMPANYS OWN SHARES
THAT subject to the Companies Act, 1965 ( the Act ), rules, regulations and orders made
pursuant to the Act, provisions of the Companys Memorandum and Articles of Association
and the requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) and any other
relevant authority, the Directors of the Company be and are hereby authorised to make
purchases of ordinary shares of RM0.50 each in the Companys issued and paid-up share
capital through the Bursa Securities subject further to the following: -
(i) the maximum number of shares which may be purchased and/or held by the Company
shall be equivalent to 10% of the issued and paid-up share capital of the Company
( Shares ) at any point in time;
(ii) the maximum fund to be allocated by the Company for the purpose of purchasing the
Shares shall not exceed the aggregate of the retained profits and share premium account
of the Company at the time of purchase of the Proposed Share Buy-Back;
Ordinary Resolution 1
86
N o t ic e O f A n n u a l G e n e ra l M e e t in g
(iii) the authority conferred by this resolution will commence immediately upon passing of this
resolution and will expire at the conclusion of the next Annual General Meeting ( AGM ) of
the Company, unless earlier revoked or varied by ordinary resolution of the shareholders
of the Company in a general meeting or the expiration of the period within which the next
AGM after that date is required by the law to be held, whichever occurs first, but not so as
to prejudice the completion of purchase(s) by the Company before the aforesaid expiry
date and, in any event, in accordance with the provisions of the guidelines issued by the
Bursa Securities or any other relevant authority; and
(iv) upon completion of the purchase(s) of the Shares by the Company, the Directors of the
Company be and are hereby authorised to deal with the Shares in the following manner: -
(a) cancel the Shares so purchased; or
(b) retain the Shares so purchased as treasury shares; or
(c) retain part of the Shares so purchased as treasury shares and cancel the remainder;
or
(d) distribute the treasury shares as dividends to shareholders and/or resell on the Bursa
Securities and/or cancel all or part of them; or
in any other manner as prescribed by the Act, rules, regulations and orders made pursuant
to the Act and the requirements of the Bursa Securities and any other relevant authority for
the time being in force.
AND THAT the Directors of the Company be and are hereby authorised to take all such steps
as are necessary or expedient to implement or to effect the purchase(s) of the Shares with full
power to assent to any condition, modification, variation and/or amendment as may be
imposed by the relevant authorities and to take all such steps as they may deem necessary or
expedient in order to implement, finalise and give full effect in relation thereto.
BY ORDER OF THE BOARD
TAN FONG SHIAN @ LIM FONG SHIAN (MAICSA 7023187)
Company Secretary
Shah Alam
7 April 2010
Notes :
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more
than two (2)) to attend and vote in his/her stead. If a member appoints two (2) proxies, the appointment
shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.
A proxy may but need not be a member of the Company and if he is not a member, he need not be an
advocate, an approved Company auditor or a person approved by the Registrar of Companies.
2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association
and the instrument appointing a proxy shall be given under the Companys Common Seal or under the
hand of an officer or attorney duly appointed.
3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Silver
Bird Complex, Lot 72, Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan not less
than forty-eight (48) hours before the time appointed for the holding of the Sixteenth Annual General
Meeting or any adjournment thereof.
87
N o t ic e O f A n n u a l G e n e ra l M e e t in g
Explanatory Note on the Special Business
Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965
The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company, from the date of the
Fifteenth Annual General Meeting, to issue and allot shares (other than bonus or rights issue) of the Company up to and
not exceeding in total ten per centum (10%) of the issued share capital of the Company at the time of issue for such
purpose as they considered would be in the best interest of the Company. This authority, unless revoked or varied at a
general meeting, will expire at the next Annual General Meeting of the Company.
Proposed Renewal of Authority to Purchase the Companys Own Shares
The proposed Ordinary Resolution 7, if passed, will empower the Company to purchase and/or hold up to 10% of the
issued and paid-up share of the Company. This authority unless revoked or varied by the Company at a General Meeting
will expire at the next Annual General Meeting of the Company.
Please refer to Share Buy Back Statement dated 7 April 2010 for further information.
S TATEM EN T A C C O M PA N YIN G N O TIC E O F A N N U A L G EN ERA L
M EETIN G (A G M )
Names of Directors who are standing for re-election at the Sixteenth AGM of the Company:
(i) Mr Ching Siew Cheong
(ii) Encik Richard George Azlan Bin Abas
(iii) Dato Seri Talaat Bin Husain
Please refer to pages 10 to 15 for further details of the above directors
88
*I/We_________________________________________________________________________(FULL NAME IN BLOCK CAPITALS)
NRIC No./Company No._____________________________________(NEW)__________________________________(OLD)
of________________________________________________________________________________________(FULL ADDRESS)
being a member of SILVER BIRD GROUP BERHAD hereby appoint_________________________________(FULL NAME)
NRIC No._________________________(NEW)_________________________(OLD) or failing him/her_____________________
_____________________(FULL NAME) NRIC No.___________________________(NEW)____________________________(OLD)
or failing him/her, the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Sixteenth
Annual General Meeting ( AGM ) of the Company to be held at High5 Breadtown, Silver Bird Complex, Lot 72 Persiaran
Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan on Thursday, 29 April 2010 at 10.00 a.m. and at any
adjournment thereof of the following resolutions referred to in the Notice of Sixteenth AGM. My/Our proxy is to vote as
indicated below:
FOR AGAINST
(Please indicate with an X in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated
in the space above, the proxy will vote as he/she thinks fit.)
(i)
Applicable to shares held through a nominee account.
* Delete where applicable
Signed this .............. day of ........................ 2010
____________________________________________
Signature/Common Seal of Member
Notes:-
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than
two (2)) to attend and vote in his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid
unless he/she specifies the proportion of his/her holdings to be represented by each proxy. A proxy may but need
not be a member of the Company and if he is not a member, he need not be an advocate, an approved Company
auditor or a person approved by the Registrar of Companies.
2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the
instrument appointing a proxy shall be given under the Companys Common Seal or under the hand of an officer
or attorney duly appointed.
3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Silver Bird
Complex, Lot 72 Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan not less than forty-
eight (48) hours before the time appointed for the holding of the Sixteenth AGM or any adjournment thereof.
For appointment of two proxies, percentage if
shareholdings to be represented by the proxies:
No. of shares Percentage
Proxy 1
Proxy 2
Total 100%
F O R M O F P R O XY C D S A c c o u n t N o .
i)
N o . o f S h a re s h e ld
The Company Secretary
S I LVE R B I R D G R O U P B E R H A D
(Company No. 277977-X)
Lot 72, Persiaran Jubli Perak
Seksyen 21, 40300 Shah Alam
Selangor Darul Ehsan
S TA M P
(fold here)
(fold here)
Silver Bird Complex Lot 72, Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan.
Tel : 603 - 5192 2888 Fax : 603 - 5192 4293 Email : [email protected]
www.silverbird.com.my

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