DL Annualreport 2011

Dutch Lady Milk Industries Berhad
Laporan Tahunan 2011 Annual Report

Dutch Lady Milk Industries Berhad is a
subsidiary of Royal FrieslandCampina NV.
www.frieslandcampina.com
This Annual Report is printed on 100% recycled paper
contents
Notice of Annual General Meeting

1
Corporate Information

3
Chairmans Statement

6
Corporate Governance Statement

8
Directors Profle

14
Audit Committee Report

1 6
Corporate Social Responsibility

20
Statement of Internal Control

24
Directors Report

28
Statement of Financial Position

30
Statement of Comprehensive Income

31
Statement of Changes in Equity

32
Statement of Cash Flows

33
Notes to the Financial Statements

34
Statement by Directors

59
Statutory Declaration

59
Independent Auditors Report

60
Financial Highlights

61
Additional Compliance Information

62
Other Information

63
Proxy Form

65
BLUE VALUES
Believe in Growth Look Forward Unite as One Team Excel in Execution
AGENDA
AS ORDINARY BUSINESS
Ordinary Resolution 1
1 To receive the Audited Financial Statements for the fnancial
year ended 31 December 2011, together with the Reports of the
Directors and Auditors thereon.
Ordinary Resolution 2 & 3
2 To approve the payment of Directors fees of RM200,200
for the fnancial year ended 31 December 2011.
3 To approve the payment of Directors fees of RM212,700
for the fnancial year ended 31 December 2012, to be made
payable quarterly in arrears.
Ordinary Resolution 4 & 5
4 To re-elect the following Directors, who retire by rotation to
pursuant Article 94(a) of the Companys Articles of Association:-
(i) Dato Zainal Abidin bin Putih
(ii) Mr. Boey Tak Kong
5 To re-elect Mr. Rahul John Colaco, who was appointed during
the year and retires pursuant to Article 97 of the Company's
Articles of Association.
6 To re-appoint Messrs KPMG (AF: 0758) as the Companys
Auditors and to authorise the Directors to fx their
remuneration.
AS SPECIAL BUSINESS
To consider and if thought ft, pass the following resolutions:
7 PROPOSED NEW AND EXISTING SHAREHOLDERS MANDATE
FOR RECURRENT RELATED PARTY TRANSACTIONS OF A
REVENUE OR TRADING NATURE
THAT approval be and is hereby given to the Company to
enter into and to give effect to the Recurrent Related Party
Transactions of a Revenue or Trading Nature as stated in
Section 2.1.4 with the specifed classes of Related Parties as
stated in Section 2.1.3 of the Circular to Shareholders dated
27 April 2012 which are necessary for the Companys
day-to-day operations subject to the following:-
(i) the transactions are in the ordinary course of business and
are on terms not more favourable to the Related Parties
than those generally available to the public and are not
to the detriment of the minority shareholders; and
(ii) the aggregate value of such transactions conducted
pursuant to the Shareholders Mandate during the fnancial
year will be disclosed in the Annual Report for the said
fnancial year;
AND THAT such approval shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting
(AGM) of the Company at which time it will lapse, unless
by a resolution passed at the Meeting the authority is
renewed; or
(b) the expiration of the period within which the next AGM
of the Company subsequent to the date it is required
to be held pursuant to Section 143(1) of the Malaysian
Companies Act, 1965 (the Act)(but shall not extend to
such extension as may be allowed pursuant to Section
143(2) of the Act); or
(c) revoked or varied by resolution passed by the shareholders
in a general meeting;
whichever is earlier.
AND THAT the Directors of the Company be and are hereby
authorised to complete and do all such acts and things as they
may consider expedient or necessary in the best interest of
the Company (including executing all such documents as may
be required) to give effect to the transactions contemplated
and / or authorised by this Ordinary Resolution.
Special Resolution 1
8 PROPOSED AMENDMENTS TO THE COMPANY'S ARTICLES
OF ASSOCIATION
THAT the Articles of Association of the Company be altered
as follows:-
(a) Inclusion of the following new defnitions under Article
2(a):-
NOTICE IS HEREBY GIVEN that the Forty-Ninth Annual General Meeting of the Company will be held at Hotel Armada, Lorong
Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan, on Wednesday, 13 June 2012 at 10.00 a.m. for the purpose
of transacting the following business:
notice of annual general meeting
1
WORDS MEANINGS
Omnibus Account - An account in which securities are
held for two or more benefcial
owners.
Exempt Authorised -
Nominee
An authorised nominee defned
under the Central Depositories Act
which is exempted from compliance
with the provisions of subsection
25A(1) of the Central Depositories
Act.
(b) Amendments to Article 69 to read as follows:-
Article 69 Rights of proxy to vote and to speak
A Proxy shall be entitled to vote on a show of hands on
any question at any general meeting. The Proxy shall
also have the same rights as Member to speak at any
general meeting.
(c) Amendment to Article 74 which reads as follows:-
Article 74 - Proxy of an authorised nominee
Where a Member is an authorised nominee as defned
under the Central Depositories Act, it may appoint not
more than two (2) proxies in respect of each Securities
Account it holds with ordinary shares of the Company
standing to the credit of the said Securities Account to
attend and vote at the same meeting.
Where a Member is an Exempt Authorised Nominee which
holds ordinary shares in the Company in an Omnibus
Account, such Exempt Authorised Nominee may appoint
multiple proxies in respect of each Omnibus Account
it holds.
In both cases, such appointment shall be invalid unless
the authorised nominee or Exempt Authorised Nominee
specifies the proportion of its shareholdings to be
represented by each proxy it has appointed.
(d) Inclusion of a new Article 125A to read as follows:-
Article 125A Payment of dividends by electronic means
Subject to the provisions of the Act, the Central
Depositories Act and the Rules, the Listing Requirements
and/or regulatory authorities, payment of dividends
may be made by direct transfer or such other mode of
electronic means to the bank account of the holder whose
name appear in the Register of Members or Record of
Depositors or, if more than one (1) person is entitled
thereto in consequence of the death or bankruptcy of
the holder, payment in such manner to the bank account
of any one of such persons or to the bank account of
such person as such persons may by writing direct. The
payment of any dividends by such electronic means shall
constitute a good and full discharge to the Company of the
dividends to which it relates regardless of any discrepancy
given by the Member in the details of bank account(s).
THAT the Directors and Secretary of the Company be and are
hereby authorised to carry out all the necessary formalities in
effecting the amendments;
AND THAT the Directors of the Company be and are hereby
authorised to assent to any condition, modifcation, variation
and/or amendments as may be required by Bursa Malaysia
Securities Berhad.
notice of annual general meeting
2
9. To transact any other business for which due notice shall have
been given.
By Order of the Board
HUANG SHI CHIN (MIA 3891)
IZREEN FARA BINTI ISMAIL (MAICSA 7056439)
Joint Company Secretaries
Petaling Jaya
27 April 2012
Notes:
A Member entitled to attend a vote at the Annual General Meeting
of the Company is entitled to appoint a proxy /proxies to attend and
vote instead of him. A proxy need not be a member of the Company
and Section 149(1)(b) of the Companies Act, 1965 shall not apply.
Save for an Exempt Authorised Nominee as defned under the Central
Depositories Act which may appoint multiple proxies in respect of
each Omnibus Account it holds with ordinary shares of the Company
standing to the credit of the said securities account, a Member
(including an authorised nominee) shall be entitled to appoint not
more than two (2) proxies to attend and vote at the same meeting.
In any case, where more than one (1) proxy is appointed, such
appointment shall not be valid unless the proportion of the holdings
represented by each proxy is specifed.
The instrument appointing the proxy must be signed by the Member
or his attorney duly authorised in writing, or if the appointer is a
corporation, the instrument must be executed under its common
seal or under the hand of its offcer or attorney duly authorised.
To be valid, the instrument appointing a proxy, duly completed (and
if applicable) the power of attorney or other authority under which
it is signed or notarially certifed copy of that power of authority)
must be deposited at the Registered Offce of the Company not less
than 48 hours before the time set for holding the Meeting or any
adjournment thereof.
Explanatory Notes on Special Business:
Proposed New And Existing Shareholders Mandate For Recurrent
Related Party Transactions of a Revenue or Trading Nature
Please refer to the Circular to Shareholders dated 27 April 2012.
Special Resolution 1
Proposed Amendments to the Company's Articles of Association
Please refer to the Circular to Shareholders dated 27 April 2012.
BOARD OF DIRECTORS
CHAIRMAN
Dato Zainal Abidin bin Putih
Independent Non-Executive Director
DIRECTORS
Rahul John Colaco
Managing Director
Dato Dr. Mhd. Nordin bin Mohd. Nor
Non-Independent Non-Executive Director
AUDIT COMMITTEE NOMINATION COMMITTEE REMUNERATION COMMITTEE
Level 5, Quill 9
112, Jalan Semangat
46300 Petaling Jaya
Selangor Darul Ehsan
Telephone : 03-7953 2600
Facsimile : 03-7953 2700
SYMPHONY SHARE
REGISTRARS SDN BHD
Level 6, Symphony House
Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Telephone : 03-7841 8000
Facsimile : 03-7841 81 51
REGISTRAR REGISTERED OFFICE
www.dutchlady.com.my
[email protected]
AUDITORS
WEBSITE
INVESTOR RELATIONS & ENQUIRIES
Main Market of Bursa Malaysia
Securities Berhad
STOCK EXCHANGE LISTING
SOLICITORS PRINCIPAL BANKERS
KHAW & PARTNERS
6th Floor
Menara Boustead
Jalan Raja Chulan
50200 Kuala Lumpur
PUBLIC BANK BERHAD
12, Jalan 14/14
46100 Petaling Jaya
THE ROYAL BANK OF SCOTLAND BERHAD
Level 1, Menara Maxis
Kuala Lumpur City Centre
50088 Kuala Lumpur
MALAYAN BANKING BERHAD
18A, Jalan 14/14
46100 Petaling Jaya
CHAIRMAN
Boey Tak Kong
MEMBERS
Foo Swee Leng
CHAIRMAN
Foo Swee Leng
MEMBERS
Boey Tak Kong
KPMG (AF: 0758)
Chartered Accountants
Level 10, KPMG Tower
8, First Avenue, Bandar Utama
47800 Petaling Jaya
CHAIRMAN
MEMBERS
Foo Swee Leng
Rahul John Colaco
Kapil Garg
Non-Independent Non-Executive Director
Foo Swee Leng
Huang Shi Chin
Executive Director
Boey Tak Kong
JOINT COMPANY SECRETARIES
Huang Shi Chin
(MIA 3891)
Izreen Fara binti Ismail
(MAICSA 7056439)
corporate information
3
Believe
in
Growth
Growth creates passion and passion
creates growth
We love what we do best at Dutch
Lady Malaysia helping Malaysians
move forward in life with trusted dairy
nutrition. We achieve this through
embracing a passion for continuous
learning and growing our talent
and expertise. To stakeholders, this
means we continually exceed our own
standards and expectations to deliver
outstanding quality nutritious dairy
products.
chairman's statement
6
On behalf of the Board of Directors, I have pleasure
in presenting the Companys Annual Report and
Audited Financial Statements for the fnancial year
ended 31 December 2011.
The Company achieved a commendable revenue
growth in 2011 of RM810 million, 16% higher than
the previous year. Demand for the Companys
core powder and liquid dairy products continue to
be strong, helped by highly effective promotions,
value-enhancing product innovations and correct
strategies in the market place that drove sales.

I am even more pleased to inform that in 2011, the
Company achieved the highest level of proft before
tax in its history, of RM141 million, 57% higher than
the previous year. This is an extraordinary result
as we were faced with steep increases in dairy raw
material prices during the year. What this proves
is that the Company has obviously put into place
strategies that not only spur growth but at the same
time help it overcome obstacles.
The Company has certainly been active during the
year. First was the integrated launch of Dutch Lady
Growing up Milk with 5xDHA which really moved
the needle in the mainstream Infant, Follow-on and
Toddler market.
The World Milk Day 2011 celebrations held in June
once again saw Dutch Lady Malaysia taking the
lead for the fourth time in our country for this
global celebration. This time, we held the frst Milk
Elections that saw sweet corn winning the most
popular UHT favour by Malaysians.
The success of Dutch Lady Kid and Dutch Lady
School, and the Companys involvement in the
Governments 1Malaysia School Milk programme
(PS1M), helped to further grow the Companys dairy
beverage business to unprecedented levels.
As the market leader in dairy, and in line with its
mission of helping Malaysians move forward in
life with trusted dairy nutrition, the Company
embarked on an ambitious two-year sugar reduction
programme. It started the campaign by introducing
three products with 25% less sugar. In addition, a
historic decision was made to cease the production
of Sweetened Condensed Milk for the same reason.
The Company intends to reduce its total sugar usage
by 40% by the end of 2013.
This move is consistent with our Corporate Social
Responsibility (CSR) strategy of Leading in
providing healthy dairy nutrition. The other pillars
of our CSR strategy are: Ensuring sustainability in
the environment and business operations, Move
society forward by giving back this could be
seen in our many employee engagement and Dairy
Development activities, and Being the number one
employer in dairy. We are committed to further
increase our investments in CSR in 2012.
Our emphasis on engaging and developing our
employees has paid dividends. The Companys
employee engagement programme called Passion
for BLUE has translated to better teamwork,
stronger project management, and a more
professional and focussed team.
One of the other things that we did to improve
the working environment of our staff was to move
the commercial offce across the road from our
factory to Quill 9. The open plan in the new offce,
which comprise all departments except Operations,
improved communications tremendously.
As a responsible employer, we place a lot of
attention on the safety of our workplace. This will
continue to be an area of focus in 2012.
On dividends, the Company has utilised all its tax
credits in 2011 and will henceforth be declaring
single-tier dividends. A separate announcement will
be made on this and I trust that the shareholders
will be satisfed with the Companys declaration.
I wish to remind shareholders though, that the
payment of special interim dividends is not
guaranteed but is very much dependent on the
Companys business and operational needs during
the year.
On behalf of the Board, I have the pleasure in
extending a warm welcome to Mr. Rahul Colaco, the
new Managing Director of Dutch Lady Malaysia. He
is replacing Mr Bas van den Berg who will return to
our holding company Royal FrieslandCampina NV in
the Netherlands following his promotion to lead a
newly formed operating unit within the Group.
The Board of Directors is grateful for the
extraordinary achievement of Mr. Bas van den Berg
in driving Dutch Lady Malaysia to greater heights
and wishes him every success in his new role.
As always, on behalf of the Board, I would like to
convey our sincere thanks to the Management,
employees and business partners of the Company
for their exemplary performance in 2011 and wish
them even greater success in the current year.
DATO ZAINAL ABIDIN BIN PUTIH
Chairman
7
corporate governance statement
1 The Board of Directors
1.1 Composition
The Board comprises seven directors; two of whom are
Non-Independent Non-Executive Directors, three are
Independent Non-Executive Directors and two Executive
Directors within the meaning of Chapter 1.01 of the Listing
Requirements. The Board is required under Paragraph
15.02 of the Main Market Listing Requirements to ensure
that it has one-third independent directors.
The Board has identifed Dato Zainal Abidin bin Putih as
its senior Independent and Non-Executive Chairman, to
whom concerns of shareholders, Management and others
may be conveyed.
Duties and Responsibilities
The Company is led by an experienced Board under a
Chairman who is an Independent and Non-Executive
Director. The roles of the Chairman and Managing Director
are separate and each has a clearly accepted division of
responsibilities. Members of the Board are professionals
from varied backgrounds, bringing depth and diversity
zin experience, expertise and perspectives to the
Company's business operations. The profiles of the
members of the Board are set out in this Annual Report
on pages 14 and 15.
The Board is ensured of a balanced view at all board
deliberations largely due to the presence of its non-
executive directors that form a majority in the Board.
More importantly, the Board has as members, Independent
Non-Executive Directors who are independent from
Management and major shareholders of the Company.
The Independent Directors are also free from any business
or other relationships that could materially interfere with
the exercise of their independent judgement.
Together with the Managing Director who has an intimate
knowledge of the Companys business, the Board is
constituted of individuals who are committed to business
integrity and professionalism in all its activities. As part
of its commitment, the Board supports the highest
standards of corporate governance and the development
of best practices for the Company.
The Board retains full and effective overall control of and
responsibility for the Company. This includes the following
six specifc responsibilities in the discharge of its duties:
reviewing and adopting a strategic plan for the
Company;
overseeing the conduct of the Companys business to
evaluate whether the business is being properly
managed. The Board plays a supportive yet watchful
role over the performance of Management;
identifying principal risks to ensure the implementation
of appropriate systems to manage these risks;
establishing succession planning, including the
appointment, training and fxing of compensation and
where appropriate, replacement of senior management;
maintaining shareholder and investor relations for the
Company; and
reviewing the adequacy and the integrity of the
Companys internal control and management systems;
including systems for compliance with applicable laws,
regulations, rules, directives and guidelines.
2 Board Meetings
The Board meets at least four times a year and has a formal
schedule of matters reserved to it. Additional meetings are
held as and when required. It meets within two months of
the end of every quarter of the fnancial year, whereat the
Companys fnancial statements and results are deliberated and
considered. The Board and its Committees are supplied
with sufficient information to enable them to discharge
thei r duti es. Duri ng these meeti ngs, the Board al so
appraises business proposals, reviews the management
or performance of the business and any other strategic
issues that affect or may affect the Companys business.
During the fnancial year, the Board met four times; whereat it
deliberated and considered a variety of matters including the
Companys fnancial results, the business plan and direction of
the Company. The Board receives documents on matters
requiring its consideration prior to and in advance of each
meeting. The Board papers are comprehensive and encompass
all aspects of the matters being considered which enable the
Board to look at both the quantitative and qualitative factors
so that informed decisions are made.
Directors have access to information within the Company and
to the advice and services of the Company Secretaries who are
responsible for ensuring that Board meeting procedures are
followed and that applicable rules and regulations are complied
with. The Directors also have access to independent professional
advice in furtherance of their duties.
The attendance of the directors at the Board Meetings is set
out in the Directors Profle appearing on pages 14 and 15 of the
Annual Report.
The Board of Directors is pleased to report to shareholders the manner in which the Company has applied the principles
and the extent of compliance with the best practices of good governance as set out in Part 1 and Part 2 respectively of the
revised Malaysian Code on Corporate Governance (the Code) pursuant to Paragraph 15.25 of the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad (the Listing Requirements).
8
5 Directors Remuneration
Directors fees are paid to Non-Executive Directors and these
are approved by shareholders at the Annual General Meeting.
Non-Executive Directors are also paid an attendance allowance
for each Board or Committee Meeting that they attend.
Members of the Audit Committee also receive a committee
allowance. The Executive Directors are not paid an attendance
allowance nor directors fees.
The Company has adopted the objectives as recommended by
the Code to determine the remuneration of Directors so as to
ensure that the Company attracts and retains the Directors
needed to run the Company successfully.
The aggregate remuneration of Directors of the Company for
the fnancial year ended 31 December 2011 are as follows:
The number of Directors whose total remuneration falls within
the following bands are as follows:
6 Board Committees
As appropriate, the Board has delegated certain responsibilities
to Board Committees that operate within clearly defned terms
of reference. These Committees are:
6.1 Audit Committee
The Companys Audit Committee assists and supports the
Boards responsibility to oversee the Companys operations
in the following manner:-
provides a means for review of the Companys
processes for producing financial data, its internal
controls and independence of the Companys External
and Internal Auditors.
3 Re-election of Directors
At least one-third of the Directors are required to retire by
rotation each fnancial year in accordance with the Companys
Articles of Association and can offer themselves for re-election
at the Annual General Meeting.
Directors who are appointed by the Board to fll a casual vacancy
during the year are subject to election by shareholders at the
next Annual General Meeting following their appointment.
The Companys Articles of Association provide that the
Managing Director is also subject to retire by rotation once every
three years.
4 Directors Training
All members of the Board (except for Mr. Rahul John Colaco
who was appointed to the Board on 1 April 2012) have
attended and successfully completed the Mandatory
Accreditation Programme.
The Board has the responsibility of overseeing the training needs
of their directors. In addition to specifc training programmes
for its Directors annually, Directors are encouraged to attend
relevant seminars and training programmes to equip
themselves with the knowledge to effectively discharge their
duties as Directors.
For the year under review, all Directors (except for Mr. Rahul
John Colaco who was appointed to the Board on 1 April 2012)
attended briefngs/ trainings that covered the following topics:
Recent updates on the Main Market Listing requirements
of Bursa Malaysia Securities Berhad
Corporate Governance Blueprint
Personal Data Protection Act 2011
Anti-Profteering Act 2011
Managing Corporate Reputation in a Digital Age (except
for Mr. Kapil Garg).
Reputation Management as a Component of Business
Continuity (except for Mr. Kapil Garg).
In addi ti on, Mr. Kapi l Garg attended the Leadershi p
Development Programme organised by the International
Institute for Management Development.
Throughout the year, the Directors received regular updates
and briefngs on regulatory, industry and legal developments,
including information on signifcant changes in business and
operational risks and procedures instituted to mitigate
such risks.
9
Executive
Directors
Non-Executive
Directors
RM 000 RM 000
Directors fees
- 200
Meeting & Committee
allowances
- 53
Salaries and other
emoluments
1,742 44
Benefts in kind
719 -
Range of
Renumeration
Executive
Directors
Non-Executive
Directors
RM50,001 to
RM100,000
- 4
Above
RM500,000
2 -
reinforces the independence of the Companys External
Auditors.
reinforces the objectivity of the Companys Internal
Audit function.
The Audit Committee comprises four Directors (three of
whom, including the Chairman, are Independent Non-
Executive Directors). The members of the Committee are:
1. Mr. Boey Tak Kong
(Independent Non-Executive Director) - Chairman
2. Dato Zainal Abidin bin Putih
(Independent Non-Executive Director)
3. Mr. Foo Swee Leng
4. Dato Dr. Mhd. Nordin bin Mohd. Nor
(Non-Independent Non-Executive Director)
The Committees terms of reference include the review of
and deliberation on the Companys Financial Statements,
the audit fndings of the External Auditors arising from their
audit of the Companys Financial Statements and the audit
fndings and issues raised by the Internal Auditors together
with Managements responses thereon. The Finance
Director, Internal Auditors and External Auditors attend
meetings at the invitation of the Audit Committee.
The Committee also reviews the Companys quarterly
unaudited statements and final audited (12 months)
Financial Statements before they are considered,
deliberated and approved by the Board as well as related
party transactions and any conficts of interest situations
during the year.
The Audit Committee Report for the fnancial year pursuant
to Paragraph 15.15 of the Listing Requirements is contained
on pages 16 and 17 of this Annual Report.
6.2 Nomination Committee
The Committee comprises three Directors, all of whom are
Non-Executive Directors. The members of the Committee are:
(Independent Non-Executive Director) - Chairman
(appointed on 24 February 2012)
Mr. Kapil Garg (Non-Independent Non-Executive Director)
was the chairman of the Nomination Committee from
August 2010 to February 2012, when he was replaced by
Mr. Foo Swee Leng because of ill-health.
The Committees responsibility among others, is to propose
or review new nominees for the Board and Board Committees,
to assess the effectiveness of Board as a whole, examine its
size with a view to determine the impact of its number upon
its effectiveness, the Committees of the Board and the
individual Directors on an on-going basis, and to annually review
the required skills and core competencies of Non-Executive
Directors. The Committee also ensures that an orientation and
education programme is in place for new Board members.
6.3 Remuneration Committee
The Committee comprises three directors, two of
whom are non-executive directors. The members of the
Committee are:
(Non-Independent Non-Executive Director) - Chairman
3. Mr. Rahul John Colaco
(Managing Director)
(appointed on 1 April 2012)
Mr. Sebastiaan Gijsbertus van den Berg, (the former
Managing Director) was a member of the Remuneration
Committee from January 2010 to March 2012, when he
was replaced by Mr. Rahul John Colaco who was appointed
as the new Managing Director of the Company and
member of the Remuneration Committee on 1 April 2012.
The Committees primary responsibility is to recommend
to the Board the remuneration of Directors (Executive
and Non-Executive). The Company adheres to the Groups
human resource policies and procedures, which includes
its performance appraisal system and compensation and
benefts scheme. Nevertheless, the determination of
remuneration packages of Directors is a matter for the
Board as a whole and individual directors abstain from
discussion of their own remuneration.
7 Accountability and audit
7.1 Financial Reporting:
The Board aims to provide and present a balanced and
meaningful assessment of the Companys fnancial
performance and prospects at the end of the fnancial
year, primarily through the Financial Statements and the
Chairmans Statement in the Annual Report.
corporate governance statement
10
7.2 Statement of Directors Responsibility in respect
of Audited Financial Statements pursuant to
Paragraph 15.26(a) of the Main Market Listing
Requirements.
Directors are required pursuant to Section 169(15) of the
Companies Act, 1965 to state whether the Companys
Financial Statements for the fnancial year are drawn up in
accordance with approved accounting standards so as to
give a true and fair view of the Companys state of affairs
and of the results of the Companys business operations
for the fnancial year.
In preparing the Financial Statements, the Directors have:
adopted suitable accounting policies and then applied
them consistently;
made judgements and estimates that are prudent
and reasonable;
ensured applicable accounting standards have been
followed; and
prepared the Financial Statements on an ongoing basis.
The Companys quarterly and annual results
announcements are released to shareholders within
the stipulated time frame to reinforce the Boards
commitment to provide a true and fair view of the
Companys operations.
7.3 Internal Audit
The Company has an Internal Audit function that
is supported by the Groups Corporate Internal
Audit department.
They report to the Audit Committee. During the year,
the Internal Auditors had four meetings with the Audit
Committee. They reported on the Companys system of
internal and operational controls with focus on key areas
of business risks.
The Internal Auditors audit plan, nature and scope of
the audit were approved by the Audit Committee prior to
the commencement of their audit based on the Groups
specially designed Internal Control Framework that aims
at optimising the effectiveness and effciency of the
Companys internal controls. They reported on weaknesses
in control procedures and made recommendations on
areas for improvement.
They also reviewed the extent to which their
recommendations have been implemented by the
Company.
7.4 External Audit
The Companys independent external auditors, KPMG,
play an essential role to the shareholders by enhancing
the reliability of the Companys Financial Statements
and by giving assurance of that reliability to users of the
Financial Statements.
The External Auditors have an obligation to bring any
signifcant weaknesses in the Companys system of controls
and compliance to the attention of Management, the Audit
Committee and the Board.
8 Relations with Shareholders and Investors
The Companys Annual General Meeting (AGM) is the principal
forum for dialogue with individual shareholders. It is a crucial
mechanism in shareholder communication for the Company.
At the Companys AGM, which is generally well attended,
shareholders have direct access to the Board and are given
the opportunity to ask questions during the open question and
answer session prior to the moving of the motion to approve
the proposed resolution. Shareholders are encouraged to ask
questions about the resolutions being proposed and on the
Companys operations in general.
A press conference is held immediately after the AGM whereat
the Chairman and the Managing Director advise members of
the media of the resolutions passed, and answer questions on
the Companys operations posed by the reporters. Members
of the media are also invited to the Companys major product
launches where clarifcations are given on the products and
the business in general. Interviews are also held with research
analysts and fund managers upon request.
Announcements are made on a timely basis to Bursa
Malaysia Securities Berhad and these are made
electronically to the public via Bursa Malaysias website at
www.bursamalaysia.com as well as on the Companys website.
The Companys website, www.dutchlady.com.my provides
corporate and financial information, as well as news,
highlights, events, product information and medical advice.
Investors may forward their queries to the Company via
e-mail: [email protected]
11
Look Forward
Continuously driving ourselves to
do better
In todays competitive environment,
it takes the attitude and mindset
of a winner to succeed. At Dutch
Lady Malaysia, we appreciate our
peoples inner talents and abilities.
More importantly, we believe in their
exceptional energy and potential
to excel in what they do. Inevitably,
this passion to push the boundaries
and surmount challenges helps the
Company to achieve its goals and stay
at the forefront of competition.
directors profile
Aged 39. Indian national. Executive Director. Appointed as
Managing Director of the Company on 1 April 2012 and was
appointed to the Board on the same date. Appointed as member of
the Remuneration Committee on 1 April 2012. He holds a degree in
Commerce from Mumbai University, India and has an MBA from the
International Institute for Management Development, Lausanne
in Switzerland. He does not have any family relationship with any
director and/or shareholder of the Company other than as nominee
director of Royal FrieslandCampina NV. He does not have any
confict of interest with the Company and has no convictions for
any offences within the past ten years. He does not hold any shares
in the Company. He did not attend any Board Meetings held during
the fnancial year since he was only appointed as a Director on
1 April 2012.
Aged 65. Malaysian. Independent Non-Executive Director. Chairman
of the Company since 27 May 2009. Member of the Audit and
Nomination Committees. He is also a director of several publicly
listed companies. An accountant by profession. He does not have
any family relationship with any director and / or major shareholder
of the Company, nor any confict of interest with the Company.
He has no convictions for any offences within the past ten years.
He does not hold any shares in the Company. He attended all four
Board meetings held during the fnancial year.
DATO ZAINAL ABIDIN BIN PUTIH
MR. RAHUL JOHN COLACO
MR. KAPIL GARG
Aged 47. Indian national. Non-Independent Non-Executive Director.
Appointed to the Board on 18 August 2010. Was Chairman of the
Nomination Committee up to 24 February 2012. He is a member
of the Executive Board of Royal FrieslandCampina N.V., the
ultimate holding company of the Company, with responsibility for
the business group Consumer Products International. He holds
a degree in Economics and an MBA from the University of Delhi,
India. He does not have any family relationship with any director
and / or major shareholder of the Company other than as nominee
director of Royal FrieslandCampina NV. He does not have any
confict of interest with the Company and has no convictions for
any offences within the past ten years. He does not hold any shares
in the Company. He attended two out of four Board Meetings held
during the fnancial year.
14
Aged 53. Malaysian. Executive Director. Appointed to the Board
on 6 May 2004. He is currently the Companys Corporate Affairs
Director and Joint Company Secretary. A Member of the Institute
of Chartered Accountants (England & Wales) and a Chartered
Accountant of the Malaysian Institute of Accountants. He does
not have any family relationship with any director and / or major
shareholder of the Company. He does not have any confict of
interest with the Company and has no convictions for any offences
within the past ten years. He does not hold any shares in the
Company. He attended all four Board Meetings held during the
fnancial year.
Aged 65. Malaysian. Non-Independent Non-Executive Director.
Appointed to the Board on 6 August 2003. Chairman of the
Remuneration Committee and member of the Audit Committee.
He is also a Director of Sunzen Biotech Berhad. He was formerly
the Director-General of the Department of Veterinary Services,
Malaysia. He is also the Chairman of the Malaysian Animal Welfare
Foundation and Patron of the Malaysian Feline Society. He holds a
degree in Veterinary Science from the University of Queensland,
Australia. He does not have any family relationship with any
director and / or major shareholder of the Company other than as
nominee director of Permodalan Nasional Berhad. He does not have
any confict of interest with the Company and has no convictions
for any offences within the past ten years. He does not hold any
shares in the Company. He attended all four Board Meetings held
during the fnancial year.
Aged 57. Malaysian. Independent Non-Executive Director.
Appointed to the Board on 12 November 2001. Chairman of the
Audit Committee and member of the Nomination Committee. He
is also a director of several publicly listed companies. Currently,
he is the Managing Director of Terus Mesra Sdn Bhd, a leadership
training company. A Fellow Member of the Chartered Association
of Certifed Accountants, United Kingdom, Associate Member of
the Institute of Chartered Secretaries & Administrators, United
Kingdom, Chartered Accountant of the Malaysian Institute of
Accountants and Member of the Malaysian Institute of Management.
He does not have any family relationship with any director and / or
major shareholder of the Company, nor any confict of interest with
the Company. He has no convictions for any offences within the
past ten years and he does not hold any shares in the Company.
He attended all four Board Meetings held during the fnancial year.
MR. BOEY TAK KONG DATO DR. MHD. NORDIN BIN MOHD. NOR
MR. HUANG SHI CHIN
Aged 65. Malaysian. Independent Non-Executive Director.
Appointed to the Board on 18 June 1986. Appointed Chairman of
the Nomination Committee on 24 February 2012 and a member
of the Audit and Remuneration Committees. He was formerly
the Managing Director of the Company and the Regional Director
of Friesland Asia Pacifc. He holds a degree in Economics from
University Malaya. He does not have any family relationship with
any director and / or major shareholder of the Company. He does
not have any confict of interest with the Company and has no
convictions for any offences within the past ten years. He does
not hold any shares in the Company. He attended all four Board
Meetings held during the fnancial year.
MR. FOO SWEE LENG
15
1 Membership and Meeting of the Committee
Members of the Audit Committee are:-
(Independent, Non-Executive Director)Chairman
(Independent, Non-Executive Director)
(Independent, Non-Executive Director)
(Non-Independent Non-Executive Director)
Mr. Boey Tak Kong and Dato Zainal Abidin bin Putih, being
members of the Malaysian Institute of Accountants, fulfll
the requirement of paragraph 15.09(1)(c) of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad.
The Audit Committee held four meetings during the fnancial
year ended 31 December 2011. Details of attendance of the
Audit Committee members are as follows:-
2 Role of the Audit Committee
An independent Audit Committee assists, supports and
implements the Boards responsibility to oversee the
Companys operations in the following manner:-
provides a means for the review of the Companys processes
for producing financial data, its internal controls and
independence of the Companys External and Internal
Auditors.
reinforces the independence of the Companys External
Auditors.
reinforces the objectivity of the Companys Internal Audit
function.
3 Terms of reference
Composition
The Committee comprises four Directors, a majority of
whom is independent. The Chairman is an Independent
Non-Executive Director. Two members of the Committee
are professional accountants.
In compliance with the Code, all members of the Committee
are Non-Executive Directors.
Quorum
The quorum for the Meeting is three.
Agenda and Notice of Meeting
The Company Secretary with the concurrence of the
Chairman is responsible for preparing and circulating
Pursuant to paragraph 15.15 of the Listing Requirements of Bursa Malaysia Securities Berhad
the Agenda and the Notice of Meeting, together with
supporting explanatory documentation to members of the
Committee prior to each meeting.
Attendance at Meeting
The Finance Director, Internal Auditors and External
Auditors attend meetings by invitation of the
Committee. Other Board Members have the right
of attendance.
Frequency of Meetings
Meetings are held not less than four times a year. The
External Auditors may request a meeting if they consider
that one is necessary.
Authority
The Committee is authorised by the Board to investigate
any activity within its terms of reference. It is authorised
to seek any information it requires from any employee
and all employees are directed to co-operate with any
request made by the Committee.
The Committee is authorised by the Board to obtain
outside legal or other independent professional advice
and to secure the attendance of outsiders with relevant
experience and expertise as it deems necessary.
Duties
The duties of the Committee are:
(a) To consider the appointment of the External
Auditors and fix their audit fee, and any question
of their resignation or dismissal.
(b) To discuss with the External Auditors their audit
plan, the nature and scope of the audit, evaluation
of the Companys system of internal controls and
audit report on the annual Financial Statements.
(c) To review the quarterly and annual Financial Statements
of the Company before submission to the Board of
Directors, focusing particularly on:
(i) public announcement of the results and dividend
payment;
(ii) any changes in accounting policies and practices;
(iii) the going concern assumption;
(iv) compliance with approved accounting standards;
(v) compliance with stock exchange and legal
requirements; and
(vi) signifcant adjustments arising from the audit.
(d) To discuss issues and reservations arising from the
interim and fnal audits, and any matters the External
Auditors may wish to discuss, in the absence of
Management where necessary.
(e) To review the External Auditors letter to Management
and Managements response thereon.
(f) To do the following, in relation to the internal audit
function:-
(i) 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;
(ii) review the internal audit plan and results of the
internal audit process and, where necessary,
ensure that appropriate actions are taken on
the recommendations of the internal audit
function by Management;
audit committee report
16
Name of Members Total Meetings
Attended
Boey Tak Kong 4 out of 4
Dato Zainal Abidin bin Putih 4 out of 4
Mr. Foo Swee Leng 4 out of 4
Dato Dr. Mhd Nordin bin Mohd Nor 4 out of 4
(iii) review and appraise the performance of members
of the internal audit function;
(iv) approve any appointment or termination of
senior staff members of the internal audit
function; and
(v) take cognisance of resignations of internal audit
staff members and provide the resigning staff
member an opportunity to submit his reasons for
resigning.
(g) To consider any related party transactions and confict
of interest situations that may arise within the
Company.
(h) To consider the major findings of any internal
investigations and Managements response
thereon.
(i) To review the draft Circular on Proposed Shareholders
Mandate for Recurrent Related Party Transactions
of a Revenue or Trading Nature, before submission
to the Board of Directors.
(j) To consider any other topics, as defned by the Board.
Reporting Procedures
The Secretary shall circulate the minutes of meetings of
the Committee to all members of the Board.
Detailed audit reports by the Internal Auditors and
the respective Management response are circulated
to members of the Committee before each Meeting
at which the said reports are tabled.
4 Internal Audit Function
The Company has an Internal Audit function that is supported
by the Groups Corporate Internal Audit department. The
Internal Audit function reports to the Audit Committee.
The Internal Auditors are empowered to audit the Companys
business units, review the units compliance with internal
control procedures, highlight areas of weaknesses and
make appropriate recommendations to the Company for
improvements.
During the fnancial year, the Internal Auditors undertook the
following activities:
prepared the audit plan for the year, which is
reviewed and approved annually by the Audit
Committee. The annual audit plan is based on the
2009 - 2011 audit plan following a risk likelihood/
impact assessment and approved by the Audit
Committee on 18 November 2008, and modified
where necessary by the Audit Committee;
determined the manpower requirement to support
the audit plan;
prepared the audit programme based on the audit plan,
for each activity or process to be audited;
maintained the Company's Internal Control
Framework, including designing controls, training
on self assessments and ensured proper functioning
of the system;
discussed with auditees, process owners and
Management on the results of the audit for each
activity or process, and the recommendations for
improvements;
reported to the Audit Committee on a quarterly basis,
the internal audit findings on risk management,
control and governance issues identified during the
risk based audits, together with recommendations for
improvement in the processes;
undertook investigations and special reviews of
matters arising from the audits and/or as requested
by Management and/or Audit Committee, and issued
reports accordingly;
followed up on recommendations from the previous
internal audit reports to ensure that all matters arising
are adequately addressed; and
conducted follow-up of recommendations by the
External Auditors in their Management letter.
5 Summary of Audit Committees Activities
The Audit Committee met at scheduled times during the
year; with due notices of meetings issued, and with agendas
planned and itemised so that matters were deliberated and
discussed in a focused and detailed manner. The minutes of
each meeting held were distributed to each member of the
Board at the subsequent Board Meeting. The Audit Committee
Chairman reported on each meeting to members of
the Board.
The activities of the Audit Committee during the fnancial year
ended 31 December 2011 were as follows:
(i) reviewed the audit plan, nature and scope of the audit
with the Internal and External Auditors;
(ii) discussed the fndings and recommendations by the
Internal and External Auditors on systems and control
weaknesses, and ensured that corrective actions were
taken by Management;
During the year, the Audit Committee had four meetings
with the Internal Auditors and three meetings with the
External Auditors, which included separate sessions
between the Independent and Non-Executive Directors
and External Auditors, without the presence of the
Executive Directors and Management staff;
(iii) reviewed the compliance with accounting standards and
ensured that the Company used appropriate accounting
policies for its fnancial statements;
(iv) reviewed the Companys quarterly fnancial results and
recommended the same to the Board for approval and
announcement to Bursa Malaysia Securities Berhad;
(v) reviewed the Companys audited accounts for the year
and audit report of the External Auditors on the fnancial
statements and recommended the same to the Board for
approval;
(vi) considered the quantum, timing and cash fow of dividend
payments, and recommended the same to the Board for
approval;
(vii) reviewed the related party transactions and any conficts
of interest situations during the year; and
(viii) reviewed the Circular on Proposed Shareholders Mandate
for Recurrent Related Party Transactions of a Revenue
or Trading Nature and recommended the same to
the Board for approval.
17
Unite as
One Team
People working together to deliver
great results
Dutch Lady Malaysias success does
not happen by chance. In addition
to carefully planned goals and well-
executed strategies, the people
factor comes into play. Collectively
working as a team, each work team is
committed to delivering the desired
results within its domain while at the
same time, functioning effectively as
an interdependent contributor across
the organisation. This way, Dutch Lady
Malaysia moves forward as a seamless
single entity.
Corporate Social Responsibility (CSR) is a key pillar of our
business strategy and continues to be an important tenet of
our operating philosophy. CSR is not new to us, we have always
been engaged and elements of CSR run through the veins of our
Company and are central to our business. We believe in leading
responsibly and creating shared values to all our stakeholders
through our strategic CSR initiatives. Taking this into account,
we aim to demonstrate our commitment by:
Leading in providing healthy dairy nutrition
Ensuring sustainability in the environment and our business
operations
Moving society forward by giving back
Being the number one employer in dairy

Leading in providing healthy dairy nutrition
In line with our mission of Helping Malaysians move forward in
life with trusted dairy nutrition, we aim to continue developing
products that contribute to a healthy society. The year saw the
Company involved in the biggest and most in-depth nutritional
study in the region, organised by our parent company. The South
East Asia Nutritional study (Seanut) was launched to identify
nutritional habits and gaps in knowledge among children of 12
years old and below. In Malaysia, the project is a collaboration
between Dutch Lady Malaysia and Universiti Kebangsaan
Malaysia (UKM).
Sugar reduction campaign
In support of the Governments sugar reduction campaign,
the Company launched its own aggressive two-year plan
to reduce sugar consumption via its product range. The
aim is to reduce 40% of its sugar consumption (from
current usage level) by 2013. It is part of our continuous
efforts towards improving the nutritional profile of our
products. This campaign also aims to raise the awareness
and understanding of consumers habits related to sugar
consumption by making relevant changes to the product
portfolio.
corporate social responsibility
20
Partner in the Governments School Milk Programme
Dutch Lady Malaysias participation in the Program Susu
1Malaysia (PS1M) is in line with our efforts to spread the
goodness of milk to school children to help them achieve
optimum growth and learning. Our participation ultimately
reinforces our strength as an expert in dairy nutrition.
Through this partnership we provide milk to over 400,000
school children between the ages of 7 and 12 years in more
than 1,500 primary schools in 2011.
Ensuring sustainability in environment and business
operations
We will continue to maintain and improve our processes
through Good Manufacturing Practices, Hazard Analysis
Critical Control Point (HACCP) System and Quality
Management System (ISO 9001). In addition, we are fully
committed towards our responsibility on environmental
issues in the conduct of our business. Our commitment
and efforts towards the environment is embodied in the
ISO 14001 Environment Management System, a systematic
management approach towards the environment. Our Safety,
Health & Environment Policy outlines our commitment and
position on this.
Safety is paramount in all aspects of our operations
We are committed in ensuring a safe environment for our
employees, contractors and visitors who work on-site
through our demonstration of safe work practices. Concerted
efforts are continually made to create awareness on the
collective responsibility among our employees for the
prevention of occupational injuries and health hazards when
working within our vicinity of the workplace. We have in place
OHSAS 18001 (Occupational Health and Safety Assessment
Series) that assist the Company in managing and controlling
the health and safety risks and improving our occupational
health and safety performance.
Energy, water and waste management
Managing water consumption is an important priority for
the Company. Various water recycling improvement projects
were undertaken at production plants. Our Engineering
department also regularly conducts audit of leakages to
avoid wastages. We made conscious efforts in improving our
manufacturing processes and continuously work towards the
reduction in the use of energy throughout the Company. We
use natural gas in our manufacturing operations where the
consumption and trend of usage is continuously monitored.
We regularly made efforts to ensure we have efficient
operations in place to minimise the use of natural gas. We
have a systematic procedure for the disposal of market-
returned products, used packaging materials and scheduled
waste. We believe all these efforts contribute to a cleaner
and greener environment.
Foqus quality system
The Royal FrieslandCampina Group safeguards food safety
and food quality with Foqus a broad-based quality system
that is applicable for both the farms of the member dairy
farmers and FrieslandCampinas production and distribution
facilities. Foqus supports the Company in the development of
an increasingly robust production process. With Foqus audit
implementation conducted in 2011, stricter requirements are
enforced to ensure all our products and the way in which they
are produced meet our own high standards on food safety,
quality, labour safety and environment.
Continuous Improvement Programmes
In 2011, the Company implemented Lean and Six Sigma
transformation programme as a continuous improvement
tool. Various focused improvement programmes are
conducted to reduce waste at all levels of operation
processes. Waste elimination has helped to reduce cost and
aids in faster operations which allows the Company to be
more responsive to our customers, thereby driving growth.
Halal Standards
We introduced the Halal Policy statement which spells out
the Companys commitment to provide Halal products to our
consumers by adhering to Halal requirements which sets high
standards for hygiene, quality, safety and sanitary conditions.
Sustainable palm oil
Since January 2011, Dutch Lady Malaysia has purchased
sustainable palm oil certificated in accordance with the
Round Table for Sustainable Palm Oil (RSPO) principles and
criteria.
Moving society forward by giving back
We attach great value to establishing and maintaining good
relationship with our consumers, customers, shareholders,
suppliers, business partners, organisations and communities in
which we operate. We fully acknowledge and remain committed to
conduct our business responsibly whilst contributing to society.
Supporting local dairy farmers
Dutch Lady Malaysia started its Dairy Development
Programme (DDP) in 2008 in cooperation with the
Department of Veterinary Service (DVS) and the Embassy
of the Kingdom of the Netherlands. The programme is
designed to help local farmers produce better quality milk
in higher volumes and helps to ensure sustainability of milk
supply to us. In 2011, seven workshops on Dairy Development
were conducted for local dairy farmers nationwide and DVS
officials. Farmers were given access to the Dutch experts
brought in for the workshops and the DDP became a good
platform for farmers to network and share their ideas
with the DVS officials and vice versa. As a result of this
programme, the quality and volume of local fresh milk has
improved.
21
Embedding CSR among employees through volunteerism
Dutch Lady Blue Brigade (DLBB), the Companys employee
volunteering pool for community outreach programmes
set up in 2010, continues to support the Company in its
activities. Spreading the goodness of dairy is seen as pivotal
in most of the DLBB activities. In 2011, DLBB continues to
actively participate in nine community activities with media,
charitable organisations, childrens homes and schools. To
date, DLBB members has donated more than 3,000 hours
of their personal time for worthy causes.
Fundraising to support local underprivileged childrens
organisations
In August 2011, Dutch Lady Malaysia partnered with Giant
Hypermarket Malaysia and Tesco Stores (Malaysia) Sdn.
Bhd. and ran two separate fundraising campaigns in aid
of underprivileged children where RM194,760 were raised
for StART Society (a non-profit organisation that provides
underprivileged children with free lessons in music, arts,
dance and drama) and for 15 Childrens Centres under the
purview of the Department of Social Welfare Malaysia.
Being the Number One Employer in Dairy
We want to be an employer that respects its employees and
inspires them to give their best to the Company. We aim to
provide a working environment characterised by fairness, respect
and integrity. We have always taken seriously the value of our
people and are committed to good employment practices. In
our ambition to be the number one dairy company in Malaysia,
we have adopted the Groups Way We Work working ethos and
localised it to enable our employees to understand and assimilate
into their own working culture. The Passion for BLUE (PfB)
change programme introduced in 2010 as a strategy to realise
our goals, was improved in 2011 through stronger co-operation
amongst teams in the company. The BLUE values, which is based
on the Group's 'Way We Work' was coined to help build a common
set of values that employees can easily remember and assimilate.
It is an acronym of four key values: Believe in Growth, Look
Forward, Unite as One Team and Excel in Execution. Culture Club,
a group of select employees formed in 2010, continues to support
the Companys objective of driving the BLUE values among our
employees through various employee engagement activities.
Employee engagement
We pride ourselves on ensuring open two-way communication
channels are available to all employees. To facilitate better
understanding of the Companys objectives and directions,
we ensure line of sight through various face-to-face
communications, town hall sessions, monthly MD podcasts,
employees newsletter known as SUARA and a regularly
updated employee portal. We have organised various
employee engagement initiatives, ranging from trainings to
social gatherings like the Family Day in September as well
as recreational activities through the Dutch Lady Sports
and Social Club. We continue to recognise our employees
through various employee recognition programmes.
corporate social responsibility
22
The Company introduced a 90-day paid maternity leave effective January 2011. This move further
refects the Companys support towards the bond between mothers and their infants. In addition, a
dedicated Mother Care room was designed in our new offce to support our working mothers to
continue with their maternal care duties.
Employee Engagement Survey known as the BLUE Pulse was
continually administered every quarter as a key indicator
of how we are performing as an employer. It is important
for us to know if our employees believe in the Company's
objectives and values, that they have a sense of belonging
in the company and that they will strive for the Company.
The results give us an insight on what areas we should focus
to help improve the working experience for our employees.
In 2011, to help improve the working environment of our
employees, we moved the commercial office to Quill 9
building which is across the road from our factory. The open
plan in the new office contributes to better communications
and more conducive working environment
Training and development
We place highest importance in ensuring that our people
are continuously equipped with the necessary skills and
knowledge to keep us at the forefront of our business. Various
programmes were held which focused on upgrading the
competencies of our people to help unleash their potential
and productivity while creating a talent pool for effective
succession planning. Investment is made in structured
on-the-job training, workshops and seminars covering areas
on management, technical, communication, leadership and
soft-skills. We have in place a Talent Assessment Programme
to identify and develop future leaders. We also have a Dutch
Lady Associate Programme, a graduate training programme
to identify and develop energetic young talents with
excellent leadership and managerial qualities. A total of 10
trainees were recruited during the year.
Corporate and personal conduct
To us, sustainability means carrying out our business in a
socially responsible and holistic manner to ensure continued
growth and success for the benefit of both the present and
future generations. In pursuing this, we are guided by the
Royal FrieslandCampinas Code of Conduct and Anti-Trust
Code of Conduct which sets out the values, principles and
guidelines for how we should conduct our business to ensure
integrity, transparency and accountability in all our business
undertakings. Employees are contractually bound to abide by
the Code of Conduct when conducting themselves at work
and with external stakeholders . Bribery and corruption is
not tolerated. Employees are encouraged to report any
malpractices without fear or favour to the Companys local
trusted representatives or an external contact at the Group's
head office. Whistle-Blowing Procedures are in place for
employees to address these concerns.

Responsibility to shareholders and investors
We recognise the importance of maintaining transparency
and accountability to our shareholders and investors. In line
with good governance practices, we place utmost importance
on compliance, accountability and transparency in the
disclosure of information to our stakeholders. We frequently
engage research analysts, fund managers and the media
about our Companys performance, new product launches
and corporate social activities. The Companys website at
www.dutchlady.com.my provides corporate and financial
information as well as news, highlights, events, product
information and nutritional advice.
23
The Board has overall responsibility for the Companys system of
internal controls, which includes the establishment of a control
environment and framework, and reviews its effectiveness,
adequacy and integrity. The Board is responsible for identifying the
major business risks faced by the Company and for determining the
course of actions to manage those risks. The Company continually
evaluates and manages risks and reviews the planned actions.
The Board maintains full control over strategic, financial,
organisational and compliance issues and has put in place an
organisation with formal lines of responsibility and delegation of
authority. The Board and Audit Committee have delegated to
Management this implementation of the system of internal controls
within an established framework throughout the Company.
Internal Control Structure and Processes
The system of internal controls is designed to safeguard the assets
of the Company, to ensure the maintenance of proper accounting
records and to provide reliable fnancial information for use within
the business and for publication. However, these controls provide
only reasonable and not absolute assurance against material error,
misstatement, loss or breach of set regulations.
The principal features of the Companys internal control structure
are summarised as follows:
Board Committees
The functions and responsibilities of the various committees
of the Board of Directors are defned in the terms of reference.
These include the Audit Committee, the Nomination Committee
and the Remuneration Committee.
Organisational Structure and Responsibility Levels
The Company has an organisational structure with formal
lines of accountability and authorisation, approval and control
procedures within which senior management operates.
Authority Levels, Acquisitions and Disposals
There are authorisation procedures and delegated authority
levels for major tenders, major capital expenditure projects,
acquisitions and disposals of businesses and other signifcant
transactions.
Investment decisions are delegated to Management in
accordance with authority limits. Appraisal and monitoring
procedures are applied to all major investment decisions.
Board of Directors approval is required for key treasury
matters including equity and loan fnancing, approving cheque
signatories and the opening of bank accounts.
Procedures and Control Environment
Control procedures and environment at Company and individual
business unit levels and on staff policies have been established.
The integrity and competence of personnel are ensured
through pre-determi ned recruitment standards, the Hay
Reward Management System, a comprehensive Performance
Management System, talent assessment programme and
management organisation development.
The Company also publishes and distributes to every employee
guidelines on safety, health and environment.
Standards of Business Ethics
Employees are contractually bound to observe prescribed
standards of business ethics when conducting themselves at
work and in their relationship with external parties, such as
customers and suppliers. Employees are expected to conduct
themselves with integrity and objectivity and not be placed in
a position of confict of interest.
In line with this, the Company has a comprehensive Employee
Handbook, Code of Conduct and Whistle-Blowing Procedures.
In addition, the Groups Anti-Trust Code of Conduct is cascaded
to all relevant employees.
Formalised Strategic Planning and Operating Plan
Processes
The Company undertakes a comprehensive business planning
and budgeting process each year, to establish plans and targets
against which performance is monitored on an ongoing basis.
Key business risks are identifed during the business planning
process and are reviewed regularly during the year.
Reporting and Review
The Companys Management Team monitors on a daily or
monthly basis the key performance indicators and reviews the
fnancial results and forecasts for all the businesses within the
Company against the operating plans and annual budgets. The
results are communicated on a regular basis to employees.
The Managing Director regularly reports to the Audit Committee
and Board of Directors on signifcant changes in the business
and the external environment in which the Company operates.
Financial Performance
The preparation of quarterly and full year fnancial results and
the state of affairs, as published to shareholders, are reviewed
and approved by the Board. The full year Financial Statements
are also audited by External Auditors.
statement of internal control
24
25
Assurance Compliance
The Board, Audit Committee and Management review
quarterly the internal audit reports and monitor the status of
the implementation of corrective actions to address internal
control weaknesses noted.
Internal Control Framework
The Company has in place a risk and control framework which
is based on the COSO Internal Control Framework, a world
standard against which companies measure the effectiveness
of the internal control systems in managing business risks.
During the year, the Company completed the implementation
of the Groups Internal Control Framework (ICF). ICF is the new
internal control standard within the Group.
Update on Developments
Quarterly reporting is made to the Board at its meetings of
legal, accounting and environmental developments.
The Internal Audit function independently focuses on the key areas
of business risk based on a work programme approved annually with
the Audit Committee, and reports on the systems of fnancial and
operational controls on a quarterly basis to the Audit Committee.
The Internal Audit team advises executive and operational
management on areas for improvement and subsequently reviews
the extent to which its recommendations have been implemented.
The extent of compliance is reported to the Audit Committee on a
quarterly basis.
The Audit Committee in turn reviews the effectiveness of the
system of internal controls in operation and reports the results
thereon to the Board.
In addition to internal controls, the Directors have ensured that
health and safety regulations, environmental controls and political
risks have been considered; and relevant laws and regulations
complied with. The quality of the Companys products is paramount.
Quality Assurance, Quality Control and meeting customers'
requirements are prime considerations and this is achieved by the
Company being continuously ISO 9001 certifed since 1995. Strong
emphasis is also given to food safety with Good Manufacturing
Practices and HACCP (Hazard Analysis Critical Control Point)
System that covers all plants.
The Company has in place the ISO 14001 Environment Management
System, a systematic management approach to the environmental
concerns of the Company, and OHSAS 18001, the Occupational
Health and Safety Assessment Series that contributes to the
protection of employees from hazards and the elimination of work
related injuries and health-related issues.
Conclusion
The Directors have reviewed the effectiveness, adequacy and
integrity of the system of internal controls in operation during the
fnancial year through the monitoring process set out above.
There were no material losses incurred during the current fnancial
year as a result of weaknesses in internal control. Management
continues to take measures to strengthen the control environment.
Excel
in
Execution
Focusing on key priorities and
delivering in full and on time
Execution is key to strategic success.
Based on this premise, focus is given
to critical initiatives and drivers
that generate energy and output to
deliver on our value proposition in an
effective, effcient and timely manner.
Operational priorities, team roles
and scorecards are defned, aligned
and consistently communicated to
all employees towards building high
commitment and implementation
support. We aim to deliver superior
value to our customers, thereby
making Dutch Lady Malaysia the
premier brand for nutritious dairy
products among Malaysians.
The Directors have pleasure in submitting their report and the
audited fnancial statements of the Company for the year ended
31 December 2011.
Principal activities
The Company manufactures and distributes a wide range of dairy
products and fruit juice drinks, such as specialised powders for
infant and growing children, liquid milk in different packaging
formats and yoghurts. The Company markets these products
under various brand names such as Dutch Lady, Frisolac, Friso and
Joy. There has been no signifcant change in the nature of these
activities during the fnancial year.
Results
RM000
Proft for the year 108,082

Reserves and provisions
There were no material transfers to or from reserves and provisions
during the fnancial year under review except as disclosed in the
fnancial statements.
Dividends
Since the end of the previous fnancial year, the Company paid:
i) a fnal ordinary dividend of 10.00 sen per ordinary share less
tax at 25% totalling RM4,800,000 (7.50 sen net per ordinary
share) in respect of the year ended 31 December 2010 on
1 July 2011;
ii) a fnal ordinary dividend of 5.00 sen per ordinary share, tax
exempt, totalling RM3,200,000 in respect of the year ended 31
December 2010 on 1 July 2011;
iii) a special interim ordinary dividend of 30.00 sen per ordinary
share less tax at 25% totalling RM14,400,000 (22.50 sen net
per ordinary share) in respect of the year ended 31 December
2011 on 1 July 2011;
iv) an interim ordinary dividend of 10.00 sen per ordinary share
less tax at 25% totalling RM4,800,000 (7.50 sen net per
ordinary share) in respect of the year ended 31 December 2011
on 28 December 2011; and
v) a special interim ordinary dividend of 40.00 sen per ordinary
share less tax at 25% totalling RM19,200,000 (30.00 sen net
per ordinary share) in respect of the year ended 31 December
2011 on 28 December 2011.
Directors of the Company
Directors who served since the date of the last report are:

Sebastiaan Gijsbertus van den Berg
Kapil Garg
Foo Swee Leng
Boey Tak Kong
Dato Dr. Mhd Nordin bin Mohd. Nor
Huang Shi Chin
In accordance with Article 94(a) of the Companys Articles of
Association, Dato Zainal Abidin bin Putih and Mr. Sebastiaan
Gijsbertus van den Berg retire by rotation at the forthcoming
Annual General Meeting and, being eligible offer themselves for
re-election.
Directors interests
None of the Directors holding offce at the end of the fnancial year
held shares or had benefcial interest in the shares of the Company
or of related companies during and at the end of the fnancial year.
Under the Companys Articles of Association, the Directors are not
required to hold any shares in the Company.
Directors benefts
Since the end of the previous fnancial year, no Director of
the Company has received nor become entitled to receive any
beneft (other than a beneft included in the aggregate amount
of emoluments received or due and receivable by Directors as
shown in the fnancial statements or the fxed salaries of full-time
employees of the Company) by reason of a contract made by the
Company or a related corporation with the Director or with a frm
of which the Director is a member, or with a company in which the
Director has a substantial fnancial interest.
There were no arrangements during and at the end of the fnancial
year which had the object of enabling Directors of the Company
to acquire benefts by means of the acquisition of shares in or
debentures of the Company or any other body corporate.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital
of the Company during the fnancial year.
There were no debentures issued during the fnancial year.
directors' report
28
In the opinion of the Directors, except for the impairment loss on
property, plant and equipment of RM2,000,000 as disclosed in
the Note 12 to the fnancial statements, the fnancial performance
of the Company for the year ended 31 December 2011 have not
been substantially affected by any item, transaction or event of
a material and unusual nature nor has any such item, transaction
or event occurred in the interval between the end of that fnancial
year and the date of this report.
Holding companies

The immediate and ultimate holding companies during the
fnancial year are FrieslandCampina DLMI Malaysia Holding BV
and Royal FrieslandCampina NV respectively. Both companies are
incorporated in the Netherlands.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to
accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a
resolution of the Directors:
Sebastiaan Gijsbertus van den Berg
Huang Shi Chin
Petaling Jaya
24 February 2012
Options granted over unissued shares
No options were granted to any person to take up unissued shares
of the Company during the fnancial year.

Other statutory information
Before the statement of fnancial position and statement of
comprehensive income of the Company were made out, the
Directors took reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate
provision made for doubtful debts; and
ii) any current assets which were unlikely to be realised in the
ordinary course of business 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:
i) that would render the amount written off for bad debts, or the
amount of the provision for doubtful debts, in the Company
inadequate to any substantial extent; or
ii) that would render the value attributed to the current assets
in the fnancial statements of the Company misleading; or
iii) which have arisen which render adherence to the existing
method of valuation of assets or liabilities of the Company
misleading or inappropriate; or
iv) not otherwise dealt with in this report or the fnancial
statements, that would render any amount stated in the
fnancial statements of the Company misleading.
At the date of this report, there does not exist:
i) any charge on the assets of the Company that has arisen since
the end of the fnancial year and which secures the liabilities
of any other person; or
ii) any contingent liability in respect of the Company that has
arisen since the end of the fnancial year.

No contingent liability or other liability of the Company has
become enforceable, or is likely to become enforceable within the
period of twelve months after the end of the fnancial year which,
in the opinion of the Directors, will or may substantially affect the
ability of the Company to meet its obligations as and when they
fall due.
29
Note
2011
RM000
2010
RM000
ASSETS
Property, plant and equipment 3 71,602 69,803
Intangible assets 4 2,446 3,443
TOTAL NON-CURRENT ASSETS 74,048 73,246
Inventories 5 93,448 72,722
Trade and other receivables 6 36,714 75,1 76
Prepayments 1 , 1 61 689
Cash and cash equivalents 7 193,143 85,657
TOTAL CURRENT ASSETS 324,466 234,244
TOTAL ASSETS 398,514 307,490
EQUITY
Share capital 8 64,000 64,000
Retained earnings 8 195,154 133,472
TOTAL EQUITY 259,154 1 97,472
LIABILITIES
Deferred tax liabilities 9 4,051 3,757
TOTAL NON-CURRENT LIABILITIES 4,051 3,757
Trade and other payables 10 121,832 99, 638
Provision 11 375 348
Current tax liabilities 13,102 6,275
TOTAL CURRENT LIABILITIES 135,309 106, 261
TOTAL LIABILITIES 139,360 1 1 0,018
TOTAL EQUITY AND LIABILITIES 398,514 307,490
The notes on pages 34 to 58 are an integral part of these fnancial statements.
statement of financial position
as at 31 december 2011
30
Note
2011
RM000
2010
RM000
restated
Revenue 810,647 696,625
Cost of sales (506,175) (447,961)
GROSS PROFIT 304,472 248,664
Other income 2,057 1 , 1 47
Distribution expenses (106,180) (92,128)
Administrative expenses (26,134) (22,657)
Other expenses (34,847) (45,805)
RESULT FROM OPERATING ACTIVITIES 139,368 89, 221
Interest income 3,104 883
Finance costs (919) -
PROFIT BEFORE TAX 12 141, 553 90,104
Income tax expenses 14 (33,471) (26,217)
PROFIT FOR THE YEAR AND TOTAL COMPREHENSIVE
INCOME FOR THE YEAR
108,082 63,887
BASIC EARNINGS PER ORDINARY SHARE (SEN) 15 168.90 99.80
statement of comprehensive income
for the year ended 31 december 2011
31
Attributable to owners of the Company
Note
Non-distributable
Share capital
RM000
Distributable
Retained
earnings
RM000
Total
equity
RM000
AT 1 JANUARY 2010 64,000 115,985 179,985
Total comprehensive income for the year - 63,887 63,887
Dividends to owners of the Company 16 - (46,400) (46,400)
AT 31 DECEMBER 2010/ 1 JANUARY 2011 64,000 133,472 197,472
Total comprehensive income for the year - 108,082 108,082
Dividends to owners of the Company 16 - (46,400) (46,400)
AT 31 DECEMBER 2011 64,000 195,1 54 259,1 54
Note 8 Note 8
statement of changes in equity
32
Note
2011
RM000
2010
RM000
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers and other receivables 849,442 730,398
Cash paid to suppliers and employees (661,156) (607,007)
CASH GENERATED FROM OPERATIONS 188,286 1 23, 391
Income tax paid (26,350) (25,002)
NET CASH FROM OPERATING ACTIVITIES 1 61 ,936 98,389
CASH FLOWS FROM INVESTING ACTIVITIES
Additions of property, plant and equipment (10,882) (9,089)
Additions of intangible assets (823) (136)
Proceeds from disposal of property, plant and equipment 1,470 278
Interest received 3,104 883
NET CASH USED IN INVESTING ACTIVITIES (7, 1 31 ) (8,064)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid (919) -
Dividends paid 16 (46,400) (46,400)
NET CASH USED IN FINANCING ACTIVITIES (47, 319) (46,400)
Net increase in cash and cash equivalents 107,486 43,925
Cash and cash equivalents at 1 January (i) 85,657 41 , 732
CASH AND CASH EQUIVALENTS AT 31 DECEMBER (i) 193,143 85, 657
i) Cash and cash equivalents
Cash and cash equivalents included in the statement of cash fows comprise the following statement of fnancial position
amounts:
Note
2011
RM000
2010
RM000
Cash and bank balances 7 85,945 46,657
Deposits placed with licensed banks 7 107,198 39,000
193,143 85,657
statement of cash flows
33
FRSs, Interpretations and amendments effective for
annual periods beginning on or after 1 July 2012
Amendments to FRS 101, Presentation of Financial
Statements Presentation of Items of Other
Comprehensive Income
annual periods beginning on or after 1 January 2013
FRS 9, Financial Instruments (2009)
FRS 9, Financial Instruments (2010)
FRS 10, Consolidated Financial Statements
FRS 11, Joint Arrangements
FRS 12, Disclosure of Interests in Other Entities
FRS 13, Fair Value Measurement
FRS 119, Employee Benefits (2011)
FRS 127, Separate Financial Statements (2011)
FRS 128, Investments in Associates and Joint Ventures
(2011)
IC Interpretation 20, Stripping Costs in the Production
Phase of a Surface Mine
The Companys financial statements for annual period
beginning on 1 January 2012 will be prepared in accordance
with the Malaysian Financial Reporting Standards (MFRSs)
issued by the MASB and International Financial Reporting
Standards (IFRSs). As a result, the Company will not be
adopting the above FRSs, Interpretations and amendments.
(b) Basis of measurement
The fnancial statements have been prepared on the
historical cost basis other than as disclosed in the notes to
the fnancial statements.
(c) Functional and presentation currency
These fnancial statements are presented in Ringgit Malaysia
(RM), which is the Companys functional currency. All
fnancial information is presented in RM and has been
rounded to the nearest thousand, unless otherwise stated.
(d) Use of estimates and judgements
The preparation of the fnancial statements in conformity
with FRSs requires management to make judgements,
estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected.
Dutch Lady Milk Industries Berhad is a public limited liability
company, incorporated and domiciled in Malaysia and is listed on
the Main Market of Bursa Malaysia Securities Berhad. The address
of the principal place of business and registered offce of the
Company is as follows:
Principal place of business / Registered offce
Level 5, Quill 9
No 112, Jalan Semangat
46300 Petaling Jaya
The Company manufactures and distributes a wide range of dairy
products and fruit juice drinks, such as specialised powders for
infant and growing children, liquid milk in different packaging
formats and yoghurts. The Company markets these products under
various brand names such as Dutch Lady, Frisolac, Friso and Joy.
The immediate and ultimate holding companies during the
fnancial year are FrieslandCampina DLMI Malaysia Holding BV
and Royal FrieslandCampina NV respectively. Both companies are
incorporated in the Netherlands.
These fnancial statements were authorised for issue by the Board
of Directors on 24 February 2012.
1 BASIS OF PREPARATION
(a) Statement of compliance
The fnancial statements of the Company have been
prepared in accordance with Financial Reporting Standards
(FRSs), generally accepted accounting principles and the
Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments
and interpretations of the FRS framework that have been
issued by the Malaysian Accounting Standards Boards
(MASB) but have not been adopted by the Company:

IC Interpretation 19, Extinguishing Financial Liabilities
with Equity Instruments
Amendments to IC Interpretation 14, Prepayments of a
Minimum Funding Requirement
FRS 124, Related Party Disclosures (revised)
Amendments to FRS 1, First-time Adoption of Financial
Reporting Standards Severe Hyperinflation and Removal
of Fixed Dates for First-time Adopters
Amendments to FRS 7, Financial Instruments: Disclosures
Transfers of Financial Assets
Amendments to FRS 112, Income Taxes Deferred Tax:
Recovery of Underlying Assets
notes to the financial statements
34
There are no signifcant areas of estimation uncertainty
and critical judgements in applying accounting policies
that have signifcant effect on the amounts recognised
in the fnancial statements, other than as disclosed in
Note 3 estimation of impairment loss on property, plant
and equipment and Note 11 estimation of provision for
employees pension contribution.
2 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied
consistently to the periods presented in these financial
statements, and have been applied consistently by the
Company, unless otherwise stated.
(a) Foreign currency transactions
Transactions in foreign currencies are translated to the
functional currency of the Company at exchange rates at
the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at reporting period are retranslated to the
functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign
currencies are not retranslated at the end of the reporting
date except for those that are measured at fair value which
are retranslated to the functional currency at the exchange
rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are
recognised in proft or loss.
(b) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised
in the statement of financial position when, and only
when, the Company becomes a party to the contractual
provisions of the instrument.
A financial instrument is recognised initially, at its fair
value plus, in the case of a financial instrument not at
fair value through profit or loss, transaction costs that
are directly attributable to the acquisition or issue of
the financial instrument.
An embedded derivative is recognised separately from
the host contract and accounted for as a derivative if,
and only if, it is not closely related to the economic
characteristics and risks of the host contract and
the host contract is not categorised at fair value
through profit or loss. The host contract, in the event
an embedded derivative is recognised separately, is
accounted for in accordance with policy applicable to
the nature of the host contract.
(ii) Financial instrument categories and subsequent
measurement
The Company categorises financial instruments as
follows:
Financial assets
Loans and receivables
Loans and receivables category comprises trade and
other receivables and cash and cash equivalents.
Financial assets categorised as loans and receivables
are subsequently measured at amortised cost using the
effective interest method.
All financial assets are subject to review for impairment
(see note 2(h)(i)).
Financial liabilities
All financial liabilities are subsequently measured at
amortised cost.
(iii) Hedge accounting
Cash flow hedge
A cash flow hedge is a hedge of the exposure to
variability in cash flows that is attributable to a
particular risk associated with a recognised asset
or liability or a highly probable forecast transaction
and could affect the profit or loss. In a cash flow
hedge, the portion of the gain or loss on the hedging
instrument that is determined to be an effective hedge
is recognised in other comprehensive income and the
ineffective portion is recognised in profit or loss.
Subsequently, the cumulative gain or loss recognised in
other comprehensive income is reclassified from equity
into profit or loss in the same period or periods during
which the hedged forecast cash flows affect profit
or loss. If the hedge item is a non-financial asset or
liability, the associated gain or loss recognised in other
comprehensive income is removed from equity and
included in the initial amount of the asset or liability.
However, loss recognised in other comprehensive
income that will not be recovered in one or more future
periods is reclassified from equity into profit or loss.
Cash flow hedge accounting is discontinued
prospectively when the hedging instrument expires
or is sold, terminated or exercised, the hedge is no
longer highly effective, the forecast transaction is no
longer expected to occur or the hedge designation is
revoked. If the hedge is for a forecast transaction, the
cumulative gain or loss on the hedging instrument
remains in other comprehensive income until the
forecast transaction occurs. When the forecast
transaction is no longer expected to occur, any
related cumulative gain or loss recognised in other
comprehensive income on the hedging instrument is
reclassified from equity into profit or loss.
(iv) Derecognition
A financial asset or part of it is derecognised when,
and only when, the contractual rights to the cash
flows from the financial asset expire or the financial
35
(iii) Depreciation
Depreciation is calculated over the depreciable
amount, which is the cost of an asset, or other amount
substituted for cost, less its residual value.
Depreciation is recognised in profit or loss on a
straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment.
Leased assets are depreciated over the shorter of the
lease term and their useful lives unless it is reasonably
certain that the Company will obtain ownership by the
end of the lease term. Property, plant and equipment
under construction are not depreciated until the assets
are ready for their intended use.
The estimated useful lives are as follows:

Depreciation methods, useful lives and residual values
are reviewed, and adjusted as appropriate at end of the
reporting period.
During the current financial year, the Company revised
the estimated economic useful lives and accordingly,
the estimated useful lives of certain buildings and plant
and machinery have changed with effect from 1
January 2011 from a range of 5 25 years to a range
of 5 33 years. The revision has been accounted for
prospectively as a change in accounting estimates
and the effect on the financial statements is to reduce
depreciation charge and increase profit before taxation
by RM1,831,000 for the current financial year.
(d) Leased assets
(i) Finance lease
Leases in terms of which the Company assumes
substantially all the risks and rewards of ownership
are classified as finance leases. On initial recognition,
the leased asset is measured at an amount equal to
the lower of its fair value and the present value of
the minimum lease payments. Subsequent to initial
recognition, the asset is accounted for in accordance
with the accounting policy applicable to that asset.
Minimum lease payments made under finance leases
are apportioned between the finance expense and
the reduction of the outstanding liability. The finance
expense is allocated to each period during the lease term
asset is transferred to another party without retaining
control or substantially all risks and rewards of the
asset. On derecognition of a financial asset, the
difference between the carrying amount and the sum
of the consideration received (including any new asset
obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised in
equity is recognised in the profit or loss.
A financial liability or a part of it is derecognised when,
and only when, the obligation specified in the contract
is discharged or cancelled or expires. On derecognition
of a financial liability, the difference between the
carrying amount of the financial liability extinguished
or transferred to another party and the consideration
paid, including any non-cash assets transferred or
liabilities assumed, is recognised in the profit or loss.
(c) Property, plant and equipment
(i) Recognition and measurement
Items of property, plant and equipment are measured at
cost less any accumulated depreciation and any
accumulated impairment losses.
Cost includes expenditures that are directly
attributable to the acquisition of the asset and any
other costs directly attributable to bringing the asset
to working condition for its intended use, and the costs
of dismantling and removing the items and restoring
the site on which they are located. The cost of self-
constructed assets also includes the cost of materials
and direct labour.
Purchased software that is integral to the functionality
of the related equipment is capitalised as part of that
equipment.
When significant parts of an item of property, plant
and equipment have different useful lives, they are
accounted for as separate items (major components)
of property, plant and equipment.
The gain or loss on disposal of an item of property,
plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount
of property, plant and equipment and is recognised
net within other income and other expenses
respectively in profit or loss.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant
and equipment is recognised in the carrying amount
of the item if it is probable that the future economic
benefits embodied within the part will flow to the
Company, and its cost can be measured reliably. The
carrying amount of the replaced part is derecognised
to profit or loss. The costs of the day-to-day servicing
of property, plant and equipment are recognised in
profit or loss as incurred.
36
2011 2010
long term
leasehold land
70 - 99 years 70 - 99 years
buildings 10 - 25 years 10 - 25 years
plant and
machinery
5 - 33 years 5 - 13.3 years
motor vehicles 5 years 5 years
furniture and
equipment
5 - 10 years 5 - 10 years
so as to produce a constant periodic rate of interest on
the remaining balance of the liability. Contingent lease
payments are accounted for by revising the minimum
lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is
classified as property, plant and equipment.
(ii) Operating leases
Leases, where the Company does not assume
substantially all the risks and rewards of ownership are
classified as operating leases and the leased assets are
not recognised on the statement of financial position.
Payments made under operating leases are recognised
in profit or loss on a straight-line basis over the term
of the lease. Lease incentives received are recognised
in profit or loss as an integral part of the total lease
expense, over the term of the lease. Contingent rentals
are charged to profit or loss in the reporting period in
which they are incurred.
Leasehold land which in substance is an operating
lease is classified as prepaid lease payments.
(e) Intangible assets
(i) Other intangible assets
Other intangible assets that are acquired by the
Company, which have finite useful lives, are measured
at cost less any accumulated amortisation and any
accumulated impairment losses.
Costs that are directly associated with identifiable
computer software and that will probably generate
economic benefits exceeding cost beyond one year
or cost savings to the Company, and are not integral
to other equipment are recognised as intangible
assets. These costs include the employee costs of
software development and an appropriate portion of
relevant overheads.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates. All other
expenditure is recognised in profit or loss as incurred.
(iii) Amortisation
Other intangible assets are amortised from the date
they are available for use.
Amortisation is recognised in profit or loss on a
straight-line basis over the estimated useful lives of
intangible assets.
The estimated useful life of computer software for the
current and comparative periods is 5 years.
Amortisation methods, useful lives and residual values
are reviewed at the end of each reporting period and
adjusted, if appropriate.
(f) Inventories
Inventories are measured at the lower of cost and net
realisable value.
The cost of inventories is measured based on the frst-in
frst-out principle and includes expenditure incurred in
acquiring the inventories, production or conversion costs
and other costs incurred in bringing them to their existing
location and condition. In the case of fnished goods, cost
includes an appropriate share of production overheads
based on normal operating capacity.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and the estimated costs necessary to make
the sale.
(g) Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, balances
and deposits placed with licensed banks.
(h) Impairment
(i) Financial assets
All financial assets are assessed at each reporting date
whether there is any objective evidence of impairment
as a result of one or more events having an impact on
the estimated future cash flows of the asset. Losses
expected as a result of future events, no matter how
likely, are not recognised. For an investment in equity
instrument, a significant or prolonged decline in the
fair value below its cost is an objective evidence of
impairment.
An impairment loss in respect of loans and receivables
is recognised in profit or loss and is measured as
the difference between the assets carrying amount
and the present value of estimated future cash flows
discounted at the assets original effective interest
rate. The carrying amount of the asset is reduced
through the use of an allowance account.
37
(ii) Other assets
The carrying amounts of other assets except for
inventories are reviewed at the end of each reporting
period to determine whether there is any indication
of impairment. If any such indication exists, then the
assets recoverable amount is estimated.
For the purpose of impairment testing, assets are
grouped together into the smallest group of assets
that generates cash inflows from continuing use that
are largely independent of the cash inflows of other
assets (known as cash-generating unit).
The recoverable amount of an asset or cash-generating
unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre-tax discount rate that
reflects current market assessments of the time value
of money and the risks specific to the asset or cash-
generating unit.
An impairment loss is recognised if the carrying
amount of an asset or its related cash-generating unit
exceeds its estimated recoverable amount.
Impairment losses are recognised in the profit or loss.
Impairment losses recognised in respect of cash-
generating units are allocated to reduce the carrying
amount of the other assets in the cash-generating
unit (or a group of cash-generating units) on a pro rata
basis.
Impairment losses recognised in prior periods are
assessed at the end of each reporting period for any
indications that the loss has decreased or no longer
exists. An impairment loss is reversed if there has
been a change in the estimates used to determine the
recoverable amount since the last impairment loss
was recognised. An impairment loss is reversed only
to the extent that the assets carrying amount does
not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no
impairment loss had been recognised. Reversals of
impairment losses are credited to profit or loss in the
year in which the reversals are recognised.
(i) Equity instruments
Instruments classifed as equity are measured at cost on
initial recognition and are not remeasured subsequently.
(j) Employee benefts
(i) Short term employee benefits
Short term employee benefit obligations in respect of
salaries, annual bonuses, paid annual leave and sick
leave are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognised for the amount expected to
be paid under short-term cash bonus if the Company
has a present legal or constructive obligation to pay
this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
(ii) State plans
The Companys contributions to statutory pension
funds are charged to profit or loss in the financial
year to which they relate. Once the contributions
have been paid, the Company has no further payment
obligations.
(iii) Termination benefits
Termination benefits are recognised as an expense
when the Company is demonstrably committed, without
realistic possibility of withdrawal, to a detailed formal
plan to either terminate employment before the normal
retirement date, or to provide termination benefits as
a result of an offer made to voluntary redundancy.
Termination benefits for voluntary redundancies are
recognised as expenses if the Company has made an
offer encouraging voluntary redundancy, it is probable
that the offer will be accepted, and the number of
acceptances can be estimated reliably.
(k) Provisions
A provision is recognised if, as a result of a past event, the
Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle the
obligation.
(l) Revenue and other income
(i) Goods sold
Revenue from the sale of goods in the course of
ordinary activities is measured at fair value of the
consideration received or receivable, net of returns
and allowances, trade discounts and volume rebates.
Revenue is recognised when the significant risks and
38
rewards of ownership have been transferred to the
customer, recovery of the consideration is probable,
the associated costs and possible return of goods
can be estimated reliably, and there is no continuing
management involvement with the goods, and the
amount of revenue can be measured reliably. If it
is probable that discounts will be granted and the
amount can be measured reliably, then the discount is
recognised as a reduction of revenue as the sales are
recognised.
(ii) Interest income
Interest income is recognised as it accrues using the
effective interest method in profit or loss.
(m) Income tax
Income tax expense comprises current and deferred tax.
Current tax and deferred tax are recognised in proft or loss.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted
or substantively enacted by the end of reporting period,
and any adjustment to tax payable in respect of previous
fnancial years.
Deferred tax is recognised using the liability method,
providing for temporary differences between the carrying
amounts of assets and liabilities in the statement of
fnancial position and their tax bases. Deferred tax is not
recognised for the initial recognition of assets or liabilities
in a transaction that is not a business combination and
that affects neither accounting nor taxable proft or
loss. Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences when
they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, but they intend
to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profts will be available against
which temporary difference can be utilised. Deferred tax
assets are reviewed at the end of each reporting period
and are reduced to the extent that it is no longer probable
that the related tax beneft will be realised.
A tax incentive that is not a tax base of an asset is
recognised as a reduction of tax expense in proft or loss as
and when it is granted and claimed. Any unutilised portion
of the tax incentive is recognised as a deferred tax asset to
the extent that it is probable that future taxable profts will
be available against which the unutilised tax incentive can
be utilised.
(n) Earnings per ordinary share
The Company presents basic and diluted earnings per share
data for its ordinary shares ("EPS").
Basic EPS is calculated by dividing the proft or loss
attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding
during the period.
Diluted EPS is determined by adjusting the proft or loss
attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the
effects of all dilutive potential ordinary shares.
(o) Operating segments
An operating segment is a component of the Company
that engages in business activities from which it may
earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the
Companys other components. An operating segments
operating results are reviewed regularly by the chief
operating decision maker, which in this case is the Board
of Directors of the Company, to make decisions about
resources to be allocated to the segment and to assess its
performance, and for which discrete fnancial information is
available.

39
1,933 17,964 66,825 - 86,722
Depreciation for the year 76 1,776 6,850 - 8,702
Impairment loss - - 3,210 9,098 12,308
Disposals - - (769) - (769)
At 31 December 2010 / 1 January 2011
Accumulated depreciation 2,009 19,740 72,906 - 94,655
Accumulated impairment loss - - 3, 210 9,098 12,308
2,009 19,740 76,1 1 6 9,098 106,963
Depreciation for the year 75 1,819 5,068 - 6,962
Impairment loss - - - 2,000 2,000
Disposals - - (2,905) - (2,905)
Write off - - (3,084) - (3,084)
At 31 December 2011
Accumulated impairment loss - - 3,21 0 11,098 14,308
2,084 21,559 75,1 95 11,098 109,936
Note
Long term
leasehold
land
RM000
Buildings
RM000
Plant
and
equipment*
RM'000
Capital
work-in
progress
RM000
Total
RM000
COST/VALUATION
At 1 January 2010 5,639 43,999 103,070 16,341 169,049
Additions - - 261 8,828 9,089
Disposals - - (1,372) - (1,372)
Transfer - - 10,448 (10,448) -
At 31 December 2010/
1 January 2011 5,639 43,999 112,407 14,721 176,766
Additions - - 372 10,510 10,882
Disposals - - (3,108) - (3,108)
Write off - - (3,099) - (3,099)
Transfer - 1,886 10,605 (12,491) -
Reclassifcation from intangible assets 4 - - - 97 97
At 31 December 2011 5,639 45,885 1 1 7,177 12,837 181,538
DEPRECIATION AND IMPAIRMENT LOSS
At 1 January 2010
Accumulated impairment loss - - - - -
40
3 PROPERTY, PLANT AND EQUIPMENT
Long term
leasehold
land
RM000
Buildings
RM000
Plant
and
equipment*
RM000
Capital
work-in
progress
RM000
Total
RM000
CARRYING AMOUNTS
At 1 January 2010 3,706 26,035 36,245 16, 341 82,327
At 31 December 2010/
1 January 2011 3,630 24,259 36,291 5,623 69,803
At 31 December 2011 3,555 24,326 41 ,982 1,739 71,602
2011 2012 2013 2014 2015 Later
(Decrease)/Increase in
depreciation expense

(1,831) (1, 350) (923)

(721)

(775) 5,600
* Plant and equipment comprise plant, machinery, motor vehicles, furniture and equipment.
3.1 Included in property, plant and equipment of the Company are fully depreciated assets, which are still in use, with
an aggregate cost of approximately RM46,187,265 (2010 RM49,221,489).
3.2 In 2010, due to the strategic re-alignment to its core businesses, the Company impaired the cost of four production
lines that were no longer part of its focus. An amount of RM12,308,000 was charged to the statement of
comprehensive income.
During the year, the Company impaired the remaining cost of a production line that was no longer part of its focus.
An amount of RM2,000,000 has been charged to the statement of comprehensive income.
3.3 Long term leasehold land relates to the lease of land for the Companys factory buildings, offce complex and
warehouse located in Petaling Jaya. The lease will expire in 2059 and the Company does not have an option to
purchase the leased land at the expiry of the lease period. Long term leasehold land are amortised over the lease
term of the land.

As allowed by the transitional provision of FRS 117, the prepaid lease payments at valuation are stated on the basis
of its 1968 valuation which has not been updated.
3.4 During the fnancial year ended 31 December 2011, the Company conducted an operational effciency review on its
property, plant and equipment, which resulted in changes in their expected usage. The effect of these changes on
depreciation expense, recognised in proft or loss, in current and future periods is as follows:
41
4 INTANGIBLE ASSETS
Note
Computer
software
RM000
Capital
work-in
progress
RM000
Total
RM000
COST
At 1 January 2010 7,069 499 7,568
Additions - 1 36 136
Adjustment 4.1 - (159) (159)
Transfer 1 05 (105) -
At 31 December 2010/ 1 January 2011 7,1 74 371 7,545
Additions - 823 823
Adjustment 4.1 - (244) (244)
Transfer 31 5 (315) -
Reclassifcation to property, plant and
equipment
3 - (97) (97)
At 31 December 2011 7,489 538 8,027
AMORTISATION
At 1 January 2010 2,689 - 2,689
Amortisation for the year 1,41 3 - 1, 413
At 31 December 2010/ 1 January 2011 4,1 02 - 4,102
Amortisation for the year 1,479 -
1,479
At 31 December 2011 5,581 - 5,581
CARRYING AMOUNTS
At 1 January 2010 4,380 499 4,879
At 31 December 2010/ 1 January 2011 3,072 371 3,443
At 31 December 2011 1,908 538 2,446
4.1 The adjustment is in relation to credit note received from a supplier for the additions in 2009.
42
5 INVENTORIES
6 TRADE AND OTHER RECEIVABLES
2011
RM000
2010
RM000
At net realisable value
Finished goods 36,806 33,362
Raw materials 50,740 36,244
Packaging materials 5,823 2,986
Spare parts 79 130
93,448 72,722
Recognised in proft or loss:
Inventories recognised as cost of sales 414,584 386,035
Write-down to net realisable value 435 1,541
The write-down is included in cost of sales.
Note
2011
RM000
2010
RM000
TRADE
Amount owing by related companies 6.1 6, 819 5,049
Trade receivables 6.2 23,7 1 6 65,744
30,535 70,793
NON-TRADE
Amount owing by related companies 6. 3 1,368 1,294
Other receivables 2,691 1,831
Deposits 2,120 1,258
6,179 4,383
36,714 75,1 76
6.1 The amount owing by related companies is subject to normal trade terms.
6.2 During the year, the Company entered into an arrangement with a licensed fnancial institution to enable certain
trade customers to pay goods invoiced through a corporate purchasing card issued by the fnancial institution.
This has resulted in the fnancial institution assuming the debts to the Company and credit risk is effectively
transferred to the fnancial institution.
6.3 The amount owing by related companies is unsecured, interest free and repayable on demand.
43
7 CASH AND CASH EQUIVALENTS
2011
RM000
2010
RM000
Cash and bank balances 85,945 46,657
Deposits placed with licensed banks 107,198 39,000
193,143 85,657
The deposits placed with licensed banks bear interest at 3.30% (2010: 2.79%) per annum.
8 CAPITAL AND RESERVES
Share Capital
Amount
2011
RM000
Number
of shares
2011
000
Amount
2010
RM000
Number
of shares
2010
000
Ordinary shares of RM 1 each
Authorised 100,000 100,000 100,000 100,000
Issued and fully paid 64,000 64,000 64,000 64,000
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one
vote per share at meetings of the Company and rank equally with regard to the Companys residual assets.
Section 108 tax credit
Subject to agreement by the Inland Revenue Board, the Company has tax exempt income to frank and distribute
approximately RM41,000,000 of its retained earnings at 31 December 2011 if paid out as dividends.
The Finance Act, 2007 introduced a single tier company income tax system with effect from 1 January 2008. During the
year, the Company fully utilised the remaining Section 108 tax credit balance.

44
At
1.1.2010
RM000
Recognised
in proft
or loss
(Note 14)
RM000
At
31.12.2010/
1.1.2011
RM000
Recognised
in proft
or loss
(Note 14)
RM000
At
31.12.2011
RM000
Property, plant and equipment (5,662) 399 (5,263) (1,339) (6,602)
Inventories 1 61 224 385 826 1 , 21 1
Receivables 648 (303) 345 (72) 273
Provisions 703 73 776 291 1,067
(4,150) 393 (3,757) (294) (4,051)
Movement in temporary differences during the year
2011
RM000
2010
RM000
2011
RM000
2010
RM000
2011
RM000
2010
RM000
Property, plant and equipment - - (6,602) (5,263) (6,602) (5,263)
Inventories 1 , 21 1 385 - - 1 , 21 1 385
Receivables 273 345 - - 273 345
Provisions 1,067 776 - - 1,067 776
Tax assets/(liabilities) 2,551 1,506 (6,602) (5,263) (4,051) (3,757)
9 DEFERRED TAX LIABILITIES
Deferred tax liabilities are attributable to the following:
Assets Liabilities Net
45
46
11 PROVISION
Employees pension
contribution
Employees Pension Contribution
Provision for employees pension contribution refects provisions made for additional contributions to the statutory
Employees Provident Fund that would vest upon unionised staff having completed fve years of service. The provisions
have been made on the assumption that all relevant staff will complete their fve year term and that therefore their
benefts will vest in its entirety.
10 TRADE AND OTHER PAYABLES
Note
2011
RM000
2010
RM000
TRADE
Amount owing to related companies 10.1 1 1 ,009 12,397
Trade payables 78,562 60,187
89,571 72,584
NON-TRADE
Amount owing to related companies 10.2 968 2,073
Accrued expenses 30,046 24,467
Other payables 1,247 514
32,261 27,054
121,832 99,638
2011
RM000
2010
RM000
At 1 January 348 283
Addition during the year 27 65
Utilised during the year - -
At 31 December 375 348
10.1 The amount owing to related companies is subject to normal trade terms.
10.2 The amount owing to related companies is unsecured, interest free and repayable on demand.

47
12 PROFIT BEFORE TAX
13 KEY MANAGEMENT PERSONNEL COMPENSATION
2011
RM000
2010
RM000
Proft before tax is arrived at after charging/(crediting):
Amortisation of intangible assets 1,479 1,413
Auditors remuneration:
Statutory audit - current year 85 85
Other services 1 5 15
Depreciation of property, plant and equipment 6,962 8,702
(Gain)/Loss on disposal of property, plant and equipment (1,267) 325
Impairment loss recognised/(reversed):
Property, plant and equipment 2,000 12, 308
Trade receivables 68 (251)
Loss arising from cash fow hedge - 4,398
Net loss/(gain) on foreign exchange
Realised 423 (12,41 1 )
Unrealised (48) 418
Operating lease rental 3, 531 2,252
Personnel expenses (including key management personnel)

Contributions to state plans 5,084 5,005
Wages, salaries and others 44,233 38,324
Property, plant and equipment written off 1 5 -
Rental expense in respect of:
Premises 1 , 1 47 1 51
Equipment 1 81 279
Write down of inventories 435 1,541
2011
RM000
2010
RM000
Directors
Fees 200 1 74
Remuneration 1,742 1,420
Benefts-in-kind 71 9 766
Other emoluments 97 20
2,758 2,380
Other key management personnel:
Short-term employee benefts 4,138 3,993
EPF contributions 165 180
4,303 4,173
7,061 6,553
The key management personnel compensations are as follows:
restated
Directors remuneration includes salaries, contributions to EPF, allowance and all other Directors related expenses.
Included in salaries and other emoluments of Executive Directors are contributions to EPF by the Company amounting
to RM93,000 (2010: RM89,000).
Other key management personnel comprise persons other than the Directors of Company, having authority and
responsibility for planning, directing and controlling the activities of the Company either directly or indirectly.
14 INCOME TAX EXPENSE
2011
RM000
2010
RM000
RECOGNISED IN PROFIT OR LOSS
Current tax expense
Current year 35,947 26,610
Prior year (2,770) -
33,1 77 26, 610
Deferred tax expense
Origination and reversal of temporary differences 294 (829)
Under provision in prior years - 436
294 (393)
Total income tax expense 33,471 26, 217
RECONCILIATION OF TAX EXPENSE
Proft for the year 108,082 63,887
Total income tax expense 33,471 26, 217
Proft excluding tax 141,553 90,104
Income tax calculated using Malaysian tax rate of 25% 35,388 22,526
Non-deductible expenses 853 3,255
(Over)/Under provided in prior year (2,770) 436
33,471 26,217
2011
RM000
2010
RM000
Tax exempt income arising from:
Reinvestment allowances claimed and utilised under
the Income Tax Act, 1967 35,71 6 37,904
Tax incentives claimed under the Promotion of
Investments Act, 1986 3,564 3,564
Income tax waived in accordance with Income Tax
(Amendment) Act, 1999 1,533 1,533
40,813 43,001
The above balances in the tax exempt income accounts, if agreed with the tax authorities, will enable the Company to
distribute tax-exempt dividends to its members.
At 31 December 2011, the Company has the following tax exempt income accounts:
48
15 EARNINGS PER ORDINARY SHARE
2011
RM000
2010
RM000
Proft for the year 108,082 63,887
Weighted average number of ordinary shares of RM1 each in issue (000) 64,000 64,000
Basic earnings per ordinary share (sen) 168.90 99.80
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share at 31 December 2011 was based on the proft attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
Diluted earnings per ordinary share
There were no diluted earnings per ordinary share for the Company as at 31 December 2011 and 2010.
16 DIVIDENDS
Dividends recognised by the Company:
Sen
per share
(net of tax)
Total
amount
RM000
Date of
payment
2011
Final 2010 ordinary
(10.00 sen less 25% tax) 7.50 4,800 1.7.2011
Final 2010 ordinary
(5.00 sen tax exempt) 5.00 3,200 1.7.2011
First special interim 2011 ordinary
(30.00 sen less 25% tax) 22.50 14,400 1.7.2011
Interim 2011 ordinary
(10.00 sen less 25% tax) 7.50 4,800 28.12.2011
Second special interim 2011 ordinary
(40.00 sen less 25% tax) 30.00 19,200 28.12.2011
Total amount 46,400
2010
Final 2009 ordinary
(10.00 sen less 25% tax and 5 sen tax exempt) 12.50 8,000 1.7.2010
First special Interim 2010 ordinary
(30.00 sen less 25% tax) 22.50 14,400 1.7.2010
Interim 2010 ordinary
(10.00 sen less 25% tax) 7.50 4,800 28.12.2010
Second special interim 2010 ordinary
(40.00 sen less 25% tax) 30.00 19,200 28.12.2010
Total amount 46,400
49
2011
RM000
2010
RM000

Segment proft 108,082 63,887

Included in the measure of segment proft are:
Revenue from external customers 810,647 696,625
Cost of sales (506,175) (447,961)
Depreciation (6,962) (8,702)
Segment assets 398,51 4 307,490
Included in the measure of segment assets are:
Additions to non-current assets 11,705 9,225
17 OPERATING SEGMENTS
The Company operates principally in Malaysia and in one major business segment. As such, only one reportable segment
analysis is prepared. The Companys Board of Directors (the chief operating decision maker) reviews internal management
reports at least on a quarterly basis.
Performance is measured based on segment proft, as included in the internal management reports that are reviewed
by the Companys Board of Directors. Segment proft is used to measure performance as management believes that such
information is the most relevant in evaluating the results of the segments relative to other entities that operate within
these industries.
Segment assets
The total of segment asset is measured based on all assets of a segment, as included in the internal management reports
that are reviewed by the Companys Board of Directors. Segment total asset is used to measure the return of assets of
the segment.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the fnancial year to acquire property, plant and equipment,
and intangible assets.
50
No reconciliation is performed for reportable segment proft, revenue from external customers, cost of sales, depreciation
and assets as there is no difference.
Carrying
amount
RM000
L&R/
(OL)
RM000
2011
Financial assets
Trade and other receivables 36, 714 36, 714
Cash and cash equivalents 193,143 193,143
229,857 229,857
Trade and other payables (121,832) (121,832)
2010
Financial assets
Trade and other receivables 75,176 75,176
Cash and cash equivalents 85,657 85,657
160,833 160,833
Trade and other payables (99,638) (99,638)
2011
RM000
2010
RM000
Net gains / (losses) arising from:
Loans and receivables 666 (164)
Financial liabilities measured at amortised cost (3) 13,291
663 13,127
18 FINANCIAL INSTRUMENTS
18.1 Categories of fnancial instruments

The table below provides an analysis of fnancial instruments categorised as follows:

(a) Loans and receivables (L&R); and
(b) Other fnancial liabilities measured at amortised cost (OL)
18.2 Net gains and losses arising from fnancial instruments
18.3 Financial risk management

The Company has exposure to the following risks from its use of fnancial instruments:
Credit risk
Liquidity risk
Market risk
51
52
2010
Not past due 46,266 - - 46,266
Past due 0 - 30 days 17,845 - - 17,845
Past due 31 - 90 days 1,307 - - 1,307
Past due more than 90 days 9,455 (9,129) - 326
74,873 (9,129) - 65,744
Gross
RM000
Individual
impairment
RM000
Collective
impairment
RM000
Net
RM000
2011
Not past due 18,392 - - 18,392
Past due 0 - 30 days 4,91 3 - - 4,91 3
Past due 31 - 90 days 1,435 (1,326) - 109
Past due more than 90 days 8,1 73 (7,871) - 302
32,91 3 (9,197) - 23,71 6
18.4 Credit risk
Credit risk is the risk of a fnancial loss to the Company if a customer or counterparty to a fnancial instrument
fails to meet its contractual obligations. The Company has adopted a policy of only dealing with creditworthy
customers, based on careful evaluation of the customers fnancial condition and credit history, as a means of
mitigating the risk of fnancial loss from defaults. The Company also maintains a large number of customers so as
to limit high credit concentration in a single customer.
Receivables
Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The
Company performs credit evaluations on customers requiring credit over a certain amount and customers are also
required to place collaterals with the Company in the forms of bank guarantees, cash deposits or property charge.
During the year, the Company entered into an arrangement with a licensed fnancial institution to enable certain
trade customers to pay goods invoiced through a corporate purchasing card issued by the fnancial institution.
This has resulted in the fnancial institution assuming the debts to the Company and credit risk is effectively
transferred to the fnancial institution.
Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented
by the carrying amounts in the statement of fnancial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are
measured at their realisable values. A signifcant portion of these receivables are regular customers that have been
transacting with the Company. The Company uses ageing analysis to monitor the credit quality of the receivables.
Any receivables having signifcant balances past due more than 60 days which are deemed to have higher credit
risk, are monitored individually.
Receivables amounting to RM7,293,000 (2010: RM37,533,000) are secured by bank guarantees, cash deposits and
customers properties charged to the Company.
Impairment losses
The ageing of trade receivables as at the end of the reporting period was:
The movements in the allowance for impairment losses of trade receivables during the fnancial year were:
2011
RM'000
2010
RM000
At 1 January 9,129 9,380
Impairment loss recognised/(reversed) 68 (251)
At 31 December 9,197 9,129
The allowance for impairment losses at year end amounting to RM7,871,000 relates to trade receivable
balances which are under legal proceedings and the remaining balance relates to invoices which are considered
doubtful by management.

The allowance account in respect of receivables is used to record impairment losses. Unless the Company is
satisfed that recovery of the amount is possible, the amount considered irrecoverable is written off against
the receivable directly.
Related company balances
The Company undertakes trade and non-trade transactions with a number of related companies. The Company
monitors the repayment from its related companies on a regular basis.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts
in the statement of fnancial position. The Company regularly follows up on timely settlement of the amount
owing by related companies. The related companies are not required to place any collateral with the Company.
Impairment losses
As at the end of the reporting period, there was no indication that the amount owing by related companies are not
recoverable as substantially all of these amounts are aged less than a year.
18.5 Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its fnancial obligations as they fall due. The
Companys exposure to liquidity risk arises principally from its various payables.
The Company maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have suffcient liquidity to meet its liabilities when they fall
due.
Maturity analysis
As at the end of the reporting period, the Company has no fnancial liabilities other than trade and other
payables of RM121,832,000 (2010 - RM99,638,000). The trade and other payables of the Company do not bear any
contractual interest and are expected to be settled within 1 year.
18.6 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other
prices that will affect the Companys fnancial position or cash fows.
53
Currency risk sensitivity analysis
A 10% strengthening of the RM against the following currencies at the end of the reporting period would
have increased equity and post-tax proft or loss by the amounts shown below. This analysis assumes that all
other variables, in particular interest rates, remained constant and ignores any impact of forecasted sales and
purchases.
2011
RM'000
2010
RM'000
2011
RM'000
2010
RM'000
USD 1,755 776 1,755 776
EUR 202 424 202 424
54
Equity Proft or loss
USD
RM000
NZD
RM000
SGD
RM000
EUR
RM000
AUD
RM000
GBP
RM000
THB
RM000
2011
Amount owing by
related companies 7,1 74 - - 38 - - -
Cash at bank 2,599 - - - - - -
Trade payables (28,181) (553) (157) (471) (346) - -
Amount owing to
related companies (4,992) - - (2,264) - - (243)
(23,400) (553) (157) (2,697) (346) - (243)
2010
Amount owing by
related companies 5,078 - - 3 - - -
Cash at bank 9,776 - - - - - -
Trade payables (18,436) (442) (39) (1,705) (449) (33) -
Amount owing to
related companies (6,768) - - (3,945) - - (317)
(10,350) (442) (39) (5,647) (449) (33) (317)
Denominated in
18.6.1 Currency risk
The Company undertakes trade transactions denominated in foreign currencies such as United States Dollar (USD),
New Zealand Dollar (NZD), Singapore Dollar (SGD), Euro (EUR), Australia Dollar (AUD), Great Britain Pound (GBP)
and Thai Baht (THB) with a number of related companies and third parties, where the amounts outstanding are
exposed to currency translation risks.
Exposures to foreign currency risk are monitored on an ongoing basis. The Company does not hedge its foreign
currency risk.
Exposure to foreign currency risk
The Companys exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period
was:
18.6.2 Interest rate risk
The Company is not exposed to a risk of change in cash fow due to changes in interest rates as the Company
has no short term borrowing as of the fnancial year end. The Company places short term deposits with
licensed banks which are not signifcantly exposed to risk of changes in interest rates. Short term receivables
and payables are not signifcantly exposed to interest rate risk.
18.6.3 Other price risk
Other price risk is the risk that fair value or future cash fows of a fnancial instrument will fuctuate because
of changes in market prices (other than those arising from interest rate risk or currency risk). Other price risk
comprises equity price risk and commodity price risk.
The Company is not exposed to any other price risk.
18.7 Fair values of fnancial instruments
The carrying amounts of cash and cash equivalents and short term receivables and payables approximate fair
values due to the relatively short term nature of these fnancial instruments.
19 CAPITAL MANAGEMENT
The Companys objectives when managing capital is to maintain a strong capital base and safeguard the Companys
ability to continue as a going concern, so as to maintain investor, creditor and market confdence and to sustain future
development of the business. The Board of Directors monitors the return on capital, which the Company defnes as
results from operating activities divided by total equity attributable to owners of the Company. The Board of Directors
also monitors the level of dividends to shareholders.
The Company monitors and maintains a prudent level of total equity attributable to the owners of the Company to ensure
it is adequate to balance the support to future development of the business and the payment of dividends to owners of
the Company.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a shareholders
equity equal to or not less than the 25 percent of the issued and paid-up capital and such shareholders equity is not less
than RM40 million. The Company has complied with this requirement.
20 OPERATING LEASES
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
Operating lease payments represent rentals payable by the Company for certain vehicles, forklifts and machinery. Leases
are negotiated and rentals are fxed for a term of between 3 to 5 years.
2011
RM000
2010
RM000
Less than one year 2,658 2,733
Between one and fve years 4,136 3,692
6,794 6,425
55
A 10% weakening of RM against the above currencies at the end of the reporting period would have had equal
but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables
remained constant.
The movements in other currency exchange rates are not expected to have any signifcant effect on the proft or
loss.
Related companies
Sales to:
FrieslandCampina (Singapore) Pte. Ltd. 33,778 34,927
FrieslandCampina Hong Kong Ltd. 1,428 1,488
Purchases from:
FrieslandCampina Nederland Holding BV 85, 418 54,765
FrieslandCampina Foremost (Thailand) Plc 2,683 3,225
P.T. Frisian Flag Indonesia 8,715 53,888
Know-how, Trademark Licence and Management Support fees paid to:
Friesland Brands BV 27,339 23,719
Shared services charges paid to:
FrieslandCampina Service Centre Asia Pacifc Sdn. Bhd. 1 , 731 1,818
FrieslandCampina Nederland Holding BV 1,563 2,049
Shared services fees received from:
FrieslandCampina Service Centre Asia Pacifc Sdn. Bhd. 60 36
FrieslandCampina Business Development Unit Sdn. Bhd. 60 36
The signifcant related party transactions of the Company, other than key management personnel compensation
(see Note 13), are as follows:
2011
RM000
2010
RM000
Immediate holding company
Management fee payable to
FrieslandCampina DLMI Holding BV 42 35

56
22 RELATED PARTIES
21 CAPITAL COMMITMENTS
Identity of related parties
For the purposes of these fnancial statements, parties are considered to be related to the Company if the Company has
the ability, directly or indirectly, to control the party or exercise signifcant infuence over the party in making fnancial
and operating decisions, or vice versa, or where the Company and the party are subject to common control or common
signifcant infuence. Related parties may be individuals or other entities.
Key management personnel are defned as those persons having authority and responsibility for planning, directing
and controlling the activities of the Company either directly or indirectly. Key management personnel includes all the
Directors of the Company, and certain members of senior management of the Company.
2011
RM000
2010
RM000
Property, plant and equipment
Authorised but not contracted for 17,900 16,700
Contracted but not provided for 539 471
The transactions have been entered into in the normal course of business and have been established under negotiated
terms.
There are no allowances for impairment loss being made in respect of the balances due from related companies.
The outstanding net amounts due from/(to) related companies as at 31 December are disclosed in Note 6 and Note 10
respectively.
23 Comparative fgures
The following comparative fgures have been re-presented to refect the reclassifcation of certain expenses from
distribution expenses to revenue to be consistent with the Companys revenue recognition policy;
As
restated
RM'000
As
previously
stated
RM'000
Statement of comprehensive income
Revenue 696,625 710,588
Distribution expenses (92,128) (106,091)

57
2010
58
24 Supplementary fnancial information on the breakdown of realised and unrealised profts or losses
The breakdown of the retained earnings of the Company as at 31 December, into realised and unrealised profts, pursuant
to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:
The determination of realised and unrealised profts is based on the Guidance of Special Matter No.1, Determination of
Realised and Unrealised Profts or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad
Listing Requirements, issued by Malaysian Institute of Accountants on 20 December 2010.
2011
RM'000
2010
RM'000
Total retained earnings
Realised 199,1 57 137,647
Unrealised (4,003) (4, 175)
195,154 133,472

SEBASTIAAN GIJSBERTUS VAN DEN BERG HUANG SHI CHIN
Petaling Jaya,
Date: 24 February 2012
In the opinion of the Directors, the fnancial statements set out on pages 30 to 57 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 fnancial position
of the Company as of 31 December 2011 and of its fnancial performance and cash fows for the fnancial year then ended.
In the opinion of the Directors, the information set out in Note 24 on page 58 to the fnancial statements has been
compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profts or
Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
statement by directors
pursuant to section 169(15) of the companies act, 1965
I, Petrus Johannes Franciscus Kerckhaert, the Offcer primarily responsible for the fnancial management of Dutch Lady Milk
Industries Berhad, do solemnly and sincerely declare that the fnancial statements set out on pages 30 to 58 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 the above named in Petaling Jaya on 24 February 2012.
PETRUS JOHANNES FRANCISCUS KERCKHAERT
Before me:
ARSHAD ABDULLAH (W550)
Commissioner for Oaths
Kuala Lumpur
statutory declaration
pursuant to section 169(16) of the companies act, 1965
59
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
In accordance with the requirements of the Companies Act,
1965 in Malaysia, we also report that in our opinion the
accounting and other records and the registers required by
the Act to be kept by the Company have been properly kept
in accordance with the provisions of the Act.
OTHER REPORTING RESPONSIBILITIES
Our audit was made for the purpose of forming an opinion
on the fnancial statements taken as a whole. The
information set out in Note 24 on page 58 to the fnancial
statements has been compiled by the Company as required
by the Bursa Malaysia Securities Berhad Listing
Requirements and is not required by the Financial
Reporting Standards. We have extended our audit
procedures to report on the process of compilation of
such information. In our opinion, the information has been
properly compiled, in all material respects, in accordance
with the Guidance of Special Matter No. 1, Determination
of Realised and Unrealised Profts or Losses in the
Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants and presented based on
the format prescribed by Bursa Malaysia Securities Berhad.
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.

KPMG
Firm Number: AF 0758
Chartered Accountants
Chew Beng Hong
Approval Number: 2920/02/14(J)
Chartered Accountant
Petaling Jaya, Selangor
Date: 24 February 2012
REPORT ON THE FINANCIAL STATEMENTS
We have audited the fnancial statements of Dutch Lady
Milk Industries Berhad, which comprise the statement
of fnancial position as at 31 December 2011, and the
statements of comprehensive income, changes in equity
and cash fows for the year then ended, and a summary
of signifcant accounting policies and other explanatory
information, as set out on pages 30 to 57.
DIRECTORS RESPONSIBILITY FOR THE FINANCIAL
STATEMENTS
The Directors of the Company are responsible for the
preparation of fnancial statements that give a true and
fair view in accordance with Financial Reporting Standards
and the Companies Act, 1965 in Malaysia and for such
internal control as the Directors determine as necessary
to enable the preparation of fnancial statements that are
free from material misstatement, whether due to fraud
or error.
AUDITORS RESPONSIBILITY
Our responsibility is to express an opinion on these fnancial
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 about whether the fnancial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
fnancial statements. The procedures selected depend
on our judgement, including the assessment of risks of
material misstatement of the fnancial statements, whether
due to fraud or error. In making those risk assessments,
we consider internal control relevant to the entitys
preparation of the fnancial statements that give a true
and fair view 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
entitys 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 fnancial statements.
We believe that the audit evidence we have obtained is
suffcient and appropriate to provide a basis for our audit
opinion.
OPINION
In our opinion, the fnancial 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 fnancial position of
the Company as of 31 December 2011 and of its fnancial
performance and cash fows for the year then ended.
independent auditors report
to the members of Dutch Lady Milk Industries Berhad (Incorporated in Malaysia)
60
financial highlights
0
200,000
400,000
600,000
800,000
1,000,000
REVENUE
YEAR 2007 2008 2009 2010 2011
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
RM000
YEAR
RM000
YEAR
RM000
YEAR
RM000
YEAR
RM000
YEAR
RM000
YEAR
RM000
PROFIT BEFORE TAX
0
150,000
200,000
250,000
300,000
350,000
400,000
TOTAL ASSETS
0
1.0
2.0
3.0
4.0
5.0
NET TANGIBLE ASSET BACKING PER SHARE
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
ISSUED & FULLY PAID CAPITAL
0
50,000
100,000
150,000
200,000
250,000
300,000
SHAREHOLDERS FUNDS
0
40,000
20,000
60,000
80,000
100,000
120,000
NET PROFIT FOR THE YEAR
0
10,000
20,000
30,000
40,000
50,000
NET DIVIDEND PAID
288,570
280,990
307,490
2.52
2.81
3.09
161,585
179,985
197,472
42,647
60,400
63,887
8,320
46,400
42,000
47,255
64,000 64,000 64,000 64,000 64,000
40,944
127,258
294,688
1.99
YEAR
RM000
0
50
100
150
200
EARNINGS PER SHARE (NET)
67
74
94
100
711,567
691,847
696,625
609,232
0
30,000
60,000
90,000
120,000
150,000
YEAR 2007 2008 2009 2010 2011
RM000
57,858
82,481
90,104
64,780
810,647
108,082
398,514
169
259,154
4.05
141,553
46,400
61
MATERIAL CONTRACTS
For the fnancial year, there were no material contracts entered into by the Company (not being contracts entered into the
ordinary course of business) involving directors and substantial shareholders.
SHARE BUYBACKS
During the fnancial year, there were no share buybacks by the Company.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
During the fnancial year, the Company did not issue any options, warrants or convertible securities.
AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR) PROGRAMME
During the fnancial year, the Company did not sponsor any ADR or GDR programme.
IMPOSITION OF SANCTIONS AND / OR PENALTIES
There were no sanctions and/or penalties imposed on the Company, Directors or management by any relevant regulatory
bodies.
NON-AUDIT FEES
During the fnancial year, the Company paid RM15,000 in non-audit fees to the External Auditors.
PROFIT ESTIMATE, FORECAST OR PROJECTION
There was no material variance between the results for the fnancial year and the unaudited results previously announced.
The Company did not release any proft estimate, forecast or projection for the fnancial year.
PROFIT GUARANTEES
During the fnancial year, there were no proft guarantees given by the Company.
UTILISATION OF PROCEEDS
The Company did not carry out any corporate exercise to raise funds during the fnancial year.
additional compliance information
62
1,062
1,488,292
5,456,298
4,834,248
5,261,800
46,958,300
64,000,000
Distribution Schedule of Shareholders
Size of Holdings

Less than 100 shares
100 to 1,000 shares
1,001 to 10,000 shares
10,001 to 100,000 shares
100,001 to Less than 5% of issued shares
5% and above of the issued shares

Total
70
2,1 1 0
1,509
191
21
2
3,903
No. of
Shareholders
% of
Shareholders
No. of
Shares
No. of
Shares
% of
Shareholding
% of
Holding
Analysis of Shareholdings as at 19 March 2012
Class of Shares Ordinary shares of RM1.00 each
Voting Rights On show of hands : 1 vote
On a poll : 1 vote for each share held
Name of 30 Largest Shareholders
1. FrieslandCampina DLMI Malaysia Holding B.V.*
2. Amanahraya Trustees Berhad*
- Skim Amanah Saham Bumiputera
3. Amanahraya Trustees Berhad as 1Malaysia
4. Yong Siew Lee
5. Public Nominees (Tempatan) Sdn Bhd - Pledged Securities
Account for Aun Huat & Brothers Sdn Bhd
6. Aun Huat & Brothers Sdn Bhd
7. Yeo Khee Bee
8. Universal Trustee (Malaysia) Berhad - CIMB Islamic Small Cap Fund
9. Cartaban Nominees (Asing) Sdn Bhd - BBH And CO Boston
For Fidelity Low-Priced Stock Fund
10. Mayban Nominees (Tempatan) Sdn Bhd Mayban Trustees
Berhad for CIMB-Principal Small Cap Fund
11. Quek Guat Kwee
12. Kumpulan Wang Simpanan Guru-Guru
13. Amanahraya Trustees Berhad - Public Index Fund
14. Amanahraya Trustees Berhad - Amanah Saham Didik
15. Amanahraya Trustees Berhad - Amanah Saham Malaysia
16. Public Nominees (Tempatan) Sdn Bhd - Pledged Securities
Account For Chan See Min
17. Citigroup Nominees (tempatan) Sdn Bhd - Kumpulan Wang
Persaraan (Diperbankan) (Kenanga)
18. Citigroup Nominees (Asing) Sdn Bhd - CBNY for DFA
Emerging Markets Small Cap Series
19. Lee Sim Kuen
20. Chow Kok Meng
50.96
22.41
1.30
0.80
0.73
0.71
0.65
0.56
0.39
0.39
0.25
0.24
0.24
0.23
0.23
0.20
0.20
0.20
0.19
0.19
1.79
54.06
38.67
4.89
0.54
0.05
100.00
0.00
2.33
8.53
7.55
8.22
73.37

100.00
32,614,800
14,343,500
833,000
509,000
467,500
453,500
419,000
357,600
250,000
246,400
162,000
156, 300
1 56,1 00
149, 500
147, 200
1 31 , 000
127, 600
125,700
120,000
1 1 9, 400
other information
63
Particulars of Properties as at 31 December 2011
Location of property 13 & 15, Jalan Semangat, Petaling Jaya Lot 79, Jalan 13/6, Petaling Jaya

Brief description Factory buildings and offce complex Warehouse
Approximate land area 358,482 sq. ft. 74,135 sq. ft.
Tenure leasehold land Leasehold land expiring in the year 2059 Leasehold land expiring in the year 2059
Date of acquisition 21.10.1960 & 19.03.1980 12.01.1989
Age of property Between 25 years to 46 years 23 years
Net Book Value (RMmln) 22.7 2.4
Substantial Shareholders
Name Direct % Indirect %
1. FrieslandCampina DLMI Malaysia Holding B.V. 32,614,800 50.96 0 0
2. Amanahraya Trustees Berhad 14,343,500 22.41 0 0
- Skim Amanah Saham Bumiputra
21. Tong Yoke Kim Sdn Bhd
22. Wong So-Ch'i
23. Wong So Haur
24. Tan Kim Onm
25. Amanahraya Trustees Berhad - Public Dividend Select Fund
26. Citigroup Nominees (Tempatan) Sdn Bhd - Exempt AN For
Kenanga Investors Bhd
27. Foo Loke Weng
28. BHLB Trustee Berhad Exempted - Trust Account For EPF
Investment For Member Savings Scheme
29. Tan Pak Nang
30. HSBC Nominees (Tempatan) Sdn Bhd - HSBC (M) Trustee
Bhd For Kenanga Growth Fund

*Registered in the Companys Register as Substantial Shareholders
1 1 1 , 000
1 1 1 , 000
109,000
89,900
89,800
82,000
80,004
78,000
76,000
75,500

52,791,304
0.17
0.17
0.17
0.14
0.14
0.13
0.13
0.12
0.12
0.12

82.48
Directors Shareholdings
Name Direct % Indirect %
1. Dato Zainal Abidin bin Putih - - - -
2. Sebastiaan G. van den Berg - - - -
3. Foo Swee Leng - - - -
4. Boey Tak Kong - - - -
5. Dato Dr. Mhd. Nordin bin Mohd. Nor - - - -
6. Huang Shi Chin - - - -
7. Kapil Garg - - - -
64
DUTCH LADY MILK INDUSTRIES BERHAD (5063-V)
(Incorporated in Malaysia under the then Companies Ordinances, 1940-1946)
FORM OF PROXY
I/We (NRIC No. )
of
being a member/members of DUTCH LADY MILK INDUSTRIES BERHAD (the Company), do hereby appoint
#
the Chairman of the Meeting or
(NRIC No. ) of
as my/our proxy/proxies to vote for me/usand on my/our behalf at the Forty-Ninth Annual General Meeting of the Company to be held at
Hotel Armada, Lorong Utara C, Section 52, 46200 Petaling Jaya, Selangor Darul Ehsan on Wednesday, 13 June 2012 at 10.00 a.m. and any
adjournment thereof, in respect of my/our shareholding in the manner indicated below:-

* Please indicate with an X how you wish your vote to be cast. If no specifc direction as to voting is given, the proxy will vote or
abstain at his/her discretion.
# Delete the words the Chairman of the Meeting if you wish to appoint some other person(s) to be your proxy.
Signed this day of 2012
Signature(s) of Shareholder/Attorney (if Shareholder is a corporation, this part should be executed under seal)
Notes:-
A member entitled to attend and vote at the Annual General Meeting of the Company is entitled to appoint a proxy/proxies to attend and
vote instead of him. A proxy need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply.
Save for an Exempt Authorised Nominee as defned under the Central Depositories Act which may appoint multiple proxies in respect of each
Omnibus Account it holds with ordinary shares of the Company standing to the credit of the said securities account, a Member (including an
authorised nominee) shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting. In any case, where
more than one (1) proxy is appointed, such appointment shall not be valid unless the proportion of the holdings represented by each proxy
is specifed.
The instrument appointing the proxy must be signed by the Member or his attorney duly authorised in writing or, if the appointer is a
corporation, the instrument must be executed under its common seal or under the hand of its offcer or attorney duly authorised.
The instrument appointing the proxy, duly completed (and, if applicable, the power of attorney or other authority under which it is signed
or notarially certifed copy of that power of attorney) must be deposited at the Company's place of business at 13, Jalan Semangat, 46200,
Petaling Jaya, Selangor not less than 48 hours before the time set for holding the Meeting or any adjournment thereof.
No. of Shares held
CDS Account No
proxy form
RESOLUTION NO. *FOR *AGAINST
Ordinary Resolution 1 Receive the Audited Financial Statements for the fnancial year ended 31 December
2011 together with the Reports of the Directors and Auditors thereon.
Ordinary Resolution 2 Approve the payment of Directors fees for the fnancial year ended 31 December 2011.
Ordinary Resolution 3 Approve the payment of Directors' fees for the fnancial year ending 31 December
2012, to be paid quarterly in arrears.
Ordinary Resolution 4 Re-election of Dato Zainal Abidin bin Putih
Ordinary Resolution 5 Re-election of Mr. Boey Tak Kong
Ordinary Resolution 6 Re-election of Mr. Rahul John Colaco
Ordinary Resolution 7 Re-appointment of Messrs KPMG as the Company's Auditors
Ordinary Resolution 8 Approve the Proposed and New Existing Shareholders' Mandate for Recurrent
Related Party Transactions of a Revenue or Trading Nature.
Special Resolution 1 Approve the Amendments to the Company's Articles of Association.
[This page is deliberately left blank]
w w w . d u t c h l a d y . c o m . m y
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