Professional Documents
Culture Documents
Key Strategies
Clear and bold with in-built dynamism
guiding philosophy
upon which we hold, to achieve
our objectives
Performance Measurement
Well defined yardstick that focuses equally on non-monetary output
Partnership
Trencsending boundaries even further
We create avenues for effective and beneficial global partnerships through our
002
Financial Calendar
Announcements of Financial Results
Quarter 1st quarter 2nd quarter 3rd quarter 4th quarter 31 May 2010 25 August 2010 30 November 2010 24 February 2011 Date of Announcement
37
th
Dividends for the Financial Year Ended 31 December 2010 First Interim 20 sen per share less 25% Income Tax Announced Entitlement Date Paid 14 January 2011 7 February 2011 28 February 2011
Final Subject to the approval by 20 sen per share less shareholders at the 37th Annual 25% Income Tax General Meeting General Meetings 36th Annual General Meeting 37th Annual General Meeting 22 June 2010 28 June 2011
p p
36
30
Chairmans Statement
003
We are proud to conclude that the year 2010 is our best ever performance of the Group
Dato Wira Syed Abdul Jabbar bin Syed Hassan Chairman
Financial Calendar 004 005 006 010 011 014 019 020 026 Corporate Vision & Mission Corporate Information Corporate Structure Group Half-Yearly Results Group Financial Highlights Notice of Annual General Meeting Statement Accompanying Notice of Annual General Meeting Profile of Directors Group Management Chairmans Statement Review of Operations by the Group Managing Director Corporate Responsibility Statement on Corporate Governance Statement on Directors Responsibility Additional Compliance Information Statement on Internal Control Report of the Audit Committee Financial StatementS Properties of the Group Shareholding Statistics Additional Information on Shareholders Top Thirty Shareholders Directory of Groups Operations Notice of Nomination of Auditors FORM OF PROXY
Contents
030 036 046 054 060 061 063 065 068 199 205 206 207 209 218
40
38
004
Corporate Vision
To be the preferred globally competitive integrated agribusiness organisation that delivers outstanding value for all.
Corporate Mission
We, as a team, are committed to achieve our vision by: providing premium products and services to our customers optimising shareholder value improving the quality of life of our employees fostering a sustainable environment
005
Board of Directors
chairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Independent Non-Executive Director Group managing Director Bakry bin Hamzah Non-Independent Executive Director Directors Syed Azmin bin Syed Nor Non-Independent Non-Executive Director Chuah Seong Tat Non-Independent Non-Executive Director Ooi Teik Huat Independent Non-Executive Director Khalid bin Sufat Independent Non-Executive Director Datuk Hj. Ismail bin Hj. Hashim Non-Independent Non-Executive Director (Appointed w.e.f. 11 March 2010) Datuk R Sharifuddin Hizan bin R Zainal Abidin Non-Independent Non-Executive Director (Appointed w.e.f. 22 February 2010) (Resigned w.e.f. 12 April 2011)
Corporate Information
audit committee Chairman Ooi Teik Huat Syed Azmin bin Syed Nor Khalid bin Sufat nomination and Remuneration committee Chairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Ooi Teik Huat Khalid bin Sufat executive committee Chairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Bakry bin Hamzah Chuah Seong Tat Registered Office Level 12, Menara HLA No. 3, Jalan Kia Peng 50450 Kuala Lumpur t : 603 2179 7777 F : 603 2161 1632 W : www.twinds.com.my e : info@twinds.com.my company Secretary Zainal Rashid bin Ab Rahman (LS007008) (Appointed w.e.f. 11 January 2011) Mohamad Affendi bin Yusoff (LS007158) (Resigned w.e.f. 6 February 2011) auditors Messrs Anuarul Azizan Chew & Co. No. 18, Jalan 1/64 Off Jalan Kolam Air, Jalan Ipoh 51200 Kuala Lumpur t : 603 4041 7233 F : 603 4041 0395 Share Registrar Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Selangor Darul Ehsan t : 603 7841 8000 F : 603 7841 8008 Solicitors Messrs Lee Hishammudin Allen & Gledhill Messrs Martin Cheah & Associates Messrs Pakharuddin & Partners Messrs Azmi & Associates Bankers Malayan Banking Berhad CIMB Bank Berhad RHB Bank Berhad Bangkok Bank Berhad AmBank (M) Berhad Form of legal entity Incorporated on 19 June 1974 as a private company limited by shares under the Companies Act, 1965 as Tradewinds (M) Sdn Bhd and was converted into a public company on 28 September 1987 and since then known as Tradewinds (M) Berhad Place of incorporation and Domicile Malaysia Stock exchange listing Main Market of Bursa Malaysia Securities Berhad Stock name TWS Stock code 4421 iSin MYL 442100003
006
Corporate Structure
Delta Delights (Cambodia) Co Ltd Tradewinds Cambodia Co Ltd Tradewinds Realty Co Ltd Croesus Limited
Tradewinds Plantation Management Sdn Bhd Tradewinds Agro Services Sdn Bhd Tradewinds Plantech Sdn Bhd Tradewinds Plantation Services Sdn Bhd Tradewinds Plantation Capital Sdn Bhd Tradewinds Corridor Sdn Bhd Quek Shin & Sons Pte Ltd Teon Choon Realty Company Sdn Berhad Ladang Chendana Sdn Bhd Ibok Plantation Sdn Bhd Binu Plantations Sdn Bhd Ladang Permai Sdn Bhd Ladang Serasa Sdn Berhad Ladang Mawar Sdn Bhd Syarikat Ladang Sawit Cherul Sdn Bhd Prisma Spektra Sdn Bhd Kumpulan Kris Jati Sdn Bhd Bahtera Bahagia Sdn Bhd Barisan Tekad Sdn Bhd Northern Intergrated Agriculture Sdn Bhd > NIA Development Sdn Bhd > NIA Infrastructure Sdn Bhd
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 70% 70% 70% 70% 100% 100%
> >
Pride Palm Oil Mill Sdn Bhd > Solar Green Sdn Bhd Johore Tenggara Oil Palm Berhad > Ladang Petri Tenggara Sdn Bhd > Pertanian Johor Tenggara Sdn Bhd > Agromaju Sendirian Berhad > Permodalan Pelangi Sdn Bhd > Tanah Semai Sdn Bhd > Semai Segar Sdn Bhd > Uni-Agro Plantations (Trengganu) Sdn Bhd > M.P Plantation Sdn Bhd > Ladang Sungai Relai Sdn Bhd > Agromaju Landscape Sdn Bhd > Hak JTOP Sdn Bhd > Barisan Perangsang Sdn Bhd Amalan Penaga (M) Sdn Bhd > Trans Kenyalang Sdn Bhd > Senandung Masyhur Sdn Bhd > Tradewinds Tanjung Alan Plantation Sdn Bhd > Arah Bersama Sdn Bhd > Usaha Wawasan Sdn Bhd > Melur Gemilang Sdn Bhd > Amalan Pelita Pasai Sdn Bhd
50% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 70% 100% 100% 51% 100% 85% 85% 70% 70% 70% 70% 60%
> > > > > > > > > > > > >
>
> Dormant
* Public Listed
>
100%
>
Beras Corporation Sdn Bhd > Liansin Trading Sdn Bhd > Liangtye Trading Sdn Bhd > Tong Seng Huat Rice Trading Sdn Bhd > Sabarice Sdn Bhd > Sazarice Sdn Bhd > Dayabest Sdn Bhd > Haskarice Food Sdn Bhd > Ban Say Tong Sdn Bhd > Hock Chiong Foodstuff Sdn Bhd Bernas Dominals Sdn Bhd > Bernas Feedstuff Sdn Bhd Edaran Bernas Nasional Sdn Bhd Bernas Seed Pro Sdn Bhd
100% 60% 100% 51% 100% 95% 100% 51% 51% 51% 100% 49% 80% 100%
>
Jasmine Food Corporation Sdn Bhd > Jasmine Food (Ipoh) Sdn Bhd > Jasmine Food (Alor Setar) Sdn Bhd > Jasmine Khidmat & Harta Sdn Bhd > Jasmine Food (Johor Bahru) Sdn Bhd > Jasmine Food (Seremban) Sdn Bhd > Jasmine Food (Prai) Sdn Bhd > Jasmine Food (Kuantan) Sdn Bhd > Jasmine Rice Mill (Tunjang) Sdn Bhd > Jasmine Rice Products Sdn Bhd > JS Jasmine Sdn Bhd Syarikat Faiza Sdn Bhd Era Bayam Kota Sdn Bhd Bernas Project & Development Sdn Bhd Bernas Logistics Sdn Bhd Bernas Overseas (L) Limited > Irfan Noman Bernas (Pvt) Limited Bernas Agrotech Sdn Bhd Bernas Production Sdn Bhd
>
YHL Holding Sdn Bhd > YHL Trading (Kedah) Sdn Bhd > YHL Trading (KL) Sdn Bhd > YHL Trading (Melaka) Sdn Bhd > YHL Trading (Segamat) Sdn Bhd > YHL Trading (Johor) Sdn Bhd > YHL Trading (Terengganu) Sdn Bhd Gardenia Bakeries (KL) Sdn Bhd OEL Realty Holdings Sdn Bhd United Malayan Flour (1996) Sdn Bhd Ban Heng Bee Holdings Sdn Bhd Serba Wangi Sdn Bhd
51% 100% 100% 100% 100% 100% 100% 30% 30% 45% 20% 40%
> >
100% 100% 51% 51% 60% 100% 100% 100% 20% 100% 100%
> >
RM5.6
RM806.6
million for 2010
Performance
growth
010
* 2010 gross dividend excludes the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.
011
* 2010 gross dividend excludes the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.
012
4,000
1,691 1,768
800 600
254
1,151
2,000 1,000 0
400 200 0
65
06
07
08
09
10
06
07
299
08
09
349
3,000
2,069
10
500 400
241
2,500 2,000
1,264 1,374 1,576
7,500 6,000
2,982
1,159
09
10
06
07
08
09
10
06
3,066
07
3,450
08
09
6,324
10
6,765
807
5,000
013
23.0
20.0
15.3
15.0
20
11.7 11.7
20 15 10
20.0
25
23.8
25
15 10 5 0 06
4.0
70
15.7
5 0 07 08 09 10 06 07 08 09 10
35 0
06
07
56.1
08
09
10
* Excluding the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.
7.5
4.63
08
09
5.32
10
6.81
165.0
014
as Ordinary Business, to consider and if thought fit, to pass the following resolutions:Ordinary Resolutions 1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2010 together with the Reports of the Directors and Auditors thereon; To declare a Final Dividend of 20 sen per share less 25% income tax for the financial year ended 31 December 2010; To approve the payment of Directors fees for the financial year ended 31 December 2010; To re-elect the following Directors who are required to retire by rotation from office pursuant to Articles 105 and 106 of the Companys Articles of Association:i) Syed Azmin bin Syed Nor; and ii) Bakry bin Hamzah To reappoint Dato Wira Syed Abdul Jabbar bin Syed Hassan whose office shall become vacant at the conclusion of this AGM pursuant to Section 129(2) of the Companies Act, 1965 (Act) to hold office until the conclusion of the next AGM; To appoint Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Notice of Nomination pursuant to Section 172(11) of the Act, a copy of which is included in the Annual Report 2010 has been received by the Company for the nomination of Messrs Ernst & Young, who have given their consent to act, for appointment as Auditors and of the intention to propose the following ordinary resolution:That Messrs Ernst & Young be and are hereby appointed Auditors of the Company in place of retiring Auditors, Messrs Anuarul Azizan Chew & Co., to hold office until the conclusion of the next AGM at a remuneration to be determined by the Board of Directors. Resolution 1
2.
Resolution 2
3. 4.
Resolution 3
5.
6.
Resolution 7
015
as Special Business, to consider and if thought fit, to pass the following resolutions:Ordinary Resolutions 7. Proposed Shareholders Mandates for the Company and its Subsidiary Companies (collectively, Group Companies) to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature specified in the Circular to Shareholders dated 3 June 2011 (Circular):i) Proposed Category A Mandate:THAT approval be and is hereby given for the Group Companies to enter into the recurrent related party transactions of a revenue or trading nature specified and set out in Section 3.2 of the Circular (Category A Mandate) provided that such transactions are (i) in the ordinary course of business and necessary for day-to-day operations of the Group Companies and (ii) on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of TWM AND THAT unless revoked or varied by the resolutions of the shareholders of the Company in general meeting, Category A Mandate shall continue to be in force until the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the said Act) whichever is earlier. AND FURTHER THAT the Group Companies be and are hereby authorised to enter into and execute all such agreements, instruments, documents and deeds and to do all acts, deeds and things necessary, expedient or advisable for and in respect of the Category A Mandate and the transactions contemplated and/or authorised by Category A Mandate. ii) Proposed Category B Mandate:THAT approval be and is hereby given for the Group Companies to enter into the recurrent related party transactions of a revenue or trading nature specified and set out in Section 4.2 of the Circular (Category B Mandate) provided that such transactions are (i) in the ordinary course of business and necessary for day-to-day operations of the Group Companies and (ii) on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of TWM AND THAT unless revoked or varied by the resolutions of the shareholders of the Company in general meeting, Category B Mandate shall continue to be in force until the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the said Act) whichever is earlier. AND FURTHER THAT the Group Companies be and are hereby authorised to enter into and execute all such agreements, instruments, documents and deeds and to do all acts, deeds and things necessary, expedient or advisable for and in respect of Category B Mandate and the transactions contemplated and/or authorised by the Category B Mandate. Resolution 9 Resolution 8
016
Special Resolution 8. Proposed Amendments of the Articles of Association of the Company (Proposed Amendments of Articles):THAT the existing Article 139 and Article 141 be and are hereby deleted in their entirety and be replaced with the following new Article 139 and Article 141, respectively:(i) existing article 139 Payment by cheque or warrant Any dividend, instalment of dividend, bonus or interest in respect of any shares may be paid by cheque or warrant payable to the order of the member in the register and/or the Records of Depositors. Resolution 10
Proposed new article 139 Mode of payment of dividend Any dividend, instalment of dividend, or other money payable in cash in respect of shares may be paid by the Company to the member or the person entitled thereto by way of direct bank transfer or such other form of electronic fund transfer to the bank account notified and provided by that member or that person to the Depository under and in accordance with the Listing Requirements and the Rules of the Depository, or by way of cheque or warrant made payable to the order of the member or the person entitled thereto in the event that details of that member or that payees bank account has not been provided to the Depository, or by such other manner as may be prescribed or permitted by the Exchange and/or the Depository or as the Directors may determine.
(ii) existing article 141 Payment by post and discharge Every such cheque or warrant shall be sent by post to the last registered address of member or person entitled appearing on the register and/or the Record of Depositors and the receipt of such a member shall be a good discharge to the company of all dividends, bonuses or other payments made in respect of such share. Every such cheque or warrant shall be sent at risk of the person entitled to the money represented thereby.
Proposed new article 141 Payment of dividend and discharge The payment of dividend, instalment of dividend, or other money payable in respect of any shares by direct bank transfer or any other form of electronic fund transfer to the bank account notified and provided by the member or person entitled thereto to the Depository shall operate as a good discharge of the Companys obligation in respect of the payment of the dividend represented thereby, notwithstanding that it may subsequently appear that the instruction for payment by such direct transfer or electronic means and/or the details of the bank account provided had been forged.
017
Proposed new article 141 (contd) Payment of dividend and discharge The payment of dividend, instalment of dividend, or other money in respect of any shares by cheque or warrant shall be made payable to the order of the member or the person entitled thereto and sent by post to the last registered or last known address of the member or of the person entitled thereto, and the payment of every such cheque or warrant by the Company as aforesaid shall operate as a good discharge of the Companys obligation in respect of the payment of the dividend represented thereby, notwithstanding that it may subsequently appear that the cheque or warrant has been stolen or any endorsement thereon has been forged or that any discrepancy in the details of the bank account(s) given by the member. Every such cheque or warrant shall be sent by post at the risk of the member or the person entitled to the dividend represented thereby.
AND THAT the Board be and is hereby authorised to sign, execute and deliver on behalf of the Company all necessary documents, and also all such acts and things as may be required or relevant for and in connection with and to give effect to and implement the Proposed Amendment with full power to assert any conditions, modifications, variations and/or amendments in any manner as may be imposed or permitted by the relevant authorities. 9. To transact any other ordinary business for which due notice shall have been given. nOtice OF DiViDenD entitlement anD PaYment Notice is hereby given that a Final Dividend of 20 sen per share less 25% income tax in respect of the financial year ended 31 December 2010, if approved by shareholders at the forthcoming AGM, will be paid on 29 July 2011 to shareholders whose names appear on the Companys Register of Depositors on 14 July 2011. A Depositor shall qualify for entitlement to the dividend only in respect of:a) Shares deposited into the Depositors Securities Account before 12.30 p.m. on 12 July 2011 in respect of shares which are exempted from mandatory deposit; b) Shares transferred into the Depositors Securities Account before 4.00 p.m. on 14 July 2011 in respect of ordinary transfer; and c) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.
BY ORDER OF THE BOARD Zainal RaSHiD Bin aB RaHman (lS 007008) Company Secretary Kuala Lumpur 3 June 2011
018
notes: Proxy 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint any one person to be his/her proxy without limitation to attend and vote in his/her stead and the provisions of Section 149 (1)(a) and (b) of the Act shall not apply to the Company. A proxy may but need not be a member of the Company; 2. Where a member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appoint one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account; 3. This Form of Proxy to be valid, must be deposited at the Share Registrars office, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor on or before Sunday, 26 June 2011 at 10.30 a.m. being not less than forty-eight hours before the time fixed for holding the meeting or at any adjournment thereof; 4. In the case of a corporate member, the proxy appointed must be in accordance with the Memorandum and Articles of Association and the Form of Proxy should be given under its common seal or under the hand of its attorney; and 5. Statement Accompanying the Notice of Annual General Meeting on Profiles of Directors standing for re-election and reappointment as Directors of the Company for Resolutions 4 to 6 are shown on pages 21 to 23 of this Annual Report. eXPlanatORY nOteS On ReSOlutiOnS:1. Ordinary Resolution 7 appointment of auditors Notice of Nomination has been received pursuant to Section 172(11) of the Act, a copy of which is included in this Annual Report 2010 for the appointment of Messrs Ernst & Young as Auditors of the Company in place of the retiring Auditors, Messrs Anuarul Azizan Chew & Co., to hold office until the conclusion of the next AGM at a remuneration to be determined by the Directors. 2. Ordinary Resolutions 8 and 9 Recurrent Related Party transactions For further information on Ordinary Resolutions 8 and 9, please refer to the Circular to Shareholders dated 3 June 2011 accompanying this Annual Report. 3. Special Resolution 10 Proposed adoption of new articles of association The proposed Special Resolution, if passed, will align Article 139 and Article 141 of the Articles of Association of the Company with the requirement of Bursa Malaysia Securities Berhad that cash dividends shall be paid to shareholders by directly crediting the same into their bank accounts as notified and provided by the shareholders to Bursa Malaysia Depository Sdn Bhd.
019
1.
Directors who are standing for re-election and reappointment by rotation at the Annual General Meeting of the Company (AGM) pursuant to Articles 105 and 106 of the Articles of Association of the Company are as follows:i. Syed Azmin bin Syed Nor; and ii. Bakry bin Hamzah.
2.
Dato Wira Syed Abdul Jabbar bin Syed Hassan who is over 70 years of age, is standing for reappointment at the AGM in accordance with Section 129(6) of the Companies Act, 1965. Six Board Meetings were held during the financial year ended 31 December 2010. Details of attendance of Directors at the said Board Meetings are contained in their respective profile on pages 21 to 25 of this Annual Report. The AGM of Tradewinds (M) Berhad will be held as follows:Venue : Mahkota Ballroom 2, Ballroom Level Hotel Istana Kuala Lumpur 73, Jalan Raja Chulan 50200 Kuala Lumpur : 28 June 2011 : 10.30 a.m.
3.
4.
Date Time 5.
Further details of Directors who are standing for re-election and reappointment are shown on pages 21 and 23 of this Annual Report.
020
021
Profile of Directors
DatO WiRa SYeD aBDul JaBBaR Bin SYeD HaSSan Chairman / Independent Non-Executive Director YBhg. Dato Wira Syed Abdul Jabbar bin Syed Hassan, a Malaysian aged 71, was appointed as Chairman of Tradewinds (M) Berhad on 29 October 2008. He also sits as Chairman of the Executive Committee as well as Nomination and Remuneration Committee of the Company. He holds a Bachelor of Economics degree from University of Western Australia and a Masters of Science degree in Marketing from University of Newcastle-Upon-Tyne, United Kingdom. YBhg. Dato Wira Syed Abdul Jabbar was previously the Chief Executive Officer of the Kuala Lumpur Commodity Exchange, Executive Chairman of Malaysia Monetary Exchange and Executive Chairman of the Commodity and Monetary Exchange. YBhg. Dato Wira Syed Abdul Jabbar is currently the Chairman of MMC Corporation Berhad, MARDEC Berhad, Padiberas Nasional Berhad, Tradewinds Plantation Berhad and Aliran Ihsan Resources Berhad. He is also a board member of Star Publications (M) Berhad and KAF Investment Bank (M) Berhad. He has attended all six Board Meetings held during the financial year under review. YBhg. Dato Wira Syed Abdul Jabbar no longer holds any shares in the Company. Details of his share movement are as disclosed on page 71 of this Annual Report. He has no family relationships with any director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any. BaKRY Bin HamZaH Group Managing Director / Non-Independent Executive Director
Encik Bakry bin Hamzah, a Malaysian aged 53, was redesignated as Non-Independent Executive Director and Group Managing Director of Tradewinds (M) Berhad on 3 February 2010. Previously, he was appointed as Non-Independent Non-Executive Director on 9 April 2007. He also sits as a member of the Executive Committee of the Company. He had previously served as a director of the Company from 22 August 2002 to 24 March 2003 before being appointed the Chief Operating Officer on 1 April 2003. He later became the Chief Executive Officer of the Company effective 1 December 2005 until 8 April 2007. Encik Bakry holds a Bachelor of Arts degree from University Malaya and began his career as Assistant Director of Marketing in Lembaga Padi dan Beras Negara. Subsequently, he became the Operations Manager of Bukhary Holdings Sdn Bhd before joining Juara Niaga Sdn Bhd as General Manager, prior to being the Head of Business Development of Aero Mutiara Sdn Bhd in 1995. He was also the Executive Director of Latitude Tree Holding Berhad and a Director of Oriental Food Industries Berhad and MARDEC Berhad. He is currently a director of Tradewinds Plantation Berhad and Managing Director of Padiberas Nasional Berhad. Encik Bakry has attended all the six Board Meetings held during the financial year under review.
He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
022
023
SYeD aZmin Bin SYeD nOR Non-Independent Non-Executive Director Tuan Syed Azmin bin Syed Nor, a Malaysian aged 47, was appointed to the Board of Directors of Tradewinds (M) Berhad on 28 September 2005. He also sits as a member of the Audit Committee of the Company. He holds a Bachelor of Science degree, majoring in Business Management from University of Berkeley, USA. Upon his return in 1984 until 1993, he was involved in several private business ventures including trading in commodities, housing development, manufacturing, stock broking and international trading. In 1997, he was appointed as Executive Director of CN Asia Corporation Berhad until 2001. He was also involved in the incorporation of Commerce Dot Com Sdn Bhd which undertook one of the Governments electronic commerce projects, e-Perolehan. He currently sits on the boards of Amtek Holdings Berhad, Engtex Group Berhad, Tradewinds Corporation Berhad, United Malayan Land Berhad and several private limited companies. Tuan Syed Azmin has attended all six Board Meetings held during the financial year under review. Tuan Syed Azmin is the brother of YBhg. Tan Sri Dato Seri Syed Mokhtar Shah bin Syed Nor, who holds indirect major shareholding in the Company. His interest in the securities of the Company or its subsidiaries is as disclosed on page 71 of this Annual Report. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
cHuaH SeOnG tat Non-Independent Non-Executive Director Mr. Chuah Seong Tat, a Malaysian aged 60, was appointed to the Board of Directors of Tradewinds (M) Berhad on 23 June 2006. He also sits as a member of the Executive Committee of the Company. He obtained his Bachelor of Applied Science (Hons) degree from Universiti Sains Malaysia and a Masters of Business Administration from the Australian Graduate School of Management, University of New South Wales. Currently, he is also a Director of Tradewinds Plantation Berhad and Padiberas Nasional Berhad. He had also held prominent positions in various companies such as Director in Bukhary Sdn Bhd and KHSB Marketing Sdn Bhd, an Executive Director in Botly Securities Sdn Bhd, Chief Dealer in UMBS Securities Sdn Bhd, Senior General Manager in Alor Setar Securities Sdn Bhd, Corporate Finance Officer in Asian International Merchant Bankers Berhad and as an engineer in Intel Technology Sdn Bhd and NS Electronics Malacca Sdn Bhd. Mr. Chuah has attended all six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
Mr. Ooi Teik Huat, a Malaysian aged 51, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. He is the Chairman of the Audit Committee and is also a member of the Nomination and Remuneration Committee. Mr. Ooi Teik Huat is a member of Malaysian Institute of Accountants and CPA Australia and holds a Bachelor of Economics degree from Monash University, Australia. He started his career with Messrs Hew & Co (now known as Messrs Mazars), Chartered Accountants before joining Malaysian International Merchant Bankers Berhad (now known as MIMB Investment Bank Berhad). He subsequently joined Pengkalen Securities Sdn Bhd (now known as PM Securities Sdn Bhd) as Head of Corporate Finance, before leaving to set up Meridian Solutions Sdn Bhd where he is presently a director. Mr. Ooi Teik Huat is also a director of Tradewinds Plantation Berhad, MMC Corporation Berhad, DRB-Hicom Berhad and Zelan Berhad. Mr. Ooi Teik Huat has attended all six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
024
025
DatuK HJ. iSmail Bin HJ. HaSHim Non-Independent Non-Executive Director YBhg. Datuk Hj. Ismail bin Hj. Hashim, a Malaysian aged 66, was appointed to the Board of Directors of Tradewinds (M) Berhad on 11 March 2010. He holds a Diploma in Accountancy from RIDA College, Petaling Jaya (now known as Universiti Teknologi MARA). YBhg. Datuk Hj. Ismail is also a Fellow of the Chartered Institute of Management Accountants, United Kingdom. He had also attended the Management Development Program at Harvard Business School, Boston, USA. YBhg. Datuk Hj. Ismail began his career at Shell Marketing Malaysia as a Management Trainee and subsequently joined ICI Group of Companies in Malaysia, Singapore, Indonesia, United Kingdom and Canada in 1966 as an Accountant and Project Investment Analyst. In 1973, he then joined Tower Group of Companies for South East Asia Timber Industry as Director of Finance for South East Asia. YBhg. Datuk Hj. Ismail joined PETRONAS Group of Companies as Financial Controller in 1974 and was later appointed to the Main Board of PETRONAS as Executive Director, Finance from 1975 to 1986; as Vice President, Finance, Planning and Information Services until 1990 and as Senior Vice President, Downstream until 1994. He served as Non-Executive Director, ANCOM Berhad from 1995 to 1997 and became the Chief Executive Officer of ANCOM Energy & Services Sdn Bhd until his retirement in 2004. YBhg. Datuk Hj. Ismail is currently an independent board member of Felda Holdings Bhd and Sarawak Economic Development Corporation. YBhg. Datuk Hj. Ismail has attended all four Board Meetings held since his appointment and for the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/ or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
Encik Khalid bin Sufat, a Malaysian aged 55, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. He also sits as a member of the Audit Committee of the Company. An accountant by profession, Encik Khalid is a Fellow of Association of Chartered Certified Accountants, United Kingdom, a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. He has vast experience in the banking industry and has held several senior portfolios including Managing Director of Bank Kerjasama Rakyat Malaysia Berhad, General Manager, Consumer Banking of Malayan Banking Berhad and Executive Director of United Merchant Finance Berhad. He had previously managed Tronoh Mines Malaysia Berhad, Furqan Business Organisation Berhad and Seacera Tiles Berhad as Executive Director, Deputy Executive Chairman and Group Managing Director, respectively. Currently, he is a board member of Bina Puri Holdings Berhad, Malaysia Building Society Berhad, UMW Holdings Berhad and Chemical Company of Malaysia Berhad. Encik Khalid has attended five out of six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He also has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.
026
Bakry bin Hamzah Group Managing Director / Managing Director Rice Division chan Seng Fatt Chief Executive Officer Plantation Division tuan ngah bin tuan Baru Chief Executive Officer Sugar Division
mohd nazri bin Shariff Group Chief Financial Officer mohd azanuddin bin Salleh Senior General Manager Finance Zainudin bin Hashim Senior General Manager Corporate Planning
from left to right: Bakry bin Hamzah (seated), Tuan Ngah bin Tuan Baru and Chan Seng Fatt
Group Management
from left to right: Zainudin bin Hashim, Mohd Nazri bin Shariff and Mohd Azanuddin bin Salleh
027
C from left to right: Zurkarnain bin Mohd Yusoff, Sabrina binti Yon, Ibrahim bin Husian and Lim Yin Meng
Zurkarnain bin mohd Yusoff Senior General Manager Commodity & Derivatives Management Sabrina binti Yon General Manager Corporate Communication ibrahim bin Husian General Manager Project / Operations lim Yin meng General Manager Group Internal Audit
from left to right: Azmin bin Abidin, Zainal Rashid bin Ab Rahman, Ismail bin Mohamed Yusoff and Ainul Arfah binti Baharim D
ismail bin mohamed Yusoff Senior General Manager Group Managing Directors Office / Investor Relations azmin bin abidin General Manager Human Resources & Administration ainul arfah binti Baharim Assistant General Manager Risk Management Zainal Rashid bin ab Rahman Company Secretary
24,491
hectares of its plantable reserves over the next 4 years
50%
Key Strategies
market leadership
030
Chairmans Statement
031
RM806.6 million
for the FYe 2010
032
bunches (FFB) production nationwide. Despite all these, I am pleased to report that the Plantation Division recorded a 34.2% increase in revenue to RM1.025 billion whilst its PBT grew to RM335 million from RM92.9 million in the previous year. This represents the highest PBT ever recorded by the Plantation Division since it came into existence in 2006. Sugar has been one of the most volatile commodities in recent years. In 2010 itself, we witnessed the price of raw sugar fluctuating from a low of US14.5 cents per lb to an all-time-high of US34.8 cents per lb towards the end of 2010. However, despite this volatility, the Sugar Division recorded a 38% increase in revenue to RM1.35 billion and a 97% increase in PBT to RM266.5 million. This is the best performance of the Sugar Division in its 45 years of operations. DiViDenD Based on the record-breaking performance in 2010, we declared and paid an interim dividend of 20 sen per share less 25% income tax in February this year, while another 20 sen per share less 25% income tax will be recommended to you for your approval at this forthcoming 37th Annual General Meeting, thus giving a total dividend per share of 40 sen. This is more than double the 15 sen per share declared for 2009.
cORPORate DeVelOPmentS On 20 January 2010, our Company completed the acquisition of an additional 22.24% equity in BERNAS following the successful completion of the Mandatory General Offer in December 2009, taking the Companys interest in BERNAS to 72.57%. The TWM Group is now one of the largest food and commodity groups listed on the Main Market of Bursa Malaysia Securities Berhad. As I mentioned in my letter in the last years annual report, the acquisition of BERNAS was expected to generate synergies amongst the divisions of the Group. I am pleased to report that plans have been implemented to achieve such synergies. In May 2010, we relocated the corporate office, together with our Plantation, Sugar and Rice divisions under one roof in Kuala Lumpur. We have also restructured the corporate service at the holding company level to centralise the services for better coordination and harmonisation of plans and operations. Efforts to further streamline the operations and realise the synergies within the enlarged Group are still ongoing.
5.6
RM5.6
billion
033
On 25 April 2011, BERNAS announced that the Government has agreed to extend the BERNAS Agreement for a period of 10 years commencing from 11 January 2011 to 10 January 2021. This extension is a reflection of the Governments confidence in BERNAS for its role in ensuring food security and price stability in the country. The effectiveness of BERNAS role is most evident in 2007/2008 when the international rice prices increased by more than double during the period. In Malaysia however, the increase in rice price was only between 30% to 50% and the regulated Super Tempatan 15%s price remained unchanged. There was never a shortage of rice in the country at that time. The stability in prices and supply was due to BERNAS effective management in procurement and distribution with the support from the Government to increase the national rice stockpile. BERNAS, as the leader in the domestic rice industry was also invited to participate in the Economic Transformation Programme (ETP) which was launched in September 2010. The ETP is part of the Governments initiatives to transform Malaysia into a high income economy by 2020. One of the initiatives is the Entry Point Project 10 (EPP10) aimed to scale up and strengthen the productivity of paddy farming in the Muda area, Kedah. Following this, BERNAS signed an MOU with Muda Agricultural Development Authority (MADA) in March 2011 to undertake commercial activities in relation to the EPP10.
As reported last year on 30 September 2009, Prisma Spektra Sdn Bhd, a wholly-owned subsidiary of Tradewinds Plantation Berhad entered into a conditional share sale agreement with Semi Bayu Sdn Bhd to purchase the entire issued and paidup ordinary share capital of MARDEC Berhad (Mardec), an investment holding company involved in the processing and trading of natural rubber as well as the manufacturing of value-added rubber products. The proposed acquisition of Mardec is conditional upon the fulfilment of various conditions that are still pending. However, we are confident that this acquisition will be completed within this year. At the shareholding level, FELDA emerged as a new substantial shareholder when its whollyowned subsidiary, Felda Global Ventures Holdings Sdn Bhd acquired a 20% equity in TWM from Grenfell Sdn Bhd in January 2010. We believe that with FELDAs vast business ventures in agro-based industries, there could be opportunities for both parties to explore for mutual benefits. OutlOOK FOR 2011 The prospects for our business in 2011 are encouraging. Malaysias economy is forecasted to grow by 5% to 6% this year after recording a growth of 7.2% in 2010. This growth will provide an impetus for our businesses to grow and continue to perform well in 2011. In addition, local
034
paddy and international rice prices have stabilised in the past few months and we expect this stability to sustain for the rest of the year. With regards to sugar, our fixed-price long term contract will continue until the end of the year allowing us to significantly protect our sales margin amidst a very volatile international sugar market. Crude palm oil (CPO) prices are also at a level which is favourable to our Plantation Division. For the first quarter of 2011, CPO prices have been higher than the average recorded in 2010. If this continues, our Plantation Division is likely to record another excellent year. However, we will continue to focus on improvements in efficiency and productivity through various initiatives and programmes planned for this year. Plans are already in the pipeline to construct three additional palm oil mills, with the first set to take off in 2011 at Kuala Suai, in Miri, Sarawak. We are also looking at upgrading selected rice mills nationwide as well as our sugar storage capacity. With improvements in production and storage capacity, we are looking at expanding our market share both locally and abroad. At present, only 30% of our sugar production is exported and
opportunities are there for the Group to develop its export business and raise total contribution from overseas sales. We will also continue our efforts to increase local rice market share via Program Rakan Ladang (PRL) which has contributed positively in 2010. Through PRL, we managed to improve our local paddy market share from 30.8% in 2009 to 32.2% in 2010. The emphasis for 2011 will also be on yield improvements. The graded rice recovery (GRR) at our mills improved by 1% in 2010 compared to the year before, even with generally lower quality paddy received caused by floods and diseases. With further capital investments to modernise our mills and through strategic collaborations, we are confident that the GRR will improve further. Similarly, our Plantation Division is showing an uptrend in crop yield and oil extraction rate. Overall, 2011 is expected to be another good year for our business. However, we are very much aware of the challenges ahead and hence, have prepared ourselves for any eventualities. We believe our strengths in areas of procurement, production and market development will enable us to expand our business and continue to create value for you.
035
The TWM Group is now one of the largest food and commodity groups listed on the Main Board of Bursa Malaysia Securities Berhad.
aPPReciatiOn & RecOGnitiOn On behalf of the Board, I would like to extend our appreciation to the Government for their confidence in the Group in the management of the essential commodities in the country. We would also like to thank all the relevant agencies for their guidance and support in all areas of our business operations. Our appreciation also goes to our business associates, financiers and partners for working steadfastly with us to take the Group to greater heights. Our success would not have been possible without the resolve and dedication of our management and employees thank you for your sacrifices and contributions. My utmost gratitude goes to you, our shareholders for your continued support and faith in the Board. Last but not least, I wish to thank my esteemed colleagues on the Board for their wisdom and counsel. Our sincere appreciation also goes to YBhg Datuk R Sharifuddin Hizan bin R Zainal Abidin for his invaluable contributions during his tenure as a member of the Board. We look forward to continuing support from all our stakeholders as we move along the journey to nurture the growth of the Group.
036
037
I am pleased to present the review of operations for Tradewinds (M) Berhad (TWM) for the financial year 2010. It has been a remarkable year for Tradewinds Group (Group) and it is our sincere hope that we have done our stakeholders proud.
For the financial year 2010, the Group recorded profit before tax (PBT) of RM806.6 million. It is the highest PBT ever recorded by the Group and excellent performance is recorded across all divisions.
Rice
Plantation
Sugar
038
Rice Division
The year 2010 marks the first full years inclusion of Padiberas Nasional Berhad (BERNAS) into the Group and it has truly been a promising start. BERNAS benefited greatly from a relatively conducive business environment in 2010 compared to those of 2008 and 2009. Globally, the year 2010 saw a firmer supply of rice which had caused a drop in the international price of rice in contrast to the significant increase in other major food grains such as maize and wheat. The benchmark Thai White Rice 100% B was trading at approximately USD600 per tonne at the beginning of 2010 but dropped to USD460 per tonne in June. However, strong demand combined with supply concerns arising from the massive floods hitting Thailand and other producing nations caused the price to gradually increase before closing at approximately USD560 per tonne in December 2010. Volume of rice sold by BERNAS grew marginally by 1.6% to 1.33 million tonnes in 2010 compared to 1.31 million tonnes in 2009. However, revenue dropped to RM3.2 billion in 2010 compared to RM3.25 billion recorded in the previous year. By managing demand and supply well, BERNAS was able to improve its operating margins. For the financial year 2010, BERNAS PBT grew by 3% to RM245.8 million from RM238.3 million posted in 2009. During the year under review, BERNAS share of local paddy purchase increased to 32.2% compared to 30.8% in 2009 despite the 7% drop in the overall national paddy production volume caused by floods and diseases. This increase was mainly due to the successful implementation of Program Rakan Ladang (PRL) with the farmers and our strategic partnership programme of Skim Upah Mengering dan Kisar (SUMK) with Bumiputera millers.
039
Reaching out In reaching out to the community, we have donated staples like rice, sugar, bread and other provisions to ease the financial burden borne by orphanages and needy families throughout the country.
040
Plantation Division
The year 2010 was a spectacular year for the Plantation Division. The Divisions revenue grew by 34.2% to RM1.025 billion in 2010 compared to RM758.9 million registered previously. The increase in revenue was mainly due to higher average crude palm oil (CPO) price in 2010 at RM2,701 per tonne against RM2,236 per tonne recorded in 2009. The adverse weather conditions and flood have affected the national average fresh fruit bunches (FFB) yield and oil extraction rate (OER). Peninsular Malaysia was severely affected with average FFB yield declining by 7.5% followed by Sabah and Sarawak at 4.7% and 2.6%, respectively. The Divisions production of FFB in 2010 however was almost unchanged at approximately 1.36 million tonnes. In addition, we also achieved a higher yield of 17.07 tonnes per hectare in 2010 compared to 16.95 tonnes per hectare recorded in the previous year. On the milling activities, CPO production volume increased to 293,717 tonnes from 288,400 tonnes previously recorded in 2009. Driven mainly by the increase in CPO price, the Plantation Divisions PBT increased significantly to RM335.0 million in 2010 compared to RM92.9 million recorded in the previous year. The Division has a landbank of 151,901 hectares nationwide of which 87,560 or 57.6% are located in Sarawak, 11,302 hectares or 7.4% in Sabah and the remaining 53,039 hectares or 34.9% in Peninsular Malaysia. About 104,837 hectares or 69% has been planted with oil palms and rubber trees leaving another 12,235 hectares or 8.1% still under development. As at the year-end 2010, the Divisions total remaining reserves stood at 24,491 hectares which will be developed over the next four years.
041
RSPO certification During the year, the Group moved a step closer towards RSPO certification.
042
Sugar Division
During the year 2010, the domestic selling price of sugar was adjusted from RM1,540 per tonne in January to RM1,940 per tonne in December. Such a move was seen as necessary in view of the extreme volatility in the price of raw sugar which saw the price began at US29.0 cents per lb in January 2010 before bottoming at US14.5 cents per lb in May, only to surge erratically thereafter, building up to peak at US34.8 cents per lb in December 2010. With the Sugar Divisions revenue surpassing the RM1.0 billion mark, 2010 was truly a remarkable year. Volume of sales in 2010 was 731,882 tonnes which generated revenue of RM1.35 billion for the Division compared to lower volume of sugar sold in 2009 at 666,984 tonnes, at a value of RM977.2 million. The increase in volume was recorded for both the domestic and export market sales which grew by 5% and 25%, respectively. We can definitely attribute the good sales performance to the ability of the Division to adapt to the growing needs of the market. As a result, PBT almost doubled to RM266.3 million from RM135.0 million recorded in 2009.
043
Our raw sugar melting capacity at CSR is now at 2000 tonnes per day compared to 150 tonnes in 1965.
044
Facilities & infrastructure and Quality management The volatile nature of commodity prices is undoubtedly the main challenge of a commoditybased Group like ours - more so in recent years when we have seen the international prices of all three of our products fluctuating significantly. However, this will not distract us from focussing on improvements to our mills, refineries and warehouses to increase efficiency and reduce operational unit costs. On the Rice Division, we have initiated a few improvement programmes in 2010 specific on increasing milling capacity and more efficient operating systems. These include the construction of gantry crossing railway track for paddy pneumatic transport system and other infrastructure works at our rice mill in Arau, Perlis. In addition, we have also undertaken the upgrading of incoming electricity supply and control room for the 20 tonne-per-hour central packaging plant in Bukit Raya, Kedah. Moving on to our Plantation Division, we have implemented many quality initiatives and programmes spearheaded by our Mill Engineering Unit and Total Quality Environmental Management Strategic Business Unit (TQEM-SBU) together with the respective Joint Consultative Committees (JCC). As a result, the OER for CPO improved from
21.21% in 2009 to 21.47% in 2010. This compares favourably with the national OER of 20.45%. The extraction rate for palm kernel has also improved to 5.32% from 5.25% over the same period. With respect to quality management, we are proud to announce that our Sg. Kachur Palm Oil Mill and Ulu Sebol Palm Oil Mill earned their certifications for ISO 9001:2008 on 16 July and 6 September 2010, respectively. For our Sugar Division, we have completed the additional melting facility at one of our sugar refineries, Central Sugars Refinery Sdn Bhd (CSR), in September 2010. With this additional facility, raw sugar melting capacity at CSR is now 2,000 tonnes per day. This is far cry from the 150 tonnes per day capacity when CSR began operations way back in 1965. All these improvements signify our commitment for market growth amidst the challenging market conditions in which we operate. Our successes thus far are attributable to our firm focus on product quality, timely delivery and consistent cooperation with our major customers with a sole view to improve the value of our services. Research & Development (R&D) We firmly believe that R&D is a major source of long term productivity growth and will provide the Group with a sustainable competitive advantage in
045
the future. In the Rice Division, the Universiti Putra Malaysia-BERNAS laboratory has been undergoing the process to obtain ISO 170025 accreditation in 2010. Once accredited, the laboratory which is recognised as one of its kind in the country will be able to conduct rice analysis for BERNAS own purpose or other commercial entities including contract research services. Indeed, R&D has played a major role in positioning Malaysia as a leader in the global palm oil industry. For our Plantation Division, specific R&D projects have been conducted in collaboration with the Malaysian Palm Oil Board (MPOB) as well as Universiti Putra Malaysia (UPM) which include improvements on agronomic management and the determination of suitable protocols for the establishment of leguminous cover crops in peat soils. Another interesting joint-research project with UPM involves research into phosphate requirements for peat planting. Human capital Development We have embarked on a continuous training programme both in-house and external to equip our employees with the relevant skills to complement the expectations of the Group. To enhance our human capital development more effectively, we have revamped our training needs and programmes, reviewed the training hours allocated to employees and enhance our job rotation programme and succession planning. We
have also adopted the job analysis improvement initiatives that identify the fit between the individual employees and job requirements. closing Remarks Although we are pleased with our performance to date, we cannot rest on our laurels. TWM will remain committed to its corporate and social mandates. We will continue to seek improvements in all facets of our operations while remain committed to our sustainability agenda. We have had a fantastic 2010 and I am appreciative of all the efforts, commitments and show of unity and strength demonstrated by our workforce out in the fields and in the office who have kept the positive energy permeating throughout the Group. The bountiful harvest reaped in 2010 has put us in a good financial standing to invest further in expanding and strengthening our market share. The remarkable achievements and the challenges we successfully overcame have also given us newfound confidence to take the Group to the next level. I believe that we are now consolidated in our shared mission. As a team, we now look forward to another successful year in 2011.
046
Corporate Responsibility
As an agribusiness organisation, Tradewinds (M) Berhad (TWM) recognises that its business conducts can and will have a profound impact on the environment, its workforce, society and the local communities. Tradewinds Group (Group) therefore takes its corporate social responsibility seriously and is committed to the continuous improvements of our policies, action plans and work systems across the Group to ensure that all aspects of our social responsibilities are considered and addressed. Although TWM adheres to the principles of creating and sustaining long term value for the shareholders, our Board of Directors do place significant emphasis on corporate social responsibility and it is well reflected in the development and implementations of appropriate policies. Our corporate social responsibility stresses on the importance of employee development, health and safety, community involvement, good ethical behaviour and care for the environment. emPlOYee DeVelOPment These days, it is common for organisations to claim that people are their core assets. However, at TWM, people have been the centre of our policies and strategies long before the phrase entered the lexicon of corporate language. We have always envisaged that as our Group progresses, we will be able to disseminate and experience the benefits of our corporate social responsibility programmes throughout the Group. Over the years, we have invested in providing our workers with housing, water and electricity,
047
schools, mini parks, shops and other infrastructure developments aimed at enhancing the quality of life in their communities. HOuSinG & cOmmunitY inFRaStRuctuRe The Group has worked closely with all its subsidiaries in the design and construction of houses and quarters for the sugar refinery workers at both of our Central Sugars Refinery Sdn Bhd (CSR) and Gula Padang Terap Sdn Bhd (GPT) refineries. At Tradewinds Plantation Berhad (TPB), our community infrastructure development programme goes a step further into the design and building of complete mini township consisting of mosques, community halls and sundry shops. Furthermore, we provide electricity to all the homes in our plantations and we have taken great care to ensure 24-hours of uninterrupted electricity to enable operations to continue without disruptions. Equally, we want to ensure that our workers are comfortable and productive not only at work but also at home with their families. We consider this vital to enable the development of healthy and thriving communities in our plantations. A good example of these would be the Kuala Suai Estate in Miri, the Gemilang and Melur Estates in Gedong and the Jaya Estate in Kota Tinggi.
FeStiVitieS tO FOSteR tieS The Group has great pleasure in providing the venues, platforms, time and space for our workforce to celebrate their cultural and religious festivities. We believe in hard and smart work but we also enjoy giving rewards and recognitions when due while at same time being able to provide our people with the opportunity to enjoy celebrating their festivities. These gatherings also provide a great opportunity for us to foster good relationships and understanding between the different cultures and religions in our communities, in line with the spirit of 1Malaysia. It has been very rewarding when we consider the depth of appreciation we have created between the cultures and festivals of East and West Malaysia. It has made us appreciate the rich diversities we have in our country alone. Events such as Annual Sports Meet, Workers Day, Family Day, Hari Raya Puasa celebrations, birthdays and Annual Dinners are much awaited calendar events for our staff. They represent the opportunity for everyone to meet and enjoy each others company as contemporaries and members of the same community. Our Sports Meets are becoming good arenas for comradeship and healthy competition to evolve and we have diehard competitive employees always waiting for the next meet. We believe in providing and participating in these activities as we are aware that the multiplier effects of goodwill, comradeship and team spirit will translate into success and returns for the Group.
048
OuR cOmmitment tO OccuPatiOnal SaFetY anD HealtH Occupational Safety and Health (OSH) is becoming top priority in the Group. It stems from the conviction that all accidents and injuries are preventable through the establishment and compliance of health and safety policies. It is a guiding principle embraced by all staff of TWM to work as a team to inculcate a work safe culture within the Group. To this end, and as an initiative towards the RSPO requirement for OSH, we recently initiated the OHSAS 18001:2007 in our Melur Gemilang Palm Oil Mill. We have great hopes for the success of this initiative. We want to inculcate proactive involvement and compliance and create OSH awareness amongst our estate managers and employees. We will do this through a few training sessions by introducing the necessary documentations, familiarisation and compliance with audits, reviews, processes and records needed to substantiate the award of the certification. Therefore, with all that needs to be achieved, choosing Melur Gemilang Palm Oil Mill was a practical one. This is our first initiative with OSH certification and to facilitate a smoother and faster transference and evolution of Occupational Safety and Health awareness, we decided to start with a mill that is nearest to an OSH Monitoring Unit. To date, this has proven to be the right decision as we are still on track to complete the process within the stipulated 12 to 15 month period. The success of this project and all other health and safety initiatives are closely monitored by our inhouse OSH Department, headed by a dedicated OSH officer who is registered with the Department of Occupational Safety and Health (Ministry of Human Resource). OuR DeDicatiOn FOR Human caPital DeVelOPment The Group aims to attract, keep and engage the highest caliber of employees and once in, to continue to encourage their development. Thus, an environment that fosters learning, innovation and collaboration is critical to the Groups success. TWM encourages and provides educational and training programmes throughout its different subsidiaries. To enable this to happen, a significant proportion of our subsidiaries annual operating budgets are allocated to human capital development. Furthermore, as an ongoing initiative, the Tradewinds Plantation Academy provides various programmes to TPBs workforce to update and equip them with the necessary new skills and knowledge to add value to their handson experience. The Group will endeavour to continue creating value through people development to meet not just the current requirements but also future business expectations. Programmes covering a broad range of subjects such as corporate governance, compliance, finance, management, leadership, quality and productivity improvements, risk management, information technology and communication skills were conducted successfully during the year under review. Subsequent results from those who participated have been positive and encouraging.
049
The Group will aim to do the right things to ensure sustainability of our business for all our stakeholders.
cOmmunitY DeVelOPment education Education has long been the core of the Groups community relations activities. The Group has been actively involved with certain public and private educational organisations to facilitate young and bright students who do not have the financial means to further their studies. In 2010, the Group has contributed RM15 million to Albukhary International University, a non-profit institution for higher learning catering for the poor and less privileged to pursue higher education. The newly-completed campus in Alor Setar has opened its doors for students from Malaysia and overseas based on family income and academic excellence. Our subsidiary BERNAS has been working closely with the daily newspaper, Berita Harian, to perpetuate the Program Skor A aimed at the children and orphans of BERNAS and the Albukhary Foundation. We are proud to announce that we now have 543 students, out of which 516
students are from the paddy farming community and another 27 consisting of young orphans from the Albukhary Foundation. This programme not only provides the young students with the financial assistance but equally important, it gives them access and opportunity to appreciate and learn examination techniques critical to achieving good results in examinations. In addition to the above, all our subsidiaries now provide placements for students to undergo internship programmes. These internship programmes are necessary as they provide these inexperienced young potential professionals with the solid foundation needed to build their capabilities and strength. It also allows them the opportunity to experience a working environment and to accumulate work experience. community assistance As part of our community service, we are proud that one of the subsidiaries of TPB, Binu Plantation Sdn Bhd worked hand in hand with the Ministry of Rural and Regional Development to provide electricity to three long houses within the vicinity of our Binu Estate in Sarawak. This has created plenty of goodwill and community spirit between our neighbours and us. The goodwill and good publicity have subsequently attracted local labour force potential.
050
We are honoured that we had the opportunity to lend a helping hand to some of the 30,000 farmers in Kedah and Perlis who were traumatised economically and personally by the devastating floods that took the two states by surprise last November. We promptly sent a team of volunteers to the affected area to provide relief assistance including donations in the form of rice and other necessities. Programmes for the Farmers TWM is equally concerned for those who supply us with agricultural produce. BERNAS has specially developed the Program Rakan Ladang or better known as the PRL programme in December 2007 to facilitate the welfare of the paddy farmers who sell their paddy directly and entirely to BERNAS.
BERNAS has made all this possible by the methodology and technical training, financial and farm schemes that they have introduced to the paddy farmers. We have encouraged the farmers to work on other paddy fields apart from their own so that productivity and efficiencies are shared throughout the local farming community. enViROnment Roundtable of Sustainable Palm Oil (RSPO)
The Group will continue to foster a sustainable environment for its estates. Our RSPO programmes are progressing well and we are on track to attain the certifications for all our estates. The initiative is laudable and the requirements are tough. However, we are well aware that once we get it, it will represent an affirmation to our customers The purpose of this programme was to help improve and clients that TWM practices environmental and the quality of the grains and the quantity of the social consciousness in our agricultural practices harvest so that these farmers may see the monetary and business activities. Nevertheless, regardless results from their efforts. Indirectly, by helping the of our efforts to obtain the RSPO certifications, paddy farmers, BERNAS, in collaboration with the we want our stakeholders to be assured that we Government will also be able to guarantee the have always been a responsible business entity. We continuous cultivation of our top quality, local rice have been practicing, perfecting and promoting responsible and green work ethics progressively species. long before the RSPO initiatives.
051
OuR cOmmitment tO PReSeRVinG tHe enViROnment At our Plantation Division, as part of our RSPO programmes, we have embarked on a series of Palm Oil Mill Effluent (POME) treatment projects. POME consists of the water-soluble components of palm fruit as well as a variety of suspended materials. It is acidic, has a high Biological Oxygen Demand (BOD) and has to be treated before it can be discharged. Our Retus Estate Complex in Sibu has benefitted from both our recent efforts and we are proud to say that we now have clean water flowing out of the estates. The level of the mills final discharge now meets the standards set by the Department of Environment in Sarawak. A similar project is being implemented at the Trusan Palm Oil Mill and should be completed by the end of 2011. Regardless, be rest assured that we make it a point to monitor the quality and quantity of the water supplies in all our plantations and refineries.
a clOSinG nOte OF aSSuRance Finally, we would like to say that today our subsidiaries are all learning and working with each other towards cost and quality improvements without jeopardising our business or neglecting our environment. Our combined aim is to provide our customers with products that are grown and manufactured ethically, are of the highest quality, at the best price and personifies the values important to TWM Group.
Partnership
global ventures
054
The Board is pleased to disclose the Groups application of the Principles as set out in Part 1 of the Code and pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR) during the financial year ended 31 December 2010 up to the date of this Statement. DiRectORS the Board The Board is responsible for the overall performance of the Group by maintaining full and effective control over strategic, financial, operational, compliance and governance issues. The Board comprised of members drawn from various professional backgrounds, bringing depth and diversity in experience, expertise and perspectives to the Groups operations. The Group recognises the vital role played by the Board in the stewardship of its directions and operations, and ultimately the enhancement of long-term shareholder value. The Board reserves material matters to itself for decision which include the overall Group strategies and directions, acquisition and divestment policies, approval of major capital expenditure projects, plans and budgets and significant financial matters as well as human capital policies including succession planning for top management. Profile of directors which are presented from pages 20 to 25 of this Annual Report demonstrate their range of experiences and expertise. Board Balance The Board has a balanced composition of executive and non-executive directors. Currently, the Board is made up of an independent nonexecutive chairman, three non-independent non-executive directors, two independent non-executive directors and one non-independent executive director. One non-independent non-executive director has resigned from the Board effective 12 April 2011.
More than one-third of the Board consist of independent directors, which is in compliance with the MMLR. No individual or small group of individuals dominates the decision-making of the Board and the number of directors fairly reflects the best interests of shareholders investment. Collectively, the directors bring a wide spectrum of business acumen, skills and perspectives necessary for the decision-making process. The diversity and depth of knowledge offered by the directors reflect the commitment of the Company to ensure effective leadership and control of the Group. The non-executive directors provide considerable depth of knowledge collectively gained from experiences in a variety of public and private companies. They have the necessary caliber and credibility as well as necessary skills and experiences bringing their judgement on the issues of strategy, performance and resource, including key appointments and standard of conduct. The independent non-executive directors provide unbiased and independent views in ensuring that the strategies proposed by the management are fully deliberated and examined, not only in the interests of the Group but also of other stakeholders. There is a clear division of responsibilities between the roles of the Chairman and the Group Managing Director (GMD) to ensure a balance of power and authority and no individual has unfettered powers of decision. The Chairman is primarily responsible for the orderly conduct and working of the Board whilst the GMD is responsible for the overall operations of the business, organisational effectiveness and the implementation of the Board policies and strategies. The GMD is assisted by the management team in managing the business of the Group on a day-to-day basis. Supply of information Board meetings are scheduled in advance of the new financial year to enable directors to plan ahead and fit the years meetings into their schedules. The Board meets at least six times yearly. Additional meetings are held as and when required. During the financial year under review, six Board meetings were held. Details of attendance are as follows:-
055
Board of Directors Dato Wira Syed Abdul Jabbar bin Syed Hassan Bakry bin Hamzah Syed Azmin bin Syed Nor Chuah Seong Tat Khalid bin Sufat Ooi Teik Huat Datuk Hj Ismail bin Hj Hashim (appointed w.e.f. 11 March 2010) Datuk R Sharifuddin Hizan bin R Zainal Abidin (appointed w.e.f. 22 February 2010) (Resigned w.e.f. 12 April 2011)
number of meetings attended 6 out of 6 6 out of 6 6 out of 6 6 out of 6 6 out of 6 6 out of 6 5 out of 5 5 out of 5
The agenda and full set of Board papers for consideration and information are distributed prior to the Board meetings to ensure that directors have sufficient time to read and be properly prepared for discussion at the meetings. Proposals comprising comprehensive and balanced financial and non-financial information are encapsulated in the papers covering amongst others, strategic, operational, regulatory, marketing and human resource issues to enable the Board to examine both the quantitative and qualitative aspects of the business. Minutes of meetings which include a record of decisions and resolutions of the board meetings are duly recorded and thereafter confirmed by the Chairman of the meetings. All directors have the right to make further enquiries where deemed necessary. The three independent directors are independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgement. They have the caliber to ensure that the strategies proposed by the management are fully deliberated and examined in the long-term interest of the Group as well as the shareholders, employees and customers. Directors have full and unhindered access to the advice and services of the company secretary who is responsible for ensuring that Board meeting procedures are adhered to and that applicable rules and regulations are complied with. The directors may, whether as a full Board or in their individual capacities, obtain independent professional advice, where necessary and appropriate, in furtherance of their duties at the Companys expense.
appointments to the Board The Company has in place a formal and transparent procedure for the appointment of new directors to the Board. All nominees are initially considered by the Nomination and Remuneration Committee (NRC) taking into account the required mix of skills, experiences and other qualities prior to putting forward a recommendation to the Board for its aproval. Re-election In accordance with the provisions of the Companys Articles of Association, all directors who are newly appointed by the Board are subject to re-election by the shareholders at the first Annual General Meeting (AGM) following their appointments. Additionally, at least one-third of the Board shall retire from office at least once in three years but shall be eligible for re-election at every AGM. This provides shareholders the opportunity to evaluate the performances of their directors and also promotes an effective Board. Pursuant to Section 129 of the Companies Act, 1965 (Act), directors over the age of 70 are also required to retire but shall be eligible for reappointment. DiRectORS RemuneRatiOn the level and make up of Remuneration Directors are remunerated at levels which allow the Company to attract and retain directors with the relevant experience and expertise to manage the Group successfully. The remunerations reflect the level of experience and expertise they bring with them and the amount of responsibility undertaken by them.
056
All Non-Executive Directors are paid directors fees which are subsequently approved by the shareholders at the AGM. Procedure The Board, through its NRC, annually reviews the performance of the Executive Director as a prelude to determining his annual remuneration, bonus and other benefits. In discharging this duty, the NRC evaluates the Executive Directors performance against the objectives set by the Board, thereby linking his remuneration to performance. The remuneration of Non-Executive Directors is reviewed by the Board as a whole to ensure that it is aligned to the market and to their duties and responsibilities. Disclosure A summary of remuneration of the Directors (including from companies within the Group) during the financial year under review is as follows:Fees (Rm) Non-Executive Directors Executive Director tOtal 670,823 89,000 759,823 emoluments (Rm) 1,058,814 971,614 2,030,428 Benefits-in-Kind (Rm) 48,950 12,500 61,450 total (Rm) 1,778,587 1,073,114 2,851,701
The number of Directors whose total remuneration falls within the following bands is as follows:Range of Remuneration per annum RM1 to RM50,000 RM50,001 to RM100,000 RM100,001 to RM150,000 RM150,001 to RM200,000 RM200,001 to RM250,000 RM250,001 and above number of Directors executive 1 non-executive 2 2 2 3
Notes: 1. The total remuneration includes salaries, bonuses, fees and meeting allowances received from subsidiaries. 2. Tan Gee Sooi and Boo Yew Leng resigned w.e.f. 6 January 2010.
057
SHaReHOlDeRS Dialogue between companies and investors The Board recognises the importance of transparency and accountability to its shareholders and maintains an effective communication policy that enables both the Board and the management to communicate effectively with its shareholders and the public. An important aspect of an active and constructive communication policy is the timeliness in disseminating information to shareholders and investors. In addition to the various announcements made during the financial year under review in respect of corporate developments of the Group, the timely release of financial results on a quarterly basis provides shareholders with an overview of the performance and operations of the Group. Copies of full announcement are supplied to the shareholders and members of the public upon request. The full financial results and announcements made by the Company can also be obtained from Bursa Malaysia Securities Berhad (Bursa Malaysia)s website at www.bursamalaysia.com as well as the Companys website at www.twinds.com.my. The website of the Company also provides convenient access to the latest corporate information of the Group. the aGm The AGM, usually held in June each year, is the principal forum for dialogue with shareholders. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members of the Board, senior management of the Group, as well as the Companys auditors are present to answer questions raised during the meeting. Additionally, a press conference is held immediately after the AGM whereby the Chairman briefs the media on the resolutions passed and answers questions concerning the Group. accOuntaBilitY anD auDit Financial Reporting The Board aims to present a balanced and meaningful assessment of the Groups financial performance, position and prospects, primarily through the annual financial statements, quarterly announcements of results to the shareholders as well as the Chairmans Statement and Group Managing Directors Review of Operations in the Annual Report. The Board is assisted by its Audit Committee to oversee the Groups financial reporting processes and the quality of its financial reporting in reviewing information to be disclosed through annual financial statements and announcements of quarterly results to shareholders to ensure accuracy, adequacy and completeness. The Board takes responsibility in presenting a balanced and meaningful assessment of the financial performance and prospects of the Group. The financial statements are drawn up in accordance with the provisions of the Act and the applicable approved Financial Reporting Standards in Malaysia. A statement on directors responsibilities in preparing the financial statements is set out separately on page 60 of this Annual Report. internal control The Board acknowledges its overall responsibility for continuous maintenance of a sound system of internal control to safeguard investments of the shareholders and assets of the Group. Statement on Internal Control by the Board as set out on pages 63 and 64 of this Annual Report provides an overview of the state of internal control of the Company. Relationship with auditors The external auditors, Messrs Anuarul Azizan Chew & Co., has continued to report to members of the Company on their findings which are included as part of the Companys financial reports each year. In so doing, the Company ensures that there are formal and transparent arrangements with the auditors to meet their professional requirements. The Audit Committee also reviews with the auditors, results of the annual audit, the audit report and the management letter including the managements responses thereon. At least two meetings with the auditors were held in the absence of the management to discuss any matters that they may wish to present. Quarterly results of the Company are also reviewed by the Audit Committee. DiRectORS tRaininG All members of the Board have attended and completed the Mandatory Accreditation Programme in compliance with the MMLR. The Company recognises the importance and need for continuous education in order for Board members to gain better insights into the technological advances, regulatory updates and management strategies. Directors are encouraged to attend continuous education programmes, talks, seminars, workshops, conferences and other training programmes to enhance their skills and knowledge and to ensure the directors keep abreast with new developments in the business environment. During the financial year under review, all directors have attended the relevant training programmes to further enhance their knowledge in enabling them to discharge their duties and responsibilities more effectively, amongst others, the following:-
058
DiRectORS tRaininG (contd) no. name of Director 1. Dato Wira Syed Abdul Jabbar bin Syed Hassan course attended Audit Committee Institute Roundtable Discussion on Going Forward: Risk & Reform Implications for Audit Committee Oversight by KPMG; The MPH Power Packed Seminar - Investment Opportunities for 2010 and Beyond for Asian Companies and Investors by Jim Rogers; Seminar on Recent Tax Cases and Development by Messrs Lee Hishamuddin Allen & Gledhill; Financial Institutions Directors Education Programme - Developing High Impact Boards - Module 1 to 4 by Bank Negara Malaysia and Perbadanan Insurans Deposit Malaysia; Corporate Governance and the Media by Bursatra Sdn Bhd (TWM Group In-House Seminar); and The Non-Executive Director Development Series - Is It Worth the Risk (TWM Group InHouse Seminar). Towards Boardroom Excellence and Corporate Governance Best Practice by Malaysian Institute of Corporate Governance; The MPH Power Packed Seminar - Investment Opportunities for 2010 and Beyond for Asian Companies and Investors by Jim Rogers; The 7th Superlative Annual Brand Marketing Conference 2010 by Brandedge Sdn Bhd; Leading Innovation Seminar by Prima Asia Pacific Consulting Berhad; Strategic Agility by IBN International; and Corporate Governance and the Media by Bursatra Sdn Bhd (TWM Group In-House Seminar). Gearing for Economic Resurgence by World Islamic Economic Forum. The MPH Power Packed Seminar - Investment Opportunities for 2010 and Beyond for Asian Companies and Investors by Jim Rogers; and Corporate Governance and the Media by Bursatra Sdn Bhd (TWM Group In-House Seminar). Forum on FRS 139 Financial Instruments Standard by Bursa Malaysia Securities Berhad; Seminar on Investment Opportunities for 2010 and Beyond for Asian Companies and Investors; Seminar on Recent Tax Cases and Development by Messrs Lee Hishamuddin Allen & Gledhill; Corporate Governance and the Media by Bursatra Sdn Bhd (TWM Group In-House Seminar); and The Non-Executive Director Development Series - Is It Worth the Risk (TWM Group InHouse Seminar). Tax and Finance Developments Unlocking Potential by PriceWaterhouseCoopers; and World Congress of Accountants 2010 by Malaysian Institute of Accountants. In-house Seminar by Felda Global Ventures Sdn Bhd; Corporate Governance and the Media by Bursatra Sdn Bhd (TWM Group In-House Seminar); and The Non-Executive Director Development Series - Is It Worth the Risk (TWM Group InHouse Seminar). The Non-Executive Director Development Series - Is It Worth the Risk (TWM Group InHouse Seminar).
2.
3. 4.
5.
6. 7.
8.
Datuk R Sharifuddin Hizan bin R Zainal Abidin (resigned w.e.f. 12 April 2011)
059
Directors are also encouraged to visit various operations sites of the Group, as part of their training and development programme to expose and familiarise themselves with the operations and issues directly affecting the businesses of the Group. BOaRD meetinGS Six board meetings were held during the financial year under review whereby various matters including the Companys financial results, business plan and directions of the Company were discussed and deliberated. Details of each directors attendance at the board meetings are set out on page 55 of this Annual Report. All directors have fulfilled the requirements of the MMLR in respect of board meeting attendance. tHe BOaRD cOmmitteeS The Board has formed various committees in delegating specific responsibilities to ensure Board effectiveness and to efficiently discharge its duties and responsibilities. The committees operate under clearly defined terms of reference and report to the Board with their recommendations. The ultimate responsibility for the final decision on all matters however, lies with the Board. audit committee (ac) The composition and terms of reference of the AC and a summary of its activities are set out in the Report of the Audit Committee Report on pages 66 and 67 of the Annual Report. executive committee (eXcO) The EXCO which was established on 10 October 2007 to assist the Board in overseeing the management and operations of the Group as well as expediting the decision-making process comprises three members and is governed by a written charter which deals clearly with its authority and duties. Members of EXCO are as follows: Dato Wira Syed Abdul Jabbar bin Syed Hassan (Chairman) Bakry bin Hamzah Chuah Seong Tat
nomination and Remuneration committee (nRc) The NRC which was established on 23 November 2001 is responsible for recommending new nominees with the necessary skills, experience and competencies to be appointed to the Board as well as committees of the Board. The NRC shall be appointed by the Board from amongst its members or such other persons as the Board thinks fit and shall comprise a Chairman and at least two other members. A majority of the members of NRC shall be independent directors. The NRC which comprises three members also assists the Board in assessing the effectiveness of the Board as a whole, its committees as well as the performance of each existing director. The NRC is also responsible for developing policy on remuneration of the executive director and recommending remuneration and compensation of executive director and senior management to the Board. Members of the NRC are as follows: Dato Wira Syed Abdul Jabbar bin Syed Hassan (Chairman) Ooi Teik Huat (appointed w.e.f. 27 January 2010) Khalid bin Sufat (appointed w.e.f. 3 February 2010)
The Chairman of the Company, Dato Wira Syed Abdul Jabbar bin Syed Hassan, acts as the senior independent non-executive director. Any matters concerning the Group may be conveyed to him at:Tradewinds (M) Berhad Level 12, Menara HLA No. 3, Jalan Kia Peng 50450 Kuala Lumpur Tel : 603 2179 7777 Fax : 603 2161 1632 Shareholders may, at any time, contact the company secretary at the registered address and telephone number of the Company as aforementioned, to convey any concern or make queries. This Statement is made in accordance with a resolution of the Board of Directors dated 28 April 2011.
060
The Board is pleased to include a statement in the Companys Annual Report explaining its responsibility for preparing the annual audited financial statements pursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR). The Companies Act, 1965 (Act) requires directors to prepare financial statements which give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year, to prepare together with the results and cash flows. As required by the Act and the MMLR, the directors are satisfied that the financial statements have been prepared in accordance with the applicable approved Financial Reporting Standards in Malaysia and provisions of the Act. The directors consider that in preparing the financial statements for the financial year ended 31 December 2010 as set out on pages 70 to 198 of this Annual Report, the directors are also satisfied that the Company and the Group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates. The directors have the responsibility in ensuring that the Company and the Group maintain accounting records which disclose with reasonable accuracy the financial position of the Company and the Group which enable them to ensure that the financial statements are in compliance with the financial reporting standard in Malaysia and the Act. The directors are responsible to take such steps as are reasonably available to them to safeguard the assets of the Group and to prevent and detect fraud as well as other irregularities. This Statement is made in accordance with a resolution of the Board of Directors dated 28 April 2011.
061
The following additional information for the financial year ended 31 December 2010 have been provided in compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Malaysia):-
1. non-audit Fees The amount of non-audit fees paid to the Groups external auditors was RM595,000. 2. material contracts involving Directors and major Shareholders Neither the Company nor any of its subsidiaries had entered into any contracts which are material involving directors and major shareholders interests during the financial year ended 31 December 2010. 3. imposition of Sanction/Penalties on the company and its Subsidiaries There was no sanction or penalties imposed on the Company, its subsidiaries, board members and management. 4. Revaluation of landed Properties The Group does not revalue its landed properties as its principal landed properties are agricultural land used for the cultivation of palm oil. 5. Share Buy-backs The Company did not purchase any of its own shares. 6. Option, Warrants or convertible Securities The Company did not offer any option or warrant.
7. american Depository Receipt (aDR) or Global Depository Receipt (GDR) Programme The Company does not sponsor any ADR or GDR programme. 8. Profit estimates, Forecast or Projection The Company did not make any release on the profit estimate, forecast or projection for the financial year. 9. Profit Guarantee No profit guarantee was given by the Company. 10. Status of utilisation of Proceeds Raised from corporate Proposal There was no corporate proposal involving the raising of funds. 11. Public Shareholding Spread The Company is in compliance with the Public Shareholding Spread requirement of Bursa Malaysia. 12. contracts Relating to loans There were no contracts relating to loans by the Company involving Directors and major shareholders.
062
13. Disclosure of Recurrent Related Party transactions of a Revenue or trading nature (RRPt) The RRPT entered into by the Company during the financial year ended 31 December 2010 are as follows:nature of transactions Vendors Purchasers interested Directors/ major Shareholders aggregate value of transactions for the 12-month period from 1 January 2010 to 31 December 2010 (Rm000) 33,337 6,850 262,347 10,877
Purchase of natural gas Provision of logistics and transportation services Sale of refined sugar Agency services for the sale and distributorship of refined sugar and molasses Provision of transportation services
SKS Transport
GPT
4,369
abbreviations: AKMK BH BSB CSR CST Gas Malaysia GPT JP Logistics PLSB RJSB SASN SKS Transport TSDSSM Ahmed Kamil bin PM Mustafa Kamal Bakry bin Hamzah Bukhary Sdn Bhd Central Sugars Refinery Sdn Bhd Chuah Seong Tat Gas Malaysia Sdn Bhd Gula Padang Terap Sdn Bhd JP Logistics Sdn Bhd Perspective Lane (M) Sdn Bhd Restu Jernih Sdn Bhd Syed Azmin bin Syed Nor SKS Transport Sdn Bhd Tan Sri Dato Seri Syed Mokhtar Shah bin Syed Nor
063
Management is responsible to inculcate a risk awareness culture via enchancement of risk management and internal control review, reviewing the existing risk management framework to enhance risk awareness in managing risks and internal control, ensuring compliance with applicable laws and regulations and the policies adopted by the Board. The following key features have been incorporated in the risk management framework of the Group:-
064
5. A detailed budgeting process is established for all key operating companies within the Group in preparing their annual budgets which are subsequently discussed and approved by the Board; 6. Regular and comprehensive management reports are provided to the Board on quarterly basis for monitoring performance against the approved budget covering all key financial and operational indicators as well as compliance with all applicable rules and regulations; 7. Group Internal Audit Department (GIAD) was set up by the Board to provide independent assurance on the adequacy of risk management, internal control and governance systems; GIAD carries out regular reviews on business processes to assess the adequacy and effectiveness of internal control, compliance with regulations and policies of the Group and procedures based on a risk-based audit approach. Results of such reviews are reported to the Audit Committee and ultimately to the Board. The work of the GIAD is undertaken in accordance with an annual audit plan approved by the Audit Committee at the beginning of the year. The head of the GIAD reports to the Audit Committee. Formal procedures are put in place to rectify weaknesses identified in the Internal Audit Reports. 8. The Audit Committee holds regular meetings to deliberate the audit findings, recommendations, management responses and corrective actions for improvement in respect of the SIC. Minutes of Audit Committee meetings are tabled to the Board for notation; and 9. The Audit Committee meets regularly with the senior management, the head of GIAD and the external auditors to review the financial reporting of the Company and the Group, the nature, scope and results of audit review and the effectiveness of the SIC. The Audit Committee meets the external auditors without the presence of management team at least twice yearly. Activities of the Audit Committee during the financial year ended 31 December 2010 are set out in the Report of the Audit Committee on pages 66 and 67 of this Annual Report.
RelatiOnSHiP WitH tHe auDitORS The Board maintains a formal and transparent professional relationship with the auditors through the Audit Committee. The role of the Audit Committee in relation to the internal and external auditors is described in the Report of the Audit Committee of this Annual Report. This statement is made in accordance with a resolution of the Board of Directors dated 28 April 2011.
065
066
Functions The AC shall undertake the following responsibilities and duties:1) external audit Consider and recommend the nomination and reappointment of the external auditors, the audit fee and any questions of resignation or dismissal; Review with the external auditors:i) the scope and audit plan of the audit examination to ensure that adequate tests to verify the accounts and procedures of the Group will be performed and ensure coordination where more than one audit firm is involved; ii) the evaluation of the effectiveness of the internal control systems; and iii) the audit report. Review the assistance given by the employees to the external auditors; and Discuss issues and reservations arising from the audit, and any matters the external auditors may wish to discuss in the absence of management, where necessary.
iv) adequacy of accounting, financial and operating controls and to monitor the implementation of any recommendations made. 4) Related Party transactions Review any related party transactions and conflict of interest situations that may arise within the Company or Group including any transactions, procedure or course of conduct that raise questions with regards to management integrity and the adequacy of the Groups procedures for monitoring and reviewing of related party transactions. 5) Risk management Review the adequacy and effectiveness of risk management, internal control and governance systems instituted in the Group. 6) Other matters Perform such other responsibilities as may be approved by the Board. SummaRY OF actiVitieS DuRinG tHe Financial YeaR In line with its terms of reference, the main activities undertaken by the AC during the financial year ended 31 December 2010 in the discharge of its functions and duties are as follows:1. Reviewed with external auditors, results of the audit and the audit report, including interim audit reports on subsidiary companies and managements responses in relation thereto. Subsequent discussions with the management were held with regards to the actions taken to improve the system of internal control based on recommendations made; 2. Reviewed unaudited quarterly financial statements of the company prior to submission to the Board; 3. Reviewed with external auditors, the audited year-end financial statements of the Group and the company prior to submission to the Board, focusing particularly on any changes in or implementation of major accounting policies and procedures, significant adjustments arising from the audit and compliance with applicable approved FRS and other legal and regulatory requirements; 4. Reviewed with external auditors, the accounting issues arising from audit exercise including updates on new developments on FRS issued by the relevant authorities; 5. Reviewed with internal auditors all audit reports on the results of the work undertaken together with the recommended action plans and their implementation status;
2) internal audit Review the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work; Review the internal audit plan, processes, major findings of internal audit programme, processes or investigations undertaken and managements responses and ensure coordination between the internal and external auditors; and Review the appointment and assessment of performance of the internal audit staff.
3) Financial Reporting Review the unaudited quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly on:i) the nature and impact of any changes in or implementation of major accounting policy and practices;
ii) significant and unusual events; iii) compliance with accounting standards and other legal requirements; and
067
6. Reviewed the related party transactions entered into by the Group to ensure that all transactions made were in compliance with the shareholders mandates; 7. Reviewed the Report of the Audit Committee and the Statement on Internal Control for inclusion in this Annual Report; 8. Reviewed and assessed the risk management activities and risk review reports of the Group; 9. Reviewed the extent of compliance of the Group with the provisions set out under the Malaysian Code on Corporate Governance (Code) and the recommendations made to the Board on the action plans to address any identified gaps between the existing corporate governance practices of the Group and the prescribed corporate governance principles and best practices under the Code; and 10. Reviewed the compliance of the Group with the provisions of the MMLR and other regulatory authorities and regularly monitored actions taken on issues of non-compliance that were reported to the Board and Bursa Malaysia. During the financial year ended 31 December 2010, a total of five Audit Committee meetings were held. Details of attendance are as follows:attenDance at meetinGS members Ooi Teik Huat # Syed Azmin bin Syed Nor Khalid bin Sufat #
#
objective reports on the state of internal controls within the Group and the extent of compliance by such operations with the established policies and procedures of the Group. The internal audit function is guided by its Audit Charter and the Head of GIAD reports to the AC. AC reviews and thereafter, approves the annual internal audit plan at the beginning of each year. GIAD adopts a risk-based auditing approach towards the preparation of the audit plan and conduct of audits which is consistent with the framework of the Group in designing, implementing and monitoring its internal control system. Throughout the financial year under review, audit assignments, investigations and follow-ups were carried out on the units of operations and subsidiaries. These were carried out in accordance with the annual internal audit plan or as special audits. Upon completion of the audits, the internal audit reports were forwarded to the parties concerned for their necessary action before being presented to the AC for its deliberation. GIAD monitors the progress of implementation of the audit recommendations in order to obtain assurance that all major risks and controls concerns have been duly addressed by the management. Approximately RM1,059,838 was incurred by the Group for the internal audit function for the financial year ended 31 December 2010. Activities undertaken by GIAD during the financial year under review were as follows:1. Carried out 27 regular reviews on the business processes to assess the adequacy and effectiveness of internal control, compliance with regulations and the Groups policies and procedures based on the approved audit plan; 2. Held exit audit discussions with the senior management in respect of audit findings, recommendations, managements responses and corrective actions to be taken by operating units management team; 3. Monitored the status of corrective actions and implementations to ensure that all audit issues raised in the internal audit reports were appropriately addressed by the operating units management team; and 4. Reported to the AC on the audit findings, recommendations, managements responses and corrective actions to be taken by the operating units management team on a regular basis.
At least one member of the AC must be a member of the MIA or have at least three years working experience and have passed the examinations specified in Part 1 of the First Schedule of the Accountants Act, 1967 or a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act, 1967 or fulfils such other requirements as prescribed by the approved Exchange. The Chairman, Mr. Ooi Teik Huat, has the necessary qualification as a member of the AC as he is a member of the MIA and CPA Australia. inteRnal auDit The Company has a Group Internal Audit Department (GIAD) whose primary function is to assist the AC in discharging its duties and responsibilities. Its role is to provide the AC with independent and
FInAnCIAL STATeMenTS
070 - 073 074 074 075 - 076 077 - 078 079 080 081 - 082 083 - 086 087 - 198 Directors Report Statement by Directors Statutory Declaration Independent Auditors Report to the Members Statements of Financial Position Comprehensive Income Statements Statements of Comprehensive Income Statements of Changes in Equity Statements of Cash Flows Notes to the Financial Statements
Corporate Values
emerging opportunities
070
Directors Report
The Directors hereby present their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2010. Principal Activities The principal activities of the Company are provision of management services and investment holding. The principal activities of the subsidiary companies are stated in Note 45(a) to the financial statements. There has been no significant change in the nature of these activities during the financial year. Financial Results Group RM000 Profit for the financial year Profit for the financial year attributable to: - Owners of the Parent - Minority interests 481,139 145,675 626,814 160,020 160,020 626,814 Company RM000 160,020
Dividends The Company paid a final dividend of 5 sen gross per share less 25% income tax amounting to RM11,117,000 on 30 July 2010 in respect of the previous financial year. On 14 January 2011, the Company declared an interim dividend of 20 sen gross per share less 25% income tax amounting to RM44,471,000 in respect of the current financial year, paid on 28 February 2011. At the forthcoming Annual General Meeting, a final dividend of 20 sen gross per share less 25% income tax amounting to RM44,471,000 in respect of the current financial year will be proposed for shareholders approval. Reserves and Provisions There was no material transfer to or from reserves and provisions during the financial year other than those disclosed in the financial statements. Issue of Shares and Debentures There was no issue of shares or debentures during the financial year.
071
Directors Report
Options Granted Over Unissued Shares No option was granted to any person to take up unissued shares of the Company during the financial year. Directors The Directors who served since the date of the last report are as follows: Dato Wira Syed Abdul Jabbar bin Syed Hassan Bakry bin Hamzah Syed Azmin bin Syed Nor Chuah Seong Tat Khalid bin Sufat Ooi Teik Huat Datuk Hj. Ismail bin Hj. Hashim Datuk R Sharifuddin Hizan bin R Zainal Abidin (resigned on 12 April 2011) Directors Interests Details of holdings in the ordinary shares of the Company or its related corporations by the Directors in office at the end of the financial year, according to Directors in office at the end of the financial year, according to the register required to be kept under Section 134 of the Companies Act, 1965, were as follows: No. of ordinary shares of RM1.00 each As at 1.1.2010 Syed Azmin bin Syed Nor Indirect Interest: Tradewinds (M) Berhad * Dato Wira Syed Abdul Jabbar bin Syed Hassan Direct Interest: Tradewinds (M) Berhad 20,000 (20,000) 127,388,663 127,388,663 Bought Sold As at 31.12.2010
None of the other Directors holding office at the end of the financial year had any interest in the ordinary shares of the Company or its related corporations during the financial year.
072
Directors Report
Directors Benefits Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in Note 31 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest other than remuneration received by certain Directors as directors or executives of subsidiary companies and any deemed benefits that may accrue to certain Directors by virtue of transaction negotiated between the Group and companies in which the Directors are the directors of the companies as disclosed in Note 40 to the financial statements. Neither during nor at the end of the financial year, was the Company a party to any arrangement the object of which is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Statutory Information on the Financial Statements of the Group and of the Company (a) Before the income statements and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(ii)
(b)
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 allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading; or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(ii)
(iii)
(c)
No contingent or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations when they fall due. At the date of this report, there does not exist: (i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.
(d)
(ii)
073
Directors Report
Other Statutory Information (a) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading. In the opinion of the Directors: (i) the results of the operations of the Group and of the Company for the financial year ended 31 December 2010 have not been substantially affected by any item, transaction or event of a material and unusual nature; and there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
(b)
(ii)
Significant Events The significant events are disclosed in Note 44 to the financial statements. Auditors The auditors, Anuarul Azizan Chew & Co., retire and do not seek for re-appointment.
DATO WIRA SYED ABDUL JABBAR BIN SYED HASSAN KUALA LUMPUR - 28 April 2011
074
Statement By Directors
DATO WIRA SYED ABDUL JABBAR BIN SYED HASSAN KUALA LUMPUR - 28 April 2011
Statutory Declaration
Before me,
COMMISSIONER FOR OATH Asmah binti Buroh (W456) No. 766, Jalan Sentul Sentul 51000 Kuala Lumpur
075
(b)
(c)
(d)
076
ANUARUL AZIZAN CHEW & CO. Firm Number: AF 0791 Chartered Accountants
077
078
1,279,747 1,077,053
079
Profit attributable to:- Owners of the Parent - Minority interests 481,139 145,675 626,814 Earnings per share attributable to Owners of the Parent (sen): - Basic - Diluted 34(a) 34(b) 165.01 81.81 240,973 34,121 275,094 160,020 160,020 13,235 13,235
080
081
Group 2009 At 1 January Total comprehensive income - As previously reported - Fair value adjustments - As restated Realisation upon liquidation of an associated company Acquisition of subsidiary companies - As previously reported - Fair value adjustments - As restated Dividends paid to minority shareholders of subsidiary companies Dividends paid At 31 December 2010 At 1 January - As previously reported - Fair value adjustments - Effect on adopting FRS 139 - As restated Total comprehensive income Accreation of interest in subsidiary companies Acquisition of subsidiary companies Dividends paid to minority shareholders of subsidiary companies Dividends paid At 31 December
Note
Capital Exchange reserves reserves RM000 RM000 3,684 26,967 307 307
35
(16,351)
(16,351)
(16,351)
7(h) 35
36 296,471
84,171
3,684
10,923
2,077
(22,235) 1,178,892
(22,235) 1,576,218
(7,575) 1,079,143
36
296,471
84,171
3,684
9,673
406
2,077
(33,353) 1,622,469
(33,353) 2,019,005
(49,497) 905,135
082
Distributable
Company 2009 At 1 January Total comprehensive income Dividends paid At 31 December 2010 At 1 January - As previously reported - Effect on adopting FRS 139 - As restated Total comprehensive income Dividends paid At 31 December
Note
Total RM000
685,540 1,066,679
901,801 1,282,427
083
114,970 -
612 (283,902)
559 (82,349)
7(d)
(55,856)
(117,442)
084
085
(48,082) (436,011)
086
Less: Islamic deposits held on trust for the benefit of the Islamic Securities Investors Less: Fixed deposits pledged to licensed banks Less: Sinking Fund Account Less: Bank overdraft
(40,300) 25,540
54,745
087
088
(iii) Income taxes The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters are different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amount of the Groups tax payable and tax recoverable as at 31 December 2010 were RM50,245,000 and RM22,707,000 (2009: RM31,253,000 and RM14,563,000) respectively. (iv) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unutilised capital and agriculture allowances to the extent that it is probable that taxable profit will be available against which the losses and capital and agriculture allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying amounts of recognised/unrecognised tax losses and capital and agriculture allowances of the Group as at 31 December 2010 are disclosed in Note 12. (v) Depreciation of property, plant and equipment and amortisation of plantation development expenditure The costs of property, plant and equipment and plantation development expenditure for plantation activities are depreciated on a straight-line basis over their useful lives. Management estimates the useful lives of the property, plant and equipment and plantation development expenditure as stated in Note 2(e) and Note 2(g) respectively. These are common life expectancies applied in the industries. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges and amortisation expenses could be revised. The carrying amount of the Group and of the Companys property, plant and equipment and plantation development expenditure as at 31 December 2010 are stated in Note 3 and Note 5 respectively. (vi) Assets held for sale The Group follows the guidance of FRS 5 in classifying assets recovered principally through a sale transaction as assets held for sale. This classification requires significant judgement. In making this judgement, the Group takes into consideration the likelihood of the sale. The Groups carrying amount of the assets held for sale as at 31 December 2010 is disclosed in Note 18.
089
(xi) Contingent liabilities As disclosed in Note 39 to the financial statements, the Group has several pending litigation with various parties as at current financial year end. The Board of Directors, after due consultation with the Groups solicitors, assess the merit of each case, and makes the necessary provision for liabilities in the financial statements if its crystallisation is deemed to be probable. (xii) Impairment of investments in subsidiaries The Directors review the material investments in subsidiaries for impairment when there is an indication of impairment. The recoverable amounts of the investments in subsidiaries are assessed by reference to the value in use of the respective subsidiaries. The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate discount rate. For such discounted cash flow method, it involves the use of estimated future results and a set of assumptions to reflect their income and cash flows. Judgement has been used to determine the discount rate for the cash flows and the future growth of the businesses of the subsidiaries.
090
(b) recognise immediately in profit or loss any excess remaining after that reassessment. When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiarys identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation. Subsidiaries are consolidated from the date on which control is transferred to the Group to the date on which that control ceases.
091
092
(vii) Transaction costs Costs directly attributable to an acquisition are included as part of the cost of acquisition. (e) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(i). 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. Freehold land and capital work-in-progress are not depreciated. Leasehold land is amortised on a straight line method over the period of the lease. Other property, plant and equipment are depreciated on a straight line basis to write off the cost of the assets to their residual values over their estimated useful lives as follows:
093
Depreciation methods, useful lives and residual values are reassessed at the reporting date. Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits will flow to the Group and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred. Gains or losses on disposals are determined by comparing net disposal proceeds with carrying amount and are recognised in the income statements. (f) Leases (i) Classification A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets. All leases that do not transfer substantially all the risks and rewards are classified as operating lease. Finance leases Assets acquired by way of finance leases or hire purchase are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the statements of financial position as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Groups incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets. Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the income statements over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2(e). (iii) Operating lease - the Group as lessee The upfront payments made under an operating lease are classified as prepaid lease payments and are amortised to the income statement on a straight line basis over the lease period.
(ii)
094
(g)
Plantation development expenditure Mature plantations are stated at cost less accumulated amortisation and any impairment losses. The policy of recognition and measurement of impairment losses is in accordance with Note 2(i). Amortisation is charged to the income statements so as to write off the cost of mature plantations, using the straight-line method, over the estimated useful lives of 25 years, representing the economic useful lives of the crops. Costs incurred in the preparation of the nursery, purchase of seedlings and their maintenance are stated at cost. The accumulated costs will be capitalised in plantation development expenditure at the time of planting. Immature plantations are stated at cost. The costs of immature plantations consist mainly of the accumulated cost of land clearing, planting, fertilising and maintaining the plantation, borrowing costs and other indirect overhead costs up to the time the trees are harvestable and to the extent appropriate. The residual values and useful lives of plantation assets are reviewed, and adjusted as appropriate, at each reporting date.
(h)
Property development activities (i) Land held for property development Land held for property development is stated at costs less accumulated impairment losses, if any. Such land is classified as non-current asset when no significant development work has been carried out or where development activities are not expected to be completed within the normal operating cycle. Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies. Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (ii) Property development costs Property development costs comprise all cost that are directly attributable to the development activities or that can be allocated on a reasonable basis to such activities. They comprise the cost of land under development, construction costs and other related development costs common to the whole project including professional fees, stamp duties, commissions, conversion fees and other relevant levies as well as borrowing costs.
095
096
(iii)
097
098
(iii) the financial liability contains an embedded derivative that would need to be separately recorded. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. (o) Financial guarantee contract A financial guarantee contract is a contract required the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Financial guarantee contracts are recognised as financial liabilities at the date the guarantee is issued. Liabilities arising from financial guarantee contracts, including company guarantees of subsidiaries through deeds of cross guarantee, are initially recognised at fair value and subsequently at the higher of the amount determined in accordance with the measurement requirements of a provision of liabilities in Note 2(r) and the amount initially recognised less cumulative amortisation. The fair value of the financial guarantee is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument, and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligation. Where guarantees in relation to loans or other payables of subsidiaries or associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of investment in the financial statements of the Group. (p) Inventories Inventories are stated at the lower of cost and net realisable value after adequate allowance has been made for all deteriorated, damaged, obsolete or slow-moving inventories. Cost of inventories comprises the original cost of purchase plus the cost of bringing the inventories to their intended location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
099
100
101
(iii)
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings, are taken to statements of comprehensive income. When a foreign operation is sold or dissolved, such exchange differences are recognised in the income statements as part of the gain or loss on sale or dissolution. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The principal exchange rate used for every unit of foreign currencies ruling at the reporting date is as follows:2010 RM 1 United States Dollars (USD) 3.08 2009 RM 3.42
(v)
Income tax Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted at the reporting date. Deferred tax is provided for, using the liability method, on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unutilised tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unutilised tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in the income statements, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.
(w) Employee benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
102
(iii)
(iv)
(x)
Revenue recognition (i) Revenue from sale of goods is measured at the fair value of the consideration receivable and is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.
103
Government grants Government grants are recognised at fair values where there is reasonable assurance that the grants will be received and the Group will comply with all attached conditions. Government grants relating to income are recognised in the income statements to match them with the cost they are intended to compensate.
(z)
Segment reporting For management purposes, the Group is organised into operating segments based on their products and services/business activities. An operating segments operating results are reviewed regularly by the chief operating decision maker, who will make decisions to allocate resources to the segments and assess the segment performance.
(aa) Earnings per share The Group presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period and ordinary shares that will be issued upon the conversion of mandatorily convertible instruments from the date the contract is entered into. (bb) Reserves (i) Available-for-sales reserves Available-for-sales reserve represents the cumulative fair value changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired.
104
(iii)
(cc) Equity instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided. (dd) Non-current assets (or disposal groups) held for sale Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable. Immediately before the initial classification as held for sale, the carrying amounts of the non-current assets (or all the assets and liabilities in a disposal group) are measured in accordance with applicable FRSs. On initial classification as held for sale, non-current assets or disposal groups (other than investment properties, deferred tax assets, employee benefits assets, and financial assets carried at fair value) are measured at the lower of carrying amount before the initial classification as held for sale and fair value less costs to sell. The differences, if any, are recognised in income statements as impairment loss. Non-current assets (or disposal groups) held for sale are classified as current assets (and current liabilities, in the case of non-current liabilities included within disposal groups) on the face of the statements of financial position and are stated at the lower of carrying amount immediately before initial classification and fair value less costs to sell and are not depreciate, Any cumulative income or expense recognised directly in equity relating to the non-current asset (or disposal group) classified as held for sale is presented separately. If the Group has classified an asset (or disposal group) as held for sale but subsequently the criteria for classification is no longer met, the Group ceases to classify the asset (or disposal group) as held for sale. The Group measures a non-current asset that ceases to be classified as held for sale (or ceases to be included in a disposal group classified as held for sale) at the lower of: (i) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset (or disposal group) not been classified as held for sale; and its recoverable amount at the date of the subsequent decision of not to sell.
(ii)
105
Group 2010 Cost At 1.1.2010 - As previously reported - Effect of adopting the amendments to FRS 117 - Fair value adjustments (Note 35) - As restated Additions Acquisition of subsidiary companies (Note 7) Disposals Write-off Reclassification At 31.12.2010 Accumulated depreciation At 1.1.2010 - As previously reported - Effect of adopting the amendments to FRS 117 - As restated Charge for the financial year Acquisition of subsidiary companies (Note 7) Disposals Write-off Reclassification At 31.12.2010 Carrying amount At 31.12.2010
Total RM000
103,598
804,627 104,590 38,455 4,052 (6,568) (6,598) 11,320 12,222 1,895 (3,796) (2,219) 414
87,339 1,755,465 - 1,063,909 75,654 574 (41,258) 22,181 182,191 26,807 (15,164) (17,656) 87,339 2,841,555
804,627 104,590
125,779 1,076,980
845,288 113,106
142,488 136,994
122,309 3,017,733
125,779
106
Group 2009 Cost At 1.1.2009: - As previously reported - Effect of adopting the amendments to FRS 117 (Note 4) - As restated Additions Acquisition of subsidiary companies (Restated) (Note 7) Fair value adjustments (Note 35) Disposals Termination of lease Write-off Exchange differences Transfer to assets held for sale (Note 18) Reclassification At 31.12.2009 Accumulated depreciation At 1.1.2009: - As previously reported - Effect of adopting the amendments to FRS 117 (Note 4) At 1.1.2009 Charge for the financial year Acquisition of subsidiary companies (Note 7) Disposals Termination of lease Write-off Exchange differences Transfer to assets held for sale (Note 18) Reclassification At 31.12.2009 Carrying amount At 31.12.2009
Leasehold Buildings and Plant and land infrastructure machinery RM000 RM000 RM000
Total RM000
31,746 1,107,005 - 1,033,225 31,746 2,140,230 33,830 46,095 (24,332) 115,147 617,607 22,181 (1,541) (26,000) (20,679) 110 (5,500) -
87,339 2,841,555
125,779
338,342 338,342 36,295 118,564 (319) (15,020) 23 (4,716) 467 473,636 330,991
579,542 74,026 653,568 81,685 227,264 (1,367) (5,275) (20,064) 96 (4,716) 931,191
87,339 1,910,364
107
Company 2010 Cost At 1.1.2010 Additions Disposals At 31.12.2010 Accumulated depreciation At 1.1.2010 Charge for the financial year Disposals At 31.12.2010 Carrying amount At 31.12.2010 2009 Cost At 1.1.2009 Additions Disposals Write-off At 31.12.2009 Accumulated depreciation At 1.1.2009 Charge for the financial year Disposals Write-off At 31.12.2009 Carrying amount At 31.12.2009
Renovation RM000
Total RM000
2,077 2,077
108
Group 2010 RM000 Additions in property, plant and equipment Less: Hire purchase Cash payments on additions of property, plant and equipment (d) 182,191 (2,713) 179,478 2009 RM000 115,147 115,147
The net carrying amounts of property, plant and equipment held under hire purchase and finance lease arrangements are as follows: Group 2010 RM000 Motor vehicles Plant and machinery 3,587 4,003 7,590 Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 22. 2009 RM000 2,606 5,817 8,423
109
Group 2010 Cost At 1 January - As previously reported - Effect of adopting the amendments to FRS 117 (Note 47) - As restated Accumulated amortisation At 1 January - As previously reported - Effect of adopting the amendments to FRS 117 (Note 47) - As restated Carrying amount At 31 December 2010 2009 Cost At 1 January - As previously reported - Effect of adopting the amendments to FRS 117 (Note 47) - As restated Accumulated amortisation At 1 January - As previously reported - Effect of adopting the amendments to FRS 117 (Note 47) - As restated Carrying amount At 31 December 2009
Total RM000
1,011,975 (1,011,975) -
51,934 (51,934) -
1,063,909 (1,063,909) -
79,375 (79,375) -
10,120 (10,120) -
89,495 (89,495) -
982,903 (982,903) -
50,322 (50,322) -
1,033,225 (1,033,225) -
65,118 (65,118) -
8,908 (8,908) -
74,026 (74,026) -
In previous years, upfront payments made for long term leasehold lands were included under prepaid lease payments. Following the adoption of Amendments to FRS 117, the leasehold lands are now reclassified under property, plant and equipment as disclosed in Note 3.
110
1,515,511 1,387,955
Included in staff costs are contributions made to a defined contribution plan amounting to RM665,000 (2009:RM702,000).
111
Assets retired from use comprises plantation development expenditure incurred on oil palm which had reached the end of its normal life cycle and had been replanted. The net carrying amount of plantation development expenditure charged to licensed banks for credit facilities granted to the Group as disclosed in Note 23 is RM867,440,000 (2009: RM812,947,000). Retus Plantation Sdn Bhd (RPSB), a subsidiary company of the Company planted oil palm trees on approximately 749 hectares of land which belongs to the Sarawak State Government. Total carrying value of the plantation development expenditure incurred on this land as at 31 December 2010 was approximately RM4,909,000. RPSB is awaiting the clearance from the State Land and Survey Department to submit the application for the alienation of this land. RPSB harvested fresh fruit bunches in the current and previous financial years from the planted land which is outside its land boundary. RPSB will continue to harvest from this 749 hectares of land and foresee that it will be able to do so in the foreseeable future, unless the land is alienated to third parties. The Directors of RPSB are of the opinion that the plantation development expenditure incurred on the overplanted area of 749 hectares is fully recoverable. In the event RPSB is unsuccessful in the application for the alienation of this 749 hectares of land, RPSB would not be able to recover the plantation development expenditure incurred of approximately RM4,909,000 and consequently this amount may have to be written off to the income statements.
(d)
(e)
6.
Land Held for Property Development Group 2010 RM000 Long term leasehold land at cost At 1 January Acquisition of subsidiary companies [Note 7(h)(ii)] At 31 December 87,412 87,412 87,412 87,412 2009 RM000
An approved master plan for the long term leasehold land had been obtained for the development of the second border town between Malaysia and Thailand known as Bandar Sempadan Kota Putra.
112
(a)
The above investment in subsidiary companies at Group level in prior year represents investment in an unconsolidated subsidiary company as explained in Note 45(a). In the previous financial year as disclosed in Note 7(h)(iv), the Company acquired 50.33% equity interest in Padiberas Nasional Berhad (Bernas), a company incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. On 20 January 2010, the Company acquired additional interest of 22.24% in Bernas as diclosed in Note 7(e) (i) and Note 44(b)(i). The Company now owns 72.57% equity interest in Bernas. Details of the subsidiary companies and shareholdings therein are shown in Note 45(a). Acquisition of subsidiary companies during the financial year (i) Acquisition of remaining 60% equity interest in Hak JTOP Sdn Bhd (Hak JTOP) On 9 June 2010, Tradewinds Plantation Berhad, a subsidiary company of the Company, acquired the remaining 60% equity interest in Hak JTOP Sdn Bhd (Hak JTOP) for a cash consideration of RM3.2 million. Consequently, Hak JTOP became a wholly-owned subsidiary of JTOP. The effect of the acquisition on the financial results of the Group in the financial year was as follows: RM000 Revenue Loss for the period (23)
(b)
(c) (d)
There was no material effect to the Groups financial results for the financial year if the acquisition had been completed on 1 January 2010.
113
The acquisitions of BLSB was completed on 31 May 2010. However, if the acquisitions of BLSB had been completed on 1 January 2010, the Groups revenue and profit for the financial year would have been RM5.58 billion and RM626.7 million respectively for the financial year ended 31 December 2010. The assets acquired and liabilities assumed as at date of acquisition were as follows: Acquirees carrying amount RM000 Property, plant and equipment Deferred tax assets Trade and other receivables Cash and cash equivalents Trade and other payables Net identifiable assets 186 47 30,302 345 30,880 13,950 16,930 Fair value recognised on acquisition RM000 186 47 30,302 345 30,880 13,950 16,930
114
115
116
The above accreation of interest in subsidiary companies had resulted in the dilusion of minority interest of approximately RM277.3 million during the financial year. (f) Disposal of subsidiary companies during the financial year (i) On 6 April 2010, Bernas dissolved the following wholly-owned subsidiaries:i. Bernas Realty & Development Sdn. Bhd. ii. Bernas-KME Sdn. Bhd. iii. Bernas Fisheries Sdn. Bhd.
117
(ii)
(iii) (iv)
The above subsidiary companies were struck-off from CCMs register during the financial year and the striking-off has no material effect to the Groups financial position and financial results for the current financial year.
118
There was no material effect to the Groups financial results for the previous financial year if the acquisition had been completed on 1 January 2009. The assets acquired and liabilities assumed as at date of acquisition were as follows: Acquirees carrying amount RM000 Prepaid lease payments for land Receivables Payables Deferred tax liabilities Total net assets Goodwill on consolidation Cash flow on acquisition (ii) Acquisition of Northern Integrated Agriculture Sdn Bhd (NIA) On 21 August 2009, Tradewinds Plantation Berhad, a subsidiary company of the Company entered into a conditional Sale and Purchase Agreement with Gerak Mashyur (Malaysia) Sdn Bhd (GMSB) for the acquisition of 700,000 ordinary shares of RM1.00 each, representing 70% of the equity interest of NIA for a total cash consideration of RM50.36 million. The purchase consideration was adjusted to RM49.32 million upon the completion of assessment of the acquirees identifiable assets, liabilities, and contingent liabilities based on due diligence report. NIA is a property development company incorporated in Malaysia and was established as a joint venture vehicle between GMSB and Perbadanan Kemajuan Negeri Kedah to undertake the development of the second border town between Malaysia and Thailand known as Bandar Sempadan Kota Putra. 557 66 (545) 78 Fair value recognised on acquisition RM000 7,208 66 (545) (1,663) 5,066 2,142 7,208
119
If the acquisition had been completed on 1 January 2009, the Group revenue and profit for the previous financial year would have been RM2.07 billion and RM276.2 million, respectively. The acquisition had the following effect on the Groups assets and liabilities on acquisition date: Acquirees carrying amount RM000 Prepaid lease payments for land Property, plant and equipment Land held for development Other receivables Fixed deposits with a licensed bank Cash and bank balances Trade and other payables Tax payables Deferred tax liability Total net assets Less: Minority interest Groups share of net assets Excess of fair value of net assets acquired over purchase consideration Adjusted purchase consideration discharged by cash Less: Cash and cash equivalents Cash out flow on acquisition, net of cash and cash equivalents acquired 3,313 103 4,148 26 1,429 3,037 (7,869) (729) 3,458 Fair value recognised on acquisition RM000 12,265 103 87,412 26 1,429 3,037 (7,869) (729) (23,054) 72,620 (21,786) 50,834 (1,519) 49,315 (3,037) 46,278
120
If the acquisition was completed on 1 January 2009, the Group revenue and profit for the financial year would have been RM4,995,115,000 and RM334,789,000 respectively. The acquisition had the following effect on the Groups assets and liabilities on acquisition date: Acquirees carrying amount RM000 Prepaid lease payments for land Property, plant and equipment Investment in associated companies Other investments Intangible assets - trademarks Inventories Trade and other receivables Fixed deposits with licensed banks Cash and bank balances Trade and other payables Bank borrowings Tax payables (net) 30,256 340,511 249,187 40 140 542,040 730,875 66,196 135,971 (215,717) (762,358) (6,323) Fair value recognised on acquisition RM000 30,256 340,511 249,187 40 140 542,040 730,875 66,196 135,971 (215,717) (762,358) (6,323)
121
The initial accounting for the business combination above had been determined provisionally during the previous financial year. The Company had during the financial year conducted a Purchase Price Allocation (PPA) exercise and adjustments to the provisional values were applied retrospectively in accordance to Para 62 of the FRS 3 Business Combinations. The effect of the fair value adjustments arising from the PPA exercise is disclosed in Note 35. 8. Investment in Associated Companies Group 2010 RM000 Unquoted shares outside Malaysia, at cost Unquoted shares in Malaysia, at cost Share of post acquisition reserves Distribution of pre-acquisition reserves 14,505 202,263 37,402 (11,807) 242,363 Details of the associated companies and shareholdings therein are shown in Note 45(b). During the financial year, the Group had increased equity interest in associated companies namely Hak JTOP Sdn Bhd (Hak JTOP), Bernas Logistic Sdn Bhd (BLSB) and Liansin Trading Sdn Bhd (Liansin) as disclosed in Note 7(d)(i),(ii) and (iii), respectively. Consequently, Hak JTOP, BLSB and Liansin became subsidiary companies of the Group. 2009 RM000 14,465 227,004 2,661 (11,807) 232,323
122
On 19 October 2009, Tradewinds Plantation Berhad (TPB) entered into a supplemental agreement to the Shareholders Agreement dated 1 August 2008 with CB Industrial Product Holding Berhad (CBIP) to subscribe equally for 20,000,000 RCPS of RM1.00 each at an issue price of RM1.00 each in the jointly controlled entity, Pride Palm Oil Mill Sdn. Bhd. (PPOM). There was no effect on the equity interest held by TPB subsequent to the subscription. On 29 October 2009, PPOM issued 10,000,000 RCPS of RM1.00 each which were subscribed equally by TPB and CBIP. The remaining 10,000,000 RCPS of RM1.00 each to be issued by PPOM and subscribed equally by TPB and CBIP is disclosed as capital commitments in Note 38.
123
The Groups aggregate share of the assets, liabilities and income and expenses of the jointly controlled entity are as follows: Group 2010 2009 RM000 RM000 Assets and Liabilities Non-current assets Current assets Non-current liabilities Current liabilities 9,894 45,791 55,685 17,196 25,000 42,196 Results Income Expenses (including finance costs and tax expenses) Share of results 29,042 (27,776) 1,266 9,827 (15,705) (5,879) 7,093 49,060 56,153 11,430 32,500 43,930
124
Total RM000
125
Total RM000
126
11.
Intangible Assets Group 2010 RM000 At 1 January Arising from acquisition of subsidiary companies - As previously stated [Note 7(h)(i),(iv)] - Fair value adjustments (Note 35) - As restated Amortisation of concession rights At 31 December Analysed as: Goodwill Trademarks Concession rights 93,282 140 215,589 309,011 93,282 140 258,000 351,422 (42,411) 309,011 2,282 258,000 260,282 351,422 351,422 2009 RM000 Restated 91,140
127
The Management has determined the growth rate based on past performance and its expectations of market development. The average growth rate is consistent with the trends and expectation of the Group. The discount rate used is the Groups overall weighted pre-tax average cost of capital for that industry.
128
ii)
iii)
(c)
Concession rights Concession assets represent exclusive rights relating to import and distribution of rice in Malaysia. The rights enable the Group to amongst others, procure, import, process and distribute rice in Malaysia. The rights also include the maintenance of the rice stockpile, the distribution of paddy price subsidies to farmers on behalf of the Government, the management of the Bumiputra Rice Millers Scheme and acting as a buyer of last resort at the Guaranteed Minimum Price of paddy.
129
The components and movements of deferred tax liabilities and assets of the Group and of the Company during the financial year prior to offsetting are as follows: Deferred tax liabilities of the Group: Accelerated capital allowances RM000 At 1 January 2010 Fair value adjustments (Note 35) Restated Transfer to/from between DTA/DTL At 1 January 2010 (restated) Acquisition of subsidiary companies Over/(Under) provision in prior year Recognised in income statement Offsetting At 31 December 2010 290,500 290,500 (11,366) 279,134 1,070 3,603 32,685 316,492 Fair value adjustment RM000 176,344 61,058 237,402 237,402 (305) (15,974) 221,123
Total RM000 466,406 61,058 527,464 (11,366) 516,098 1,070 3,298 18,522 538,988 (173,776) 365,212
130
Fair value adjustment RM000 156,811 24,717 61,058 (133) (5,051) 237,402
Total RM000 392,555 62,913 61,058 (3,350) 14,288 527,464 (162,393) 365,071
Total RM000 240,098 (11,366) 228,732 47 5,337 26,400 260,516 (173,776) 86,740 174,012 52,276 (1,737) 15,547 240,098 (162,393) 77,705
131
The unused tax losses and unutilised capital and agriculture allowances are available indefinitely for offset against future taxable profits of the subsidiary companies in which those items arose. Deferred tax assets have not been recognised in respect of these items as they may not be able to be offset against taxable profits of other subsidiary companies in the Group and they have arisen in subsidiary companies that have a recent history of business losses. The recognition of the deferred tax assets is dependent on future taxable profits in excess of profits arising from the reversal of existing taxable temporary differences. The evidence used to support this recognition is based on the Managements budget and relevant business plans, which shows that it is probable that the deferred tax assets would be recognised in future years.
132
The inventories above are net of inventories written down to net realisable value and inventories written off amounting to RM209,000 and RM NIL (2009:RM946,000 and RM3,499,000) respectively. The Group manages the Government Rice Stockpile of 239,000 metrics tonnes. The stockpile rice held on behalf of the Government is excluded from the inventories of the Group. 14. Trade Receivables Group 2010 RM000 Trade receivables Less: Allowance for impairment losses 704,708 (73,792) 630,916 2009 RM000 614,961 (54,817) 560,144
The Groups normal trade credit terms range from 7 to 90 days (2009: 7 to 90 days). Other credit terms are assessed and approved on a case-by-case basis.
133
134
Trade receivables that are collectively determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements. Included in the above trade receivables are amounts owing by related parties as follow: Group 2010 RM000 Bukhary Sdn Bhd Bintulu Edible Oils Sdn Bhd Lahad Datu Edible Oils Sdn Bhd Solar Green Sdn Bhd Felda Marketing Services Sdn Bhd 96,362 2,228 8,852 107,442 The relationship with the above parties is disclosed in Note 40. In addition to the above, included in the Group trade receivables is an aggregate amount of RM2,131,000 (2009: RM1,565,000) owing by Recent Giant Sdn Bhd (RGSB), Benua Haulage Sdn Bhd (BHSB), Fragstar Corporation Sdn Bhd (FCSB), Firma Rena Sdn Bhd (FRSB), Kien Fatt Rice Mill Sdn Bhd (KFRMSB) and Ban Seng Heng Rice Mill Sdn Bhd (BSH), companies in which certain Directors of YHL Holding Sdn Bhd, a subsidiary company of Padiberas Nasional Berhad (Bernas), are related by virtue of their family relationship with the directors of RGSB, BHSB and BSH. The Group has no significant credit risk that may arise from exposure to a single receivable or to groups of receivables except for the above amounts owing by related parties. 2009 RM000 118,082 19,665 7,501 873 146,121
135
Included in other receivables of the Group is balance of consideration receivable for surrender of lease amounting to RM24,950,000 (2009: RM58,900,000) which is stated after discounting the gross amount of RM88,350,000 (2009: RM88,350,000) collectible by 3 equal annual instalments using the rate of 3.7% (2009: 3.7%). The total fair value gain on financial assets held at fair value recognised in the Groups income statements previously was RM1,050,000. There was no such amount recognised in 2009 and 2010. Included in the Groups other receivables is an amount owing by Solar Green Sdn Bhd, a jointly controlled entity of a subsidiary company, amounting to RM11,951,000 (2009: RM1,320,000). The amount owing by SGSB comprise trade transactions which are unsecured, interest-free and payable on demand in cash and cash equivalents. In addition to the above, other receivables of the Group include an amount of RM5,108,400 (2009: RM5,108,400) being rental deposit paid to Yew Poe Hai and Yew Chor Khooi, where the former is an alternate director of YHL Holding Sdn Bhd (YHL), a subsidiary company of Padiberas Nasional Berhad, and the latter is connected to certain directors of YHL by virtue of his family relationship. Grant receivables from the Government of Malaysia comprise subsidies recoverable from the Government, in relation to government grants as disclosed in Note 29. Included in the previous years other receivables of the Group is an amount owing by Johor Port Berhad (JPB) amounting to RM20,725,000. The amount represents receivable lease balance arising from the termination of sub-lease agreement as disclosed in Note 44(e). This balance is payable by JPB within 6 months from the date of the termination agreement on 2 December 2009. JPB has fully settled the amount in the current financial year. The relationship with JPB is disclosed in Note 40.
136
(a) The amount owing by subsidiary companies represents unsecured advances which are repayable on demand. Interest is charged at rate of 5.0% (2009: 5.0%) per annum. (b) The amount owing to subsidiary companies represents unsecured interest free advances which are repayable on demand except for an amount of RM30,953,000 (2009: RM2,974,000) which is charged at a rate of 5.0% (2009: 1.75%) per annum. 17. Amount Owing by/(to) Associated Companies
Group 2010 RM000 Amount owing by associated companies Less: Allowance for impairment losses Analysed as: Trade Non-trade 19,351 1,129 20,480 Amount owing to associated companies Trade Non-trade 304 304 Allowance for impairment losses At 1 January Recognised in the income statement Acquisition of subsidiary company At 31 December 25,267 (268) 24,999 25,267 25,267 3,030 338 3,368 20,292 14,580 34,872 45,479 (24,999) 20,480 2009 RM000 60,139 (25,267) 34,872
The amount owing by/to associated companies arising from non-trade transaction represents unsecured interest free advances, and is repayable on demand.
137
(a) On 7 December 2009, the Group agreed to dispose certain plant and machinery with a carrying amount of RM784,000 to a third party for a cash consideration of RM1,500,000. On 4 January 2010, the Group entered into a sale and purchase agreement with the third party for the disposal. The disposal was completed during the financial year and the gain arising from the disposal amounted to RM716,000. (b) The non-current asset transferred from investment in associated companies in prior year relates to the disposal of investment in Asian Peninsula Corporation Ltd. as disclosed in Note 44 (d). The disposal was completed during the financial year and the loss arising from the disposal amounted to RM630,000.
19.
Cash and Cash Equivalents 2010 RM000 Fixed deposits - Licensed banks - Other financial institutions 143,080 88,653 231,733 243,523 475,256
138
Group 2010 RM000 Other payables Interest payables Accruals Deposits Dividend payables 224,887 9,906 52,836 3 66 287,698 2009 RM000 171,333 5,260 131,641 6 68 308,308
Company 2010 RM000 311 5,982 2,362 66 8,721 2009 RM000 46,033 3,287 1,349 68 50,737
Included in other payables of the Group above are balances owing to minority shareholders and Solar Green Sdn Bhd, a subsidiary company of a jointly controlled entity of the Group, amounting to RM14,415,000 and RM6,000 (2009: RM14,415,000 and RM10,000), respectively. These amounts are unsecured, interest-free and are payable on demand in cash and cash equivalents.
139
Analysed as: Repayable within twelve months Repayable after twelve months 2,815 4,901 7,716 Interest is charged at rates between 1.75% and 7.80% (2009: 2.75% and 6.90%) per annum. 4,082 4,854 8,936
140
2,878,258 2,662,009
141
(ii)
The TL Facility is secured by way of: (i) Memorandum of deposit of up to four hundred and seventy million (470,000,000) issued and fully paid ordinary shares of RM1.00 each in Bernas; Memorandum of deposit of up to three hundred and sixty nine million (369,000,000) issued and fully paid ordinary shares of RM1.00 each in Tradewinds Plantation Berhad (TPB); Memorandum of up to one hundred and fifty million (150,000,000) Irredeemable Convertible Unsecured Loan Stock in TPB; Memorandum of deposit over the entire paid-up capital in Central Sugar Refinery Sdn Bhd (CSR) of thirty three million (33,000,000) ordinary shares of RM1.00 each; and First legal charge over the revenue and sinking fund accounts.
(ii)
(iii) (iv)
(v)
In addition, the Company shall observe the following security covenants in respect of the Facility: (i) The aggregate value of the securities pledged shall not be less than 2 times (minimum threshold) of the loan outstanding at all times; and The value of CSR shares shall be based on the CSRs net assets, which shall not be lower than RM7.50 per share at all times.
(ii)
In the event the security value falls below the minimum threshold, the Company shall pledge additional security to maintain the minimum threshold within five working days, failing which, an additional interest charge of one percent (1%) per annum shall be imposed by the lender above the interest rate. (b) The Sukuk of RM750 million nominal value of Islamic Commercial Papers (ICP) and/or Medium Term Notes (MTNs) is issued under the Islamic principle of Musyarakah which is a partnership contract (Sukuk) obtained by Bernas, a subsidiary company of the Company during the financial year, of which RM398,372,000 was redeemed during the financial year. The Sukuk is initially stated at cost, being the fair value of the consideration received. After initial recognition, the profit element attributable to the Sukuk in each period is recognized as an expense at a constant rate to its maturity. The profit is payable semi-annually in arrears. RAM Ratings Services Berhad has assigned initial long and short-term ratings of AA3 and P1 to Bernas proposed ICP/MTN respectively, with a stable outlook.
142
(ii)
The Islamic Debt Securities are secured by the first and second legal charges over the freehold land, leasehold land, plantations and palm oil mills owned by certain subsidiaries. The Islamic Debt Securities are repayable by installments of varying amounts over the periods as disclosed in Note 23(g). (d) (e) Secured revolving credits are secured by fixed charges over certain long term leasehold land of certain subsidiary companies. Other secured term loans are secured by way of: (i) The first and second legal charges over the leasehold land, plantations and palm oil mill owned by certain subsidiary companies of the Company; and Fixed deposits placed with licensed bank as disclosed in Note 19.
(ii) (f)
The range of interest or profit rates on borrowings during the financial year is as follows: Group 2010 % p.a. Term loans - fixed rate - floating rate Revolving credits Bill payables Islamic debts securities: - Sukuk Al-Ijarah - Murabahah Commercial Papers Bank overdraft 4.95 - 5.70 4.85 - 5.70 4.45 - 4.55 5.5 3.20 - 7.80 5.20 - 6.50 5.11 2.96 - 3.66 3.20 - 5.80 3.21 - 5.11 5.11 - 5.80 2.92 - 5.80 2.92 - 3.97 2.96 - 4.54 2.43 - 4.72 2.56 - 3.57 2009 % p.a. Company 2010 % p.a. 2009 % p.a.
143
Interest/ Profit Group 2010 Unsecured - Revolving credits - Bill payables - Bank overdraft Secured - Term loans - Term loans - Islamic debts securities - Sukuk Al-Ijarah - Murabahah Commercial Papers - Revolving credits 2009 Unsecured - Revolving credits - Bill payables - Bank overdraft Secured - Term loans - Term loans - Islamic debts securities - Sukuk Al-Ijarah - Murabahah Commercial Papers - Revolving credits Company 2010 Unsecured - Revolving credits Secured - Term loan 2009 Unsecured - Revolving credits Secured - Term loan
1 2 years RM000
2 5 years RM000
Floating rate Floating rate Floating rate Floating rate Fixed rate Fixed rate Floating rate Floating rate
Floating rate Floating rate Floating rate Floating rate Fixed rate Fixed rate Floating rate Floating rate
72,807 72,807
218,421 218,421
291,230 291,230
51,250 51,250
153,750 153,750
256,247 256,247
144
(b) The amounts recognised in the income statements are as follows: Group 2010 RM000 Current service cost Interest cost Expected return on plan assets Amortisation of actuarial loss Net transition asset recognised during the financial year Total (included in staff costs) 5,478 4,632 (229) 75 (465) 9,491 2009 RM000 1,536 971 (231) 17 (372) 1,921
145
(d) Changes in the present value of funded defined benefit obligation during the financial year are as follows: Group 2010 RM000 At 1 January Service cost Interest cost Benefits paid Actuarial gain due to actual experience At 31 December 4,767 390 304 (546) 57 4,972 2009 RM000 4,444 323 281 (335) 54 4,767
(e) Changes in the present value of unfunded defined benefit obligation during the financial year are as follows: Group 2010 RM000 At 1 January Acquisition of subsidiary companies (Note 7) Service cost Interest cost Benefits paid At 31 December 74,688 5,284 4,329 (6,467) 77,834 2009 RM000 7,536 66,156 1,214 690 (908) 74,688
146
25.
Share Capital Group/Company 2010 Number of shares 000 Ordinary shares: Authorised Issued and fully paid 500,000 296,471 500,000 296,471 500,000 296,471 500,000 296,471 Amount RM000 2009 Number of shares 000 Amount RM000
147
The movements in each category of reserve are reflected in the statements of changes in equity. (a) Available-for-sale reserves Fair value gain or losses arising on financial assets classified as available-for-sale. (b) Exchange translation reserves The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the Groups presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Groups net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (c) Capital reserves (i) Distributable capital reserve comprises surpluses arising from disposals of quoted investments and government acquisitions of land in previous years. Non-distributable capital reserve represents a transfer from revenue reserve arising from the issuance of bonus issue by certain subsidiary companies.
(ii)
148
149
28.
Other Operating Income Other operating income includes: Group 2010 RM000 Gain on disposal of : - other investments - property, plant and equipment - assets held for sale (net) Rental income Interest income from: - fixed deposits with licensed banks - a related party (Note 40) - others Dividends income from quoted shares Unrealised gains on foreign exchange Impairment loss recovered on trade receivables Reversal of allowance for impairment losses on amount owing by associated company 8,311 11 2,398 44 268 1,377 1,961 883 7 332 28 1,553 257 86 1,652 79 352 648 1,494 146 92 2009 RM000 Restated 2010 RM000 Company 2009 RM000
150
29.
Raw Materials and Consumables Used Raw materials and consumables used is arrived at after crediting: Group 2010 RM000 Government grants 776,258 2009 RM000 287,082
The above grants represent total subsidies received during the current financial year to subsidise the price of refined sugar and rice. 30. Staff Costs Staff costs include: Group 2010 RM000 Pension cost - defined contribution plans - defined benefit plan Termination benefits 17,527 17,754 177 9,349 1,921 1,227 858 2009 RM000 Company 2010 RM000 2009 RM000
151
152
33.
Taxation Group 2010 RM000 Tax expense for the financial year: - Malaysian income tax Deferred tax (Note 12): - Relating to origination and reversal of temporary differences (Over)/Under provision in prior years: - Malaysian income tax - Deferred tax (Note 12) (14,162) (2,292) (16,454) Total income tax expense 179,781 (1,962) (2,045) (4,007) 74,131 (2,234) (1) (2,235) 53,254 1,321 163 1,484 18,965 (7,625) 10,326 12,489 2,281 203,860 67,812 43,000 15,200 2009 RM000 Company 2010 RM000 2009 RM000
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2009: 25%) of the estimated assessable profit for the financial year.
153
34.
Earnings Per Share Attributable to Owners of the Parent (a) The earnings per share is calculated after taking into consideration of the 100 million new ordinary shares which will be mandatorily converted on the maturity date arising from Tradewinds Plantation Berhads 160,000,000 ICULS (TPB ICULS) of RM1.00 each issued on 28 February 2006. Profit for the financial year attributable to Owners of the Parent used in computing the earnings per share has been adjusted as follows: Group 2010 RM000 Profit attributable to Owners of the Parent Effect of assumed conversion of TPB ICULS Profit attributable to Owners of the Parent including assumed conversion of TPB ICULS 489,216 242,535 481,139 8,077 2009 RM000 240,973 1,562
The Groups weighted average number of ordinary shares in issue during the financial year is 296,470,484 (2009: 296,470,484). (b) There is no diluted earnings per share as the Company does not have any potential dilutive ordinary shares as at financial year end.
154
Note Statement of Financial Position Property, plant and equipment Intangible assets Other payables Deferred tax liabilities Minority interest Statement of Comprehensive Income Other operating income - Excess of fair value of net assets acquired over purchase consideration 28 3 11 21 12
14,087
103,355
117,442
155
On 14 January 2011, the Company declared an interim dividend of 20 sen gross per share less 25% income tax amounting to RM44,471,000 in respect of the current financial year, paid on 28 February 2011. At the forthcoming Annual General Meeting, a final dividend of 20 sen gross per share less 25% income tax amounting to RM44,471,000 in respect of the financial year ended 31 December 2010 will be proposed for shareholders approval. The financial statements for the current financial year do not reflect this proposed dividend. This proposed dividend, if approved by shareholders, will be accounted for as an appropriation of retained earnings in the financial year ending 31 December 2011. 37. Paddy Price Subsidy Account As disclosed in Note 44(b)(i), the Company has, during the year, become the holding company of Padiberas Nasional Berhad (Bernas). Bernas is vested with the responsibility to administer the Governments Paddy Price Subsidy Scheme. The movement of the paddy price subsidy account which represents the paddy price subsidy to be distributed to the registered paddy farmers on behalf of the Government are as follows: Group 2010 RM000 Balance at 1 January Add: Government subsidy funds received Interest income Less: Payments made during the financial year Balance at 31 December The amounts were not included in the assets and liabilities of the Group. Pursuant to the Bernas Agreement dated 12 January 1996, the Government shall deposit the fund under the Paddy Price Subsidy Scheme into bank accounts with licensed banks or financial institutions and operated by Bernas for the sole purpose of disbursement of subsidies. The unutilised portion of the fund is to be placed into fixed deposits accounts with licensed banks or financial institutions approved by the Government. 7,407 468,000 525 (470,417) 5,515 2009 RM000 74,341 532,000 1,030 (599,964) 7,407
156
39.
Material Litigations and Contingent Liabilities (a) Padiberas Nasional Berhad (Bernas), a subsidiary of the Company was served with a Writ and Statement of Claim dated 14 October 2005 by Konsortium Pemborong Beras (Melayu) Kelantan Sdn Bhd (KBK) and was named as the First Defendant. KBK is seeking the following: (i) A declaration that Bernas violated the terms of the Joint Venture Agreement (JVA) by not complying with its duties and obligations as a member/partner of Formula Timur Sdn Bhd (the Joint Venture Company); A declaration that Bernas action in stopping the supply of rice to the Joint Venture Company was contrary to the provision of the JVA, and was wrongful and invalid; A declaration that Bernas, by commission or omission, committed a fraud upon the minority shareholders of the Joint Venture Company and/or abuse of power; General damages of RM112 million to be paid by Bernas to the Joint Venture Company; Rebate of RM760,000;
(ii)
(iii)
(iv) (v)
157
(vii) Injunction and Costs and other relieves as the Courts deem just. On 23 June 2006, Bernas filed an application to strike out the said Statement of Claim on the ground that there was no valid cause of action. On 7 May 2006, the Senior Assistant Registrar dismissed Bernas application to strike out. On 7 May 2007, Bernas lodged an appeal to Judge in Chambers against the Senior Assistant Registrars decision pertaining to Bernas striking out application which was fixed for decision on 20 May 2009. On 20 May 2009, the Judge in Chambers dismissed Bernas appeal with costs. Bernas had upon advice by its solicitors, instructed its solicitors to file a Notice of Appeal at the Court of Appeal against the decision of the Judge in Chambers. The Court of Appeal on 16 November 2010 had unanimously allowed the Companys appeal against the decision of the Senior Assistant Registrar in dismissing the Companys application to strike out KBKs derivative action that was commenced against the Company. The Court of Appeal was of the view that the Statement of Claim filed by KBK clearly indicate that this case is one of a breach of the Joint Venture Agreement and there is no basis for a derivative action and the damages suffered by KBK is a result of the breach of the Joint Venture Agreement. (b) On 27 March 2006, Bernas was served with a sealed copy of a Summons in Chambers dated 3 March 2006 by KBK for an interlocutory injunction, inter alia, the followings: (i) Restrain Bernas from selling, hiring and supplying rice to any third party or allowing any activities which may compete with the business of the Plaintiff; and Instruct Bernas to resume selling, hiring and supplying rice to the Plaintiff.
(ii)
KBKs application for injunctive relief and discovery which had been fixed for 22 June 2009 had been adjourned to 2 September 2009 and 26 October 2009, respectively for further mention. However, Bernas had given instruction to its solicitors to set aside the said injunction application. The Court has yet to fix the date for KBKs application for injunctive relief and discovery. With the decision awarded by the Court on 16 November 2010 in allowing the Companys appeal to strike out KBKs derivative action that was commenced against the Company, KBK can no longer maintain the suit against the Company. The Companys solicitor shall inform court on the outcome of the Companys appeal. (c) Bernas was served with a Writ of Summons and Statement of Claim dated 5 May 2006 initiated by A Halim Bin Hamzah and 291 others (the Plaintiffs). The civil suit is brought by the Plaintiffs against Bernas and 24 others (the Defendants) for, inter alia, the following claims: (i) (ii) A declaration that the 2000 Voluntary Separation Scheme initiated by Bernas is void and of no effect. A declaration that the Defendants had, by unlawful means, conspired and combined together to defraud or injure the Plaintiffs. Alternatively, a declaration that the Defendants had acted in furtherance of a wrongful conspiracy to injure the Plaintiffs. Damages to be assessed. Interest and costs.
158
(ii) (iii)
The Court had granted Order In Terms for the Bernas Application to strike out the 21st Defendants with cost payable to Bernas but dismissed Bernas Application to strike out the 2nd to 12th Defendants on 3 September 2007. On 3 March 2008, the Court dismissed Bernas Application to strike out the 2nd to 12th Defendants from being the party to the suit. Bernas solicitors had on 17 April 2008, filed a Statements of Defence for 2nd to 12th Defendants. The matter has been fixed for further case management on 30,31 May and 1 June 2011 pending the parties compliance with the case management directions. (d) On 6 June 2006, Bernas was served with a sealed copy of Originating Summons and Affidavit in Support (the Plaintiffs Application) affirmed by Zainon Bt Ahmad for and on behalf of the 690 others (the Plaintiffs) for the following claims: (i) A declaration that the Plaintiffs as employees of Bernas whose service of employment has been terminated before attaining the age of 55 due to reasons other than that of compulsory retirement, optional retirement, death or a disability are entitled to the Retirement/Termination Benefits provided for in clause 7.3 of the Terma dan Syarat Perkhidmatan Kumpulan Eksekutif dan Kumpulan Bukan Eksekutif and in clause 5.5 of the Buku Panduan Kumpulan Eksekutif dan Bukan Eksekutif. An order that Bernas pays the Retirement/Termination Benefits due to the Plaintiffs as follows:- for those Plaintiffs who have attained the age of retirement of 55 years as at the date of the order, the Retirement/ Termination Benefits be paid directly to them; and - for those Plaintiffs who have not attained the age of retirement of 55 years as at the date of the order, the Retirement/ Termination Benefits be paid into their accounts at the Employment Provident Fund. (iii) (iv) (v) Interest at the rate of 8% per annum from 1 January 2004 to the date of payments as ordered by the Court. Such further orders, directions or relief that the Court deems fit and appropriate. Costs to be paid by Bernas to the Plaintiffs.
(ii)
The Court had on 13 March 2008 allowed the Plaintiffs application with cost and Bernas had instructed its solicitors to file Grounds of Appeal to the Court of Appeal. The Court of Appeal had, on 24 August 2009, allowed Bernas application to amend the Memorandum of Appeal and the Notice of Appeal. The Court of Appeal fixed 18 January 2011 as the hearing date for the appeal and that the decision of the same fixed for 8 February 2011. Matter came up for decision on 7 February 2011 wherein the Court of Appeal allowed the Companys appeal and set aside the High Court order with no order as to costs.
159
(ii)
Bernas had filed its affidavit in reply to the affidavit in support affirmed by the Plaintiffs. Matter came up for mention on 5 October 2010, wherein the court fixed for 15 December 2010 for further case management pending the disposal of the appeal in the Court of Appeal in relation to the civil suit filed by Zainon Binti Ahmad & 690 others against Bernas. Court has fixed for 23 May 2011 for the case management. (f) Bernas was served with a Writ and Statement of Claim on 25 February 2011 by Konsortium Pemborong Beras (Melayu) Kelantan Sdn Bhd (KBK) and was named as the First Defendant. KBK is seeking, the following: (i) A declaration that Bernas as the 1st Defendant had committed fraud against the minority shareholders of Formula Timur Sdn Bhd (FTSB) including KBK. General damages. Interest. Costs. Such further orders, direction or relief that the Court deems fit and appropriate.
Bernas had filed its Memorandum of Apperance on 25 February 2011 and intends to dispute the said claim by filing its defence by/or on 21 March 2011. Bernas had filed its defence and application to strike out KBKs Statement of Claim. The Court has yet to fix the date for the hearing of Bernas application to strike out KBKs Statement of Claim. No provision was made in the financial statements of the Group and Company as at 31 December 2010 as Bernas may have a reasonable prospect of success against the Plaintiffs claim. (g) The Company had guaranteed the bank credit facilities of a subsidiary company for RM150,000,000 (2009: RM80,000,000) of which the outstanding balance is RM134,029,000 (2009: RM80,000,000).
160
2009 RM000 -
1,961
1,591 4,800 -
5,838 4,800 -
Interest expenses paid to: - Subsidiary companies Management and agency fees from: - Subsidiary companies - Solar Green Sdn Bhd i Premise/Office rental paid to: - Zelan Corporation Sdn Bhd xii - Asian Net Sdn Bhd xvii - Southern Edipro Packaging Sdn Bhd - Sin Hock Soon Trading Sdn Bhd xix - Eternal Promenade Sdn Bhd xix - TSH Realty Sdn Bhd xx - Joo Seng Edar Sdn Bhd xvi Premise rental paid to: - Yew Chye Seng xxii Purchase of insurance from: - Tradewinds International Insurance Brokers Sdn Bhd vi Provision of agency services and distributorship of goods from: - Bukhary Sdn Bhd ix,x 10,877 7,735 6,026 5,467 132 83 300 25 xix
48
989
207
1,200 -
1,200 -
92 73 97 384 124 15 28
15 -
92 -
161
2009 RM000
100
108
6,660
423
2,121
412
55
33,337
31,159
- Iman Cargo Transportation and Freight Sdn Bhd xiii,xiv - Sin Hock Soon Transport Sdn Bhd xix - Xeng Heng Sdn Bhd xix - Melia Best Sdn Bhd xiii,xiv - Nagoya Agency xviii - Joo Seng Edar Sdn Bhd xvi - Racktop Transport Sdn Bhd
5,198
Sale of fresh fruit bunches to: - Solar Green Sdn Bhd i Sale of refined sugar to: - Bukhary Sdn Bhd ix, x 120,662 203,610 17,954 1,231 -
162
58,846
49,546 155,587 -
329,494
41,700
100,132
44,245
3,794
250 200
The above transactions have been entered into in the normal course of business and have been established on commercial terms that are not materially different from those obtainable in transactions with unrelated parties: (i) Solar Green Sdn Bhd (SGSB) was a subsidiary of the former ultimate holding company, Tradewinds Corporation Berhad. Tradewinds Corporation Berhad ceased to be the ultimate holding company with effect from 21 February 2008 and thereafter SGSB became a company in which a major shareholder of the Company has interest until 31 July 2008. SGSB subsequently became a subsidiary of a jointly controlled entity of the Group with effect from 1 August 2008. (ii) PPB Group Berhad (PPB) had an indirect interest in the Company through its subsidiary company, FFM Berhad (FFM) and associated company, Grenfell Holdings Sdn Bhd. Pursuant to Section 6A of the Act, PPB was deemed as a major shareholder of the Company until 6 January 2010. (iii) Tego Sdn Bhd is a subsidiary company of FFM. FFM is in turn a wholly-owned subsidiary company of PPB. PPB was deemed as a major shareholder of the Company until 6 January 2010. (iv) PPB indirectly having interest in Agri-Sabah Fertilizer Sdn Bhd through PPB Oil Palms Berhad. PPB was deemed as a major shareholder of the Company until 6 January 2010. (v) Minsec Engineering Services Sdn Bhd and Sitamas Environmental Systems Sdn Bhd are subsidiaries of Chemquest Sdn Bhd. Chemquest Sdn Bhd is a subsidiary company of PPB. PPB was deemed as a major shareholder of the Company until 6 January 2010.
163
(vii)
(ix)
(xi)
(xii)
164
(xv)
(xvi)
(xvii)
(xviii)
(xix)
(xx)
(xxi)
Information regarding outstanding balances arising from related party transactions is disclosed in Note 14, Note 15, Note 16, Note 17 and Note 21. Information regarding compensation of key management personnel is as follows: Group 2010 RM000 Short term employee benefits Defined contribution plan Benefits-in-kind 8,326 996 15 2009 RM000 8,599 890 193 Company 2010 RM000 1,946 301 2009 RM000 1,159 210 38
(c)
Key management personnel comprises directors and executives of the Group and of the Company, who have authority and responsibility for planning, directing and controlling the activities of the Group and of the Company either directly or indirectly.
165
2010 Revenue External revenue Inter-segment revenue Total revenue Results Operating results Share of results of a jointly controlled entity Share of results in associated companies Segments results Finance costs Profit before taxation Taxation Profit for the financial year Assets Segment assets Investment in associated companies Investment in a jointly controlled entity Segment assets Tax assets Total assets Liabilities Segment liabilities Tax liabilities Total liabilities
Rice RM000
271,672 271,672
256,047 256,047
(259,925) (259,925)
1,003,846 1,003,846
171,685 171,685
(248,406) (248,406)
368,795
1,196,741 1,219,148
780,378
(139,182)
166
2009 Revenue External revenue Inter-segment revenue Total revenue Results Operating results Share of results of a jointly controlled entity Share of results in associated companies Segments results Finance costs Profit before taxation Taxation Profit for the financial year Assets Segment assets Investment in associated companies Investment in a jointly controlled entity Segment assets Tax assets Total assets Liabilities Segment liabilities Tax liabilities Total liabilities
141,687 141,687
42,337 42,337
40,481 40,481
903,249 903,249
226,323 226,323
(249,526) (249,526)
3,227,970 2,123,588
385,807
1,280,147 1,035,833
713,848
(143,448)
167
2009 Other information Capital expenditure Depreciation and amortisation (b) Geographical segments
In determining the geographical segments of the Group, segment revenue is based on the geographical location of customers. Segment assets and segment capital expenditure are based on geographical location of the assets. Malaysia RM000 2010 Revenue Assets Capital expenditure 2009 Revenue Assets Capital expenditure (c) Major Customers Based on FRS 8 Operating Segments, there was no transaction with a single customer or group of customers that amounted to 10% or more of the Groups total revenue. 42. Financial Instruments (a) Financial risk management objectives and policies The Groups financial risk management policy is to ensure that adequate financial resources are available for the development of the Groups operations whilst managing its financial risks, including foreign currency exchange risk, interest rate risk, credit risk, liquidity and cash flow risk, market risk and price fluctuation risk. (b) Foreign currency exchange risk The Group is exposed to foreign currency risk on sales, purchases, assets and liabilities that are denominated in a currency other than Ringgit Malaysia. The Group maintains a natural hedge which includes foreign exchange contract to minimise the foreign exchange exposure by matching foreign currency income with foreign currency costs. 1,932,588 6,310,863 237,271 13,134 186 89,258 7,192 11,879 146 9,810 811 12,729 4,674 2,069,398 6,323,872 237,271 5,319,614 6,750,416 325,249 67,755 9,047 79,142 1,197 50,164 17,174 1,023 17,530 3,794 5,551,379 6,765,477 325,249 Indonesia RM000 Singapore RM000 Hong Kong RM000 Australia RM000 Others RM000 Total RM000
168
Functional Currency Group 2010 Investments in associated companies Other investments Trade receivables Cash and bank balances Borrowings 2009 Investments in associated companies Other investments Trade receivables Other payables Assets held for sale Cash and bank balances Borrowings Company 2010 Other investments 2009 Other investments
Total RM000
2,984 3,499 -
173 -
420 2,984 12,077 5,746 329,527 16,731 3,499 9,075 196 4,315 4,037 20,012
2,984
2,984
3,499
3,499
The following table demonstrates the sensitivity of the Groups profit net of tax to a reasonably possible change in the USD, CAD and SGD exchange rates against the functional currency of the affected group companies (RM) with all other variables held constant. Group 2010 Effect on profit after tax RM000 USD/RM - strengthening 5% (2009: 5%) CAD/RM - strengthening 5% (2009: 5%) SGD/RM - strengthening 5% (2009: 5%) 17,388 149 2009 Effect on profit after tax RM000 2,710 175 9 Company 2010 Effect on profit after tax RM000 149 2009 Effect on profit after tax RM000 175 -
A 5% weakening against the above currencies at the end of the reporting period would have had equal opposite effect on the above currencies to the amounts shown above.
169
170
2010 Group Financial liabilities: Trade and other payables Borrowings Total undiscounted financial liabilities Company Financial liabilities: Trade and other payables Borrowings Total undiscounted financial liabilities (f) Market price risk
Total RM000
1,213,437 1,213,437
373,012 373,012
291,228 291,228
291,230 291,230
The Groups exposure to market risk arises mainly from changes in equity prices. The Group does not use derivative financial instruments to manage equity risk. The risk of loss in value is minimised via thorough analysis before making the investments and continuous monitoring of the performance and risk of the investments made. Equity investments classified as non-current assets are held for long-term. Changes in market values of long-term investments, except where an impairment occurs or a permanent loss in value can be foreseen, do not affect the carrying amounts of the investments. Sensitivity analysis for market price risk At 31 December 2010, if the market value of the quoted investments classified as available-for-sale had been 5% lower/ higher, with all other variables held constant, the Groups and the Company available-for-sale reserve would have been RM200,000 and RM149,000 higher/lower, arising as a result of an increase/decrease in the fair value of these quoted shares. While if the market value of the quoted investments classified as fair value through profit and loss had been 5% lower/higher, the Companys income statements would have been RM12,239,000 higher/lower, arising as a result of an increase/decrease in the fair value of this quoted investment. (g) Price fluctuation risk The Group, in the normal course of business is exposed to price fluctuation risk on commodities particularly on palm oil, sugar and rice. The Group mitigates its risk to the price volatility through constantly monitoring the movement of the commodities prices, and where deemed prudent, selling forward in the physical market and by entering into foreign exchange contracts.
171
* In the previous financial year, the Groups unquoted investments were stated at cost less accumulated impairment loss. In the current financial year, the Groups unquoted investments have been categorised as available-for-sale financial assets, resulting from the adoption of FRS 139, and are measured at fair value. ^ The carrying amount of long term financial liabilities with floating interest rate are reasonable approximation of fair value as they are floating rate instruments that are re-priced to market interest rates on or near the end of reporting period. @ It is not practicable to estimate the fair value of contingent liabilities reliably due to the uncertainties of timing, cost and eventual outcome.
172
173
174
The Group and the Company plan to adopt the abovementioned FRSs, revised FRSs, IC Interpretations, amendments to FRSs and IC Interpretations which are relevant to the Companys operation when they become effective.
175
(2)
(3)
(4)
(ii)
FRS 127: Consolidated and Separate Financial Statements The revised standard requires the effects of all transactions with non-controlling interest to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. Other main changes include the requirement to allocate losses to non-controlling interests NCI (formerly known as minority interest), even if it results in the NCI to be in a deficit position. Under FRS 127 (Revised), increases or decreases in ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are dealt with in equity and attributed to the owners of the parent, with no impact on goodwill or profit or loss. When control of a subsidiary is lost as a result of a transaction, event or other circumstance, FRS 127 (Revised) requires that the Group derecognise all assets, liabilities and non-controlling interests at their carrying amounts. Any retained interest in the former subsidiary is recognised at its fair value at the date when control is lost, with the resulting gain or loss being recognised in profit or loss.
(iii)
IC Interpretation 4: Determining whether an Arrangement contains a Lease The Interpretation aims to provide guidance for determining whether certain arrangements are, or contain, leases that should be accounted for in accordance with FRS 117 Leases; It clarifies that an arrangement, although does not take the legal form of a lease, is a lease when the fulfilment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. This is the case if the purchaser has the right to operate or direct others to operate or control physical access to the asset. Another condition is that it is remote parties other than the purchaser will take more than an insignificant amount of the assets output and the price is neither fixed nor at current market price.
176
177
Effect of adopting FRS 139 RM000 (8,362) (4,209) (4,153) (4,475) 4,332 143
The effects on the adoption of FRS 139 on the current year consolidated financial statements are as follows:Current Year To Date Increase RM000 Consolidated statement of financial position: Fair value reserves Available-for-sale investments Consolidated statement of comprehensive income: Comprehensive income Other comprehensive income Total comprehensive income 603 603 603 603
The adoption of FRS 139 has the following effects on the opening balances in the statement of financial position of the Company as at 1 January 2010:Balance as at 1.1.2010 before adopting FRS 139 (Restated) RM000 Fair value reserves Retained profits Other investments Available-for-sale investments 685,540 163,489 Balance as at 1.1.2010 after adopting FRS 139 RM000 (30) 775,134 253,113
178
Amendments to FRS 117 Leases requires entities with existing leases of land and buildings (combined) to reassess the classification of land as a finance or operating lease. The Company has adopted the amendment to FRS 117. The Company has reassessed and determined that all leasehold land of the Company which are in substance is finance leases and has reclassified the leasehold land to property, plant and equipment. The change in accounting policy has been made retrospectively in accordance with the transitional provisions of the amendment. Summary of effects on adoption of Amendments to FRS 117 Leases:Effect of adopting the amendment to FRS 117 RM000 974,414 (974,414)
As reported previously RM000 Property, plant and equipment Prepaid lease payments for land 935,950 974,414
The adoption of Amendment to FRS 117 does not have any impact to the financial results of the Group for the financial year and the previous financial year.
179
Mardec is an investment holding company and through its local and overseas subsidiary and associated companies, is involved in the processing and trading of natural rubber and the manufacturing of value-added rubber and polymer products.
180
(5)
The initial period for the fulfillment and satisfaction of the conditions precedent to the Proposed Acquisition of Mardec (Prescribed Period) expired on 29 April 2010. On 30 April 2010, Semi Bayu Sdn Bhd and PSSB agreed to extend the Prescribed Period by a further period of six months to 30 October 2010. On 1 November 2010, the Prescribed Period was extended by a further period of six months to 30 April 2011. On 25 February 2011, PSSB and SBSB entered into a supplemental agreement to revise the purchase consideration for the Proposed Acquisition of Mardec as provided in the SSA from RM150,000,000 to RM140,000,000, which shall be payable in the following manner: (i) a first instalment of RM42,000,000 or 30% of the revised purchase consideration to be paid on the completion date; and a second instalment of RM98,000,000 or 70% of the revised purchase consideration to be paid with in 3 months of the completion date.
(ii)
The revised purchase consideration is arrived at based on Ernst & Youngs appraisal of the fair value of the Mardec Group by using the Hybrid Methodology, which is a combination of Income and Asset Approaches of valuation, which ranges between RM130,000,000 and RM150,000,000. The Proposed Acquisition of Mardec is pending the approvals of the shareholders of TPB at a general meeting to be convened and the Economic Planning Unit of the Prime Ministers Department. (b) Additional interest in subsidiary companies (i) Padiberas Nasional Berhad (Bernas) The Company had on 28 August 2009 entered into conditional share sale agreements with the following parties:(1) Wang Tak Company Limited to acquire 148,281,100 ordinary shares of RM1.00 each (Bernas Shares) in Bernas representing 31.52% equity interest in Bernas for a total cash consideration of RM308,424,688 on the basis of RM2.08 per Bernas Share (Acquisition 1); and
181
(ii)
182
183
Malaysia
100
100
Sugar refining
Malaysia
100
100
Malaysia
100
Malaysia
60
60
Cultivation of oil palm and production of crude palm oil Ceased operations
Malaysia
100
100
Malaysia
100
Struck-off
Malaysia
70
70
Investment holding and provision of management services Procure, collect, process, import, export,purchase rice, paddy and other grains, activities in relation to the distribution of rice and investment holding
Malaysia
73
50
184
Cambodia
100
100
Dormant
Cambodia
100
100
Property development
* Croesus Limited
Hong Kong
100
100
Investment holding
Subsidiary company of Croesus Limited: @ HBT Realty Company Limited * Subsidiary company of Retus Plantation Sdn Bhd: Masretus Oil Palm Plantation Sdn Bhd Malaysia 60 60 Dormant Vietnam 70 Members voluntary liquidation
Subsidiary companies of Tradewinds Plantation Berhad: Amalan Penaga (M) Sdn Bhd Malaysia 70 70 Investment holding
Malaysia
49
49
Malaysia
49
49
185
Malaysia
70
70
Malaysia
70
70
Investment holding
Malaysia
49
49
Cultivation of oil palm and production of crude palm oil Cultivation of oil palm
Malaysia
70
70
Malaysia
70
70
Malaysia
70
70
Cultivation of oil palm and production of crude palm oil Cultivation of oil palm and production of crude palm oil Property development
Malaysia
70
70
Malaysia
49
49
Malaysia
70
70
Investment holding
Singapore
70
70
Malaysia
70
70
Malaysia
70
70
Malaysia
70
70
186
Malaysia
70
70
Malaysia
70
70
Malaysia
70
70
Tradewinds Corridor Sdn Bhd Subsidiary companies of Amalan Penaga (M) Sdn Bhd: Amalan Pelita Pasai Sdn Bhd
Malaysia
70
70
Malaysia
42
42
Malaysia
49
49
Malaysia
49
49
Cultivation of oil palm and production of crude palm oil Cultivation of oil palm
Malaysia
59
59
Malaysia
49
49
Malaysia
59
59
Malaysia
49
49
187
Malaysia
70
70
Malaysia
36
36
Ceased operations
Malaysia
70
Struck-off
Malaysia
70
Malaysia
70
70
Malaysia
70
70
Dormant
Malaysia
70
70
Cultivation of oil palm and production of crude palm oil Investment holding
Malaysia
70
70
Malaysia
70
70
Malaysia
70
70
Cultivation of oil palm and animal husbandry Cultivation of oil palm and agriculture contractors Cultivation of oil palm
Malaysia
70
70
Malaysia
70
70
188
Subsidiary company of Teon Choon Realty Company Sdn Berhad: * Teon Choon Quarry Sdn Bhd Malaysia 70 Struck-off
Subsidiary companies of Northern Integrated Agriculture Sdn Bhd: * NIA Development Sdn Bhd Malaysia 34 34 Dormant
Malaysia
34
34
Dormant
Subsidiary companies of Padiberas Nasional Berhad * Bernas Production Sdn Bhd Malaysia 73 50 Rice processing
Malaysia
44
30
Trader, distributor and supplier of rice Trader, distributor and supplier of rice Dormant
Malaysia
38
26
* Consolidated Bernas United Distributors Sdn Bhd * Jasmine Food Corporation Sdn Bhd
Malaysia
73
50
Malaysia
45
31
189
Malaysia
73
50
Malaysia
73
50
Investment holding
Malaysia
73
50
Malaysia
73
50
Investment holding
Malaysia
58
40
Malaysia
73
50
Malaysia
73
13
* Bernas Engineering & Technology Sdn Bhd * P.B Construction & Supplies Sdn Bhd
Malaysia
73
50
Dormant
Malaysia
73
50
Dormant
Malaysia
50
Wound up
Malaysia
73
50
Dormant
Malaysia
73
50
Dormant
Malaysia
73
50
Dormant
190
Malaysia
73
50
Dormant
Malaysia
50
Wound up
Malaysia
50
Wound up
Malaysia
73
50
Dormant
Malaysia
73
50
Dormant
Thailand
70
48
Processing and trading of rice and other related food product Dormant
Malaysia
73
Malaysia
73
Dormant
Subsidiary company of Consolidated Bernas United Distributors Sdn Bhd: * Machind Realty Sdn Bhd Malaysia 73 50 Dormant
Subsidiary companies of Jasmine Food Corporation Sdn Bhd: * Jasmine Food (Ipoh) Sdn Bhd Malaysia 38 26 Trader, distributor and supplier of rice Trader, distributor and supplier of rice
Malaysia
38
26
191
Malaysia
38
26
Malaysia
19
13
Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Rice miller and rice trader
Malaysia
38
26
Malaysia
38
26
Malaysia
38
26
Malaysia
38
26
Subsidiary companies of YHL Holding Sdn Bhd: * YHL Trading (KL) Sdn Bhd Malaysia 38 26 Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice
Malaysia
38
26
Malaysia
38
26
Malaysia
38
26
Malaysia
38
26
Malaysia
38
26
192
Subsidiary company of Jasmine Rice Mill (Tunjang) Sdn Bhd: * Jasmine Rice Products Sdn Bhd Malaysia 45 31 Manufacturing and sale of vermicelli
Subsidiary company of Bernas Agrotech Sdn Bhd: * Padi Gedong Sdn Bhd Malaysia 45 31 Dormant
Subsidiary companies of Beras Corporation Sdn Bhd: * Sazarice Sdn Bhd Malaysia 70 48 Trader, distributor and supplier of rice Investment holding
Malaysia
73
50
Malaysia
73
28
Trader, distributor and supplier of rice Wholesale and trading of rice and rice related products
Malaysia
44
15
Subsidiary companies of Dayabest Sdn Bhd: * Haskarice Food Sdn Bhd Malaysia 38 26 Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice
Malaysia
38
26
Malaysia
38
26
193
Subsidiary company of Bernas Dominals Sdn Bhd: * Bernas Chaff Products Sdn Bhd Malaysia 38 26 Dormant
Subsidiary companies of Liansin Trading Sdn Bhd: * Liantye Trading Sdn Bhd Malaysia 44 15 General trading and rice wholesaler
Malaysia
44
15
Malaysia
44
15
Malaysia
38
* Companies not audited by Anuarul Azizan Chew & Co. + Companies listed on Bursa Malaysia Securities Berhad. @ The audited financial statements for the financial year ended 31 December 2009 of this subsidiary company are not available at the date the financial statements of the Group are authorised for issue. However, the Directors are of the opinion that the financial results of this subsidiary company are not material to the Group as the said subsidiary company is dormant and is currently in the process of being wound up by the Group. # The Government of Malaysia (Special Shareholder) holds one (1) unit of Special Rights Redeemable Preference Share (Special Share) at RM1 each in this subsidiary company. The main features of the Special Shares are as follows: (i) The Special Share may only be held by or transferred to the Minister of Finance Incorporated or its successor or any Minister, representative or any person acting on behalf of the Special Shareholder.
194
(iii)
(iv)
(v)
(vi)
(b)
The associated companies and shareholdings therein are as follows: Country of incorporation Name of Company Associated company of Johore Tenggara Oil Palm Berhad: @ Hak JTOP Sdn Bhd Malaysia 28 Investment holding but is currently dormant Effective interest (%) Principal activities 2010 2009
Associated companies of Padiberas Nasional Berhad: Gardenia Bakeries (KL) Sdn Bhd Malaysia 22 15 Bread manufacturing and bakery Dormant
Malaysia
36
25
Malaysia
29
20
Dormant
195
Malaysia
38
26
Malaysia
22
15
Malaysia
13
United Malayan Flour (1996) Sdn Bhd Associated company of Bernas Dominals Sdn Bhd: Bernas Feedstuff Sdn Bhd
Malaysia
33
23
Malaysia
36
25
Associated company of Beras Corporation Sdn Bhd: @ Liansin Trading Sdn Bhd Subsidiary companies of Kilang Beras Fajar Sdn Bhd: Fajar Jerlun Sdn Bhd Malaysia 36 25 Dormant Malaysia 15 Wholesale and trading of rice and rice related products
Malaysia
36
25
Dormant
Subsidiary companies of Serba Wangi Sdn Bhd: * Serba Wangi (KL) Sdn Bhd Malaysia 38 26 Trader, distributor and supplier of rice
196
Malaysia
35
24
Malaysia
38
26
Malaysia
30
21
Malaysia
20
14
Malaysia
38
26
Subsidiary companies of OEL Realty Holdings Sdn Bhd: OEL Distribution (Kedah) Sdn Bhd Malaysia 22 15 Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice Trader, distributor and supplier of rice
Malaysia
22
15
Malaysia
22
15
Malaysia
22
15
Malaysia
22
15
Malaysia
13
Malaysia
13
197
Subsidiary companies of Liansin Trading Sdn Bhd: Liantye Trading Sdh Bhd Malaysia 15 General trading and rice wholesaler Dormant
Malaysia
15
Subsidiary companies of Gardenia Bakeries (KL) Sdn Bhd: Gardenia Sales & Distribution Sdn Bhd Malaysia 22 15 Sales and distribution of bread Bread manufacturing and bakery
Malaysia
22
15
Associated companies of Bernas Overseas (L) Limited: # Asian Peninsula Corporation Ltd Thailand 25 Disposed
Pakistan
15
10
Rice trading
@ Associated companies that became subsidiary companies during the financial year. ^ The financial results of Hak JTOP Sdn Bhd have not been equity accounted for as no financial statements are available. The associated company is currently inactive and the Directors are of the opinion that the effect of the non-equity accounting on the financial results of Hak JTOP Sdn Bhd is not material to the financial statements of the Group. * The Group regards these companies as associated companies by virtue of its partly indirect shareholding through another associated company, Ban Heng Bee Holding Sdn Bhd. # The investment cost has been reclassified as assets held for sale during the financial year.
198
Group As at 1 January 2009 Statements of Financial Position Property, plant and equipment Prepaid lease payments As at 31 December 2009 Statements of Financial Position Property, plant and equipment Prepaid lease payments For the financial year ended 31 December 2009 Statements of Comprehensive Income Depreciation of property, plant and equipment Amortisation of prepaid lease payments Statements of Cash Flows Depreciation of property, plant and equipment Amortisation of prepaid lease payments Gain on disposal of property, plant and equipment Gain on disposal of prepaid lease payments Proceeds from disposal of prepaid lease payments Proceeds from disposal of property, plant and equipment 48. Date of Authorisation for Issue
As restated RM000
527,463 959,199
959,199 (959,199)
1,486,662 -
913,769 974,414
974,414 (974,414)
22,181 -
1,910,364 -
65,003 14,204
14,204 (14,204)
79,207 -
The financial statements of the Group and of the Company for the financial year ended 31 December 2010 were authorised for issue in accordance with a resolution of the Board of Directors on 28 April 2011.
199
Kelantan LADANg SERASA SDN BHD Ladang Serasa and Ladang Sg. Bayu Lot No. PT 862 Mukim of Relai District of Chiku Kelantan Lot No. PT 629 Mukim of Kuala Sungai District of Bertam Kelantan Oil Palm Plantation 4.317 Plantation Leasehold for 99 years expires on 7 August 2098 Leasehold for 99 years expires on 7 August 2098 1996
83,028
815
Plantation
1996
LADANg SUNgAi RELAi SDN BHD Ladang Relai GM 53/99 PT 3294 Mukim Relai Daerah Gua Musang Kelantan GM 54/99 PT 3295 Mukim Relai Daerah Gua Musang Kelantan GM 55/99 PT 3296 Mukim Relai Daerah Gua Musang Kelantan GM 56/99 PT 3297 Mukim Relai Daerah Gua Musang Kelantan GM 57/99 PT 3298 Mukim Relai Daerah Gua Musang Kelantan GM 58/99 PT 3299 Mukim Relai Daerah Gua Musang Kelantan PT 3252 HS(D) 432 Mukim Relai Daerah Gua Musang Kelantan Oil Palm Plantation 6.02 Plantation 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064 2006 Leasehold for 66 years expires on 29 November 2064
99,239
12.41
Plantation
7.57
Plantation
170.12
Plantation
288.4
Plantation
4,681.1
Plantation
1,067
Plantation
200
PT 3254 HS(D) 433 Mukim Relai Daerah Gua Musang Kelantan PT 3255 HS(D) 434 Mukim Relai Daerah Gua Musang Kelantan PT 6632 HS(D) 435 Mukim Relai Daerah Gua Musang Kelantan
Plantation
Leasehold for 66 years expires on 29 November 2064 Leasehold for 66 years expires on 29 November 2064 Leasehold for 66 years expires on 29 November 2064
224.3
Plantation
2006
77.96
Plantation
2006
johor LADANg pETRi TENggARA SDN BHD Ladang Ulu Sebol PTD 4428 HS(D) 17845 Mukim Hulu Sg Johor Daerah Kota Tinggi Johor PTD 4444 HS(D) 17846 Mukim Hulu Sg Johor Daerah Kota Tinggi Johor Oil Palm Plantation 3,500.53 Plantation Leasehold for 84 years expires on 26 August 2076 Leasehold for 84 years expires on 26 August 2076 2006
96,931
364.21
Plantation
2006
SaraWaK BAHTERA BAHAgiA SDN BHD Ladang Sungai Klad and Ladang Sibuti Lot 1 Block 11 Bukit Kisi Land District Miri Sarawak Lot 2 Block 11 Bukit Kisi Land District Miri Sarawak Oil Palm Plantation 3,097 Plantation Leasehold for 60 years expires on 9 June 2047 Leasehold for 60 years expires on 25 April 2055 1996
70,425
1,172
Plantation
1996
KUMpULAN KRiS JATi SDN BHD Ladang Simunjan and Ladang Ladong Lot 737 Sebangan Kepayang Land District Samarahan Sarawak Oil Palm Plantation 187 Plantation Leasehold for 60 years expires on 25 January 2060 2000
109,171
201
Address
Description
Existing Use
Tenure (Years)
Lot 738 and 739 Sebangan - Kepayang Land District Samarahan, Sarawak Lot 1223 Sedilu - Gedong Land District Samarahan, Sarawak Lot 490 and 492 Trusan Land District Limbang Division Sarawak Lot 493 Trusan Land District Limbang Division Sarawak
Plantation
Leasehold for 60 years expires on 19 June 2060 Leasehold for 60 years expires on 19 June 2060 Leasehold for 60 years expires on 7 August 2056 Leasehold for 60 years expires on 30 March 2057
2,187
Plantation
2000
Ladang Trusan and Ladang intan Oil Palm Plantation 6,140 Plantation 1996
73,990
446
Plantation
1997
MELUR gEMiLANg SDN BHD Ladang gemilang, Ladang Melur and Ladang Sg. Krang Lot 1224, Sedilu Gedong Land District and Lot 2978 Melikin Land District Samarahan, Sarawak Lot 2982 & 2983 Melikin Land District Lot 1225, Sedilu Gedong Land District and Lot 33 & 34 Punda-Sabal Land District Samarahan, Sarawak Oil Palm Plantation 8,273 Plantation Leasehold for 60 years expires on 16 February 2060 Leasehold for 60 years expires on 22 April 2062 2000
259,269
7,320
Plantation
2000
RETUS pLANTATiON SDN BHD Ladang Retus and Ladang Rantau Lot No. 3544 Block O Pasai-Siong Land District Sibu, Sarawak Lot No. 3544 Block O Pasai-Siong Land District Sibu, Sarawak Oil Palm Plantation 4,020 Plantation Leasehold for 60 years expires on 24 February 2059 Leasehold for 60 years expires on 24 February 2059 1999
162,734
Mill
1999
202
AMALAN pELiTA pASAi SDN BHD Ladang pelitanah Lot 16, Block O Oya-Dalat Land District Sibu Sarawak Oil Palm Plantation
TRADEwiNDS cORiDOR SDN BHD Ladang Sg. Tekai, Ladang Sg. Seraya, Ladang Tanah Merah and Ladang Batu Hitam HS(D) 1/87 and 2/87 PT No. 245 and 246 Mukim Padang Terap Kiri District of Padang Terap, Kedah HS(D) 5/92 and 9/92 PT No. 334 to 338 Mukim Padang Terap Kiri District of Padang Terap, Kedah HS(D) 235 and 237 PT No. 692 to 694 Mukim Padang Terap Kiri District of Padang Terap, Kedah HS(D) 253, PT No. 1286 Mukim Padang Terap Kiri District of Padang Terap, Kedah HS(D) 249 to 250 PT No. 776 to 777 Mukim Padang Terap Kanan District of Padang Terap, Kedah Oil Palm and Rubber Plantation 1,328.87 Plantation 2008 Leasehold for 60 years expires on 26 November 2055
297,196
354.89
Plantation
661.44
Plantation
140.11
Plantation
2008 Leasehold for 60 years expires on 26 November 2055 Leasehold for 60 years expires on 13 April 2063 2008
35.79
Plantation
203
Address
Description
Existing Use
Tenure (Years)
HS(D) 1/92 to 2/92 PT No. 229 to 230 Mukim Padang Terap Kanan District of Padang Terap, Kedah HS(D) 10/92 to 14/92 PT No. 351 to 355 Mukim Batang Tunggang Kiri District of Padang Terap, Kedah HS(D) 4 to 7 PT No. 379 to 382 Mukim Batang Tunggang Kiri District of Padang Terap, Kedah HS(D) 238 to 244 PT No. 695 to 701 Mukim Batang Tunggang Kiri District of Padang Terap, Kedah HS(D) 253 to 260 PT No. 421 to 428 Mukim Batang Tunggang Kiri District of Padang Terap, Kedah HS(D) 252, PT No. 879 Mukim Batang Tunggang Kiri District of Padang Terap, Kedah HS(D) 2 to 3 PT No. 136 and 152 Mukim Batang Tunggang Kanan District of Padang Terap, Kedah
Plantation
1,402.88
Plantation
792.65
Plantation
116.06
Plantation
19.74
Plantation
79.17
Plantation
2008 Leasehold for 60 years expires on 21 September 2063 2008 Leasehold for 60 years expires on 26 November 2055
1,327.48
Plantation
204
HS(D) 15/92 PT No. 1468 Mukim Pedu District of Padang Terap, Kedah HS(D) 16/92 to 18/92 PT No. 1476 to 1478 Mukim Pedu District of Padang Terap, Kedah HS(D) 1, PT No. 1569 Mukim Pedu District of Padang Terap, Kedah HS(D) 19/92, PT No. 4479 Mukim Tekai District of Padang Terap, Kedah HS(D) 1/89, PT No. 4278 Mukim Tekai District of Padang Terap, Kedah HS(D) 158/89, PT No. 4279 Mukim Tekai District of Padang Terap, Kedah HS(D) 408/89, PT No. 2333 Mukim Bukit Lada District of Padang Terap, Kedah HS(D) 389, PT No. 805 Mukim Kuala Nerang District of Padang Terap, Kedah HS(D) 2158, PT No. 363 Mukim Bandar Pokok Sena District of Padang Terap, Kedah HS(D) 251 PT No. 1705 Mukim Tolak District of Padang Terap, Kedah
Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation
Plantation
2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 26 November 2055 2008 Leasehold for 60 years expires on 21 September 2063
1,633.54
Plantation
Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation Oil Palm and Rubber Plantation
187.84
Plantation
1,447.69
Plantation
48.78
Plantation
3.14
Plantation
249.39
Plantation
7.99
Plantation
634.81
Plantation
8.38
Plantation
205
Shareholding Statistics
as at 29 April 2011
Authorised Capital Issued and Paid-up Capital Class of Shares Voting Rights No. of Shareholders : RM500,000,000 : RM296,470,484 : Ordinary Shares of RM1.00 each : One vote for each ordinary share : 6,694
Size of Holdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 to 100,000 100,001 to less than 5% of issued shares 5% and above of issued shares TOTAL
BREAKDOwN Of SHAREHOLDiNgS Size of Holdings 1. Government Agency 2. Bumiputra a) Individuals b) Companies c) Nominees Company 3. Non-Bumiputra a) Individuals b) Companies c) Nominees Company MALAYSiAN TOTAL 4. Foreign a) Individuals b) Companies c) Nominees Company fOREigN TOTAL gRAND TOTAL No. of shareholders 4 292 34 384 5,220 156 382 6,472 97 11 114 222 6,694 % 0.06 4.36 0.51 5.74 77.98 2.33 5.71 96.68 1.45 0.16 1.70 3.32 100.00 No. of shares 148,310 1,722,916 200,258,815 22,301,325 36,411,532 11,839,327 7,403,324 280,085,549 880,033 174,500 15,330,402 16,384,935 296,470,484 % 0.05 0.58 67.55 7.52 12.28 3.99 2.50 94.47 0.30 0.06 5.17 5.53 100.00
206
SUBSTANTiAL SHAREHOLDERS
Direct interest No. 1. 2. 3. 4. 5. Shareholders Perspective Lane (M) Sdn Bhd Felda Global Ventures Holdings Sdn Bhd Kelana Ventures Sdn Bhd Restu Jernih Sdn Bhd Tan Sri Dato Seri Syed Mokhtar Shah bin Syed Nor No. of shares 89,048,663 59,294,097 26,270,000 % 30.04 20.00 8.86
% - 30.04 42.97
127,388,663 (2)
Notes: (1) Deemed interested by virtue of its interest in Perspective Lane (M) Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. (2) Deemed interested by virtue of his interest in Kelana Ventures Sdn Bhd, Seaport Terminal (Johore) Sdn Bhd and Restu Jernih Sdn Bhd pursuant to Section 6A of the Companies Act, 1965. Seaport Terminal (Johore) Sdn Bhd holds 12,070,000 (4.07%) shares in Tradewinds (M) Berhad.
207
Shareholdings 89,048,663 59,294,097 26,270,000 12,070,000 8,210,600 7,588,700 6,390,000 3,867,740 2,745,402 2,391,190 2,195,200 2,016,200 2,006,560 1,876,000 1,782,500 1,704,900 1,657,900 1,555,900 1,493,750 1,287,700 1,280,300 1,200,000 1,157,186
% 30.04 20.00 8.86 4.07 2.77 2.56 2.16 1.30 0.93 0.81 0.74 0.68 0.68 0.63 0.60 0.58 0.56 0.52 0.50 0.43 0.43 0.40 0.39
ACARA KREATIF SDN BHD JOHAN ENTERPRISE SDN BHD GRENFELL HOLDINGS SDN BHD YEOH KEAN HUA CITIGROUP NOMINEES (TEMPATAN) SDN BHD
EMPLOYEES PROVIDENT FUND BOARD (PHEIM)
208
Note: (1) Deemed interested pursuant to section 6A of the Companies Act, 1965 by virtue of his family relationship with a major shareholder of the Company.
209
210
211
Ladang pelangi Ladang Sembrong Kiri P.O. Box 15 86700 Kahang, Kluang Johor Tel : 607-780 0064 Fax : 607-780 0068 KUcHiNg REgiON Regional Office Level 23, Gateway Kuching No.9, Jalan Bukit Mata 93100 Kuching Sarawak Tel : 6082-412 909 / 413 909 Fax : 6082-248 909 Ladang gemilang Ladang Melur P.O. Box 935 94700 Serian Sarawak Tel : 6082-895 969 (Gemilang) Fax : 6082-895 969 (Gemilang) 6082-325 531 (Melur) Ladang Sg. Krang P.O. Box 1010 94700 Serian Sarawak Tel : 6082-895 193 Fax : 6082-895 193 Ladang Sg. Mangga Ladang Tg. Melano P.O. Box 931 94700 Serian Sarawak Tel : 6082-895 182 (Sg. Mangga) 6082-895 405 (Tg. Melano) Fax : 6082-895 182 (Sg. Mangga) 6082-895 405 (Tg. Melano)
Melur gemilang palm Oil Mill P.O. Box 952 94700 Serian Sarawak Tel : 6082-895 130 Fax : 6082-896 182 Ladang Simunjan Ladang Ladong Ladang Sebuyau P.O. Box 24 94800 Simunjan Sarawak Te : 6082-809 089 Fax : 6082-809 113 Ladang Sg. Tersak P.O. Box 931 94700 Serian Sarawak Tel : 6082-895 624 Fax : 6082-895 627 SiBU REgiON Regional Office P.O. Box 504 96007 Sibu Sarawak Tel : 6084-350 454 / 455 Fax : 6084-350 453 Ladang Lingga KM 11.5, Off Jalan Tanjung Asam P.O. Box 2014 95700 Betong Sarawak Tel : 6083-480 102 Fax : 6083-480 139 Ladang pelitanah 1 Ladang pelitanah 2 CDT 174 96000 Sibu Sarawak Tel : 6084-366 957 Fax : 6084-366 782
MUKAH REgiON Regional Office No. 92, 1st Floor Lot 1167, Block E Mukah New Township Phase II, 96400 Mukah Sarawak Tel : 6084-874 053 Fax : 6084-874 062 Ladang Judan Ladang petian Judan palm Oil Mill P.O. Box 197 96400 Mukah Sarawak Tel : 6084-875 413 (Judan) 6084-875 432 (Petian) 6084-875 792 (Judan Palm Oil Mill) Fax : 6084-875 022 (Judan Palm Oil Mill) Ladang Tanjung Alan 1 Ladang Tanjung Alan 2 Matu-Daro Road c/o Post Office 96200 Daro Sarawak Tel : 6084-813 002 Fax : 6084-813 004 Ladang Jemoreng 1 Ladang Jemoreng 2 c/o Post Office 96200 Daro Sarawak Tel : 6084-823 209 Fax : 6084-823 210 MiRi REgiON Regional Office c/o Ladang Binu P.O. Box 1374 98009 Miri Sarawak Tel : 6085-739 708 Fax : 6085-739 011
212
213
Ban Heng Bee Holdings Sdn Bhd 450, 1st Floor, Jalan Raja 05000 Alor Setar Kedah Tel : 604-735 5620 Fax : 604-730 6620 Edaran Bernas Nasional Sdn Bhd Level 29, Menara HLA No. 3, Jalan Kia Peng 50450 Kuala Lumpur Tel : 603-2161 1803 Fax : 603-2161 1812 Era Bayam Kota Sdn Bhd Lot PT 4154 Kawasan Perindustrian Pengkalan Chepa 11, Padang Tembak 16100 Kota Bharu Kelantan Tel : 609-773 0878 / 5878 Fax : 609-744 7878 Hock chiong foodstuff Sdn Bhd No. 17, Jalan Bank 96000 Sibu Sarawak Tel : 6084-330 476 Fax : 6084-330 964 Jasmine food corporation Sdn Bhd Lot No. 5, Jalan 25/124, Seksyen 25 40000 Shah Alam Selangor Tel : 603-5122 3188 Fax : 603-5122 3288 Liansin Trading Sdn Bhd Lot 2041, Section 66, Jalan Kisar Bintawa Industrial Estate 93450 Kuching Sarawak Tel : 6082-333 555 Fax : 6082-335 599
OEL Realty Holding Sdn Bhd Lot 54623, Jalan Kuala Kangsar 31200 Ipoh Perak Tel : 605-291 5555 Fax : 605-291 2233 Sabarice Sdn Bhd Lot 85 Kompleks Perindustrian SEDCO, Likas 88999 Kolombong Inanam Kota Kinabalu Sabah Tel : 6088-433 586 / 640 Fax : 6088-433 539 Sazarice Sdn Bhd Lot 85 Kompleks Perindustrian SEDCO, Likas 88999 Kolombong Inanam Kota Kinabalu Sabah Tel : 6088-433 586 / 640 Fax : 6088-433 539 Serba wangi Sdn Bhd 450, 1st Floor, Jalan Raja 05000 Alor Setar Kedah Tel : 604-759 6620 Fax : 604-759 0264 Syarikat faiza Sdn Bhd PLO 442, Jalan Wawasan 16 Kawasan Perindustrian Sri Gading 83300 Batu Pahat Johor Tel : 607-455 6900 Fax : 607-455 7900 Tong Seng Huat Rice Trading Sdn Bhd 58A, Merbau Road 98000 Miri Sarawak Tel : 6085-431 037 Fax : 6085-415 643
YHL Holding Sdn Bhd No. 39-45, Jalan P4/6 Bandar Teknologi Kajang Batu 18, Jalan Semenyih 43500 Semenyih, Kajang Selangor Tel : 603-8724 3368 / 3792 Fax : 603-8724 3763 OTHER BUSiNESSES Bernas feedstuff Sdn Bhd Lot PT 4132 & 4133 Kawasan Perindustrian Pengkalan Chepa II, Mukim Panchor 16100 Kota Bharu Kelantan Tel : 609-773 3232 Fax : 609-774 2252 gardenia Bakeries (KL) Sdn Bhd Lot 3, Jalan Pelabur 23/1 40300 Shah Alam Selangor Tel : 603-5542 3228 Fax : 603-5542 3213 United Malayan flour (1996) Sdn Bhd 4826, Jalan Permatang Pauh 13400 Butterworth Pulau Pinang Tel : 604-333 2499 Fax : 604-331 7557 OVERSEAS VENTURES irfan Noman Bernas (pvt) Limited QNB House, Bahria Complex-1 Ground Gloor, M.T. Khan Road Karachi 74000 Pakistan Tel : 00-9221 5610 132 Fax : 00-9221 5610 226
214
215
pERAK Sungai Manik KBB Sungai Manik 36000 Telok Intan Perak Tel : 605-623 4542 Fax : 605-621 2551 changkat Lada KBB Changkat Lada 36800 Kampong Gajah Perak Tel : 605-655 1872 Fax : 605-655 1875 Sungai Ranggam KBB Sungai Ranggam 36800 Kampong Gajah Perak Tel : 605-655 1428 Fax : 605-655 1608 Simpang Lima, perak KBB Simpang Lima 4200 Parit Buntar Perak Tel : 605-716 1279 Fax : 605-716 4795 KELANTAN & TERENggANU (EAST) Tumpat KBB Tumpat 16200 Tumpat Kelantan Tel : 609-725 7377 Fax : 609-725 7334 peringat KBB Peringat 16400 Melor, Kota Bharu Kelantan Tel : 609-712 8389 Fax : 609-712 7310
pasir putih KBB Pasir Putih 16800 Pasir Putih Kelantan Tel : 609-786 6330 Fax : 609-786 9927 Bukit Kenak KBB Bukit Kenak 22000 Jerteh Terengganu Tel : 609-697 1221 Fax : 609-697 1412 pAHANg & SELANgOR (cENTRAL) Sungai Besar KBB Sg. Besar 45300 Sungai Besar Selangor Tel : 603-3224 2204 Fax : 603-3224 1601 Kuala Rompin KBB Rompin 26800 Kuala Rompin Pahang Tel : 609-414 6575 Fax : 609-414 5793 Seri Tiram Jaya KBB Seri Tiram Jaya 45500 Tanjung Karang Selangor Tel : 603-3269 8101 Fax : 603-3269 8568 Sekinchan KBB Sekinchan 45400 Sekinchan Selangor Tel : 603-3241 0001 Fax : 603-3241 1300 Bagan Terap KBB Bagan Terap 45300 Sungai Besar Selangor Tel : 603-3216 4240 Fax : 603-3224 7025 / 1601
Bahagian pengurusan Benih Langgar KBB Langgar 06650 Langgar Kedah Tel : 604-787 6571 Fax : 604-787 7116 BERNAS DiSTRiBUTiON cENTRES / wAREHOUSES cENTRAL gudang BSS 1 Lot 30, Lingkungan Sultan Hishamuddin 1 Bandar Sultan Sulaiman 42000 Pelabuhan Klang Selangor Tel : 603-3176 0361 Fax : 603-3176 0375 gudang BSS 2 (century 1) No. 7, Jalan Hishamuddin 2 Kawasan 20 42000 Pelabuhan Klang Selangor Tel : 603-3176 4763 Fax : 603-3176 4791 gudang EBN Lot 30, Lengkongan Sultan Hishamuddin 1 Bandar Sultan Sulaiman Pelabuhan Klang Selangor Tel : 603-3176 3311 Fax : 603-3176 2154 gudang century 2 (Dc4) Lot 4, Solok Sultan Hishamuddin 8 Kawasan 20, Bandar Sultan Sulaiman 42000 Pelabuhan Kelang, Selangor Tel : 603-3176 0739 Fax : 603-3176 0740
216
217
gudang Kempas A, B & c (EBN) Lot 6600, Jalan Kempas Baru 81200 Johor Tel : 607-2344 526 Fax : 607-2544 527 gudang chendering A & B (EBN) Gudang EBN, Jalan Kubang Ikan 21080 Kuala Terengganu Terengganu Tel : 609-616 1551 Fax : 609-616 1552 gudang Bukit Raya (BERNAS) Lot PT S28 & 30 Mukim Bukit Raya Pendang Kedah Tel : 604-759 6227 Fax : 604-759 7429 EAST MALAYSiA SABAH gudang Kota Kinabalu (1) Gudang Bandar (B5) Kota Kinabalu Sabah Tel : 6088-423 267 Fax : 6088-422 322 gudang Kota Kinabalu (2) BCSB, Lot 85 Komplek Perindustrian Sedco Likas Inanam Kota Kinabalu Sabah Tel : 6088-423 267 Fax : 6088-422 322 gudang Kota Kinabalu (3) BCSB, Batu 17 1/2, Kg Nongkolod Jalan Tuaran, Tuaran Sabah Tel : 6088-423 267 Fax : 6088-422 322
gudang Sandakan (1) BCSB, Gdg By 3 ABC, Jalan Bomba Bt 3, Jalan Labuk Sandakan Sabah Tel : 6089-213 500 Fax : 6089-219 311 gudang Sandakan (2) BCSB, Gdg Bandar JKR Jalan Dewan Masyarakat Sandakan Sabah Tel : 6089-213 500 Fax : 6089-219 311 gudang Tawau BCSB, TB 1774, Gdg Apas, KM 5.5 Jalan Apas, Tawau Sabah Tel : 6089-911 017 Fax : 6089-912 952 gudang Lahad Datu BCSB, MDLD 2637 KK 5 Jln Kastam Baru Lahad Datu Sabah Tel : 6089-881 452 Fax : 6089-881 411 gudang Labuan BCSB, Lot 12, Jln Arshat Ranca-Ranca Wilayah Persekutuan Labuan Tel : 6087-424 493 Fax : 6087-421 929 gudang Kudat BCSB, Jln Pantai Bandar WDT 33, Kudat Sabah Tel : 6088-612 987 Fax : 6088-621 214
SARAwAK gudang Kuching BCSB, Lot 895 Jalan Belian Biawak Kuching Sarawak Tel : 6082-349 672 Fax : 6082-343 745 gudang Sibu BCSB, Lot 478 Jalan Lanang Ulu Sibu Sarawak Tel : 6084-212 733 Fax : 6084-216 251 gudang Bintulu BCSB, Lot 1019 Kaw. Perindustrian Kidurong Sarawak Tel : 6086-253 934 Fax : 6086 253 842
218
Form of Proxy
19123-K
I/We (FULL NAME IN BLOCK LETTERS) of (FULL ADDRESS) being a member/members of TRADEWINDS (M) BERHAD, hereby appoint (FULL NAME IN BLOCK LETTERS) of (FULL ADDRESS)
as my/our proxy failing which the Chairman of the meeting* to vote for me/us and on my/our behalf at the Thirty-Seventh (37th) Annual General Meeting of the Company to be held at Mahkota Ballroom 2, Ballroom Level, Hotel Istana Kuala Lumpur, 73 Jalan Raja Chulan, 50200 Kuala Lumpur on Tuesday, 28 June 2011 at 10.30 a.m. My/Our proxy is to vote as indicated below:RESOLUTiON 1 2 3 4 5 6 7 8 9 10 To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2010 To declare a Final Dividend of 20 sen per share less 25% income tax To approve the payment of Directors' fees To re-elect Director Syed Azmin bin Syed Nor To re-elect Director Bakry bin Hamzah To reappoint Director Dato Wira Syed Abdul Jabbar bin Syed Hassan To appoint Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration Proposed Shareholders Mandates for the Company and its Subsidiary Companies to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature Proposed Category A Mandate Proposed Shareholders Mandates for the Company and its Subsidiary Companies to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature Proposed Category B Mandate Proposed Amendments of the Articles of Association of the Company for Against
(Please indicate with an X in the appropriate spaces provided above as to how you wish your votes to be cast. Failing to do so, the proxy will vote or abstain from voting at his/her discretion). Dated this _______ day of _________________ 2011 No. of shares held
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STAMP
SYMPhonY Share reGIStrarS SDn BhD Level 6, Symphony House Pusat Dagangan Dana 1, Jalan PJU 1A/46 47301 Petaling Jaya Selangor
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