2011

Annual Report 2011
SILVER BIRD GROUP BERHAD

(277977-X)
Annual Report 2011
1
Silver Bird Group Berhad
Corporate Structure 2
Corporate Information 3
Chairmans Statement 4
Directors Profle 6
Statement on Corporate Governance 11
Audit Committee Report 18
Syariah Panels Report 22
Statement on Internal Control 24
Statement of Directors Responsibility in Respect to
the Preparation of the Financial Statements 26
Financial Statements
Statutory Declaration 27
Directors Report 28
Statement by Directors 32
Independent Auditors Report 33
Statements of Financial Position 36
Statements of Comprehensive Income 38
Statements of Changes in Equity 40
Statements of Cash Flows 42
Notes to the Financial Statements 44
Analysis of Ordinary Shareholdings and Warrants 91
Notice of Annual General Meeting 95
Statement Accompanying Notice of Annual
General Meeting 96
Proxy Form enclosed
CONTENTS
Annual Report 2011
2
CORPORATE STRUCTURE (OPERATING SUBSIDIARIES)
Silver Bird
Foods (S) Pte. Ltd.
Standard
Confectionery Sdn Bhd
Stanson Group
Sdn Bhd
100%
100%
100% 100%
100% 100%
Silver Bird
International Sdn Bhd
Stanson
Marketing
Sdn Bhd
Stanson
Bakeries
Sdn Bhd
Annual Report 2011
3
BOARD OF DIRECTORS
Dato Dr Gan Khuan Poh
(Chairman/Independent Non-Executive Director)
Dato Jackson Tan Han Kook
(Group Managing Director)
Ching Siew Cheong
(Group Executive Director)
Lim Hock Chye
(Independent Non-Executive Director)
Richard George Azlan Bin Abas
Dato Seri Talaat Bin Husain
Peter John McLoghlin
(Non-Independent Non-Executive Director)
Dato Lee Kok Chuan
Adi Azuan Bin Abdul Ghani
Vanda Russell Gould
(Alternate Director to Peter John McLoghlin)
AUDIT COMMITTEE
Richard George Azlan Bin Abas - Chairman
Lim Hock Chye - Member
Dato Lee Kok Chuan - Member
NOMINATION COMMITTEE
Dato Dr Gan Khuan Poh - Chairman
Richard George Azlan Bin Abas - Member
Dato Seri Talaat Bin Husain - Member
REMUNERATION COMMITTEE
Lim Hock Chye - Chairman
Peter John McLoghlin - Member
Richard George Azlan Bin Abas - Member
CORPORATE INFORMATION
SYARIAH PANEL
Datuk Abu Hasan Din Al Hafz - Chairman
Dato Hj Kamaruddin Bin Hj Zakaria - Member
Prof. Dr Siti Salwani Razali - Member
Dato Seri Talaat Bin Husain - Member
COMPANY SECRETARY
Lee Suet Yin
(MAICSA 7057807)
REGISTERED OFFICE
Silver Bird Complex
Lot 72, Persiaran Jubli Perak
Seksyen 21, 40300 Shah Alam
Selangor Darul Ehsan
Tel: 03-5192 2888
Fax: 03-5192 4293
Email: investor@stanson-high5.com
Website: www.silverbird.com.my
AUDITORS
Crowe Horwath
Level 16, Tower C
Megan Avenue II
12 Jalan Yap Kwan Seng
50450 Kuala Lumpur
PRINCIPAL BANKERS
Malayan Banking Berhad
United Overseas Bank (M) Berhad
RHB Bank Berhad
SHARE REGISTRAR
Berjaya Registration Services Sdn Bhd
Lot 06-03, Level 6 (East Wing)
Berjaya Times Square
No. 1 Jalan Imbi
55100 Kuala Lumpur
Tel: 03-2145 0533
Fax: 03-2145 9702
STOCK EXCHANGE LISTING
Main Board of Bursa Securities
WEBSITE
www.silverbird.com.my
Annual Report 2011
4
On behalf of the Board of Directors, I present to you
the Annual Report that includes the Audited Financial
Statements of Silver Bird Group Berhad for the fnancial year
ended 31 October 2011.
Highlights
The global economy continued to be confronted by a number of challenges. Continuing uncertainties in fnancial markets
including ratings downgrade of banks and risks of OECD commodities, unfavourable fscal conditions and weaknesses in
labour markets in the advanced economies continued to pose risks to growth of the emerging economies, like Malaysia.
Despite the challenging environment, it is expected that the Malaysian economy will grow, albeit at a slower rate of
between 3.8% and 5% for 2012.
These are trying times that have befallen the Group and it is unfortunate that the scourge of fnancial irregularities have
crept into our fold. Many will be aware from the announcements by the Company that this year was marred by the
recent discovery of fnancial irregularities that have cast severe doubts on the accuracy and reliability of the fnancial
reporting of the Group, and which have led to some of the Companys subsidiaries defaulting in their respective loan
repayments and the Company being classifed as an afected listed issuer under Practice Note 17 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad.
Upon such discovery, I am pleased to inform you of the expeditious and transparent manner in which the Board has acted
to address the issues that have arisen, including the immediate suspension of the individuals suspected to be connected
with the fnancial irregularities and the appointment of PKF Advisory Sdn Bhd as the forensic accountant to investigate
the fnancial irregularities. At the same time, in order to protect the interests of all stakeholders, the Board has formed a
Special Committee to manage the afairs of the Group, including the overseeing the day-to-day afairs and operations
of the Group. One of the frst matters on the agenda for the Special Committee was the review of the businesses of the
Group to determine the viability of the businesses and the extent to which the fnancial irregularities may have afected
the businesses. I am pleased to inform that the preliminary fndings indicate that the businesses would be proftable if
properly managed. On this footing, the Company has set itself the task of hoisting the High 5 bread to be the No. 1 bread
for Malaysians. The Special Committee has also been tasked to oversee investigations into the fnancial irregularities, as
well as to assist the authorities in their investigations.
Despite the withdrawal of the supplier for the Groups telecommunication segment, this is not likely to have a substantial
impact on the business of the Group. In this regard, I would like to stress that the Board is committed to carrying on with
its core business of consumer food. The Board is working towards formulating plans to regularise the fnancial condition
of the Group and to revitalise its business, which will be implemented after the completion of the investigation by the
forensic accountants. These eforts will improve the prospects of the Group in the coming years.
Dividend
The Board of Directors is not recommending any dividend for the fnancial year under review. However, if the Board
is successful in its plans to regularise the fnancial condition of the Group and revitalise its business, shareholders can
expect better results in the near future.
In view of the crisis before the Company, the Board of Directors has resolved to put all directors fees for the fnancial year
ending 31 October 2012 in abeyance pending completion of the on-going investigations into the fnancial irregularities.
CHAIRMANS STATEMENT
Annual Report 2011
5
CHAIRMANS STATEMENT (CONTD)
Outlook and Prospects
The Group will continue to pursue its vision as one of the nations leading players in the consumer food market.
With our new mission of placing the High 5 bread as the No. 1 bread of choice for Malaysians, the Group has recognised
the need to reach out to Malaysians and to provide them with choices. On this note, the Group is taking a fresh new
perspective into its existing distribution network and will be launching its new wheat germ bread to add to its existing
range of breads.
The Group will continue to improve on efciencies in its operations, with more eforts put in the area of cost control
without sacrifcing quality and efciency, to pursue better marketing and promotion activities, to strengthen brand
equity, increase distribution and logistics channels in order to achieve greater results.
Acknowledgements
On behalf of the Board, I would like to extend our heart-felt appreciation to our valued shareholders and customers, our
business partners, our bankers and the regulatory authorities for their trust, confdence and cooperation given to us
during this critical period in the history of the Group, and to our staf for their hard work, dedication and commitment to
grow our business.
Chairman
The rest of this page is intentionally left blank.
Annual Report 2011
6
DIRECTORS PROFILE
Independent Non-Executive Chairman
Malaysian, 66 years of age
Chairman of Nomination Committee
Dato Dr Gan Khuan Poh was appointed to the Board on
27 April 2006. He holds a Ph.D and M.A. in Economics
from Duke University, NC, USA; M.B.A. in Finance from
Cornell University, NY, USA and B.A. (Hons.) in Business
Economics from University of Malaya. He started his career
as a Government Service Ofcer in 1967 and had served
in various positions ranging from the District level, the
National Institute of Public Administration (INTAN) to the
Prime Ministers Department as Senior Director responsible
for Macroeconomics in the Economic Planning Unit for
31 years. He later joined Pilecon Group of Companies in
1997 as an Executive Director responsible for the Groups
Finance and Corporate Planning and the last position he
held was as Managing Director before he left the Company
in year 2000.
He currently sits on the Board of Permodalan BSN Berhad
and Prudential Assurance Malaysia Berhad.
He is not related to any director and/or major shareholders
of the Company and there is no business arrangement
with the Company in which he has a personal interest. He
has not been convicted for any ofences within the past 10
years other than trafc ofences, if any.
Dato Jackson Tan Han Kook
Group Managing Director
Dato Jackson Tan was appointed to the Board on 5 October
1993. He is the founder of Standard Confectionery Sdn
Bhd (Standard Confectionery) and the prime-mover
in formulating, nurturing and implementing Standard
Confectionerys strategies since its incorporation in 1986.
To keep abreast with business skills, he had undergone the
Harvard Business School Alumni Club of Malaysias Senior
Management Development Programme in 1994. Dato
Jackson Tan was primarily responsible for the Management
and Operations of the Group prior to his suspension from
work and currently also holds directorships in several
private limited companies.
Dato Jackson Tan is the spouse of Datin Ong Hooi Siang,
a substantial shareholder of the Company. Apart from the
aforesaid, he has no family relationship with any other
director and/or major shareholder of the Company and
there is no business arrangement with the Company in
which he has a personal interest.
He has not been convicted for any ofences within the past
10 years other than trafc ofences, if any.
Dato Jackson Tan has been suspended from work with
efect from 24 February 2012 to facilitate the conduct of
an internal inquiry into allegations of, amongst others,
irregularities in the Companys accounts.
Annual Report 2011
7
DIRECTORS PROFILE (CONTD)
Ching Siew Cheong
Group Executive Director
Ching Siew Cheong was appointed to the Board on 10
June 1997. He joined Standard Confectionery in 1990 as
Finance and Administration Manager working closely with
Dato Jackson Tan in the management and operations of
Standard Confectionery and other subsidiary companies.
During his 21 years of service with the Group, he played
an active role in formulating and implementing business
strategies to expand the Group. He graduated from
Strathclyde Graduate Business School with a Master in
Business Administration in 1996.
Ching Siew Cheong has been suspended from work with
efect from 24 February 2012 to facilitate the conduct of
an internal inquiry into allegations of, amongst others,
irregularities in the Companys accounts.
Lim Hock Chye
Independent Non-Executive Director
Member of Audit Committee
Chairman of Remuneration Committee
Lim Hock Chye was appointed to the Board on 20 April
2002. Mr Lim is a law graduate with a LLB (Hons) Degree
from the University of London and holds a Certifcate in
Legal Practice. Mr Lim was one of the pioneer consultants
with the Malaysian Minority Watchdog Group, an initiative
set up by the Ministry of Finance in 2002 to protect the
minority shareholders interest and promoting good
corporate governance and practices. Prior to that, he was a
Deputy Editor with The Star Newspaper, where he wrote for
the Business section.
In addition, he was also a panel speaker for Bursatra Sdn
Bhd. Lim Hock Chye is currently the Group Director of
Strategic Planning & Corporate Afairs of HELP University
College, a position he has held since April 2008.
He is a director of TSM Global Berhad, Ancom Logistics
Berhad, Nylex (Malaysia) Berhad and Ancom Berhad.
of the Company and there is no business arrangement with
the Company in which he has a personal interest. He has
not been convicted for any ofences within the past 10
Annual Report 2011
8
Chairman of Audit Committee
Member of Remuneration Committee and Nomination
Committee
Richard George Azlan Bin Abas was appointed to the
Board on 21 May 2004. He holds a Bachelor of Commerce
from the University of Western Australia. He articled
with Arthur Andersen & Co. from 1984 to 1989 and
subsequently served Arab-Malaysian Corporation Berhad
from 1989 to 1996. From 1997 to 2002, he was the Group
Chief Executive of Yayasan Pelajaran Johor Holdings
Sdn Bhd. He is presently the Chief Executive Ofcer and
Managing Director of Theta Edge Berhad. He is a Fellow
of the Institute of Chartered Accountants in Australia
and a Chartered Accountant of the Malaysian Institute of
Accountants. In 1995, he attended the Asian Institute of
Management, Management Development Program.
He also sits on the board of Theta Edge Berhad.
Dato Seri Talaat Bin Husain
Member of Nomination Committee
Dato Seri Talaat Bin Husain was appointed to the Board
on 5 March 2007 and he is a member of the Nomination
Committee. He holds a Masters in Professional Studies from
Cornell University, USA majoring in International Planning.
Dato Seri Talaat Bin Husain has attended Senior Executive
Program, London Business School, United Kingdom
and Advanced Management Program, Harvard Business
School, U.S.A.
He started his civil service career as an Assistant State
Secretary in Penang and had since then held several vital
posts in the Malaysian Centre for Development Studies,
Socio-Economics Research Unit, National Institute for
Public Administration, National Palace, the Ministry of
Education and as Mayor of Ipoh City, Perak.
He also held the position of the Secretary General of the
Ministry of Youth and Sports and later appointed as the
Secretary General of the Ministry of Domestic Trade and
Consumer Afairs. Whilst in the government service, he
was the Chairman of Companies Commission of Malaysia
and Board Member of Malaysia Communication and
Multimedia Corporation, Sepang International Circuit and
Intellectual Property Corporation of Malaysia.
Currently, he is a director of Shell Refning Company
(Federation of Malaya) Berhad and Konsortium Logistik
Berhad.
Annual Report 2011
9
Dato Lee Kok Chuan
Non-Independent Non-Executive Director
Member of Audit Committee
Dato Lee Kok Chuan was appointed to the Board on 3
January 2008. He graduated with a Bachelor of Economics
(Accounting Major) from Monash University, Melbourne in
1983 and is a Fellow Member of the Institute of Chartered
Accountants in Australia.
He has over 10 years of working experience in the felds
of accounting, auditing and corporate services with major
international accounting frms including Messrs Ernst &
Whinney (Kuala Lumpur) (now known as Ernst & Young),
Messrs Arthur Young (Melbourne) and subsequently
Messrs Ernst & Young (Melbourne). He joined Berjaya Land
Berhad as Senior Manager, Internal Audit in 1994 and
was responsible for its internal audit functions. He was an
Executive Director of Berjaya Group Berhad from January
2000 to September 2001.
He is currently a Director of Berjaya Capital Berhad, Berjaya
Group Berhad, Berjaya Auto Berhad and Berjaya Food
Berhad. He also holds directorships in several other private
limited companies in the Berjaya Corporation group of
companies. Dato Lee Kok Chuan is a representative of
Berjaya Corporation Berhad on the Board of Silver Bird
Group Berhad.
Adi Azuan Bin Abdul Ghani
Adi Azuan Bin Abdul Ghani was appointed to the Board
on 3 January 2008. He graduated with a BSc (Honours)
Accounting from Queens University of Belfast, United
Kingdom in 1993 and Association of Chartered Certifed
Accountants (ACCA) from Emile Woolf College, London,
United Kingdom in 1995. He is a Fellow Member of the
ACCA and also a member of the Malaysian Institute of
Accountants (MIA).
He started his professional career in the auditing and
accounting felds with Messrs PricewaterhouseCoopers,
Kuala Lumpur in year 1996. He was then promoted to
the position of Manager in year 2002 and involved in
the provision of audit and accounting services mainly to
banking and fnancial institutions before joining Lembaga
Tabung Haji as the Divisional Head of Group Finance in
July 2002. Presently, he is the Deputy Group Chief Financial
Ofcer of Lembaga Tabung Haji.
He is currently also a director of Theta Edge Berhad and
Y.S.P Southeast Asia Holding Berhad. Adi Azuan Bin Abdul
Ghani is a representative of Lembaga Tabung Haji on the
Board of Silver Bird Group Berhad.
Annual Report 2011
10
Peter John McLoghlin
Australian, 67 years of age
Member of Remuneration Committee
Peter John McLoghlin was appointed to the Board on
3 January 2008. He holds a Bachelor of Engineering
(Electrical) from Melbourne University, Australia in 1966
and obtained a Master of Business Administration from
Monash University, Australia in 1973.
He has an extensive Fast Moving Consumer Goods
(FMCG) experience with Australian and Multinational
companies including Mars Confectionary, Kimberly-Clark
Australia and the Goodman Fielder group. Prior to his
current appointment, he joined Greens Foods Limited
(Greens) as Chief Operating Ofcer in May 2002 and was
Managing Director from September 2002 until July 2004.
He remained as non executive director in the Greens Board
until early 2007. Peter John McLoghlin is a representative
of CVC Limited on the Board of Silver Bird Group Berhad.
Vanda Russell Gould
Alternate Director to Peter John McLoghlin
Australian, 64 years of age
Vanda Russell Gould was appointed as an alternate
Director to Peter John McLoghlin on 3 January 2008. He
holds a Bachelor of Commerce Degree in Accountancy
(UNSW) and Master of Commerce Degree in Accounting
and Financial Management (UNSW)
He is a fellow of The Institute of Chartered Accountants
in Australia and a Fellow of CPA, Australia. He is also an
Associate Fellow of the Australian Financial Institute of
Management and holds Australian Financial Services
Licences issued under the Financial Services Reform Act.
He commenced work as a Chartered Accountant in 1969 and
worked for Messrs Ernst & Young and Greenwood Challoner.
He has established a frm of Chartered Accountants as a
sole practitioner (now known as Gould Ralph) in May 1976.
He has extensive experience in corporate restructuring
and turn-around situations with specialised knowledge
in taxation and law. He is a Registered Liquidator and
Registered Trustee. He was the founder and executive
chairman of CVC Limited (CVC) in 1985. CVC was one
of only two venture capital companies not associated
with a major fnancial institution which were awarded
by Australian Government Management and Investment
Companies Licenses in 1985. He had established a number
of commercial businesses and initiated more than ten
successful public company fotations, including CVC and
Sunland Group Limited.
Annual Report 2011
11
STATEMENT ON CORPORATE GOVERNANCE
The Board of Directors (Board) of Silver Bird Group Berhad remains committed towards striving for the highest standard
of good corporate governance throughout the Company and its subsidiaries (the Group).
The Board wishes to report to the shareholders the manner in which the Group has applied these principles and best
practices, and where these best practices of the Malaysian Code on Corporate Governance (the Code) were not adopted
during the fnancial year if any, they are explained in the relevant paragraphs.
THE BOARD OF DIRECTORS
The fundamental responsibility of the Directors is to exercise their judgement to act in the best interest of the Company,
as they reasonably believe.
(a) Composition and Balance
The Company has 9 Board members, made up of 4 Independent Non-Executive Directors including the Chairman, 3
Non-Independent Non-Executive Directors and 2 Executive Directors. This composition satisfes the Bursa Securities
Listing Requirements that requires at least 3 Directors or 1/3 of the Board whichever is higher, are Independent
Directors.
The role of the Independent Non-Executive Directors is to provide objective and independent inputs to the decision
making process of the Board so as to provide an efective check and balance. The Board composition brings together
a group of extensively experienced Directors who are from diverse backgrounds and professionals in their respective
felds. Together, they have a wide range of skills, capabilities and relevant business experiences to manage and direct
the Groups operations.
The Executive Directors are primarily responsible for the implementation of policies and decisions of the Board,
overseeing the Groups operations and developing the Groups business strategies.
The Board did not appoint a Senior Independent Non-Executive Director to whom concerns may be conveyed as the
Chairman of the Board encourages the active participation of each and every Board member in the decision making
process.
The profles of the members of the Board are set out on pages 6 to 10 of this Annual Report.
(b) Duties and Responsibilities
The main focus of the Board is on the overall strategic leadership, identifcation and management of principal risks
and development and control of the Group. The Board has delegated specifc responsibilities to Board Committees,
all of which discharge the duties and responsibilities within their respective Terms of Reference.
The roles of the Chairman and Group Managing Director are clearly distinct to ensure that there is a balance of
power and authority. The Chairman is primarily responsible for the efective and efcient conduct and working of
the Board whilst the Group Managing Director is responsible for the daily management of the Groups operations
and implementation of the policies and strategies adopted by the Board.
Annual Report 2011
12
STATEMENT OF CORPORATE GOVERNANCE (CONTD)
(c) Board Meetings
The Board meets regularly on a quarterly basis with additional meetings being convened when necessary. In the
meetings, the Board will deliberate on and consider matters relating to the Groups fnancial performance, signifcant
investments, corporate development, strategic issues and business plan. For the fnancial year ended 31 October
2011 the Board met 7 times. The meeting attendance records of the Directors who held ofce are set out below:
Name of Director Designation No. of meetings
attended
(Chairman)
Independent Non-Executive Director 7/7
Dato Jackson Tan Han Kook Group Managing Director 7/7
Ching Siew Cheong Group Executive Director 7/7
Lim Hock Chye Independent Non-Executive Director 6/7
Richard George Azlan Bin Abas Independent Non-Executive Director 7/7
Dato Seri Talaat Bin Husain Independent Non-Executive Director 7/7
Adi Azuan Bin Abdul Ghani Non-Independent Non-Executive Director 7/7
Dato Lee Kok Chuan Non-Independent Non-Executive Director 6/7
Peter John McLoghlin Non-Independent Non-Executive Director 7/7
Vanda Russell Gould
(Alternate Director to Peter John McLoghlin)
Board meetings are structured with a pre-set agenda which encompass all aspects of matters under discussion. The
Board papers are circulated to directors well in advance of the board meetings for their deliberation. All meetings of
the Board are duly recorded in the Board Minutes.
Senior management may be invited to attend these meetings to explain and clarify matters being tabled.
For the fnancial year under review, in furtherance of their duties, the Board had unrestricted access to any information
pertaining to the Group, possibly other than information pertaining to the fnancial irregularities, as well as the advice
and services of the Company Secretary and professional advisers, whenever appropriate, at the Groups expense.
(d) Appointment and Re-election of Directors
Any new appointments to the Board will require deliberation by the full Board guided by formal recommendations
by the Nomination Committee. Board members who are appointed by the Board are subject to retirement at the
frst Annual General Meeting (AGM) of the Company subsequent to their appointment. Article 97 of the Companys
Articles of Association also provides that at least one-third (1/3) of the Directors shall retire by rotation at each AGM
and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance
with Section 129(6) of the Companies Act, 1965 (the Act).
(e) Directors Training
Throughout the year, the Directors have attended various conferences, seminars and programmes, including
speaking engagements, to enhance their skills and knowledge. The Board will continue to evaluate and determine
the training needs of its Directors on an ongoing basis.
For new Directors, the Nomination Committee is responsible for ensuring that they undergo an orientation
program so that they are familiar with the Groups operations and current business issues. However, there were no
appointments of new Directors during the fnancial year under review.
Annual Report 2011
13
BOARD COMMITTEES
Apart from the Audit Committee, there are two other additional committees established to assist the Board in the
execution of its responsibilities. Both the committees are provided with written terms of reference. Details of the Board
committees are provided below.
(a) Nomination Committee
The Nomination Committee has three (3) members, all of whom are Independent Non-Executive Directors. The
members of the Nomination Committee are:
(i) Chairman
Dato Dr Gan Khuan Poh Independent Non-Executive Director
(ii) Members
Richard George Azlan Bin Abas Independent Non-Executive Director
Dato Seri Talaat Bin Husain Independent Non-Executive Director
The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board of
Directors in their responsibilities in nominating new directors to the Board and Board Committees. The Committee
also reviews the Board of Directors composition and balance, and considers the Board of Directors succession
planning.
Members met once during the fnancial year.
The Board considers that the current mix of skills and experience of its members is sufcient for the discharge of its
duties and responsibilities efectively.
(b) Remuneration Committee
The Remuneration Committee comprises three (3) members with the majority being Independent Directors. The
Remuneration Committee is to assist the Board of Directors in their responsibilities in reviewing and assessing the
remuneration packages of the executive directors. The members of the Remuneration Committee are:
(i) Chairman
Lim Hock Chye Independent Non-Executive Director
(ii) Members
Richard George Azlan Bin Abas Independent Non-Executive Director
Peter John McLoghlin Non-Independent Non-Executive Director
The Remuneration Committee is responsible for recommending to the Board the remuneration framework for the
remuneration package of each Executive Director.
This includes recommending remuneration packages necessary to attract, retain and motivate the Directors and is
refective of the Directors experience and level of responsibilities.
None of the Executive Directors participate in any way in determining their individual remuneration. The
remuneration of the Executive Directors is to be reviewed annually. The remuneration and entitlements of the Non-
Executive Directors shall be a matter to be decided by the Board as a whole.
The Remuneration Committee met once during the fnancial year. The meeting was attended by all its members to
discuss the remuneration package of Directors that commensurate with corporate and individual performance.
(c) Audit Committee
The Audit Committee has three (3) members, all of whom are Non-Executive Directors.
The detailed report of the Audit Committee is set out on pages 18 to 21.
Annual Report 2011
14
DIRECTORS REMUNERATION
The details of the remuneration of each Director during the fnancial year ended 31 October 2011 are as follows:
(a) Total Remuneration
Executive Directors
RM 000
Non-Executive Directors
RM 000
Total
RM 000
Basic Salary 1,478 1,478
Fees 264 264
Attendance fee 44 44
Beneft-in-kind 23 23
Total 1,501 308 1,809
(b) Directors remuneration by bands
The number of Directors whose total remuneration falls within the following bands during the fnancial year ended
31 October 2011 is as follows:
Directors Remuneration Executive Directors Non-Executive Directors Total
RM1 to RM50,000 6 6
RM50,001 to RM100,000 1 1
RM350,001 to RM400,000 1 1
RM950,001 to RM1,000,000 1 1
Details of the individual Directors Remuneration are not disclosed in this report as the Board considers that the
above Remuneration disclosures by band and analysis between Executive and Non-Executive Directors satisfes the
accountability and transparency aspects of the Code.
SHAREHOLDERS
(a) Shareholders and Investors Relations
The Board acknowledges the importance of accountability to the shareholders. Timely release of the fnancial
results on a quarterly basis, press releases and announcements provide an overview of the Groups performance and
operations to its shareholders.
Information disseminated to the investment community is in accordance with Bursa Malaysias disclosure rules and
regulations. The Board has taken steps to ensure that no market sensitive information is disclosed to any party prior
to making an ofcial announcement to Bursa Malaysia.
The Group has also established a website at www.silverbird.com.my from which shareholders as well as members of
the public may access for the operations and activities of the Group.
(b) Annual General Meeting
The Annual General Meeting (AGM) is the principal platform for dialogue with the shareholders. At the AGM, the
Board presents the progress and performance of the Group to provide shareholders with the opportunity to question
the business issues, concerns and operations in general. The Board will also ensure that each item of special business
is included in the notice of the AGM and will be accompanied by an explanation of the efects of the proposed
resolutions.
Annual Report 2011
15
ACCOUNTABILITY AND AUDIT
(a) Financial Reporting
In presenting the annual fnancial statements and quarterly announcements to shareholders, the Directors aim to
ensure that the fnancial statements and quarterly announcements are prepared in accordance with the Companies
Act, 1965 and applicable approved accounting standards so as to ofer a balanced and comprehensive assessment
of the Groups fnancial position and prospects.
A Responsibility Statement by the Directors is set out on page 26 of this Annual Report.
(b) Accumulated losses
Pending the completion of the forensic investigation, the accumulated losses as at the end of the fnancial year
consist of:
THE GROUP THE COMPANY
2011 2011
RM000 RM000
Total accumulated losses:
- realised (43,374) (49,070)
- Unrealised (764)
At 31 October 2011 (44,138) (49,070)
Subject to the fndings of the forensic investigation, the realised and unrealised losses are based on Guidance
on Special Matter No.1, Determination of Realised and Unrealised Profts or Losses in the Context of Disclosures
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements issued by Bursa Malaysia Securities Berhad.
(c) Internal Control
The Groups Statement on Internal Control is set out on pages 24 to 25 of the annual report to provide an overview
on the state of internal control throughout the year.
In relation to the internal audit function, having considered the Groups operational requirements and recent
developments, whilst the Board is of the view that the Group should still continue to outsource its internal audit
function to external consultants, the Board intends to review in detail the functional capabilities and/or efectiveness
of the existing internal auditor and to commission an independent internal audit frm to carry out a detailed review
of prevailing internal controls. The outsourced internal auditors should be capable of assisting the Board and the
Audit Committee in providing an independent assessment of the adequacy, efciency and efectiveness of the
Groups internal control systems. They will report directly to the Audit Committee.
(d) Relationship with Auditors
The Group maintains a professional and transparent relationship with its external auditors. The external auditors are
expected to , from time to time, highlight to the Audit Committee and the Board of Directors matters that require
their attention.
The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report set
out on pages 18 to 21 of the annual report.
(e) Non-Audit Fees
There was no non-audit fees paid to external auditors by the Group for the fnancial year ended 31 October 2011.
Annual Report 2011
16
OTHER INFORMATION
(a) Share Buy-Back
During the fnancial year, there was no share buy-back by the Company.
(b) Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities exercised during the fnancial year ended 31 October 2011.
(c) Material Contracts involving Directors Interests
There were no contracts involving directors interests that have been brought to the attention of the Board, which
are or may be material, not being contracts entered into in the ordinary course of business, which have been entered
into by the Company and its subsidiary companies since the end of the previous fnancial year.
(d) Recurrent Related Party Transactions
As had been disclosed to the Board, the details of the transactions with related parties undertaken by the Company
during the fnancial period are disclosed in note 39 on pages 74 to 75 of the notes to the fnancial statements.
(e) American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programmes
During the fnancial year, the Company did not sponsor any ADR or GDR programme.
(f) Imposition of Sanctions/Penalties
As had been disclosed to the Board, there were no sanctions and/or penalties imposed on the Company and its
subsidiaries, Directors or management by the authorities during the fnancial year.
(g) Proft Guarantees
During the fnancial year, there were no proft guarantees given by the Company that has been brought to the
attention of the Board.
(h) Variation of Results
Due to the fnancial irregularities, pending the completion of the forensic investigation, an opinion cannot be formed
at this juncture whether adjustments are necessary to the audited results for the fnancial year ended 31 October
2011, and hence, whether there will be any material variation against the unaudited results for the fourth quarter
ended 31 October 2011.
Annual Report 2011
17
(i) Utilisation of Proceeds
The total proceeds raised by the Company from the Private Placement exercises amounted to RM25,500,000.
Pending the completion of the forensic investigation, the status of the utilisation of proceeds is as follows:-
Purpose Proposed Utilisation
RM000
Actual Utilisation
RM000
Intended timeframe
for utilisation
Deviation
RM000
Repayment of borrowings 4,000 4,000 Within 12 months
Advertising and promotions 2,000 2,000 Within 12 months
Research and development 1,000 300 Within 12 months 700
Other general working capital 12,100 12,100 Within 12 months
Estimated expenses 600 600 Within 12 months
Repayment of borrowings 5,500 5,500 Within 6 months
Proposed expenses 300 300 Within 6 months
Total 25,500 24,800 700
Due to the fnancial irregularities, the Board is unable to confrm the actual utilisation of proceeds pending
completion of the forensic investigation.
(j) Contracts Relating to Loans
As had been disclosed to the Board, there was no contract relating to loans by the Company.
(k) Revaluation of Landed Properties
The Group does not have any revaluation policy on landed properties.
(L) Corporate Social Responsibilities
Silver Bird Group Berhad worked with Asian Youth Ambassadors to help the community in PPR Kg. Muhibbah,
Bandar Kinrara 1 on the 23 April 2011.
We sponsored our products to approximately 70 families whom needed essential food items.
Annual Report 2011
18
AUDIT COMMITTEE REPORT
The Board of Directors of Silver Bird Group Berhad is pleased to present the report of the Audit Committee for the fnancial
year ended 31 October 2011.
Composition and Meetings
The members of the Audit Committee and details of their attendance at meetings during the fnancial year ended 31
October 2011 are as follows:
Number of
meetings
Attendance of
meetings
Chairman: Richard George Azlan Bin Abas
5 5
Members: Lim Hock Chye
Dato Lee Kok Chuan
5
5
5
3
Senior Management staf and the external consultants, to whom the internal audit function was outsourced to, attended
the meetings at the invitation of the Audit Committee. The agenda of the meetings and relevant information are
distributed to its members with sufcient notice. The proceedings of the meetings are formalised in the form of meeting
minutes by the Secretary, who is appointed by the Board, during the Audit Committee meetings.
Summary of Activities of the Audit Committee
The following activities were undertaken by the Audit Committee during the fnancial year ended 31 October 2011:-
(a) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended 31 October
2010, 31 January 2011, 30 April 2011 and 31 July 2011, as reported by the Management.
(b) Reviewed and approved the internal audit plan prepared by the Internal Audit Function.
(c) Reviewed the internal audit reports and ensured appropriate actions were taken on the recommendation of the
internal auditors.
(e) Reviewed the audit plan of the external auditors.
(f ) Reviewed the annual audited fnancial statements, external auditors reports and their audit fndings.
(g) Reviewed related party transactions and considered potential confict of interest situation within the Group as
disclosed by the Management.
Annual Report 2011
19
AUDIT COMMITTEE REPORT (CONTD)
Summary of Activities of the Internal Audit Function
The activities of the Internal Audit Function during the fnancial year were as follows:
(a) develop the internal audit plan for year 2011;
(b) execution of the approved internal audit plan;
(c) presentation of the internal audit fndings at the quarterly Audit Committee meetings; and
(d) conducted follow up reviews to ensure that action plans are properly and appropriately implemented by
Management.
The internal audits conducted did not reveal weaknesses which would result in material losses, contingencies or
uncertainties that would require disclosure in the annual report.
The Internal Audit function is outsourced to external consultants and the cost incurred for the Internal Audit function in
respect of the fnancial year was approximately RM55,120.00.
The terms of reference of the audit committee, which are subject to the reports and fndings of the internal auditors and
disclosure made by the Management, are set out below.
TERMS OF REFERENCE OF AUDIT COMMITTEE
1. Composition
The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members.
All the audit committee members must be non-executive directors with a majority of whom shall be independent
directors and at least one (1) member must be a member of the Malaysian Institute of Accountants or possess such
other qualifcations and/or experience as approved by Bursa Malaysia Securities Berhad (Bursa Securities).
No alternate director shall be appointed as a member of the Audit Committee.
In the event of any vacancy with the result that the number of members is reduced to below three (3), the vacancy
must be flled within three (3) months.
2. Chairman
The Chairman, who shall be elected by the Audit Committee, shall be an independent non-executive director.
3. Secretary
The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction with the
Chairman, for drawing up the agenda and circulating it prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them
to the Committee Members.
Annual Report 2011
20
4. Meetings
The Committee shall meet at least four (4) times in each fnancial year. The quorum for a meeting shall be two (2)
members, provided that the majority of members present at the meeting shall be independent.
The Committee Members may call for a meeting as and when required with reasonable notice as the Committee
Members deem ft. The Committee Members may participate in a meeting by means of conference telephone,
conference videophone or any similar or other communications equipment by means of which all persons
participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person
at such meeting.
The internal auditors and external auditors have the right to appear at any meeting of the Audit Committee and shall
appear before the Committee when required to do so by the Committee. The internal auditors and external auditors
may also request a meeting if they consider it necessary.
5. Rights
The Audit Committee shall:
(a) have authority to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information pertaining to the Group;
(d) have direct communication channels with the external auditors and person(s) carrying out the internal audit function
or activity;
(e) have the right to obtain independent professional or other advice at the Companys expense;
(f ) have the right to convene meetings with the internal auditors and external auditors, excluding the attendance of the
executive directors or employees of the Group, whenever deemed necessary;
(g) promptly report to the Bursa Securities matters which has not been satisfactorily resolved by the Board of Directors
resulting in a breach of the listing requirements;
(h) the Chairman shall call for a meeting upon the request of the internal auditors and external auditors; and
(i) have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall have
the casting vote should a tie arise.
Annual Report 2011
21
6. Duties
(a) To review with the external auditors on:
the audit plan, its scope and nature;
the audit report;
the results of their evaluation of the accounting policies and systems of internal accounting controls within
the Group; and
the assistance given by the ofcers of the Company to external auditors, including any difculties or
disputes with Management encountered during the audit.
(b) To do the following, in relation to internal audit function:
review the adequacy of the scope, functions, competency and resources of the internal audit function, and
that it has the necessary authority to carry out its work;
review the internal audit programme and results of the internal audit process and, where necessary, ensure
that appropriate actions are taken on the recommendations of the internal audit function;
review any appraisal or assessment of the performance of members of the internal audit function;
approve any appointment or termination of senior staf members of the internal audit function; and
take cognisance of resignations of internal audit staf members and provide the resigning staf member an
opportunity to submit his reasons for resigning.
(c) To provide assurance to the Board of Directors on the efectiveness of the system of internal controls and risk
management practices of the Group.
(d) To review with management:
audit reports and management letter issued by the external auditors and the implementation of audit
recommendations;
interim fnancial information; and
the assistance given by the ofcers of the Company to external auditors.
(e) To monitor related party transactions entered into by the Company or the Group and to determine if such
transactions are to be undertaken on an arms length basis and normal commercial terms and on terms not more
favourable to the related parties than those generally available to the public, and to ensure that the Directors
report such transactions annually to shareholders via the annual report and to review confict of interest that
may arise within the Company or the Group including any transaction, procedure or course of conduct that
raises questions of management integrity.
(f ) To review the quarterly reports on consolidated results and annual fnancial statements prior to submission to
the Board of Directors, focusing particularly on:
changes in or implementation of major accounting policy and practices;
signifcant and/or unusual issues arising from the audit;
the going concern assumption;
compliance with accounting standards and other legal requirements;
and major judgemental areas.
(g) To consider the appointment and/or re-appointment of internal and external auditors, the audit fee and any
questions of resignation or dismissal including recommending the nomination of person or persons as auditors.
(h) To verify any allocation of options in accordance with the employees share scheme of the Company, at the end
of the fnancial year.
Annual Report 2011
22
INTRODUCTION
The halal industry has developed rapidly as more consumers including non-muslim are aware of the halal concept that
promotes wholesome and healthy food. Silver Bird Group Berhad (SBGB) is committed to halal standards and halal
certifcation of its products and towards this end has initiated the formation of an independent adviser known as Syariah
Panel on 1 November 2008. The initiative is to enhance the halal integrity of its products.
a) Composition
Currently the Panel has four (4) members made up of two (2) experts in Islamic jurisdiction, a member of the Board of
Directors and an expert in food technology. The Panel is led by a prominent and experienced individual Y.Bhg Datuk
Abu Hasan Din Al Hafz who is the Chairman of the Syariah Panel of Bank Kerjasama Rakyat Malaysia Berhad.
The term of service of the Panel is for two years and they are eligible for re-appointment. The list of present members
of the Panel is as follows:
Datuk Abu Hasan Din Al Hafz (Chairman)
- Chairman of Syariah Panel, Bank Kerjasama Rakyat Malaysia Berhad
- Ex-Religious Adviser at the Istana Negara
Dato Hj Kamaruddin Bin Hj Zakaria (Member)
- Member of Syariah Panel, Bank Kerjasama Rakyat Malaysia Berhad
- Ex-Iman Besar, Masjid Negara
Prof. Dr Siti Salwani Razali (Member)
- Lecturer, International Islamic University Malaysia
Dato Seri Talaat Bin Husain (Member)
- Member of the Board of Directors of SBGB
b) Duties & Responsibilities
The focus of the Panel is to advise the Board of Directors and management on halal matters in order to ensure
adherence to halal policy and standards by the Company. The Panel also monitors the business through inspection
of the premises in ensuring the process conforms to Syariah.
c) Meetings
The Panel shall meet at least twice a year to deliberate on the reports by the Internal Halal Committee of SBGB. The
Internal Halal Committee is made up of Muslim employees from relevant departments in the Company who plays a
very important role in ensuring the halal standards are applied on a continuous basis as drawn up in the halal manual
of the Company. For the fnancial year ended 31 October 2011, the Panel had met once with full attendance of all
members.
The quorum for a meeting shall be two (2) members.
d) Secretary
The Secretary of the Panel is the Chairman of the Internal Halal Committee of SBGB who is responsible for drawing
up the meeting agenda with the consent of the Chairman. The secretary is responsible to keep the minutes of the
meeting of the Syariah Panel.
SYARIAH PANELS REPORT
Annual Report 2011
23
SYARIAH PANELS REPORT (CONTD)
e) Halal Policy
Silver Bird shall always conform to the Malaysian Halal Standards MS1500:2009 in ensuring that products produced
are halal, clean and safe for consumption. The integrity of the process starts from sourcing of raw materials to
manufacturing, packing, storing and distributing of the products. Silver Bird also ensures that product manufactured
for the Group either made locally or imported conforms to Halal standards of the country of origin, of which is also
recognized by JAKIM.
f) Summary of activities
i) Reviewed the halal certifcates issued by JAKIM to the company and halal certifcates of the suppliers;
ii) Reviewed the report on new products manufactured by the Company;
iii) Reviewed the customers complaints on the products;
iv) Reviewed the audit report on suppliers;
v) Reviewed the minutes of the Internal Halal Committee meetings.
Annual Report 2011
24
STATEMENT ON INTERNAL CONTROL
The Board of Directors (the Board) of Silver Bird Group Berhad has prepared a statement on the state of the Groups
internal controls in accordance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad and the Statement on Internal Control: Guidance for Directors of Public Listed Companies (Internal
Control Guidance) for inclusion in this annual report for the fnancial year ended 31 October 2011.
Responsibility
The Board acknowledges that it has a responsibility to maintain a sound system of internal control to safeguard
shareholders investments and the Groups assets as well as reviewing the adequacy and integrity of the system of internal
control.
However, as there are inherent limitations in any system of internal controls, such systems put into efect by Management
can only reduce but cannot eliminate all risks that may impede the achievement of the Groups business objectives.
Therefore, the internal control system can only provide reasonable and not absolute assurance against material
misstatement or loss.
Key Features Of The Groups Internal Control System
1. Control Environment
Organisation Structure & Authorisation Procedures
The Group maintains a formal organisation structure with well-defned delegation of responsibilities and
accountability within the Groups Senior Management. It sets out the roles and responsibilities, appropriate
authority limits, review and approval procedures in order to enhance the internal control system of the Groups
various operations.
Periodical and/or Annual Budget
Budgetary control for every operations of the Group, where actual performance is closely monitored against
budgets to identify and to address signifcant variances.
Group Policies and Procedures
The Group has documented policies and procedures that are to be regularly reviewed and updated to ensure
that it maintains its efectiveness and continues to support the Groups business activities at all times as the
Group continues to grow.
Human Resource Policy
Comprehensive guidelines on the employment and retention of employees are in place, to ensure that the
Group has a team of employees who are well trained and equipped with all the necessary knowledge, skills and
abilities to carry out their responsibility efectively.
2. Risk Management Framework
Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains an
on-going commitment to enhance the Groups control environment and processes. The key risks relating to the Groups
operations and strategic and business plans are to be addressed at Managements periodic meetings. Signifcant risks
identifed by the Management are to be brought to the attention of the Board at their scheduled meetings.
During the fnancial year ended 31 October 2011, Management with the assistance of external consultants have
been given the responsibility to update the Groups key risk profle which are then to be presented to the Audit
Committee. Risks identifed are to be prioritised in terms of likelihood of their occurrence and the impact on the
achievement of the Groups business objectives/goals. The key risk profle are also to be updated by Management
on a regular basis to ensure that all key risks are identifed and adequate responses are devised and continue to be
relevant in mitigating these risks.
The abovementioned practices/initiatives put in place by the Board serve as the on-going process used to identify,
evaluate and manage signifcant risks. Given the fnancial irregularities which have recently come to the Boards
attention, it is the Boards view that there may be a need to review and enhance the implementation of and continued
adherence to the said practices/initiatives. For this reason, the Board intends to review in detail the functional
capabilities and/or efectiveness of the existing risk management framework by commissioning an independent
internal audit frm to carry out a detailed review of prevailing internal controls.
Annual Report 2011
25
STATEMENT ON INTERNAL CONTROL (CONTD)
3. Internal Audit Function
The Groups internal audit function is outsourced to external consultants. The outsourced internal auditors are engaged
to assist the Board and the Audit Committee in providing independent assessment of the adequacy, efciency and
efectiveness of the Groups internal control systems. They report directly to the Audit Committee and internal audit plans
are tabled to the Audit Committee for review and approval to ensure adequate coverage.
On a quarterly basis, the Groups internal auditors table the results of their review of the business processes of diferent
operating units to the Audit Committee at their scheduled meetings. The internal auditors are also tasked to follow up on
the status of the implementation of corrective actions to address control weaknesses to ensure that these actions have
been satisfactorily implemented.
During the fnancial year under review, weaknesses in internal controls which were identifed by the outsourced internal
auditors were addressed. However, due to the fnancial irregularities that have come to the Boards attention after the end
of the fnancial year under review, the Board believes that there would be a need to review the efectiveness of the internal
audit function to ensure that appropriate action is taken to enhance and strengthen the internal control environment. For
this purpose, the Board intends to review in detail the functional capabilities and/or efectiveness of the existing internal
auditor and to commission an independent internal audit frm to carry out a detailed review of prevailing internal controls.
4. Information And Communication
Information critical to the achievement of the Groups business objectives are to be communicated through established
reporting lines across the Group. This is to ensure that matters that require the Board and Managements attention are
highlighted for review, deliberation and decision on a timely basis. In light of the fnancial irregularities, subject to the
fndings of the forensic investigation, such critical information may not have been communicated through the established
reporting lines.
5. Monitoring And Review
Management meetings are scheduled to be held on a regular basis to discuss and review the business planning, budgeting,
fnancial and operational performances.
Financial and Operational Review
The monthly management accounts and the quarterly fnancial statements containing key fnancial results,
operational performance results and comparisons of performance against budget are presented to the Board for
their review, consideration and approval.
Business Planning and Budgeting Review
The Board plays an active role in discussing and reviewing the business plans, strategies, performance and risks faced
by the Group.
6. Conclusion
Due to recent developments, the Board will be commissioning an independent review of the adequacy of the Groups
system of internal controls and risk management framework to safeguard shareholders investments and the Groups
assets. The Board is cognizant of the fact that the Groups system of internal control and risk management practices must
continuously evolve to meet the changing and challenging business environment. Upon completion of the independent
review, the Board will put in place appropriate action plans to further enhance the system of internal controls.

This statement was approved by the Board of Directors on 26 March 2012.
Annual Report 2011
26
STATEMENT OF DIRECTORS RESPONSIBILITY IN RESPECT
OF THE PREPARATION OF THE FINANCIAL STATEMENTS
The Board is fully accountable to ensure that the fnancial statements are drawn up in accordance with Companies Act,
1965 and the applicable approved accounting standards set by Malaysian Accounting Standards Board so as to give a
true and fair view of the state of afairs of the Group and the Company as at 31 October 2011 and of the results and cash
fows of the Group and Company for the fnancial year ended on that date.
In the process of preparing these fnancial statements, and other than as disclosed in the notes to the fnancial statements,
the Directors have reviewed the accounting policies and practices. However, due to the circumstances that have been
brought to the attention of the Board after the fnancial year ended 31 October 2011 and pending the completion of
the forensic investigation into the fnancial afairs of the Group and the Company, the Directors are not in a position to
determine whether the accounting policies and practices were consistently applied throughout the year, and in cases
where judgment and estimates were made, whether they were based on reasonableness and prudence.
Additionally, although the Directors have relied on the system of internal controls to ensure that the information generated
for the preparation of the fnancial statements from the underlying accounting records is accurate and reliable, in view of
the fnancial irregularities, the Directors are unable to form an opinion on the accuracy and reliability of such information.
This statement is made in accordance with a resolution of the Board of Directors dated 26 March 2012.
Annual Report 2011
27
I, Richard George Azlan Bin Abas, being an independent non-executive director of Silver Bird Group Berhad, who has
taken primary responsibility for the fnancial management of Silver Bird Group Berhad, upon the suspension from work
of the director and/or ofcer primarily responsible for the fnancial management of Silver Bird Group Berhad, do solemnly
and sincerely declare that, to the best of my knowledge and belief, the fnancial statements set out on pages 36 to 90
may be incorrect, in light of the circumstances as highlighted in Note 47 to the fnancial statements and the Statement
of Directors, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the
provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by
at Klang in the State of
on this 26th day of March 2012
Before me
Tay Keng Seng
No.: B392
Commissioner for Oaths
STATUTORY DECLARATION PURSUANT TO SECTION
169(16) OF THE COMPANIES ACT, 1965
Annual Report 2011
28
DIRECTORS REPORT
The directors hereby submit their report and the audited fnancial statements of the Group and of the Company for the
fnancial year ended 31 October 2011.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries
are set out in Note 5 to the fnancial statements. There have been no signifcant changes in the nature of these activities
during the fnancial year.
RESULTS
RM000 RM000
Proft/(Loss) for the fnancial year 4,925 (2,978)
Attributable to:
Owners of the Company 4,932 (2,978)
Non-controlling interests (7)
4,925 (2,978)
The results should be read in conjunction with Note 47 to the fnancial statements.
DIVIDENDS
No dividend was paid since the end of the previous fnancial year and the directors do not recommend the payment of
any dividend for the current fnancial year.
RESERVES AND PROVISIONS
All material transfers to or from reserves or provisions during the fnancial year are disclosed in the fnancial statements.
ISSUES OF SHARES AND DEBENTURES
During the fnancial year,
(a) there were no changes in the authorised share capital of the Company;
(b) The Company increased its issued and paid-up share capital from RM193,340,853 to RM203,340,853 by the issuance
of:
(i) 10,000,000 ordinary shares of RM0.50 each at an issue price of RM0.58 per ordinary share pursuant to the private
placement exercise; and
(ii) 10,000,000 ordinary shares of RM0.50 each at an issue price of RM0.60 per ordinary share pursuant to the private
placement exercise.
The new ordinary shares were issued for cash consideration for the purpose of working capital. The new ordinary
shares issued during the fnancial year rank pari passu in all respects with the existing shares of the Company; and
(c) there were no issues of debentures by the Company during the fnancial year.
OPTIONS GRANTED OVER UNISSUED SHARES
During the fnancial year, no options were granted by the Company to any person to take up any unissued shares in the
Company.
Annual Report 2011
29
DIRECTORS REPORT (CONTD)
BAD AND DOUBTFUL DEBTS
Before the fnancial statements of the Group and of the Company were made out, the directors took reasonable steps
to ascertain that action had been taken in relation to the writing of of bad debts and the making of allowance for
impairment losses on receivables.
As explained in Note 47 to the fnancial statements:-
(i) the directors are of the opinion that there may be bad debts and additional allowance that may need to be made for
impairment losses on receivables;
(ii) at the date of this report, the directors are aware that there may be circumstances that would require the writing
of of bad debts, or the additional allowance for impairment losses on receivables in the fnancial statements of the
Group and of the Company.
CURRENT ASSETS
As explained in Note 47 to the fnancial statements:-
(i) before the fnancial statements of the Group and of the Company were made out, the directors took reasonable steps to
ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business,
including their value as shown in the accounting records of the Group and of the Company, have been written down to an
amount which they might be expected so to realise, but were unable to form an opinion in this regard.
(ii) at the date of this report, the directors are aware that there may be circumstances that may render the values
attributed to the current assets in the fnancial statements misleading.
VALUATION METHODS
Other than as explained in Note 47 to the fnancial statements, at the date of this report, the directors are not aware of
any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities
of the Group and of the Company misleading or inappropriate.
CONTINGENT AND OTHER LIABILITIES
The contingent liability is disclosed in Note 43 to the fnancial statements. At the date of this report, the directors are
unable to form an opinion whether there are:-
(i) any charge on the assets of the Group and of the Company that has arisen since the end of the fnancial year which
secures the liabilities of any other person; or
(ii) any contingent liability of the Group and of the Company which has arisen since the end of the fnancial year.
Other than as explained in Note 47 to the fnancial statements, there may be further contingent or other liability of the
Group and of the Company that has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the fnancial year which, in the opinion of the directors, will or may substantially afect the ability
of the Group and of the Company to meet their obligations when they fall due.
CHANGE OF CIRCUMSTANCES
Other than as explained in Note 47 to the fnancial statements, at the date of this report, the directors are aware that
there may be circumstances not otherwise dealt with in this report or the fnancial statements of the Group and of the
Company which may render any amount stated in the fnancial statements misleading.
ITEMS OF AN UNUSUAL NATURE
The results of the operations of the Group and of the Company during the fnancial year, in the opinion of the directors,
may be substantially afected by items, transactions or events of a material and unusual nature.
Between the end of the fnancial year and the date of this report, there may be items, transactions or events of a material
and unusual nature likely, in the opinion of the directors, to afect substantially the results of the operations of the Group
and of the Company for the fnancial year.
Annual Report 2011
30
DIRECTORS
The directors who served since the date of the last report are as follows:-
DATO PROF. DR. GAN MIEW CHEE @ GAN KHUAN POH
DATO TAN HAN KOOK
CHING SIEW CHEONG
LIM HOCK CHYE
RICHARD GEORGE AZLAN BIN ABAS
DATO SERI TALAAT BIN HUSAIN
ADI AZUAN BIN ABDUL GHANI
DATO LEE KOK CHUAN
PETER JOHN MCLOGHLIN
VANDA RUSSELL GOULD (ALTERNATE DIRECTOR TO PETER JOHN MCLOGHLIN)
DIRECTORS INTERESTS
According to the register of directors shareholdings, the interests of directors holding ofce at the end of the fnancial
year in shares in the Company and its related corporations during the fnancial year are as follows:-
NUMBER OF ORDINARY SHARES OF RM0.50 EACH
AT AT
1.11.2010 BOUGHT SOLD 31.10.2011
Direct Interests
Dato Tan Han Kook 44,090,866 44,090,866
Ching Siew Cheong 7,654,191 7,654,191
Richard George Azlan Bin Abas 133,333 271,600 404,933
Indirect Interests
Dato Tan Han Kook
(1)
8,076,079 8,076,079
Vanda Russell Gould
(2)
36,876,666 36,876,666
(1)
Deemed interests through spouses shareholdings.
(2)
Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.
Annual Report 2011
31
NUMBER OF WARRANTS
AT AT
1.11.2010 BOUGHT SOLD 31.10.2011
Warrants B - 2010/2013
Direct Interests
Dato Tan Han Kook 3,657,330 3,657,330
Ching Siew Cheong 372,640 372,640
Richard George Azlan Bin Abas 12,499 12,499
Indirect Interests
Dato Tan Han Kook
(1)
757,425 757,425
Vanda Russell Gould
(2)
980,900 980,900
(1)
Deemed interests through spouses shareholdings.
(2)
Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.
By virtue of his shareholding in the Company, Dato Tan Han Kook is deemed to have interests in shares in its related
corporations during the fnancial year to the extent of the Companys interest, in accordance with Section 6A of the
Companies Act 1965.
The other directors holding ofce at the end of the fnancial year had no interests in shares in the Company or its related
corporations during the fnancial year.
DIRECTORS BENEFITS
Since the end of the previous fnancial year, no director is entitled or become entitled to receive any beneft (other than
a beneft included in the aggregate amount of emoluments received or due and receivable by directors as shown in the
fnancial statements, or the fxed salary of a full-time employee of the Company) by reason of a contract made by the
Company or a related corporation with the director or with a frm of which the director is a member, or with a company
in which the director has a substantial fnancial interest.
Neither during nor at the end of the fnancial year was the Group or the Company a party to any arrangements whose
object is to enable the directors to acquire benefts by means of the acquisition of shares in or debentures of the Company
or any other body corporate.
SIGNIFICANT EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD
In addition to Note 45 to the fnancial statements, there may be other signifcant events occurring after the end of the
reporting period.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 28 FEBRUARY 2012
Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh
Annual Report 2011
32
STATEMENT BY DIRECTORS
We, Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh and Richard George Azlan Bin Abas, being two of the independent
non-executive directors of Silver Bird Group Berhad, state that as explained in Note 47 to the fnancial statements, the
non-executive directors have taken note of the Independent Auditors disclaimers pertaining to the fnancial statements
set out on pages 36 to 90 but are in no position to form an opinion on the said disclaimers.
We are unable to form an opinion as to the extent of the circumstances leading to the disclaimers by the Independent
Auditors. There may however be additional circumstances that we may not at this juncture be aware that may have a
material impact on the truth and fairness of the fnancial statements.
Accordingly, we are unable to form an opinion as to whether the fnancial statements set out on pages 36 to 90 have been
drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true
and fair view of the state of afairs of the Group and of the Company at 31 October 2011 and of their results and cash fows
for the fnancial year ended on that date. We have however taken the necessary steps to ascertain a true and fair view of
the state of afairs of the Group and of the Company at 31 October 2011 and their results and cash fows for the fnancial
year ended on that date, and will report the same expeditiously once the directors are in a position to do so.
SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 28 FEBRUARY 2012
Dato Prof. Dr. Gan Miew Chee @ Gan Khuan Poh Richard George Azlan Bin Abas
Annual Report 2011
33
Report on the Financial Statements
We were engaged to audit the fnancial statements of Silver Bird Group Berhad, which comprise the statements of
fnancial position as at 31 October 2011 of the Group and of the Company, and the statements of comprehensive income,
statements of changes in equity and statements of cash fows of the Group and of the Company for the fnancial year
then ended, and a summary of signifcant accounting policies and other explanatory information, as set out on pages
36 to 90.
Directors Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of fnancial statements that give a true and fair view in
accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control
as the directors determine is necessary to enable the preparation of fnancial statements that are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these fnancial statements based on our audit in accordance with approved
standards on auditing in Malaysia. Because of the matter described in the Basis for Disclaimer of Opinion paragraph,
however, we were not able to obtain sufcient appropriate audit evidence to provide a basis for an audit opinion.
Basis for Disclaimer of Opinion
1. During the course of our audit for the fnancial year ended 31 October 2011, we expressed concerns to the Audit
Committee and the Board of Directors over the validity and recording of certain transactions for which we were not
able to obtain the sufcient and appropriate audit evidence and satisfactory explanations from management, the
details of the said transactions, as disclosed in Note 47 to the fnancial statements, are as follows:-
(i) The capital work-in-progress of the Group under property, plant and equipment, includes payments made
amounting to approximately RM7.6 million to a third party for the design, renovation and refurbishment of the
existing warehouse and factory. We have not been able to verify the veracity of the payments made. In addition,
we have not been able to obtain all the information required to verify the additions of plant and equipment
amounting to RM4.9 million ;
(ii) In August 2011, the Group ventured into a new business segment of trading in sweetened creamer. Revenue
and cost of sales amounting to approximately RM31.9 million and RM31.3 million respectively were recorded
for this segment in the proft or loss. We have not been able to verify the veracity of the transactions for this
segment which were undertaken with fve (5) customers; and
(iii) We have not been able to verify the veracity of sales transactions undertaken by the Group with six (6)
customers comprising four (4) customers from the bakery segment and two (2) customers from the
telecommunication segment amounting to RM149.0 million included in proft or loss. The said amount include
gross telecommunication sales of RM83.9 million.
2. The matters referred to in paragraph 1(i) to (iii) above cast a signifcant doubt on the fnancial performance and
position of the Group. We have not been able to obtain all the necessary information and explanations required for
the review of impairment of the following assets of the Group as included in the Consolidated Financial Position as
at 31 October 2011 :-
(i) the carrying amount of property, plant and equipment of the Group of RM195.4 million; and
(ii) the carrying amount of intangible assets of the Group of RM36.7 million.
3. We have not been able to obtain all the necessary information and explanations required for the review of the
recoverability of the carrying amount of the trade receivables of the Group as at 31 October 2011 for those trade
receivables mentioned in 1(ii) and 1(iii) above amounting to approximately RM31.9 million and RM35.9 million,
respectively;
INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF SILVER BIRD GROUP BERHAD (INCORPORATED IN MALAYSIA) COMPANY NO : 277977 - X
Annual Report 2011
34
INDEPENDENT AUDITORS REPORT (CONTD)
4. The following items required for our audit remain outstanding at the date of this report, and therefore may be
subject to adjustments:-
(i) Sales transaction data for fve (5) customers in the sweetened creamer segment, four (4) customers in the bakery
segment and two (2) customers in the telecommunication segment;
(ii) Confrmation of balances that have not been received from the following third parties in relation to the amounts
included in the Statement of Financial Position as at 31 October 2011:-
(a) the carrying amount of cash and bank balances of the Group of RM1.3 million;
(b) the carrying amount of short-term deposits with fnancial institution of the Group and of the Company of
RM1.1 million;
(c) the carrying amount of bonds of the Group and of the Company of RM5.0 million;
(d) the carrying amount of commercial papers of the Group and of the Company of RM15.0 million;
(e) the carrying amount of hire purchase payables of the Group of RM5.1 million;
(f ) the carrying amount of term loans of the Group of RM18.4 million; and
(g) the carrying amount of certain trade receivables of the Group of RM25.1 million.
5. In view of the matters referred to above, we have not been able to obtain sufcient appropriate audit evidence to
ascertain the following:-
(i) impairment to the carrying amounts of the investment in subsidiaries and loans to subsidiaries of the Company
of RM205.6 million and RM58.0 million respectively; and
(ii) the appropriateness of the preparation of the fnancial statements of the Group and of the Company on a going
concern basis.
Disclaimer of Opinion
Because of the signifcance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not
been able to obtain sufcient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not
express an opinion on the fnancial statements.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-
(i) Because of the signifcance of the matters described in the Basis for Disclaimer of Opinion paragraphs, in our opinion,
the accounting and other records required by the Act to be kept by the Company and by its subsidiaries of which
we have acted as auditors have not been properly kept in accordance with the provisions of the Act. However, in our
opinion, the registers required by the Act to be kept by the Company have been properly kept in accordance with
the provisions of the Act.
(ii) The audits of the subsidiaries (details of the subsidiaries are disclosed in Note 5 to the fnancial statements) have
commenced but have not been completed as at the date of this report. As a result of the delay in the completion of
the audit of the subsidiaries, we have not been able to consider the fnancial statements and the audit reports of the
subsidiaries.
(iii) Accordingly, we are unable to comment whether the fnancial statements of the subsidiaries that have been
consolidated with the Companys fnancial statements are in form and content appropriate and proper for the
purposes of the preparation of the fnancial statements of the Group. We have not received satisfactory information
and explanations required by us for those purposes.
Annual Report 2011
35
(iv) We are unable to report whether the audit reports on the fnancial statements of the subsidiaries contain any
qualifcation or any adverse comment made under Section 174(3) of the Act, as the audited fnancial statements of
the subsidiaries are not available as at the date of this report.
The supplementary information set out in Note 48 on page 90 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad and is not part of the fnancial statements. The directors are responsible for the preparation of the
supplementary information in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised
Profts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued
by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. We are
unable to report on whether the supplementary information is prepared, in all material respects, in accordance with the
MIA Guidance and the directive of Bursa Malaysia Securities Berhad because of the signifcance of the matters described
in the Basis for Disclaimer of Opinion paragraphs.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.
Crowe Horwath Onn Kien Hoe
Firm No: AF 1018 Approval No: 1772/11/12(J/PH)
Chartered Accountants Chartered Accountant
Kuala Lumpur
INDEPENDENT AUDITORS REPORT (CONTD)
Annual Report 2011
36
RESTATED
2011 2010 2011 2010
NOTE RM000 RM000 RM000 RM000
ASSETS
NON-CURRENT ASSETS
Investment in subsidiaries 5 205,605 205,605
Investment in associate 6 300
Property, plant and equipment 7 195,395 201,678
Other receivable 8 7,546 7,546 7,546 7,546
Intangible assets 9 36,730 36,730
Loan to subsidiaries 10 58,006 63,372
239,971 245,954 271,157 276,523
CURRENT ASSETS
Inventories 11 15,016 17,777
Trade receivables 12 128,174 75,186
Other receivables, deposits
and prepayments 13 2,398 1,988 493 115
Amount owing by a subsidiary 14 6 6
Tax refundable 247 1
Short-term deposits with
fnancial institution 15 1,145 3,138 1,145 3,138
Fixed deposits with licensed
banks 16 2,560 2,489
Cash and bank balances 7,578 19,712 38 31
157,118 120,291 1,682 3,290
TOTAL ASSETS 397,089 366,245 272,839 279,813
STATEMENT OF FINANCIAL POSITION
AT 31 OCTOBER 2011
The annexed notes form an integral part of these fnancial statements.
Annual Report 2011
37
RESTATED
2011 2010 2011 2010
EQUITY AND LIABILITIES
EQUITY
Share capital 17 203,341 193,341 203,341 193,341
Share premium 18 53,622 52,453 53,622 52,453
Merger defcit 19 (5,326) (5,326)
Capital reserve 20 277 277
Warrants reserve 21 6,059 6,059 6,059 6,059
Accumulated losses (44,138) (49,070) (13,754) (10,776)
Foreign exchange
translation reserve 22 (670) (360)
TOTAL EQUITY
ATTRIBUTABLE TO
OWNERS OF THE
COMPANY 213,165 197,374 249,268 241,077
MINORITY INTERESTS 258 265
TOTAL EQUITY 213,423 197,639 249,268 241,077
NON-CURRENT LIABILITIES
Hire purchase payables 23 6,290 9,613
Term loans 24 15,448 13,479
Bonds 25 4,677 4,677
Deferred taxation 26 764
22,502 27,769 4,677
CURRENT LIABILITIES
Trade payables 27 25,919 19,423
Other payables and accruals 28 8,840 7,570 2,580 96
Amount owing to
subsidiaries 14 59 59
Hire purchase payables 23 3,298 3,411
Term loans 24 4,187 1,250
Bonds 25 4,677 3,899 4,677 3,899
Commercial papers 29 15,000 30,000 15,000 30,000
Bills payable 30 93,905 74,839
Bank overdrafts 31 5,165 1,522
Provision for taxation 173 173 5 5
161,164 140,837 23,571 34,059
TOTAL LIABILITIES 183,666 168,606 23,571 38,736
TOTAL EQUITY AND
LIABILITIES 397,089 366,245 272,839 279,813
STATEMENT OF FINANCIAL POSITION (CONTD)
AT 31 OCTOBER 2011
Annual Report 2011
38
RESTATED
2011 2010 2011 2010
REVENUE 32 232,068 190,015
COST OF SALES
(146,352) (103,720)
GROSS PROFIT 85,716 86,295
OTHER INCOME
2,839 1,246 2,797 3,562
88,555 87,541 2,797 3,562
ADVERTISING AND PROMOTION
EXPENSES (2,706) (3,532)
ADMINISTRATIVE EXPENSES (26,979) (22,610) (3,195) (3,948)
SELLING AND DISTRIBUTION EXPENSES (41,214) (46,369)
OTHER EXPENSES (4,032) (4,634)
FINANCE COSTS
(7,874) (6,752) (2,580) (3,192)
PROFIT/(LOSS) BEFORE TAXATION 33 5,750 3,644 (2,978) (3,578)
INCOME TAX EXPENSE 34
(825)
PROFIT/(LOSS) FOR THE
FINANCIAL YEAR

4,925 3,644 (2,978) (3,578)
OTHER COMPREHENSIVE
(EXPENSES)/INCOME
- Foreign currency translation (310) 2
TOTAL COMPREHENSIVE INCOME/
(EXPENSES) FOR THE FINANCIAL
YEAR 4,615 3,646 (2,978) (3,578)
.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 OCTOBER 2011
The annexed notes form an integral part of these fnancial statements
Annual Report 2011
39
RESTATED
2011 2010 2011 2010
PROFIT/(LOSS) FOR THE FINANCIAL
YEAR ATTRIBUTABLE TO:-
Owners of the Company 4,932 3,650 (2,978) (3,578)
Minority interests (7) (6)
4,925 3,644 (2,978) (3,578)
TOTAL COMPREHENSIVE INCOME/
(EXPENSES) FOR THE FINANCIAL
YEAR ATTRIBUTABLE TO:-
Owners of the Company 4,622 3,652 (2,978) (3,578)
Minority interests
(7) (6)
4,615 3,646 (2,978) (3,578)
EARNINGS PER SHARE
- Basic 35 1.25 sen 1.05 sen
- Diluted 35
N/A N/A
N/A - Not applicable
STATEMENT OF COMPREHENSIVE INCOME (CONTD)
Annual Report 2011
40
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Annual Report 2011
41
SHARE
CAPITAL
SHARE
PREMIUM
WARRANTS
RESERVE
ACCUMULATED
LOSSES TOTAL
THE COMPANY RM000 RM000 RM000 RM000 RM000
Balance at 1.11.2009 157,090 36,077 7,363 (7,198) 193,332
Issuance of ordinary shares pursuant to:
- private placement 26,938 10,775 37,713
- conversion of warrant A 9,313 6,519 (1,304) 14,528
Share issue expenses incurred (918) (918)
Total comprehensive expenses for the
fnancial year (3,578) (3,578)
Balance at 31.10.2010/1.11.2010 193,341 52,453 6,059 (10,776) 241,077
Issuance of ordinary shares pursuant to
private placement 10,000 1,850 11,850
Share issue expenses incurred (681) (681)
Total comprehensive expenses for the
fnancial year (2,978) (2,978)
Balance at 31.10.2011 203,341 53,622 6,059 (13,754) 249,268
STATEMENT OF CHANGES IN EQUITY (CONTD)
Annual Report 2011
42
RESTATED
2011 2010 2011 2010
RM000 RM000 RM000 RM000
CASH FLOWS FOR
OPERATING ACTIVITIES
Proft/(Loss) before taxation 5,750 3,644 (2,978) (3,578)
Adjustment for:-
Allowance for impairment losses on trade
receivables 819 427
Amortisation of discount on bonds 1,101 1,101 1,101 1,101
Amortisation of intangible assets 1
Depreciation on property plant and equipment 22,259 22,737
Gain on disposal of property, plant and
equipment (48) (8)
Interest income (345) (370) (2,797) (3,562)
Interest expense
6,773 5,651 1,479 2,090
Operating proft/(loss) before working capital
changes 36,309 33,183 (3,195) (3,949)
Decrease/(Increase) in inventories 2,761 (5,302)
(Increase)/Decrease in trade and other
receivables (54,217) (22,753) (378) 366
Increase/(Decrease) in trade and other payables
7,766 (6,876) 2,484 (643)
CASH FOR OPERATIONS (7,381) (1,748) (1,089) (4,226)
Interest paid (6,773) (5,651) (1,479) (2,090)
Income tax paid
(307)
NET CASH FOR OPERATING
ACTIVITIES/BALANCE CARRIED FORWARD
(14,461) (7,399) (2,568) (6,316)
STATEMENTS OF CASH FLOWS
Annual Report 2011
43
2011 2010 2011 2010
BALANCE BROUGHT FORWARD (14,461) (7,399) (2,568) (6,316)
CASH FLOWS (FOR)/FROM
INVESTING ACTIVITIES
Purchase of property, plant and
equipment 36 (11,802) (14,198)
Interest received 345 370 2,797 3,562
Proceeds from disposal of property,
plant and equipment 119 68
Net repayment from/(advances to)
subsidiaries 5,366 (37,985)
Acquisition of an associate (300)
Increase in fxed deposit pledged to
licensed bank (71) (54)
NET CASH (FOR)/FROM INVESTING
ACTIVITIES (11,709) (13,814) 8,163 (34,423)
CASH FLOWS FROM/(FOR)
FINANCING ACTIVITIES
Proceeds from disposal of ordinary
shares, net of expenses 11,169 51,323 11,169 51,323
Net drawdown/(repayment) of bills
payable 19,066 (15,896)
Net drawdown of term loans 1,911 1,250
Net repayment of hire purchase
payables (3,436) (3,037)
Repayment of bonds (5,000) (20,000) (5,000) (20,000)
Repayment of commercial papers (15,000) (15,000)
NET CASH FROM/(FOR) FINANCING
ACTIVITIES
8,710 12,390 (7,581) 31,323
NET DECREASE IN CASH AND CASH
EQUIVALENTS (17,460) (8,823) (1,986) (9,416)
EFFECTS OF FOREIGN EXCHANGE
TRANSLATION ON CASH AND
CASH EQUIVALENTS (310) 2
CASH AND CASH EQUIVALENTS
AT BEGINNING OF THE
FINANCIAL YEAR
21,328 30,149 3,169 12,585
CASH AND CASH EQUIVALENTS AT
END OF THE FINANCIAL YEAR 37
3,558 21,328 1,183 3,169
STATEMENTS OF CASH FLOWS (CONTD)
Annual Report 2011
44
1. GENERAL INFORMATION
The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia.
The domicile of the Company is Malaysia. The registered ofce and principal place of business is at Lot 72, Persiaran
Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan.
The fnancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors dated 28 February 2012.
2. PRINCIPAL ACTIVITIES
The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries
are set out in Note 5 to the fnancial statements. There have been no signifcant changes in the nature of these
activities during the fnancial year.
3. BASIS OF PREPARATION
The fnancial statements of the Group are prepared under the historical cost convention and modifed to include
other bases of valuation as disclosed in other sections under signifcant accounting policies, and in compliance with
Financial Reporting Standards (FRS) and the Companies Act 1965 in Malaysia.
(a) During the current fnancial year, the Group has adopted the following new accounting standards and IC
Interpretations (including the consequential amendments):-
FRSs and IC Interpretations (including the Consequential Amendments)
FRS 1 (Revised) First-time Adoption of Financial Reporting Standards FRS 3 (Revised) Business Combinations
FRS 3 (Revised) Business Combinations
FRS 4 Insurance Contracts
FRS 7 Financial Instruments: Disclosures
FRS 101 (Revised) Presentation of Financial Statements
FRS 123 (Revised) Borrowing Costs
FRS 127 ( Revised) Consolidated and Separate Financial Statements
FRS 139 Financial Instruments: Recognition and Measurement
Amendments to FRS 1 (Revised) and FRS 127 (Revised): Cost of an Investment in a Subsidiary, Jointly Controlled
Entity or Associate
Amendments to FRS 2: Vesting Conditions and Cancellations
Amendments to FRS 2: Scope of FRS 2 and FRS 3 (Revised)
Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary
Amendments to FRS 7, FRS 139 and IC Interpretation 9
Amendments to FRS 101 (Revised) and FRS 132: Puttable Financial Instruments and Obligations Arising on
Liquidation
Amendments to FRS 132: Classifcation of Rights Issues and the Transitional Provision in Relation to Compound
Instruments
NOTES TO THE FINANCIAL STATEMENTS
Annual Report 2011
45
3. BASIS OF PREPARATION (CONTD)
(a) FRSs and IC Interpretations (including the Consequential Amendments) (Contd)
Amendments to FRS 138: Consequential Amendments Arising from FRS 3 (Revised)
IC Interpretation 9 Reassessment of Embedded Derivatives
IC Interpretation 10 Interim Financial Reporting and Impairment
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions
IC Interpretation 12 Service Concession Arrangements
IC Interpretation 13 Customer Loyalty Programmes
IC Interpretation 14: FRS 119 - The Limit on a Defned Beneft Asset, Minimum Funding Requirements and their
Interaction
IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17 Distributions of Non-cash Assets to Owners
Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and FRS 3 (Revised)
Annual Improvements to FRSs (2009)
The adoption of the above accounting standards and interpretations (including the consequential amendments)
did not have any material impact on the Groups fnancial statements, other than the following:-
(i) FRS 3 (Revised) introduces signifcant changes to the accounting for business combinations, both at the
acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction
costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be
applied prospectively and therefore there will be no fnancial impact on the fnancial statements of the
Group for the current fnancial year but may impact the accounting for future transactions or arrangements.
(ii) FRS 7 requires additional disclosures about the fnancial instruments of the Group. Prior to 1 November 2010,
information about fnancial instruments was disclosed in accordance with the requirements of FRS 132 -
Financial Instruments: Disclosures and Presentation. FRS 7 requires the disclosure of qualitative and quantitative
information about exposure to risks arising from fnancial instruments, including specifed minimum disclosures
about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.
The Group has applied FRS 7 prospectively in accordance with the transitional provisions. Accordingly, the
new disclosures have not been applied to the comparatives and are included throughout the fnancial
statements for the current fnancial year.
(iii) FRS 101 (Revised) introduces the statement of comprehensive income, with all items of income and expense
in proft or loss, together with all other items of recognised income and expense recognised directly in
equity, either in one single statement, or in two linked statements. The Group has elected to present this
statement as one single statement.
The revised standard also separates owner and non-owner changes in equity. The statement of changes in
equity includes only details of transactions with owners, with all non-owner changes in equity presented in
the statement of comprehensive income as other comprehensive income.
In addition, a statement of fnancial position is required at the beginning of the earliest comparative period
following a change in accounting policy, the correction of an error or the classifcation of items in the
statement.
FRS 101 (Revised) also requires the Group to make new disclosures to enable users of the fnancial statements
to evaluate the Groups objectives, policies and processes for managing capital. This new disclosure is made
in Note 44(b) to the fnancial statements.
Comparative information has been re-presented so that it is in conformity with the requirements of this
revised standard.
NOTES TO THE FINANCIAL STATEMENTS (CONTD)
Annual Report 2011
46
(a) FRSs and IC Interpretations (including the Consequential Amendments) (Contd)
(iv) FRS 127 (Revised) requires accounting for changes in ownership interests by the group in a subsidiary,
while maintaining control, to be recognised as an equity transaction. When the group loses control of a
subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or
loss recognised in proft or loss. The revised standard also requires all losses attributable to the minority
interest to be absorbed by the minority interest instead of by the parent. The Group will apply the major
changes of FRS 127 (Revised) prospectively and therefore there will be no fnancial impact on the fnancial
statements of the Group for the current fnancial year but may impact the accounting for future transactions
or arrangements.
(v) Amendments to FRS 1 and FRS 127 remove the defnition of cost method currently set out in FRS 127,
and instead require an investor to recognise all dividends from subsidiaries, jointly controlled entities or
associates as income in its separate fnancial statements. In addition, FRS 127 has also been amended to
deal with situations where a parent reorganises its group by establishing a new entity as its new parent.
Under this circumstance, the new parent shall measure the cost of its investment in the original parent
at the carrying amount of its share of the equity items shown in the separate fnancial statements of the
original parent at the reorganisation date. The amendments will be applied prospectively and therefore
there will be no fnancial impact on the fnancial statements of the Company for the current fnancial year
but may impact the accounting for future transactions or arrangements.
(vi) IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments
in equity instruments and fnancial assets carried at cost to be reversed at a subsequent reporting period.
(b) The Group has not applied in advance the following accounting standards and interpretations (including the
consequential amendments) that have been issued by the Malaysian Accounting Standards Board (MASB) but
are not yet efective for the current fnancial year:-
FRSs and IC Interpretations (including the Consequential Amendments) Efective Date
FRS 9 Financial Instruments 1 January 2013
FRS 10 Consolidated Financial Statements 1 January 2013
FRS 11 Joint Arrangements 1 January 2013
FRS 12 Disclosure of Interests in Other Entities 1 January 2013
FRS 13 Fair Value Measurement 1 January 2013
FRS 119 (Revised) Employee Benefts 1 January 2013
FRS 124 (Revised) Related Party Disclosures 1 January 2012
FRS 127 (2011) Separate Financial Statements 1 January 2013
FRS 128 (2011) Investments in Associates and Joint Ventures 1 January 2013
Amendments to FRS 1 (Revised): Limited Exemption from Comparative FRS 7 Disclosures
for First-time Adopters 1 January 2011
Amendments to FRS 1 (Revised): Severe Hyperinfation and Removal of Fixed Dates for First-
time Adopters 1 January 2012
Amendments to FRS 1(Revised): Additional Exemptions for First-time Adopters 1 January 2011
Amendments to FRS 2: Group Cash-settled Share-based Payment Transactions 1 January 2011
Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011
Amendments to FRS 7: Disclosures - Transfers of Financial Assets 1 January 2012
Amendments to FRS 101 (Revised): Presentation of Items of Other Comprehensive Income 1 July 2012
Amendments to FRS 112: Recovery of Underlying Assets 1 January 2012
IC Interpretation 4 Determining Whether An Arrangement Contains a Lease 1 January 2011
IC Interpretation 15 Agreements for the Construction of Real Estate Withdrawn on 19
November 2011
Annual Report 2011
47
FRSs and IC Interpretations (including the Consequential Amendments) (CONTD) Efective Date
IC Interpretation 18 Transfers of Assets from Customers 1 January 2011
IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011
IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013
Amendments to IC Interpretation 14: Prepayment of a Minimum Funding Requirement 1 July 2011
Annual Improvements to FRSs (2010) 1 January 2011
The above accounting standards and interpretations (including the consequential amendments) are not
relevant to the Groups operations except as follows:-
FRS 9 replaces the parts of FRS 139 that relate to the classifcation and measurement of fnancial instruments.
FRS 9 divides all fnancial assets into 2 categories - those measured at amortised cost and those measured at
fair value, based on the entitys business model for managing its fnancial assets and the contractual cash fow
characteristics of the instruments. For fnancial liabilities, the standard retains most of the FRS 139 requirement.
An entity choosing to measure a fnancial liability at fair value will present the portion of the change in its fair
value due to changes in the entitys own credit risk in other comprehensive income rather than within proft or
loss.
FRS 10 replaces the consolidation guidance in FRS 127 and IC Interpretation 121. Under FRS 10, there is only
one basis for consolidation, which is control. Extensive guidance has been provided in the standard to assist
in the determination of control. The possible impacts on the fnancial statements of the Group upon its initial
application are immaterial to disclose to the fnancial statements.
FRS 12 is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or
unconsolidated structured entities. FRS 12 is a disclosure standard and the disclosure requirements in this
standard are more extensive than those in the current standards. Accordingly, there will be no fnancial impact
on the fnancial statements of the Group upon its initial application but may impact its future disclosures.
FRS 13 defnes fair value, provides guidance on how to determine fair value and requires disclosures about
fair value measurements. The scope of FRS 13 is broad; it applies to both fnancial instrument items and non-
fnancial instrument items for which other FRSs require or permit fair value measurements and disclosures about
fair value measurements, except in specifed circumstances. In general, the disclosure requirements in FRS 13
are more extensive than those required in the current standards and therefore there will be no fnancial impact
on the fnancial statements of the Group upon its initial application but may impact its future disclosures.
(b) The amendments to FRS 7 expand the disclosures required in respect of fair value measurements and liquidity
risk. There will be no fnancial impact on the fnancial statements of the Group upon its initial application but
may impact its future disclosures.
The amendments to FRS 101 retain the option to present proft or loss and other comprehensive income in
either a single statement or in two separate but consecutive statements. In addition, items presented in other
comprehensive income section are to be grouped based on whether they are potentially re-classifable to proft
or loss subsequently i.e. those that might be reclassifed and those that will not be reclassifed. Income tax on
items of other comprehensive income is required to be allocated on the same basis. There will be no fnancial
impact on the fnancial statements of the Group upon its initial application but may impact its future disclosures.
(c) Following the issuance of Malaysian Financial Reporting Standards (equivalent to International Financial
Reporting Standards) (MFRSs) by the Malaysian Accounting Standards Board on 19 November 2011, the Group
will be adopting these new accounting standards during the fnancial year ending 31 October 2013. The Group
is in the process of making an assessment of the fnancial impacts of the MFRSs and the extent of the impacts
has not been determined.
Annual Report 2011
48
4. SIGNIFICANT ACCOUNTING POLICIES
(a) Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated by the directors and management and are based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The estimates and judgements that afect the application of the Groups
accounting policies and disclosures, and have a signifcant risk of causing a material adjustment to the carrying
amounts of assets, liabilities, income and expenses are discussed below:-
(i) Depreciation of Plant and Equipment
The estimates for the residual values, useful lives and related depreciation charges for the plant and
equipment are based on commercial factors which could change signifcantly as a result of technical
innovations and competitors actions in response to the market conditions.
The Group anticipates that the residual values of its plant and equipment will be insignifcant. As a result,
residual values are not being taken into consideration for the computation of the depreciable amount.
Changes in the expected level of usage and technological development could impact the economic useful
lives and the residual values of these assets, therefore future depreciation charges could be revised.
(ii) Income Taxes
There are certain transactions and computations for which the ultimate tax determination is uncertain during
the ordinary course of business. The Group recognises tax liabilities based on its understanding of the prevailing
tax law and estimates of whether such taxes will be due in the ordinary course of business. Where the fnal
outcome of these matters is diferent from the amounts that were initially recognised, such diference will
impact the income tax and deferred tax provisions in the year in which such determination is made.
(iii) Impairment of Non-Financial Assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the
cash-generating unit to which the asset is allocated, the management is required to make an estimate of
the expected future cash fows from the cash-generating unit and also to apply a suitable discount rate in
order to determine the present value of those cash fows.
(iv) Allowance for Inventories
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These
reviews require judgement and estimates.
Possible changes in these estimates could result in revisions to the valuation of inventories.
(v) Impairment of Trade and Other Receivables
An impairment loss is recognised when there is objective evidence that a fnancial asset is impaired.
Management specifcally reviews its loans and receivables fnancial assets and analyses historical bad
debts, customer concentrations, customer creditworthiness, current economic trends and changes in
the customer payment terms when making a judgment to evaluate the adequacy of the allowance for
impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash
fows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the
expectation is diferent from the estimation, such diference will impact the carrying value of receivables.
(vi) Impairment of Goodwill
Goodwill is tested for impairment annually and at other times when such indicators exist. This requires
management to estimate the expected future cash fows of the cash-generating unit to which goodwill is
allocated and to apply a suitable discount rate in order to determine the present value of those cash fows.
The future cash fows are most sensitive to budgeted gross margins, growth rates estimated and discount
rate used. If the expectation is diferent from the estimation, such diference will impact the carrying value
of goodwill.
Annual Report 2011
49
4. SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(a) Critical Accounting Estimates and Judgements (contd)
(vii) Impairment of Investments in Subsidiaries
Investments in subsidiaries are assessed for impairment losses whenever events or changes in circumstances
indicate that the carrying amount of these assets may not be recoverable. Such assessment requires the
Directors to make estimates of the recoverable amounts. Impairment loss is recognised for the amount by
which the carrying amount of the assets exceed its recoverable amount, which is the higher of an assets
fair value less cost to sell and its value in use. The Directors believe that the estimates of the recoverable
amounts are reasonable.
(viii) Fair Value Estimates for Certain Financial Assets and Liabilities
The Group carries certain fnancial assets and liabilities at fair value, which require extensive use of accounting
estimates and judgement. While signifcant components of fair value measurement were determined using
verifable objective evidence, the amount of changes in fair value would difer if the Group uses diferent
valuation methodologies. Any changes in fair value of these assets and liabilities would afect proft and
equity.
(b) Basis of Consolidation
The consolidated fnancial statements include the fnancial statements of the Company and its subsidiaries
made up to 31 October 2011.
A subsidiary is defned as a company in which the parent company has the power, directly or indirectly, to
exercise control over its fnancial and operating policies so as to obtain benefts from its activities.
The acquisition method is used to consolidate the results of some of the subsidiaries as disclosed in Note 5 to
the fnancial statements. Under this method, the results of the subsidiaries acquired or disposed of during the
fnancial year are included in the consolidated statement of comprehensive income from the date of acquisition
or up to the date of disposal.
For subsidiaries which were acquired by way of the issue of shares as disclosed in Note 5 to the fnancial
statements, and which satisfy the requirements of FRS 3 - Business Combinations, the merger method is used to
consolidate the results of these subsidiaries. The diference between the acquisition cost and the nominal value
of the share capital and reserves of the subsidiaries is taken to the merger reserve.
Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where necessary,
adjustments are made to the fnancial statements of subsidiaries to ensure consistency of accounting policies
with those of the Group.
Non-controlling interests are presented within equity in the consolidated statement of fnancial position,
separately from the Companys shareholders equity, and are separately disclosed in the consolidated statement
of comprehensive income. Transactions with non-controlling interests are accounted for as transactions with
owners and are recognised directly in equity. Proft or loss and each component of other comprehensive income
are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income
is attributed to non-controlling interests even if this results in the non-controlling interests having a defcit
balance.
At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those
interests at initial recognition plus the non-controlling interests share of subsequent changes in equity.
All changes in the parents ownership interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions. Any diference between the amount by which the non-controlling interest is adjusted
and the fair value of consideration paid or received is recognised directly in equity and attributed to owners of
the parent.
Annual Report 2011
50
(b) Basis of Consolidation (contd)
Upon loss of control of a subsidiary, the proft or loss on disposal is calculated as the diference between:-
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the
former subsidiary; and
(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and
any non-controlling interests.
Amounts previously recognised in other comprehensive income in relation to the former subsidiary are
accounted for (i.e. reclassifed to proft or loss or transferred directly to retained profts) in the same manner as
would be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained
in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under FRS 127.
Business combinations from 1 November 2010 onwards
Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the
consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred
and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the
fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related
costs, other than the costs to issue debt or equity securities, are recognised in proft or loss when incurred.
In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to
fair value at the acquisition date and any corresponding gain or loss is recognised in proft or loss.
Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling
interests proportionate share of the fair value of the acquirees identifable net assets at the date of acquisition.
The choice of measurement basis is made on a transaction-by-transaction basis.
Business combinations before 1 November 2010
All subsidiaries are consolidated using the purchase method. At the date of acquisition, the fair values of the
subsidiaries net assets are determined and these values are refected in the consolidated fnancial statements.
The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the
acquiree, plus any costs directly attributable to the business combination.
Non-controlling interests are initially measured at their share of the fair values of the identifable assets and
liabilities of the acquiree as at the date of acquisition.
(c) Goodwill on Consolidation
Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is
reviewed for impairment annually. The impairment value of goodwill is recognised immediately in proft or loss.
An impairment loss recognised for goodwill is not reversed in a subsequent period.
Business combinations from 1 November 2010 onwards
Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the
business combination, the amount of non-controlling interests recognised and the fair value of the Groups
previously held equity interest in the acquiree (if any), over the net fair value of the acquirees identifable assets
and liabilities at the date of acquisition is recorded as goodwill.
Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain
and is recognised as a gain in proft or loss.
Annual Report 2011
51
(c) Goodwill on Consolidation (contd)
Business combinations before 1 November 2010
Under the purchase method, goodwill represents the excess of the fair value of the purchase consideration
over the Groups share of the fair values of the identifable assets, liabilities and contingent liabilities of the
subsidiaries at the date of acquisition.
If, after reassessment, the Groups interest in the fair values of the identifable net assets of the subsidiaries
exceeds the cost of the business combinations, the excess is recognised as income immediately in proft or loss.
(d) Investments in Subsidiaries
Investments in subsidiaries are stated at cost in the statement of fnancial position of the Company, and are
reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that
the carrying values may not be recoverable.
On the disposal of the investments in subsidiaries, the diference between the net disposal proceeds and the
carrying amount of the investments is recognised in proft or loss.
(e) Investment in Associates
An associate is an entity in which the Group and the Company have a long-term equity interest and where it
exercises signifcant infuence over the fnancial and operating policies.
The investment in an associate is accounted for under the equity method, based on the fnancial statements of
the associate made up to 31 October 2011. The Groups share of the post acquisition profts of the associate is
included in the consolidated statement of comprehensive income and the Groups interest in the associate is
carried in the consolidated statement of fnancial position at cost plus the Groups share of the post-acquisition
retained profts and reserves.
Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the
Groups interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.
(f) Functional and Foreign Currencies
(i) Functional and Presentation Currency
The individual fnancial statements of each entity in the Group are presented in the currency of the primary
economic environment in which the entity operates, which is the functional currency.
The consolidated fnancial statements are presented in Ringgit Malaysia (RM) which is the Companys
functional and presentation currency.
(ii) Transactions and Balances
Transactions in foreign currency are converted into the respective functional currencies on initial
recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary
assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date.
Non-monetary assets and liabilities are translated using exchange rates that existed when the values were
determined. All exchange diferences are recognised in proft or loss.
Annual Report 2011
52
(f) Functional and Foreign Currencies (contd)
(iii) Foreign Operations
Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end
of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates
ruling at the dates of the transactions. All exchange diferences arising from translation are taken directly
to other comprehensive income and accumulated in equity under the translation reserve. On the disposal
of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that
particular foreign operation is reclassifed from equity to proft or loss.
Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations
and translated at the closing rate at the end of the reporting period.
(g) Financial Instruments
Financial instruments are recognised in the statements of fnancial position when the Group has become a party
to the contractual provisions of the instruments.
Financial instruments are classifed as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to a fnancial instrument classifed as a liability, are
reported as an expense or income. Distributions to holders of fnancial instruments classifed as equity are
charged directly to equity.
Financial instruments are ofset when the Group has a legally enforceable right to ofset and intends to settle
either on a net basis or to realise the asset and settle the liability simultaneously.
A fnancial instrument is recognised initially, at its fair value plus, in the case of a fnancial instrument not at
fair value through proft or loss, transaction costs that are directly attributable to the acquisition or issue of the
fnancial instrument.
Financial instruments recognised in the statements of fnancial position are disclosed in the individual policy
statement associated with each item.
(i) Financial Assets
On initial recognition, fnancial assets are classifed as either fnancial assets at fair value through proft
or loss, held-to-maturity investments, loans and receivables fnancial assets or available-for-sale fnancial
assets, as appropriate.
Financial Assets at Fair Value Through Proft or Loss
Financial assets are classifed as fnancial assets at fair value through proft or loss when the fnancial
asset is either held for trading or is designated to eliminate or signifcantly reduce a measurement or
recognition inconsistency that would otherwise arise. Derivatives are also classifed as held for trading
unless they are designated as hedges.
Financial assets at fair value through proft or loss are stated at fair value, with any gains or losses
arising on remeasurement recognised in proft or loss. Dividend income from this category of fnancial
assets is recognised in proft or loss when the Companys right to receive payment is established.
Annual Report 2011
53
(g) Financial Instruments (contd)
(i) Financial Assets (contd)
Held-to-maturity Investments
Held-to-maturity investments are non-derivative fnancial assets with fxed or determinable payments
and fxed maturities that the management has the positive intention and ability to hold to maturity.
Held-to-maturity investments are measured at amortised cost using the efective interest method less
any impairment loss, with revenue recognised on an efective yield basis.
Loans and Receivables Financial Assets
Trade and other receivables that have fxed or determinable payments that are not quoted in an active
market are classifed as loans and receivables fnancial assets. Loans and receivables fnancial assets
are measured at amortised cost using the efective interest method, less any impairment loss. Interest
income is recognised by applying the efective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
Available-for-sale Financial Assets
Available-for-sale fnancial assets are non-derivative fnancial assets that are designated in this category
or are not classifed in any of the other categories.
After initial recognition, available-for-sale fnancial assets are remeasured to their fair values at the end
of each reporting period. Gains and losses arising from changes in fair value are recognised in other
comprehensive income and accumulated in the fair value reserve, with the exception of impairment
losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve
is reclassifed from equity into proft or loss.
(ii) Financial Liabilities
All fnancial liabilities are initially at fair value plus directly attributable transaction costs and subsequently
measured at amortised cost using the efective interest method other than those categorised as fair value
through proft or loss.
Fair value through proft or loss category comprises fnancial liabilities that are either held for trading or
are designated to eliminate or signifcantly reduce a measurement or recognition inconsistency that would
otherwise arise. Derivatives are also classifed as held for trading unless they are designated as hedges.
(iii) Equity Instruments
Ordinary shares are classifed as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from proceeds.
Dividends on ordinary shares are recognised as liabilities when approved for appropriation.
Annual Report 2011
54
4 SIGNIFICANT ACCOUNTING POLICIES (CONTD)
(h) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
Depreciation is calculated under the straight-line method to write of the depreciation amount of the assets
over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is
retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-
Plant and machinery 5% - 10%
Gallery 10%
Motor vehicles 20%
Ofce equipment, furniture and fttings 10% - 20%
The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end
of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with
previous estimates and the expected pattern of consumption of the future economic benefts embodied in the
items of the property, plant and equipment.
Capital work-in-progress represents assets under construction, and which are not ready for commercial use
at the end of the reporting period. Capital work-in-progress is stated at cost, and is transferred to the relevant
category of assets and depreciated accordingly when the assets are completed and ready for commercial use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefts
are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in proft and loss.
(i) Impairment
(i) Impairment of Financial Assets
All fnancial assets (other than those categorised at fair value through proft or loss), are assessed at the
end of each reporting period whether there is any objective evidence of impairment as a result of one or
more events having an impact on the estimated future cash fows of the asset. For an equity instrument,
a signifcant or prolonged decline in the fair value below its cost is considered to be objective evidence of
impairment.
An impairment loss in respect of held-to-maturity investments and loans and receivables fnancial assets is
recognised in proft or loss and is measured as the diference between the assets carrying amount and the
present value of estimated future cash fows, discounted at the fnancial assets original efective interest
rate.
An impairment loss in respect of available-for-sale fnancial assets is recognised in proft or loss and
is measured as the diference between its cost (net of any principal payment and amortisation) and its
current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the
cumulative loss recognised in other comprehensive income and accumulated in equity under fair value
reserve, is reclassifed from equity to proft or loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through proft or loss
to the extent that the carrying amount of the investment at the date the impairment is reversed does not
exceed what the amortised cost would have been had the impairment not been recognised. In respect
of available-for-sale equity instruments, impairment losses previously recognised in proft or loss are
not reversed through proft or loss. Any increase in fair value subsequent to an impairment loss made is
recognised in other comprehensive income.
Annual Report 2011
55
(i) Impairment (contd)
(ii) Impairment of Non-Financial Assets
The carrying values of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are
reviewed at the end of each reporting period for impairment when there is an indication that the assets
might be impaired. Impairment is measured by comparing the carrying values of the assets with their
recoverable amounts. The recoverable amount of the assets is the higher of the assets fair value less costs
to sell and their value-in-use, which is measured by reference to discounted future cash fow.
An impairment loss is recognised in proft or loss immediately unless the asset is carried at its revalued
amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a
previously recognised revaluation surplus for the same asset.
In respect of assets other than goodwill, and when there is a change in the estimates used to determine the
recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of
the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would
have been determined (net of amortisation and depreciation) had no impairment loss been recognised.
The reversal is recognised in proft or loss immediately, unless the asset is carried at its revalued amount. A
reversal of an impairment loss on a revalued asset is credited to other comprehensive income. However, to
the extent that an impairment loss on the same revalued asset was previously recognised as an expense in
the statements of comprehensive income, a reversal of that impairment loss is recognised as income in the
statements of comprehensive income.
(j) Assets Under Hire Purchase
Assets under hire purchase are capitalised in the fnancial statements and are depreciated in accordance with
the policy set out in Note 4(h) above. Each hire purchase payment is allocated between the liability and fnance
charges so as to achieve a constant rate on the fnance balance outstanding. Finance charges are allocated to
the income statement over the period of the respective hire purchase agreements.
(k) Trademarks
The purchased trademark is stated at cost less accumulated amortisation and impairment losses, if any. The
trademark is amortised on a straight-line basis over a period of ten (10) years.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present
location and condition.
Net realisable value represents the estimated selling price less the estimated costs necessary to make the sale.
Where necessary, due allowance is made for all damaged, obsolete and slow-moving items.
Annual Report 2011
56
(m) Income Taxes
Income taxes for the year comprises current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable proft for the year and
is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting
period.
Deferred tax is provided in full, using the liability method, on temporary diferences arising between the tax
bases of assets and liabilities and their carrying amounts in the fnancial statements.
Deferred tax liabilities are recognised for all taxable temporary diferences other than those that arise from
goodwill or excess of the acquirers interest in the net fair value of the acquirees identifable assets, liabilities
and contingent liabilities over the business combination costs 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, afects neither
accounting proft nor taxable proft.
Deferred tax assets are recognised for all deductible temporary diferences, unused tax losses and unused tax
credits to the extent that it is probable that future taxable profts will be available against which the deductible
temporary diferences, unused tax losses and unused tax credits can be utilised. The carrying amounts of
deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no
longer probable that sufcient future taxable profts will be available to allow all or part of the deferred tax
assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively
enacted at the end of the reporting period.
Deferred tax assets and liabilities are ofset when there is a legally enforceable right to set of current tax assets
against current tax liabilities and when the deferred income taxes relate to the same taxation authority.
Deferred tax relating to items recognised outside proft or loss is recognised outside proft or loss. Deferred tax
items are recognised in correlation to the underlying transactions either in other comprehensive income or
directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or
excess of the acquirers interest in the net fair value of the acquirees identifable assets, liabilities and contingent
liabilities over the business combination costs.
(n) Borrowing Costs
All borrowing costs are recognised in proft or loss as expenses in the period in which they are incurred.
Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection
with the borrowing of funds.
(o) Bonds and Commercial Papers (CPs)
Bonds and CPs issued by the Company are initially recognised based on the proceeds received, net of issuance
expenses incurred and are adjusted in subsequent years for amortisation of discount and/or accretion of
premium to maturity, using the efective yield method. The discount amortised and/or premium accreted is
recognised in the proft or loss over the period of the bonds and CPs.
(p) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with
fnancial institutions, bank overdrafts and short term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignifcant risk of changes in value.
For the purpose of statements of cash fows, cash and cash equivalents are presented net of bank overdrafts and
exclude deposits pledged to secure banking facilities.
Annual Report 2011
57
(q) Employee Benefts
(i) Short-term Benefts
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefts are accrued in the
period in which the associated services are rendered by employees of the Group.
(ii) Defned Contribution Plans
The Groups contributions to defned contribution plans are recognised in proft or loss in the period to
which they relate. Once the contributions have been paid, the Group has no further liability in respect of
the defned contribution plans.
(r) Related Parties
A party is consider to be related if:-
(i) directly, or indirectly through one or more intermediaries, the party:-
controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries
and fellow subsidiaries);
has an interest in the entity that gives it signifcant infuence over the entity; or
has joint control over the entity;
(ii) the party is an associate of the entity;
(iii) the party is a joint venture in which the entity is a venturer;
(iv) the party is a member of the key management personnel of the entity or its parent ;
(v) the party is a close member of the family of any individual referred to in (i) or (iv);
(vi) the party is an entity that is controlled, jointly controlled or signifcantly infuenced by, or for which
signifcant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or
(v); or
(vii) the party is a post-employment beneft plan for the beneft of employees of the entity, or of any entity that
is a related party of the entity.
Close members of the family of an individual are those family members who may be expected to infuence, or
be infuenced by, that individual in their dealings with the entity.
(s) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will only be
confrmed by the occurrence of one or more uncertain future events not wholly within the control of the Group.
It can also be a present obligation arising from past events that is not recognised because it is not probable that
an outfow of economic resources will be required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the fnancial statements. When a change
in the probability of an outfow occurs so that the outfow is probable, it will then be recognised as a provision.
(t) Revenue
(i) Sale of Goods and Services
Revenue are recognised upon delivery of goods and customers acceptance or rendering of services and
where applicable, net of returns and trade discounts.
(ii) Interest Income
Interest income is recognised on an accrual basis, based on the efective yield on the investment.
Annual Report 2011
58
(u) Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of
the Groups other components. An operating segments operating results are reviewed regularly by the chief
operating decision maker to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete fnancial information is available.
5. INVESTMENTS IN SUBSIDIARIES
THE COMPANY
2011 2010
RM000 RM000
Unquoted shares, at cost 107,172 107,172
Accumulated impairment losses
(1,744) (1,744)
105,428 105,428
Loan to subsidiaries
100,177 100,177
205,605 205,605
The details of the subsidiaries are as follows:-
Name of Company Country of Incorporation Efective Equity Interest Principal Activities
2011 2010
% %
Stanson Bakeries Sdn. Bhd.
(SBSB)
# ^
Malaysia 100 100 Manufacturer of bread.
Standard Confectionery Sdn.
Bhd. (SCSB) *
^
Malaysia 100 100 Manufacturer of frozen and daily
fresh/shelf-stable bakery goods.
Stanson Marketing Sdn. Bhd.
(SMSB)
# ^
Malaysia 100 100 Sales and distribution of bakery
goods and telecommunication
products
Silver Bird Foods (S) Pte. Ltd.
(SBF)
# ~ ^
Singapore 100 100 Sales and distribution of bakery
goods.
Silver Bird International Sdn.
Bhd. (SBI)
# ^
Malaysia 100 100 Sales and distribution of bakery
goods and telecommunication
products.
Inforaire Sdn. Bhd. (ISB)
# ^
Malaysia 51 51 Dormant.
Stanson Distribution Sdn. Bhd.
(SDSB)
# ^
Stanson Group Sdn. Bhd.
(SGSB)
# ^
Malaysia 100 100 Investment holding.
Standard Food R & D Lab Sdn.
Bhd. (SFRD)
#
Madeleine Bakery Sdn. Bhd.
(MBSB) *
^
Annual Report 2011
59
5. INVESTMENTS IN SUBSIDIARIES (CONTD)
2011 2010
% %
Madeleine Cafe Sdn. Bhd.
(MCSB) *
^
Madeleine Foods Sdn. Bhd.
(MFSB) *
^
Madeleine Property Sdn. Bhd.
(MPSB) *
^
* Subsidiaries consolidated by way of the merger method.
# Subsidiaries consolidated by way of the acquisition method.
~ This subsidiary was audited by another frm of chartered accountants.
^ The unaudited management account of the subsidiaries was used in consolidation the Group result.
The loans to subsidiaries represent interest-free, unsecured advances made to subsidiaries where the repayment is
neither fxed nor likely to occur in the foreseeable future.
6. INVESTMENTS IN ASSOCIATE
THE GROUP
2011 2010
RM000 RM000
Unquoted shares in Malaysia, at cost 300
Share of post acquisition-profts

300
(a) On 15 August 2010, Stanson Marketing Sdn. Bhd. acquired 300,000 ordinary shares of RM1.00 each in KPF Quality
Foods Sdn. Bhd. (KPFQ) which represents a 30% equity interest for a total cash consideration of RM300,000.
(b) The fnancial year end of KPFQ is 31 December 2011. The unaudited fnancial statements of KPFQ for the two (2)
months ended 31 October 2011 have been used in consolidation of the result of the associate.
(c) The details of the associate are as follows:-
2011 2010
% %
KPF Quality Foods
Sdn. Bhd.
Malaysia 30 Sales and distribution of agriculture-
based foods.
(d) The summarised unaudited fnancial information of the associate is as follows:
THE GROUP
2011 2010
RM000 RM000
Assets and liabilities
Total assets 1,000
Total liabilities

Results
Revenue
Proft after taxation

Annual Report 2011
60
7. PROPERTY, PLANT AND EQUIPMENT
AT DEPRECIATION AT
1.11.2010 ADDITIONS DISPOSALS CHARGE 31.10.2011
THE GROUP RM000 RM000 RM000 RM000 RM000
NET BOOK VALUE
Plant and machinery 143,604 3,624 (1) (18,679) 128,548
Gallery 5,478 32 (1,179) 4,331
Motor vehicles 479 (62) (397) 20
Ofce equipment, furniture and
fttings 3,708 181 (8) (2,004) 1,877
Capital work-in-progress
48,409 12,210 60,619
201,678 16,047 (71) (22,259) 195,395
RESTATED
AT DEPRECIATION AT
1.11.2009 ADDITIONS DISPOSALS CHARGE 31.10.2010
THE GROUP RM000 RM000 RM000 RM000 RM000
NET BOOK VALUE
Plant and machinery 142,285 19,894 (34) (18,541) 143,604
Gallery 6,538 110 (1,170) 5,478
Motor vehicles 1,120 (641) 479
fttings 5,632 487 (26) (2,385) 3,708
31,930 16,479 48,409
187,505 36,970 (60) (22,737) 201,678
ACCUMULATED
ACCUMULATED IMPAIRMENT CARRYING
COST DEPRECIATION LOSS AMOUNT
AT 31.10.2011 RM000 RM000 RM000 RM000
Plant and machinery 259,142 (119,367) (11,227) 128,548
Gallery 11,816 (7,485) 4,331
Motor vehicles 4,455 (4,435) 20
fttings 22,038 (20,161) 1,877
60,619 60,619
358,070 (151,448) (11,227) 195,395
ACCUMULATED RESTATED
ACCUMULATED IMPAIRMENT CARRYING
COST DEPRECIATION LOSS AMOUNT
AT 31.10.2010 RM000 RM000 RM000 RM000
Plant and machinery 255,942 (101,111) (11,227) 143,604
Gallery 11,784 (6,306) 5,478
Motor vehicles 4,592 (4,113) 479
fttings 22,312 (18,604) 3,708
48,409 48,409
343,039 (130,134) (11,227) 201,678
Annual Report 2011
61
7. PROPERTY, PLANT AND EQUIPMENT (CONTD)
(a) The Group carried out a review of the recoverable amount of the property, plant and equipment during the
fnancial year. The Group determined that the property, plant and equipment are not impaired.
The recoverable amount was determined based on the value-in-use of the assets. Cash fow projections used in
the value-in-use calculations were based on fnancial budgets approved by management covering a ten-year
period. The key assumptions of the calculations are disclosed in Note 9 to the fnancial statements.
(b) At the end of the reporting period, the carrying amounts of the assets acquired under hire purchase were as
follows:-
THE GROUP
2011 2010
RM000 RM000
CARRYING AMOUNTS:-
Plant and machinery 21,625 24,120
Motor vehicles
21 480
21,646 24,600
(c) At the end of the reporting period, the capital work-in-progress represents machinery which is not ready
for commercial use. Included in capital work-in-progress is the cost amounting to RM18,424,000 (2010 -
RM16,479,000) acquired under Term Loan I as disclosed in Note 24(a) to the fnancial statements. The directors
are of the opinion that the said machinery is not ready for its intended use and therefore no depreciation charge
was accounted for.
(d) Included in property, plant and equipment are exceptional items which have been explained in Note 47 to the
fnancial statements.
8. OTHER RECEIVABLE
This represents the security deposits placed with Amanah Raya Berhad pursuant to a sale and leaseback transaction.
The amount is due and receivable by the end of the lease period, in the fnancial year 2016.
The weighted average efective interest rate of the deposits placed at the end of the reporting period was 4.31%
(2010 - 3.27%) per annum.
9. INTANGIBLE ASSETS
THE GROUP
2011 2010
RM000 RM000
AT CARRYING AMOUNT:-
Goodwill on acquisition of subsidiaries 36,730 36,730
Trademark

36,730 36,730
Trademark
At cost 20 20
Accumulated amortisation:-
At 1 November (20) (19)
Amortisation during the fnancial year (1)
(20) (20)

Annual Report 2011
62
9. INTANGIBLE ASSETS (CONTD)
Goodwill arose from the acquisition of SGSB by the Group in 2004, is stated at cost and reviewed for impairment
annually.
Goodwill has been allocated for impairment testing to the Groups cash-generating unit (CGU), the Groups bakery
products manufacturing division and telecommunication division.
During the fnancial year, the Group assessed the recoverable amount of the goodwill, and determined that the
goodwill is not impaired.
The recoverable amount of a CGU was determined based on value-in-use calculated using cash fow projections
based on fnancial budgets approved by management covering a period of ten (10) (2010 - fve (5) years) years. The
key assumptions used for value-in-use calculations are:-
GROSS MARGIN GROWTH RATE DISCOUNT RATE
2011 2010 2011 2010 2011 2010
Bakery products manufacturing
division 43% 47% 6% 10% 8.3% 6.5%
Telecommunication division 1% 1% 5% 10% 8.3% 6.5%
(a) Budgeted gross margin The margin is based on the past performance and its expectations of market
developments.
(b) Growth rate The growth rates used are based on the industry reports.
(c) Discount rate The discount rates used are based on the weighted average cost of capital of the Group.
Other than as explained in Note 47 to the fnancial statements, the management believes that no reasonable change
in the above key assumptions would cause the carrying amount of the goodwill to exceed its recoverable amounts.
10. LOAN TO SUBSIDIARIES
THE COMPANY
2011 2010
RM000 RM000
Interest-free 1,083
Interest bearing at 3.50% per annum
58,006 62,289
58,006 63,372
Other than as explained in Note 47 to the fnancial statements, the long-term loan is unsecured and is not repayable
within the next twelve (12) months.
11. INVENTORIES
THE GROUP
2011 2010
RM000 RM000
AT COST:-
Raw materials 4,094 3,540
Finished goods 5,185 4,998
Packaging materials 2,077 2,007
Telecommunication products
3,660 7,232
15,016 17,777
None of the inventories is carried at net realisable value.
Annual Report 2011
63
12. TRADE RECEIVABLES
THE GROUP
2011 2010
RM000 RM000
Trade receivables 131,036 77,229
Allowance for impairment losses
(2,862) (2,043)
128,174 75,186
Allowance for impairment losses:-
At 1 November (2,043) (1,616)
Addition during the fnancial year
(819) (427)
At 31 October
(2,862) (2,043)
The Groups normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approved on a
case-by-case basis.
Other than as explained in Note 47 to the fnancial statements, the trade receivables net of allowance for impairment
losses which are past due amounted to approximately RM59,608,000. Subsequent to the fnancial year ended 31
October 2011 and at the date of the issuance of these fnancial statements, approximately RM55,313,000 had been
received from those debts past due from the trade receivables. The management are of the opinion that the net
remaining debts of approximately RM4,295,000 as at the date of the issuance of these fnancial statements are
recoverable.
13 OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Other receivables 722 572 437 97
Deposits 1,053 830
Prepayment
623 586 56 18
2,398 1,988 493 115
14. AMOUNTS OWING BY/(TO) SUBSIDIARIES
The amounts owing are non-trade in nature, unsecured, interest-free and receivable/(repayable) on demand.
15. SHORT-TERM DEPOSITS WITH FINANCIAL INSTITUTION
The short-term deposits with a fnancial institution represent cash placed in a bond debt reserve account for the
purpose of bond settlement.
The short-term deposits of the Group and the Company at the end of the reporting period bore an efective interest rate
of 3.3% (2010 - 2.3%) per annum. The short-term deposits have maturity periods of 1 to 6 months (2010 - 4 to 6 months).
16. FIXED DEPOSITS WITH LICENSED BANKS
The fxed deposits have been pledged to fnancial institutions as security for banking facilities granted to the Group.
The weighted average efective interest rate of the fxed deposits at the end of the reporting period was 3.25% (2010
- 2.7%) per annum. The fxed deposits have a maturity period of 3 months (2010 - 3 months).
Annual Report 2011
64
17. SHARE CAPITAL
THE COMPANY
2011 2010 2011 2010
NUMBER OF SHARES RM000 RM000
000 000
ORDINARY SHARES OF RM0.50 EACH
AUTHORISED
At 1 November/31 October
1,000,000 1,000,000 500,000 500,000
ISSUED AND FULLY PAID-UP
At 1 November 386,682 314,180 193,341 157,090
Issuance of shares pursuant to the:
- private placement 20,000 53,876 10,000 26,938
- conversion of Warrant A
18,626 9,313
At 31 October
406,682 386,682 203,341 193,341
During the fnancial year, the Company increased its issued and paid-up share capital from RM193,340,853 to
RM203,340,853 by the issuance of:
(i) 10,000,000 ordinary shares of RM0.50 each at an issue price of RM0.58 per ordinary share pursuant to the
private placement exercise; and
(ii) 10,000,000 ordinary shares of RM0,50 each at an issue price of RM0.60 per ordinary share pursuant to the private
placement exercise.
The new ordinary shares were issued for cash consideration for the purpose of working capital. The new ordinary
shares issued during the fnancial year rank pari passu in all respects with the existing shares of the Company.
18. SHARE PREMIUM
The movements in the share premium of the Group and the Company are as follows:-
THE GROUP/THE COMPANY
2011 2010
RM000 RM000
At 1 November 52,453 36,077
Premium arising from:
- private placements 1,850 10,775
- conversion of Warrant A 5,215
- transfer from the warrants reserve (Note 21) 1,304
Share issuance expenses
(681) (918)
At 31 October
53,622 52,453
The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section
60(3) of the Companies Act 1965.
19. MERGER DEFICIT
The merger defcit relates to the diference between the nominal value of shares issued for the purchase of
subsidiaries and the nominal value of the shares acquired.
20. CAPITAL RESERVE
The capital reserve arose from the capitalisation of the post-acquisition profts of a subsidiary for the bonus issue of
shares in prior years. This reserve is not distributable by way of dividends.
Annual Report 2011
65
21. WARRANTS RESERVE
2011 2010
RM000 RM000
Warrant A
At 1 November 1,304
- transfer to share premium (Note 18)
(1,304)
At 31 October
Warrant B
At 1 November/31 October
6,059 6,059
6,059 6,059
The principal terms of the Warrant A - 2005/2010 are as follows:-
(a) Tenure 5 years from the date of issuance of the Warrants.
(b) Exercise Period The Warrants may be exercised at any time within a period commencing from the date of
issue of the Warrants and ending on the Expiry Date. Warrants not exercised during the
exercise period shall thereafter lapse and cease to be valid.
(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of RM0.50 each
(Share) in SBGB at the Exercise Price at any time during the Exercise Period.
(d) Exercise Price RM0.78 payable in full in respect of each Share upon exercise of the Warrant or any such
price adjusted in accordance with the terms and conditions set out in the Deed Poll
governing the Warrants.
(e) Expiry Date 17 September 2010, being the date of the end of the 5
th
anniversary from
the date of issue of the Warrants and if that date does not fall on a Market
Day, then it shall be the immediate preceding Market Day.
(f ) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments
and/or other distributions, the entitlement date of which is prior to the
date of the allotment of the new Shares in SBGB arising from the exercise
of their Warrants.
(g) Ranking of the SBGB new
Shares
The new SBGB Shares to be issued pursuant to the exercise of the Warrants
shall, upon issue and allotment rank pari passu in all respects with existing
SBGB Shares, save and except that they shall not be entitled to any
dividends, rights, allotments and/or other distributions, the entitlement
date of which is prior to the date of the allotment of new Shares arising
from the exercise of Warrants.
(h) Listing Approval-in-principle has been obtained from Bursa Securities on 18 May
2009 for the admission of the Warrants to the Ofcial List of Bursa Securities
and for the listing of and quotation for the Warrants and the new SBGB
Shares arising from the exercise of the Warrants on the Main Board of Bursa
Securities.
(i) Adjustment to the Exercise
Price and the number of
Warrants
The exercise price of the Warrants, and the number of Warrants belonging
to the Warrant holder, may from time to time be adjusted, calculated or
determined by the directors in consultation with an approved merchant
bank and certifed by the auditor appointed by the Company, in accordance
with the terms of the Deed Poll.
Annual Report 2011
66
21. WARRANTS RESERVE (CONTD)
The principal terms of the Warrant B - 2011/2013 are as follows:-
(a) Tenure 5 years from the date of issuance of the Warrants.
(b) Exercise Period The Warrants may be exercised at any time within a period commencing from the date of
issue of the Warrants and ending on the Expiry Date. Warrants not exercised during the
exercise period shall thereafter lapse and cease to be valid.
(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of RM0.50 each
(Share) in SBGB at the Exercise Price at any time during the Exercise Period.
(d) Exercise Price RM0.90 payable in full in respect of each Share upon exercise of the Warrant or any such
price adjusted in accordance with the terms and conditions set out in the Deed Poll
governing the Warrants.
(e) Expiry Date 24 February 2013, being the date of the end of the 5
th
anniversary from the date of issue of
the Warrants and if that date does not fall on a Market Day, then it shall be the immediate
preceding Market Day.
(f ) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments and/or other
distributions, the entitlement date of which is prior to the date of the allotment of the
new Shares in SBGB arising from the exercise of their Warrants.
(g) Ranking of the SBGB new
Shares
The new SBGB Shares to be issued pursuant to the exercise of the Warrants
shall, upon issue and allotment rank pari passu in all respects with existing
SBGB Shares, save and except that they shall not be entitled to any
dividends, rights, allotments and/or other distributions, the entitlement
date of which is prior to the date of the allotment of new Shares arising
from the exercise of Warrants.
(h) Listing Approval-in-principle has been obtained from Bursa Securities on 4 January
2010 for the admission of the Warrants to the Ofcial List of Bursa Securities
and for the listing of and quotation for the Warrants and the new SBGB
Shares arising from the exercise of the Warrants on the Main Board of Bursa
Securities.
(i) Adjustment to the Exercise
Price and the number of
Warrants
The exercise price of the Warrants, and the number of Warrants belonging
to the Warrant holder, may from time to time be adjusted, calculated or
determined by the directors in consultation with an approved merchant
bank and certifed by the auditor appointed by the Company, in accordance
with the terms of the Deed Poll.
Annual Report 2011
67
22. FOREIGN EXCHANGE TRANSLATION RESERVE
The foreign exchange translation reserve arose from the translation of the fnancial statements of a foreign subsidiary
and is not distributable by way of dividends.
23. HIRE PURCHASE PAYABLES
THE GROUP
2011 2010
RM000 RM000
Minimum hire purchase payments:
- not later than one year 3,839 4,224
- later than one year but not later than fve years
6,892 10,754
10,731 14,978
Less: Future fnance charges (1,143) (1,954)
Present value of hire purchase payables 9,588 13,024
Current portion:
Non-current portion:
- later than one year but not later than fve years
6,290 9,613
9,588 13,024
Other than as explained in Note 47 to the fnancial statements, the weighted average efective interest rate per annum as
at the end of the reporting period of the hire purchase payables of the Group is 6.29% (2010 - 7.45%) per annum.
24. TERM LOANS
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Current portion:
- later than one year and not later than two
years 2,738 2,937
- later than two years and not later than fve
years 9,616 8,896
- later than fve years 3,094 1,646
15,448 13,479
19,635 13,479 1,250
Other than as explained in Note 47 to the fnancial statements, the details are as follows:-
(a) Term Loan I
Term Loan I bore an efective interest rate of 1.50% per annum above the fnancial institutions efective cost of
funds (ECOF), which is calculated on a monthly rest basis. Term Loan I is secured by:-
i) a facility agreement for RM20,000,000 as principal instrument;
ii) a corporate guarantee of the Company;
iii) a specifc debenture over the plant and equipment (Bread Line) fnanced by the term loan; and
iv) any other security documentation as may be required by the fnancial institution as deemed ft.
Annual Report 2011
68
24. TERM LOANS (CONTD)
(a) Term Loan I (contd)
Term Loan I is repayable in 72 monthly instalments commencing three (3) months after full drawdown or twelve (12)
months from the frst disbursement, whichever is earlier.
At the end of the reporting period, Term Loan I of RM20,000,000 has not yet been fully drawndown and in accordance
with the said repayment terms above, the Group is scheduled to make its frst payment on 3 September 2011.
On 11 July 2011, the Group applied for deferment of payment by six (6) months as its plant and equipment had yet
to be installed. The Groups application for the deferment is pending approval from the fnancial institution.
(b) Term Loan II
Term Loan II bore an efective interest of 1.25% per annum above the BLR. Term Loan lI is repayable in 6 monthly
instalments commencing one (1) month from the date of the frst drawdown.
25. BONDS
2011 2010
RM000 RM000
Gross amount of bonds 5,000 10,000
Discount on bonds
(323) (1,424)
4,677 8,576
Discount on bonds
At 1 November (1,424) (2,525)
Amortisation during the fnancial year
1,101 1,101
At 31 October
(323) (1,424)
Current portion:
- Not later than one year 4,677 3,899
- Later than one year but not later than fve years
4,677
4,677 8,576
The principal terms of the bonds are as follows:-
(a) Maturity Tranche Tenure (Years) Amount
RM000
A 3 20,000
B 4 20,000
C 5 20,000
D 6 5,000
E 7
5,000
70,000
Tranches A, B and C have been fully settled in prior years. Tranch D has been fully settled
during the fnancial year.
Annual Report 2011
69
(b) Coupon rate Interest at 3.5% per annum shal be payable semi- annually commencing 6 months from
the date of the frst issue until fnal maturity of the respective tranches.
(c) Security Assignment over the Designated Account, comprising the Debt Service Reserve Account.
(d) Basis of Arrangement On a bought deal basis.
(e) Issue and Redemption The Serial Bonds shall be issued at a discount and redeemed at par on the
respective maturities.
(f ) Listing The Serial Bonds will not be listed on Bursa Securities or on any other stock
exchange.
26. DEFERRED TAXATION
THE GROUP
2011 2010
RM000 RM000
At 1 November
Recognised in proft or loss (Note 34)
764
At 31 October
764
The deferred tax liabilities are attributable to the following:-
THE GROUP
2011 2010
RM000 RM000
Accelerated capital allowances over depreciation 997
Allowance for impairment losses on trade receivables
(233)
764
27. TRADE PAYABLES
The normal trade credit terms granted to the Group range from 30 to 90 days.
28. OTHER PAYABLES AND ACCRUALS
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Other payables 2,256 4,605 44 96
Accruals 5,864 2,965 2,536
Deposit received
720
8,840 7,570 2,580 96
25. BONDS (CONTD)
Annual Report 2011
70
29. COMMERCIAL PAPERS (CPS)
2011 2010
RM000 RM000
At 1 November 30,000 30,000
Drawdown during the fnancial year 270,000 360,000
Repayment during the fnancial year (285,000) (360,000)
At 31 October 15,000 30,000
The CPs are subjected to a weighted average efective interest of 5.40% (2010 - 5.15%) per annum.
The principal terms of the CPs are as follows:-
(a) Tenure/Maturity The CPs facility is available up to seven (7) years from the date of execution of the Facility
Agreements with the issuance of CPs with one (1) month to twelve (12) months maturity.
(b) Security The CPs issued are unsecured in nature.
(c) Interest rate The interest on CPs is recognised based on the diference between gross and net proceeds
received, and amortised to the income statement over the period of the CPs.
(d) Redemption At par on the respective maturity dates.
(e) Ranking of notes The notes to be issued under the CPs Facility shall constitute direct,
unconditional and unsecured obligations of the Issuer and evidence the
obligations of the Issuer to payto the noteholders the sumsrepresented
thereby. The notes shall at all times rank pari passu and rateably,without
discrimination, preference or Priority amongst themselves, subject to
priorities or rights preferredat lawand will rank at least equally andrateably
(pari passu)in pointof priority and security with all other present and future
unsecured and unsubordinated liabilities (both actual and contingent) of the
Issuer.
30. BILLS PAYABLE
The bills payable bore a weighted average efective interest rate of 3.30% (2010 - 3.08%) per annum at the end of the
reporting period.
The bills payable are secured by:-
(i) a deed of debenture incorporating a frst fxed charge over all the property, plant and equipment of a subsidiary,
and a foating charge over all current assets, both present and future of a subsidiary;
(ii) a lien over the fxed deposits of the Group; and
(iii) a corporate guarantee of the Company.
31. BANK OVERDRAFTS
The bank overdrafts bore a weighted average efective interest of 6.75% (2010 - 7.31%) per annum and are secured
in the same manner as the bills payable disclosed in Note 30 to the fnancial statements.
Annual Report 2011
71
32. REVENUE
THE GROUP
2011
RM000
RESTATED
2010
RM000
Bakery products 228,606 185,147
3,462 4,868
232,068 190,015
The details of the net telecommunication revenue are as follows:
THE GROUP
2011
RM000
RESTATED
2010
RM000
- Revenue 384,139 408,358
- Cost of sales
(380,677) (403,490)
Net revenue arising from telecommunication sales
3,462 4,868
33. PROFIT/(LOSS) BEFORE TAXATION
2011
RM000
2010
RM000
2011
RM000
2010
RM000
Proft/(Loss) before taxation is arrived at after charging/(crediting):-
Audit fee:
- current year 233 187 54 32
- underprovision in the previous fnancial year 6 6 13
Allowance for impairment losses on trade receivables 819 427
Amortisation expense:
- discount on bonds 1,101 1,101 1,101 1,101
- intangible assets 1
Depreciation of property, plant and equipment 22,259 22,737
Directors fee 264 264 264 264
Directors non-fee emoluments 1,534 1,526 1,534 1,526
Interest expense:
- bills payable 2,809 1,807
- bank overdrafts 397 331
- commercial papers 1,156 965 1,156 1,547
- hire purchase 811 833
- term loans 1,405 1,172 128
- bonds 195 543 195 543
Rental of premises 7,790 7,768
Rental of truck 7,304 7,523
Staf costs:
- salaries, wages, bonuses and allowances 27,425 26,919 657 635
- defned contribution plan 2,640 2,591 81 82
- other benefts 1,581 1,552 25 52
Gain on disposal of plant, property and equipment (48) (8)
Insurance claim (1,300)
Interest income (416) (424) (345) (370)
Interest income from subsidiaries (2,452) (3,192)
Realised gain on foreign exchange
(208)
Annual Report 2011
72
34. INCOME TAX EXPENSE
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Current taxation:-
- for the fnancial year 61
Deferred taxation (Note 26):-
- for the fnancial year
764
825
A reconciliation of income tax expense applicable to the proft/(loss) before taxation at the statutory tax rate to
income tax expense at the efective tax rate of the Group and of the Company is as follows:-
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Proft/(Loss) before taxation
5,750 3,644 (2,978) (3,578)
Tax at the statutory tax rate of 25% 2,212 2,047 (745) (894)
Tax at the domestic rate applicable to
proft in the countries where the Group
operates (526) (1,136)
Tax efects of:-
Non-taxable gain (117) (86)
Non-deductible expenses 2,146 1,110 831 894
Tax incentive and allowances (555)
Deferred tax assets not recognised during
the fnancial year 487 1,957
Utilisation of previously unrecognised
deferred tax assets
(2,822) (3,978)
Tax for the fnancial year
825
No deferred tax assets were recognised in the statements of fnancial position for the followings items:-
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Unabsorbed capital allowances 29,420 41,253
Unutilised tax losses 65,348 70,845
Unutilised reinvestment allowances 123,760 121,539
Allowances for impairment losses on trade
receivables 732
Accelerated capital allowances
(83,826) (90,327)
134,702 144,042
Subsequent to the agreement of the Inland Revenue Department, the unabsorbed capital allowances, unutilised tax
losses and unutilised reinvestment allowances are allowable for the Group to ofset against future taxable income.
35. EARNINGS PER SHARE
The basic earnings per share is arrived at by dividing the Groups proft attributable to shareholders of RM4,932,000
(2010 - RM3,650,000) by the weighted average number of ordinary shares in issue during the fnancial year of
approximately 396,437,000 (201- 348,218,000).
Diluted earnings per share is not presented as there were no potential dilutive ordinary shares.
Annual Report 2011
73
36. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
THE GROUP
2011 2010
RM000 RM000
Cost of property, plant and equipment purchased 16,047 36,970
Transfer of deposits paid for purchase of property, plant and equipment to
capital work-in-progress (2,905)
Amount fnanced through:
- hire purchase (6,388)
- term loans
(4,245) (13,479)
Cash disbursed for purchase of property, plant and equipment
11,802 14,198
37. CASH AND CASH EQUIVALENTS
For the purpose of the statements of cash fows, cash and cash equivalents comprise the following:-
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Short-term deposit with fnancial institution 1,145 3,138 1,145 3,138
Fixed deposits with licensed banks 2,560 2,489
Cash and bank balances 7,578 19,712 38 31
Bank overdrafts
(5,165) (1,522)
6,118 23,817 1,183 3,169
Less: Fixed deposits pledged to
licensed bank
(2,560) (2,489)
3,558 21,328 1,183 3,169
38. DIRECTORS REMUNERATION
(a) The aggregate amounts of emoluments received and receivable by directors of the Group and of the Company
during the fnancial year are as follows:-
2011 2010
RM000 RM000
Executive directors:-
- non-fee emoluments
1,478 1,478
Non-executive directors:-
- fee 264 264
- allowances
56 48
320 312
Annual Report 2011
74
38. DIRECTORS REMUNERATION (CONTD)
(b) Details of emoluments for the directors of the Group and of the Company received/receivable for the fnancial
year in bands of RM50,000 are as follows:-
2011 2010
Non-executive directors:-
Below RM50,000 6 6
RM50,001 - RM100,000 1 1
Executive directors:-
RM400,001 - RM450,000 1 1
RM1,050,001 - RM1,100,000
1 1
39. SIGNIFICANT RELATED PARTY DISCLOSURES
(a) Identities of related parties
The Group has related party relationships with its directors, key management personnel and entities within the
same group of companies.
(b) In addition to the information detailed elsewhere in the fnancial statements, the Group and the Company
carried out the following signifcant transactions with the related parties during the fnancial year:-
THE COMPANY
2011 2010
RM000 RM000
Interest income from subsidiaries:-
SCSB 1,604 2,075
SMSB
848 1,117
(c) Key management personnel compensation:-
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Directors:
- fees 264 264 264 264
- remuneration 1,478 1,478 1,478 1,478
- others 56 48 56 48
1,798 1,790 1,798 1,790
Other key management personnel:
- remuneration
1,344 1,331 449 423
3,142 3,121 2,247 2,213
Annual Report 2011
75
THE COMPANY
2011 2010
RM000 RM000
Long-term loans to:-
ISB (486) (719)
MBSB 1,004 1,160
MCSB 4,524 5,802
MFSB (4) 2,545
MPSB 35
SBI 1,750 50
SBSB 4,398 (796)
SCSB 48,886 39,457
SDSB 113 113
SGSB 1,400 1,400
SMSB
(3,614) 14,360
58,006 63,372
THE COMPANY
2011 2010
RM000 RM000
Amount owing by:-
SGSB
6 6
THE COMPANY
2011 2010
RM000 RM000
Amounts owing to:-
MBSB 6 6
SMSB
53 53
59 59
The outstanding amounts of the related parties will be settled in cash. No guarantees have been given or
received. No expenses have been recognised during the fnancial year as impairment loss in respect of the
amounts owing by the related parties.
40. OPERATING SEGMENTS
Operating segments are prepared in a manner consistent with the internal reporting provided to the Group
Executive Committee as its chief operating decision maker in order to allocate resources to segments and to assess
their performance. For management purposes, the Group is organised into business units based on their products
and services provided.
The Group is organised into two (2) main business segments as follows:-
(i) Manufacturing and distribution of bakery products segment; and
(ii) Distribution of telecommunication products segment.
The Group Executive Committee assesses the performance of the operating segments based on operating proft or
loss which is measured diferently from those disclosed in the consolidated fnancial statements.
39. SIGNIFICANT RELATED PARTY DISCLOSURES (CONTD)
(d) Year-end balances with related parties are as follows:-
Annual Report 2011
76
40. OPERATING SEGMENTS (CONTD)
Group fnancing (including fnance costs) and income taxes are managed on a group basis and are not allocated to
operating segments.
Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments
are presented under unallocated items. Unallocated items comprise mainly investments and related income, loans
and borrowings and related expenses, corporate assets (primarily the Companys headquarters) and head ofce
expenses.
Transfer prices between operating segments are at arms length basis in a manner similar to transactions with third
parties.
BUSINESS SEGMENTS
MANUFACTURING
AND
DISTRIBUTION
OF CONSUMER
DISTRIBUTION OF
TELE-
COMMUNICATION
FOOD PRODUCTS OTHERS THE GROUP
RM000 RM000 RM000 RM000
2011
Revenue
Total revenue 374,504 3,462 377,966
Inter-segment revenue
(145,898) (145,898)
External revenue
228,606 3,462 232,068
Results
Segment results 35,749 1,328 (3,214) 33,863
Interest income 71 345 416
Other items of income 2,423 2,423
Depreciation of property, plant and
equipment (22,210) (49) (22,259)
Other non-cash expenses
(819) (819)
15,214 1,279 (2,869) 13,624
Finance costs (7,874)
Income tax expense
(825)
Consolidated proft after taxation
4,925
Annual Report 2011
77
BUSINESS SEGMENTS (contd)
MANUFACTURING
AND
DISTRIBUTION
OF CONSUMER
DISTRIBUTION OF
TELE-
COMMUNICATION
RM000 RM000 RM000 RM000
2011
Assets
Segment assets 363,296 23,972 9,274 396,542
Investment in associate 300
Tax refundable
247
Consolidated total assets
397,089
Liabilities
Segment liabilities 152,242 6,936 23,551 182,729
Deferred taxation 764
Provision for taxation
173
Consolidated total liabilities
183,666
2010
Revenue
Totall revenue 316,112 4,868 320,980
Inter-segment revenue
(130,965) (130,965)
External revenue
185,147 4,868 190,015
Results
Segment results 34,213 1,693 (3,591) 32,315
Interest income 54 370 424
Other items of income 822 822
Depreciation of property, plant and
equipment (22,690) (47) (22,737)
Other non-cash expenses
(428) (428)
11,971 1,646 (3,221) 10,396
Finance costs (6,752)
Income tax expense
Consolidated proft after taxation

3,644
Annual Report 2011
78
BUSINESS SEGMENTS (contd)
MANUFACTURING
AND DISTRIBUTION
OF CONSUMER
DISTRIBUTION OF
TELE-
COMMUNICATION
RM000 RM000 RM000 RM000
2010
Assets
Segment assets 341,968 13,383 10,893 366,244
Tax refundable
1
Consolidated total assets
366,245
Liabilities
Segment liabilities 129,701 37 38,695 168,433
Provision for taxation
173
Consolidated total liabilities
168,606
GEOGRAPHICAL INFORMATION
REVENUE
NON-CURRENT
ASSETS
2011 2010 2011 2010
RM000 RM000 RM000 RM000
Malaysia 210,834 169,976 239,631 245,202
Singapore
21,234 20,039 340 752
232,068 190,015 239,971 245,954
41. CAPITAL COMMITMENT
Authorised capital expenditure not provided for in the fnancial statements:-
THE GROUP
2011 2010
RM000 RM000
Approved capital commitment contracted but not provided for
2,990
42. OPERATING LEASE COMMITMENTS
The future minimum lease payments under the non-cancellable operating leases are as follows:-
THE GROUP
2011 2010
RM000 RM000
Not later than one year 12,286 13,553
Later than one year and not later than fve years 32,734 30,473
Later than fve years
7,752
45,020 51,778
Annual Report 2011
79
43. CONTINGENT LIABILITY
THE COMPANY
2011 2010
RM000 RM000
Corporate guarantees given to secure banking facilities granted to
certain subsidiaries
206,222 178,000
44. FINANCIAL INSTRUMENTS
The Groups activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk
and equity price risk), credit risk and liquidity risk. The Groups overall fnancial risk management policy focuses on
the unpredictability of fnancial markets and seeks to minimise potential adverse efects on the Groups fnancial
performance.
(a) Financial Risk Management Policies
The Groups policies in respect of the major areas of treasury activity are as follows:-
(i) Market Risk
(i) Foreign Currency Risk
The Group is exposed to foreign currency risk on transactions and balances that are denominated in
currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States
Dollar and Singapore Dollar. Foreign currency risk is monitored closely on an ongoing basis to ensure
that the net exposure is at an acceptable level.
The Groups exposure to foreign currency is as follows:-
UNITED
STATES
DOLLAR
SINGAPORE
DOLLAR
RINGGIT
MALAYSIA TOTAL
THE GROUP RM000 RM000 RM000 RM000
2011
Financial assets
Trade receivables 5,369 122,805 128,174
Other receivables and deposits 125 183 1,467 1,775
fnancial institution 1,145 1,145
banks 2,560 2,560
Cash and bank balances
104 7,474 7,578
125 5,656 135,451 141,232
Annual Report 2011
80
44. FINANCIAL INSTRUMENTS (CONTD)
(a) Financial Risk Management Policies (Contd)
(i) Market Risk (Contd)
(i) Foreign Currency Risk (Contd)
UNITED
STATES
DOLLAR
SINGAPORE
DOLLAR
RINGGIT
MALAYSIA TOTAL
2011
Financial liabilities
Trade payables 1,287 24,632 25,919
Other payables and accruals 724 8,116 8,840
Hire purchase payables 9,588 9,588
Term loans 19,635 19,635
Bonds 4,677 4,677
Commercial papers 15,000 15,000
Bills payable 93,905 93,905
Bank overdrafts
5,165 5,165
1,287 724 180,718 182,729
Net fnancial (liabilities)/
assets (1,162) 4,932 (45,267) (41,497)
Less: Net fnancial (assets)/
liabilities denominated
in the respective entities
functional currencies
(4,932) 45,267 40,335
Currency exposure
(1,162) (1,162)
Annual Report 2011
81
(i) Foreign Currency Risk (Contd)
UNITED
STATES
DOLLAR
SINGAPORE
DOLLAR
RINGGIT
MALAYSIA TOTAL
2010
Financial assets
Trade receivables 91 4,818 70,277 75,186
Other receivables and deposits 167 1,235 1,402
fnancial institution 3,138 3,138
banks 2,489 2,489
89 19,623 19,712
91 5,074 96,762 101,927
Trade payables 670 18,753 19,423
Other payables and accruals 693 6,877 7,570
Term loans 13,479 13,479
Bonds 8,576 8,576
Bank overdrafts
1,522 1,522
670 693 167,070 168,433
Net fnancial (liabilities)/assets (579) 4,381 (70,308) (66,506)
Less: Net fnancial (assets)/
liabilities denominated
in the respective entities
functional currencies
(4,339) 70,308 65,969
Currency exposure
(579) 42 (537)
The Company does not have any transactions or balances denominated in foreign currencies and hence is
not exposed to foreign currency risk.
Foreign currency risk sensitivity analysis
A 1% strengthening of the RM against the United States Dollar at the end of the reporting period would
have increased proft after taxation by appropriately RM12,000. A 1% weakening in the foreign currencies
would have had an equal but opposite efect on the proft after taxation. This assumes that all other variables
remain constant.
(ii) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash fows of a fnancial instrument will fuctuate
because of changes in market interest rates. The Groups exposure to interest rate risk arises mainly from
interest-bearing fnancial assets and liabilities. The Groups policy is to obtain the most favourable interest
rates available. Any surplus funds of the Group will be placed with licensed fnancial institutions to generate
interest income.
Annual Report 2011
82
(ii) Interest Rate Risk (Contd)
Information relating to the Groups exposure to the interest rate risk of the fnancial liabilities is
disclosed in Note 44(a)(iii) to the fnancial statements.
Interest rate risk sensitivity analysis
The following table details the sensitivity analysis to a reasonably possible change in the interest rates
as at the end of the reporting period, with all other variables held constant:-
2011 2011
Increase/
(Decrease)
Increase/
(Decrease)
RM000 RM000
Efects on proft after taxation
Increase of 100 basis points (bp) (1,384) (198)
Decrease of 100 bp 1,384 198
Efects on equity
Increase of 100 bp (1,384) (198)
Decrease of 100 bp
1,384 198
(iii) Equity Price Risk
The Group does not have any quoted investments and hence is not exposed to equity price risk.
(ii) Credit Risk
The Groups exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and
other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit
limits and monitoring procedures on an ongoing basis. For other fnancial assets (including cash and bank
balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect
of the trade and other receivables as appropriate. The main components of this allowance are a specifc loss
component that relates to individually signifcant exposures, and a collective loss component established
for groups of similar assets in respect of losses that have been incurred but not yet identifed. Impairment is
estimated by management based on prior experience and the current economic environment.
Credit risk concentration profle
The Groups major concentration of credit risk relates to the amounts owing by twelve (12) customers which
constituted approximately 91% of its total trade receivables as at the end of the reporting period.
Exposure to credit risk
As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the
carrying amount of the fnancial assets as at the end of the reporting period.
Annual Report 2011
83
(ii) Credit Risk (Contd)
The exposure of credit risk for trade receivables by geographical region is as follows:-
THE GROUP
2011 2010
RM000 RM000
United States 91
Singapore 5,369 4,818
Malaysia
122,805 70,277
128,174 75,186
Ageing analysis
The ageing analysis of the Groups trade receivables as at 31 October 2011 is as follows:-
GROSS INDIVIDUAL COLLECTIVE CARRYING
AMOUNT IMPAIRMENT IMPAIRMENT VALUE
2011
Not past due 68,566 68,566
Past due:-
- less than 3 months 57,039 57,039
- 3 to 6 months 1,207 1,207
- over 6 months
4,224 (1,929) (933) 1,362
131,036 (1,929) (933) 128,174
At the end of the reporting period, trade receivables that are individually impaired were those in signifcant
fnancial difculties and have defaulted on payments. These receivables are not secured by any collateral or
credit enhancement.
The collective impairment allowance is determined based on estimated irrecoverable amounts from the
sale of goods, determined by reference to past default experience.
Trade receivables that are past due but not impaired
The Group believes that no impairment allowance is necessary in respect of these trade receivables. They
are substantially companies with good collection track record and no recent history of default.
Annual Report 2011
84
(iii) Liquidity Risk
Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk
management by maintaining sufcient cash and bank balances and the availability of funding through
certain committed credit facilities.
The following table sets out the maturity profle of the fnancial liabilities as at the end of the reporting
period based on contractual undiscounted cash fows (including interest payments computed using
contractual rates or, if foating, based on the rates at the end of the reporting period):-
WEIGHTED
AVERAGE
EFFECTIVE
RATE
CARRYING
AMOUNT
CONTRACTUAL
UNDISCOUNTED
CASH FLOWS
WITHIN
1 YEAR
1 - 5
YEARS
OVER
5 YEARS
THE GROUP % RM000 RM000 RM000 RM000 RM000
2011
Trade
payables 25,919 25,919 25,919
Other
payables
and accruals 8,840 8,840 8,840
Hire purchase
payables 6.29 9,588 10,731 3,839 6,892
Term loans 6.13 7.80 19,635 24,329 5,738 15,386 3,205
Bonds 3.50 4,677 5,000 5,000
Commercial
papers 3.50 15,000 15,000 15,000
Bills payable 5.40 93,905 93,905 93,905
Bank
overdrafts 6.75 5,165 5,165 5,165
182,729 188,889 163,406 22,278 3,205
Annual Report 2011
85
(iii) Liquidity Risk (Contd)
WEIGHTED
AVERAGE
EFFECTIVE
RATE
CARRYING
AMOUNT
CONTRACTUAL
UNDISCOUNTED
CASH FLOWS
WITHIN
1 YEAR
1 5
YEARS
OVER
5 YEARS
THE GROUP % RM000 RM000 RM000 RM000 RM000
2010
Trade payables 19,423 19,423 19,423
Other payables
and accruals 7,570 7,570 7,570
Hire purchase
payables 7.45 13,024 14,978 4,224 10,754
Term loans 7.80 13,479 16,921 11,751 5,170
Bonds 3.50 8,576 10,000 5,000 5,000
Commercial
papers 5.15 30,000 30,000 30,000
Bills payable 3.08 74,839 74,839 74,839
Bank overdrafts 7.31
1,522 1,522 1,522
168,433 175,253 142,578 27,505 5,170
WEIGHTED
AVERAGE
EFFECTIVE
RATE
CARRYING
AMOUNT
CONTRACTUAL
UNDISCOUNTED
CASH FLOWS
WITHIN 1
YEAR
1 5
YEARS
THE COMPANY % RM000 RM000 RM000 RM000
2011
Other payables and
accruals 2,580 2,580 2,580
Amount owing to
Term loan 6.13 1,250 1,250 1,250
Bonds
3.50 4,677 5,000 5,000
Commercial papers
3.40
15,000 15,000 15,000
23,566 23,889 23,889
Annual Report 2011
86
(iii) Liquidity Risk (Contd)
WEIGHTED
AVERAGE CONTRACTUAL
EFFECTIVE CARRYING UNDISCOUNTED WITHIN 1 - 5
RATE AMOUNT CASH FLOWS 1 YEAR YEARS
THE COMPANY % RM000 RM000 RM000 RM000
2010
Other payables and
accruals 96 96 96
Amount owing to
Bonds 3.50 8,576 10,000 5,000 5,000
Commercial papers 5.15
30,000 30,000 30,000
38,731 40,155 35,155 5,000
(b) Capital Risk Management
The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal
capital structure so as to support their businesses and maximise shareholders value. To achieve this objective,
the Group may make adjustments to the capital structure in view of changes in economic conditions, such as
adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.
The Group manages its capital based on debt-to-equity ratio. The Groups strategies were unchanged from the
previous fnancial year. The debt-to-equity ratio is calculated as total borrowings divided by total equity.
The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:-
THE GROUP
2011 2010
RM000 RM000
Term loans 19,635 13,479
Bonds 4,677 8,576
Bank overdrafts
5,165 1,522
Total borrowings
147,970 141,440
Total equity attributable to owners of the Company
213,165 197,374
Debt-to-equity ratio
0.69 0.72
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a
consolidated shareholders equity (total equity attributable to owners of the Company) equal to or not less than
the 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders equity is not
less than RM40 million. At the date of this report, the Company has complied with this requirement.
Annual Report 2011
87
(c) Classifcation Of Financial Instruments
2011 2011
RM000 RM000
Financial assets
Loans and receivables fnancial assets
Trade receivables 128,174
Other receivables and deposits 1,775 437
Amount owing by subsidiary 6
Short term deposits with fnance institution 1,145 1,145
Fixed deposits with licensed banks 2,560
7,578 38
141,232 1,626
Other fnancial liabilities
Trade payables 25,919
Other payables and accruals 8,840 2,580
Amount owing to subsidiaries 59
Hire purchase payables 9,588
Term loans 19,635 1,250
Bonds 4,677 4,677
Bills payable 93,905
Bank overdrafts
5,165
182,729 23,566
(d) Fair Values Of Financial Instruments
The carrying amounts of the fnancial assets and fnancial liabilities reported in the fnancial statements
approximated their fair values except for the following:-.
2011 2010
CARRYING
AMOUNT FAIR VALUE
CARRYING
AMOUNT FAIR VALUE
RM000 RM000 RM000 RM000
THE GROUP
Hire purchase payables
9,588 8,987 13,024 11,812
THE COMPANY
Loan to subsidiaries 58,006 38,934 63,372 46,254
Contingent liability
206,222 * 178,000 *
* The fair value of the contingent liability is estimated to be minimal as the subsidiaries are expected to fulfl their obligations
to repay their borrowings.
The following summarises the methods used to determine the fair values of the fnancial instruments:-
(i) The fnancial assets and fnancial liabilities maturing within the next 12 months approximated their fair
values due to the relatively short-term maturity of the fnancial instruments.
(ii) The fair value of hire purchase payables is determined by discounting the relevant cash fows using current
interest rates for similar instruments as at the end of the reporting period.
Annual Report 2011
88
45. SIGNIFICANT EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD
(a) On 23 November 2011, Stanson Marketing Sdn. Bhd. subscribed for an additional 750,000 new ordinary shares
of RM1.00 each in KPFQ to retain its equity interest of 30%, for a total cash consideration of RM750,000;
(b) On 24 February 2012, the Company announced the delay in issuance of the annual audited fnancial statements
for the fnancial year ended 31 October 2011. The details of the said matter are disclosed in Note 47 to the
fnancial statements; and
(c) On 27 February 2012, the Company announced the change of its fnancial year-end from 31 October to 31
March whereby the frst set of the fnancial statements shall be drawn up for the period 1 November 2010 to 31
March 2012 or a period of seventeen (17) months.
46. COMPARATIVE FIGURES
Certain comparative fgures have been reclassifed to conform with the current year presentation.
THE GROUP
As As
Restated Reported
RM000 RM000
STATEMENTS OF FINANCIAL POSITION
NON-CURRENT ASSETS
Property, plant and equipment 201,678 185,199
CURRENT ASSETS
Trade receivables 75,186 51,168
Other receivables, deposits and prepayments 1,988 18,467
19,712 43,730
STATEMENTS OF COMPREHENSIVE INCOME
Revenue 190,015 593,505
Cost of sales
(103,720) (507,210)
Annual Report 2011
89
46. COMPARATIVE FIGURES (CONTD)
THE GROUP
As As
Restated Reported
RM000 RM000
STATEMENTS OF CASH FLOWS
CASH FLOWS FOR OPERATING ACTIVITIES
Operating proft before working capital changes 33,183 33,129
Increase in trade and other receivables (22,753) (12,309)
Cash (for)/from operations (1,748) 8,642
Net cash (for)/from operating activities (7,399) 2,991
CASH FLOWS FOR INVESTING ACTIVITIES
Purchase of property, plant and equipment (14,198) (14,103)
Interest received 370 424
Increase in fxed deposits pledged to licensed banks (54)
Net cash for investing activities (13,814) (13,611)
CASH FLOWS FROM FINANCING ACTIVITIES
Net drawdown of term loans 13,479
Net cash from fnancing activities 12,390 25,869
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (8,823) 15,249
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 30,149 32,584
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR
21,328 47,835
47. EXCEPTIONAL ITEMS
On 22 February 2012, the external auditors, Messrs Crowe Horwath, had highlighted the following exceptional items
to the Audit Committee and the Board of Directors (the Board). The external auditors expressed that they have
not been able to obtain all the information and explanations from management for their audit. The Board initiated
a preliminary investigation into these items immediately upon being notifed by the external auditors, and based
on the results of the preliminary investigation to-date, are of the opinion that there is a strong possibility of material
misstatement to the fnancial statements with in regard to the exceptional items. The details of the exceptional items
are set out below:-
(a) the capital work-in-progress of the Group under property, plant and equipment, include payments made
amounting to approximately RM7.6 million to a third party for the design, renovation and refurbishment of the
existing warehouse and factory;
(b) in August 2011, the Group ventured into a new business segment of trading in sweetened creamer. Revenue and
cost of sales amounting to approximately RM31.9 million and RM31.3 million were recorded for this segment in
the proft or loss. Information on the commercial terms entered into between management and the third party
customers and supplier is limited;
(c) the external auditors have not been able to verify the veracity of transactions undertaken by the Group
with six (6) customers comprising four (4) customers from the bakery segment and two (2) customers from
the telecommunication segment and satisfy themselves as to the recoverability of the amount owed of
approximately RM35.9 million by these customers as included in trade receivables;
(d) the Board has taken management to task with regard to the exceptions noted as explained in (a) to (c) above,
and has suspended the Managing Director, Executive Director and a senior management person. The Board has
also appointed PKF Advisory Sdn. Bhd. to perform a forensic audit on the exceptions;
Annual Report 2011
90
47. EXCEPTIONAL ITEMS (CONTD)
(e) based on the preliminary investigation carried out by the Board, the Board has reasons to believe that the
fnancial statements for the fnancial year ended 31 October 2011 may contain material misstatement with
regard to the exceptions noted. However, pending the outcome of a forensic audit, the Board is unable to
ascertain the extent of the misstatement in the fnancial statements;
(f ) the Board, in discharging its fduciary duties, has authorised the issuance of this fnancial statements which
comprise the fnancial statements of the Company together with the consolidation of the fnancial statements
of the subsidiaries. The Board is of the view that the expediency of providing the fnancial statements of the
Group and of the Company to be an overriding factor and of upmost importance to enable dissemination of
information on a timely basis to the shareholders and stakeholders. This delay in the completion of the audit
of the subsidiaries is due to the exceptions noted above, as well as administrative procedures required for the
completion of the audit of the subsidiaries; and
(g) there may be additional circumstances at this juncture that may have a material impact on the truth and fairness
of the fnancial statements.
Upon completion of the forensic audit, the Board may re-issue the fnancial statements or make announcement as
necessary depending on the outcome of the forensic audit. The completion of the forensic audit is expected to be
within three (3) months from the date of this report.
48. SUPPLEMENTARY INFORMATION - DISCLOSURE OF REALISED AND UNREALISED LOSSES
The breakdown of the accumulated losses of the Group and of the Company as at the end of the reporting period
into realised and unrealised losses are presented in accordance with the directive issued by Bursa Malaysia Securities
Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised
Profts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as
issued by the Malaysian Institute of Accountants, as follows:-
2011 2011
RM000 RM000
Total accumulated losses:
- realised (43,374) (49,070)
- unrealised
(764)
At 31 October
(44,138) (49,070)
ANALYSIS OF ORDINARY SHAREHOLDINGS
AND WARRANTS AS AT 16 MARCH 2012
Annual Report 2011
91
AND WARRANTS AS AT 16 MARCH 2012
A. Authorised Share Capital
:
RM500,000,000-00
Issued and Fully Paid-Up
:
RM203,340,852-00
Class of Shares
:
Ordinary shares of RM0-50 each
Voting Right
:
Every member of the Company, present in person or by proxy, shall have on a
show of hands one (1) vote or on poll, one (1) vote for each share held
B. Distribution of Shareholdings
Size of Shareholdings No. of Shareholders % No. of Shares %
Less than 100 192 7.24 10,236 0.003
100 1,000 230 8.67 151,687 0.037
1,001 10,000 1,115 42.01 6,335,437 1.558
10,001 100,000 946 35.64 36,012,749 8.855
100,001 20,334,084 167 6.29 147,670,290 36.311
20,334,085 & above 4 0.15 216,501,305 53.236
Total
2,654 100.00 406,681,704 100.000
C. Substantial Shareholders Shareholdings
Substantial Shareholders
Direct Shareholdings Indirect Shareholdings
No. of Shares % No. of Shares %
Lembaga Tabung Haji 90,252,306 22.19
Dato Tan Han Kook

24,534,966 6.03
(1)
7,276,079 1.79
Datin Ong Hooi Siang 7,276,079 1.79
(1)
24,534,966 6.03
Rantau Embun Sdn Bhd 37,730,000 9.28
Berjaya Capital Berhad
(2)
58,330,000

14.34
Bizurai Bijak (M) Sdn Bhd
(3)
58,330,000

14.34
Juara Sejati Sdn Bhd
(4)
73,930,000

18.18
Berjaya Group Berhad
(4)
73,930,000 18.18
Berjaya Corporation Berhad
(5)
73,930,000 18.18
Tan Seri Dato Seri Vincent Tan Chee
Yioun

2,670,000 0.66
(6)
83,475,000

20.53
Koperasi Permodalan Felda Malaysia
Berhad
51,642,333 12.70
CVC Limited 36,876,666 9.07
Vanda Russell Gould
(7)
36,876,666 9.07
(1)
Deemed interested by virtue of his/her spouses shareholding.
(2)
Deemed interested by virtue of interest in Berjaya Sompo Insurance Berhad (15,600,000 shares) and Inter-Pacifc
Capital Sdn Bhd (5,000,000 shares), and 100% interest in Rantau Embun Sdn Bhd.
(3)
Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance
Berhad, Rantau Embun Sdn Bhd and Inter-Pacifc Capital Sdn Bhd.
(4)
Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance
Berhad, Rantau Embun Sdn Bhd and Inter-Pacifc Capital Sdn Bhd, and Berjaya Land Berhad, the holding company of
Selat Makmur Sdn Bhd (15,600,000 shares).
(5)
Deemed interested by virtue of 100% equity interest in Berjaya Group Berhad.
(6)
Deemed interested by virtue of interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya
Sompo Insurance Berhad, Rantau Embun Sdn Bhd, Selat Makmur Sdn Bhd and Inter-Pacifc Capital Sdn Bhd and HQZ
Credit Sdn Bhd, the ultimate holding company of Premier Merchandise Sdn Bhd (9,545,000 shares).
(7)
Deemed interested through CVC Limited by virtue of Section 6A of the Companies Act, 1965
Annual Report 2011
92
ANALYSIS OF ORDINARY SHAREHOLDINGS (CONTD)

D. Directors Shareholdings
Directors
Direct Shareholdings Indirect Shareholdings
No. of Shares % No. of Shares %
Dato Tan Han Kook 24,534,966 6.03
(1)
7,276,079 1.79
Ching Siew Cheong 1,800,027 0.44
Richard George Azlan Bin Abas 404,933 0.10
Vanda Russell Gould (Alternate
Director to Peter John McLoghlin)
(2)
36,876,666 9.07

(1)
Deemed interested by virtue of his spouses shareholding.

(2)
Deemed interested through CVC Limited by virtue of the Section 6A of the Companies Act, 1965.
E. Thirty (30) Largest Shareholders
No. Name of Shareholders No. of Share %
1 Lembaga Tabung Haji 90,252,306 22.19
2 Koperasi Permodalan Felda Malaysia Berhad 51,642,333 12.70
3 Rantau Embun Sdn Bhd 37,730,000 9.28
4 AmanahRaya Trustees Berhad
Exempt An for Perkasa Normandy Managers Sdn Bhd
36,876,666 9.07
5 Berjaya Sompo Insurance Berhad 15,600,000 3.84
6 Selat Makmur Sdn Bhd 15,600,000 3.84
7 OSK Nominees (Tempatan) Sdn Berhad
OSK Capital Sdn Bhd For Tan Han Kook
13,028,664 3.20
8 Premier Merchandise Sdn Bhd 9,545,000 2.35
9 Inter-Pacifc Equity Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Tan Han Kook
7,307,524 1.80
Inter-Pacifc Capital Sdn Bhd
5,000,000 1.23
OSK Capital Sdn Bhd For Ong Hooi Siang
4,519,800 1.11
12 Kamarudin Bin Meranun 4,101,100 1.01
13 Siti Munajat Binti MD Ghazali 3,945,300 0.97
14 ECM Libra Investment Bank Berhad
CLR Amanah Raya Trustees Berhad For Perkasa Normandy Managers Sdn Bhd
3,463,400 0.85
15 Nor Ashikin Binti Khamis 3,205,800 0.79
OSK Capital Sdn Bhd For Chai Yeng Sun
2,974,362 0.73
Pledged Securities Account For Ong Hooi Siang
2,700,000 0.66
18 CIMSEC Nominees (Tempatan) Sdn Bhd
CIMB Bank For Tan Han Kook
2,370,000 0.58
19 Zalaraz Sdn Bhd 2,000,000 0.49
20 Lee Sing Hin 1,856,300 0.46
21 Mayban Securities Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Suresh A/L Sammuggam
1,693,500 0.42
22 Amsec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Vincent Tan Chee Yioun
1,670,000 0.41
23 CIMB Investment Bank Berhad
Exempt An Clearing For Perkasa Normandy Managers Sdn Bhd
1,489,000 0.37
AND WARRANTS (CONTD) AS AT 16 MARCH 2012
Annual Report 2011
93
ANALYSIS OF ORDINARY SHAREHOLDINGS (CONTD)
E. Thirty (30) Largest Shareholders (CONTD)
No. Name of Shareholders No. of Share %
24 Abdul Radzim Bin Abdul Rahman 1,306,000 0.32
25 Ooi Thong Hock 1,250,000 0.31
Pledged Securities Account For Ching Siew Cheong
1,100,000 0.27
27 Vincent Tan Chee Yioun 1,000,000 0.25
28 Tan Ah Eng @ Tan Sing Meng 1,000,000 0.25
29 Alwin Thian Phaik Yeong 1,000,000 0.25
30 Maureen Chong Mai Lee 959,000 0.24
ANALYSIS OF WARRANT 2008/2013 HOLDINGS
A. No. of Warrant Issued
:
29,448,302
No. of Warrant Exercised
: -
No. of Warrant Unexercised
:
29,448,302
Exercise Period
:
25 February 2008 to 24 February 2013
Voting Right at the Meeting
of Warrant Holders
:
Every member of the Company, present in person or by proxy, shall have
on a show of hands one (1) vote or on poll, one (1) vote for each Warrant
held in the meeting of Warrant holders.
B. Distribution of Warrant Holdings
Size of Warrant Holdings No. of Warrant Holders % No. of Warrant %
Less than 100 201 20.98 9,415 0.03
100 1,000 420 43.84 161,724 0.55
1,001 10,000 189 19.73 662,216 2.25
10,001 100,000 122 12.73 4,457,826 15.14
100,001 1,472,414 20 2.09 8,169,200 27.74
1,472,415 and above 6 0.63 15,987,921 54.29
Total
958 100.00 29,448,302 100.00
C. Directors Warrant Holdings
Direct Warrant Holdings Indirect Warrant Holdings
Directors No. of Warrant % No. of Warrant %
Dato Tan Han Kook 1,547,330 5.25
(1)
757,425 2.57
Richard George Azlan Bin Abas 12,499 0.04
Vanda Russell Gould (Alternate Director
to Peter John McLoghlin)

(2)
980,900 3.33

(1)
Deemed interested by virtue of his spouses shareholding.

(2)
Deemed interested through CVC Limited by virtue of the Section 6A of the Companies Act, 1965.
Annual Report 2011
94
ANALYSIS OF WARRANT 2008/2013 HOLDINGS (CONTD)
D. Thirty (30) Largest Warrants Holders
No. Name of Shareholders No. of Warrant %
1 Lembaga Tabung Haji 5,341,291 18.14
2 Rantau Embun Sdn Bhd 3,450,000 11.72
3 Premier Merchandise Sdn Bhd 2,500,000 8.49
Pledged Securities Account For Chai Yeng Sun
1,649,300 5.60
OSK Capital Sdn Bhd For Tan Han Kook
1,547,330 5.25
6 Selat Makmur Sdn Bhd 1,500,000 5.09
7 Berjaya Sompo Insurance Berhad 1,450,000 4.92
8 Rajendran A/L Karuppiah 1,046,800 3.55
9 Amanahraya Trustees Berhad
Exempt an For Perkasa Normandy Managers Sdn Bhd
980,900 3.33
Exempt An For UOB Kay Hian Pte Ltd
773,500 2.63
OSK Capital Sdn Bhd For Ong Hooi Siang
757,425 2.57
12 RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Tan Seow Than
543,500 1.85
Inter-Pacifc Capital Sdn Bhd
300,000 1.02
14 HLG Nominee (Tempatan) Sdn Bhd
Pledged Securities Account For Hassan Bin Swam @ Sivam
284,900 0.97
15 Harjinder Singh A/L Kuldip Singh 280,000 0.95
16 Vincent Tan Chee Yioun 250,000 0.85
17 Lim Poh Hock 207,900 0.71
18 Rahmat Bin Ali 200,000 0.68
19 Krishna A/L V Dallumah 197,800 0.67
20 Toh Sok Kiang 195,600 0.66
21 Nor Ashikin Binti Khamis 145,200 0.49
22 Maureen Chong Mai Lee 125,000 0.42
23 Lim Kawn Yee 119,300 0.41
24 RHB Capital Nominees (Tempatan) Sdn Bhd
Lai Wah Choung
109,900 0.37
25 HLG Nominee (Tempatan) Sdn Bhd
Pledged Securities Account For Lee Eng Min
101,100 0.34
26 Low Siang Tim 100,375 0.34
27 Chin Yok Lay @ Chin Yok Lin 100,000 0.34
28 Lee Fook On 100,000 0.34
29 Yap Chieng Boon 100,000 0.34
30 Lee Soi Yung 100,000 0.34
Annual Report 2011
95
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of SILVER BIRD GROUP BERHAD will be held at
High5 Breadtown, Silver Bird Complex, Lot 72 Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan
on Monday, 30 April 2012 at 10.00 a.m. for the following purposes:
AGENDA
SPECIAL BUSINESS
1. To consider and if thought ft, pass the following resolutions:
REMOVAL OF DIRECTORS
THAT Dato Tan Han Kook (NRIC No. 540426-10-5801) be and is hereby removed as a
Director of the Company with immediate efect.
Ordinary Resolution 1
THAT Mr Ching Siew Cheong (NRIC No. 620521-10-7055) be and is hereby removed as a
Director of the Company with immediate efect.
The Requisition pursuant to Section 151 of the Companies Act, 1965 (the Act) to give
notice to members of the Company of the intention to move the resolution as Ordinary
Resolutions at the Annual General Meeting and the Special Notice of Resolution pursuant
to Section 128 and 153 of the Act has been received by the Company. A copy of the
Requisition and Special Notice is enclosed with the Annual Report 2011 for notice of
members.
ORDINARY BUSINESS
2. To receive the Audited Financial Statements for the fnancial year ended 31 October 2011
together with the Reports of the Directors and Auditors thereon.
3. To re-elect the following Directors who are retiring under Article 97 of the Articles of
Association of the Company:
3.1 Dato Dr Gan Khuan Poh
3.2 Mr Lim Hock Chye
3.3 Dato Tan Han Kook (subject to Ordinary Resolution 1 not being passed)
4. To approve the sum of RM264,000.00 (2010: RM264,000.00) being the directors fees for
the fnancial year ended 31 October 2011, payment of which shall be deferred in relation
to those directors who have not received directors fees for the fnancial year, until the
regularisation plan for the Group has been approved by the relevant authorities.
5. To appoint Messrs Baker Tilly Monteiro Heng as Auditors in place of the retiring auditors,
Messrs Crowe Horwath, to hold ofce until the conclusion of the next Annual General
Meeting and to authorise the Directors to fx their remuneration.
BY ORDER OF THE BOARD
LEE SUET YIN (MAICSA 7057807)
Company Secretary
Shah Alam
6 April 2012
Annual Report 2011
96
NOTICE OF ANNUAL GENERAL MEETING (CONTD)
Notes :
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two
(2)) to attend and vote in his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless
he/she specifes the proportion of his/her holdings to be represented by each proxy. A proxy may but need not be a
member of the Company and if he is not a member, he need not be an advocate, an approved Company auditor or a
person approved by the Registrar of Companies.
2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the
instrument appointing a proxy shall be given under the Companys Common Seal or under the hand of an ofcer or
attorney duly appointed.
3. The instrument appointing a proxy must be deposited at the Registered Ofce of the Company at Silver Bird Complex,
Lot 72, Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours
before the time appointed for the holding of the Eighteenth Annual General Meeting or any adjournment thereof.
4. Ordinary Resolution 7 is proposed in view of the retiring auditors do not wish to seek re-appointment and the notice of
nomination, pursuant to Section 172 (11) of the Act, has been received for the nomination of Messrs Baker Tilly Monteiro
Heng for appointment of auditors of the Company. A copy of the notice of nomination is enclosed with the Annual Report
2011 for notice of members.
Explanatory Note on the Special Business
Ordinary Resolutions 1 and 2
Removal of Directors
The proposed Ordinary Resolutions 1 and 2, if passed, will remove Dato Tan Han Kook and Mr Ching Siew Cheong as
Directors of the Company.
STATEMENT ACCOMPANYING
NOTICE OF ANNUAL GENERAL MEETING (AGM)
Names of Directors who are standing for re-election at the Eighteenth AGM of the Company:
(i) Dato Dr Gan Khuan Poh;
(ii) Mr Lim Hock Chye
(iii) Dato Tan Han Kook;
Please refer to pages 6 to 7 for further details of the above directors
FORM OF PROXY
(277977-X)
CDS Account No.
(i)
No. of Shares held
*I/We (FULL NAME IN BLOCK CAPITALS)
NRIC No./Company No.
of FULL ADDRESS
being a member of SILVER BIRD GROUP BERHAD hereby appoint
FULL NAME
NRIC No.
and/or failing him/her FULL NAME
NRIC No.
or failing him/her, the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Eighteenth
Annual General Meeting (AGM) of the Company to be held at High5 Breadtown, Silver Bird Complex, Lot 72 Persiaran Jubli
Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan on Monday, 30 April 2012 at 10.00 a.m. and at any adjournment
thereof of the following resolutions referred to in the Notice of Eighteenth AGM. My/Our proxy is to vote as indicated below:
ORDINARY
RESOLUTION
FOR AGAINST
1 Removal of Dato Tan Han Kook as a Director of the Company
2 Removal of Mr Ching Siew Cheong as a Director of the Company
3 Re-election of Dato Dr Gan Khuan Poh
4 Re-election of Mr Lim Hock Chye
5
Re-election of Dato Tan Han Kook
(subject to Ordinary Resolution 1 not being passed)
6 Approval of Directors Fee
7
Appointment of Messrs Baker Tilly Monteiro Heng as Auditors in place of
retiring auditors, Messrs Crowe Horwath, to hold ofce until the conclusion
of the next Annual General Meeting and to authorise the Directors to fx their
remuneration
(Please indicate with an X in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space
above, the proxy will vote as he/she thinks ft.)
(i)
Applicable to shares held through a nominee account.
* Delete where applicable
Signed this .. day of ... 2012
For appointment of two proxies, percentage if
shareholdings to be represented by the proxies:
No. of shares Percentage
Proxy 1
Proxy 2
Signature/Common Seal of Member
Total 100%
Notes:-
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two (2)) to attend and vote in
his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifes the proportion of his/her holdings
to be represented by each proxy. A proxy may but need not be a member of the Company and if he is not a member, he need not be an advocate,
an approved Company auditor or a person approved by the Registrar of Companies.
2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxy
shall be given under the Companys Common Seal or under the hand of an ofcer or attorney duly appointed.
3. The instrument appointing a proxy must be deposited at the Registered Ofce of the Company at Silver Bird Complex, Lot 72 Persiaran Jubli Perak,
Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for the holding of the Eighteenth
AGM or any adjournment thereof.
(277977-X)
Lot 72, Persiaran Jubli Perak,
Seksyen 21, 40300 Shah Alam,
The Company Secretary
fold here
fold here
STAMP
(277977-X)
Silver Bird Complex Lot 72, Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan
Tel: 603 5192 2888 Fax: 603 5192 4293 Email: investor@stanson-high5.com

2011

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2011

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Annual Report 2011

SILVER BIRD GROUP BERHAD

Consolidated proft after taxation

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