Penyata Kewangan Syarikat Yeo's
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Transcript of Penyata Kewangan Syarikat Yeo's
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Yeo Hiap Seng
(Malaysia) Berhad(3405-X)
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01 Corporate Information
02 Financial Highlights of the Group
03 Five-Year Summary
04 Directors Prole
10 Chairmans Statement
12 Penyata Pengerusi
14 Corporate Responsibility Statement
17 Statement on Corporate Governance
25 Statement on Internal Control
27 Audit Committee Report30 Directors Responsibilities Statement
31 Group Property Particulars
33 Financial Statements
116 Analysis of Shareholdings
118 Notice of Annual General Meeting
122 Statement Accompanying Notice of Annual General Meeting127 Administrative Detail for 38th Annual General Meeting
Form of Proxy
CONTENTS
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Annual Report 2011 01
Corporate Information
BOARD OF DIRECTORS
Koh Boon Hwee (Chairman)
Tjong Yik Min (Chief Executive Ofcer)
Dato Mohamed Nizam bin Abdul Razak
Dato N. Sadasivan a/l N.N. Pillay
Razman Hadz bin Abu Zarim
Chandra Das s/o Rajagopal Sitaram
Ow Tin NyapYap Ng Seng(Deputy Chief Executive Ofcer)
Pearl Foong Lye Fong
AUDIT COMMITTEE
Dato Mohamed Nizam bin Abdul Razak (Chairman)
Dato N. Sadasivan a/l N.N. Pillay
Razman Hadz bin Abu Zarim
Pearl Foong Lye Fong
REMUNERATION COMMITTEE
Dato N. Sadasivan a/l N.N. Pillay (Chairman)
Dato Mohamed Nizam bin Abdul Razak
Chandra Das s/o Rajagopal Sitaram
NOMINATION COMMITTEE
Razman Hadz bin Abu Zarim (Chairman)
Dato N. Sadasivan a/l N.N. Pillay
Tjong Yik Min
INVESTMENT COMMITTEE
Dato Mohamed Nizam bin Abdul Razak (Chairman)
Dato N. Sadasivan a/l N.N. Pillay
Razman Hadz bin Abu Zarim
Tjong Yik Min
COMPANY SECRETARY
Sau Ean Nee
AUDITORS
PricewaterhouseCoopers
BANKERS
Citibank Berhad
Standard Chartered Bank Malaysia Berhad
Malayan Banking Berhad
SOLICITORS
Raja, Darryl & Loh
REGISTRARS
Tricor Investor Services Sdn Bhd
Level 17, The Gardens North Tower,
Mid Valley City,
Lingkaran Syed Putra,
59200 Kuala Lumpur
Tel : (603) 2264 3883
Fax : (603) 2282 1886
REGISTERED OFFICE
7, Jalan Tandang,
46050 Petaling Jaya,Selangor Darul Ehsan
Tel : (603) 7787 3888
Fax : (603) 7781 3509
(603) 7782 2730
Email: [email protected]
Website: www.yeos.com.my
Customer Care Hotline: 1-300-80-2828
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)02
Financial Highlights of the Group
2011RM000
2010RM000
RESULTS OF OPERATION
Revenue 533,381 471,234
Prot Before Taxation 32,487 7,660
Prot Attributable to Equity Holders of the Company 24,983 3,817
FINANCIAL POSITION
Net Current Assets 146,335 155,069
Net Tangible Assets 255,105 242,806
Total Tangible Assets 379,441 333,950
Paid Up Capital 153,548 153,548
Shareholders Equity 263,998 253,605
DIVIDENDS
Interim 3,436 5,726
Final 10,307* 10,307
Cover (Times) 1.82 0.24
PER SHARE
Net Tangible Assets (in RM) 1.67 1.59
Earnings Before Tax (in sen) 21.27 5.02
Earnings After Tax (in sen) 16.4 2.5
Dividend- Interim (net - in sen) 2.25 3.75
- Final (net - in sen) 6.75* 6.75
* Proposed nal dividend
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Annual Report 2011 03
Five-Year Summary
2007RM000
2008RM000
2009RM000
2010RM000
2011RM000
Group Revenue 476,579 568,836 545,504 471,234 533,381
Prot/(Loss) Attributable to EquityHolders of the Company
(13,601)
2,229 (11,079) 3,817 24,983
Net Tangible Assets 273,825 260,162 240,802 242,806 255,105
Total Dividend 17,807 14,507 10,308 16,033 13,743*
* Includes proposed nal dividend (net)
Total Dividend (RM000)Net Tangible Assets (RM000)
Profit/(Loss) Attributable to Equity Holdersof the Company (RM000)
Group Revenue (RM000)
476,579
273,825
(13,601)
17,807
568,836
260,162
2,229
14,507
545,504
240,802
(11,079)
10,308
471,234
242,806
3,817
16,033
533,381
255,105
24,983
13,743*
07
07
07
07
09
09
09
09
08
08
08
08
10
10
10
10
11
11
11
11
0 200,000 400,000 600,000
0 100,000 200,000 300,000
-10,000 0 10,000 20,000
0 5,000 10,000 15,000 20,000
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)04
Directors Prole
Koh Boon HweeChairman
Non-Independent / Non-Executive
Age: 61 years
Koh Boon Hwee is a Singaporean and he was
appointed to the Board on 20 January 2009 and as
Chairman of the Company on 22 April 2010.
He received his Bachelors Degree (First Class
Honours) in Mechanical Engineering from the
Imperial College of Science and Technology,
University of London, and his MBA (Distinction) from
the Harvard Business School.
He started his career in 1977 at Hewlett Packard and
became its Managing Director in Singapore, a post
he held from 1985 to 1990. From 1991 to 2000, he
was Executive Chairman of the Wuthelam Group.
Mr Koh is currently the Chairman of Yeo HiapSeng Limited, Chairman of Sunningdale Tech Ltd,
Chairman of AAC Technologies Holdings Inc, and a
board member of Agilent Technologies, Inc. in the
United States. Mr Koh contributes actively to non-
prot organisations, and is the current Chairman
of the Board of Trustees of Nanyang Technological
University, Singapore and a director of the Hewlett
Foundation in the United States.
He was formerly the Chairman of the Singapore
Telecom Group (SingTel) and its predecessor
organisations from 1986 to 2001, Chairman of
Singapore Airlines Limited from July 2001 to
December 2005 and Chairman of DBS Group and
DBS Bank from January 2006 to April 2010. He
served on the Board of Temasek Holdings Pte Ltd
from November 1996 to September 2010, and was a
member of the Executive Committee from January
1997 to September 2010.
Mr Koh attended all 5 Board meetings held in the
year.
He has no family relationship with any other
director/major shareholder of the Company and hasno conict of interest with the Company.
He has not been convicted for offences within the
past 10 years.
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Annual Report 2011 05
Directors Prole (continued)
Dato Mohamed Nizam bin Abdul RazakDirector
Independent / Non-Executive
Age: 53 years
Dato Mohamed Nizam bin Abdul Razak is a
Malaysian and he was appointed to the Board on 5November 2002.
He graduated with a Bachelor of Arts (Oxon) degreein Politics, Philosophy and Economics from the
Oxford University, United Kingdom.
Dato Nizam was attached to Bumiputra MerchantBankers Berhad from 1981 to 1984 and to PB
Securities Sdn Bhd from 1984 to 1998. He presentlysits on the board of Mamee-Double Decker (M)
Berhad, Delloyd Ventures Berhad, Synergy TrackBerhad and Deutsche Bank (M) Berhad. He also
serves on the board of several private limited
companies engaged in a wide range of activitiesand is actively involved in several charitable
foundations.
Dato Nizam is the Chairman of the Audit andInvestment Committees and a member of the
Remuneration Committee.
Dato Nizam attended all 5 Board meetings held inthe year.
He has no family relationship with any other
director/major shareholder of the Company and hasno conict of interest with the Company.
He has not been convicted for offences within the
past 10 years.
Tjong Yik MinChief Executive Ofcer
Non-Independent / Executive
Age: 59 years
Tjong Yik Min is a Singaporean and he was appointedto the Board as a Director on 22 July 2002. He was
appointed as the Chief Executive Ofcer on 1 June2010.
He holds a Bachelor of Engineering (Hons) (Class
1) (Industrial Engineering) degree from theUniversity of Newcastle, Australia, a Bachelor of
Commerce (Economics) degree from the Universityof Newcastle, Australia and a Master of Science
(Industrial Engineering) degree from the Universityof Singapore.
Mr Tjong has been an Executive Director of Far East
Organization and a Director of Yeo Hiap Seng Limited(YHS Limited), Singapore and also its President
and Chief Operating Ofcer since 22 July 2002. He
was appointed the Group Chief Executive Ofcer of
YHS Limited on 26 April 2010. Prior to joining YHSLimited, he was the Executive Director and Group
President of Singapore Press Holdings Limited. MrTjong has also served in various capacities in the
Singapore Civil Service.
He presently sits on the boards of Orchard ParadeHoldings Limited and Genting Singapore PLC.
Mr Tjong is a member of the Nomination and
Investment Committees.
Mr Tjong attended all 5 Board meetings held in theyear.
He has no family relationship with any other
director/major shareholder of the Company and hasno conict of interest with the Company.
He has not been convicted for offences within the
past 10 years.
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)06
Directors Prole (continued)
Razman Hafdz bin Abu ZarimDirector
Independent / Non-Executive
Age: 56 years
Razman Hadz bin Abu Zarim is a Malaysian and hewas appointed to the Board on 1 March 2005.
Encik Razman graduated with a Joint-Honours
degree in Economics and Accounting, BSc (Econ),
from University College, Cardiff, University ofWales. He is a Fellow of the Institute of CharteredAccountants in England and Wales and a member of
the Malaysian Institute of Accountants.
He started his career with Touche Ross & Co.,Chartered Accountants, London, England and
later joined Hacker Young, Chartered Accountants,London, England, where he was admitted as an
Audit Partner.
In 1989, he returned to Malaysia as an Audit Partnerof Price Waterhouse (PW) and later Partner-in-
Charge of PWs Management Consulting Practiceand became an Executive Committee member. In
1994, he established Norush Sdn Bhd, an investment
holding and business advisory rm, where heremains as Chairman.
He sits on the Boards of Panasonic Manufacturing
Malaysia Berhad, eBworx Berhad, Linde MalaysiaHoldings Berhad and Sumitomo Mitsui Banking
Corporation Malaysia Berhad. He also holdsdirectorships in several other private limited
companies.
Encik Razman is the Chairman of the NominationCommittee and a member of the Audit and
Investment Committees.
Encik Razman attended all 5 Board meetings heldin the year.
He has no family relationship with any other
director/major shareholder of the Company and hasno conict of interest with the Company.
He has not been convicted for offences within the
past 10 years.
Dato N. Sadasivan a/l N.N. PillayDirector
Independent / Non-Executive
Age: 72 years
Dato N. Sadasivan is a Malaysian and he wasappointed to the Board on 13 August 2004.
Dato N. Sadasivan graduated with a Bachelor of Arts
(Hons) in Economics from the University of Malaya in1963. He began his career as an Economist with the
Economic Development Board, Singapore in 1963and was subsequently promoted to the position of
Chief of the Industrial Facilities Division in 1965.
In 1968, he joined the Malaysian IndustrialDevelopment Authority (MIDA) and served as the
Deputy Director General from 1976 to 1983. From1984 until his retirement in 1995, he was the
Director-General of MIDA.
He presently sits on the board of several private
and public listed companies namely Petronas GasBerhad, APM Automotive Holdings Berhad and
Leader Universal Holdings Berhad. He is also adirector of Bank Negara Malaysia.
Dato N. Sadasivan is the Chairman of the
Remuneration Committee and a member of theAudit, Nomination and Investment Committees.
Dato N. Sadasivan attended all 5 Board meetings
held in the year.
He has no family relationship with any otherdirector/major shareholder of the Company and has
no conict of interest with the Company.
He has not been convicted for offences within thepast 10 years.
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Annual Report 2011 07
Chandra Das s/o Rajagopal SitaramDirectorIndependent / Non-ExecutiveAge: 72 years
Chandra Das s/o Rajagopal Sitaram is a Singaporeanwho received his Bachelor of Arts degree (withhonours) in Economics from the University ofSingapore in 1965 and he was appointed to theBoard on 26 April 2011.
Mr Das has over 37 years of experience primarily in
companies involved in the trading and manufacturingindustries. He served as the Singapore TradeRepresentative to the USSR from 1970 to 1971,Chairman of the Trade Development Board from1983 to 1986 and Chairman of NTUC Fairprice Co-operative Ltd from 1993 to 2005. He also served asa Member of Parliament in Singapore from 1980 to1996.
Mr Das is currently the Managing Director of NUR
Investment & Trading Pte Ltd, Singapores Non-Resident Ambassador to Turkey and also servesas Pro-Chancellor of Nanyang TechnologicalUniversity (NTU). He has been conferred numerousawards, such as the Presidents Medal by theSingapore Australian Business Council in 2000 andthe Distinguished Service (Star) Award by NationalTrades Union Congress in 2005. He also holdsdirectorships in various private and public listedcompanies in Singapore. Mr Das does not hold anyother directorship in public companies in Malaysia.
Mr Das attended 3 out of 3 Board meetings heldsince his appointment.
He has no family relationship with any otherdirector/major shareholder of the Company and hasno conict of interest with the Company.
He has not been convicted for offences within thepast 10 years.
Directors Prole (continued)
Ow Tin NyapDirectorNon-Independent / Non-ExecutiveAge: 58 years
Ow Tin Nyap is a Malaysian and he was appointed tothe Board as Managing Director and Chief ExecutiveOfcer on 1 June 2005. He was re-designated as aNon-Executive Director on 1 March 2010.
Mr Ow holds the Malaysian Certicate of Education.In an illustrious and sterling career spanning 40years, Mr Ow brings with him strategic broad-based experience and many years of international
exposure in the areas of business re-engineering,mergers and acquisitions, sales and marketing,logistics and manufacturing. Mr Ows extensiveknowledge and experience stems from starting atrank and le positions to various senior managementappointments in fast-moving consumer goods(FMCG) market.
Mr Ow is currently a Non-Executive Director of YeoHiap Seng Limited, Singapore.
Mr Ow retired from his appointment as ExecutiveDirector at the end of February 2012, after a span of
more than 6 years with Far East Organization duringwhich he provided strategic leadership and businessdevelopment counsel to various business portfolios,driving the growth of Kitchen Language, leading
as Chairman of the Establishment Committee and
the Far East Academy, and playing an active rolein the Branding and Food & Beverage ExecutiveCommittees. With effect from March 2012, Mr Owwill continue to be the Deputy Chairman for Far EastAcademy, and also a member of the Branding andFood & Beverage Executive Committees.
Prior to this, Mr Ow has spent 8 years with theDanone Group; working to grow Danones ASEANportfolio and strategic market leadership. Mr Owspent his last 5 years in Indonesia as PresidentDirector of Danone Group of Companies and asChairman of Danone Group of Companies in theASEAN Region for Water/Beverages, Dairy andBiscuits from 2004. He was also a member of theAsia Pacic Matrix and he sat on the InternationalCommittee of Danone Group in Paris. Mr Ow hasalso previously held positions as President of SaraLee Corporation (SEA), overseeing the market ofMalaysia, Singapore and Indo China and GeneralManager of Boustead Trading (M) Sdn Bhd.
Mr Ow attended all 5 Board meetings held in the year.
He has no family relationship with any other director/major shareholders of the Company and has noconict of interest with the Company.
He has not been convicted for offences within thepast 10 years.
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)08
Directors Prole (continued)
Pearl Foong Lye FongDirectorNon-Independent / Non-Executive
Age: 46 years
Pearl Foong Lye Fong is a Singaporean and she wasappointed to the Board on 26 July 2005.
She graduated from National University of Singapore
in 1989 with a Bachelor of Accountancy Degree.
Ms Pearl Foong worked in Price Waterhouse as
Assistant Manager of Audit and Business Servicesfrom 1993 to 1995. From 1995 to February 1999,she was promoted to Manager of Assurance/
Business Advisory Services. In February 2000, sheleft PricewaterhouseCoopers as Senior Manager of
Assurance/Business Advisory Services.
She was appointed as Group Financial Controllerof Tuan Sing Holdings Limited and SP Corporation
Ltd, Singapore from March 2000 to October 2002.Subsequently, she worked with Gul Technologies
Singapore Ltd as Vice President of Finance andAccounting from November 2002 to 14 June 2005.
Ms Pearl Foong is a member of the Audit
Committee.
Ms Pearl Foong attended all 5 Board meetings heldin the year.
She has no family relationship with any other
director/major shareholder of the Company and hasno conict of interest with the Company.
She has not been convicted for offences within thepast 10 years.
Yap Ng SengDeputy Chief Executive Ofcer
Non-Independent / Executive
Age: 55 years
Yap Ng Seng is a Singaporean and he was appointedas an Executive Director and Deputy Chief Executive
Ofcer on 2 August 2010.
He graduated with a Bachelor of Engineering(Mechanical & Production Engineering) and a Master
of Science (Industrial Engineering) from NationalUniversity of Singapore. In 1994, he obtained a
Master of Business Administration (Accountancy)from Nanyang Technological University, Singapore.
He started his career as a Project Engineer in
Singapore Automotive Engineering Pte Ltd from
1982 to 1984. He then joined Singapore Aerospace
Manufacturing Pte Ltd as a Materials Manager from1984 to 1989. Before joining the Company, he was
attached to Crown Asia Pacic Holdings Ltd since1989 and his last position held was Vice President
South East Asia, responsible for 5 plants in SouthEast Asia.
Mr Yap attended all 5 Board meetings held in the
year.
He has no family relationship with any otherdirector/major shareholder of the Company and has
no conict of interest with the Company.
He has not been convicted for offences within thepast 10 years.
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Annual Report 2011 09
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)10
Chairmans Statement
FINANCIAL PERFORMANCE
The nancial year ended 31 December 2011
(FY2011) has been another good year for
Yeos, marked by improving nancial results andimprovement in operations efciency.
The Groups operating revenue increased by 13%
to RM533 million for FY2011 compared to RM471
million in the previous year. The Group also achieved
prot from operations of RM30.8 million for this
year, an increase of RM11.2 million or a 57% growth
against RM19.6 million in year 2010. The increase in
prot was largely attributable to increased sales and
improvement in operations efciency.
The Group recorded prot after tax of RM25 million
against RM3.8 million achieved last year despite
volatility in currencies and escalating prices of
raw materials in the wake of uncertainty in global
markets.
The Groups nancial position remains healthy with a
net cash and short-term cash investment of RM47.1
million, with no borrowings.
DIVIDEND
On 12 October 2011, the Company had declared
and paid out an interim dividend of 3 sen (5 sen
in 2010) gross per ordinary share of RM1.00 each
less Malaysian income tax of 25%. The Board is
recommending for shareholders approval, a Final
Dividend of 9 sen (9 sen in 2010) gross per ordinary
share of RM1.00 each less Malaysian income tax of
25%, bringing the total dividend for the nancial year
to 12 sen gross per ordinary share of RM1.00 each.
OPERATIONS REVIEw
During the year, we have signicantly raised
our operating performance and strengthened
key functions. We remain focused on deliveringsustainable growth for our core products and also
evaluating various initiatives and opportunities to
attract new consumers through the introduction of
new products.
In line with the Governments call for a healthier
lifestyle, we launched Yeos Chrysanthemum Tea
Light with 40% Less Sugar, a healthier choice for
those who like beverages that contain less sugar. And
for those who want to hydrate their bodies quickly,
we introduced Yeos Sparkling H-Two-O, an isotonic
drink which replenishes the essential minerals and
uids in the body.
In the nancial year, the Group invested a
considerable amount in advertising and promotion
activities to enhance its brand leading position in
Asian stilled drinks category. Our market position
remains strong with 38% market share in Asian
stilled drinks category.
Beverage sales improved by 13% year on year and
sale of food products also grew by 15%.
The plant rationalisation exercise embarked
since 2010 has been progressing well. We have
successfully transferred the production of sauces
to Johor Bahru plant after closure of the Kuching
plant in 2010. The consolidation of Petaling Jaya
and Shah Alam plants is on schedule and we have
invested RM25 million in capital expenditure on plant
upgrading in 2011. We expect to realise signicant
annual savings when the exercise is completed in
2013.
On behalf of the Board of Directors of Yeo Hiap Seng (Malaysia) Berhad (Yeos), I am
pleased to present to you the Annual Report and Audited Financial Statements of the
Company and its Group of Companies for the nancial year ended 31 December 2011.
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Annual Report 2011 11
Chairmans Statement
During the year, we have successfully re-launchedour products in Indonesia following the issuance
of new ML numbers by the Indonesian authority.
The sales in Indonesia have been encouraging and
we see huge potential in growing our brands and
distribution network.
CORPORATE RESPONSIBILITY
Yeos recognises the importance of corporate
responsibility as an integral part of the business to
create sustainable value for all our stakeholders,including our consumers, shareholders and
employees.
Yeos initiated a school recycling contest, a platform
for schools to educate and raise awareness about
the importance of recycling amongst the younger
generation and at the same time, emphasize
the importance of healthy living through better
understanding of food nutrition.
Inspired by the enthusiasm of the 60 primary
schools for the Yeos Program Susu Soya Sekolah
campaign held in year 2010, the Company continued
its campaign to reach out to an additional 100
primary schools in the Klang Valley by giving
educational talks on the importance of a balanced
diet and distributed Yeos soy milk to the students
from April to July 2011.
In this Annual Report, we have included a more
detailed write-up of our corporate responsibilityinitiatives to inform all our stakeholders of the
Companys engagement in the community and in
preserving the environment.
FUTURE STRATEGY AND PROSPECTS
The better performance in 2011 gives us condence
as we move into 2012 and the Board is optimistic in
spite of the challenges facing the global economy.
We will stay focused on our core products and
markets in the new nancial year while we build our
skills and capacity for the future. We are positive of
the future prospects and within 3 years, we plan to
invest RM190 million in new plant and technologies
and upgrading our facilities to prepare for future
growth.
ACKNOwLEDGEMENT AND APPRECIATION
On behalf of the Board, I would like to express
my sincere appreciation and gratitude to the
management and staff for their conscientious effort,
commitment and dedication to delivering results.
My appreciation also goes to our valued customers,
business associates, partners, and shareholders,for their continuing support of Yeos. To my fellow
Board members, I thank you for your contribution
and guidance throughout the year.
Stay Healthy and Lead a Joyful Life!
Koh Boon Hee
Chairman
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)12
Penyata Pengerusi
PRESTASI KEwANGAN
Tahun kewangan berakhir 31 Disember 2011 (TK2011) merupakan satu tahun yang memberangsangkanbagi Yeos, nyata dengan peningkatan keputusan kewangan dan kecekapan dalam operasi.
Perolehan operasi Kumpulan meningkat sebanyak 13% kepada RM533 juta bagi TK2011 berbanding dengan
RM471 juta pada tahun sebelumnya. Kumpulan juga mencatatkan keuntungan daripada operasi sebanyakRM30.8 juta bagi tahun ini, iaitu peningkatan sebanyak RM11.2 juta, 57% lebih tinggi berbanding denganRM19.6 juta pada tahun 2010. Peningkatan dalam keuntungan sebahagian besar didorong oleh peningkatanjualan dan kecekapan dalam operasi.
Kumpulan telah mencatatkan keuntungan selepas cukai sebanyak RM25 juta berbanding dengan RM3.8juta yang dicapai pada tahun sebelumnya walaupun kadar pertukaran mata wang asing tidak stabil dan kosbahan mentah meningkat berikutan pasaran global yang tidak menentu.
Kedudukan kewangan Kumpulan kekal sihat dengan lebihan tunai dan pelaburan jangka pendek sebanyakRM47.1 juta, tanpa sebarang pinjaman.
DIVIDEN
Pada 12 Oktober 2011, pihak Syarikat telah mengumum dan membayar dividen interim sebanyak 3 sen(5 sen pada tahun 2010) tidak termasuk 25% Cukai Pendapatan Malaysia bagi setiap saham biasa yangbernilai RM1.00. Pihak Lembaga Pengarah mengesyorkan dividen akhir sebanyak 9 sen (9 sen pada tahun2010) tidak termasuk 25% Cukai Pendapatan Malaysia bagi setiap saham biasa yang bernilai RM1.00 untukkelulusan para pemegang saham. Jumlah dividen bagi TK2011 adalah sebanyak 12 sen bagi setiap sahambiasa yang bernilai RM1.00.
ULASAN OPERASI
Sepanjang tahun 2011, kami telah meningkatkan prestasi di bahagian operasi dan terus mengukuhkanfungsi-fungsi utama kami. Kami kekal fokus untuk mengembang perusahaan untuk produk dan jenamateras kami dan juga melaksanakan pelbagai inisiatif untuk menarik perhatian pengguna-pengguna baru
melalui pelancaran produk-produk baru.
Sejajar dengan seruan kerajaan ke arah gaya hidup sihat, kami telah memperkenalkan Teh KrisantimumLight Yeos dengan 40 peratus kurang gula, salah satu pilihan yang lebih sihat bagi mereka yang gemarminuman yang mengandungi kandungan gula yang lebih rendah. Dan bagi mereka yang mahu menghidrattubuh mereka dengan cepat, kami juga memperkenalkan Yeos Sparkling H-TWO-O, minuman isotonik yangboleh mengisikan semula mineral-mineral utama dan kandungan air dalam badan.
Dalam tahun 2011, Kumpulan telah membelanjakan sejumlah wang dalam pengiklanan dan aktiviti promosiuntuk mengukuhkan kedudukan jenamanya terutama bagi kategori minuman Asian. Kedudukan jenamakami kekal kukuh dengan 38% bahagian pasaran bagi kategori minuman Asian.
Jualan produk minuman dan makanan masing-masing meningkat sebanyak 13% dan 15%.
Projek rasionalisasi kilang telah dilaksanakan dengan lancar sejak tahun 2010. Dalam tahun 2010, kamitelah berjaya mengalihkan pengeluaran sos dari kilang pemprosesan Kuching ke Johor Bahru. Selain itu,penggabungan kilang pemprosesan Petaling Jaya dan Shah Alam sedang berjalan dengan lancar dan kami
Bagi pihak Lembaga Pengarah Yeo Hiap Seng (Malaysia) Berhad (Yeos), saya ingin
mengemukakan Laporan Tahunan dan Penyata Keangan yang telah diauditkan bagi
Syarikat dan Kumpulan bagi tahun keangan berakhir 31 Disember 2011.
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Annual Report 2011 13
Pyt Ps
juga membelanjakan sebanyak RM25 juta dalam pembelanjaan modal untuk meningkatkan taraf kilang-kilang pemprosesan. Pelaksanaan projek ini dijangka akan merealisasikan penjimatan tahunan yang nyataapabila ia selesai pada tahun 2013 nanti.
Pada tahun ini, kami telah berjaya melancar semula produk-produk kami di Indonesia selepas memperolehinombor-nombor ML yang baru dari pihak berkuasa Indonesia. Jualan di Indonesia amat menggalakkandan kami dapat melihat potensi yang besar dalam meningkatkan jenama kami dan juga rangkaianpengedarannya.
Tanggungjawab KorPoraT
Yeos mengiktiraf tanggungjawab korporat merupakan sebahagian penting dalam urusniaganya bagimewujudkan nilai mampan bagi semua pemegang berkepentingan, termasuk pengguna-pengguna,
pemegang saham dan juga warga pekerja.
Yeos telah melancarkan satu pertandingan kitar semula, satu platform bagi sekolah-sekolah untuk mendidikdan memupuk kesedaran di kalangan generasi muda mengenai kepentingan kitar semula dan pada masayang sama, menegaskan lagi kepentingan hidup sihat melalui pemahaman yang mendalam tentang nutrisimakanan.
Didorong oleh kesungguhan 60 buah sekolah rendah dalam Kempen Program Susu Soya Sekolah Yeosyang diadakan pada tahun 2010, kami telah melanjutkan kempen ini dengan penambahan 100 buah sekolahrendah di sekitar daerah Lembah Klang dengan menyampaikan ceramah pendidikan tentang pengamalanpemakanan yang seimbang dan seterusnya mengedarkan pek minuman Susu Soya Yeos kepada semuamurid yang terlibat dari bulan April ke Julai 2011.
Dalam Laporan Tahunan ini, kami juga memaparkan inisiatif-inisiatif tanggungjawab korporat yangdilaksanakan oleh Syarikat sepanjang tahun ini dalam aktiviti masyarakat dan pemeliharaan persekitarandengan lebih terperinci.
STraTegi dan ProSPeK MaSa HadaPan
Peningkatan prestasi tahun ini menyakinkan kami untuk mengorak langkah ke arah tahun 2012 dan LembagaPengarah tetap optimistik meskipun menghadapi cabaran ekonomi global. Kami akan kekal menumpukandan memasarkan produk teras kami dalam tahun kewangan baru ini di samping membina kemahiran dankeupayaan untuk masa depan. Kami amat positif terhadap prospek masa depan dan dalam jangka masa3 tahun, kami merancang untuk melabur RM190 juta bagi pembinaan kilang dan teknologi-teknologi yangbaru dan meningkatkan taraf kemudahan bagi menyediakan kami untuk pertumbuhan pada masa akandatang.
PengHargaan dan PengaKuan
Bagi pihak Lembaga, izinkan saya merakamkan setinggi-tinggi penghargaan ikhlas dan ucapan terimakasih kepada pihak pengurusan dan kakitangan atas usaha gigih, komitmen dan dedikasi dalam mencapaiprestasi yang baik.
Penghargaan saya juga ditujukan kepada para pelanggan kami, rakan-rakan perniagaan, rakan kongsi, danpemegang-pemegang saham atas sokongan berterusan mereka terhadap Yeos. Bagi rakan-rakan Pengarahseperjuangan saya, saya ingin mengucapkan jutaan terima kasih atas sokongan teguh dan bimbingan andasemua sepanjang tahun ini.
Kekal Sihat Sentiasa dan Hidup Riang Dan Ceria Bersama Yeos !
Kh b H
Ps
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)14
Yeo Hiap Seng (Malaysia) Berhad (Yeos or the Company), as a sociallyresponsible company, has integrated its corporate responsibility into a
sustainable business model that goes beyond shareholders interests, for
the betterment of society. It reects our commitments to our customers,
employees, investors, suppliers and the community.
COMMUNITIES
Yeos Program Susu Soya Sekolah 2
In 2010, the Company initiated a corporate
responsibility campaign, Yeos Program SusuSoya Sekolah which received positive feedbacks
from the public on its educational and nourishingvalues to the young. In continuing this initiative, the
Company embarked on Yeos Program Susu SoyaSekolah 2 to cover another 100 schools and reach
out to another 50,000 students with an aim to instillthe importance of a balanced diet and in educatingthe students on preserving the environment through
recycling.
Corporate Responsibility Statement
Yeos Scholarship Programme
Backed by the spirit of enthusiasm and perseverance,
students from 51 primary schools in the Klang
Valley and Putrajaya took part in the Yeos ProgramTajaan Biasiswa Sekolah. The students battledfor the scholarship through collection of Yeoslogo from empty beverage packs. Through this
programme, Yeos achieved its primary objective insetting a platform for students to exercise creativity
and problem solving skills. This programme alsoaimed to promote the spirit of esprit de corps
amongst students and teachers to work towardsachieving the school category scholarship for school
development fund.
1Malaysia Creative Sculpture Recycling
Competition
In support of the 1Malaysia philosophy, Yeosembarked on its green and remarkable 1Malaysia
recycled sculpture competition among allparticipating schools of Yeos Program Susu Soya
Sekolah using Yeos recyclable materials. Theultimate objective of this competition is to encourage
creativity and nurture recycling mindset amongstthe young. In recognition of the effort shown in this
recycling competition, Yeos awarded the winningschools each with school development fund to
support the development and extra-educationalactivities at school level.
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Annual Report 2011 15
My Ne Village Carnival
For the 3rd consecutive year, Yeos joined hands withNanyang Siang Pau in My New Village Carnivalto reach out to smaller communities and villages.Besides organising interactive activities with villagers,the Company contributed part of its sales generatedfrom the carnival to the schools in those villages insupport of their infrastructural and facilities buildingfund. This year, we also embarked on EmbellishYour Village with Yeos in which the participatingvillages collected, cleaned, and recycled Yeos
recyclable materials to embellish a selected spotin the villages and Yeos also shared knowledge ofcreative recycling through fun and interactive games.
Dynamic Dance Competition
In line with Lead a Joyful Life campaign, Yeosin collaboration with China Press, organised anational dynamic dance competition with the mainobjective to encourage communities to live and leada healthier and joyful lifestyle.
Support of world Vision Malaysia Movement
Yeos continued to support 30-Hour Famine programthrough its sponsorship of soy milk to individualcamps to raise fund for World Vision Malaysiasmovement in aid of those who are suffering frompoverty and hunger, giving them the opportunityfor improved health, better quality life, and mostimportantly, hope.
Factory Educational Visits
Yeos continues its initiative to welcome local andoverseas colleges and universities to enhancestudents knowledge on food and beveragemanufacturing processes.
wORKPLACE
Yeos recognises that employees are the driversof business performance. The Companys human
resources policies aim to enhance the performance
of staff through staff recognition schemes, offeringequal opportunities, training and development, andcreating sound employees relations.
Every year, in recognition of the loyal, dedicated and
committed employees, the Company honoured andrewarded the long service employees at its Annual
Dinner and Dance.
Corporate Responsibility Statement (continued)
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Yeo Hiap Seng (Malaysia) Berhad (3405-X)16
Continue to Build Human Capital
Yeos continues to aggressively provide a supportive
working culture through training and developmentprogrammes. During the year, employees
participated in various in-house and external trainingprogrammes from technical-related skills to soft
management skills. To nurture the future workforceof our industry, we continue to open our doors to
interns for short-term attachment to complete theirdegree requirements.
Committed to Hazard Free Zone
Yeos is committed to providing a safe, healthy,
secure and conducive workplace for all itsemployees, visitors and business stakeholders. Our
commitments to the effective implementation ofOccupational Safety and Health Policy has achieved
a hazard-free work zone. Various communicationsactivities and campaigns were organised to ensure
the employees awareness to safety precautions.
ENVIRONMENT
Reusable Resources
Yeos is committed and passionate aboutenvironmental conservation. Yeos is the rst
food and beverage company to introduce its AsianDrinks products in Tetra Pak packaging which is
environmental friendly and recyclable.
Moving Toards Paper-less
Several programmes were introduced to upgrade ITinfrastructure to encourage paper-less environment
through electronic communications and e-ling
system. This effort has further been enhancedwith the introduction and implementation of theDistributor Management System (DMS).
MARKETPLACE
Yeos continues its efforts to rigorously adhere to
responsible business practices when engagingwith its stakeholders particularly its consumers,
suppliers and investors so as to provide clearerunderstanding of Yeos performance and enhance
their experience with us.
Commitment to Maintain the Highest Halal
Standard Compliance
Strict halal compliance is a vital component in
the continued success and an integral part of theCompanys DNA. Our ingredients, employees, and
systems constantly meet the most rigorous of halalstandards and our halal compliance is something
we are honoured to offer to our consumers.
Interaction ith Investor
We engage in constant dialogue with our investors
and shareholders through Annual General Meeting(AGMs) and meetings. Our AGMs are the primary
platform for direct two ways interaction between theBoard of the Company and shareholders. We keep
investors updated on the Companys performanceand key business activities including quarterly
nancial announcements which are made availablethrough our website.
Corporate Responsibility Statement (continued)
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Statement on Corporate Governance
The Board of Directors is fully committed to the principles of corporate governance and best practices asembodied in the Malaysian Code on Corporate Governance (the Code). The Board takes every step toensure that the highest standards of corporate governance are practised throughout the Group in order to
protect and enhance shareholders value and the nancial performance of the Group. The Board is pleasedto provide the following which outlines the corporate governance practices that were in place throughout the
nancial year.
THE BOARD OF DIRECTORS
Composition and Board Balance
The Board currently has nine members, comprising two Executive Directors and seven Non-ExecutiveDirectors. Of the seven Non-Executive Directors, four are independent, satisfying the requirement of the
Code for Independent Non-Executive Directors to make up at least one-third of the Board membership.
The role of the Chairman is separate from that of the Chief Executive Ofcer. The Chairman is responsible
for leadership of the Board and monitoring its effectiveness. He facilitates both the contribution of the Non-Executive Directors and constructive relations between the Executive and Non-Executive Directors. The
Chief Executive Ofcer is responsible for managing the Groups business, including the formulation andimplementation of major strategies and initiatives adopted by the Board.
The Directors are from diverse professional background with a wide range of expertise, bringing with them
an independent judgment and considerable knowledge to the Board. They advise management on strategydevelopment and ensure that the Board maintains high standards of nancial and other reporting compliance
as well as providing adequate checks and balances for safeguarding the interests of shareholders and theGroup as a whole. Where a potential conict of interest may arise, it is mandatory practice for the Director
concerned to declare his interest and abstain from the decision-making process.
A brief prole of each Director is set out on pages 4 to 8 of this Annual Report.
Board Attendance
The Board meets at least once every quarter on a scheduled basis and additional meetings will be convenedas and when required. Board meetings for the following nancial year are scheduled before the end of the
current nancial year to allow the Directors to plan their appointments ahead and as such to facilitate fullattendance at the Board meetings.
During the year, ve (5) Board Meetings were held and the Directors attended the following number ofmeetings:
Name of Directors Attendance
Koh Boon Hwee 5/5
Tjong Yik Min 5/5
Dato Mohamed Nizam bin Abdul Razak 5/5
Dato N. Sadasivan a/l N.N. Pillay 5/5
Razman Hadz bin Abu Zarim 5/5
Chandra Das s/o Rajagopal Sitaram (Appointed on 26 April 2011) 3/3
Ow Tin Nyap 5/5
Yap Ng Seng 5/5
Pearl Foong Lye Fong 5/5
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Statement on Corporate Governance (continued)
Supply of Information
The Directors have full and unrestricted access to all information pertaining to the Groups business andaffairs to enable them to discharge their duties. All Directors are provided with reports and other relevantinformation on a timely manner, covering various aspects of the Groups operations and performance. Theyare also provided with an agenda and a set of board papers pertaining to agenda items prior to Boardmeetings for consideration and where appropriate, for decision. In addition, the Board has access to theadvice and services of the Company Secretary and senior management. The Company Secretary attends allBoard meetings and ensures that accurate records of the proceedings of the Board meetings and decisionsmade are properly recorded. Senior management ofcers may be invited to attend Board meetings whennecessary to provide the Board with clarications and comments on the relevant agendas tabled at theBoard meetings. The Board may seek independent professional advice from external consultants at the
Companys expense, if required, in furtherance of their duties.
Board Committees
The Board currently has four Committees, the majority members of which comprise Independent Non-Executive Directors. The Board delegated certain responsibilities to these four Board committees whichoperate within clearly dened terms of reference as set out below. The Board Committees evaluate mattersand report to the Board their ndings and recommendations thereon. The responsibility for the nal decisionon all matters discussed and recommended by the Board Committees, however, lies with the Board.
a) Audit Committee
The Audit Committee (AC) reviews issues of accounting policies and presentation for external nancial
reporting, monitors the work of the internal audit function and ensures an objective and professionalrelationship is maintained with the external auditors. The AC has full access to both the internal andexternal auditors who, in turn, have access at all times to the Chairman of the AC.
The composition and terms of reference of the AC may be found on pages 27 to 30.
b) Nomination Committee
The Nomination Committee (NC) recommends the appointment of Directors to the Board. The termsof reference of the NC adopted by the Board are as follows:
To recommend appropriate candidates to the Board. To determine annually whether or not a Director is independent. To decide whether or not a Director is able and has been adequately carrying out his/her duties
based on the following criteria:- Attendance- Preparedness- Participation
To evaluate and propose objective performance criteria for the Board. Performance criteria thatmay be used include return on assets (ROA), return on equity (ROE), economic value added (EVA),return on sales, return on investment, etc.
To review the Boards required mix of skills and experience and other qualities that the Directorsshould bring to the Board.
The members of the NC as at the date of this statement are as follows:
Razman Hadz bin Abu Zarim (Chairman) - Non-Executive / Independent Dato N. Sadasivan a/l N.N. Pillay - Non-Executive / Independent Tjong Yik Min - Executive / Non-Independent
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Statement on Corporate Governance (continued)
c) Remuneration Committee
The Remuneration Committee (RC) reviews and recommends remuneration framework for Executive
Directors. The terms of reference of the RC are as follows:
Made up of Non-Executive Directors, the majority of whom are independent of management and
free from any business or other relationship, which may materially interfere with the exercise oftheir independent judgment. This ensures transparency in the development of the remuneration
framework and minimises the risk of any potential conict of interest. Chaired by an Independent Non-Executive Director.
RCs recommendations are made in consultation with the Chairman of the Board and submittedfor endorsement by the entire Board.
RC recommends to the Board a framework of remuneration for the Board and key executives anddetermines specic remuneration packages for each Executive Director and the CEO if the CEO is
not an Executive Director. The determination of remuneration packages of Non-Executive Directors is the matter of the
Board and individuals concerned should abstain from discussion of their own remuneration. No Director should be involved in deciding his own remuneration.
The RC covers all aspects of remuneration, including but not limited to Directors fees, salaries,allowances, bonuses, options and benets-in-kind.
The RC comprises the following members:
Dato N. Sadasivan a/l N.N. Pillay (Chairman) - Non-Executive / Independent
Dato Mohamed Nizam bin Abdul Razak - Non-Executive / IndependentChandra Das s/o Rajagpoal Sitaram - Non-Executive / Independent
d) Investment Committee
The term of reference of the Investment Committee (IC) is to manage the Companys portfolio ofsecurities, reviewing and evaluating proposals for joint ventures, mergers and acquisitions.
The IC comprises the following members:
Dato Mohamed Nizam bin Abdul Razak (Chairman) - Non-Executive / Independent Dato N. Sadasivan a/l N.N. Pillay - Non-Executive / Independent
Razman Hadz bin Abu Zarim - Non-Executive / Independent Tjong Yik Min - Executive / Non-Independent
Appointments and Re-Election
Procedures relating to the appointment and re-election of Directors are set out in the Companys Articlesof Association. All newly appointed Directors will be subject to retirement and re-election by shareholders
at the rst Annual General Meeting (AGM) subsequent to their appointment. In addition, one-third (or thenumber nearest to one-third) of the remaining Directors, including the Chief Executive Ofcer, shall retire
from ofce and be eligible for re-election at each subsequent AGM, provided always, all Directors, includingthe Chief Executive Ofcer, shall retire from ofce once at least in every three years but shall be eligible for
re-election.
The NC recommends candidate for directorship to be lled by the shareholders or the Board. In making itsrecommendations, the NC will focus on the skills and personal qualities of the candidate as well as businessexperience the candidate possess to enhance the Boards decision making and management of the business
and affairs of the Company.
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Appointments and Re-Election (continued)
The NC carries out an annual assessment and evaluation on the effectiveness of the Board as a whole and
the contribution of each of the individual Directors, including Independent Non-Executive Directors, as wellas the Chief Executive Ofcer. All assessments carried out by the NC are documented.
Pursuant to Section 129(2) of the Companies Act, 1965, all Directors who are over seventy years of age are
required to submit for re-appointment annually.
The NC also recommends the re-appointment and re-election of Directors who are seeking for re-appointmentand re-election at the AGM. The Directors who are standing for re-appointment and re-election at the Thirty-
Eighth AGM of the Company to be held on 25 April 2012 are contained in the Notice of AGM.
Directors Training Programme
Given the fact that Directors roles are increasingly demanding in an organisation, the Board of Directorscontinues to equip and update themselves with the relevant programmes, technologies and current
developments in the industry as well as with the new regulatory and statutory requirements. All members ofthe Board have also attended the Mandatory Accreditation Training Programme (MAP) prescribed by Bursa
Malaysia Securities Berhad, including Mr Chandra Das s/o Rajagopal Sitaram who was appointed to theBoard on 26 April 2011.
Except those Directors who were not able to attend any training during the year due to tight work schedule,
the following Directors had attended the following conferences, forums, seminars and training programmesduring the nancial year.
Name ofDirectors
Training Programme
Dato N.Sadasivan a/lN.N. Pillay
Corporate Governance and Boardroom Issues in Challenging Times on 18 February2011
Sustainability Programme for Corporate Malaysia on Trading Services and IndustrialProducts on 23 March 2011
Razman Hadzbin Abu Zarim
Government Financial Assistance for SMEs on 6 December 2011 New Corporate Governance Blueprint & Regulatory Updates on 14 December 2011
Ow Tin Nyap Far East Organization Leadership Talk Series on 18 February 2011 Far East Organization Leadership Talk Series on 25 March 2011 Far East Organization Leadership Talk Series on 29 June 2011 FEO Management Workshop 2011 : Do Good Business held in Shanghai on 18-22 October
2011 Far East Organization Leadership Talk Series on 22 November 2011
Pearl FoongLye Fong
Doing Deals in Vietnam on 19 January 2011 New Challenges and Priorities for CFOs on 12 October 2011 Global Transfer Pricing Conference 2011 Sustainable Transfer Pricing in an Era of
Growth and Business Transformation on 19-21 October 2011
Statement on Corporate Governance (continued)
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Directors Remuneration
The RC is responsible for reviewing and recommending the policy framework on the remuneration of the
Executive Directors with the aim to attract, motivate and retain Directors of the right caliber needed torun the Company successfully. The determination of the remuneration of the Non-Executive Directors is a
matter for the Board as a whole. Directors do not participate in decisions regarding their own remunerationpackage. Directors fees are subject to shareholders approval at the AGM.
The Independent Non-Executive Directors are paid attendance allowances for Board and Audit Committee
meetings that they attended as well as allowances for serving as a Board Committee member.
For the year ended 31 December 2011, the aggregate remuneration of the Directors are as follows:
Directors Fees(RM)
Salaries(RM)
Bonuses(RM)
OtherEmoluments
(RM)Total(RM)
Executive - 963,201 272,268 329,308 1,564,777
Non-Executive 128,972 - - 206,667 335,639
128,972 963,201 272,268 535,975 1,900,416
The number of Directors whose total remuneration fall within the following bands are as follows:
Number of Directors
Range of Remuneration Executive Non-Executive
Nil - 3
RM1 to RM50,000 - 1
RM50,001 to RM100,000 - 2
RM100,001 to RM150,000 - 1
RM600,001 to RM650,000 1 -
RM900,001 to RM950,000 1 -
RELATIONSHIP WITH SHAREHOLDERS
Investors Relations and Shareholders Communication
The Group recognises the importance of establishing a direct line of communication with shareholders andinvestors through timely and thorough dissemination of information on the Groups performance and major
developments via appropriate channels of communication.
Dissemination of information includes the distribution of the Annual Report and relevant circulars, issuanceof press releases inclusive of quarterly nancial performance of the Group to Bursa Malaysia Securities
Berhad (Bursa Securities) and the public as well as press conferences.
Statement on Corporate Governance (continued)
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Investors Relations and Shareholders Communication (continued)
In order to maintain a high level of transparency and to promote wider dissemination of corporate andnancial disclosures, all information that is made to the public, is available on the Companys website, www.
yeos.com.my. Alternatively, shareholders and the public may access to our Customer Care toll free line at1300-80-2828 for more information on the Company. All announcements released to the Bursa Securities
are available on Bursa Securities website at www.bursamalaysia.com.
Annual General Meeting
The Chairman and the Board encourage shareholders to attend and participate in the AGM held annually.
The AGM is the principal forum for dialogue and interaction with individual shareholders and investors wherethey may seek clarications and comments on the Groups businesses and nancial performance from the
Board as well as the senior management.
ACCOUNTABILITY AND AUDIT
Financial Reporting
In addition to providing the nancial report on an annual basis, the Company also presents the Groupsnancial results on a quarterly basis via public announcements. The Directors ensure the integrity of
nancial information and the effectiveness of the nancial controls, internal control and risk managementsystems. The AC assists the Board in reviewing the information disclosed to ensure accuracy, adequacy and
completeness of all annual and quarterly reports, audited or unaudited, and approved by the Board beforereleasing to Bursa Securities.
The Directors are also responsible for ensuring that all nancial statements are prepared in accordancewith the provisions of the Companies Act, 1965 and Malaysian Accounting Standards Board (MASB), the
Approved Accounting Standards in Malaysia for entities other than private entities.
A statement by Directors of their responsibility in preparing the nancial statements is set out on page 30 ofthis Annual Report.
Internal Control
The Board recognises the importance of a sound system of internal control and acknowledges its ultimate
responsibility in maintaining the same, which includes the establishment of an appropriate control environmentand framework as well as reviewing its adequacy and integrity. The internal control system covers all levels
of personnel and business processes and is designed to safeguard the Companys assets and shareholdersinterest. The Board is satised with the design of the existing internal control system, which would continue
to be improved, reviewed and updated in line with changes in the operating environment.
Information of the Groups internal control is presented in the Statement on Internal Control set out on pages25 to 26 of this Annual Report.
Statement on Corporate Governance (continued)
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Internal Audit Function
During the year under review, the internal audit team performed regular review of the effectiveness of therisk management, internal control, and governance processes within the Group. Their responsibilities are
as follows:
Evaluate the relevance, reliability and integrity of nancial and management information; Review systems and operations to assess the extent to which company objectives are achieved and the
adequacy of control activities leading to such achievement; Appraise utilisation of resources with regard to economy, efciency and effectiveness;
Assess the means of safeguarding assets and verify their existence; Ascertain the extent of compliance with established policies, procedures, plans, laws and regulations.
Internal auditors also perform ad hoc appraisals, inspections, investigations, examinations, reviewsrequested by the AC or senior management, as appropriate.
The internal audit team reports directly to the AC of their ndings, the AC in turn will review their ndingswith management on quarterly basis. The internal audit team will subsequently follow-up to determine the
extent of their recommendations that have been implemented. As such, the internal audit function providesassurance to the Board on the Groups system of internal control.
Relationship with External Auditors
Messrs. PricewaterhouseCoopers is the Companys external auditors. The Board, through the establishmentof the AC, maintains a formal and transparent arrangement with the external auditors.
The roles of the AC in relation to the external auditors is described in the Audit Committee Report on pages27 to 30 of this Annual Report.
ADDITIONAL COMPLIANCE INFORMATION
Share Buy-Back
The Company had at its Thirty-Seventh AGM held on 26 April 2011 obtained the approval of the shareholders
in relation to the Share Buy-Back authority, whereby the Directors are authorised to purchase and/or holdat any point of time up to ten per cent (10%) of the issued and paid-up share capital of the Company for the
time being quoted on Bursa Securities.
For the nancial year ended 31 December 2011, the Company purchased a total of 2,000 shares, all of whichare retained as treasury shares. None of the shares purchased has been sold or cancelled. Details of the
shares bought back are set out below:
DateNo. of
Ordinary SharesMinimumprice paid
(RM)
Maximumprice paid
(RM)
Averageprice paid *
(RM)Consideration *
(RM)
29.04.2011 1,000 1.69 1.69 1.733 1,732.51
09.11.2011 1,000 1.78 1.78 1.823 1,822.54
* Inclusive of transaction costs
As at the date of this statement, the total number of shares purchased by the Company is 845,900 shares andthese shares are presently held as treasury shares.
Statement on Corporate Governance (continued)
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Recurrent Related Party Transactions
The Company had also at the Thirty-Seventh AGM obtained the shareholders mandate to enter into recurrent
related party transactions of a revenue nature, which are necessary for the day-to-day operations on theterms not more favorable to the related party than those available to the public and not to the detriment of
the minority shareholders.
Breakdown of the aggregate value and type of recurrent related party transactions conducted pursuant tothe shareholders mandate for the nancial year ended 31 December 2011 is set out below:
Related Parties Nature of Transactions
Interested Directors/Major Shareholders/
Person ConnectedAggregate Value
(RM)
YHS (Singapore)Pte. Ltd.
(YHSPL), a majorshareholder of
the Company withdirect interest of
61.147% as at 15March 2012
Purchase of nishedgoods by Yeo Hiap
Seng Trading Sdn Bhd(YHST), a wholly-owned
subsidiary of Yeo HiapSeng (Malaysia) Berhad
(YHSM)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Yeo Hiap Seng Limited (YHSL),the penultimate holding companyof the Company through its 100%shareholding in YHSPL
Koh Boon Hwee, a commondirector of YHSL and YHSM
Tjong Yik Min, a common directorof YHSL, YHSPL and YHSM
Ow Tin Nyap, a common director ofYHSL and YHSM
Yap Ng Seng, a common director ofYHSL, YHSPL and YHSM
Pearl Foong Lye Fong, GroupFinancial Controller of YHSL andcommon director of YHSM and YHST
3,226,336.68
Material Contracts
During the nancial year, there were no material contracts entered into by the Company and its subsidiarycompanies which involve Directors and major shareholders interests.
Non-Audit Fees
The details of the non-audit fees paid/payable to the external auditors, PricewaterhouseCoopers for the
nancial year ended 31 December 2011 are set out below:
RM
Review of Interim Financial Information for Quarter 2 of 2011 and other services 40,818.00
This Statement on Corporate Governance is made in accordance with the resolution of the Board of Directorsdated 15 March 2012.
Statement on Corporate Governance (continued)
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Statement on Internal Control
The Board of Directors recognises the importance of a sound system of internal control which consists interalia, risk management, nancial organisational, operational and compliance control to meet the Groupsbusiness objectives, safeguard shareholders investments, the interest of customers, regulators, employees
and the Groups assets. The Groups system of internal control involves all management and personnel fromeach business unit. The Board afrms its overall responsibility for the Groups system of internal control
in determining key strategies and policies for signicant risks and control issues, while management ofthe Group is responsible for the effective implementation of the Boards policies by designing, operating,
monitoring and managing risks and control processes.
For the nancial year ended 31 December 2011, management of the Group continued to assist the Board in
the implementation of the Boards policies and procedures in maintaining a sound system of internal controland risk management. The Audit Committee (AC) and internal auditors continued to provide independent,
objective assurance and consulting services designed to add value and improve the Groups operations. Theinternal auditors help the Group accomplish its objectives by bringing a systematic, disciplined approach in
evaluating and improving the effectiveness of risk management, controls and governance processes.
The Board of Directors is pleased to provide the following statement on the state of internal control of theGroup in accordance with Statement on Internal Control : Guidance for Directors of Public Listed Companiesfor the nancial year ended 31 December 2011.
Internal Control
The Board recognises the importance of a sound system of internal control and acknowledges its ultimateresponsibilities in maintaining the same, which includes the establishment of an appropriate control
environment and risk management framework as well as reviewing, monitoring and ensuring its adequacyand integrity. The Group has a system of internal control designed to address the following areas, in order
to achieve its strategic goals and business objectives, whilst safeguarding its assets and shareholdersinterests:
(i) Governance(ii) Regulations Compliance
(iii) Efcient and Effective Operations(iv) Assets Protection and Safeguarding
(v) Timely and Accurate Reporting
The nature of risks means that events may occur which would give rise to unanticipated or unavoidable
losses and because of the limitations that are inherent in any system of internal control, the Board recognisesthat such system of internal control are designed to manage and control, rather than eliminate the risk offailure to achieve its business objectives. Accordingly, it should be noted that the system of internal control
could therefore only provide reasonable and not absolute assurance against the risk of material errors,misstatement, fraud or losses.
The Groups system of internal control comprises the following key elements:
Board Committees
Clear denitions of functions and responsibilities of the various committees of the Board of Directors.
Control Procedures
Well established policies, procedures and practices are in place to ensure clear accountability and
control procedures for all business units. These policies and procedures are available and accessibleby all employees.
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Organisational Structure and Accountability Levels The Group has a well-dened organisational structure with clear lines of accountability. The delegation
of authority is properly documented and sets out the decisions that need to be taken and the appropriateauthority levels of management, including matters that require Board approval.
Information System
The Group maintains a comprehensive information system which enables transactions to be captured,compiled and reported in an organised manner. The SAP IT system provides management with exception
reports to identify risk areas for appropriate remedial action.
Reporting and Review
There is a strategic planning, annual budgeting and target setting process formulated by managementteam, which comprises the Chief Executive Ofcer, the Deputy Chief Executive Ofcer, the ChiefOperating Ofcer and senior management ofcers (known as the Matrix).
Actual sales performance compared to budget is reported to the Matrix on a daily basis and the Matrix
carries out regular meetings to review nancial results and forecasts for all business units within theGroup, including actual performance against operating plans and annual budgets. The Matrix also
reviews and monitors operational, nancial performance and considers business developments as wellas formulating action plans to address any areas of concern. In addition, quarterly business reviewsand nancial results are prepared and tabled at the Board meetings for review.
Internal Audit and Audit Committee
The internal auditors perform regular examination and evaluation of the adequacy and effectivenessof the Companys governance, system of internal control structure and the quality of managements
performance in carrying out assigned responsibilities to achieve the Companys goals and objectives.The internal auditors reports directly to the AC of their ndings, the AC in turn will review their ndings
with management on quarterly basis. The internal auditors will subsequently follow-up to determinethe extent to which their recommendations have been implemented. As such, the internal auditors
provide assurance to the Board on the effectiveness of the Groups system of internal control.
The AC reports to the Board of Directors on the activities of the internal auditors, signicant ndingsand the necessary recommendations in relation to the adequacy and effectiveness of the system of
internal control and accounting control procedures of the Group.
Risk Management
The Groups operations involve the management of a wide range of risks. A Risk Management Committee
comprising key management team has been set up and is responsible for identifying business risks andin ensuring the implementation of appropriate systems to manage these risks. The Risk Management
Committee which is led by the Deputy Chief Executive Ofcer meets regularly to discuss, review andmonitor strategic and operational matters and reports their ndings and action plans to the Board on
quarterly basis.
Conclusion
The Board is of the view that there is a continuous process in evaluating and managing signicant risksfaced by the Group. Because of the changing circumstances and conditions, the effectiveness of an internal
control system may vary over time. The Board and management will continually evaluate and take measuresto strengthen the internal control environment.
This Statement on Internal Control is made in accordance with the resolution of the Board of Directors dated15 March 2012.
Statement on Internal Control (continued)
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Audit Committee Report
Composition and Meetings
The Audit Committee comprises the following four (4) members, three (3) of whom, including the Chairman,are Independent Non-Executive Directors.
During the year, ve (5) Audit Committee meetings were held and the members attended all the meetings.
Name Status of Directorship Attendance
Dato Mohamed Nizam bin Abdul Razak (Chairman) Independent Non-Executive Director 5/5
Dato N. Sadasivan a/l N.N. Pillay Independent Non-Executive Director 5/5
Razman Hadz bin Abu Zarim Independent Non-Executive Director 5/5
Pearl Foong Lye Fong Non-Independent Non-ExecutiveDirector
5/5
The following terms of reference were reviewed and approved by the Board of Directors on 15 March 2012.
Terms of Reference:
1. Terms of Membership
An independent Audit Committee exists to implement and support the functions of the Board. TheAudit Committee is appointed by the Board of Directors from among the Directors of the Company andconsists of at least three members, all of whom must be non-executive directors. The majority of themembers must be independent directors and at least one member of the committee;
a. must be a member of the Malaysian Institute of Accountants (MIA); or
b. has at least three years working experience andi. has passed the examinations specied in Part I of the First Schedule of the Accountants Act
1967; orii. is a member of one of the associations of accountants specied in Part II of the First Schedule
of the Accountants Act 1967; or
c. fullls such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.
No Alternate Director has been appointed as a member of the Audit Committee. The Chairman ofthe Audit Committee is elected among the members and is an Independent Non-Executive Director.If a member of the Audit Committee resigns, dies or for any reason ceases to be a member with the
result that the number of members is reduced to below three, the Board of Directors shall, withinthree months of that event, appoint such number of new members as may be required to make up theminimum number of three members.
The terms of ofce and performance of the Audit Committee shall be reviewed by the Board of Directorsat least once in every three years to determine whether the Audit Committee and members have carriedout their duties in accordance with their terms of reference.
2. Objectives
The primary objectives of the Audit Committee are:
a. To assist the Board in discharging its responsibilities relating to the Groups and the Companysmanagement of principal risks, internal controls, nancial reporting and compliance of statutoryand legal requirements.
b. To maintain through regularly scheduled meetings, a line of communication between the Board ofDirectors, senior management, internal auditors and external auditors.
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3. Duties and Responsibilities
The duties and responsibilities of the Audit Committee shall be:
With the External Auditors:
a. To review their audit plans;
b. To review their evaluation of the system of internal control;
c. To review their audit reports;
d. To consider the nomination of a person or persons as auditors;
e. To review any letter of resignation from the external auditors of the Company; and
f. To review the assistance given by the employees of the Company to the external auditors.
With the Internal Auditors:
a. To review the adequacy of the scope, functions, competency and resources of the internal auditfunctions and that it has the necessary authority to carry out its work; and
b. To review the internal audit programme, processes, the results of the internal audit programme,processes or investigations undertaken and whether or not appropriate actions are taken on the
recommendations of the internal audit function.
On Financial Reporting:
To review the quarterly results and year-end nancial statements, prior to the approval by the Board of
Directors, focusing particularly on:
i. Changes in or implementation of major accounting policies and practices;ii. Signicant and unusual events;
iii. Signicant adjustments arising from the audit;iv. The going concern assumption; and
v. Compliance with accounting standards and other legal requirements.
On Related Party Transactions:
Any related party transactions that may arise within the Company or the Group.
Other matters:
To review such other functions as may be agreed by the Audit Committee and the Board of Directors.
4. Authority
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 Company and the Group;
Audit Committee Report (continued)
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Audit Committee Report (continued)
4. Authority (continued)
d. Have direct communication channels with the external auditors, internal auditors and person(s)carrying out the internal function or activity;
e. Be able to obtain external professional advice; and
f. Be able to convene meetings with the external auditors, internal auditors or both.
5. Activities of the Audit Committee
In line with the terms of reference, the Audit Committee during the year ended 31 December 2011:
a. reviewed the audit plans of the Company and the Group for the year which were prepared by boththe external and internal auditors;
b. reviewed the audit reports for the Company and the Group prepared by the external and internalauditors, the major ndings by the auditors and the managements responses thereto;
c. reviewed the quarterly and annual reports of the Company and the Group and thereafter submittingthem to the Board for consideration and approval;
d. reviewed the ndings of investigations conducted during the year and the managements responsesthereto;
e. reviewed the related party transactions; and
f. considered and recommended to the Board for approval of the audit fees payable to the externaland internal auditors.
6. Internal Audit Function and its Activities
The internal audit function was performed by a professional rm, Deloitte Enterprise Risk Services SdnBhd and the internal auditors reports directly to the Audit Committee, assisting the Audit Committee indischarge its duties and responsibility. The costs incurred for the internal audit function in respect ofthe nancial year ended 31 December 2011 was RM198,109.25.
The internal audit provides independent, objective assurance and consulting services designed toadd value and improve the Companys operations. Internal audit helps the Company accomplish itsobjectives by bringing a systematic, disciplined approach to evaluating and improving the effectivenessof risk management, controls and governance processes.
The scope of internal audit encompasses the examination and evaluation of the adequacy andeffectiveness of the Company governance, system of internal control structure, and the quality ofperformance in carrying out assigned responsibilities to achieve the Companys stated goals andobjectives.
It includes: Evaluate the relevance, reliability and integrity of nancial and management information; Review systems and operations to assess the extent to which company objectives are achieved
and the adequacy of control activities leading to such achievement; Appraise utilisation of resources with regard to economy, efciency and effectiveness;
Assess the means of safeguarding assets and verify their existence; Ascertain the extent of compliance with established policies, procedures, plans, laws andregulations.
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Audit Committee Report (continued)
6. Internal Audit Function and its Activities (continued)
Internal auditors also perform ad hoc appraisals, inspections, investigations, examinations, reviewsrequested by the Audit Committee or senior management, as appropriate.
7. Meetings and Minutes
a. Audit Committee meetings are held not fewer than four times a year. Internal auditors and externalauditors may attend the meetings upon the invitation of the Audit Committee.
b. At least twice a year, the Audit Committee shall meet the external auditors without the presenceof any executive directors and management of the Company. There is a continuous engagement,both formal and informal, between the Chairman of the Audit Committee and the General Manager
of Finance of the Company, as well as the external auditors, in order for the Audit Committee to bekept informed of matters affecting the Company.
c. To form a quorum, a majority of members present must be independent directors.
d. Minutes of each meeting shall be kept and distributed to each member of the Audit Committee.
e. The Chairman of the Audit Committee shall report on each meeting to the Board.
f. The Secretary to the Audit Committee shall be the Company Secretary.
g. Detailed audit reports by the internal auditors and the respective management responses arecirculated to the members of the Audit Committee before each meeting at which the said reports
are tabled.
Directors Responsibilities Statement
The Directors are required by the Companies Act, 1965 (the Act) to prepare nancial statements for each
nancial year, which give a true and fair view of the state of affairs of the Group and of the Company at the
end of the nancial year and of the results and cash ows of the Group and the Company for the nancialyear then ended.
The Directors afrm that in preparing the nancial statements for the nancial year ended 31 December2011 set out on pages 41 to 115, the Group used certain critical accounting estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thedate of the nancial statements, and the reported amounts of revenues and expenses during the reported
nancial year in accordance with the provision of Companies Act, 1965 and MASB Approved AccountingStandards in Malaysia for Entities Other than Private Entities. Although these estimates and judgment are
based on the Directors best knowledge of currents events and actions, actual results may differ as theDirectors exercised their judgment in the process of applying the Groups accounting policies.
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Group Property Particulars
Listed below are the particulars of the properties referred to in Notes 14, 15, 19 and 21 to the Financial Statements.Location of
PropertyBrief
DescriptionApproximate
Land Area(sq. ft.)
Tenure Date ofAcquisition
ApproximateAge of
Building(years)*
Net BookValue as at31.12.2011(RM000)
Corporate Ofce and Factories
1. 7, Jalan Tandang,Petaling Jaya,Selangor
CorporateOfce, Factory
and TradingWarehouse
125,235 99 years leaseexpiring in year
2058
8.9.1977 52 1,902
2. Lots 191 & 121,
Shah AlamIndustrial Estate,Shah Alam
Factory and
TradingWarehouse
428,140 99 years lease
expiring in year2074 and 2073
respectively
5.11.1981
&27.12.1983
30 1,768
3. Lot 66134, Districtof Kinta, Perak
Factory andTrading
Warehouse
264,209 60 years leaseexpiring in year
2033
9.1.1989 40
498
4. Lot 154475, Districtof Kinta, Perak
Factory andTrading
Warehouse
52,554 60 years leaseexpiring in year
2048
30.11.1988 40
5. Lot 65644, Districtof Kinta, Perak
Factory andTrading
Warehouse
218,876 60 years leaseexpiring in year
2033
11.4.1994 40
1,120
6. Lot 154474, Districtof Kinta, Perak
Factory andTrading
Warehouse
65,659 60 years leaseexpiring in year
2048
12.1.1996 40
7. H.S. (M) 2458(formerly knownas Lot 1151-1154),Mukim of Plentong,Johor
Factory andTrading
Warehouse
298,769 Interest inperpetuitysubject to
payment ofannual rent
6.12.1990 41 6,404
8. Lot 2050 (formerlyknown as Lots1340-1346) Sec.66,
Kuching, Sarawak
Factory andTrading
Warehouse
144,550 60 years leaseexpiring in year
2027
12.11.1984 26 238
Trading Warehouses
9. Lots 24, 29-31 MIELIndustrial EstatePrai
TradingWarehouse
85,895 99 years leaseexpiring in year
2071
29.9.1972&
20.3.1978
34 300
10. Lot PT 645-650,Mukim Panchor,Daerah KemuminKota Bharu,Kelantan
TradingWarehouse
52,830 66 years leaseexpiring in year
2048
3.11.1993 16 680
11. Lot 147A, Kawasan
PerindustrianSemambu, Kuantan,Pahang
Trading
Warehouse
209,611 66 years lease
expiring in year2046
4.11.1980 29 277
* The approximate age of building denotes the age of the oldest building.
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Group Property Particulars (continued)
Location ofProperty
BriefDescription
ApproximateLand Area
(sq. ft.)
Tenure Date ofAcquisition
ApproximateAge of
Building(years)*
Net BookValue as at31.12.2011(RM000)
12. Lots K-70 &71, TemerluhIndustrial Park(Phase One)Mentakab
TradingWarehouse
43,560 Freehold Land 25.9.1995 15 709
13. Lot 1347, Sec.66,Kuching, Sarawak
TradingWarehouse
213,836 60 years leaseexpiring inyear 2027
7.9.1996 14
2,564
14. Lot 1348, Sec.66,Kuching, Sarawak
TradingWarehouse
102,279 60 years leaseexpiring inyear 2027
7.9.1996 15
15. Lot 30, Block 19,SeduanLand District,Sibu, Sarawak
TradingWarehouse
65,732 60 years leaseexpiring inyear 2039
4.4.1979 31 137
16. Lot 4183 (formerlyknown 1732-1750)Block 5, LambirLand District, Miri,Sarawak
TradingWarehouse
95,347 60 years leaseexpiring inyear 2054
29.8.1994 16 1,306
17. Lot 71, SedcoIndustrial Estate,Kota Kinabalu,Sabah
TradingWarehouse
56,350 60 years leaseexpiring inyear 2034
20.9.1990 20 529
Vacant Land
18. Mukim of Ulu Kintaand Sungei Raja,Perak
FarmingLands
11,288,138 17 lots freehold,3 lots with 60years lease
expiring in year2045
5.11.1985 37 624
19. Lot 6843 (PT 2987),
Mukim Bidor,Daerah BatangPadang, Perak
Industrial
Land
2,178,000 99 years lease
expiring in year2094
15.3.1996 -
6,300
20. PT 2988, MukimBidor, DaerahBatang Padang,Perak
IndustrialLand
2,093,930 99 years leaseexpiring in year
2094
29.6.1996 -
21. District of Kluang,Mukim SungaiBenut Johor
IndustrialLand
4,523,096 Interest inperpetuity
10.11.1994 - 9,048
22. Lot 1632, KemenaLand District,
Bintulu, Sarawak
IndustrialLand
60,084 60 years leaseexpiring in
year 2058
8.7.1998 - 347
34,751
* The approximate age of building denotes the age of the oldest building.
}
}
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FINANCIAL STATEMENTS
34 Directors Report
38 Statement by Directors
38 Statutory Declaration
39 Independent Auditors Report
41 Statements of Comprehensive Income
43 Statements of Financial Position
45 Consolidated Statement of Changes in Equity
47 Statement of Changes in Equity
49 Statements of Cash Flows
51 Notes to the Financial Statements
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Directors Report
The Directors have pleasure in submitting their annual report together with the audited nancial statementsof the Group and the Company for the nancial year ended 31 December 2011.
PRINCIPAL ACTIVITIES
The Company is principally involved in the production, marketing and sale of beverage and food products.
The principal activities of the subsidiaries are shown in Note 16 to the nancial statements.
There have been no signicant changes in the nature of these activities of the Group and the Company duringthe nancial year.FINANCIAL RESULTS
Group Company
RM000 RM000
Prot for the nancial year 24,988 25,154
Attributable to:
Equity holders of the Company 24,983 25,154
Non-controlling interest 5 -
24,988 25,154
DIVIDENDS
The dividends on ordinary shares paid or declared by the Company since 31 December 2010 were as follows:
RM000
In respect of the nancial year ended 31 December 2010 as shownin the Directors report of that nancial year:
Final gross dividend of 9 sen per share, less income tax of 25%, paid on 8 July 2011 10,307
In respect of the nancial year ended 31 December 2011:
Interim gross dividend of 3 sen per share, less income tax of 25%, paid on 12 October 2011 3,436
13,743
The Directors now reco