Embed Size (px)
Citation preview
PW CONSOLIDATED BHD (420049-H)
Contents
02
07
16
22
26
7774
03
09
20
23
29 71
78
04
12
20
24
72
79
05
14
21
25
Corporate Information
Chairman’s Statement
Directors’ Report
Statements Of Financial Position
Statements Of Cash Flows
Notes To The Financial Statements
SupplementaryInformation
Statement Accompanying Notice of Annual General Meeting
Notice of Annual General Meeting
Corporate Structure
Corporate Governance Statement
Directors’ Statement
Statements Of Comprehensive Income
Additional Compliance Information
Financial Highlights
Statement On Internal Control
Statutory Declaration
Consolidated Statement Of Changes In Equity
Shareholdings Statistics
List Of Material Properties Of The Group
Directors’ Profile
Audit Committee Report
Independent Auditors’ Report To The Members
Statement Of Changes In Equity
Proxy Form
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
02 Corporate Information
SECRETARY CH’NG LAY HOON
AUDIT COMMITTEE
ONG KIM NAM (CHAIRMAN)CHEE WAI HONG (MEMBER)SHAMSUDDIN BIN MOHD SALLEH (MEMBER)
REGISTERED OFFICE
SUITE 12-A LEVEL 12MENARA NORTHAMNO. 55 JALAN SULTAN AHMAD SHAH10050 PENANGTEL : 04 - 228 0511FAX : 04 - 228 0518
BUSINESS ADDRESS PLOT 127, JALAN PERINDUSTRIAN BUKIT MINYAK 7TAMAN PERINDUSTRIAN BUKIT MINYAK14100 BUKIT MERTAJAMSEBERANG PERAI TENGAH, PENANG
SHARE REGISTRAR SYMPHONY SHARE REGISTRARS SDN. BHD. LEVEL 6, SYMPHONY HOUSEBLOCK D13, PUSAT DAGANGAN DANA 1JALAN PJU 1A/4647301 PETALING JAYASELANGORTEL : 603 - 7841 8000FAX : 603 - 7841 8008
AUDITORS
GRANT THORNTONCHARTERED ACCOUNTANTS
PRINCIPAL BANKERS
CIMB BANK BERHADMALAYAN BANKING BERHADHONG LEONG BANK BERHADBANGKOK BANK BERHADRHB BANK BERHADBANK OF CHINA (MALAYSIA) BERHADALLIANCE BANK MALAYSIA BERHADOCBC BANK (MALAYSIA) BERHADPUBLIC BANK BERHADUNITED OVERSEAS BANK (MALAYSIA) BHD
SOLICITORS
GAN TEIK CHEE & HOLOH HAN MENG & CO.
STOCK EXCHANGE LISTING
MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHADSTOCK NAME : PWSTOCK CODE : 7134
DIRECTORS
DATO’ SIAH GIM ENG (EXECUTIVE CHAIRMAN & MANAGING DIRECTOR)
DATIN LAW HOOI LEAN (DEPUTY MANAGING DIRECTOR)
LIONG JOON CHOOW (EXECUTIVE DIRECTOR)
ZAINAL BIN PANDAK (NON-INDEPENDENT NON-EXECUTIVE DIRECTOR)
CHEE WAI HONG (INDEPENDENT NON-EXECUTIVE DIRECTOR)
ONG KIM NAM (INDEPENDENT NON-EXECUTIVE DIRECTOR)
SHAMSUDDIN BIN MOHD SALLEH (INDEPENDENT NON-EXECUTIVE DIRECTOR)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
03Corporate StructureAs At 30 April 2012
PW CONSOLIDATED BHD.(420049-H)
PW NUTRIFEED SDN. BHD.(37629-M)
PW NUTRI EGGS SDN. BHD. (613817-M)
formerly known as PW Livestock (M) Sdn. Bhd.
PINWEE DUCK FARMS SDN. BHD. (752833-H)
PW NUTRIFARM CORPORATION SDN. BHD.(149054-P)
EVERAY AGRITECHSDN. BHD.(451057-H)
PW NUTRIFARM VENTURE SDN. BHD. (208636-P)
PW BREEDER FARM(TAIPING) SDN. BHD.
(346545-D)
PINWEE FOOD PROCESSING SDN. BHD. (541912-X)
PW NUTRI PROCESSING SDN. BHD.(668698-A)
PW TYRES & AUTO SERVICE SDN. BHD.
(750417-M)
PW PROPERTIES SDN. BHD.
(736271-D)
PW NUTRI BREEDER FARM SDN. BHD.(559277-W)
formerly known asPinWee Breeder Farm (Malacca) Sdn. Bhd.
PINWEE CHICKEN TRADING SDN. BHD. (594854-W)
100%
100% 100%
100%100%
100%100%
100%100%
100%80%20%
100% 100%
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
04 Five Years Group Financial Highlights
FINANCIAL YEAR ENDED
(Restated)December
2007
(Restated)December
2008
(Restated)December
2009
(Restated)December
2010December
2011
^ Revenue 298,748,068 315,333,747 244,204,489 257,088,737 264,380,844
Shareholders' fund 129,567,365 127,596,569 127,707,859 127,870,251 130,115,630
^ Earnings before interest, tax, depreciation and amortisation (EBITDA)
25,725,671 23,212,941 21,355,813 28,098,072 29,156,577
^ Profit Before Taxation 8,815,586 2,758,698 3,379,042 6,650,709 5,962,453
Net assets per share (RM) 2.17 2.13 2.14 2.14 2.18
Earnings per share (sen) 8.76 1.70 0.19 0.27 7.82
^ For comparison purposes, the comparative figures have been restated to reflect only the results from continuing operations of the Group.
2007 2008 2009 2010 2011
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
29
8,7
48
,06
8
31
5,3
33
,74
7
24
4,2
04
,48
9
25
7,0
88
,73
7
26
4,3
80
,84
4
Revenue (RM)
2007 2008 2009 2010 2011
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
12
9,5
67
,36
5
12
7,5
96
,56
9
12
7,7
07
,85
9
12
7,8
70
,25
1
13
0,1
15
,63
0
Shareholders' fund (RM)
2007 2008 2009 2010 2011
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
25
,72
5,6
71
23
,212
,94
1
21
,35
5,8
13
28
,09
8,0
72
29
,15
6,5
77
EBITDA (RM)
2007 2008 2009 2010 2011
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
8,8
15
,58
6
2,7
58,6
98
3,3
79
,04
2
6,6
50
,70
9
5,9
62
,45
3
Profit Before Taxation (RM)
2007 2008 2009 2010 2011
0.0
0.5
1.0
1.5
2.0
2.5
2.1
7
2.1
3
2.1
4
2.1
4
2.1
8
Net assets per share (RM)
2007 2008 2009 2010 2011
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
8.7
6
1.7
0
0.1
9
0.2
7
7.8
2
Earnings per share (Sen)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
05Directors’ Profile
DATO’ SIAH GIM ENGDATO’ SIAH GIM ENG, a Malaysian, aged 53, the co-founder of the Company, was appointed as the Executive Chairman and Managing Director of the Company on 12 May 2001. He is the driving force in the formulation and implementation of the Group’s corporate strategy. With more than 30 years of experience in the feedmilling and poultry farming industry, his entrepreneurial skills have steered the company from a small establishment to become one of the leading feedmill and farming group in the Northern region of Malaysia. He is the husband of Datin Law Hooi Lean, the Deputy Managing Director and the major shareholder of the Company.
He has attended all the five (5) Board Meetings of the Company held during the financial year ended 31 December 2011.
DATIN LAW HOOI LEANDATIN LAW HOOI LEAN, a Malaysian, aged 51, holds a Master Degree in Business Administration from University of Ballarat, Australia. She is a member of New Zealand Institute of Management. She is also a Fellow of The Society for Professional Management, UK; Certified Professional Manager from The Society of Business Practitioners (SBP), UK. She was appointed as the Deputy Managing Director of the Company on 12 May 2001. She is primarily involved in the business development process, strategic planning, providing directions and overseeing the adminstration of finance function of the Group. With more than 20 years experience in the area of financial accounting and company management, she has been instrumental in ensuring the smooth running of the day to day operation of the Company. She is the wife of Dato’ Siah Gim Eng, the Executive Chairman and Managing Director and the major shareholder of the Company.
She has attended four (4) of the five (5) Board Meetings of the Company held during the financial year ended 31 December 2011.
LIONG JOON CHOOWLIONG JOON CHOOW, a Malaysian, aged 39, was appointed as the Executive Director of the Company on 19 December 2011. He holds a Master Degree (Major in Accounting) from University of Aberdeen, United Kingdom. He was attached with Alcamax Printer Sdn. Bhd. and Millplex Corporation Sdn. Bhd. prior to joining PW Nutrifeed Sdn. Bhd., a wholly owned subsidiary of the Company, as the Finance Manager in 2001.
There is no Board’s Meeting held after his appointment as the Executive Director of the Company.
ZAINAL BIN PANDAKZAINAL BIN PANDAK, a Malaysian, aged 54, was appointed as a Non-Independent Non-Executive Director of the Company on 19
December 2011. He holds a Diploma in Business Administration from University Technology of Mara. He was the Assistant Director of the Inland Revenue Board. Currently, he is the Business Development and Communication Consultant of Imatera Digital Imagine Services Sdn. Bhd.
There is no Board’s Meeting held after his appointment as the Non-Independent Non-Executive Director of the Company.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
06 Directors’ Profile (Cont’d)
ALLEN CHEE WAI HONGALLEN CHEE WAI HONG, a Malaysian, aged 39, was appointed as an Executive Director of the Company on 12 May 2001 and was re-designated to Non-Independent Non-Executive Director on 22 January 2009 and thereafter as Independent Non-Executive Director on 27 April 2011. He is a qualified Advocate and Solicitor and a member of the Malaysian Bar. He is also a Fellow member of Association of Chartered Certified Accountants (United Kingdom) and a member of the Malaysian Institute of Accountants. Mr. Allen Chee holds an LL.B Honours Degree from University of London, United Kingdom and a Master Degree in Business Administration from Universiti Utara Malaysia. He is now a partner of a public practice in Penang.
He also sits on the Board of Seal Incorporated Berhad, a company listed on the Bursa Malaysia Securities Berhad and several other private limited companies.
He has attended all the five (5) Board Meetings of the Company held during the financial year ended 31 December 2011. He is a member of the Audit Committee, the Remuneration Committee, the Nominating Committee and the Option Committee.
ONG KIM NAMONG KIM NAM, a Malaysian, aged 56, was appointed as an Independent Non-Executive Director on 12 May 2001. A Chartered Accountants by profession, he is a member of Malaysian Institute of Accountants and Association of Chartered Certified Accountants. He has over 20 years of experience in the field of auditing, accounting and taxation. Presently he is the sole practitioner of O.K.Nam Associates, a firm of Chartered Accountants, which is based in Penang. He is a Independent Non-Executive Director of Eng Kah Corporation Berhad, a company listed on Main Market of Bursa Malaysia Securities Berhad.
He has attended all the five (5) Board Meetings of the Company held during the financial year ended 31 December 2011. He is the Chairman of the Audit Committee, a member of the Remuneration Committee and the Nominating Committee.
SHAMSUDDIN BIN MOHD. SALLEHSHAMSUDDIN BIN MOHD. SALLEH, a Malaysian, aged 53, was appointed as an Independent Non-Executive Director on 12 May 2001. In his career spanning over 30 years with various companies including Loytape Bhd., Central Industries Corporation Bhd., American All-Seasons Sdn. Bhd. and Superbox (M) Sdn. Bhd., he has garnered experience in the area of administration and personnel, sales and marketing within the manufacturing and agriculture industries. This enables him to participate actively in the overall operation matters of the Company and as a whole, contribute positively towards the growth of the Company. Presently, as a Managing Director of Ivory Choice Sdn Bhd and Sagarena Sdn Bhd, Encik Shamsuddin has spread his wing by venturing into property industry and employment agency. He also sits on the Board of Director of several other private limited companies.
He has attended all the five (5) Board Meetings of the Company held during the financial year ended 31 December 2011. He is the Chairman of the Remuneration Committee, the Nominating Committee and Option Committee and a member of the Audit Committee.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
07Chairman’s Statement
On behalf of the Board of Directors, I have pleasure in presenting the Annual Report and the Audited Financial Statement of the Group and of the Company for the financial year ended 31 December 2011.
Group PerformanceThe Group posted an increase of 2.8% in revenue to RM264.4 million as its poultry segment profited from higher selling price of broiler during the financial year ended 31 December 2011. Raw material cost was generally at a significantly higher level throughout the year compared with preceding year driven up mainly by the persistent high global demand for agricultural commodities. Despite rising raw material cost, the Group managed to attain 5% increase in gross profit from preceding period via proactive cost control, solid farm performance and high selling price of broiler. Nevertheless, operating profit and profit before tax from continuing operations for the year was comparatively lower compared with preceding financial year mainly due to larger gains on disposal of assets in the preceding financial year. Profit for the period showed marked improvement from preceding financial year after having accounted for the impact of operating losses in discontinued operation in the preceding period. In line with the overall improved performance, earnings per share attributable to shareholder for financial year (FY) 2011 has increased to 7.82 sen from 0.27 sen recorded in the preceding financial year.
During the year under review, we have also strengthened our financial position through more effective credit control and reduction in our borrowing level. Total borrowing was reduced by 17.6% to RM85 million from RM103 million at the end of preceding financial year while gearing ratio was lower by 19.3% decreasing from 0.79 to 0.64.
Corporate DevelopmentThe Group struck off its wholly owned subsidiaries namely PinWee Breeder Farms Sdn. Bhd. and PinWee Layer Farm Sdn. Bhd. during the financial year. Both companies have not commenced operation since incorporation and therefore the strike-off has no material financial effect on the earnings and net assets of the Group for the financial year ended 31 December 2011.
ProspectFacing an uncertain global economy brought about by deepening Euro zone sovereign debt crisis and weaker growth in major economies, the Malaysian economy will be dependent on domestic spending and public investment to maintain its growth. Nevertheless, recent survey on consumer sentiment and employment outlook in the first quarter of 2012 has been encouraging. On the supply side, we are mindful of possible upward swing of agricultural commodity prices. All in all, the consensus is that the growth for Malaysia should fall in the range of 4-5% for FY2012; this couples with the resilient nature of our poultry business should see us coping well in the treacherous water of FY2012.
The year 2012 will marks another milestone for the Group when our new layer farm commences operation. The Group is optimistic about the long term prospect and our competitive advantage in the layer business as we are able to leverage on our expertise and experience in broiler farming. We are confident this new venture will expand our earning base, diversify our income source and have a positive contribution to the Group’s bottom line in the coming years. The Group has also been continuously rationalizing its operation by amalgamating its business activities to enhance management efficiency and effectiveness. Following this, efforts are underway to merge and integrate the management and operations of breeder farms.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
08 Chairman’s Statement (Cont’d)
DividendIn view of the interim tax exempt dividend of 4 sen per share paid during the year, the Board did not recommend additional dividend for financial year 2011.
AcknowledgementOn behalf of the Board, I would like to thank our shareholders, customers and suppliers, business partners, bankers and government authorities for your support and trust in us. Your continuing support is vital to the success of our Group. To our colleagues at all level of the company, our deepest appreciation for your hard work, dedication and commitment that have contributed immensely to the growth and success of our businesses.
Dato’ Siah Gim EngExecutive Chairman
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
09Corporate Governance Statement
The Board of Directors is committed to maintaining high standard of corporate governance throughout the group. This practice of good corporate governance is fundamental to the performance of duty and responsibilities of the Directors in enhancing shareholder value and safeguarding stakeholder interest of the Group.
The corporate governance practiced by the Group is consistent with the principles and best practices set out in the Malaysian Code on Corporate Governance (“Code”). This statement reports on the compliance with the Code by the Company throughout the financial year ended 31 December 2011.
Board of DirectorsThe Board is primarily entrusted with the responsibility of setting the goals and strategic direction of the Group. The Board oversees the operation of the Group’s business and ensuring effective system of control and risk management are in place through identifying and appraisal of risk within the Group. These controls are essential in minimizing the risk exposure of the Group.
Board CompositionThe Board is currently comprised of three Executive Directors, one Non-Executive Director and three Independent Non-Executive Directors. Hence, the Board’s composition meets the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”)(“Listing Requirements”) of having at least one-third (1/3) of the membership of the Board comprising independent directors. The wealth of knowledge, skills and experience of the Board members gives added strength to the leadership that is necessary for the effective stewardship of the Group.
The Board has clear division of responsibility and is balance in terms of power and authority. The Executive Directors are responsible for making and implementing operational decisions whilst Independent Non-Executive Directors are independent of the management and are free from any relationship that could materially interfere with the exercise of their independent judgment. Together, they play an important role in ensuring that the strategies proposed by the management are fully deliberated and examined, taking into account the interest of shareholders, employees, customers, suppliers and the many communities in which the Group conducts its business.
Board MeetingThe Board meets on a quarterly basis and additionally as and when required, with a formal schedule of matters specifically reserved for the Board’s deliberation and decision. During the financial year under review, five (5) Board meetings were held and all the Directors have complied with the requirements in respect of board meeting attendance as provided in the Articles of Association.
Siah Gim Eng 5/5Law Hooi Lean 4/5Liong Joon Choow (appointed on 19.12.11) - *Chee Wai Hong 5/5Ong Kim Nam 5/5Shamsuddin Bin Mohd Salleh 5/5Zainal Bin Pandak (appointed on 19.12.11) - *Boey Goey Gnoh (resigned on 4.7.11) 3/3
* No Board’s meeting was held since their appointment to the financial year ended 31 December 2011.
BOARD BALANCE
Supply and Access to InformationThe Directors have full and unrestricted access to all information pertaining to the Group’s business and affairs, whether collectively or in their individual capacity, to enable them to discharge their duties. There are matters specifically reserved for the Board’s decision to ensure that the direction and control of the Group is firmly in its hands. Prior to the Board meetings, the Directors are provided with the agenda together with Board papers containing relevant reports and information.
All Directors have access to the advice and the services of the Company Secretaries and under appropriate circumstances may obtain independent professional advice at the Company’s expense, in furtherance of their duties.
Appointment to the BoardThe Board had established a Nominating Committee which is responsible for the review and assessment of the skills, experience, size and composition of the Board on an ongoing basis to ensure effectiveness of the Board and the contribution of each director. The Nominating Committee is also responsible for assessing the suitability of proposed candidates for directorships and making recommendations to the Board on new appointments including Board Committees.
The Nominating Committee consists wholly of Non-Executive and Independent Directors. The Committee is chaired by Encik Shamsuddin Bin Mohd Salleh and the other members Mr. Ong Kim Nam and Mr. Allen Chee Wai Hong. The Committee had one (1) meeting during the financial year.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
10 Corporate Governance Statement (Cont’d)
Re-electionIn accordance with the provisions of the Articles of Association of the Company, all directors are subject to retirement from office at least once in every three (3) years, but shall be eligible for re-election. The Articles also provide that any Director appointed during the year is required to retire and seek re-election at the following Annual General Meeting immediately after such appointment.
Directors TrainingAll Directors have completed the Mandatory Accreditation Programme (“MAP”) and the Continuing Education Programme (“CEP”) as required by Bursa Malaysia Securities Berhad. The Company continues to identify suitable training programme for the enhancement of Directors’ skill and knowledge from time to time.
DIRECTORS' REMUNERATIONThe Level and Make-up of RemunerationThe remuneration framework for Executive Directors has an underlying objective of attracting and retaining directors needed to run the Company successfully. Remuneration packages of Executive Directors are structured to commensurate with corporate and the individual’s performance. In respect of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the individual concerned.
ProcedureThe Board had established a Remuneration Committee to review and recommend to the Board the remuneration package of the Executive Directors and the determination of remuneration packages of non-executives is a matter for consideration by the Board as a whole. The individuals concerned are required to abstain from discussions pertaining to their own remuneration packages.
The Remuneration Committee is comprised of Non-Executive Directors and is chaired by Encik Shamsuddin Bin Mohd Salleh. The other members include Mr. Ong Kim Nam and Mr. Allen Chee Wai Hong. The Committee met once (1) during the financial year.
DisclosureDetails of the Directors’ remuneration for the financial year ended 31 December 2011 are as follow:
The aggregate remuneration of Directors categorized into appropriate components.
Fees
Salaries, Allowances and Bonus Others Total
RM RM RM RM
Executive 81,000 1,665,137 46,250 1,792,387
Non-Executive 90,000 27,500 - 117,500
171,000 1,692,637 46,250 1,909,887
The number of Directors whose total remuneration falls within the following bands.
Range of Remuneration (RM) Executive Non-executive
0 - 50,000 - 3
100,001 - 200,000 1 -
600,000 - 800,000 1 -
1,000,001 - 1,100,000 1 -
3 3
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
11Corporate Governance Statement (Cont’d)
SHAREHOLDERSDialogue between Company and InvestorsThe Board recognizes the importance of timely and equal dissemination of information to shareholders on the Group’s performance and direction. Communication with investor is effected through timely release of information on the Group’s corporate proposal, financial results and other material information to the public.
Information and news on the Company’s operation are also made available to investors and shareholders through the Company's website at www.pwconsolidated.com.
The Annual General Meeting (“AGM”)The Company’s AGM serves as a forum for dialogue with shareholders. At each AGM, the Chairman of the Board briefs the shareholders on the progress and performance of the business of the Group. The status of all resolutions proposed at the AGM is submitted to Bursa Malaysia Securities Berhad at the end of the meeting day. Apart from contact at general meetings, there is no formal program or schedule of meetings with investors, shareholders, stakeholders and the public generally. However, the Management has the option of calling for meetings with investors/analysts if deemed necessary. Thus far, the Management is of the opinion that this arrangement has been satisfactory to all parties.
ACCOUNTABILITY AND AUDITFinancial ReportingThe Board is aware of its responsibilities to shareholders and the requirement to present a balanced and comprehensive assessment of the Group’s financial position by means of the annual and quarterly reports and other published information. In this regard, the Board is responsible for the preparation of financial statements by applying the appropriate accounting policies and prudent estimates that present a fair and balanced report of the financial state of affairs of the Group in accordance with the provisions in the Companies Act, 1965 and applicable approved accounting standards.
Internal ControlThe Statement on Internal Control as set out on pages 12 and 13 of this Annual Report provides an overview of the state of internal controls within the Group.
Relationship with the AuditorsThe Board through the establishment of an Audit Committee maintains a formal and transparent relationship with the Group’s Auditors. The roles of the Audit Committee in relation to the Auditors are detailed on pages 14 and 15 of the Audit Committee Report in the Annual Report.
Corporate Social ResponsibilityOne of the PW Group’s missions is to produce quality and safe product for the Malaysian public. We believe that only by ensuring the sustainability of our operating environment can our long term success and our mission be achieved. In fact many of the practices and policies we implemented in the pursuit of economic benefit and excellence, and the goal of being a socially responsible corporate citizen are congruent.
The company utilizes modern farming technique in the operation and management of all broiler farms with strict implementation of bio security measure. All broiler farms are equipped with automated drinking system and semi automated feeding system with silo thereby reducing human contact. Feed performance are constantly monitored and feed back to the group’s feed mill for quality improvement and control purpose. Feed is formulated using ingredient and additive which will not result in chemical residue in the final product. The application of ‘green’ concept begin with the formulation of feed in the Group’s feed mill where it contain fiber and nutrient that reduce ammonia content in poultry excretion which results in reduction in ammonia gas released to the detriment of the flocks health and improved fly control. The broilers are almost totally on vegetarian diet thereby eliminating the use of fishmeal which could contribute to the problem of over fishing. In addition, the substitution of fishmeal with other ingredient also reduces the risk of E.Coli and Salmonella contamination.
The company is also moving toward converting existing open house chicken coops to close house system which is expected to significantly increase farm productivity, further enhancing bio-security and reducing pollution to surrounding area. To produce safe poultry meat to the consumer, comprehensive vaccination program under scrutiny of qualified veterinarian is in place and the use of hormone is prohibited and antibiotic is only allowed in treatment of sick birds. The company’s practice also emphasis the welfare of the poultry and all poultry are treated as humanely as possible especially during handling and transporting.
The group is adopting and committed to the usage of clean technology and environment safe practice as part of its corporate social responsibilities. The areas we focus on are resource conservation; including water conservation and energy conservation, waste reduction, waste treatment and recycling, usage of environmental safe and biodegradable product.
PW group is an equal opportunity employer that practice meritocracy and the welfare of our work force are high in our agenda where we also provide ample opportunities and incentives for employee’s skill and personal development.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
12 Statement On Internal Control
Introduction
The Board acknowledges the importance of maintaining a sound system of internal control and is committed to maintain a system of internal control and risk management structure that is effective in safeguarding shareholders’ investment and the Group’s asset consistent with the requirements of the Malaysian Code of Corporate Governance.
This Statement on Internal Control is made pursuant to paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad, which requires Directors of Malaysian public listed companies to make a statement about their state of internal control within the Group, in their Annual Report.
Board’s Responsibility
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness whilst the role of Management is to implement the Board’s policies on risk and control. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against material misstatement or loss. The Board confirms that there is a continuous process for identifying, evaluating and managing the significant risks that may materially affect the achievement of the Group’s corporate objectives. The Board will continue to review and enhance the process periodically so as to ensure sustainability.
Risk Management Framework
The Board maintains continuous commitment in strengthening the Group’s risk management framework and processes. Day-to-day risk management of the individual operating unit is delegated to the executive directors and senior management of the respective business units. In this regard, the executive directors are responsible for timely identification of the Group’s risks at each business unit and reviewing the effectiveness of the implementation of risk mitigation actions which shall be carried out by the senior management. Periodic meetings are held to assess and monitor the Group’s risk as well as discuss, deliberate and appropriately address matters associated with strategic, financial and operational facets of the Group. Any significant weaknesses identified during the review together with the improvement measures to strengthen the internal controls are brought to the attention of the Board for further deliberation and discussion.
Internal Audit Function
Internal audits are undertaken to provide independent assessments on the adequacy, efficiency and effectiveness of the Group’s internal control systems.
The Group’s internal audit function is outsourced to an independent audit firm which reports directly to the Audit Committee. The outsourced audit firm performs regular audits based on an annual internal audit plan which is approved by the Audit Committee. The primary objective of the internal audit function is to assess the effectiveness of the internal controls and highlight significant potential risks that may affect the Group. The Audit Committee conducts annual review on the adequacy of the internal audit firm’s scope of work and resources. The Audit Committee regularly reviews the internal auditor’s reports and will discuss the issues highlighted with the Management to ensure corrective actions are implemented accordingly.
Other Key Elements of Internal Control
The following key elements of a system of internal control are present in the Group:
(a) Control Environment
The Group has an organisational structure for planning, controlling and monitoring business operations in order to achieve the Group’s objective. Management of each operating unit has clear responsibility for identifying risk affecting their unit and the overall Group’s business as a whole. They are also charged with instituting adequate procedures and internal controls to mitigate and monitor such risks on an ongoing basis.
(b) Audit Committee
An Audit Committee, comprising a majority of independent non-executive directors was maintained throughout the financial year. The composition of the Audit Committee brings a wide range of experience, knowledge and expertise. The Audit Committee is entrusted to review the effectiveness of the internal audit function with particular emphasis on the scope and quality of audits, resources as well as the independence of the internal auditor.
They continue to meet regularly and have full and unimpeded access to both the internal and external auditors and all employees of the Group.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
13Statement On Internal Control (Cont’d)
Other Key Elements of Internal Control (cont’d)
(c) Policies and Procedures
Company policies and procedures are established and regularly updated to achieve internal controls objective as well as to adhere to our industry’s standards and regulations. Communications with all relevant parties are frequently held to ensure greater awareness and proper adherence to the Company’s policies and procedures.
Weakness in Internal Controls That Result in Material Losses
Based on the findings of the internal auditors’ report for the financial year ended 31 December 2011, the Board is of the opinion that the general system of internal control is adequate and appeared to be working satisfactorily. A number of trivial internal control weaknesses were identified during the year, all of which have been, or are being, addressed by Management. There were no material losses, contingencies or uncertainties incurred during the financial year as a result of weakness in internal control.
The Board is committed to put in more appropriate action plans, to ensure that the internal control system could continuously evolve to support the type of business and size of the operations of the Group.
The total costs incurred in managing the internal audit function for the financial year ended 31 December 2011 were approximately RM14,840.
This statement is issued in accordance with a resolution of the Directors dated 30 May 2012.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
14 Audit Committee Report
The Board is pleased to present the Audit Committee Report for the financial year ended 31 December 2011. The Audit Committee was established on May 2001.
MEMBERS AND MEETINGSMembers of the Audit Committee are as follows:-
Name DesignationOng Kim Nam Chairman/Independent Non-Executive DirectorShamsuddin Bin Mohd. Salleh Independent Non-Executive DirectorAllen Chee Wai Hong Independent Non-Executive Director
There were five (5) Audit Committee meetings held during the financial year ended 31 December 2011. The details of the attendance of the Audit Committee members are as follows:
Name AttendanceOng Kim Nam 5/5Shamsuddin Bin Mohd. Salleh 5/5Allen Chee Wai Hong 5/5
SUMMARY OF ACTIVITIES The Audit Committee carried out its duties in accordance with its Terms of Reference. During the financial year ended 31 December 2011, the activities of the Audit Committee included the following:-
• ReviewedtheunauditedquarterlyfinancialresultsoftheGroupwiththemanagementpriortosubmissiontotheBoardofDirectorsforconsideration and approval and subsequent announcements;
• Reviewedtheexternalauditors’auditplanpriortothecommencementofaudit;• Reviewedwiththeexternalauditorstheresultsofannualaudit,auditors’reportforthefinancialyearended31December2011inrelation
to audit and accounting issues arising from the audit and management letter together with management’s response to the findings of the external auditors;
• Meetingswithexternalauditorswithoutthepresenceofthemanagement;• ConsideredthenominationoftheexternalauditorsforrecommendationtotheBoardforre-appointment;• ReviewedtheyearendfinancialstatementspriortosubmissiontotheBoardforconsiderationandapproval;• ReviewedtheAuditCommitteeReportandStatementofInternalControlforthefinancialyearended31December2011andrecommended
its adoption to the Board; • Reviewedwiththeinternalauditorsoninternalauditplans,internalauditreportsandtheirevaluationonthesystemofinternalcontrolsof
the Group; and• ConsideredtherelatedpartytransactionsthathadarisenwithintheCompanyortheGroup.
TERMS OF REFERENCEThe Directors have approved and adopted the following Terms of Reference, which set out the roles and responsibilities of the Audit Committee: -
1. OBJECTIVES The primary objective of the Audit Committee is to assist the Board of Directors of the Company in fulfilling its responsibilities relating to
corporate accounting, internal controls, management and financial reporting practices of the Group.
2. COMPOSITION The members shall be appointed by the Board of Directors and shall consist of not less than three (3) members of whom a majority shall
compose of Independent Directors of the Company. No Alternate Directors shall be appointed as members of the Committee.
At least one member of the Audit Committee:-
(a) Must be a member of the Malaysian Institute of Accountants; or(b) If he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience; and
i) he must have passed the examination specified in Part I of the First Schedule of the Accountants Act, 1967; or ii) he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act,
1967.
3. CHAIRMAN The Chairman shall be an Independent Non-Executive Director.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
15Audit Committee Report (Cont’d)
4. QUORUM A quorum shall consist of two (2) members and a majority of the members present must be Independent Directors.
5. SECRETARY The Secretary of the Audit Committee shall be the Company Secretary or any other person so appointed by the Audit Committee from time
to time.
6. MEETINGS The Audit Committee shall regulate its own proceedings. The Committee shall meet at least four (4) times a year. The Committee may, as
and when deemed necessary, invite other Board members and senior management members to attend the meeting. The Committee shall meet at least twice a year with the external auditors without the presence of any Executive Director of the Board.
7. AUTHORITY The Audit Committee is authorised by the Board of Directors to investigate any activity within its terms of reference. The Committee shall
have unrestricted access to the external auditors and to all employees of the Group. The Committee may, with the approval of the Board, consult legal or other professionals where they consider it necessary to discharge their duties at the expense of the Company.
8. FUNCTIONS The functions of the Audit Committee shall be: -
a) To consider the appointment of the external auditor, the audit fee and any question of resignation or dismissal;b) To review with the external auditors the nature and scope of the audit plan, the evaluation of the system of internal control, problems
and reservations arising from the audit and any matters which may wish to discuss with the external auditors, the internal auditors or both, in the absence of the Executive Board members and management where necessary;
c) To review the external auditors management letter and managements’ response;d) To review and report to the Board of Directors on the quarterly results and year end financial 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) significant and unusual events; and(iii) compliance with applicable approved accounting standards and other legal requirements;
e) To review the adequacy of the scope, function, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;
f) To 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;
g) To review any appraisal or assessment of the performance of members of the internal audit function including appointment or termination of senior staff members and to provide opportunity for the resigning staff member, if any, to submit his reasons for resigning;
h) To consider any related party transactions and conflict of interest situation that may arise within the Company or the Group; andi) To undertake such other responsibilities as may be agreed to by the Audit Committee and the Board of Directors.
9. REPORTING PROCEDURE The Chairman of the Committee reports to the Board after each Committee meeting the result of the deliberations of the Committee. The
Committee shall prepare reports, at least once a year, to the Board summarizing the Committee’s activities during the year in discharging of its duties and responsibilities and the related significant results and findings.
INTERNAL AUDIT FUNCTIONThe Group has engaged the services of an independent professional firm to assist the Committee in ensuring the adequacy and effectiveness of the Group’s risk management and internal control systems.
The internal audit function is to add value and improve the Group’s operations by providing independent, objective, assurance and consulting activities through its audit of the Group’s key operations and also to ensure consistency in the control environment and the application of policies and procedures. The Internal Auditors report directly to the Committee.
During the financial year under review, the Internal Auditors have conducted assurance review on adequacy and effectiveness of internal control system on certain operating units and presented its findings together with recommendation and management action plan to the Audit Committee for review.
This report is made in accordance with a resolution of the Board of Directors dated 30 May 2012.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
16 Directors’ Report For The Financial Year Ended 31 December 2011
The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2011.
PRINCIPAL ACTIVITIES
The principal activities of the Company consist of investment holding and the provision of management services whilst that of the subsidiaries are disclosed in Note 5 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year other than the cessation of the trading and processing of duck activities.
RESULTS
GROUP COMPANY
RM RM
Profit after taxation for the year
Continuing operations 3,707,995 2,039,073
Discontinued operations 960,672 -
4,668,667 2,039,073
In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year ended 31 December 2011 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report, other than the write off of cattle farm buildings and development with carrying amount of RM1,083,966 charged to profit or loss as disclosed in Note 3(iv) to the financial statements.
DIVIDENDS
In respect of the financial year ended 31 December 2011, the Company has declared an interim tax exempt dividend of 4 sen per share amounting to RM2,387,630, paid on 29 December 2011.
The directors do not recommend any final dividend payment for the financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.
SHARE CAPITAL AND DEBENTURE
During the financial year, the Company did not issue any share or debenture and did not grant any option to anyone to take up unissued shares of the Company.
TREASURY SHARES
During the financial year, the Company repurchased 87,000 (2010 : Nil) of its issued ordinary shares from the open market at an average price of RM0.41 (2010 : RM Nil) per share for a total consideration of RM35,658 (2010 : RM Nil). The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.
As at 31 December 2011, the Company held a total of 1,220,500 treasury shares out of its 60,911,250 issued ordinary shares. The treasury shares are held at a carrying amount of RM841,473 and further relevant details are disclosed in Note 15 to the financial statements.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
17Directors’ Report For The Financial Year Ended 31 December 2011 (Cont’d)
EMPLOYEE SHARE OPTION SCHEME
The Company’s Employee Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 18 November 2003. The ESOS will be in force for a period of five years expiring on 14 January 2009. The Company has extended the existing ESOS for another 5 years until 14 January 2014.
As at end of the reporting period, no options were granted.
The salient features of the ESOS are disclosed in Note 14 to the financial statements.
DIRECTORS
The directors who served since the date of the last report are as follows :
Dato’ Siah Gim Eng Datin Law Hooi Lean Chee Wai Hong Ong Kim Nam Shamsuddin Bin Mohd Salleh
Liong Joon Choow (appointed on 19.12.11)Zainal Bin Pandak (appointed on 19.12.11)Boay Goey Gnoh (resigned on 4.7.11)
DIRECTORS’ INTERESTS IN SHARES
According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows :
----- Number of ordinary shares of RM1 each -----
Balance Balance
at at
1.1.11 Bought Sold 31.12.11
The Company
Direct Interest :
Dato’ Siah Gim Eng 9,719,215 - - 9,719,215
Datin Law Hooi Lean 7,961,798 - - 7,961,798
Chee Wai Hong 605,878 - - 605,878
Ong Kim Nam 7,500 - - 7,500
Deemed Interest :
Dato’ Siah Gim Eng 15,540,548 2,174,758 - 17,715,306
Datin Law Hooi Lean 17,297,965 2,174,758 - 19,472,723
By virtue of their shareholdings in the Company, Dato’ Siah Gim Eng and Datin Law Hooi Lean are also deemed interested in the shares of all the subsidiaries of the Company, to the extent that the Company has interests.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
18 Directors’ Report For The Financial Year Ended 31 December 2011 (Cont’d)
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with a director or with a firm of which the director is a member or with a company in which the director has a substantial financial interest, other than those related party transactions disclosed in the notes to the financial statements.
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps :
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts, and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances :
(i) that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the Group and in the Company inadequate to any substantial extent, or
(ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or
(iii) that would render any amount stated in the financial statements of the Group and of the Company misleading, or
(iv) 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.
At the date of this report, there does not exist :
(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person, or
(ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable, within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
19Directors’ Report For The Financial Year Ended 31 December 2011 (Cont’d)
AUDITORS
The auditors, Grant Thornton, have expressed their willingness to continue in office.
Signed in accordance with a resolution of the directors :
........................................…….......................... ........................................……..........................Dato’ Siah Gim Eng Datin Law Hooi Lean
Penang,
Date : 26 April 2012
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
20 Directors’ Statement
We, Dato’ Siah Gim Eng and Datin Law Hooi Lean, being two of the directors of PW Consolidated Bhd. state that in the opinion of the
directors, the financial statements set out on pages 22 to 70 are properly drawn up in accordance with Financial Reporting Standards and the
Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December
2011 and of their financial performance and cash flows for the financial year then ended.
Signed in accordance with a resolution of the directors :
.….......................................................... …...............................................…........
Dato’ Siah Gim Eng Datin Law Hooi Lean
Date : 26 April 2012
Statutory DeclarationI, Liong Joon Choow, the director primarily responsible for the financial management of PW Consolidated Bhd. do solemnly and sincerely
declare that the financial statements set out on pages 22 to 70 are to the best of my knowledge and belief, correct and I make this solemn
declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by )
the abovenamed at Penang, this 26th )
day of April 2012. ) ...............................……..............…......
Liong Joon Choow
Before me,
....................................................................
Goh Suan Bee
No.: P125
Commissioner for Oaths
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
21Independent Auditors‘ Report To The Members Of PW Consolidated Bhd. Company No. 420049-H (Incorporated In Malaysia)
Report on the Financial Statements
We have audited the financial statements of PW Consolidated Bhd., which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 22 to 70.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of these financial 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 financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2011 and of their financial performance and cash flows for the financial year then ended.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following :
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act,
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes, and
(c) The auditors’ reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in Note 38 to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial 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 Profits 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. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Grant Thornton Dato’ N.K. JasaniNo. AF : 0042 No. 708/03/14 (J/PH)Chartered Accountants Chartered Accountant Date : 26 April 2012
Penang
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
22 Statements Of Financial PositionAs At 31 December 2011
The notes set out on pages 29 to 70 form an integral part of these financial statements.
GROUP COMPANY
2011 2010 2011 2010
NOTE RM RM RM RM
ASSETS
Non-current assets
Property, plant and equipment 3 155,488,740 153,659,454 - -
Investment property 4 150,000 125,000 - -
Investment in subsidiaries 5 - - 39,188,963 39,188,963
Intangible assets 6 5,240,569 5,240,569 - -
160,879,309 159,025,023 39,188,963 39,188,963
Current assets
Inventories 7 43,261,982 66,130,935 - -
Trade receivables 8 23,954,818 27,055,805 - -
Other receivables, deposits and prepayments 9 9,064,387 4,207,324 - 3,352
Amount due from subsidiaries 10 - - 23,180,745 23,579,810
Investment securities 11 2,298,115 - - -
Tax recoverable 161,668 238,724 - -
Fixed deposit with a licensed bank 12 65,000 65,000 - -
Cash and bank balances 1,794,153 1,961,612 47,211 42,738
80,600,123 99,659,400 23,227,956 23,625,900
Non-current assets held for sale 13 1,981,307 11,494,492 - -
82,581,430 111,153,892 23,227,956 23,625,900
TOTAL ASSETS 243,460,739 270,178,915 62,416,919 62,814,863
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 14 60,911,250 60,911,250 60,911,250 60,911,250
Treasury shares 15 (841,473) (805,815) (841,473) (805,815)
Share premium 918,539 918,539 918,539 918,539
Capital reserve 16 14,867,838 17,366,908 - -
Retained profits 17 54,259,476 49,479,369 1,001,608 1,350,165
Total equity 130,115,630 127,870,251 61,989,924 62,374,139
Non-current liabilities
Borrowings 18 10,583,596 3,994,389 - -
Deferred tax liabilities 19 12,326,476 12,997,378 - -
22,910,072 16,991,767 - -
Current liabilities
Trade payables 20 8,980,909 18,002,323 - -
Other payables and accruals 21 5,812,242 6,677,117 426,995 440,724
Borrowings 18 74,528,881 99,353,667 - -
Provision for taxation 1,113,005 1,283,790 - -
90,435,037 125,316,897 426,995 440,724
Total liabilities 113,345,109 142,308,664 426,995 440,724
TOTAL EQUITY AND LIABILITIES 243,460,739 270,178,915 62,416,919 62,814,863
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
23Statements Of Comprehensive Income For The Financial Year Ended 31 December 2011
The notes set out on pages 29 to 70 form an integral part of these financial statements.
GROUP COMPANY(Restated)
2011 2010 2011 2010NOTE RM RM RM RM
Revenue 22 264,380,844 257,088,737 2,372,506 1,712,117
Cost of sales (233,891,179) (228,085,996) - -
Gross profit 30,489,665 29,002,741 2,372,506 1,712,117
Other income 23 1,267,555 3,380,671 - -
Administrative expenses (18,769,086) (18,038,032) (333,433) (351,627)
Selling and distribution expenses (1,650,712) (1,408,504) - -
Profit from operations 11,337,422 12,936,876 2,039,073 1,360,490
Finance costs 24 (5,374,969) (6,286,167) - -
Profit before taxation 25 5,962,453 6,650,709 2,039,073 1,360,490
Taxation 26 (2,254,458) (876,216) - (1,620)
Profit for the year from continuing operations 3,707,995 5,774,493 2,039,073 1,358,870 Discontinued operations *Profit/(Loss) for the year from discontinued operations 27 960,672 (5,665,943) - -
Profit for the year 4,668,667 108,550 2,039,073 1,358,870
Other comprehensive income :Realisation of revaluation surplus upon disposal and write off of properties 1,308 456,116 - - Realisation of revaluation surplus upon depreciation 2,497,762 2,947,471 - - Transfer of capital reserve to retained profits (2,499,070) (3,403,587) - -
Other comprehensive income for the year - - - -
Total comprehensive income for the year 4,668,667 108,550 2,039,073 1,358,870
Profit/(Loss)/Total comprehensive income/ (loss) for the year attributable to : Owners of the parent - Continuing operations 3,707,995 5,828,335 - Discontinued operations 960,672 (5,665,943)
4,668,667 162,392 Non-controlling interest - (53,842)
4,668,667 108,550
Basic earnings per share attributable to owners of the parent (Sen) 28Basic, profit from continuing operations 6.21 9.75 Basic, profit/(loss) from discontinued operations 1.61 (9.48)Basic, net profit for the year 7.82 0.27
* This represents the processed chicken and duck division of the Group which ceased operation during the financial year. Accordingly the comparative figures have been restated to conform with FRS 5 : Non-current Assets Held for Sale and Discontinued Operations.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
24 Consolidated Statement Of Changes In Equity For The Financial Year Ended 31 December 2011
The notes set out on pages 29 to 70 form an integral part of these financial statements.
------------------------------------- Attributable to owners of the parent ---------------------------------
------------------- Non-distributable ------------------- Distributable
Share Treasury Share Capital RetainedNon-
controlling Total
Capital Shares Premium Reserve Profits Total Interest Equity
NOTE RM RM RM RM RM RM RM RM
2011
Balance at beginning 60,911,250 (805,815) 918,539 17,366,908 49,479,369 127,870,251 - 127,870,251
Total comprehensive income
for the year - - - (2,499,070) 7,167,737 4,668,667 - 4,668,667
Transactions with owners :
Dividend 29 - - - - (2,387,630) (2,387,630) - (2,387,630)
Purchase of treasury shares 15 - (35,658) - - - (35,658) - (35,658)
Total transactions with owners - (35,658) - - (2,387,630) (2,423,288) - (2,423,288)
Balance at end 60,911,250 (841,473) 918,539 14,867,838 54,259,476 130,115,630 - 130,115,630
2010
Balance at beginning 60,911,250 (805,815) 918,539 20,770,495 45,913,390 127,707,859 1,490,364 129,198,223
Total comprehensive income
for the year - - - (3,403,587) 3,565,979 162,392 (53,842) 108,550
Transaction with owners :
Acquisition of remaining equity
interest of an existing subsidiary - - - - - - (1,436,522) (1,436,522)
Balance at end 60,911,250 (805,815) 918,539 17,366,908 49,479,369 127,870,251 - 127,870,251
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
25Statement Of Changes In EquityFor The Financial Year Ended 31 December 2011
The notes set out on pages 29 to 70 form an integral part of these financial statements.
-------------- Non-distributable --------------
Retained
Profits/
Share Treasury Share (Accumulated Total
Capital Shares Premium Loss) Equity
NOTE RM RM RM RM RM
2011
Balance at beginning 60,911,250 (805,815) 918,539 1,350,165 62,374,139
Total comprehensive income
for the year - - - 2,039,073 2,039,073
Transactions with owners :
Dividend 29 - - - (2,387,630) (2,387,630)
-
Purchase of treasury shares 15 - (35,658) - - (35,658)
Total transactions with owners - (35,658) - (2,387,630) (2,423,288)
Balance at end 60,911,250 (841,473) 918,539 1,001,608 61,989,924
2010
Balance at beginning 60,911,250 (805,815) 918,539 (8,705) 61,015,269
Total comprehensive income
for the year - - - 1,358,870 1,358,870
Balance at end 60,911,250 (805,815) 918,539 1,350,165 62,374,139
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
26 Statements Of Cash FlowsFor The Financial Year Ended 31 December 2011
The notes set out on pages 29 to 70 form an integral part of these financial statements.
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(Loss) before taxation
- continuing operations 5,962,453 6,650,709 2,039,073 1,360,490
- discontinued operations 959,310 (5,740,387) - -
6,921,763 910,322 2,039,073 1,360,490
Adjustments for :
Bad debts 29,379 2,476 - -
Depreciation 14,833,439 14,106,050 - -
Fair value adjustment
- investment property (25,000) - - -
- investment securities (88,384) - - -
Impairment loss on trade receivables 9,990 993,161 - -
Interest expense 5,374,969 6,286,187 - -
Interest income - -
- current year (93,197) (356,881) - -
- over provision in prior year 126,339 - - -
Loss/(Gain) on disposal of non-current assets held for sale 100,000 (1,898,314) - -
(Gain)/Loss on disposal of property, plant and equipment (740,445) 340,314 - -
Goodwill on consolidation written off - 11,694 - -
Property, plant and equipment written off 1,087,898 4,241,100 - -
Operating profit before working capital changes 27,536,751 24,636,109 2,039,073 1,360,490
* Decrease/(Increase) in inventories 23,686,942 (4,340,620) - -
(Increase)/Decrease in receivables (1,921,784) 2,734,886 3,352 (3,352)
Decrease in payables (9,886,289) (11,117,163) (13,729) (17,817)
Cash generated from operations 39,415,620 11,913,212 2,028,696 1,339,321
Income tax paid (3,017,727) (2,146,377) - (18,420)
Interest paid (5,374,969) (6,286,187) - -
Interest received 93,197 356,881 - -
Net cash from operating activities 31,116,121 3,837,529 2,028,696 1,320,901
CASH FLOWS FROM INVESTING ACTIVITIES
** Acquisition of property, plant and equipment (9,924,865) (2,472,263) - -
*** Acquisition of additional equity interest of an existing subsidiary - (1,502,622) - -
Acquisition of investment securities (2,209,731) - - -
Proceeds from disposal of non-current assets held for sale 400,000 6,328,221 - -
Proceeds from disposal of property, plant and equipment 2,064,323 1,735,371 - -
Purchase of treasury shares (35,658) - (35,658) -
Net cash (used in)/from investing activities (9,705,931) 4,088,707 (35,658) -
Balance carried forward 21,410,190 7,926,236 1,993,038 1,320,901
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
27Statements Of Cash FlowsFor The Financial Year Ended 31 December 2011 (Cont’d)
The notes set out on pages 29 to 70 form an integral part of these financial statements.
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Balance brought forward 21,410,190 7,926,236 1,993,038 1,320,901
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid (2,387,630) - (2,387,630) -
Repayment of bankers acceptance (14,650,000) (784,985) - -
Payment of finance lease (2,564,963) (3,575,636) - -
Drawdown/(Repayment) of promissory note 475,000 (7,381,000) - -
Drawdown of term loans 7,257,888 70,949 - -
(Repayment)/Drawdown of trust receipts (4,917,570) 12,189,450 - -
Net change in subsidiaries balances - - 399,065 (1,307,633)
Net cash (used in)/from financing activities (16,787,275) 518,778 (1,988,565) (1,307,633)
NET INCREASE IN CASH AND CASH EQUIVALENTS 4,622,915 8,445,014 4,473 13,268
CASH AND CASH EQUIVALENTS AT BEGINNING (12,200,038) (20,645,052) 42,738 29,470
CASH AND CASH EQUIVALENTS AT END (7,577,123) (12,200,038) 47,211 42,738
Represented by :
Cash and bank balances 1,794,153 1,961,612 47,211 42,738
Bank overdrafts (9,371,276) (14,161,650) - -
(7,577,123) (12,200,038) 47,211 42,738
* Inventories
Cash flow from inventories 22,868,953 (5,161,176) - -
Adjustment for depreciation 817,989 820,556 - -
23,686,942 (4,340,620) - -
** Acquisition of property, plant and equipment
Total cost 10,879,305 3,718,627 - -
Acquired under finance lease (954,440) (1,246,364) - -
Total cash consideration 9,924,865 2,472,263 - -
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
28
The notes set out on pages 29 to 70 form an integral part of these financial statements.
Statements Of Cash FlowsFor The Financial Year Ended 31 December 2011 (Cont’d)
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
*** Cash flow on acquisition of additional equity interest
of an existing subsidiary
Property, plant and equipment - 1,776,935 - -
Inventories - 435,857 - -
Receivables - 37,690 - -
Cash and bank balances - 16,473 - -
Payables - (337,077) - -
Borrowings - (224,573) - -
Deferred tax liabilities - (268,783) - -
Share of net assets acquired from non-controlling interests - 1,436,522 - -
Goodwill on consolidation - 66,100 - -
Total cash consideration paid - 1,502,622 - -
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
29Notes To The Financial Statements31 December 2011
1. GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad.
The principal activities of the Company consist of investment holding and the provision of management services whilst that of the subsidiaries are disclosed in Note 5 to the financial statements.
There have been no significant changes in the nature of these principal activities during the financial year other than the cessation of the trading and processing of duck activities.
The registered office of the Company is located at Suite 12-A Level 12, Menara Northam, No. 55 Jalan Sultan Ahmad Shah, 10050, Penang.
The principal place of business of the Company is located at Plot 127, Jalan Perindustrian Bukit Minyak 7, Taman Perindustrian Bukit Minyak, 14100 Bukit Mertajam, Seberang Perai Tengah.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 26 April 2012.
2. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies adopted by the Group and by the Company are consistent with those adopted in the previous financial years unless otherwise indicated below.
2.1 Basis of Preparation
The financial statements of the Group and of the Company are prepared under the historical cost convention unless otherwise indicated in the accounting policies below and in accordance with applicable Financial Reporting Standards (“FRSs”) and the Companies Act, 1965 in Malaysia.
At the beginning of the current financial year, the Group and the Company have adopted new and revised FRSs which are mandatory for the reporting period as described fully in Note 2.3.
The financial statements are presented in Ringgit Malaysia (“RM”).
2.2 Significant Accounting Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
2.2.1 Judgements made in applying accounting policies
There are no significant area of critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements.
2.2.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below :
(i) Useful lives of depreciable assets
The depreciable costs of plant and equipment are allocated on the straight line basis over their estimated useful lives. Management estimates the useful lives of these assets to be within 5 to 10 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual value of these assets. Therefore future depreciation charges could be revised.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
30 Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.2 Significant Accounting Estimates and Judgements (cont’d)
2.2.2 Key sources of estimation uncertainty (cont’d)
(ii) Impairment of property, plant and equipment
The Group performs an impairment review as and when there are impairment indicators to ensure that the carrying value of the property, plant and equipment does not exceed its recoverable amount. The recoverable amount represents the present value of the estimated future cash flows expected to arise from continuing operations. Therefore, in arriving at the recoverable amount, management exercise judgement in estimating the future cash flows, growth rate and discount rate.
During the financial year, the Group has written-off assets with carrying amount of RM1,083,966 as the assets can no longer be recoverable. Further details of the write-off are disclosed in Note 3(iv) to the financial statements.
(iii) Impairment of goodwill
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.
Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are in Note 6 to the financial statements.
(iv) Inventories Inventories are measured at the lower of cost and net realisable value. In estimating the net realisable values,
management takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to constant change in selling prices which are determined by supply and demand factors. The rapid changes in selling prices will have an impact in determining the net realisable value of inventories and ultimately the earnings of the Group.
(v) Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk charactericstics.
(vi) Deferred tax assets
Deferred tax assets are recognised for unused tax losses and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the tax losses and other deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with tax planning strategies.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
31Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.3 Adoption of Revised FRSs, Amendments/Improvements to FRSs, IC Interpretations (“IC Int”) and Amendments to IC Int
The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial year except for the adoption of the following revised FRSs, amendments/improvements to FRSs, IC Int and amendments to IC Int that are mandatory for the current financial year :
Revised FRSs FRS 1 First-time adoption of Financial Reporting Standards FRS 3 Business Combinations FRS 127 Consolidated and Separate Financial Statements
Amendments/Improvements to FRSs FRS 1 Limited Exemption from Comparative FRS 7. Disclosure for First-time Adopters FRS 2 Group Cash-settled Share-based Payment Transactions FRS 3 Business Combinations FRS 5 Non-current Assets Held for Sale and Discontinued Operations FRS 7 Improving Disclosures about Financial Instruments FRS 101 Presentation of Financial Statements FRS 121 The Effects of Changes in Foreign Exchange Rates FRS 128 Investments in Associates FRS 131 Interests in Joint Ventures FRS 132 Financial Instruments : Presentation FRS 134 Interim Financial Reporting FRS 138 Intangible Assets FRS 139 Financial Instruments : Recognition and Measurement
IC Int IC Int 4 Determining Whether an Arrangement contains a Lease IC Int 12 Services Concession Arrangements IC Int 16 Hedges of a Net Investment in a Foreign Operation IC Int 17 Distributions of Non-cash Assets to Owners IC Int 18 Transfers of Assets from Customers Amendments to IC Int IC Int 9 Reassessment of Embedded Derivatives IC Int 13 Customer Loyalty Programmes
Initial application of the above standards, amendments and interpretations did not have any material impact on the financial statements of the Group and of the Company except for the following :
FRS 3 Business Combinations (Revised) and FRS 127 Consolidated and Separate Financial Statements (Revised)
The revised FRS 3 introduces a number of changes in the accounting for business combinations occurring after 1 January 2011. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. The revised FRS 127 requires that a change in the ownership interest of a subsidiary (without loss of control) is accounted for as an equity transaction. Therefore, such transactions will no longer give rise to goodwill, nor will they give rise to a gain or loss. Furthermore, the revised standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes from revised FRS 3 and revised FRS 127 will affect future acquisitions or loss of control and transactions with non-controlling interests.
2.4 Standards Issued But Not Yet Effective
New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards
To converge with International Financial Reporting Standards (“IFRSs”) in 2012, the MASB had on 19 November 2011, issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRSs”), which are mandatory for annual financial periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate, including its parent, significant investor and venture (“Transitioning Entities”).
Transitioning Entities will be allowed to defer adoption of the new MFRSs for an additional one year. Consequently, adoption of the MFRSs by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
32 Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.4 Standards Issued But Not Yet Effective (cont’d)
The Group falls within the scope of Transitioning Entities and has opted to defer adoption of MFRSs. Accordingly, the Group will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31 December 2013.
In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profits.
The Group and the Company have not completed its quantification of the financial effects of the differences between Financial Reporting Standards (“FRS”) and accounting standards under the MFRS Framework and are in the process of assessing the financial effects of the differences. Accordingly, the consolidated financial performance and financial position as disclosed in these financial statements for the financial year ended 31 December 2011 could be different if prepared under the MFRS Framework.
The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2013.
2.5 Subsidiaries and Basis of Consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any impairment losses.
Upon the disposal of investment in a subsidiary, the difference between the net disposal proceeds and its carrying amount is recognised in profit or loss.
Basis of Consolidation
The financial statements of the Group include the audited financial statements of the Company and its subsidiaries made up to the end of the financial year. The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.
Change in accounting policy
The Group has changed its accounting policy on business combinations and accounting for non controlling interest when it adopted the revised FRS 3 “Business Combinations” and FRS 127 “Consolidated and Separate Financial Statements”.
The Group has applied the new policy prospectively to transactions occurring on or after 1 January 2011. As a consequence, no adjustments were necessary to any of the amounts previously recognised in the financial statements.
Acquisition on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date as:
• thefairvalueoftheconsiderationtransferred,plus• therecognisedamountofanynon-controllinginterestintheacquiree,plus• ifthebusinesscombinationisachievedinstages,thefairvalueoftheexistingequityinterestintheacquiree,less• thenetrecognisedamountatfairvalueoftheidentifiableassetsacquiredandliabilitiesassumed
When the excess is negative, a bargain purchase gain is recognised in profit or loss.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
33Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.5 Subsidiaries and Basis of Consolidation (cont'd)
Acquisition on or after 1 January 2011 (cont’d)
For each business combination, the Group elects whether to recognise non-controlling interest in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.
In a business combination achieved in stages, the previously held equity interest in the acquiree is re-measured at its acquisition date fair value and the resulting gain or loss is recognised in the profit or loss.
Non-controlling interest is the equity in a subsidiary not attributable, directly or indirectly, to a parent. At the end of reporting period, non-controlling interest consists of amount calculated on the date of combinations and its share of changes in the subsidiary’s equity since the date of combination.
All earnings and losses of the subsidiary are attributed to the parent and the non-controlling interest, even if the attribution of losses to the non-controlling interest results in a debit balance in the shareholders’ equity.
Accounting for changes in non-controlling interest
The Group treats all changes in its ownership in a subsidiary that do not result in a loss of control as equity transactions between the Group and the non-controlling interest. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted against Group reserves.
2.6 Property, Plant and Equipment
Property, plant and equipment are initially stated at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent to recognition, property, plant and equipment except for freehold land, long-term leasehold land, short-term leasehold land, buildings and farm development are stated at cost less accumulated depreciation and accumulated impairment losses.
Freehold land, long-term leasehold land, short-term leasehold land, buildings and farm development are stated at revalued amount, which is the fair value at the date of revaluation less accumulated impairment losses. Subsequent additions are shown at cost while disposals are at valuation or cost as appropriate. Fair value is determined by market-based evidence appraisal that is undertaken by external independent professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the end of each reporting period.
Surplus arising on revaluation are credited to asset revaluation reserve. Any deficit arising from revaluation is charged against the revaluation reserve to the extent of a previous surplus held in the asset revaluation reserve for the same asset. In all other cases, a decrease in carrying amount is included in profit or loss.
Property, plant and equipment are depreciated on the straight line method to write off the cost of each asset to its residual value over its estimated useful life, at the following annual rates :
Leasehold land Amortised over lease period of 22 - 99 years Buildings 2% Farm development 10% Plant and machinery 7% - 10% Equipment, furniture and fittings 8% - 20% Motor vehicles 20%
Freehold land is not depreciated as it has an infinite life.
Depreciation on capital expenditure in progress commences when the assets are ready for their intended use.
The residual value, useful life and depreciation method are reviewed at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.
The difference between the net disposal proceeds and its carrying amount is charged or credited to the profit or loss and the
attributable portion of the revaluation surplus is taken into other comprehensive income.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
34 Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.7 Investment Properties
Investment properties which comprise of residential apartment are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties.
Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise.
2.8 Leases
Finance lease
In accordance with FRS 117 Leases, the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards related to the ownership of the leased asset. The related asset is then recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance leasing liability, irrespective of whether some of these lease payments are payable up-front at the date of inception of the lease. Leases of land and buildings are classified separately and are split into a land and a building element, in accordance with the relative fair values of the leasehold interests at the date the asset is recognised initially.
Depreciation methods and useful lives for assets held under finance lease agreements correspond to those applied to comparable assets which are legally owned by the Group. The corresponding finance leasing liability is reduced by lease payments less finance charges, which are expensed as part of finance costs. The interest element of leasing payments represents a constant proportion of the capital balance outstanding and is charged to profit or loss over the period of the lease.
Operating Leases
All other leases are treated as operating leases. Payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred.
2.9 Intangible Assets
Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Goodwill is stated at cost less accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2.10 Impairment of Non-Financial Assets
The Group and the Company assess at the end of each reporting period whether there is an indication that an asset may be impaired.
For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating units (“CGU”) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the profit or loss except for assets that were previously revalued where the revaluation surplus was taken to other comprehensive income. In this case the impairment loss is also recognised in other comprehensive income up to the amount of any previous revaluation surplus.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
35Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.10 Impairment of Non-Financial Assets (cont’d)
An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment of goodwill is not reversed in a subsequent period.
2.11 Financial Instruments
2.11.1 Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transactions costs that are directly attributable to the acquisition or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.
2.11.2 Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows :
Financial assets
(a) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.
Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the end of the reporting period which are classified as non-current.
(b) Fair value through profit or loss Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except
for derivatives that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity intruments whose fair values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivatives that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair value with the gain or loss recognised in profit or loss.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
36 Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.11 Financial Instruments (cont’d)
2.11.3 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision.
2.11.4 Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market place concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to :
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.
2.11.5 Derecognition
A financial asset or part of it is derecognised, when and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
2.12 Impairment of Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiaries and investment in associates) 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 flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.
An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
37Notes To The Financial Statements31 December 2011 (Cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.12 Impairment of Financial Assets (cont’d)
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
2.13 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost of finished goods includes materials, direct labour and attributable production overheads.
Cost of livestock consists of purchase price of livestock plus growing costs which include feeds and vaccines, direct labour, subcontract wages and attributable farming overheads.
Cost of parent stock consists of purchase price of parent stock and attributable costs including relevant overheads in rearing the parent stock and is amortised over its estimated economic egg-laying life of ten to twelve months.
All inventories costs are determined on the first-in, first-out basis.
Net realisable value is the estimated selling price less the estimated cost necessary to make the sale.
2.14 Cash and Cash Equivalents
Cash comprises cash in hand, cash at bank and demand deposits. Cash equivalents are short term and highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value against which bank overdraft balances, if any, are deducted.
2.15 Non-current Assets Held for Sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in accordance with applicable FRSs. Then, on initial classification as held for sale, non-current assets are measured at the lower of carrying amount and fair value less costs to sell.
2.16 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each end of the reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.
2.17 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.
Other borrowing costs are recognised as expenses in the period in which they are incurred.
2.18 Income Recognition
Sale of goods Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer.
Management fees Management fees are recognised on the accrual basis.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
38
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.18 Income Recognition (cont’d)
Dividend income Dividend income is recognised when the Company’s right to receive payment is established.
Interest income Interest income is recognised on a time proportion basis using the applicable effective interest rate. Rental income Rental income is recognised on a time proportion basis over the lease term.
2.19 Employee Benefits
Short-term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
Defined contribution plans
As required by law, companies in Malaysia make contributions to the national pension scheme, the Employees Provident Fund. Such contributions are recognised as an expense in the profit or loss as incurred.
Share-based compensation The Company’s Employee Share Option Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the Group’s
employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.
At the end of each reporting period, the Group revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates in the profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium, or until the option expires, upon which it will be transferred directly to retained profits.
The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.
2.20 Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted by the end of the reporting period.
Deferred tax is provided for, using the liability method, on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised in the profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
39
2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.21 Foreign Currency Translations
Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange ruling at the date of the transaction. At the end of each reporting period, foreign currency monetary items are translated into Ringgit Malaysia at exchange rates ruling at that date, unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contract are used. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined. All exchange gains or losses are included in the profit or loss.
2.22 Segment Reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case are the Executive Directors of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
2.23 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group and of the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the Company.
2.24 Share Capital and Share Issuance Expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Share capital represents the nominal value of shares that have been issued. Dividends on ordinary shares are accounted for in
shareholder’s equity as an appropriation of unappropriated profits and recognised as a liability in the period in which they are declared.
2.25 Discontinued Operations
Discontinued operations are carried at the lower of carrying amount and fair value.
A component of the Group is classified as discontinued operations when the Group had formally announced its intention to discontinue the operations and has initiated the process of cessation.
The comparative information of the Group relating to the discontinued operations have been represented accordingly.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
40
3. PROPERTY PLANT AND EQUIPMENT
GROUP2011
---------------------------------------------------------------------------------------- At Valuation/Cost ------------------------------------------------------------------------------------------
Reclassified fromBalance at non-current assets Balance atbeginning Additions Disposals Written off held for sale Reclassification end
RM RM RM RM RM RM RMAt valuation :Freehold land 42,099,810 - (496,070) - 4,120,000 - 45,723,740 Long-term leasehold land 5,500,000 - - - - (5,500,000) - Short-term leasehold land 3,533,867 - - - - 5,500,000 9,033,867 Buildings 13,416,340 - - - - - 13,416,340 Farm development 64,399,996 - - (1,749,510) 4,570,000 - 67,220,486
At cost :Freehold land 1,309,463 4,815,893 - - - - 6,125,356 Long-term leasehold land 1,991,314 - - - - - 1,991,314 Buildings 2,268,786 - (180,000) - - - 2,088,786 Farm development 21,679,315 59,130 - (55,810) 1,206,777 2,942,395 25,831,807 Plant and machinery 30,686,288 107,462 (798,000) - - 520,335 30,516,085 Equipment, furniture and fittings 31,021,472 1,146,232 (94,264) (2,000) 394,495 332,073 32,798,008 Motor vehicles 14,214,492 1,546,808 (541,397) (4,000) - - 15,215,903 Capital expenditure in progress 1,927,517 3,203,780 - - - (3,794,803) 1,336,494
234,048,660 10,879,305 (2,109,731) (1,811,320) 10,291,272 - 251,298,186
------------------------------------------------------------------------------- Accumulated depreciation ----------------------------------------------------------------------------------
Reclassified fromBalance at Current non-current assets Balance atbeginning charge Disposals Written off held for sale Reclassification end
RM RM RM RM RM RM RMAt valuation :Freehold land - - - - - - - Long-term leasehold land 1,249,159 95,346 - - - (1,344,505) - Short-term leasehold land 969,456 178,035 - - - 1,344,505 2,491,996 Buildings 790,186 264,316 - - - - 1,054,502 Farm development 18,273,018 6,316,162 - (699,804) 914,000 - 24,803,376
At cost :Freehold land - - - - - - - Long-term leasehold land 105,589 34,927 - - - - 140,516 Buildings 122,303 53,524 (42,000) - - - 133,827 Farm development 9,777,489 3,018,338 - (21,550) 276,006 - 13,050,283 Plant and machinery 18,031,060 1,747,638 (207,506) - - - 19,571,192 Equipment, furniture and fittings 18,410,498 2,970,339 (32,427) - 88,081 - 21,436,491 Motor vehicles 12,660,448 972,803 (503,920) (2,068) - - 13,127,263
80,389,206 15,651,428 (785,853) (723,422) 1,278,087 - 95,809,446
Carryingamount at
endRM
At valuation :Freehold land 45,723,740 Long-term leasehold land - Short-term leasehold land 6,541,871 Buildings 12,361,838 Farm development 42,417,110
At cost :Freehold land 6,125,356 Long-term leasehold land 1,850,798 Buildings 1,954,959 Farm development 12,781,524 Plant and machinery 10,944,893 Equipment, furniture and fittings 11,361,517 Motor vehicles 2,088,640 Capital expenditure in progress 1,336,494
155,488,740
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
41
3. PROPERTY, PLANT AND EQUIPMENT (cont’d)
GROUP2010
------------------------------------------------------------------------------------- At Valuation/Cost -------------------------------------------------------------------------------------Balance at Balance beginning at Reclassified to
as previously beginning non-current assets Balance atstated Reclassification as restated Additions Disposals Written off held for sale Reclassification end
RM RM RM RM RM RM RM RM RMAt valuation :Freehold land 46,901,273 (1,309,463) 45,591,810 - (1,182,000) - (2,310,000) - 42,099,810 Long-term leasehold land 5,500,000 - 5,500,000 - - - - - 5,500,000 Short-term leasehold land 4,309,435 - 4,309,435 - - - (775,568) - 3,533,867 Buildings 18,296,340 - 18,296,340 20,000 - (3,930,000) (970,000) - 13,416,340 Farm development 70,847,039 (1,691,610) 69,155,429 - (310,398) - (4,540,000) 94,965 64,399,996
At cost :Freehold land - 1,309,463 1,309,463 - - - - - 1,309,463 Long-term leasehold land 1,991,314 - 1,991,314 - - - - - 1,991,314 Buildings 2,043,286 - 2,043,286 - - - - 225,500 2,268,786 Farm development 21,153,754 1,872,691 23,026,445 262,860 (66,702) (241,546) (1,206,777) (94,965) 21,679,315 Plant and machinery 32,080,744 - 32,080,744 314,317 (505,705) (994,673) (708,395) 500,000 30,686,288 Equipment, furniture and fittings 29,954,371 - 29,954,371 1,856,581 (91,164) (250,118) (448,198) - 31,021,472 Motor vehicles 14,404,762 - 14,404,762 194,151 (376,621) (7,800) - - 14,214,492 Capital expenditure in progress 2,070,769 - 2,070,769 1,070,718 (488,470) - - (725,500) 1,927,517
249,553,087 181,081 249,734,168 3,718,627 (3,021,060) (5,424,137) (10,958,938) - 234,048,660
----------------------------------------------------------------------------- Accumulated depreciation -----------------------------------------------------------------------------Balance at Balance beginning at Reclassified to
as previously beginning Current non-current assets Balance atstated Reclassification as restated charge Disposals Written off held for sale Reclassification beginning
RM RM RM RM RM RM RM RM RMAt valuation :Freehold land - - - - - - - - - Long-term leasehold land 1,153,813 - 1,153,813 95,346 - - - - 1,249,159 Short-term leasehold land 868,975 - 868,975 193,547 - - (93,066) - 969,456 Buildings 737,834 - 737,834 344,061 - (216,150) (59,059) (16,500) 790,186 Farm development 13,726,632 216,756 13,943,388 5,423,498 (179,868) - (914,000) - 18,273,018
At cost :Freehold land - - - - - - - - - Long-term leasehold land 70,662 - 70,662 34,927 - - - - 105,589 Buildings 46,403 - 46,403 59,400 - - - 16,500 122,303 Farm development 7,583,992 (35,675) 7,548,317 2,707,681 (43,486) (159,017) (276,006) - 9,777,489 Plant and machinery 17,351,108 - 17,351,108 2,025,277 (361,177) (640,212) (343,936) - 18,031,060 Equipment, furniture and fittings 15,807,073 - 15,807,073 2,914,606 (32,768) (160,034) (118,379) - 18,410,498 Motor vehicles 11,867,885 - 11,867,885 1,128,263 (328,076) (7,624) - - 12,660,448
69,214,377 181,081 69,395,458 14,926,606 (945,375) (1,183,037) (1,804,446) - 80,389,206
Carryingamount at
endRM
At valuation :Freehold land 42,099,810 Long-term leasehold land 4,250,841 Short-term leasehold land 2,564,411 Buildings 12,626,154 Farm development 46,126,978
At cost :Freehold land 1,309,463 Long-term leasehold land 1,885,725 Buildings 2,146,483 Farm development 11,901,826 Plant and machinery 12,655,228 Equipment, furniture and fittings 12,610,974 Motor vehicles 1,554,044 Capital expenditure in progress 1,927,517
153,659,454
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
42
3. PROPERTY, PLANT AND EQUIPMENT (cont'd)
(i) The valuation of the freehold land, buildings and farm development was updated on 1 September 2007 by CH Williams Talhar & Wong Sdn. Bhd., an independent professional valuer, based on the open market value basis. The updated valuation figures were approved by the directors on 31 December 2007 and incorporated into the books. The leasehold land were revalued by an independent professional valuer based on the open market value basis on 31 December 1997 and 5 December 2002.
The historical cost and net carrying amount of properties stated at valuation are as follows :
Long-term Short-term
Freehold leasehold leasehold Farm
land land land Buildings development Total
RM RM RM RM RM RM
GROUP
2011
Cost 38,090,682 - 4,624,404 12,313,131 57,778,637 112,806,854
Accumulated
depreciation - - (1,566,498) (2,297,467) (42,684,511) (46,548,476)
Carrying amount 38,090,682 - 3,057,906 10,015,664 15,094,126 66,258,378
2010
Cost 34,221,829 2,737,901 1,886,503 12,313,131 54,683,706 105,843,070
Accumulated
depreciation - (707,365) (731,564) (1,997,839) (34,819,874) (38,256,642)
Carrying amount 34,221,829 2,030,536 1,154,939 10,315,292 19,863,832 67,586,428
(ii) The carrying amount of properties charged to licensed banks as securities for banking facilities granted to certain subsidiaries are as follows :
GROUP
2011 2010
RM RM
At valuation :
Freehold land 25,347,824 26,918,892
Long-term leasehold land - 4,250,841
Short-term leasehold land 1,702,653 2,182,195
27,050,477 33,351,928
(iii) Included in the carrying amount are the following property, plant and equipment being acquired under finance lease liabilities :
GROUP
2011 2010
RM RM
Plant and machinery 879,652 1,014,010
Motor vehicles 1,216,117 218,880
Equipment, furniture and fittings 5,724,008 8,154,887
7,819,777 9,387,777
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
43
3. PROPERTY, PLANT AND EQUIPMENT (cont'd)
(iv) Included in property, plant and equipment written off are the following :
During the financial year, PW Nutri Eggs Sdn. Bhd. (formerly known as PW Livestock (M) Sdn. Bhd.), a subsidiary of the Group has decided to undertake a new business venture which will result in the conversion of the cattle farm buildings and development into layer farm houses. Arising from this, the subsidiary had assessed the present condition of its cattle farm buildings and development and decided to demolish certain portion of the said assets that cannot be use for its new business venture. This has resulted in a write-off of RM1,083,966 during the financial year.
In the previous financial year, the Group decided to ceased its chicken trading and processing business in Selangor, Malaysia due to recurring operating losses suffered. As a result, the Group decided to write-off the factory building which was erected on a leasehold land not owned by the Group together with the equipment, furniture and fittings since these assets can no longer generate a return to the Group and that there were no other use for the building. The total carrying amount written-off amounted to RM4,112,091.
4. INVESTMENT PROPERTY
GROUP
2011 2010
RM RM
At fair value :
Residential apartment
Balance at beginning 125,000 125,000
Fair value adjustment 25,000 -
Balance at end 150,000 125,000 The above investment property is held to earn rental income and for capital appreciation.
(i) The fair value of the investment property as at the end of the reporting period is derived at based on directors’ valuation by reference to recent transacted price of similar residential apartments located at the same location.
(ii) The following are rental income and related expenses in respect of the investment property :
GROUP
2011 2010
RM RM
Rental income from investment property 6,000 5,500
Direct operating expenses arising from investment property that generated rental income during the year (1,119) (2,271)
5. INVESTMENT IN SUBSIDIARIES
COMPANY
2011 2010
RM RM
Unquoted shares, at cost 39,188,963 39,188,963
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
44
5. INVESTMENT IN SUBSIDIARIES (cont'd)
Details of the subsidiaries which are all incorporated in Malaysia are as follows :
Name of CompanyEffective Equity
Interest Principal Activities2011 2010
Direct
PW Nutrifarm Corporation Sdn. Bhd. 100% 100% Broiler farming and investment holding.
PW Nutrifeed Sdn. Bhd. 100% 100% Manufacturing and selling of broiler feeds.
Everay Agritech Sdn. Bhd. 100% 100% Inactive.
Indirect - held through PW Nutrifarm Corporation Sdn. Bhd.
PW Nutri Breeder Farm Sdn. Bhd. (formerly known as PinWee Breeder
Farm (Malacca) Sdn. Bhd.)
100% 100% Breeding of day-old chicks.
PinWee Chicken Trading Sdn. Bhd. 100% 100% Trading of broilers.
PW Nutrifarm Venture Sdn. Bhd. 100% 100% Dealing of animal feed and investment holding.
PW Breeder Farm (Taiping) Sdn. Bhd. 100% 100% Breeder of livestock.
PW Properties Sdn. Bhd. 100% 100% Trading of feed materials.
PW Nutri Processing Sdn. Bhd. 100% 100% Trading and processing of chicken and ducks. However, the company has ceased its operations during the financial year and subsequently became dormant.
PinWee Food Processing Sdn. Bhd. 100% 100% Inactive.
PW Tyres & Auto Service Sdn. Bhd. 80% 80% Inactive.
^PinWee Breeder Farms Sdn. Bhd. Nil 100% Strike off during the year.
^PinWee Layer Farm Sdn. Bhd. Nil 100% Strike off during the year.
Indirect - held through PW Nutrifeed Sdn. Bhd.
PW Nutri Eggs Sdn. Bhd. (formerly known as PW Livestock (M) Sdn. Bhd.)
100% 100% The company has ceased its rearing and selling of cattle activities and will commence a new activity in layer farming.
PinWee Duck Farms Sdn. Bhd. 100% 100% Rearing and processing of ducks.
Indirect – held through PW Properties Sdn. Bhd.
PW Tyres & Auto Service Sdn. Bhd. 20% 20% Inactive.
In the previous financial year, the Company via its wholly-owned subsidiary, PW Nutrifarm Corporation Sdn. Bhd. increased its equity interest in PinWee Breeder Farm (Malacca) Sdn. Bhd. through acquisition of an additional 497,492 ordinary shares of RM1.00 each for a total cash consideration of RM1,502,622. Resulting from the acquisition, PinWee Breeder Farm (Malacca) Sdn. Bhd. became a wholly-owned subsidiary of the Company.
^ During the financial year, these subsidiaries have successfully applied to the Companies Commission of Malaysia (“CCM”) to strike off their names from the Register of Companies.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
45
6. INTANGIBLE ASSETS
GROUP
2011 2010
RM RM
Goodwill
Balance at beginning 5,240,569 5,186,163
Arising from acquisition of additional equity interests in an existing subsidiary - 66,100
Written off - (11.694)
Balance at end 5,240,569 5,240,569
The goodwill on consolidation arose from the acquisition of certain subsidiaries and have been allocated to its livestock farming segment as the cash-generating unit (CGU).
For annual impairment testing purposes, the recoverable amount of the CGU is determined based on its value-in-use, which applies a discounted cash flow model using cash flow projections based on financial budget and projections approved by management.
No impairment loss was required for the goodwill as its recoverable amount is in excess of its carrying amount.
The key assumptions on which the management has based on for the computation of value-in-use are as follows :
(i) Cash flow projections and growth rate
The five-year cash flow projections are based on the most recent budget approved by the management and extrapolated using a steady growth rate for the subsequent years.
(ii) Discount rate
The discount rate of 5.45% is applied to the cash flow projections.
The values assigned to the key assumptions represent management’s assessment of future trends in the industry.
The above estimates are particularly sensitive in the following areas :
(i) A 6% decrease in future planned revenues would have resulted in an impairment loss of approximately RM202,000.
(ii) An increase of 1% in the discount rate used would not result in any impairment loss.
7. INVENTORIES
GROUP
2011 2010
RM RM
At cost :
Consumables 774,664 668,510
Finished goods 1,286,514 827,430
Livestock 12,609,695 29,436,827
Parent stock 8,638,685 3,946,118
Raw materials 19,952,424 31,252,050
43,261,982 66,130,935
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
46
7. INVENTORIES (cont'd) Included in the parent stock and livestock are the following expenses :
2011 2010
RM RM
Depreciation 817,989 820,556
Staff costs 655,891 586,193
The cost of inventories recognised in profit or loss for the financial year amounted to RM233,891,179 (2010 : RM228,085,996).
8. TRADE RECEIVABLES
GROUP
2011 2010
RM RM
Trade receivables 28,800,471 32,110,264
Less : Allowance for impairment
Balance at beginning (5,054,459) (11,010,337)
Current year (9,990) (993,161)
Doubtful debts recovered 117,049 15,700
Written off 101,747 6,933,339
Balance at end (4,845,653) (5,054,459)
23,954,818 27,055,805 Included in the trade receivables of the previous year was an amount of RM6,316,958 which bore interest at 7.00% to 7.80% per annum.
Trade receivables amounting to RM691,214 (2010 : RM1,261,820) have pledged their properties to subsidiaries of the Group as security for their outstanding balance.
The trade receivables are extended credit terms of 7 to 90 days (2010 : 7 to 90 days). They are recognised at their original invoice amounts
which represent their fair values on initial recognition.
9. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Other receivables 1,262,089 2,476,762 - 3,352
Refundable deposits 421,505 303,963 - -
Prepayments 7,380,793 1,426,599 - -
9,064,387 4,207,324 - 3,352
Included in prepayments is an amount of RM6,071,411 (2010 : RM Nil) paid to suppliers for purchase of raw materials.
As at the end of the reporting period, there was no indication that the other receivables and deposits are not recoverable.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
47
10. AMOUNT DUE FROM SUBSIDIARIES
COMPANY The amount due from subsidiaries is non-trade related, unsecured, non-interest bearing and is repayable on demand.
11. INVESTMENT SECURITIES
GROUP
2011 2010
RM RM
Investments held for trading :
Shares quoted outside Malaysia 2,209,731 -
Fair value adjustment 88,384 -
Balance at end 2,298,115 - The investment securities are denominated in Hong Kong Dollar.
12. FIXED DEPOSIT WITH A LICENSED BANK
GROUP The fixed deposit is pledged to a licensed bank for bank guarantee facilities granted to a subsidiary.
The effective interest rate of fixed deposit as at the end of the reporting period is 3.00% (2010 : 2.60%) per annum. The maturity of the fixed deposit is 12 months (2010: 12 months).
13. NON-CURRENT ASSETS HELD FOR SALE
GROUP
2011 2010
RM RM
Balance at beginning 11,494,492 6,769,907
Reclassified from property, plant and equipment - 10,994,492
Reversed to property, plant and equipment (9,013,185) (1,840,000)
Disposed during the year (500,000) (4,429,907)
Balance at end 1,981,307 11,494,492
Represented by :
Freehold land - 4,620,000
Short-term leasehold land and building 1,593,443 1,593,443
Plant and machinery 364,459 395,469
Farm development - 4,586,771
Equipment, furniture and fixtures 23,405 298,809
1,981,307 11,494,492
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
48
13. NON-CURRENT ASSETS HELD FOR SALE (cont’d) During the financial year, the Group via its subsidiary had entered into a Sale and Purchase Agreement with a third party to sell the leasehold
land and building, together with all plant and machinery, equipment and fixtures, for a consideration of RM2,020,000. As at the end of the reporting period, the subsidiary has received a deposit of RM202,000 from the buyer. The disposal is expected to be completed in the financial year ending 31 December 2012.
The reversal to property, plant and equipment during the year was due to a change in plan to sell where the Group has decided to retain the said properties for the construction of layer farm houses.
14. SHARE CAPITAL
Number of ordinary
shares of RM1 each Amount
2011 2010 2011 2010
RM RM
Authorised 100,000,000 100,000,000 100,000,000 100,000,000
Issued and fully paid 60,911,250 60,911,250 60,911,250 60,911,250 EMPLOYEE SHARE OPTION SCHEME (“ESOS”)
The Company’s ESOS is governed by the by-law approved by the shareholders at an Extraordinary General Meeting held on 18 November 2003. The ESOS will be in force for a period of five years expiring on 14 January 2009. The Company has extended the existing ESOS for another 5 years until 14 January 2014.
The salient features of the ESOS are as follows :
(i) the maximum number of new shares of the Company which may be subscribed on the exercise of options granted under the ESOS shall not exceed ten per centum (10%) of the issued and paid-up share capital of the Company or such maximum percentages as allowable by any relevant authorities at any point of time during the existence of the ESOS,
(ii) any employee (including Executive Directors) shall be eligible to participate in the ESOS if, as at the date of offer, the employee is at least eighteen (18) years of age or above and who is a Malaysian citizen; is employed full time by and on the payroll of any company in the Group (provided that the subsidiaries are not dormant); and is confirmed in writing as a full time employee of any company in the Group (provided that the subsidiaries are not dormant) for at least one (1) year immediately preceding the date of offer. Eligibility, however, does not confer an eligible employee a claim or right to participate in the ESOS unless an offer has been extended to the eligible employee,
(iii) not more than fifty per centum (50%) (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS should be allocated, in aggregate, to directors and senior management of the Group (provided that the subsidiaries are not dormant). In addition, not more than ten per centum (10%) (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS should be allocated to any individual director or employee who, either singly or collectively through his/her associates, holds twenty per centum (20%) or more in the issued and paid-up share capital of the Company,
(iv) the ESOS shall continue to be in force for a period of five (5) years from the date of confirmation letter to the Securities Commission. However, the ESOS may, at the discretion of the Option Committee, be extended or renewed (as the case may be) provided always that the initial ESOS period stipulated above and such extension of the ESOS made pursuant to the By-Laws shall not in aggregate exceed a duration of ten (10) years. For the avoidance of doubt, no further sanction, approval or authorisation of the shareholders of the Company in a general meeting is required for any such extension or renewal (as the case may be),
(v) the price at which the grantee is entitled to subscribe for each new share shall be fixed based on the 5-day weighted average market price of the Company’s shares as quoted on Bursa Malaysia Securities Berhad, at the date of offer with a discount of not more than ten per centum (10%), if deemed appropriate, or such lower or higher limit in accordance with any prevailing guidelines issued by the Securities Commission or any other relevant authorities as amended from time to time, or at the par value of each of the share of the Company, whichever is higher,
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
49
14. SHARE CAPITAL (cont’d)
EMPLOYEE SHARE OPTION SCHEME (“ESOS”) (cont’d)
(vi) an offer made by the Option Committee to an eligible employee shall be valid for a period of thirty (30) days from the date of offer and shall be accepted within this prescribed period by the eligible employee to whom the offer is made by a written notice to the Option Committee in such form as may be prescribed by the Option Committee of such acceptance accompanied by a payment to the Company of a non-refundable cash consideration of RM1 only for the grant of the option. The day of receipt of such written notice shall constitute the date of acceptance, and
(vii) the new shares shall, upon allotment and issue, rank pari passu in all respects with the existing issued and paid-up shares of the Company except that the new shares shall not be entitled to any dividends, rights, allotments and/or other distribution unless the shares so allotted have been credited into the relevant securities accounts maintained by the Bursa Malaysia Depository Sdn. Bhd. before the entitlement date and will be subject to all the provisions of the Articles of Association of the Company relating to the transfer, transmission or otherwise of the shares of the Company.
As at the end of the reporting period, no options were offered.
15. TREASURY SHARES This amount represents the acquisition cost of treasury shares.
The shareholders of the Company, by resolution passed at the Annual General Meeting held on 28 June 2011, approved the Company’s plan and mandate to authorise the Directors of the Company to buy back its own shares up to 10% of the existing total issued and paid-up share capital.
The details of the shares repurchased during the year are as follows :
|------------------------ Price per share -----------------------| Number of shares
Total consideration
Month Lowest Highest Average RM
August 2011 0.40 0.40 0.40 19,000 7,656
September 2011 0.40 0.41 0.41 65,000 26,670
November 2011 0.43 0.43 0.43 3,000 1,332
87,000 35,658 During the financial year, the Company repurchased 87,000 (2010 : Nil) of its issued ordinary shares from the open market at an average
price of RM0.41 (2010 : RM Nil) per share for a total consideration of RM35,658 (2010 : RM Nil). The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.
Of the total 60,911,250 issued and fully paid ordinary shares as at 31 December 2011, 1,220,500 are held as treasury shares by the Company, and accordingly the number of outstanding ordinary shares in issue and fully paid as at that date is therefore 59,690,750 ordinary shares of RM1 each.
Treasury shares have no rights to voting, dividends and participation in other distribution.
16. CAPITAL RESERVE GROUP This is in respect of revaluation surplus net of deferred tax arising from the revaluation of certain freehold land, leasehold land, buildings and
farm development and is non-distributable.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
50
17. RETAINED PROFITS COMPANY
The payment of dividends of the Company is under the single tier system and therefore there is no restriction to pay dividends out of the Company’s retained profits.
18. BORROWINGS
GROUP
2011 2010
RM RM
Non-current liabilities
Secured
Finance lease liabilities 635,826 1,537,749
Term loans 9,947,770 2,456,640
10,583,596 3,994,389
Current liabilities
Secured
Bank overdrafts 2,856,807 4,973,413
Bankers acceptance 12,185,000 26,672,000
Finance lease liabilities 1,711,423 2,420,023
Promissory notes 7,838,000 7,363,000
Term loans 2,456,530 2,689,772
Trust receipts - 10,994,922
27,047,760 55,113,130
Unsecured
Bank overdrafts 6,514,469 9,188,237
Bankers acceptance 28,910,000 29,073,000
Trust receipts 12,056,652 5,979,300
47,481,121 44,240,537
74,528,881 99,353,667 The secured borrowings of the subsidiaries are secured by way of :
(i) Legal charges over certain landed properties of certain subsidiaries,(ii) Negative pledge over certain assets of certain subsidiaries both present and future,(iii) Corporate guarantee of the Company and of a subsidiary, (iv) Letter of guarantee from the Government of Malaysia/Syarikat Jaminan Pembiayaan Bhd for 80% on the facilitiy amount of a subsidiary, (v) Joint and several guarantee by certain directors of the Company,(vi) Facility agreement of a subsidiary, and (vii) Specific debentures over assets of certain subsidiaries.
The unsecured borrowings of the Group are secured by corporate guarantee of the Company.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
51
18. BORROWINGS (cont’d)
A summary of the effective interest rates and the maturities of the borrowings are as follows :
Average More than More than
effective one year and two years
interest rate Within less than and less than More than
per annum Total one year two years five years five years
(%) RM RM RM RM RM
2011
Bank overdrafts 7.35 to 8.85 9,371,276 9,371,276 - - -
Bankers acceptance 3.93 to 5.55 41,095,000 41,095,000 - - -
Finance lease liabilities :
Minimum lease payments 2.43 to 4.70 2,477,630 1,800,630 319,431 357,569 -
Finance charge (130,381)
2,347,249
Promissory notes 5.32 to 6.23 7,838,000 7,838,000 - - -
Term loans 6.50 to 8.10 12,404,300 2,456,530 1,679,492 4,776,042 3,492,236
Trust receipts 7.85 to 8.60 12,056,652 12,056,652 - - -
2010
Bank overdrafts 6.30 to 7.80 14,161,650 14,161,650 - - -
Bankers acceptance 2.23 to 5.09 55,745,000 55,745,000 - - -
Finance lease liabilities :
Minimum lease payments 3.30 to 4.70 4,201,783 2,610,274 1,536,354 55,155 -
Finance charge (244,011)
3,957,772
Promissory notes 4.86 to 4.89 7,363,000 7,363,000 - - -
Term loans 6.80 to 7.80 5,146,412 2,689,772 1,339,528 1,117,112 -
Trust receipts 6.50 to 7.75 16,974,222 16,974,222 - - -
19. DEFERRED TAX LIABILITIES
GROUP
2011 2010
RM RM
Revaluation surplus
Balance at beginning 7,692,789 8,936,455
Transfer to profit or loss (896,129) (1,148,761)
Realisation upon disposal and write off of properties - (94,905)
Balance at end carried forward 6,796,660 7,692,789
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
52
19. DEFERRED TAX LIABILITIES (cont’d)
GROUP
2011 2010
RM RM
Balance at end brought forward 6,796,660 7,692,789
Excess of capital allowances over depreciation on property, plant and equipment
Balance at beginning 5,797,572 6,018,762
Transfer from/(to) profit or loss 8,460 (318,973)
5,806,032 5,699,789
(Over)/Under provision in prior year (161,654) 97,783
Balance at end 5,644,378 5,797,572
Other temporary difference
Balance at beginning (492,983) (484,285)
Transfer to profit or loss (101,970) (480,391)
(594,953) (964,676)
Over provision in prior year 480,391 471,693
Balance at end (114,562) (492,983)
12,326,476 12,997,378
20. TRADE PAYABLES
GROUP
2011 2010
RM RM
The foreign currency profile of trade payables are as follows :
Ringgit Malaysia 8,357,445 17,094,991
US Dollar 623,464 907,332
8,980,909 18,002,323 Trade payables are non-interest bearing and are normally settled on 30 to 120 days (2010 : 30 to 120 days) terms.
21. OTHER PAYABLES AND ACCRUALS
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Other payables 2,166,500 3,870,288 8,695 35,374
Accruals 3,437,181 2,799,968 418,300 405,350
Deposit received 208,561 6,861 - -
5,812,242 6,677,117 426,995 440,724
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
53
21. OTHER PAYABLES AND ACCRUALS (cont’d) The foreign currency profile of other payables and accruals are as follows :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Ringgit Malaysia 5,810,757 6,677,117 426,995 440,724
Singapore Dollar 1,485 - - -
5,812,242 6,677,117 426,995 440,724
22. REVENUE
GROUP COMPANY
(Restated)
2011 2010 2011 2010
RM RM RM RM
Sales of goods 264,380,844 257,088,737 - -
Dividend income - - 2,372,506 1,712,117
264,380,844 257,088,737 2,372,506 1,712,117
23. OTHER INCOME
GROUP
(Restated)
2011 2010
RM RM
Compensation received - 272,021
Doubtful debts recovered 116,550 15,200
Fair value gain on investment securities 88,384 -
Fair value gain on investment property 25,000 -
Gain on disposal of non-current assets held for sale - 1,898,314
Gain on disposal of property, plant and equipment 446,830 128,542
Interest income - current year 93,197 356,881
- over provision in prior year (126,339) -
Realised gain on foreign exchange 73,444 34,990
Rental income 181,482 33,501
Others 369,007 641,222
1,267,555 3,380,671
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
54
24. FINANCE COSTS
GROUP
2011 2010
RM RM
Bank overdrafts 1,069,459 1,466,781
Bankers acceptance 1,976,981 1,957,501
Finance lease liabilities 255,148 388,565
Promissory note 423,136 550,195
Term loans 817,943 542,191
Trust receipts 832,302 1,380,934
5,374,969 6,286,167
25. PROFIT BEFORE TAXATION
This is arrived at :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
After charging :
# Audit fee
- current year 115,500 115,400 19,000 17,000
- (over)/under provision in prior year (2,000) 2,000 - -
Bad debts 29,379 2,476 - -
# * Depreciation 15,653,995 14,713,978 - -
Directors’ fee
- Non-executive directors 90,000 90,000 90,000 90,000
Directors’ emoluments
- Non-executive directors 27,500 26,100 27,500 26,100
# Impairment loss on trade receivables 9,990 993,161 - -
Interest expense 5,374,969 6,286,167 - -
# Loss on disposal of property, plant and equipment 190,731 444,854 - -
Loss on disposal of non-current assets held for sale 100,000 - - -
# Property, plant and equipment written off 1,087,898 4,241,000 - -
Rental of farm 18,300 27,350 - -
** Rental of land and building 550 6,445 - -
# Rental of premises 2,000 6,750 - -
#*** Staff costs 12,711,284 11,750,710 91,500 106,500
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
55
25. PROFIT BEFORE TAXATION (cont’d)
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
And crediting :
# Doubtful debts recovered 117,049 15,700 - -
Fair value adjustment
- investment property 25,000 - - -
- investment securities 88,384 - - -
Gain on disposal of non-current assets held for sale - 1,898,314 - -
# Gain on disposal of property, plant and equipment 931,176 134,540 - -
Goodwill on consolidation written off - 11,694 - -
Interest income
- current year 93,197 356,881 - -
- over provision in prior year (126,339) - - -
Realised gain on foreign exchange 73,444 34,990 - -
Rental income 181,482 33,501 - -
* Depreciation
- Current charge (Note 3) 15,651,428 14,926,606 - -
- Deferred under inventories (817,989) (820,556) - -
14,833,439 14,106,050 - -
- Realisation of depreciation previously deferred under inventories 820,556 607,928 - -
15,653,995 14,713,978 - -
** Rental of land and building
- Current charge 550 (229) - -
- Realisation of rental of land and building previously deferred under inventories - 6,674 - -
550 6,445 - -
*** Staff costs
- Salaries, allowances and bonus 11,672,361 10,652,429 91,500 106,500
- EPF 945,803 1,001,582 - -
- SOCSO 93,120 96,699 - -
12,711,284 11,750,710 91,500 106,500
- Current charge of staff costs 12,780,982 11,950,577 91,500 106,500
- Deferred under inventories (655,891) (586,193) - -
12,125,091 11,364,384 91,500 106,500
- Realisation of staff costs previously deferred under inventories 586,193 386,326 - -
12,711,284 11,750,710 91,500 106,500
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
56
25. PROFIT BEFORE TAXATION (cont’d)
Included in the staff costs of the Group and of the Company are the aggregate amount of remuneration received and receivable by directors of the Company and its subsidiaries as shown below :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Directors’ emoluments
Executive directors of the Company
- Salaries, allowances and bonus 1,438,577 1,546,500 10,500 10,500
- EPF 226,560 240,960 - -
Directors’ fee
Executive directors of the Company 81,000 96,000 81,000 96,000
1,746,137 1,883,460 91,500 106,500
Benefit-in-kind
Executive directors of the Company 46,250 32,900 - -
1,792,387 1,916,360 91,500 106,500
Included herein is directors’ remuneration amounting to RM18,500 (2010 : RM Nil) paid to a past director of the Company.
# Included herein are the breakdown of the following expenses/(income) categorised as discontinued operations :
GROUP
(Restated)
2011 2010
RM RM
Audit fee 5,500 10,000
Depreciation 89,298 428,998
Impairment loss on trade receivables 9,990 598,445
(Gain)/Loss on disposal of property, plant and equipment (484,346) 438,860
Property, plant and equipment written off - 4,126,376
Rental of premises 2,000 6,750
Staff costs 96,908 453,129
Doubtful debts recovered (499) (500)
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
57
26. TAXATION
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Continuing operations
Malaysian income tax :
Based on results for the year
- Current tax (2,826,896) (2,236,766) - -
- Deferred tax relating to origination and reversal of temporary differences 988,277 1,968,586 - -
(1,838,619) (268,180) - -
Under provision in prior years
- Current tax (97,102) (38,560) - (1,620)
- Deferred tax (318,737) (569,476) - -
(415,839) (608,036) - (1,620)
Income tax from continuing operations (2,254,458) (876,216) - (1,620)
Discontinued operations
Malaysian income tax :
Based on results for the year
Deferred tax relating to origination and reversal of temporary differences (Note 27) 1,362 74,444 - -
(2,253,096) (801,772) - (1,620)
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
58
26. TAXATION (cont’d)
The reconciliation of income tax expense of the Group and of the Company is as follows :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Profit before taxation
- Continuing operations 5,962,453 6,650,709 2,039,073 1,360,490
- Discontinued operations (Note 27) 959,310 (5,740,387) - -
6,921,763 910,322 2,039,073 1,360,490
Income tax at Malaysian statutory tax rate of 25% (1,730,441) (227,580) (509,768) (340,123)
Effects of :
- Income not subject to tax 759,267 963,448 593,126 428,029
- Expenses not deductible for tax purposes (1,599,453) (1,068,353) (83,358) (87,906)
- Utilisation of reinvestment allowance 92,233 195,428 - -
- Utilisation of unabsorbed tax losses and capital allowances 322,291 - - -
- Movement of deferred tax assets not recognised (577,283) (1,300,345) - -
- Realisation of deferred tax upon disposal and write off of properties - 94,905 - -
- Annual crystallisation of deferred tax on revaluation 896,129 1,148,761 - -
(1,837,257) (193,736) - -
Under provision in prior years (415,839) (608,036) - (1,620)
(2,253,096) (801,772) - (1,620)
The deferred tax (assets)/liabilities not recognised as at the end of the reporting period prior to set off are as follows :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Unabsorbed tax losses (8,782,000) (8,808,000) - -
Unabsorbed capital allowances (10,664,500) (11,952,000) - -
Other deductible temporary differences 3,388,000 5,725,000 - -
(16,058,500) (15,035,000) - -
The unabsorbed tax losses and capital allowances are available to be carried forward for set off against future assessable income of a nature and amount sufficient for the tax losses and capital allowances to be utilised.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
59
27. DISCONTINUED OPERATIONS
(Restated)
2011 2010
RM RM
Analysis of the results of discontinued operations are as follows :
Revenue 2,215,513 12,265,544
Cost of goods sold (2,238,597) (12,311,256)
Gross loss (23,084) (45,712)
Other income 1,125,519 6,498
Administrative expenses (143,125) (5,701,173)
Profit/(Loss) before taxation (Note 25) 959,310 (5,740,387)
Taxation (Note 26) 1,362 74,444
Profit/(Loss) for the year 960,672 (5,665,943)
The cash flows attributable to the discontinued operations are as follows :
Operating activities (915,400) (375,859)
Investing activities 904,666 242,914
Financing activities (16,918) (15,400)
(27,652) (148,345) During the financial year, the Group decided to ceased its chicken and duck processing division. Accordingly, the results of the said business
segment have been separately disclosed under discontinued operations to conform with FRS 5: Non-current Assets Held for Sale and Discontinued Operations.
28. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit attributable to owners of the parent for the year by the weighted average
number of ordinary shares in issue during the financial year excluding treasury shares as follow :
(Restated)
2011 2010
Profit attributable to owners of the parent (RM) 4,668,667 162,392
(Profit)/Loss from discontinued operations attributable to owners of the parent (RM) (960,672) 5,665,943
Profit from continuing operations attributable to owners of the parent used in the computation of basic earnings per share (RM) 3,707,995 5,828,335
Weighted average number of ordinary shares of RM1 each in issue 59,752,835 59,777,750
Basic, profit from continuing operations (Sen) 6.21 9.75
Basic, profit/(loss) from discontinued operations (Sen) 1.61 (9.48)
Basic, net profit for the year (Sen) 7.82 0.27
There are no diluted earnings per share as the Company does not have any convertible financial instruments as at the end of the reporting period.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
60
29. DIVIDEND
2011 2010
RM RM
Interim tax exempt dividend of 4 sen per share in respect of the financial year ended 31 December 2011 2,387,630 -
30. SEGMENTAL INFORMATION
Segmental information is presented in respect of the Group’s business segments. No geographical segment information has been presented as the Group’s activities and customers are all based in Malaysia. As at the end of the reporting period, the Group does not have any major customer with revenue equal or more than 10 percent of the Group’s revenue.
The primary format, business segments is based on the Group’s management and internal reporting structure. Inter-segment pricing is determined based on negotiated terms.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The Group is organised based on the following business segments : Business Segments Business activities (1) Livestock farming Breeding of broilers, ducks, day-old chicks and other livestock.
(2) Animal feeds Manufacturing and sale of broiler feeds.
* (3) Agriculture products Trading of agriculture products.
(4) Processed chickens Trading and processing of processed chickens and ducks. This division has been classified discontinued during the financial year and accordingly it is presented separately from the continuing divisions of the Group. Comparative figures have also been restated in accordance to FRS5 : Non-current Assets Held for Sale and Discontinued Operations.
(5) Others Trading of tyres, motor accessories and spare parts and servicing and repairs of motor vehicles.
(6) Investment holding Investment and the provision of management services.
* This segment has been consolidated under the animal feed segment division in the current financial year as it is viewed as one operating segment.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
6130
.SE
GM
ENTA
L IN
FOR
MA
TIO
N (
con
t'd
)
Dis
con
tin
ued
|---
------
------
------
------
------
------
------
------
------
-----
Co
nti
nu
ing
op
erat
ion
s ---
------
------
------
------
------
------
------
-----|
op
erat
ion
s
Live
sto
ckfa
rmin
gA
nim
alfe
eds
Oth
ers
Inve
stm
ent
ho
ldin
gTo
tal
Pro
cess
ed
chic
ken
san
d d
uck
sEl
imin
atio
ns
Co
nso
lidat
ed
RM
RM
RM
RM
RM
RM
RM
No
teR
M
2011
Exte
rnal
sal
es 2
33,5
69,1
38
30,
811,
706
- -
264
,380
,844
2
,215
,513
-
266,
596,
357
Inte
r-seg
men
t sa
les
-
163
,236
,550
-
2,37
2,50
6 1
65,6
09,0
56
- (1
65,6
09,0
56)
A
-
Tota
l rev
enue
233,
569,
138
194,
048,
256
- 2,
372,
506
429,
989,
900
2,21
5,51
3 (1
65,6
09,0
56)
266,
596,
357
Res
ult
s
Segm
ent
resu
lts2,
707,
561
7,71
9,95
9 (4
,353
)2,
039,
073
12,
462,
240
959,
310
(1,0
91,6
76)
12,3
29,8
74
Inte
rest
inco
me
23,6
19
(56,
761)
- -
(33
,142
) -
- (3
3,14
2)
Inte
rest
exp
ense
(2,4
82,5
74)
(2,8
92,3
95)
- -
(5,
374,
969)
- -
(5,3
74,9
69)
Prof
it/(L
oss)
bef
ore
taxa
tion
248,
606
4,77
0,80
3 (4
,353
)2,
039,
073
7,0
54,1
29
959,
310
(1,0
91,6
76)
6,92
1,76
3
Taxa
tion
(678
,623
)(1
,264
,481
)9,
000
- (
1,93
4,10
4)1,
362
(320
,354
)(2
,253
,096
)
Prof
it/(L
oss)
for
the
yea
r(4
30,0
17)
3,50
6,32
2 4,
647
2,03
9,07
3 5,
120,
025
960,
672
(1,4
12,0
30)
4,66
8,66
7
Ass
ets
Segm
ent
asse
ts23
8,11
1,37
5 12
9,10
3,40
9 10
7,78
6 62
,369
,708
4
29,6
92,2
78
- (1
88,2
52,3
60)
241,
439,
918
Tax
reco
vera
ble
159,
335
2,3
33
- -
161
,668
-
- 16
1,66
8
Fixe
d de
posi
t w
ith a
lice
nsed
ban
k 6
5,00
0 -
- -
65,
000
- -
65,0
00
Cas
h an
d ba
nk b
alan
ces
1,70
7,67
1 39
,271
-
47,2
11
1,7
94,1
53
- -
1,79
4,15
3
Tota
l ass
ets
240,
043,
381
129,
145,
013
107,
786
62,4
16,9
19
431
,713
,099
-
(188
,252
,360
)24
3,46
0,73
9
Liab
iliti
es
Segm
ent
liabi
litie
s11
1,28
6,41
0 12
,129
,220
3,
454
426,
995
123
,846
,079
-
(109
,052
,928
)14
,793
,151
Borr
owin
gs43
,239
,946
41
,872
,531
-
- 8
5,11
2,47
7 -
- 85
,112
,477
Prov
isio
n fo
r ta
xatio
n76
9,60
6 34
3,39
9 -
- 1
,113
,005
-
- 1,
113,
005
Def
erre
d ta
x lia
bilit
ies
8,65
7,90
5 3,
775,
860
- -
12,
433,
765
- (
107,
289)
12,3
26,4
76
Tota
l lia
bilit
ies
163,
953,
867
58,1
21,0
10
3,45
4 42
6,99
5 2
22,5
05,3
26
- (1
09,1
60,2
17)
113,
345,
109
Oth
er in
form
atio
n
Cap
ital e
xpen
ditu
re9,
983,
938
895,
367
- -
10,
879,
305
- -
B
10,8
79,3
05
Dep
reci
atio
n 1
3,00
6,23
7 2
,555
,893
-
- 1
5,56
2,13
0 8
9,29
8 -
15,6
51,4
28
Oth
er n
on-c
ash
expe
nses
/(in
com
e)95
7,67
8 (1
09,8
84)
- -
847
,794
(4
74,3
56)
- C
37
3,43
8
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
6230
.SE
GM
ENTA
L IN
FOR
MA
TIO
N (
con
t'd
)
Dis
cont
inue
d
|---
------
------
------
------
------
------
------
------
------
-----
Con
tinui
ng o
pera
tions
-----
------
------
------
------
------
------
------
---|
oper
atio
ns
Live
stoc
kfa
rmin
gA
nim
alfe
eds
Agr
icul
ture
pro
duct
sO
ther
sIn
vest
men
tho
ldin
gTo
tal
Proc
esse
d ch
icke
nsan
d du
cks
Elim
inat
ions
Con
solid
ated
RMRM
RMRM
RMRM
RMRM
Not
eRM
(Res
tate
d)
2010
Reve
nue
Exte
rnal
sal
es 2
01,6
72,8
07
55,
415,
930
- -
- 2
57,0
88,7
37
12,
265,
544
- 26
9,35
4,28
1
Inte
r-seg
men
t sa
les
11,
786,
482
147
,110
,100
-
256
,207
1,
712,
117
160
,864
,906
-
(160
,864
,906
) A
-
Tota
l rev
enue
213,
459,
289
202,
526,
030
- 25
6,20
7 1,
712,
117
417,
953,
643
12,2
65,5
44
(160
,864
,906
)26
9,35
4,28
1
Resu
lts
Segm
ent
resu
lts3,
931,
554
9,39
9,53
2 (7
5,69
1)(5
,541
)1,
360,
490
14,
610,
344
(5,7
40,3
87)
(2,0
24,0
92)
6,84
5,86
5
Inte
rest
inco
me
110,
922
181,
254
58,4
48
- -
350
,624
-
- 35
0,62
4
Inte
rest
exp
ense
(1,4
65,8
07)
(4,7
93,4
69)
(26,
891)
- -
(6,
286,
167)
- -
(6,2
86,1
67)
Prof
it/(L
oss)
bef
ore
taxa
tion
2,57
6,66
9 4,
787,
317
(44,
134)
(5,5
41)
1,36
0,49
0 8
,674
,801
(5
,740
,387
)(2
,024
,092
)91
0,32
2
Taxa
tion
215,
163
(1,4
04,6
98)
(9,8
00)
100
(1,6
20)
(1,2
00,8
55)
74,4
44
324,
639
(801
,772
)
Prof
it/(L
oss)
for
the
yea
r2,
791,
832
3,38
2,61
9 (5
3,93
4)(5
,441
)1,
358,
870
7,47
3,94
6 (5
,665
,943
)(1
,699
,453
)10
8,55
0
Ass
ets
Segm
ent
asse
ts26
7,37
6,94
9 14
7,58
2,50
0 3,
278,
902
95,8
99
62,7
72,1
25
481
,106
,375
-
(213
,192
,796
)26
7,91
3,57
9
Tax
reco
vera
ble
236,
391
- 2,
333
- -
238
,724
-
- 23
8,72
4
Fixe
d de
posi
t w
ith a
lic
ense
d ba
nk 6
5,00
0 -
- -
- 6
5,00
0 -
- 65
,000
Cas
h an
d ba
nk b
alan
ces
1,74
7,31
7 15
3,09
9 65
7 17
,801
42
,738
1
,961
,612
-
- 1,
961,
612
Tota
l ass
ets
269,
425,
657
147,
735,
599
3,28
1,89
2 11
3,70
0 62
,814
,863
48
3,37
1,71
1 -
(213
,192
,796
)27
0,17
8,91
5
Liab
ilitie
s
Segm
ent
liabi
litie
s14
6,08
0,90
0 19
,080
,702
33
,677
5,
015
440,
724
165
,641
,018
-
(140
,961
,578
)24
,679
,440
Borr
owin
gs45
,394
,799
57
,953
,257
-
- -
103
,348
,056
-
- 10
3,34
8,05
6
Prov
isio
n fo
r ta
xatio
n92
6,62
3 34
8,16
7 -
9,00
0 -
1,2
83,7
90
- -
1,28
3,79
0
Def
erre
d ta
x lia
bilit
ies
9,71
3,52
1 3,
701,
702
9,80
0 -
- 1
3,42
5,02
3 -
(42
7,64
5)12
,997
,378
Tota
l lia
bilit
ies
202,
115,
843
81,0
83,8
28
43,4
77
14,0
15
440,
724
283,
697,
887
- (1
41,3
89,2
23)
142,
308,
664
Oth
er in
form
atio
n
Cap
ital e
xpen
ditu
re2,
200,
045
1,51
8,58
2 -
- -
3,7
18,6
27
- -
B
3,71
8,62
7
Dep
reci
atio
n 1
1,81
3,10
0 2
,625
,383
4
7,56
7 11
,558
-
14,
497,
608
428
,998
-
14,9
26,6
06
Oth
er n
on-c
ash
ex
pens
es/(
inco
me)
(1,4
52,7
70)
(76,
244)
- 14
,065
11
,694
(
1,50
3,25
5)5,
163,
681
30,
005
C
3,69
0,43
1
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
63
30. SEGMENTAL INFORMATION (cont’d)
Notes to segment information :
A Inter-segment revenue are eliminated on consolidation.
B Additions to non-current assets consist of property, plant and equipment.
C Other non-cash expenses/(income) consist of the following items :
2011 2010
RM RM
Bad debts 29,379 2,476
Fair value adjustment
- investment property (25,000) -
- investment securities (88,384) -
Impairment loss on trade receivables 9,990 993,161
Loss/(Gain) on disposal of non-current assets held for sale 100,000 (1,898,314)
(Gain)/Loss on disposal of property, plant and equipment (740,445) 340,314
Goodwill on consolidation written off - 11,694
Property, plant and equipment written off 1,087,898 4,241,100
373,438 3,690,431
31. RELATED PARTY DISCLOSURES
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
(i) Related party transactions
Purchase of freehold land from Dato’ Siah Gim Eng and Datin Law Hooi Lean 4,640,276 - - -
Dividend received from a subsidiary - - 2,372,506 1,712,117
(ii) Compensation of key management personnel
The remuneration of directors and other members of key management during the year are as follows :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Salaries and other short-term employee benefits 1,909,887 2,032,460 209,000 222,600
Key management personnel are those persons including directors having authority and responsibility for planning, directing and controlling the activities of the Group and of the Company, directly or indirectly.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
64
32. CONTINGENT LIABILITIES COMPANY
2011 2010
Limit Utilised Limit Utilised
RM RM RM RM
Corporate guarantee extended to banks for credit facilities granted to subsidiaries 133,000,000 82,765,228 166,262,860 103,348,056
The corporate guarantees do not have a determinable effect on the terms of the credit facilities due to the financial institutions requiring
parent guarantee as a pre-condition for approving the credit facilities granted to the subsidiaries. The actual terms of the credit facilities are likely to be the best indicator of “at market” terms and hence the fair value of the credit facilities are equal to the credit facilities amount received by the subsidiaries. As such, there is no value on the corporate guarantee to be recognised in the financial statements.
33. CAPITAL COMMITMENT
GROUP
2011 2010
RM RM
Contracted but not provided for :
- Property, plant and equipment 1,438,832 1,025,050
34. CATEGORIES OF FINANCIAL INSTRUMENTS
The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), other liabilities measured at amortised cost (“AC”) and fair value through profit or loss (“FVTPL”).
Carrying
amount L&R AC FVTPL
RM RM RM RM
2011
GROUP
Financial assets
Trade receivables 23,954,818 23,954,818 - -
Other receivables and refundable deposits 1,683,594 1,683,594 - -
Investment securities 2,298,115 - - 2,298,115
Fixed deposit with a licensed bank 65,000 65,000 - -
Cash and bank balances 1,794,153 1,794,153 - -
29,795,680 27,497,565 - 2,298,115
Financial liabilities
Borrowings 85,112,477 - 85,112,477 -
Trade payables 8,980,909 - 8,980,909 -
Other payables and accruals 5,812,242 - 5,812,242 -
99,905,628 - 99,905,628 -
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
65
34. CATEGORIES OF FINANCIAL INSTRUMENTS (cont’d)
Carrying
amount L&R AC FVTPL
RM RM RM RM
COMPANY
Financial assets
Amount due from subsidiaries 23,180,745 23,180,745 - -
Cash and bank balances 47,211 47,211 - -
23,227,956 23,227,956 - -
Financial liabilities
Other payables and accruals 426,995 - 426,995 -
2010
GROUP
Financial assets
Trade receivables 27,055,805 27,055,805 - -
Other receivables and refundable deposits 2,780,725 2,780,725 - -
Fixed deposit with a licensed bank 65,000 65,000 - -
Cash and bank balances 1,961,612 1,961,612 - -
31,863,142 31,863,142 - -
Financial liabilities
Borrowings 103,348,056 - 103,348,056 -
Trade payables 18,002,323 - 18,002,323 -
Other payables and accruals 6,677,117 - 6,677,117 -
128,027,496 - 128,027,496 -
COMPANY
Financial assets
Other receivables 3,352 3,352 - -
Amount due from subsidiaries 23,579,810 23,579,810 - -
Cash and bank balances 42,738 42,738 - -
23,625,900 23,625,900 - -
Financial liabilities
Other payables and accruals 440,724 - 440,724 -
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
66
35. FINANCIAL RISK MANAGEMENT
The Group and the Company are exposed to a variety of financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign exchange risk. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative activities.
35.1 Credit risk Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group and
the Company. The Group’s exposure to credit risk arises principally from its trade receivables. The Company’s exposure to credit risk arises principally from advances to its subsidiaries and financial guarantees given.
35.1.1 Trade receivables
The Group extends credit terms to its customers that range between 7 to 90 days. In deciding whether credit shall be extended, the Group will take into consideration factors such as the relationship with the customer, its payment history and credit worthiness. If deemed necessary, the Group will request for collaterals from its customers to minimise its exposure to credit risk. New customers are subject to credit verification procedures before deciding whether credit shall be extended to them.
The Group uses ageing analysis to monitor the credit quality of its receivables. Any receivables having significant balances past due more than its stipulated credit terms are monitored individually.
The maximum exposure to credit risk arising from trade receivables is represented by the carrying amounts in the statement of financial position.
GROUP
The ageing of trade receivables and accumulated impairment loss of the Group is as follows :
Gross Impairment loss Net
RM RM RM
2011
Not past due 14,407,107 - 14,407,107
1 to 30 days past due 3,355,482 - 3,355,482
31 to 60 days past due 1,858,728 (6,348) 1,852,380
Past due more than 61 days 9,179,154 (4,839,305) 4,339,849
14,393,364 (4,845,653) 9,547,711
28,800,471 (4,845,653) 23,954,818
2010
Not past due 14,835,056 (4,000) 14,831,056
1 to 30 days past due 1,884,494 - 1,884,494
31 to 60 days past due 3,710,549 - 3,710,549
Past due more than 61 days 11,680,165 (5,050,459) 6,629,706
17,275,208 (5,050,459) 12,224,749
32,110,264 (5,054,459) 27,055,805
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
67
35. FINANCIAL RISK MANAGEMENT (cont’d)
35.1 Credit risk (cont’d)
35.1.1 Trade receivables (cont’d)
Trade receivables that are neither past due nor impaired are creditworthy customers with good payment record with the Group.
Total impairment loss relates to customers that have financial difficulties and have defaulted in repayment.
Certain trade receivables have exceeded the credit terms allowed. However, no impairment loss is required as these customers have no recent history of default.
The Group has significant concentration of credit risks in the form of outstanding balance due from 1 (2010 : Nil) receivable representing 11% (2010 : Nil) of total receivables.
35.1.2 Intercompany advances
The Company provides advances to its subsidiaries. The Company monitors the results of the subsidiaries regularly.
The maximum exposure to credit risk is represented by their carrying amount in the statement of financial position.
As at the end of the reporting period, there was no indication that the advances to its subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to its subsidiaries since its terms are repayable on demand.
35.1.3 Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The maximum exposure to credit risk is as disclosed in Note 32, representing the outstanding facilities of the said subsidiaries as at the reporting date. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
35.2 Liquidity risk
Liquidity risk is the risk the Group will encounter difficulty in meeting financial obligations due to shortage of funds. In managing its exposure to liquidity risk, the Group maintains a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on the undiscounted contractual payments :
Carryingamount
RM
Contractualcash flows
RM
Withinone year
RM
More thanone year and less
thantwo years
RM
More than two years
and less than five
yearsRM
More than
five yearsRM
2011
GROUP
Interest bearing borrowings 85,112,477 85,242,858 74,618,088 1,998,923 5,133,611 3,492,236
Trade payables 8,980,909 8,980,909 8,980,909 - - -
Other payables and accruals 5,812,242 5,812,242 5,812,242 - - -
99,905,628 100,036,009 89,411,239 1,998,923 5,133,611 3,492,236
COMPANY
Other payables and accruals 426,995 426,995 426,995 - - -
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
68
35. FINANCIAL RISK MANAGEMENT (cont’d)
35.2 Liquidity risk (cont’d)
Carryingamount
RM
Contractualcash flows
RM
Withinone year
RM
More thanone year and less
thantwo years
RM
More than two years
and less than five
yearsRM
2010
GROUP
Interest bearing borrowings 103,348,056 103,592,067 99,543,918 2,875,882 1,172,267
Trade payables 18,002,323 18,002,323 18,002,323 - -
Other payables and accruals 6,677,117 6,677,117 6,677,117 - -
128,027,496 128,271,507 124,223,358 2,875,882 1,172,267
COMPANY
Other payables and accruals 440,724 440,724 440,724 - -
35.3 Interest rate risk
The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s floating rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.
The interest rate profile of the Group’s and of the Company’s interest-bearing financial instruments based on the carrying amount as at the end of the reporting period is as follows :
GROUP
2011 2010
RM RM
Fixed rate instruments
Financial assets 65,000 6,381,958
Financial liabilities 2,347,249 3,957,772
Floating rate instruments
Financial liabilities 82,765,228 99,390,284
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
69
35. FINANCIAL RISK MANAGEMENT (cont’d)
35.3 Interest rate risk (cont’d)
Cash flow sensitivity analysis for variable rate instruments
An increase of 25 basis point would have decreased profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect. This analysis assumes that all other variables remain constant.
GROUP
2011 2010
RM RM
Reduce in profit before taxation (226,118) (147,678)
35.4 Foreign currency risk
The objectives of the Group’s foreign exchange policy are to allow the Group to manage exposures that arise from trading activities effectively within a framework of controls that does not expose the Group to unnecessary foreign exchange risks.
The Group is exposed to foreign currency risk on its investment in quoted shares and purchases of raw materials which are denominated in currencies other than the functional currency of the Group. The currencies giving rise to this risk is primarily the Hong Kong Dollar (“HKD”) and US Dollar (“USD”) respectively.
The Group’s exposure to foreign currency risk based on carrying amounts as at the end of the reporting period is as follows :
2011 2010
RM RM
Denominated in HKD :
- Investment securities 2,298,115 -
Denominated in USD :
- Trade payables (623,464) (907,332)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the foreign currencies exchange rates against Ringgit Malaysia, with all other variables held constant, on the Group’s profit before taxation. A 10% strengthening of the RM against the following currencies at the end of the reporting period would have the following effects to the profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect.
2011 2010
RM RM
HKD (229,812) -
USD 62,346 90,733
(Reduce)/Increase in profit before taxation (167,466) 90,733
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
70
36. CAPITAL MANAGEMENT
The primary objective of the Group’s capital management policy is to maintain a strong capital base to support its businesses and maximise shareholders’ value.
The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions or expansion of the Group. The Group may adjust the capital structure by issuing new shares, returning capital to shareholders or adjusting the amount of dividends to be paid to shareholders or sell assets to reduce debts.
As at the end of the financial period, the gearing ratio of the Group are as follows :
GROUP
2011 2010
RM RM
Total borrowings 85,112,477 103,348,056
Less : Fixed deposit with a licensed bank (65,000) (65,000)
Cash and bank balances (1,794,153) (1,961,612)
Net debt 83,253,324 101,321,444
Total equity 130,115,630 127,870,251
Gearing ratio 0.64 0.79 37. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of financial assets (other than investment in quoted shares) and financial liabilities of the Group and of the Company as at the end of the reporting period approximate their fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. The carrying amounts of the non-current portion of finance lease liabilities are reasonable approximation of fair values due to the insignificant impact of discounting.
37.1 Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
Level 1 Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
RM RM RM RM
GROUP
2011Held for trading financial assets
Shares quoted outside Malaysia 2,298,115 - - 2,298,115
The shares quoted outside Malaysia which are quoted in an active market are carried at fair value by reference to their quoted closing bid price at the end of the reporting period.
Notes To The Financial Statements31 December 2011 (Cont’d)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
71
DISCLOSURE OF REALISED AND UNREALISED PROFITS
Bursa Malaysia Securities Berhad has, on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of retained profits or accumulated losses into realised and unrealised on group and company basis, as the case may be, in quarterly reports and annual audited financial statements.
The breakdown of retained profits as at the end of the reporting period has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows :
GROUP COMPANY
2011 2010 2011 2010
RM RM RM RM
Total retained profits of the Company and its subsidiaries :
- Realised 95,164,003 91,985,985 1,001,608 1,350,165
- Unrealised (12,326,476) (12,997,378) - -
82,837,527 78,988,607 1,001,608 1,350,165
Less : Consolidation adjustments (28,578,051) (29,509,238) - -
Total retained profits as per statements of financial position 54,259,476 49,479,369 1,001,608 1,350,165
Supplementary Information
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
72 Shareholdings Statisticsas at 8 May 2012
Authorised Share Capital : RM100,000,000.00
Issued and fully paid-up Share Capital : RM60,911,250.00
Class of Shares : Ordinary shares of RM1.00 each
Voting Rights : One vote per RM1.00 share
LIST OF SUBSTANTIAL SHAREHOLDERS OF THE COMPANY
Name Direct % Deemed %
Dato’ Siah Gim Eng 9,719,215 16.28 17,715,306 (i) 29.68
Datin Law Hooi Lean 7,961,798 13.33 19,472,723 (ii) 32.62
SL Gold Sdn. Bhd. 7,578,750 16.34 - -
Tropical Consolidated Corporation Sdn. Bhd. 6,090,033 10.20 - -
TSY Asset Management Sdn. Bhd. - - 6,090,033 (iii) 10.20
Dato’ Tan Ah Bah @ Tan Boon Pin - - 6,090,033 (iv) 10.20
Notes: -
(i) Deemed interested by virtue of the shareholdings held by his wife and his major shareholdings in SL Gold Sdn. Bhd.
(ii) Deemed interested by virtue of the shareholdings held by her husband and her major shareholdings in SL Gold Sdn. Bhd.
(iii) Deemed interested by virtue of its major shareholdings in Tropical Consolidated Corporation (“TCC”)
(iv) Deemed interested by virtue of his major shareholdings in TSY Asset Management Sdn. Bhd., a major shareholder in TCC and the
shareholdings of his son and siblings in TCC
DIRECTORS’ SHAREHOLDINGS IN THE COMPANY
Name Direct % Indirect %
Dato’ Siah Gim Eng 9,719,215 16.28 17,715,306 (i) 29.68
Datin Law Hooi Lean 7,961,798 13.33 19,472,723 (ii) 32.62
Liong Joon Choow - - - -
Zainal Bin Pandak - - - -
Chee Wai Hong 605,878 1.02 - -
Ong Kim Nam 7,500 0.01 - -
Shamsuddin bin Mohd Salleh - - - -
Notes: -
(i) Deemed interested by virtue of the shareholdings held by his wife and his major shareholdings in SL Gold Sdn. Bhd. (ii) Deemed interested by virtue of the shareholdings held by her husband and her major shareholdings in SL Gold Sdn. Bhd.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
73Shareholdings Statisticsas at 8 May 2012 (Cont’d)
DISTRIBUTION SCHEDULE OF SHAREHOLDINGS
Size of Shareholdings No. of Shareholders % No. of Shares %
Less than 100 205 11.13 9,748 0.02
101 to 1,000 163 8.85 109,964 0.18
1,001 to 10,000 1,126 61.16 3,985,267 6.54
10,001 to 100,000 298 16.19 8,801,057 14.45
100,001 to less than 5% 43 2.34 18,338,631 30.11
5% and above 6 0.33 29,666,583 48.70
TOTAL 1,841 100.00 60,911,250 100.00
LIST OF THIRTY (30) LARGEST SHAREHOLDERS
NameNo. of
Shares Held%
1. SL Gold Sdn. Bhd. 8,631,608 14.17
2. Tropical Consolidated Corporation Sdn. Bhd. 6,090,033 10.00
3. Siah Gim Eng 3,902,781 6.41
4. Siah Gim Eng 3,902,778 6.41
5. Law Hooi Lean 3,569,692 5.86
6. Law Hooi Lean 3,569,691 5.86
7. Bank Pertanian Malaysia Berhad 2,427,168 3.98
8. Siah Gim Eng 1,902,778 3.12
9. Public Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Ang Ee Tan (E-BMM) 1,490,000 2.45
10. Perbadanan Pembangunan Pertanian Negeri Perak 1,305,722 2.14
11. PW Consolidated Bhd - Share Buy-Back Account 1,220,500 2.00
12. SL Gold Sdn. Bhd. 1,121,900 1.84
13. HDM Nominees (Asing) Sdn. Bhd.
Philip Securities Pte. Ltd. For Mitchell William David 690,100 1.13
14. Yeoh Kean Hua 635,000 1.04
15. Kenanga Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Chee Wai Hong 586,250 0.96
16. Kenanga Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Law Hooi Lean 543,972 0.89
17. Mayban Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Lee Chong Gee 437,400 0.72
18. Lee Siew Hoon 379,700 0.62
19. Ang Ee Tan 362,700 0.60
20. Seah Mok Khoon 300,000 0.49
21. Tan Moh Kim 292,400 0.48
22. Foo Siew Foon @ Hoo Siew Foon 273,300 0.45
23. Mayban Securities Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Chan Heng Sui (REM110) 273,000 0.45
24. Law Hooi Lean 269,691 0.44
25. Gerald John Richards 257,500 0.42
26. Tan Jin Tuan 257,500 0.42
27. Ng Ah Boon 242,000 0.40
28. Ng See Hwa 190,900 0.31
29. Mayban Securities Nominees (Tempatan) Sdn. Bhd.
Pledged Securities Account For Megat Abdul Munir Bin Megat Abdullah Rafaie (REM 868) 176,250 0.29
30. B.M. Lean Huat Chan Sdn. Bhd. 167,500 0.27
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
74 Notice Of Annual General Meeting
NOTICE IS HEREBY GIVEN that the 15th Annual General Meeting of the Company will be held at Impiana Room, Penang Golf Resort, No. 1687, Jalan Bertam, 13200 Kepala Batas, Seberang Prai Utara, Penang on 27 June 2012 at 11.00 a.m. for the following purposes:
ORDINARY BUSINESS
1. To receive the Audited Financial Statements for the financial year ended 31 December 2011.
2. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association, and being eligible have offered themselves for re-election: -
Article 95 (a) Dato’ Siah Gim Eng (Resolution 1) (b) Mr. Chee Wai Hong (Resolution 2) Article 102 (a) Mr. Liong Joon Choow (Resolution 3) (b) Encik Zainal Bin Pandak (Resolution 4)
3. To approve the Directors’ Fees of RM171,000 for the financial year ended 31 December 2011. (Resolution 5) 4. To re-appoint Messrs. Grant Thornton as Auditors of the Company to hold office until the conclusion of the next annual general meeting and
to authorise the Directors to fix their remuneration. (Resolution 6) SPECIAL BUSINESS
(I) To consider and if thought fit, to pass the following Ordinary Resolutions: -
5. AUTHORITY TO ISSUE SHARES AND ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT 1965 (“THE ACT”)
“THAT pursuant to Section 132D of the Act and the provisions of the Memorandum and Articles of Association of the Company and approval of any relevant governmental and/or regulatory authorities, where such approval is required, the Directors be and are hereby empowered pursuant to Section 132D of the Act, to issue and allot shares in the capital of the Company, from time to time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of the shares issued pursuant to this resolution does not exceed ten percentum (10%) of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad (“Bursa Securities”) and that such authority shall continue in force until the conclusion of the next Annual General Meeting (“AGM”) of the Company.” (Resolution 7)
6. PROPOSED RENEWAL OF THE AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES IN ACCORDANCE WITH SECTION
67A OF THE COMPANIES ACT, 1965
“THAT, subject always to the Act, the provisions of the Memorandum and Articles of Association of the Company and approval of any relevant governmental and/or regulatory authorities, where such approval is required, the Directors be and are hereby authorised to utilise an amount not exceeding the total audited share premium and retained profits of the Company as at 31 December 2011 of RM918,539 and RM54,259,476 respectively to purchase such number of ordinary shares of the Company provided the ordinary shares so purchased shall [in aggregate with the treasury shares as defined under Section 67A of the Act (“Treasury Shares”) then still held by the Company] not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company for the time being AND THAT such authority shall commence upon the passing of this resolution until the conclusion of the next AGM of the Company unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in a general meeting AND THAT the Directors may cancel the ordinary shares so purchased or to retain same as Treasury Shares and may distribute the Treasury Shares as share dividend or may resell same in a manner they deem fit and expedient as prescribed by the Act and the applicable regulations and guidelines of Bursa Securities and any other relevant authorities for the time being in force.
AND THAT authority be and is hereby given to the Directors to take such steps to implement, finalise and to give effect to the aforesaid transactions with full power to assent to any conditions, modifications, variations and amendments as may be imposed by the relevant authorities and to do all such acts and things and upon such terms and conditions as the Directors may in their discretion deem fit and expedient in the best interest of the Company in accordance with the Act, regulations and guidelines.” (Resolution 8)
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
75Notice Of Annual General Meeting (Cont’d)
(II) To consider and if thought fit, to pass the following resolution, with or without any modification, as Special Resolution of the Company: -
7. PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION
“THAT Article 89 of the Company’s Articles of Association be deleted in its entirety and be replaced as follows: -
89. Instrument of proxy
Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A of SICDA. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the corporation’s seal or under the hand of an officer or attorney duly authorised. The Directors may, but shall not be bound to require evidence of the authority of any such attorney or officer. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(a) and (b) of the Act shall not apply to the Company and a proxy appointed to attend and vote at a meeting of a company shall have the same rights as the member to speak at the meeting. Where a member appoints more than one (1) proxy the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.
AND THAT the Directors of the Company be and are hereby authorized to assent to any modifications, variations and/or amendments as may be considered necessary to give full effect to the proposed amendments to the Articles of Association of the Company.” (Resolution 9)
8. To transact any other ordinary business for which due notice has been given.
NOTICE IS HEREBY GIVEN that for purpose of determining a member who shall be entitled to attend this 15th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with the Article 62(3) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 20 June 2012. Only a depositor whose name appears on the Record of Depositors as at 20 June 2012 shall be entitled to the said meeting or appoint proxies to attend and/or vote on his/her behalf.
By Order of the Board
Ch’ng Lay Hoon (MAICSA No.: 0818580)Company Secretary
Penang
Date: 4 June 2012
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
76 Notice Of Annual General Meeting (Cont’d)
Notes:
1. Appointment of Proxy
A member entitled to attend, speak and vote at this Meeting may appoint more than one (1) Proxy, who need not be a member, to attend, speak and vote in his stead. Where a member appoints more than one (1) Proxy the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.
If the appointer is a corporation, the Proxy Form must be executed under its Common Seal or under the hand of its officer or attorney duly authorised.
Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.
To be valid, the duly completed Proxy Form must be deposited at the Company’s registered office at Suite 12A, Level 12, Menara Northam, No. 55, Jalan Sultan Ahmad Shah, 10050 Penang, not less than forty-eight (48) hours before the time stipulated for holding the meeting or adjournment thereof.
Should you desire your Proxy to vote on the Resolutions set out in the Notice of Meeting, please indicate with an “√” in the appropriate space. If no specific direction as to voting is given, the Proxy will vote or abstain at his discretion.
2. Explanatory Notes On Special Businesses
Resolution 7 The proposed resolution is in relation to authority to allot shares pursuant to Section 132D of the Act, and if passed, will give a renewed
mandate to the Directors of the Company, from the date of above AGM, authority to issue and allot shares in the Company up to and not exceeding in total ten percentum (10%) of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interest of the Company (“General Mandate”). This General Mandate, unless revoked or varied at a general meeting of the Company, will expire at the conclusion of the next AGM of the Company or the period within which the next AGM of the Company is required by law to be held whichever is the earlier.
As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors of the Company at the 14th AGM held on 28 June 2011 and which will lapse at the conclusion of the 15th AGM.
At this juncture, there is no decision to issue new shares. However, should the need arise to issue new shares the General Mandate would avoid any delay and costs in convening a general meeting of the Company to specifically approve such issue of share. If there should be a decision to issue new shares after the General Mandate is obtained, the Company would make an announcement in respect of the purpose and utilization of the proceeds arising from such issue.
Resolution 8 The proposed resolution, if passed, will provide the mandate for the Company to buy back its own shares up to a limit 10% of the total issued
and paid-up share capital of the Company. The explanatory notes on Resolution 8 are set out in Circular dated 4 June 2012 accompanying the Annual Report.
Resolution 9 The Proposed Amendments is to comply with the provisions of the amended Listing Requirements of Bursa Malaysia Securities Berhad which
took effect on 3 January 2012.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
77Statement Accompanying Notice Of Annual General MeetingPursuant to Paragraph 8.27(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad
Name of Directors Standing for Re-election
Pursuant to Article 95 of the Articles of Association (Retirement by Rotation)
•Dato’SiahGimEng•Mr.CheeWaiHong
Pursuant to Article 102 of the Articles of Association (Appointment since the date of last Annual General Meeting)
•Mr.LiongJoonChoow•EncikZainalBinPandak
Details of Directors who are standing for re-election in Agenda 2 of the Notice of the 15th Annual General Meeting are set out in the Directors’ Profile on pages 5 and 6 of the Annual Report.
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
78 Additional Compliance InformationAs At 31 December 2011
1. VARIATION OF RESULTS The Group achieved a total comprehensive income of RM4,668,667 for the financial year ended 31 December 2011 and there is no
significant variance in the Group’s audited financial results as previously announced.
2. MATERIAL CONTRACTS The Company and its subsidiaries involving directors and substantial shareholders have not entered into any material contracts (not being
contracts entered into in the ordinary course of business of the Group) during the financial year ended 31 December 2011.
3. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE NATURE OR TRADING NATURE The Company does not have any recurring related party transaction of revenue nature or trading nature for the financial year ended 31
December 2011.
4. SHARE BUY-BACK The Company had, on 19 June 2006, obtained its shareholders’ approval to purchase up to 10% of the issued and paid-up ordinary shares
capital of the Company. During the financial year ended 31 December 2011, the Company repurchased a total of 87,000 ordinary shares at an average price of
RM0.406 per share. All purchased shares are held as treasury shares and none of the treasury shares have been resale or cancelled during the financial year ended 31 December 2011.
As at the date of the financial year, the total number of treasury shares retained and held by the Company was 1,220,500 ordinary shares of RM1.00 each.
Details of the share bought back during the financial year ended 31 December 2011 are as follows: -
Month Number ofShares
Unit CostTotal Cost
RMHighRM
LowRM
AverageRM
August 19,000 0.400 0.400 0.400 7,600.00
September 65,000 0.400 0.410 0.410 26,427.00
November 3,000 0.430 0.430 0.430 1,290.00
5. NON-AUDIT FEES The amount of non-audit fees paid to the external auditors, Messrs Grant Thornton, by the Company for the financial year ended 31
December 2011 amounted to RM2,000.
6. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES The Company had on 18 November 2003 obtained approval from the Securities Commission and the shareholders through an Extraordinary
General Meeting respectively to establish an Employee Share Option Scheme (“ESOS”) for duration of five years expiring on 14 January 2009. The Company has extended the existing ESOS for another 5 years until 14 January 2014 and is governed by the bye-laws.
There were no options being offered during the financial year ended 31 December 2011.
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
79List Of Material Properties Of The GroupAs At 31 December 2011
Location / Address DescriptionExisting Use
Tenure Date of Valuation / Date of Purchase
Land Area Build-up Area / Age of Building
Carryingamount
31/12/2011
HS(D) 694 PT67 Mukim 13, Industrial Leasehold 1-Sep-2007 5.874 acres 4,155,495 Seberang Perai Tengah, land ExpiringPenang on 11.6.2055
(60 years)Plot 31 (Factory) erected on 1 Block 3-storey 18,248 sq.m. / 9,127,414HS (D) 694 PT 67 Mukim 13, Office Building, 14 years Seberang Perai Tengah, 1 Feedmilling PlantPenang and Warehouse
Plot 127, Jln Perindustrian Bkt Minyak 7, Industrial Land Leasehold 1-Sep-2007 / 3.529 acres 1,798,511 Tmn Perindustrian Bkt Minyak, Expiring 14-Apr-200314100 Bkt Minyak, S.P.T, Penang on 14.4.2063
(60 years)
1 Block 2-storey 1-Sep-2007 / 3,813 sq.m. / 4,779,616Office Building 1-Nov-2006 5 years
Geran Mukim No. 53, Lot No. 78, Vacant Land Freehold 1-Sep-2007/ 0.877 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
Geran Mukim No. 54, Lot No. 79, Vacant Land Freehold 1-Sep-2007/ 4.581 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
Geran Mukim No. 55, Lot No. 80, Vacant Land Freehold 1-Sep-2007/ 1.250 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
Geran Mukim No. 70, Lot No. 315, Vacant Land Freehold 1-Sep-2007/ 2.744 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
Geran Mukim No. 71, Lot No. 316, Vacant Land Freehold 1-Sep-2007/ 0.636 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
36.153 acres 7,900,000Geran Mukim No. 93, Lot No. 279, Vacant Land Freehold 1-Sep-2007/ 0.638 acresMukim 6, Daerah Seberang Perai for future 8-Jan-2007Selatan, Pulau Pinang development
Geran Mukim No. 59, Lot No. 274, Land with Freehold 1-Sep-2007/ 0.971 acresMukim 6, Daerah Seberang Perai Poultry Farm 8-Jan-2007Selatan, Pulau Pinang
Geran Mukim No. 258, Lot No. 272, Land with Freehold 1-Sep-2007/ 1.894 acresMukim 6, Daerah Seberang Perai Poultry Farm 8-Jan-2007Selatan, Pulau Pinang
Geran Mukim No. 227, Lot No. 278, Land with Freehold 1-Sep-2007/ 4.725 acresMukim 6, Daerah Seberang Perai Poultry Farm 8-Jan-2007Selatan, Pulau Pinang
Geran No. 51891, Lot No. 271, Land with Freehold 1-Sep-2007/ 17.819 acresMukim 6, Daerah Seberang Perai Poultry Farm 8-Jan-2007Selatan, Pulau Pinang
PW C
ON
SOLID
ATED
BH
D. (420049-H
) A
nnual Report 2011
80
Location / Address DescriptionExisting Use
Tenure Date of Valuation / Date of Purchase
Land Area Build-up Area / Age of Building
Carryingamount
31/12/2011
Lot 60, 61 Geran Mukim No.GM 3944, 4293 Land with Freehold 1-Sep-2007/ 70.287 acres 39,821 sq.m. 4,120,000 Mukim Ayer Puteh, Daerah Pendang, Kedah Cattle Farm 29-Nov-2005
Lot 824, 825, 871, 873, 877 Vacant land for Freehold 21-Dec-11 23.672 acres 4,640,276 Daerah Seberang Perai Selatan future developmentPulau Pinang
Lot 6378, 6379, Geran No 42500, 42501 Land with Poultry Freehold 14-Jun-04 95.982 acres 26,760 sq.m. 3,000,000 Mukim Hulu Selama, Perak Breeding Farm
GM 519 Lot No. 571, Land with Freehold 1-Sep-2007 32.492 acres 22,650 sq.m 2,830,000 Geran 16962 Lot 572, Poultry FarmGeran 43767 Lot 573,Mukim 16, Seberang Perai Tengah,Penang
PM No. 1114 Lot No. 2413, Land with Leasehold 1-Sep-2007 / 31.773 acres 25,659 sq.m. 1,702,651PM No. 1115 Lot No. 2414, Poultry Expiring 5-Dec-2002PM No. 1090 Lot No. 2415, Breeding on 29.11.2024PM No. 1116 Lot No. 2368, Farm (58 years)PM No. 1117 Lot No. 2369, PM No. 1118 Lot No. 2370, Mukim Machap, Daerah Alor Gajah,Melaka
GM841 Lot No 407, GM 842 Land with Freehold 1-Sep-2007 11.568 acres 11,965 sq.m. 1,685,000 Lot 408, Mukim 20, Poultry FarmSeberang Perai Tengah,Penang
GM 453, Lot No 1996 Land with Freehold 1-Sep-2007/ 43.769 acres 17,973 sq.m. 1,520,000 GM 454, Lot No 1992 Poultry 22-Mar-1995GM 455, Lot No 1993 BreedingGM 456, Lot No 2263 FarmGM 457, Lot No 2264GM 458, Lot No 2388GM 598, Lot No 654GM 599, Lot No 656GM 600, Lot No 657EMR 4824, Lot No 667EMR 4825, Lot No 666EMR 4826, Lot No 661EMR 4827, Lot No 1938Mukim Bukit Gantang, District of Larutand Matang, Perak
List Of Material Properties Of The GroupAs At 31 December 2011 (Cont’d)
Resolution
1. To re-elect Dato’ Siah Gim Eng as Director
2. To re-elect Mr. Chee Wai Hong as Director
3. To re-elect Mr. Liong Joon Choow as Director
4. To re-elect Encik Zainal Bin Pandak as Director
5 To approve payment of Directors’ Fees
6. To re-appoint Auditors
7. To empower Directors to issue and allot shares pursuant to Section 132D of the Companies Act 1965
8. To empower Directors for the purchase of Company’s own shares of up to 10% of total issued and paid-up capital
9. To approve the amendments to the Articles of Association
Please indicate with “√” on the spaces provided on how you wish your votes to be cast. Unless otherwise instructed, your proxy may vote as he thinks fit.
Signed this day of 2012.
(Signature)
NOTES:
1. A member entitled to attend and vote at this Meeting may appoint more than one (1) Proxy, who need not be a member, to attend and vote in his stead. Where a member appoints more than one (1) Proxy the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.
2. If the appointer is a corporation, the Proxy Form must be executed under its Common Seal or under the hand of its officer or attorney duly authorised. 3. Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 which holds
ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds.
4. To be valid, the duly completed Proxy Form must be deposited at the Company’s registered office at Suite 12A, Level 12, Menara Northam, No. 55, Jalan Sultan Ahmad Shah, 10050 Penang, not less than forty-eight (48) hours before the time stipulated for holding the meeting or adjournment thereof.
5. Should you desire your Proxy to vote on the Resolutions set out in the Notice of Meeting, please indicate with an “√” in the appropriate space. If no specific direction as to voting is given, the Proxy will vote or abstain at his discretion.
6. For the purpose of determining a member who shall be entitled to attend this Seventh AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with the Article 62(3) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 20 June 2012. Only a depositor whose name appears on the Record of Depositors as at 20 June 2012 shall be entitled to the said meeting or appoint proxies to attend and/or vote on his/her behalf.
I/We,(BLOCK LETTERS)
of
being a member/members of the above-named company hereby appoint
of
or failing him
of as my/our proxy to vote for me/us on my/our behalf at the 15th Annual General Meeting of the Company, to be held at Impiana Room, Penang Golf Resort, No. 1687, Jalan Bertam, 13200 Kepala Batas, Seberang Prai Utara, Penang on 27 June 2012 at 11.00 a.m. and any adjournment thereof.
For Against
No. of Shares held
Proxy Form
PW C
ON
SOLI
DA
TED
BH
D. (
4200
49-H
) A
nnua
l Rep
ort
2011
The Company Secretary
PW CONSOLIDATED BHD. (420049-H)
SUITE 12-A LEVEL 12, MENARA NORTHAM
NO. 55 JALAN SULTAN AHMAD SHAH
10050 PENANG
stamp
Please fold across the line and close
Please fold across the line and close
PW CONSOLIDATED BHD (420049-H)
Head Office
Plot 127, Jalan Perindustrian Bukit Minyak 7,
Taman Perindustrian Bukit Minyak,
14100 Bukit Mertajam, S.P.T. Penang, Malaysia.
(Nutrifarm) Tel • 6045081088(Generalline)
Fax • 6045023088&5023099
Manufacturing Plant
Plot31,LorongPerindustrianBukitMinyak9,
Taman Perindustrian Bukit Minyak,
14100 Bukit Mertajam, S.P.T. Penang, Malaysia.
(Nutrifeed) Tel • 6045081099(Generalline)
Fax • 6045081200&5088109
http://www.pwconsolidated.com
