Tradewinds annual Report

As an integrated agribusiness organisation that provides premium products and services, Tradewinds (M) Berhad is deriving good synergistic value from its many diversified strengths from the various industries it operates in with seamless success.

“Synergistic Value: Success Through Precision” encapsulates our growth from strength to strength in all our core businesses across the spectrum, reinforcing our position as a leading group with an expanding asset base.

The imagery of the hand stitching motion illustrates our hands-on approach, infinite passion and utmost dedication while possessing an eye for detail as we meticulously craft value and strive for excellence in all that we set out to do.

We at Tradewinds (M) Berhad, are synergised towards value creation and attaining success through precision.

SucceSS ThroughPreciSion

32Chairman’s statement

44review of operations by Group manaGinG DireCtor

38th annual General meetingMahkota Ballroom 2Ballroom LevelHotel Istana Kuala Lumpur73, Jalan Raja Chulan50200 Kuala Lumpuron Thursday, 28 June 2012 at 10.00 a.m.

Tradewinds (M) Berhad Annual Report 20112

Corporate information

4 Financial calendar5 corporate Vision & Mission6 corporate information8 corporate Structure12 group half-Yearly results13 group Financial highlights

statutory reportinG

18 notice of Annual general Meeting21 Statement Accompanying notice of Annual general Meeting

DireCtorship anD manaGement

22 Profile of Directors28 group Management

performanCe review

32 chairman’s Statement44 review of operations by group Managing Director62 corporate responsibility

Corporate GovernanCe

70 Statement on corporate governance77 Statement on Directors’ responsibility78 Additional compliance information80 Statement on internal control82 report of Audit committee

finanCial statements

86 Financial Statements

other information

222 Properties of the group232 Shareholding Statistics233 Additional information on Shareholders234 Top Thirty Shareholders235 information on Directors’ Shareholdings236 corporate Directory

• FormofProxy

Annual Report 2011 Tradewinds (M) Berhad 3

DiviDenDs for the finanCial year enDeD 31 DeCember 2011

announCementsof finanCial results2011

General meetinGs

1st quarter

announced30 May 2011

interim

announced30 September 2011

37th annualGeneral meeting

28 June 2011

2nd quarter

announced25 August 2011

20 sen per ordinary share less25% income tax

entitlement date14 october 2011

paid3 november 2011

38th annual General meeting

28 June 2012

3rd quarter

announced25 november 2011

4th quarter

announced28 February 2012

25 sen per ordinary share comprising 12.73 sen franked dividend and 12.27 sen exempt dividend

Subject to approval by shareholders at the 38th Annual general Meeting

payment8 August 2012

final

announced28 April 2012

issuance of annual report 2011

4 June 2012


“To be the preferred globally competitive integrated agribusiness organisation that delivers outstanding value for all”

We, as a team, are committed to achieve our vision by:

Providing premium products and services to our customers

optimising shareholder value

improving the quality of life of our employees

Fostering a sustainable environment

plantation Division

suGarDivision

riCeDivision


boarD of DireCtors

Dato’ wira syed abdul Jabbar bin syed hassanindependent non-executive Directorchairman

bakry bin hamzah non-independent executive Directorgroup Managing Director

syed azmin bin syed nornon-independent non-executive Director

ooi teik huatindependent non-executive Director

Khalid bin sufatindependent non-executive Director

Datuk hj. ismail bin hj. hashimnon-independent non-executive Director

Dato’ izudin bin ishaknon-independent non-executive Director(Appointed w.e.f. 26 January 2012)

Chuah seong tatnon-independent non-executive Director(Resigned w.e.f. 15 March 2012)

auDit Committee

ooi teik huatchairman

syed azmin bin syed nor

Khalid bin sufat

nomination anDremuneration Committee

Dato’ wira syed abdul Jabbar bin syed hassanchairman

ooi teik huat

Khalid bin sufat

eXeCutive Committee

Dato’ wira syed abdul Jabbar bin syed hassanchairman

bakry bin hamzah

Chuah seong tat(Resigned w.e.f. 15 March 2012)

reGistereD offiCe

Level 12, Menara hLAno. 3, Jalan Kia Peng50450 Kuala Lumpur

Tel : 603-2179 7777Fax : 603-2161 1632

Website: www.twinds.com.myemail: [email protected]

Company seCretary

Zainal rashid bin ab rahmanLS007008

auDitors

Messrs ernst & Young (AF:0039)Level 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurTel : 603-7495 8000Fax : 603-2095 5332

share reGistrar

Symphony Share registrars Sdn BhdLevel 6, Symphony housePusat Dagangan Dana 1Jalan PJu 1A/4647301 Petaling JayaSelangor Darul ehsanTel : 603-7841 8000Fax : 603-7841 8152

soliCitors

Messrs Lee hishammuddin Allen & gledhillMessrs Azmi & AssociatesMessrs Pakhruddin & PartnersMessrs Martin cheah & Associates

banKers

Malayan Banking BerhadciMB Bank BerhadrhB Bank BerhadBangkok Bank BerhadAmBank (M) Berhad

form of leGal entity

incorporated on 19 June 1974 as a private company limited by shares under the companies Act, 1965 as Tradewinds (M) Sdn Bhd and was converted into a public company on 28 September 1987 and since then known as Tradewinds (M) Berhad.

plaCe of inCorporation anD DomiCile

Malaysia

stoCK eXChanGe listinG

Main Market of Bursa Malaysia Securities Berhad

stoCK name

TWS

stoCK CoDe

4421

isin

MYL 442100003



Padiberas NasioNal berhad (*72.57%)

100% Beras Corporation Sdn Bhd

100% Bernas Seed Pro Sdn Bhd

61% Jasmine Food Corporation Sdn Bhd

100% Bernas Project & Development Sdn Bhd

95% Bernas International Trading Ltd

100% Bernas Agrotech Sdn Bhd

100% Dayabest Sdn Bhd

100% Sabarice Sdn Bhd

95% Sazarice Sdn Bhd

60% Liansin Trading Sdn Bhd

100% Jasmine Food (Ipoh) Sdn Bhd

100% Jasmine Food (Alor Setar) Sdn Bhd

100% Jasmine Food (Johor Bahru) Sdn Bhd

100% Jasmine Food (Seremban) Sdn Bhd

100% Jasmine Food (Prai) Sdn Bhd

100% Jasmine Food (Kuantan) Sdn Bhd

100% Jasmine Rice Mill (Tunjang) Sdn Bhd

51% JS Jasmine Sdn Bhd

51% Haskarice Food Sdn Bhd

51% Hock Chiong Foodstuff Sdn Bhd

51% Ban Say Tong Sdn Bhd

100% Liangtye Trading Sdn Bhd

100% Liansin Trading (Bintulu) Sdn Bhd

51% Tong Seng Huat Rice Trading Sdn Bhd

100% Jasmine Khidmat & Harta Sdn Bhd

100% Jasmine Rice Products Sdn Bhd

100% Bernas Dominals Sdn Bhd

80% Edaran Bernas Nasional Sdn Bhd

51% YHL Holding Sdn Bhd

100% Bernas Production Sdn Bhd

51% Syarikat Faiza Sdn Bhd

60% Era Bayam Kota Sdn Bhd

100% Bernas Logistics Sdn Bhd

45% United Malayan Flour (1996) Sdn Bhd#

30% Gardenia Bakeries (KL) Sdn Bhd#

30% OEL Realty Holdings Sdn Bhd#

49% Ban Heng Bee Holdings Sdn Bhd#

100% Bernas Overseas (L) Limited

100% YHL Trading (Kedah) Sdn Bhd

100% YHL Trading (KL) Sdn Bhd

100% YHL Trading (Melaka) Sdn Bhd

100% YHL Trading (Segamat) Sdn Bhd

100% YHL Trading (Johor) Sdn Bhd

100% YHL Trading (Terengganu) Sdn Bhd

49% Bernas Feedstuff Sdn Bhd

Others

Others

Others

Others

Others

20% Irfan Noman Bernas (Pvt) Limited#

TradewiNds PlaNTaTioN berhad (*69.76%)

100% Prisma Spektra Sdn Bhd

100% Tradewinds Plantation Management Sdn Bhd

100% Tradewinds Plantech Sdn Bhd

100% Tradewinds Agro Services Sdn Bhd

100% Tradewinds Corridor Sdn Bhd

100% Tradewinds Plantation Capital Sdn Bhd

100% Quek Shin & Sons Pte Ltd

100% Amalan Penaga (M) Sdn Bhd

100% Teon Choon Realty Company Sdn Bhd

100% Ladang Chendana Sdn Bhd

100% Binu Plantations Sdn Bhd

100% Ibok Plantations Sdn Bhd

100% Ladang Mawar Sdn Bhd

100% Syarikat Ladang Sawit Cherul Sdn Bhd

100% Ladang Permai Sdn Bhd

100% Ladang Serasa Sdn Bhd

70% Kumpulan Kris Jati Sdn Bhd

70% Bahtera Bahagia Sdn Bhd

70% Barisan Tekad Sdn Bhd

100% Johore Tenggara Oil Palm Berhad

50% Pride Palm Oil Mill Sdn Bhd^

70% Northern Intergrated Agriculture Sdn Bhd

Others

100% MARDEC Berhad

85% Trans Kenyalang Sdn Bhd

85% Senandung Masyhur Sdn Bhd

70% Tradewinds Tanjung Alan Plantation Sdn Bhd

70% Melur Gemilang Sdn Bhd

70% Arah Bersama Sdn Bhd

70% Usaha Wawasan Sdn Bhd

60% Amalan Pelita Pasai Sdn Bhd

100% Ladang Petri Tenggara Sdn Bhd

100% Pertanian Johor Tenggara Sdn Bhd

100% Agromaju Sendirian Berhad

100% Permodalan Pelangi Sdn Bhd

100% Tanah Semai Sdn Bhd

100% Semai Segar Sdn Bhd

100% Uni-Agro Plantations (Trengganu) Sdn Bhd

100% M.P. Plantation Sdn Bhd

100% Hak JTOP Sdn Bhd

Others

100% Mardec Processing Sdn Bhd

100% Mardec Industrial Latex Sdn Bhd

100% Mardec International Sdn Bhd

20% Alfagomma-Mardec Sdn Bhd#

100% Mardec Polymers Sdn Bhd

Others

30% Mardec R.K. Latex Pvt Ltd#

100% Mardec Saigon Rubber Co Ltd

55% PT Mardec Siger Way Kanan

51% PT Mardec Nusa Riau

51% PT Mardec Musi Lestari

100% Mardec-Yala Co Ltd

100% M-Pol Precision Products Sdn Bhd

Others

CeNTral sugars refiNery sdN bhd (100%)

sovereigN PlaCe sdN bhd (100%)

gula PadaNg TeraP sdN bhd (100%)

reTus PlaNTaTioN sdN bhd (60%)

100% Masretus Oil Palm Plantation Sdn Bhd

delTa delighTs sdN bhd (100%)

100% Delta Delights (Cambodia) Co Ltd

100% Tradewinds Cambodia Co Ltd

100% Tradewinds Realty Co Ltd

legends:

Investment holding company

Plantation management & advisory services

Cultivation of oil palm

Cultivation of oil palm & rubber trees

Cultivation of oil palm & production of crude palm oil

Sole & specific purpose of undertaking islamic securities transaction

Rice related business

Sugar refining

Bread manufacturing & bakery

Wheat flour manufacturing & trading

Property development & rubber plantation

Manufacturing

Purchasing, processing & marketing of natural rubber

Trading of natural rubber & latex

Others

^ Jointly controllled entity

# Associated company

* Public Listed

Tradewinds (M) Berhad annual report 2011 annual report 2011 Tradewinds (M) Berhad 8 9

70% Ladang Sungai Relai Sdn Bhd

100% Solar Green Sdn Bhd^

Others


twm has Grown to be one of the larGest fooD anD CommoDity Groups listeD on the main marKet of bursa malaysia


6 months ended 6 months ended 12 months ended 30 June 2011 31 December 2011 31 December 2011

rM’000 % rM’000 % rM’000 %

revenue 3,054,489 44 3,878,967 56 6,933,456 100

Profit from operations 481,751 48 516,867 52 998,618 100

Profit before taxation 438,323 49 458,710 51 897,033 100

Taxation (129,373) 56 (99,853) 44 (229,226) 100

Profit for the period/year 308,950 46 358,857 54 667,807 100

non-controlling interests (94,615) 49 (98,275) 51 (192,890) 100

Profit attributable to equity holders of the company 214,335 45 260,582 55 474,917 100

earnings per share (sen) 72.30 45 87.89 55 160.19 100

Dividend per share - gross (sen) - - 20.0* 100 20.0* 100

* 2011 gross dividend excludes the proposed Final Dividend of 25 sen per ordinary share comprising 12.73 sen franked dividend and 12.27 sen exempt dividend which is subject to shareholders approval at the 38th Annual general Meeting of the company.


2007 2008 2009 2010 2011

rM’000 rM’000 rM’000 rM’000 rM’000

revenue 1,690,837 1,767,566 2,069,398 5,551,379 6,933,456

Profit before taxation 253,616 298,808 349,225 806,595 897,033

Profit for the year 204,669 222,242 275,094 626,814 667,807

Profit attributable to equity holders of the company 147,649 160,735 240,973 481,139 474,917

equity attributable to equity holders of the company 1,263,920 1,373,524 1,576,218 2,019,005 2,360,955

Total assets 2,982,060 3,449,642 6,323,872 6,765,477 7,961,143

Total borrowings 1,018,106 1,235,364 2,662,009 2,878,258 3,486,519

issued and paid-up capital 296,471 296,471 296,471 296,471 296,471

Dividends paid (net of taxation) 47,613 50,459 22,235 33,353 133,413

Growth rates 2007 2008 2009 2010 2011

% % % % %

revenue 46.9 4.5 17.1 168.3 24.9

Profit before taxation 288.9 17.8 16.9 131.0 11.2

Profit attributable to equity holders of the company 216.6 8.9 49.9 99.7 (1.3)

equity attributable to equity holders of the company 9.1 8.7 14.8 28.1 16.9

Total assets (2.7) 15.7 83.3 7.0 17.7

Total borrowings (13.0) 21.3 115.5 8.1 21.1

ratio 2007 2008 2009 2010 2011

return on equity (%) 11.7 11.7 15.3 23.8 20.1

return on total assets (%) 5.0 4.7 3.8 7.1 6.0

return on revenue (%) 8.7 9.1 11.6 8.7 6.8

gross dividend per share (sen) 23.0 20.0 15.0 40.0 20.0*

earnings per share - basic (sen) 51.4 56.1 81.8 162.3 160.2

net assets per share (rM) 4.26 4.63 5.32 6.81 7.96

gearing (times) 0.81 0.90 1.69 1.43 1.48

* 2011 gross dividend excludes the proposed Final Dividend of 25 sen per ordinary share comprising 12.73 sen franked dividend and 12.27 exempt dividend which is subject to shareholders approval at the 38th Annual general Meeting of the company.


revenue(rM MiLLion)

profit attributable to equity holDers of the Company(rM MiLLion)

total assets(rM MiLLion)

profit before taXation(rM MiLLion)

equity attributable to equity holDers of the Company(rM MiLLion)

07

07 07

07

07

08

08 08

08

08

09

09 09

09

09

10

10 10

10

10

11

11 11

11

11

1,69

1

148

2,98

225

4

1,26

4

1,76

8

161 3,45

029

9

1,37

4

2,06

9

241

6,32

434

9

1,57

6

5,55

1

481

6,76

580

7

2,01

9

6,93

3

475

7,96

189

7

2,36

1

Group finanCial hiGhliGhts Tradewinds (M) Berhad Annual Report 201114

return on equity(%)

Gross DiviDenD per share(Sen)

net assets per share(rM)

earninGs per share – basiC (Sen)

07 07

07

0708 08

08

0809 09

09

0910 10

10

1011 11

11

11

11.7

23.0

4.26

51.4

11.7

20.0

4.63

56.1

15.3

15.0

5.32

81.8

23.8

40.0

6.81

162.

3

20.1

20.0

*

7.96

160.

2

* Excluding the proposed Final Dividend of 25 sen per ordinary share comprising 12.73 sen franked dividend and 12.27 sen exempt dividend


as ordinary business, to consider and if thought fit, to pass the following resolutions:-

ordinary resolutions

1. To receive the Audited Financial Statements for the financial year ended 31 December 2011 together with the reports of the Directors and Auditors thereon;

2. To declare a Final Dividend of 25 sen per ordinary share comprising 12.73 sen franked dividend and

12.27 sen exempt dividend for the financial year ended 31 December 2011; 3. To approve the payment of Directors’ fees for the financial year ended 31 December 2011; 4. To re-elect the following Directors who are required to retire by rotation from office pursuant to

Articles 105 and 106 of the company’s Articles of Association (Articles):-

i) Khalid bin Sufat; and ii) Datuk hj. ismail bin hj. hashim. 5. To re-elect Dato’ izudin bin ishak who is required to retire from office pursuant to Article 110 of the

company’s Articles; 6. To reappoint Dato’ Wira Syed Abdul Jabbar bin Syed hassan whose office shall become vacant at

the conclusion of this AgM pursuant to Section 129(2) of the companies Act, 1965 (Act) to hold office until the conclusion of the next AgM;

7. To reappoint Messrs ernst & Young as auditors of the company for the ensuing year and to

authorise the Directors to fix their remuneration;

noTice iS hereBY giVen ThAT The 38Th AnnuAL generAL MeeTing (AgM) oF TrADeWinDS (M) BerhAD (TWM or coMPAnY) WiLL Be heLD AT MAhKoTA BALLrooM 2, BALLrooM LeVeL, hoTeL iSTAnA KuALA LuMPur, 73, JALAn rAJA chuLAn, 50200 KuALA LuMPur on ThurSDAY, 28 June 2012 AT 10.00 A.M. For The FoLLoWing PurPoSeS:-

please refer to note a

resolution 1

resolution 2

resolution 3resolution 4

resolution 5

resolution 6

resolution 7


as special business, to consider and if thought fit, to pass the following resolution:-

ordinary resolution 8. Proposed Shareholders’ Mandate for the company and its Subsidiary companies (collectively,

group companies) to enter into recurrent related Party Transactions of a revenue or Trading nature specified in the circular to Shareholders dated 4 June 2012 (circular):-

Proposed Mandate:-

ThAT approval be and is hereby given for the group companies to enter into the recurrent related party transactions of a revenue or trading nature specified and set out in Section 3.2 of the circular (Mandate) provided that such transactions are (i) in the ordinary course of business and necessary for day-to-day operations of the group companies and (ii) on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of TWM AnD ThAT unless revoked or varied by the resolutions of the shareholders of the company in general meeting, the Mandate shall continue to be in force until the conclusion of the next AgM of the company or the expiration of the period within which the next AgM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the (Act) whichever is earlier.

AnD FurTher ThAT the group companies be and are hereby authorised to enter into and execute all such agreements, instruments, documents and deeds and to do all acts, deeds and things necessary, expedient or advisable for and in respect of the Mandate and the transactions contemplated and/or authorised by the Mandate.

9. To transact any other ordinary business for which due notice shall have been given.

notiCe of DiviDenD entitlement anD payment

notice is hereby given that a Final Dividend of 25 sen per ordinary share comprising 12.73 sen franked dividend and 12.27 sen exempt dividend for financial year ended 31 December 2011, if approved by shareholders at the forthcoming AgM, will be paid on 8 August 2012 to shareholders whose names appear on the company’s register of Depositors on 20 July 2012.

A Depositor shall qualify for entitlement to the dividend only in respect of:-

1) Shares deposited into the Depositor’s Securities Account before 12.30 p.m. on 18 July 2012 in respect of shares which are exempted from mandatory deposit;

2) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 20 July 2012 in respect of ordinary transfer; and

3) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.

BY orDer oF The BoArDZainal rashiD bin ab rahman (LS 007008)company Secretary

Kuala Lumpur4 June 2012

resolution 8


notiCe of annual General meetinG

notes:

A. This Agenda item is meant for discussion only as under the provision of Section 169(1) of the Act, the Audited Financial Statements do not require the formal approval of shareholders and hence, the matter will not be put forward for voting.

proxy

1. in respect of deposited securities, only members whose names appear in the record of Depositors on 21 June 2012 shall be eligible to attend the meeting;

2. A member of the company entitled to attend and vote at the meeting is entitled to appoint any one person to be his/her proxy without limitation to attend and vote in his/her stead and the provisions of Section 149 (1)(a) and (b) of the Act shall not apply to the company. A proxy may but need not be a member of the company;

3. Where a member of the company is an authorised nominee as defined under the Securities industry (central Depositories) Act, 1991 it may appoint one proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account;

4. The Form of Proxy to be valid, must be deposited at the Share registrar’s office, Symphony Share registrars Sdn Bhd at Level 6, Symphony house, Pusat Dagangan Dana 1, Jalan PJu 1A/46, 47301 Petaling Jaya, Selangor on or before Tuesday, 26 June 2012 at 10.00 a.m. being not less than 48 hours before the time fixed for holding the meeting or at any adjournment thereof;

5. in the case of a corporate member, the proxy must be appointed in accordance with the company’s Articles and the Form of Proxy should be given under its common seal or under the hand of its attorney; and

6. Statement Accompanying the notice of AgM on Profile of Directors standing for re-election and reappointment as Directors of the company for resolutions 3 to 6 are shown from page 22 to 25 of the Annual report.

eXplanatory notes on speCial business:-

For further information on ordinary resolution 8 please refer to circular to Shareholders dated 4 June 2012 accompanying the Annual report.


statement aCCompanyinG

notiCe of annual General meetinG

pursuant to paragraph 8.27 (2) of the main market listing requirements of bursa malaysia securities berhad

1. Directors who are standing for re-election and reappointment by rotation at the AgM of the company pursuant to Articles 105 and 106 of the company’s Articles are as follows:-

i. Khalid bin Sufat; and ii. Datuk hj. ismail bin hj. hashim.

2. Dato’ izudin bin ishak is standing for reappointment at the AgM of the company pursuant to Article 110 of the company’s Articles;

3. Dato’ Wira Syed Abdul Jabbar bin Syed hassan who is over 70 years of age, is standing for reappointment at the AgM of the company pursuant to Section 129(6) of the Act;

4. Seven Board of Directors meetings were held during the financial year ended 31 December 2011. Details of attendance of Directors at the said Board meetings are contained in their respective profile from page 22 to 25 of this Annual report;

5. The AgM of Tradewinds (M) Berhad will be held as follows:-

Venue: Mahkota Ballroom 2, Ballroom Level hotel istana Kuala Lumpur 73, Jalan raja chulan 50200 Kuala Lumpur Date: 28 June 2012 Time: 10.00 a.m.

6. Further details of Directors who are standing for re-election and reappointment are shown from page 22 to 25 of this Annual report.


profiles of DireCtors

Dato’ Wira Syed Abdul Jabbar bin Syed hassan, a Malaysian aged 72, was appointed as chairman of Tradewinds (M) Berhad on 29 october 2008. he also sits as chairman of the executive committee as well as nomination and remuneration committee of the company.

he holds a Bachelor of economics Degree from university of Western Australia and a Masters of Science Degree in Marketing from university of newcastle-upon-Tyne, united Kingdom. Dato’ Wira Syed Abdul Jabbar was previously the chief executive officer of the Kuala Lumpur commodity exchange, executive chairman of Malaysia Monetary exchange and executive chairman of the commodity and Monetary exchange.

Dato’ Wira Syed Abdul Jabbar is currently the chairman of MMc corporation Berhad, Padiberas nasional Berhad, Tradewinds Plantation Berhad and Aliran ihsan resources Berhad. he is also a board member of Star Publications (M) Berhad.

he has attended all seven Board meetings held in the financial year under review.

he has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. he has no conflict of interest in any business arrangement with the company and has no conviction for any offence within the past ten years other than traffic offences, if any.

Dato’ wira syeD abDul Jabbar bin syeD hassan Chairmanindependent non-executive Director


syeD aZmin bin syeD nornon-independent non-executive Director

Tuan Syed Azmin bin Syed nor, a Malaysian aged 48, was appointed to the Board of Directors of Tradewinds (M) Berhad on 28 September 2005. he also sits as a member of the Audit committee of the company.

he holds a Bachelor of Science Degree, majoring in Business Management from university of Berkeley, uSA. upon his return in 1984 until 1993, he was involved in several private business ventures including trading in commodities, housing development, manufacturing, stock broking and international trading.

in 1997, he was appointed as executive Director of cn Asia corporation Berhad until 2001. he was also involved in the incorporation of commerce Dot com Sdn Bhd which undertook one of the government’s electronic commerce projects, e-Perolehan.

he currently sits on the boards of Amtek holdings Berhad, Tradewinds corporation Berhad, united Malayan Land Berhad and several private limited companies.

Tuan Syed Azmin has attended all seven Board meetings held during the financial year under review.

Tuan Syed Azmin is the brother of Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed nor who holds indirect major shareholding in the company. his interest in the securities of the company or its subsidiary companies is as disclosed on page 89 of this Annual report.

he has no conflict of interest in any business arrangement with the company and has no conviction for any offence within the past ten years other than traffic offences, if any.

encik Bakry bin hamzah, a Malaysian aged 54, was redesignated as non-independent executive Director and group Managing Director of Tradewinds (M) Berhad on 3 February 2010. he also sits as a member of the executive committee of the company.

he had previously served as a Director of the company from 22 August 2002 to 24 March 2003 before being appointed the chief operating officer on 1 April 2003. he later became the chief executive officer of the company effective 1 December 2005 until 8 April 2007.

encik Bakry holds a Bachelor of Arts Degree from university Malaya and began his career as Assistant Director of Marketing in Lembaga Padi dan Beras negara. Subsequently, he became the operations Manager of Bukhary holdings Sdn Bhd before joining Juara niaga Sdn Bhd as general Manager, prior to being the head of Business Development of Aero Mutiara Sdn Bhd in 1995.

he was also the executive Director of Latitude Tree holding Berhad and a Director of oriental Food industries Berhad. he is currently a director of Tradewinds Plantation Berhad and Managing Director of Padiberas nasional Berhad. encik Bakry has attended six out of seven Board meetings held during the financial year under review.

he does not hold any interest in the securities of the company or its subsidiary companies. he has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad.


BAKRY BIN HAMZAHGroup managing Directornon-independent executive Director


profile of DireCtors

Mr. ooi Teik huat, a Malaysian aged 52, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. he is the chairman of the Audit committee and is also a member of the nomination and remuneration committee of the company.

Mr. ooi Teik huat is a member of Malaysian institute of Accountants and cPA Australia and holds a Bachelor of economics Degree from Monash university, Australia. he started his career with Messrs hew & co (now known as Messrs Mazars), chartered Accountants before joining Malaysian international Merchant Bankers Berhad (now known as MiMB investment Bank Berhad). he subsequently joined Pengkalen Securities Sdn Bhd (now known as PM Securities Sdn Bhd) as head of corporate Finance, before leaving to set up Meridian Solutions Sdn Bhd where he is presently a director.

Mr. ooi Teik huat is also a director of Tradewinds Plantation Berhad, MMc corporation Berhad, DrB-hicom Berhad and Zelan Berhad.

Mr. ooi Teik huat has attended all seven Board meetings held during the financial year under review.



ooi teiK huatindependent non-executive Director

encik Khalid bin Sufat, a Malaysian aged 56, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. he also sits as a member of the Audit committee and the nomination and remuneration committee of the company. An accountant by profession, encik Khalid is a Fellow of Association of chartered certified Accountants, united Kingdom, a member of the Malaysian institute of Accountants and the Malaysian institute of certified Public Accountants.

he has vast experience in the banking industry and has held several senior portfolios including Managing Director of Bank Kerjasama rakyat Malaysia Berhad, general Manager, consumer Banking of Malayan Banking Berhad and executive Director of united Merchant Finance Berhad.

he had previously managed Tronoh Mines Malaysia Berhad, Furqan Business organisation Berhad and Seacera Tiles Berhad as executive Director, Deputy executive chairman and group Managing Director, respectively.

currently, he is a board member of Bina Puri holdings Berhad, uMW holdings Berhad and chemical company of Malaysia Berhad.

encik Khalid has attended all seven Board meetings held during the financial year under review.


he also has no conflict of interest in any business arrangement with the company and has no conviction for any offence within the past ten years other than traffic offences, if any.

KhaliD bin sufatindependent non-executive Director


Datuk hj. ismail bin hj. hashim, a Malaysian aged 67, was appointed to the Board of Directors of Tradewinds (M) Berhad on 11 March 2010.

he holds a Diploma in Accountancy from riDA college, Petaling Jaya (now known as universiti Teknologi MArA). Datuk hj. ismail is also a Fellow of the chartered institute of Management Accountants, united Kingdom. he had also attended the Management Development Program at harvard Business School, Boston, uSA.

Datuk hj. ismail began his career at Shell Marketing Malaysia as a Management Trainee and subsequently joined ici group of companies in Malaysia, Singapore, indonesia, united Kingdom and canada in 1966 as an Accountant and Project investment Analyst. in 1973, he then joined Tower group of companies for South east Asia Timber industry as Director of Finance for South east Asia.

Datuk hj. ismail joined PeTronAS group of companies as Financial controller in 1974 and was later appointed to the Main Board of PeTronAS as executive Director, Finance from 1975 to 1986; as Vice President, Finance, Planning and information Services until 1990 and as Senior Vice President, Downstream until 1994. he served as non-executive Director, AncoM Berhad from 1995 to 1997 and became the chief executive officer of AncoM energy & Services Sdn Bhd until his retirement in 2004.

Datuk hj. ismail is currently an independent board member of Felda holdings Bhd, Felda global Ventures holdings Berhad and Sarawak economic Development corporation.

Datuk hj. ismail has attended all seven Board meetings during the financial year under review.



DatuK hJ. ismail bin hJ. hashimnon-independent non-executive Director

Dato’ iZuDin bin ishaKnon-independent non-executive Director

Dato’ izudin bin ishak, a Malaysian aged 47, was appointed to the Board of Directors of Tradewinds (M) Berhad on 26 January 2012.

he holds a Diploma in Quantity Surveyor, universiti Teknologi Malaysia and Advance Diploma in Business Administration from institute of commercial Management. Dato’ izudin also holds a Master of Business Administration from Southern cross university, Australia.

Dato’ izudin has a vast working experience as a consultant, contractor and developer for ten years and is currently a director of growth Avenue Sdn Bhd.




twm people are speCial anD this has been amply DemonstrateD in the past two years or so. it is their unrelentinG Commitment to Deliver that has maDe it possible for us to Continue to proDuCe eXCellent results, year by year



bakry bin hamzahGroup Managing Director / Managing Director Rice Division

mohd nazri bin shariff Group Chief Financial Officer

tuan ngah bin tuan baru Chief Executive Officer Sugar Division

Chan seng fatt Chief Executive Officer Plantation Division

mohd azanuddin bin salleh Senior General Manager Finance

Zainudin bin hashim Senior General Manager Corporate Planning

Dr. mohd yusoff bin omarSenior General Manager Transformation

tan Choon haiTechnical Adviser

Zainudin bin Hashim • Tan Choon Hai • Dr. Mohd Yusoff bin Omar • Tuan Ngah bin Tuan Baru • Bakry bin Hamzah • Mohd Nazri bin Shariff • Chan Seng Fatt • Mohd Azanuddin bin Salleh

From left to right


ismail bin mohamed yusoff Senior General Manager Group Managing Director’s Office / Investor Relations

Zurkarnain bin mohd yusoff Senior General Manager Commodity & Derivatives Management

azmin bin abidin General Manager Human Resources & Administration

ibrahim bin husian General Manager Project / Operations

sabrina binti yon General Manager Corporate Communications

lim yin meng General Manager Internal Audit

ainul arfah binti baharim General Manager Risk Management

Zainal rashid bin ab rahman Company Secretary

Azmin bin Abidin • Zurkarnain bin Mohd Yusoff • Ismail bin Mohamed Yusoff • Zainal Rashid bin Ab Rahman • Ibrahim bin Husian • Sabrina binti Yon • Lim Yin Meng • Ainul Arfah binti Baharim

From left to right


Dato’ wira syeD abDul Jabbar bin syeD hassan

chairman


Dear Shareholders,

on behalf of the Board of Directors (Board), it is my pleasure to present this Annual report and Audited Financial Statements of Tradewinds (M) Berhad group (TWM group) and the company for the financial year ended 31 December 2011 (FYe 2011).


revenue

RM6.9 billion+ 24.9%.

2011 was yet another year of robust growth for TWM attesting to the viability of our business model and the strategies put in place to ensure continuing success and profitability. reprising the record performance of the previous year, revenue for FYe 2011 rose to a new high, primarily driven by the improved operating performances of the Plantation and Sugar Divisions.

The year under review also saw TWM continuing to strengthen its financial position and lay the foundations for future growth. our acquisition trail that began three years ago has been expanded with the addition of MArDec Berhad (Mardec) and an additional stake in Ban heng Bee holdings Sdn Bhd.

i would like to take this opportunity to welcome the Management and staff of Mardec to the TWM corporate family. Backed by almost 40 years of experience, Mardec has grown its business globally and i believe this will enhance TWM group’s business prospects.

TWM has been steadily stitching up success and this has been noted by investors and research analysts alike over the past two years or so. Through a series of carefully planned corporate manoeuvres, TWM has grown to be one of the largest food and commodity groups listed on the Main Market of Bursa Malaysia Securities Berhad (Bursa Malaysia). even as we grow, we ensure that the corporate values that we espouse will be the thread that runs throughout the enlarged group.

going by our performances of the past two years, TWM is now a much stronger entity with solid fundamentals anchored in three profitable lines of business. More than just meeting our corporate goals, we will never lose sight of our unique position in the socio-economic fabric of the country. Directly or indirectly, we are serving the nation’s interest in ensuring adequate supply and price stability of rice and sugar, whilst helping Malaysia achieve its transformation objectives.

Chairman’s statements Tradewinds (M) Berhad Annual Report 201134

finanCial performanCe

TWM posted a commendable financial performance for FYe 2011 with a revenue of rM6.9 billion, an increase of 24.9% from rM5.6 billion recorded in the preceding year. Profit before taxation (PBT) improved by 11.2% to rM897.0 million compared to rM806.6 million achieved in 2010. Profit after taxation was also higher at rM667.8 million up by 6.5% from rM626.8 million in financial year ended 31 December 2010 (FYe 2010). The group’s Plantation Division contributed 52.7% of PBT followed by Sugar Division of 23.9% and rice Division of 23.4%.TWM’s strong financial numbers were mainly attributed to higher prices of crude palm oil (cPo) and palm kernel (PK), higher average selling price of sugar and higher volume of rice sold as compared to the previous year.

operationally, FYe 2011 was an exceptional year for the group’s Plantation Division and this was reflected in all key performance indicators namely production, yield, extraction rates and prices. Against this backdrop, Tradewinds Plantation Berhad (TPB) group recorded its best-ever financial performance in FYe 2011 with a revenue of rM1.7 billion and PBT of rM476.8 million.

The world’s sugar market continued to experience price volatility in FYe 2011, soaring to a 30-year high of uS35.31 cents/lb on 2 February and settling at uS23.30 cents/lb on 30 December. notwithstanding this, TWM’s Sugar Division posted a 16.2% increase in sales revenue to rM1.6 billion for both domestic and export markets. however, Sugar Division recorded PBT of rM244.1 million which was lower compared to rM266.3 million recorded in the previous year primarily due to higher raw sugar cost.

Meanwhile, our 72.57%-owned listed subsidiary company, Padiberas nasional Berhad (BernAS), registered its highest post-privatisation revenue of rM3.5 billion, a growth of 11.3% from rM3.2 billion achieved in 2010. PBT was however, lower at rM238.7 million as compared to rM245.8 million recorded for FYe 2010 due to the higher cost of raw materials, cessation of the group’s Save More retail operations and increase in finance costs and operating expenditure.

The rising appeal of TWM’s counter has not gone unnoticed by investors and research analysts. TWM’s share price has easily out-performed the FBM-KLci index closing the year at rM10.04 which is an increase of 49.9% from rM6.70 registered in the preceding year. The total volume of TWM shares traded on Bursa Malaysia has also shown a healthy growth of 56%.


Profit before taxation soared by 11.2% to rM897.0 million compared to rM806.6 million achieved previously

DiviDenDs

in line with our objective to share our success with shareholders, an interim dividend of 20 sen per ordinary share less income tax of 25% (2010: 20 sen) for the FYe 2011 was paid out on 30 november 2011.

on the strength of the group’s good performance, the Board is pleased to recommend a Final Dividend of 25 sen per ordinary share (2010: 20 sen per share) comprising 12.73 sen franked dividend and 12.27 sen exempt dividend subject to the approval of shareholders at the forthcoming Annual general Meeting to be held on 28 June 2012.

if approved, the total net dividend payment with respect to FYe 2011 would amount to approximately rM109.2 million which is higher than the total dividend payment for FYe 2010 of rM88.9 million.This results in a higher gross dividend payout ratio of 28.1% for FYe 2011 compared to 24.6% for FYe 2010.

Corporate Developments

on the corporate front, FYe 2011 was a busy and eventful year underpinned by several exercises to further streamline and consolidate the group’s core businesses.

in our Plantation Division, the acquisition of Mardec for a total consideration of rM140.0 million was completed on 10 october 2011. Mardec is involved in the processing and manufacturing of value-added rubber and polymer products. its acquisition therefore, is a strategic move to expand the group’s rubber business into downstream activities thereby complementing our existing upstream rubber plantation operations.

With Mardec under our wing, our immediate task is to optimise the efficiency of its operations and unlock the true value of its assets. To this end, a Share Sale Agreement was signed on 8 February 2012 to dispose Mardec’s 45% equity interest in r1 international Pte Ltd. The said disposal was completed on 30 April 2012.


profit after taXation was hiGher at rm667.8 million up by 6.5% from rm626.8 million in 2010


At BernAS, we had acquired additional shares in Ban heng Bee holdings Sdn Bhd on 11 november 2011, increasing our shareholding from 20% to 49% to take the partnership to a new level of collaborative effort which is in line with BernAS’ strategic long-term plan to strengthen its involvement in the downstream activities of the rice business.

TWM had, on 29 March 2012, entered into a Share Sale Agreement with Amalan Penaga (M) Sdn Bhd, a wholly-owned subsidiary company of TPB, for the disposal of 11,259,523 ordinary shares of rM1.00 each representing 60% of its equity interest in retus Plantation Sdn Bhd (Proposed Disposal). The Proposed Disposal is in line with TWM’s efforts to consolidate its plantation business under a single sub-group of companies within the TWM group. it will enable TWM to better manage its resources and unlock the greater potential of its plantation assets. The Proposed Disposal is subject to the approval of various parties and is expected to be completed by end of 2012.

in the national interest

More than just any commercial entity, TWM must also be seen in the context of its contributions to the nation where directly or indirectly, we are serving the nation in the following manner:-

• As thenation’spartner in thepaddyand rice industry,BernAS has discharged its responsibility effectively to maintain a sufficient supply of rice at fairly reasonable and stable prices;

• TheGroupisalsocontributingtowardsthegoalsoutlinedin the government’s economic Transformation Programme (eTP) designed to transform Malaysia into a high-income nation by 2020. Through BernAS, we are participating in two entry Point Projects (ePP) namely ePP 10 and ePP 11 which have been identified under the national Key economic Areas (nKeAs);


• Asoneofthemainplayers,TPB isalsoplayingarole inimproving the palm oil industry’s standing as a competitive global palm oil producer. This is being achieved through our replanting programmes, deployment of good agriculture practices and efforts at enhancing yields. We are also exploring the right opportunity to move further down the value chain by investing into the downstream business;

• TWM also supports Malaysia’s aspirations to make acomeback as the world’s leading rubber producer. over the years, TPB has been increasing its hectarage planted with rubber, notably through the acquisition of 70% stake in northern intergrated Agriculture Sdn Bhd in october 2009;

• MardecisalsoparticipatinginamajorNKEArubberinitiativefor the commercialisation of a new generation of latex grade specialty rubbers which include epoxidised natural rubber (ekoprena) and deprotenised natural rubber (Pureprena). Both are raw materials to support high-end rubber product industries especially green tyre manufacturing;

• Ournotablecorporateresponsibility initiativesatnationallevel include “Bowls for humanity” launched in July 2011 and the on-going Program Rakan Ladang (PrL) which have benefitted orphanages and paddy farmers, respectively; and

• Through“BowlsforHumanity”campaign,BernAS donated 500 MT or rM1.25 million equivalent to orphanages throughout the country last year. under the PrL scheme, 28,458 farmers have benefitted from the programme which saw yield increase between 10% to 20% in the few areas in Perlis, Perak, Selangor and Kedah during the last harvesting season.


Chairman’s statements

outlooK anD prospeCts our businesses are anchored in three essential commodities. The global rice market is expected to face another year of uncertainty in 2012. however, the group’s rice Division has already put in place measures to mitigate the risk of price and currency fluctuations and entered into forward purchase contracts to meet most of its rice requirements for 2012. With that, rice Division expects a satisfactory performance in 2012.

The performance of our Plantation Division is very much dependent on the price movements of palm oil products. our plantation operations will also be affected by rising labour and fertiliser costs. The division will continue to focus on field mechanisation, operational efficiency, yield enhancement and deploying more stringent cost controls. With the price of cPo expected to trade within a range of rM2,800 to rM3,500 per MT in 2012, we can expect to see similar performance from this division this year.

Through Mardec, the group i s exp lor ing into the commercialisation of the earlier mentioned specialty raw rubber products, ekoprena and Pureprena, to strengthen its position in the high value niche market. These materials are critical in high-end rubber product industry especially in the manufacturing of eco-friendly tyres. The group will be setting up a manufacturing facility to produce ekoprena specialty rubber designated for the european market by early 2013.

The Sugar Division is expected to see another challenging year of rising production costs and stiff competition in the export market. however, through the division’s continued focus on operational efficiency and meeting customers’ expectations, we can expect a set of good results from the Sugar Division.

in view of the above, we can look forward to a solid performance by the group and maintain its profitability for the year 2012. our optimism is premised on several factors, not least of all being the diversity of our core businesses which serves as a source of strength and balance to face the many uncertainties in the market.


appreCiation

in celebrating our success, we must acknowledge the roles played by the most valuable segment of the group, namely our employees. TWM people bring passion to their jobs and this has been the driving force behind our success.

We are fortunate to have exceptionally strong and visionary Board members. however two of our members, YM Datuk r Sharifuddin hizan bin r Zainal Abidin and Mr. chuah Seong Tat, resigned on 12 April 2011 and 15 March 2012, respectively. We wish them every success in their future undertakings. We also wish to welcome Dato’ izudin bin ishak who was appointed to the Board on 26 January 2012. given his background, the group will no doubt benefit from his knowledge and experience.

We greatly appreciate the cooperation and support from the government of Malaysia through its various ministries, state governments and related agencies in the successful execution of our economic and social objectives. Your belief and confidence in the group has inspired us to do even better.

We would like to acknowledge our business associates, financiers and partners, with whom we enjoy a good working and business relationships. not least of all, i want to thank our shareholders for their loyalty and continued support given to us.

i thank all of you.

Dato’ wira syeD abDul Jabbar bin syeD hassanchairman


Tradewinds (M) Berhad (TWM or group) remains an exciting and unfolding enterprise and this has been borne out by the events and results of the year under review ended 31 December 2011 (FYe 2011). in almost all aspects, FYe 2011 was another extraordinary year of highlights and achievements. good operational results have translated into significant revenue growth for the group’s three core operating divisions, demonstrating the strengths of our business model and the effectiveness of the strategies in place.


baKry bin hamZahgroup Managing Director


These results were achieved against a backdrop of change brought about, first with the acquisition of Padiberas nasional Berhad (BernAS), followed by MArDec Berhad (Mardec) a year later. For the new members of our corporate family, this has meant an assimilation of a new corporate culture and the streamlining of operational policies and procedures. Whilst changes were minimal in terms of corporate structure, the operational structures had to be adjusted to allow for new working exposures, job enlargement and accountability to employees. By and large, i am pleased to report that the integration process has proceeded very smoothly with minimal disruptions to operations and results.

We are also continually reviewing our asset base to determine how best it can be optimised. At the same time, the group is also selectively investing millions of ringgit in building new infrastructure and facilities. in doing so, we are laying the foundations for the next thrust forward.

operatinG environment

The global economic environment in FYe 2011 continued to remain challenging. Amidst heightened uncertainties over the pace of recovery in the advanced economies of the united States of America (uS) and the euro Zone, Japan was beset by the triple disasters in March 2011, triggering worldwide production and supply chain disruptions. oil prices also soared to levels not seen before in two years as production levels fell due to the uprisings in the Middle east and north Africa. notwithstanding the turbulence of the past year, the sugar, rice and plantation businesses have remained relatively resilient.

According to the Food and Agriculture organisation of the united nations, FYe 2011 was a good year for the global rice industry with world rice production and trade setting new records. The massive floods that ravaged the vast rice bowls of Thailand and indo-china had less of an impact than initially feared. consequently, price volatility had considerably lessened in 2011, remaining on average 10% above the 2010 level.

review of operations by Group manaGinG DireCtor


our Plantation Division also benefited from a favourable operating environment. The Malaysian palm oil industry enjoyed a stellar year with record highs registered in the key performance indicator namely, production, yields, exports, price and revenue. in the rubber sector, global production of natural rubber rose 5.5% to 11.0 million MT in 2011 with Malaysia accounting for 1.0 million MT. global consumption of natural rubber remains strong driven by demand from china, Japan and Korea. The average price of the Malaysian benchmark SMr 20 grade rubber was around rM13.48/kilogramme (kg) compared to rM10.58/kg realised in 2010.

The group’s sugar business has long been characterised by volatility, speculations and widespread intervention. in 2011, the world indicator price for sugar traded at uS31 cents/lb on 4 January before rallying to a high of uS35.31 cents/lb on 2 February before dipping to uS22.46 cents/lb on 1 June. it took flight again on 1 September to reach uS29.59 cents/lb before settling at uS23.30 cents/lb on 30 December.


business review

riCeDivisionbernas reGistereD its hiGhest post-privatisation revenue of rm3.5 billion

business review

riCeDivision

business reviewriCe Division

The group’s rice business is represented by BernAS, the nation’s food-grain management agency. For FYe 2011, BernAS posted a revenue of rM3.5 billion being the highest level recorded post-privatisation. This had exceeded the previous year’s revenue by 11.3% which was mainly attributed to an increase in paddy sales on consignment to the Bumiputra rice Miller Scheme (Skim Pengilang Bumiputera).

Apart from the financial numbers, real progress was also made in the ongoing transformation of BernAS into a dynamic, highly competitive and cost-efficient company positioned for a new phase of growth and profitability. in a year of aggressive consolidation, BernAS took stock of its business model, strategies and overall operations to chart new directions for future profitable growth.

in a nation where food security is synonymous with rice security, arguably one of BernAS’ most significant achievements was to ensure that the nation was provided with a secured supply of rice at stable prices. With lessons learnt from the rice crunch experienced in 2007/2008, pre-emptive measures were taken to shore up and manage the national rice Stockpile of 292,000 MT. There was also no disruption in the supply of other grades of rice consumed in Malaysia.

Some of the operational highlights of FYe 2011 included the following:

• BERNAS’ shareof the localpaddymarket improved to33.3% largely due to the successful implementation of its ‘Skim Upah Mengering dan Kisar’ and ‘Program Rakan Ladang’ (PrL);

• AtotalsumofRM64.1millionwascommittedinFYE2011to execute 481 projects as part of BernAS’ facilities and infrastructure improvement programme mainly focused on delivering both, increased milling capacity and improved operating systems. The installation of new machinery and mill infrastructure upgrades were instrumental in improving operations and reducing losses in milling operations by 30% during the year in review;


revenue

RM3.5 billion+ 11%.

• BERNASsuccessfullysecuredpreferredbuyercontractswithkey suppliers in Thailand and Vietnam which is a major coup as the rice market had the tendency to be traded on a consignment basis or at best, a three-month forward period;

• BERNAShasbeenrequestedtoparticipateintwoEntryPointProjects (ePP), i.e. ePP 10 (the scaling up and strengthening productivity of paddy farming in MuDA area (MADA) and ePP 11, Batang Lupar (the scaling up and strengthening productivity of paddy farming in areas other than MADA) identified under the national Key economic Areas (nKeA) of the economic Transformation Programme (eTP). ePP 10 will cover half of MADA’s current total area of 96,000 ha while Batang Lupar, though not new, can hardly be considered a granary. ePP 11 Batang Lupar will produce a granary of 5,100 ha;

• TheBERNAS-UPMLaboratoryhasbeenupgradedfromananalytical food technology laboratory into a full-fledged research and development laboratory. renamed the uPM-BernAS research Laboratory, it will focus on efficiency and innovation in both upstream and downstream activities as well as researching into rice by-products which can be commercialised in the future; and

• On28July,BERNAS launched its“BowlsforHumanity”campaign as part of a far-reaching corporate responsibility programme to benefit 150 orphanages nationwide.

After reviewing BernAS’ business model and in light of market dynamics, a conscious decision was taken to cease the last of its 30 Save More community stores in September 2011. When BernAS entered the retail market in 2008/2009, there were compelling reasons for it to establish a retail presence as to mitigate subsidised rice supply shortages. Since then, the proliferation of convenient stores and hypermarkets in almost every residential area, in particular Kedai rakyat 1Malaysia (Kr1M) has made our retail presence redundant. going forward, BernAS can still maintain a foothold in the retail segment through strategic co-branding options with its partners such as Jasmine Food corporation, Serba Wangi, era Bayam Kota, Sabarice and Liansin Trading, all of which are already brand leaders in the rice business.


business review

plantationDivisionthe plantation Division’s revenue inCreaseD almost two-folD to rm1.8 billion, the hiGhest level aChieveD to-Date

FYe 2011 was another record-breaking year for the group’s plantation business mainly at Tradewinds Plantation Berhad (TPB). The Division’s revenue increased almost two-fold to rM1.8 billion, the highest level achieved to-date. Accordingly, profit before taxation (PBT) rose to rM537.6 million, a significant increase from rM335.0 million from the previous year. The year in review also saw the maiden contribution of Mardec which became a wholly-owned subsidiary company of TPB effective 10 october 2011.

The group has a plantation landbank of 152,854 hectares (ha) of which 88,121 ha (57.6%) are located in Sarawak, another 11,308 ha (7.4%) in Sabah, with the remaining 53,425 ha (35.0%) in Peninsular Malaysia. About 80% of our landbank or 122,264 ha have been planted with oil palm and another 5,252 ha have been planted with rubber trees. As at February 2012, total plantable reserves amounted to 11,416 ha which have been earmarked for development over the next two years. The group also enjoys a favourable oil palm maturity profile with 47% of our landbank planted with palms at the prime age of between nine and 18 years. Meanwhile, rubber is set to make a positive contribution to the group’s revenue with the coming into maturity of Tradewinds corridor Sdn Bhd’s rubber plantations.

Favourable weather conditions in 2011 contributed towards a bumper harvest. Production of fresh fruit bunches (FFB) increased 14.2% to 1,556,484 MT while yield per ha improved by 11.1% to 18.96 MT. crude palm oil (cPo) production increased 10.2% to 323,745 MT while production of palm kernel (PK) rose by 9.7% to 79,870 MT.

The group’s Plantation Division also has nine palm oil mills strategically located throughout the country with a total capacity of approximately 1,500,000 MT. During the year, the Division achieved an average oil extraction rate (oer) of 20.81% and the kernel extraction rate (Ker) of 5.13% which exceeded the national average. A new 40 MT per hour mill is being constructed at Kuala Suai in Miri, Sarawak and will be commissioned by mid-2012. Plans are in the pipeline for the construction of two more mills with a similar capacity to be located near Kuching and Sibu.

An integral part of our blueprint for success is the diversification and broadening of our revenue base in the plantation-related business. From a mono-culture crop, the group has steadily diversified into rubber plantations and we currently own one of the largest commercially operated rubber plantations in the country within one single location. complementing our upstream rubber operations, the acquisition of Mardec is a strategic fit to the group’s plans to move further downstream in the rubber sector.

business reviewplantation Division


Through its stable of local and overseas subsidiary companies and associated companies, Mardec is involved in the processing (midstream) and manufacturing of value-added rubber and polymer products (downstream). Mardec has both domestic and overseas rubber processing operations. Mardec’s domestic rubber processing operations are vested in Mardec Processing Sdn Bhd whose core business is the processing and marketing of Standard Malaysian rubber/Technically Specified rubber as well as compound rubber to markets all over the world. Mardec has also established rubber processing operations in indonesia, Thailand and Vietnam. The company also has a manufacturing arm, Mardec Polymers Sdn Bhd, supplying rubber-based industrial products to global market.

Mardec is one of the two companies that have been selected by the technology owner, the Malaysian rubber Board, to commercialise a new generation of latex grade specialty rubbers, namely ekoprena and Pureprena. ekoprena is regarded as a green material for the rubber product manufacturing industry while Pureprena is a highly purified and an eco-efficient form of deproteinised natural rubber with properties suitable for dynamic and engineering applications. The plant for the production of both materials is targeted for commissioning by next year.


business review

suGarDivisiontwm’s suGar Division posteD a 16.2% inCrease in sales revenue to rm1.6 billion Due to hiGher priCes aChieveD for both DomestiC anD eXport sales

business review

suGarDivision

business reviewsuGar Division

The Sugar Division also ended the year on a high note, posting a revenue of rM1.6 billion. The 16.2% increase in revenue from rM1.4 billion achieved in the preceding year was mainly attributed to higher prices realised for both domestic and export sales. however, PBT declined by 8.4% to rM244.1 million largely due to the higher cost of production and other operating expenses.

During the year, domestic consumption of sugar declined marginally to 1.3 million MT. The domestic price of sugar was revised to rM2.30 per kg in May in line with the government’s concerted efforts to reduce subsidies. The new domestic price is comparable with that of our neighbouring countries.


The group also operates two sugar refineries with a combined melting capacity of 2,800 MT per day. At gula Padang Terap Sdn Bhd’s (gPT) refinery located at Padang Terap in Kedah, apart from meeting the new Department of environment’s (Doe) regulation on effluent treatment, gPT also conforms to the stringent regulations imposed by the Department of occupational Safety and health (DoSh). During the year, a significant milestone was reached when the refinery achieved zero case of notification of Accident, Dangerous occurrence, occupational Poisoning and occupational Disease (nADoPoD).

The group’s central Sugars refinery Sdn Bhd is located at Batu Tiga in Shah Alam, Selangor. continuing the work started in 2010 to ease bottlenecks and increase operational capacity, a new raw sugar warehouse has been commissioned at Pulau indah. in order to cater to the increasing demand from industrial customers, a new bulk tanker loading station was also completed and commissioned towards the end of 2011. Several new projects have been lined up for implementation in the coming year. These include another new warehouse for refined sugar at the Batu Tiga factory and the installation of an additional water tube boiler capacity project to increase plant capacity.


movinG forwarD

A great deal has been achieved the past year but we have yet to capture the full potential the group has to offer. Moving forward, we will be pursuing several strategic priorities.

For the rice Division, as part of its ongoing consolidation, the main targets and objectives set for financial year ending 2012 would include the following:-

• Enhancing local rice operations through improvedoperational efficiencies, cost reduction and strengthening the Program Rakan Ladang as a means to increase paddy market share;

• Increasingconsumer sales through joint-venture (JV)companies;

• Expanding the available product range with morevariations and grades;

• ElevatingBERNAS’brandnameviaco-brandingexerciseswith our JV companies;

• Developingadditionalwarehousingcapacitytohandleahigher stockpile threshold of 292,000 MT;

• Improvingdistributionnetworks,productioncapacityandlogistic efficiency; and

• Diversification insourcingof importedriceother thanfrom traditional suppliers.

Plantation Division has identified the following priorities moving forward:

• Utilisetheremainingundevelopedlandbankforoilpalmand rubber plantations;

• Implement theplannedyieldenhancementandcropproduction initiatives;

• Emphasiseonprudentunitcostmanagement;

review of operations by Group manaGinG DireCtor


• Addvalueonhumancapitalmanagement;

• Improveprofitabilityandcapacityofmillsoperations;and

• UnlockMardec’sgreaterpotentialbyenhancingprofitability,improving product quality and by executing plans for expansion, domestically and internationally.

For Sugar Division, our efforts and focus in the coming year will be on the following:-

• Reducingcostofrefiningthroughproductivityimprovementsand other cost reduction measures that include energy saving efficiency projects via the installation of new boilers and upgrading of steam turbines;

• Automating our warehousing system through thedeployment of robotics and establishing new loading bays to ease traffic congestion; and

• Increasingcapacityutilisation.

We have no illusions that there is a lot of ground to cover in the coming year. But as a group, we have always taken challenges in our stride and this is simply another hurdle we have to overcome.

aCKnowleDGements

Before closing this report, i would like to add my thoughts on the people who make up the TWM family. TWM people are special and this has been amply demonstrated in the past two years or so. in the transformative phase that we are in, i can appreciate that pulling together to form new teams and new working relationships can be tough. For some, it has also meant being transplanted to a new work environment and adapting to a new work culture and operational norms. Yet, our people have pulled it off, working effectively and it is their unrelenting commitment to deliver that has made it possible for us to continue to produce excellent results, year by year.

it is my conviction that our people will carry TWM to new levels of achievement. i commend all of you for your professionalism and commitment.

Thank you.

baKry bin hamZahgroup Managing Director


corporate responsibility or cr is the new business paradigm of the 21st century. in the more enlightened age we live in, businesses can no longer operate in isolation and must live up to their responsibilities as global citizens, community leaders and good neighbours in a fast-changing world. Acting in a socially responsible manner is not just an ethical duty, but as more corporations are discovering, it actually makes good business sense.

At TWM, cr has evolved to become a mainstream business agenda. Today, cr matters are debated at the top management levels and if necessary, brought to the Board of Directors’ (Board) attention for direction and approval. Taking our cue from Bursa Malaysia Securities Berhad cr Framework, the group’s cr efforts and programmes rest on four major pillars: Workplace Development, community Development, Marketplace Development and environmental Sustainability.

worKplaCe Development

a nurturing environment. Many corporations can claim that their employees are their greatest assets. At TWM, we believe in walking the talk. over and beyond a competitive remuneration package, every care is taken to ensure that our staff enjoy a conducive work environment. From an ample indoor recreational area, a well-equipped gymnasium and a 200-person surau, we have provided spaces for staff to gather after work, for recreational, for prayers and quiet reflection or to workout a sweat after a hard day. Lactating mothers also appreciate the special thought and effort that has gone into setting up ‘Mom’s care’.

The same care and attention has been given in the planning and construction of the accommodation needs of our estate workers who are truly the backbone of the group’s plantation operations. Many of our housing estates are self-contained communities in their own right, equipped with a host of amenities such as places of worship, clinics, kindergartens, crèches, club houses as well as recreational and sports facilities.


training and manpower Development. naturally, we remain attentive to the career needs of our people and we provide the critical support – training, guidance and leadership – opening doors to opportunities for those who make the effort. Besides recruiting the best the market has to offer, the development and retention of our human capital is critical to sustaining our competitive edge. our training programmes are unique, given the diverse nature of our operations and the different levels of staff. however, great attention to detail is given to ensure that training contents best match the needs of individual as well as corporate goals. At the headquarters’ level, the 2011 Training calendar included a range of in-house and external courses focusing on corporate governance and compliance, risk Management, information Systems, Leadership, Management Skills & competencies, Professional Finance, Accounting, Auditing and Taxation.

our plantation staff also benefited from a range of training programmes that were specifically tailored to upgrade the technical and managerial competencies. Field workers attended courses such as tractor maintenance, harvesting techniques and first-aid, to cite a few. Management staff benefited from programmes that covered a range of areas from satellite imaging and nursery set-up, neuro-linguistic programming and chemical safety briefings. These were augmented, from time to time, by field demonstrations and talks given by vendors and specialists on the latest innovations and technologies available in the market.

it is also noteworthy that our wholly-owned subsidiary company, gula Padang Terap Sdn Bhd, has been singled out by the Federation of Malaysian Manufacturers institute (FMM institute), Kedah/Perlis Branch for being among the few companies that has the highest frequency of training programmes conducted through the FMM institute.

succession planning programmes. The group firmly believes that the best is to be found in our own backyard. A continuing emphasis is to grow our own talent pool to eventually assume supervisory and leadership roles within the group. one of the most important initiatives in this regard is our Succession Planning Programmes (SPP) officially launched on 6 January 2011.

in order to implement the SPP, a Main Succession Planning committee made up of the top management of the group has been formed. This was followed by the identification of 29 candidates who underwent the SPP assessment process. Based on inputs from top management, including the chairman and the group Managing Director, a Leadership competencies Model was adopted with the following nine key components: integrity, excellence, Developing others, Teamwork, Managing Stakeholders, innovativeness, Business Acumen, Managing change and Strategic Thinking. All candidates were assessed against these criteria that form the basis of the Leadership competencies Model.


Corporate responsibility

As part of the stringent process to identify the leaders of tomorrow, candidates also went through a battery of management tools and career suitability assessment tests which included harrison Assessment Profiling exercise, 360 feedback surveys, competency-based interviews and strategic simulation exercises.

recreational activities. Working hard has always been a key success factor but as the adage goes, there must also be a time for play. Sports and recreational club of the group had organised sports and recreational activities to promote fitness, networking and sense of belonging to the group. Various sporting events were organised throughout the year including futsal, bowling, white water rafting, treasure hunts and even a marathon in the name of charity. not only do we celebrate the many festivities of our multi-cultural heritage, we also celebrate the birthdays of all our employees once every three months. it is through such informal gatherings that management and staff from the various Divisions are brought together, reinforcing the TWM sense of family.

Community Development

TWM has always striven to make a positive difference towards the communities in which it operates. charity-giving forms a major part of our cr efforts and each year we support many worthy charitable causes and appeals for donations from all over the nation. When the need arises, we have also responded in kind to assist local communities, donating rice and other food supplies to victims of floods and other natural disasters.

in reaching out to the communities, we also craft bespoke packages of initiatives to see where it may have the greatest impact and if possible, leave behind a positive legacy.

one of the most important cr initiatives launched in FYe 2011 was the ‘Bowls for humanity’ campaign launched by the Deputy Prime Minister, YAB Tan Sri Dato’ hj. Muhyiddin bin hj. Mohd. Yassin on 28 July 2011. The idea behind the programme is simple yet effective; for every 10 kg of Padiberas nasional Berhad (BernAS) rice purchased, 25 grammes in value would go towards feeding orphans in the country. By november 2011, a total of rM150,000 had been collected and was disbursed to 27 orphanages located in the northern region of Peninsular Malaysia. Another rM750,000 was collected between the months of november 2011 and January 2012 which has benefited 107 orphanages throughout Malaysia.

We are also reaching out to the farming community through our Program Rakan Ladang (PrL) launched in 2008 with the objective of improving the yield and quality of paddy produced in Malaysia. More than 55% of local paddy comes from the granary areas of Kedah and Perlis where farmers face a myriad of challenges that include limited funding, poor infrastructure and not least of all, old age. Through the coordinated efforts of BernAS, government agencies and farmers, PrL is addressing these by promoting greater efficiency in the supply chain whilst enhancing productivity and quality.


Another enduring cr initiative is the group’s support of the Albukhary international university (Aiu) in Alor Setar, Kedah. Aiu was set up as a charitable university and no fees are charged for students from less privileged backgrounds seeking tertiary education. The Aiu opened its doors to its first intake of undergraduate students from Malaysia as well as overseas in January 2011.

Beyond financial assistance, it is heartening to note that volunteerism is alive and well throughout the TWM group. The practice of gotong-royong or self-help is a time honoured Malaysian tradition where people volunteer their time and services to carry out cleaning, painting, repairs or any undertaking where the community can get together and lend a helping hand. Time and again, our people have also responded to various blood donation campaigns and no monetary value can be placed on their contributions. During the year, blood donation drives were organised at the Serasa Palm oil Mill and the gemilang estate near Kuching, and true to form, the turnout were very encouraging.

BernAS has been collaborating with the Malaysian civil Defence Department (Jabatan Pertahanan Awam Malaysia or JPAM) to set up a special BernAS-JPAM Taskforce which serves as a first line of defence in the event of any emergencies. As of March 2011, a total of 521 BernAS’ personnel across the country have volunteered to join the taskforce. These volunteers have been provided with the necessary training in accordance with JPAM’s emergency preparedness and response coordination systems. Apart from dealing with workplace disasters, the taskforce would strengthen the efforts of JPAM and other government agencies in responding to national emergencies such as the periodic monsoonal floods and other natural disasters.

marKetplaCe Development

The essence of cr is also to recognise the value of external stakeholder dialogue. To this end, an investor relations Department (irD) was set up in 2011 to further improve relationship with the investing community through active two-way communications. The investing community needs timely and relevant information about the TWM group to enhance their understanding of the group’s operations. on our part, we want to ensure that financial markets have sufficient information to make well-informed investment decisions so that our share price fairly reflects the underlying financial performance of the group. With the setting up of the irD, our efforts to engage the financial community will become more strategic and coordinated. Various platforms will eventually be established with continuing emphasis on enhancing investors’ understanding of the intricate nature of TWM’s business.

As a group that places a premium on excellence, we take pride in ensuring that our products reaching the marketplace match the high standards that our customers deserve. in our journey towards quality excellence, all our mills, factories and key operations have earned accreditation to the iSo 9000 series of quality management systems. iSo 9000 provides a framework for quality management throughout the entire chain of producing and delivering products and services to the customer and has become an international reference for quality requirements. incidentally, as a producer and trader of rubber produced by smallholders, Mardec Berhad earned the distinction of being the first in the world to be awarded iSo 9001 certification.


BernAS has a highly qualified and experienced team of inspectors providing rice inspection and analyses of all local and imported rice to ensure they meet the exacting stands of iSo 13690 and iSo 7301. inspections are conducted on a scheduled basis to ensure quality specifications and food safety.

The group is also contributing towards the development of the industries through its research and development (r&D) activities. As a key player in the country’s oil palm industry, we have our own r&D centre with a dedicated pool of researchers and agronomists. Since its establishment, the r&D centre has built a leadership position in peat soil development, transforming it into an efficient and productive planting medium for oil palms. in our rice business, during the year under review, the BernAS-uPM Laboratory has been upgraded from an analytical food technology laboratory into a full-fledged r&D laboratory. renamed the uPM-BernAS research Laboratory, it will focus mainly on improving efficiency levels and commercialisation of research products.

All the necessary groundwork has been laid towards roundtable Sustainable Palm oil (rSPo) certification for the group’s palm oil operations. Since its formation in 2004, rSPo has been gaining traction in promoting the growth and use of sustainable oil palm products through credible global standards. having met the necessary criteria, attaining rSPo certification is now a formality.

environmental sustainability

TWM group recognises its responsibilities towards the environment. We believe in the importance of environment protection and that our pursuit of best environmental practice will benefit the group in the long run. TWM believes in sustainable development. We intend to satisfy today’s requirements without eroding the livelihood basis of future generations. As a key player in the Malaysian agri-business, we are setting our goals even higher in striving for environmental stewardship.

in this regard, we subscribe to the iSo 14000 standards as a framework of reference. iSo 14001 is the corner stone standard of the iSo 14000 series and specifies a framework of control for an environmental Management System, against which an organisation can minimise the negative impact of its operations on the environment. We are therefore able to gauge our performance against this framework to improve on those areas that are found wanting. in the group’s Plantation Division, for example, we are able to:-

• Identify and control theenvironmental impactofouractivities, products or services;

• Continuallyimproveourenvironmentalperformance;

• Complywithinternationalenvironmentalregulations;and

• Implementasystematicapproachtosettingenvironmentalobjectives and targets.

Corporate responsibility Tradewinds (M) Berhad Annual Report 201166

in addition, the group has also adopted the industry’s best practice into its daily plantation operations. The good agricultural practices embraced by the Plantation Division address the areas of land and water management, zero burning replanting techniques, integrated pest management, palm oil mill effluent (PoMe) treatment systems, judicious use of fertilisers and biodiversity.

Since 2009, all our mills in the Plantation Division have started investing in the latest technology for the treatment of PoMe. With the commissioning of a tertiary treatment plant at the retus Palm oil Mill at the end of 2010, the Biochemical oxygen Demand and Total Suspended Solids levels of the final discharge have been reduced to meet the stipulated requirements of the Sarawak Department of energy. Similar treatment plants are being constructed at the Trusan and Binu Palm oil Mills and are scheduled for commissioning by middle of 2012. The new Kuala Suai Palm oil Mill which is now nearing completion has been equipped with similar PoMe treatment facilities.

in line with the global efforts to reduce green-house gas emissions, we are currently evaluating the latest technology available for methane capture with a view of utilising the captured gas for energy generation. Methane is one of the major green-house gases produced in the anaerobic treatment of PoMe.

BernAS has devoted its efforts towards improving overall energy efficiencies in all its mills, reducing wastage across its operations and recycling operational by-products wherever economically feasible. rice husks have been used as a bio-fuel substitute for diesel fuel for drying paddy and also as an animal feed. Through BernAS’ participation in the PrL, the increasing application of advanced seed-treatment technology has displaced the use of agro-chemicals for crop cultivation.

the way forwarD

The TWM group’s cr programmes will continue to evolve. We will endeavour to roll out new and innovative programmes that are relevant to the needs of the various stakeholders. in doing so, we hope to deepen the trust and respect we have earned over the years.


DireCtors

the board

The Board is responsible for the overall performance of the group by maintaining full and effective control over strategic, financial, operational, compliance and governance issues. The Board comprises members drawn from various professional backgrounds, bringing depth and diversity in experience, expertise and perspectives to the group’s operations. The group recognises the vital role played by the Board in the stewardship of its directions and operations and ult imately the enhancement of long-term shareholder value.

The Board reserves material matters to itself for decisions which include the overall group strategies and directions, acquisition and divestment policies, approval of major capital expenditure projects, plans and budgets and significant financial matters as well as human capital policies including succession planning for top management.

Profile of Directors which are presented from page 22 to 25 of this Annual report demonstrate their range of experience and expertise.

The BoArD oF DirecTorS oF TrADeWinDS (M) BerhAD (TWM or coMPAnY) (BoArD) iS coMMiTTeD To enSuring The higheST STAnDArD oF corPorATe goVernAnce iS APPLieD ThroughouT TWM grouP (grouP). The BoArD STriVeS To enSure ThAT The PrinciPLeS oF corPorATe goVernAnce (PrinciPLeS) AS LAiD DoWn in The MALAYSiAn coDe oF corPorATe goVernAnce (coDe) Are ADhereD To BY The grouP in ALL ASPecTS oF iTS BuSineSS DeALingS DiSPLAYing inTegriTY AnD TrAnSPArencY WiTh The oBJecTiVe To SAFeguArD The inVeSTMenTS oF ShArehoLDerS AnD uLTiMATeLY enhAncing ShArehoLDer VALue.

The BoArD iS PLeASeD To DiScLoSe The grouP’S APPLicATion oF The PrinciPLeS AS SeT ouT in PArT 1 oF The coDe AnD PurSuAnT To PArAgrAPh 15.25 oF The MAin MArKeT LiSTing reQuireMenTS (MMLr) oF BurSA MALAYSiA SecuriTieS BerhAD (BurSA MALAYSiA) During The FinAnciAL YeAr enDeD 31 DeceMBer 2011 uP To The DATe oF ThiS STATeMenT.

statement on CorporateGovernanCe


board balance

The Board has a balanced composition of executive and non-executive Directors. currently, the Board is made up of an independent non-executive chairman, three non-independent non-executive Directors, two independent non-executive Directors and one non-independent executive Director.

More than one-third of the Board consists of independent Directors, which is in compliance with the MMLr. no individual or small group of individuals dominates the decision-making of the Board and the number of Directors fairly reflects the best interests of shareholders’ investment.

collectively, the Directors bring a wide spectrum of business acumen, skills and perspectives necessary for the decision-making process. The diversity and depth of knowledge offered by the Directors reflect the commitment of the company to ensure effective leadership and control of the group. The non-executive Directors provide considerable depth of knowledge collectively gained from experience in a variety of public and private companies. They have the necessary caliber and credibility as well as necessary skills and experiences, bringing their judgement on the issues of strategy, performance and resource, including key appointments and standard of conduct. The independent non-executive Directors provide unbiased and independent views in ensuring that the strategies proposed by the management are fully deliberated and examined, not only in the interests of the group but also of other stakeholders.

There is a clear division of responsibilities between the roles of the chairman and the group Managing Director (gMD) to ensure a balance of power and authority and no individual has unfettered powers of decision. The chairman is primarily responsible for the orderly conduct and working of the Board whilst the gMD is responsible for the overall operations of the business, organisational effectiveness and the implementation of the Board policies and strategies. The gMD is assisted by the management team in managing the business of the group on a day-to-day basis.

supply of information

Board meetings are scheduled in advance of the new financial year to enable Directors to plan ahead and fit the year’s meetings into their schedules. The Board meets at least four times yearly. Additional meetings are held as and when required. During the financial year under review, seven Board meetings were held.

Details of attendance are as follows:-

board of Directors number of meetings attended

Dato’ Wira Syed Abdul Jabbar bin Syed hassan 7 out of 7Bakry bin hamzah 6 out of 7Syed Azmin bin Syed nor 7 out of 7Khalid bin Sufat 7 out of 7ooi Teik huat 7 out of 7Datuk hj ismail bin hj hashim 7 out of 7Dato’ izudin bin ishak not(Appointed w.e.f. 26 January 2012) applicablechuah Seong Tat 7 out of 7(Resigned w.e.f. 15 March 2012)Datuk r Sharifuddin hizan bin r Zainal Abidin 2 out of 2(Resigned w.e.f. 12 April 2011)

The agenda and full set of Board papers for consideration and information are distributed prior to the Board meetings to ensure that Directors have sufficient time to read and be properly prepared for discussion at the meetings. Proposals comprising comprehensive and balanced financial and non-financial information are encapsulated in the papers covering amongst others, strategic, operational, regulatory, marketing and human resource issues to enable the Board to examine both the quantitative and qualitative aspects of the business.

Minutes of meetings which include a record of decisions and resolutions of the board meetings are duly recorded and thereafter confirmed by the chairman of the meetings. All Directors have the right to make further enquiries where deemed necessary.

The three independent Directors are independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgement. They have the caliber to ensure that the strategies proposed by the management are fully deliberated and examined in the long-term interest of the group as well as the shareholders, employees and customers.

Directors have full and unhindered access to the advice and services of the company Secretary who is responsible for ensuring that Board meeting procedures are adhered to and that applicable rules and regulations are complied with. The Directors may, whether as a full Board or in their individual capacities, obtain independent professional advice, where necessary and appropriate, in furtherance of their duties at the company’s expense.


appointments to the board

The company has in place a formal and transparent procedure for the appointment of new Directors to the Board. All nominees are initially considered by the nomination and remuneration committee (nrc) taking into account the required mix of skills, experience and other qualities prior to putting forward a recommendation to the Board for its approval.

re-election

in accordance with the provisions of the company’s Articles of Association, all Directors who are newly appointed by the Board are subject to re-election by the shareholders at the first Annual general Meeting (AgM) following their appointments. in addition, at least one-third of the Board shall retire from office at least once in three years but shall be eligible for re-election at every AgM. This provides shareholders the opportunity to evaluate the performance of their Directors and also promotes an effective Board.

Pursuant to Section 129 of the companies Act, 1965 (Act), Directors over the age of 70 are also required to retire but shall be eligible for reappointment.

DireCtors’ remuneration

the level and make up of remuneration

Directors are remunerated at levels which allow the company to attract and retain Directors with the relevant experience and expertise to manage the group successfully. The remunerations reflect the level of experience and expertise they bring with them and the amount of responsibility undertaken by them.

All non-executive Directors are paid directors fees which are subsequently approved by the shareholders at the AgM.

procedure

The Board, through its nrc, annually reviews the performance of the executive Director as a prelude to determining his annual remuneration, bonus and other benefits. in discharging this duty, the nrc evaluates the executive Director’s performance against the objectives set by the Board, thereby linking his remuneration to performance. The remuneration of non-executive Directors is reviewed by the Board as a whole to ensure that it is aligned to the market and to their duties and responsibilities.

Disclosure

A summary of remuneration of the Directors (including from companies within the group) during the financial year under review is as follows:-

fees emoluments benefits-in-Kind total (rm) (rm) (rm) (rm)

non-executive Directors 702,946 1,538,772 55,324 2,297,042 executive Director 93,000 1,787,623 35,200 1,915,823

ToTAL 795,946 3,326,395 90,524 4,212,865

Note: Inclusive of fees and emoluments received from subsidiary companies.

statement on Corporate GovernanCe Tradewinds (M) Berhad Annual Report 201172

The number of Directors whose total remuneration falls within the following bands is as follows:-

range of remuneration per annum number of Directors

executive non-executive

rM1 to rM50,000 – – rM50,001 to rM100,000 – 1 rM100,001 to rM150,000 – 1 rM150,001 to rM200,000 – 2 rM200,001 to rM250,000 – – rM250,001 and above 1 3

Notes:1. The total remuneration includes salaries, bonuses, fees, benefits-in-kind and meeting allowances received from subsidiary

companies; and2. Datuk R Sharifuddin Hizan bin R Zainal Abidin resigned w.e.f. 12 April 2011.

shareholDers

Dialogue between Companies and investors

The Board recognises the importance of transparency and accountability to its shareholders and maintains an effective communication policy that enables both the Board and the management to communicate effectively with its shareholders and the public. An important aspect of an active and constructive communication policy is the timeliness in disseminating information to shareholders and investors.

in addition to the various announcements made during the financial year under review in respect of corporate developments of the group, the timely release of financial results on a quarterly basis provides shareholders with an overview of the performance and operations of the group. copies of full announcement are supplied to the shareholders and members of the public upon request. The full financial results and announcements made by the company can also be obtained from Bursa Malaysia website at www.bursamalaysia.com as well as the company’s website at www.twinds.com.my.

The website of the company also provides convenient access to the latest corporate information of the group.

the aGm

The AgM, usually held in June each year, is the principal forum for dialogue with shareholders. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members of the Board, Senior Management of the group, as well as the company’s auditors are present to answer questions raised during the meeting. in addition, a press conference is held immediately after the AgM whereby the chairman briefs the media on the resolutions passed and answers questions concerning the group.

aCCountability anD auDit

financial reporting

The Board aims to present a balanced and meaningful assessment of the group’s financial performance, position and prospects, primarily through the annual financial statements, quarterly announcements of results to the shareholders as well as the chairman’s Statement and review of operations by group Managing Director in the Annual report.


The Board is assisted by its Audit committee (Ac) to oversee the group’s financial reporting processes and the quality of its financial reporting in reviewing information to be disclosed through annual financial statements and announcements of quarterly results to shareholders to ensure accuracy, adequacy and completeness.

The Board takes responsibility in presenting a balanced and meaningful assessment of the financial performance and prospects of the group. The financial statements are drawn up in accordance with the provisions of the Act and the applicable approved Financial reporting Standards in Malaysia. A Statement on Directors’ responsibility in preparing the financial statements is set out separately on page 77 of this Annual report.

internal Control

The Board acknowledges its overall responsibility for continuous maintenance of a sound system of internal control to safeguard investments of the shareholders and assets of the group.

Statement on internal control by the Board as set out on page 80 to 81 of this Annual report provides an overview of the state of internal control of the company.

relationship with auditors

The newly appointed external auditors, Messrs ernst & Young, reports to members of the company on their findings which are included as part of the company’s financial reports. in so doing, the company ensures that there are formal and transparent arrangements with the auditors to meet their professional requirements. The Ac also reviews with the auditors, results of the annual audit, the audit report and the management letter including the management’s responses thereon. At least two meetings with the auditors were held in the absence of the management to discuss any matters that they may wish to present. Quarterly results of the company are also reviewed by the Ac.

DireCtors’ traininG

All members of the Board have attended and completed the Mandatory Accreditation Programme in compliance with the MMLr. The company recognises the importance and need for continuous education in order for Board members to gain better insights into the technological advances, regulatory updates and management strategies. Directors are encouraged to attend continuous education programmes, talks, seminars, workshops, conferences and other training programmes to enhance their skills and knowledge and to ensure the Directors keep abreast with new developments in the business environment. During the financial year under review, all Directors have attended the relevant training programmes to further enhance their knowledge in enabling them to discharge their duties and responsibilities more effectively. Some of the training or courses programmes attended include the following:-


no. name of Directors Courses attended

1. Dato’ Wira Syed Abdul Jabbar The high Performance Leadership Workshop by george Kohlrieser & bin Syed hassan roshan Thiran;

Sustainability Session for Directors – consumer Products, Finance, Technology & closed end Funds by Bursa Malaysia; and

Training on islamic Finance – updates on the Financial instruments and other related issues (in-house Seminar by Standard chartered Saadiq Berhad).

2. Bakry bin hamzah Asian rice 2011: Modernising the Asian rice industry by AFMA;

The Board responsibility for corporate culture - Selected governance concern & Tools for addressing corporate culture & Board Performance by Bursa Malaysia; Board intelligence and Agility: Strategic Foresight & governance by Marcus evans;

cargill Sugar Seminar; and


3. Syed Azmin bin Syed nor MAicSA Annual conference: governing responsibility: inevitable changes! by MAicSA.

4. ooi Teik huat iiA international conference by institute of internal Auditors Malaysia; and

competition Law – how it May impact the Way We Do Business.

5. Khalid bin Sufat corporate governance Programme – Banking insights by icLiF;

Financial institution Directors’ Programme by BnM/PiDM; and

MiA international Accountants conference by Malaysian institute of Accountants and the Asean Federation of Accountants.

6. Datuk hj. ismail bin hj. hashim AccA Annual conference and Post-Budget (update 2012); and


7. chuah Seong Tat icAeW Talk entitled “The cFo and conflicts of interest” by Bursa Malaysia; (Resigned w.e.f. 15 March 2012)

Directors Duties and corporate governance 2011 by Malaysian institute of corporate governance; and


Directors are also encouraged to visit various operations sites of the group as part of their training and development programme to expose and familiarise themselves with the operations and issues directly affecting the business of the group.


boarD meetinGs

Seven Board meetings were held during the financial year under review whereby various matters including the company’s financial results, business plans and directions of the company were discussed and deliberated.

Details of each Directors’ attendance at the Board meetings are set out on page 71 of this Annual report. All Directors have fulfilled the requirements of the MMLr in respect of Board meeting attendance.

the boarD Committees

The Board has formed various committees in delegating specific responsibilities to ensure Board effectiveness and to efficiently discharge its duties and responsibilities. The committees operate under clearly defined terms of reference and report to the Board with their recommendations. The ultimate responsibility for the final decision on all matters however, lies with the Board.

audit Committee (aC)

The composition and terms of reference of the Ac and a summary of its activities are set out in the report of Audit committee on page 82 of the Annual report.

executive Committee (eXCo)

The eXco which was established on 10 october 2007 to assist the Board in overseeing the management and operations of the group as well as expediting the decision-making process comprises two members and is governed by a written charter which deals clearly with its authority and duties.

Members of eXco are as follows:-

• Dato’WiraSyedAbdulJabbarbinSyedHassan(Chairman)• BakrybinHamzah• ChuahSeongTat (Resigned w.e.f. 15 March 2012)

nomination and remuneration Committee (nrC)

The nrc which was established on 23 november 2001 is responsible for recommending new nominees with the necessary skills, experience and competencies to be appointed to the Board as well as committees of the Board. The nrc shall be appointed by the Board from amongst its members or such other persons as the Board thinks fit and shall comprise a chairman and at least two other members. A majority of the members of nrc shall be independent Directors. The nrc which comprises three members also assists the Board in assessing the effectiveness of the Board as a whole, its committees as well as the performance of each existing Director. The nrc is also responsible for developing policies on remuneration of the executive Director and recommending remuneration and compensation of executive Director and Senior Management to the Board.

Members of the nrc are as follows:-

• Dato’WiraSyedAbdulJabbarbinSyedHassan(Chairman)• OoiTeikHuat• KhalidbinSufat

Mr. ooi Teik huat acts as the Senior independent non-executive Director. Any matters concerning the group may be conveyed to him at:-

Tradewinds (M) BerhadLevel 12, Menara hLAno. 3, Jalan Kia Peng50450 Kuala LumpurTel : 603 2179 7777Fax : 603 2161 1632

Shareholders may, at any time, contact the company Secretary at the registered address and telephone number of the company as aforementioned, to convey any concern or make queries.

This Statement is made in accordance with a resolution of the Board of Directors dated 26 April 2012.


The Board is pleased to include a statement in the company’s Annual report explaining its responsibility for preparing the annual Audited Financial Statements pursuant to Paragraph 15.26(a) of the Main Market Listing requirements (MMLr) of Bursa Malaysia Securities Berhad.

The companies Act, 1965 (Act) requires Directors to prepare financial statements which give a true and fair view of the state of affairs of the company and the group at the end of the financial year, to prepare together with the results and cash flows. As required by the Act and the MMLr, the Directors are satisfied that the financial statements have been prepared in accordance with the applicable approved Financial reporting Standards in Malaysia and provisions of the Act.

The Directors consider that in preparing the financial statements for the financial year ended 31 December 2011 set out on page 95 to 220 of this Annual report, the Directors are also satisfied that the company and the group have used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates.

The Directors have the responsibility in ensuring that the company and the group maintain accounting records which disclose with reasonable accuracy the financial position of the company and the group which enable them to ensure that the financial statements are in compliance with the financial reporting standards in Malaysia and the Act.

The Directors are responsible to take such steps as are reasonably available to them to safeguard the assets of the group and to prevent and detect fraud as well as other irregularities.

This Statement is made in accordance with a resolution of the Board of Directors dated 26 April 2012.

statement on DireCtors’

responsibility


aDDitional ComplianCe information

The following additional information for the financial year ended 31 December 2011 (FYe 2011) have been provided in compliance with the Main Market Listing requirements of Bursa Malaysia Securities Berhad (Bursa Malaysia).

1. non-audit fees

The amount of non-audit fees paid by the group to the company’s external auditors was rM231,000.00.

2. material Contracts involving Directors and major shareholders

(i) A Pre-Supply Agreement dated 15 December 2011 between gula Padang Terap Sdn Bhd (gPT), a wholly-owned subsidiary company of Tradewinds (M) Berhad (TWM or company) and gas Malaysia Berhad (gMB) for the construction of gas distribution pipeline and all other works necessary and incidental for the supply of natural gas by gMB for gPT’s premises at 45KM, Jalan Padang Sanai, 63000 Kuala nerang, Kedah.

Details of relationship

gMB is a 55% subsidiary company of MMc-Shapadu (holdings) Sdn Bhd (MMc-Shapadu). Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed nor (TSSM), a substantial shareholder of TWM, is also a substantial shareholder of MMc corporation Berhad (MMc). MMc holds 76% equity interest in MMc-Shapadu through its wholly-owned subsidiary company, Anglo-oriental (Annuities) Sdn Bhd.

(ii) A conditional Share Sale Agreement dated 29 March 2012 (SSA) between TWM and Amalan Penaga (M) Sdn Bhd, a wholly-owned subsidiary company of Tradewinds Plantation Berhad (TPB) for the disposal of 11,259,523 ordinary shares of rM1.00 each representing 60% of the equity interest in retus Plantation Sdn Bhd (retus Plantation) at a purchase consideration equivalent to 60% of the adjusted net tangible assets value of retus Plantation as determined and agreed by the parties in accordance with the SSA. Based on the net tangible asset value of retus Plantation of rM208,992,316.00 as at 31 December 2011, the purchase consideration for the share sale is rM125,395,390.00.


TWM is the major shareholder of TPB by holding 69.76% equity interest.

(iii) A Sale and Purchase Agreement (SPA) dated 18 April 2012 between Sovereign Place Sdn Bhd, a wholly-owned subsidiary company of TWM and Skyline Atlantic Sdn Bhd, a wholly-owned subsidiary company of Tradewinds corporation Berhad (TcB) in respect of the proposed acquisition of 31 floors of strata office space with 440 car park bays of Menara Tun razak 2 for a total cash consideration of rM510,000,000.00.


Perspective Lane (M) Sdn Bhd (PLSB), a major shareholder of TcB, is also a major shareholder of the company. Kelana Ventures Sdn Bhd, a major shareholder of TcB and a shareholder of the company as well as a company controlled by TSSM. restu Jernih Sdn Bhd (rJSB), the holding company of PLSB and an indirect major shareholder of TcB and the company, by virtue of its shareholdings in PLSB. TSSM, by virtue of him being an indirect major shareholder of TcB and the company, by virtue of his shareholdings in rJSB, the holding company of PLSB, which in turn is a major shareholder of the company.

Tuan Syed Azmin bin Syed nor (TSA), a Director of TcB and the company is deemed interested as he is the brother of TSSM. Whereas encik Bakry bin hamzah, who is the group Managing Director of the company, is a Director connected to TSSM as he is also a Director in rJSB, a private limited company in which TSSM has interests.

3. imposition of sanction/penalties on the Company and its subsidiary Companies

There was no sanction or penalties imposed on the company, its subsidiary companies, Board members and management.

4. share buybacks

The company did not purchase any of its own shares.

5. option, warrants or Convertible securities

The company did not offer any option or warrant.

6. american Depository receipt (aDr) or Global Depository receipt (GDr) programme.

The company does not sponsor any ADr or gDr programme.


7. profit estimates, forecast or projection

The company did not make any release on the profit estimate, forecast or projection for the financial year.

8. profit Guarantee

no profit guarantee was given by the company.

9. status of utilisation of proceeds raised from Corporate proposal

There was no corporate proposal involving the raising of

funds.

10. public shareholding spread

The company is in compliance with the Public Shareholding Spread requirement of Bursa Malaysia.

11. Contracts relating to loans

There were no contracts relating to loans by the company involving Directors and major shareholders.

12. Disclosure of recurrent related party transactions of a revenue or trading nature (rrpt)

The rrPT entered into by the company during the FYe 2011 are as follows:-

nature of vendors purchasers interested aggregate value of transactions Directors/ transactions for the major 12-month period from shareholders 1 January 2011 to 31 December 2011 (rm’000) Purchase of natural gas gMB cSr 34,868 Provision of logistics and JP Logistics cSr and gPT 6,348transportation services Agency services for the sale BSB cSr and gPT 8,075and marketing of refined sugar and molasses Provision of transportation SKS Transport gPT 5,895services

abbreviations:

AKMK Ahmed Kamil bin PM Mustafa Kamal Bh Bakry bin hamzah BSB Bukhary Sdn Bhd cSr central Sugars refinery Sdn Bhd cST chuah Seong Tat (Resigned w.e.f. 15 March 2012)gMB gas Malaysia Berhad gPT gula Padang Terap Sdn Bhd

JP Logistics JP Logistics Sdn Bhd PLSB Perspective Lane (M) Sdn Bhd rJSB restu Jernih Sdn BhdTSA Syed Azmin bin Syed norSKS Transport SKS Transport Sdn BhdTSSM Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed nor

interested MajorShareholders:-TSSM, rJSMPLSB

interestedDirectors:-TSA, cST,AKMK, Bh


statement on internal Control

The BoArD oF DirecTorS (BoArD) iS reSPonSiBLe For The grouP’S SYSTeM oF inTernAL conTroL (Sic). The Sic iS DeSigneD To MeeT The grouP’S BuSineSS oBJecTiVeS AnD To SAFeguArD The ASSeTS oF The grouP, inVeSTMenTS oF ShArehoLDerS, inTereSTS oF cuSToMerS, reguLATorS AnD eMPLoYeeS in AccorDAnce WiTh SecTion 167A oF The coMPAnieS AcT, 1965. The Sic coVerS AreAS oF riSK MAnAgeMenT, FinAnce, oPerATionS, MAnAgeMenT inForMATion SYSTeM AnD coMPLiAnce WiTh The reLeVAnT LAWS AnD reguLATionS.

The Sic involves each key business unit in the group, its Management and the Board. it is designed to meet the group’s particular needs and to manage the risks to which it is exposed in pursuit of its business objectives. The Board acknowledges that risks cannot be completely eliminated. The system by its nature can only provide reasonable and not absolute assurance against material misstatement, operational failure, fraud or loss.

risK manaGement

A formal group-wide enterprise risk management (erM) framework covering the core business activit ies of the group to identify, evaluate and manage significant business risks that may affect the achievement of its business objectives had been approved by the Board and implemented. This erM framework is continuously reviewed by the Board for its adequacy and effectiveness. The Board is assisted by the risk Management committee which comprises the group Managing Director, group chief Financial officer, heads of operating Divisions and the risk officer.

The duties of the risk Management committee are as follows:-

1. overseeing the risk management framework of the group;

2. recommending appropriate risk management procedures;

3. implementing relevant methodologies across the group; and

4. identify ing and managing the strategic and key operational risks.

Management is responsible to inculcate a risk awareness culture vide enhancement of their risk awareness in risk management and internal control review, reviewing the existing risk management framework to enhance risk awareness in managing risks and internal control, ensuring compliance with applicable laws and regulations and the policies adopted by the Board. The following key features have been incorporated in the risk management framework of the group:-

1. The group reaffirms its on-going processes of risk management by conducting sessions on retraining awareness and risk assessment processes and methodologies. The group-wide risk assessment processes includes re-evaluating existing key risk areas and identifying new key risk areas, potential impact and likelihood of those risks occurring, control effectiveness and adopting the appropriate action plan to mitigate those risks;


The risk reports of each subsidiary company across the group are updated bi-annually in each financial year. reports on the risk profile of the group were presented to the risk Management committee for review and thereafter to the Board on significant risks as well as controls available to mitigate those risks for the Board’s information; and

2. continuous evaluation is carried out by the Management throughout the various divisions, subsidiary companies and departments on key risks faced by the group, the potential impact and likelihood of those risks occurring, control effectiveness and action plans to manage those risks.

other Key elements of internal Control

Apart from the above, the other key elements of the Sic of the group which have been reviewed by the Board are described below:-

1. Specific responsibilities have been delegated to the relevant Board committees which have written terms of reference. These committees have the authority to examine all matters within their scope of responsibilities and to report to the Board with their recommendations. The ultimate responsibility for the final decision on all matters however, lies with the Board;

2. The Management of the various companies in the group are delegated to the respective head of operations and their Management teams, whose roles, responsibilities and authority limits are set by the respective board;

3. The Management is responsible for the periodic review and stream lining of policy and procedural manuals to be adopted group-wide. These are supplemented by operating standards set by the Management for application across the group;

4. There are specific procedures for both capital and revenue expenditures;

5. A detailed budgeting process is established for all key operating companies within the group in preparing their annual budgets which are subsequently discussed and approved by the Board;

6. regular and comprehensive management reports are provided to the Board on quarterly basis for monitoring performance against the approved budget covering all key financial and operational indicators as well as compliance with all applicable rules and regulations;

7. internal Audit Department (iAD) was set up by the Board to provide an independent assurance on the adequacy of risk management, internal control and governance systems.

iAD carries out regular reviews on business processes to assess the adequacy and effectiveness of internal control, compliance with regulations and policies of the group and procedures based on a risk-based audit approach. results of such reviews are reported to the Audit committee (Ac) and ultimately to the Board.

The work of the iAD is undertaken in accordance with an annual audit plan approved by the Ac at the beginning of the year. The head of the iAD reports to the Ac.

Formal procedures are put in place to rectify weaknesses identified in the internal Audit reports.

8. The Ac holds regular meetings to deliberate the audit findings, recommendations, Management responses and corrective actions for improvement in respect of the Sic. The minutes of the Ac meetings are tabled to the Board for notation; and

9. The Ac meets regularly with the Senior Management, the head of the iAD and the external auditors to review the financial reporting of the company and the group, the nature, scope and results of audit review and the effectiveness of the Sic. The Ac meets the external auditors without the presence of Management team at least twice yearly.

Activities of the Ac during the financial year ended 31 December 2011 are set out under the report of the Ac on page 84 of this Annual report.

relationship with the auDitors

The Board maintains a formal and transparent professional relationship with the auditors through the Ac.

The role of the Ac in relation to the internal and external auditors is described in the report of the Ac of this Annual report.

This statement is made in accordance with a resolution of the Board of Directors dated 26 April 2012.


reportof auDit Committee

terms of referenCe of the auDit Committee (aC)

obJeCtives

The primary objective of the Ac is to assist the Board of Directors (Board) in the effective discharge of its fiduciary responsibilities for corporate governance, financial reporting, internal control and compliance with applicable approved Financial reporting Standards (FrS) and Main Market Listing requirements (MMLr) of Bursa Malaysia Securities Berhad (Bursa Malaysia). in addition, the Ac will endeavour to adopt certain practices aimed at maintaining appropriate standards of corporate responsibility, integrity and accountability to the shareholders.

Composition

1. Members of the Ac sha l l be appointed by the Board from amongst its number which shall fulfill the requirements of Bursa Malaysia;

2. Members of the Ac shall all be non-executive Directors, with a majority of them being independent;

3. no alternate Director is to be appointed as a member of the Ac; and

4. Members of the Ac shall elect a chairman among themselves who shal l be an independent non-executive Director. Should the chairman be absent from any meeting, one of the members who shall also be an independent non-executive Director shall be elected as chairman.

The AuDiT coMMiTTee Which WAS eSTABLiSheD on 8 noVeMBer 1993 coMPriSeS TWo inDePenDenT non-eXecuTiVe DirecTorS AnD one non-inDePenDenT non-eXecuTiVe DirecTor AS FoLLoWS:-

ooi teiK huat (chairman)

syeD aZmin bin syeD nor

KhaliD bin sufat


meetinGs

1. Meetings shall be held not less than four times a year;

2. The presence of a majority of independent non-executive Directors shall form a quorum for the meetings;

3. The group Managing Director, group chief Financial officer and representatives of the internal auditors shall normally attend meetings. Attendance of other Directors, the external auditors and employees at any particular Ac meeting shall only be at the Ac’s invitation, specific to the relevant meeting;

4. The secretary to the Ac shall be the company Secretary or any other person appointed by the Ac; and

5. The notice and agenda of each meeting shall be sent to all members of the Ac and any other persons that may be required to attend. Minutes of each meeting shall be kept and distributed to each member of the Ac and to the Board for notation. The Ac shall report and may make such recommendations to the Board on any audit and financial reporting matters, as it may think fit.

authority

The Ac shall have the following authority as empowered by the Board:-

1. The authority to investigate any matters within its terms of reference;

2. The resources which are required to perform its duties;

3. Full and unrestricted access to any information and documents relevant to the company’s activities;

4. The mandate to have full authority over the internal audit function and requiring the internal audit function to report directly to the Ac;

5. Direct communication channels with the external auditors, any person(s) carrying out the internal audit function or activity and with the Senior Management of the company and its subsidiary companies;

6. The ability to obtain external legal or independent professional or other advice and secure the attendance of outsiders with relevant experience and expertise, if it considers necessary; and

7. The ability to convene meetings with the external auditors, the internal auditors or both at least twice a year, excluding the attendance of other Directors and/or management, whenever deemed necessary.

funCtions

The Ac shall undertake the following responsibilities and duties:-

1. external audit

• Consider and recommend the nomination andreappointment of the external auditors, the audit fee and any questions of resignation or dismissal;

• Reviewwiththeexternalauditors:-

i) The scope and audit plan of the audit examination to ensure that adequate tests to verify the accounts and procedures of the group will be performed and ensure co-ordination where more than one audit firm is involved;

ii) The evaluation of the effectiveness of the internal control systems; and

iii) The audit report.

• Reviewtheassistancegivenbytheemployeestotheexternal auditors; and

• Discussissuesandreservationsarisingfromtheaudit,and any matters the external auditors may wish to discuss in the absence of management where necessary.

2. internal audit

• Review the adequacy of the scope, functions,competency and resources of the internal audit functions and that it has the necessary authority to carry out its work;

• Review the internal audit plan, processes,majorfindings of internal audit programme, processes or investigations undertaken and management’s responses and ensure co-ordination between the internal and external auditors; and

• Review the appointment and assessment ofperformance of the head of internal Audit function.


3. financial reporting

review the unaudited quarterly results and year-end financial statements prior to the approval by the Board, focusing particularly on:-

i) The nature and impact of any changes in or implementation of major accounting policies and practices;

ii) Significant and unusual events;

ii) compliance with accounting standards and other legal requirements; and

iii) Adequacy of accounting, financial and operating controls and to monitor the implementation of any recommendations made.

4. related party transactions

review any related party transactions and conflict of interest situations that may arise within the company or group including any transactions, procedure or course of conduct that raise questions of management integrity and the adequacy of the group’s procedures for monitoring and reviewing of related party transactions.

5. risk management

review the adequacy and effectiveness of risk management, internal control and governance systems instituted in the group.

6. other matters

Perform such other responsibilities as may be approved by the Board.

summary of aCtivities DurinG the finanCial year

in line with its terms of reference, the main activities undertaken by the Ac during the financial year ended 31 December 2011 in the discharge of its functions and duties are as follows:-

1. reviewed with external auditors, results of the audit and the audit report, including interim audit reports on subsidiary companies and management’s responses in relation thereto. Subsequent discussions with the management were held with regards to the actions taken to improve the system of internal control based on recommendations made;

2. reviewed unaudited quarterly financial statements of the company prior to submission to the Board;

3. reviewed with the external auditors, the audited year-end financial statements of the group and the company prior to submission to the Board, focusing particularly on any changes in or implementation of major accounting policies and procedures, significant adjustments arising from the audit and compliance with applicable approved FrS and other legal and regulatory requirements;

4. reviewed with external auditors, the accounting issues arising from the audit exercise including updates on new developments on FrS issued by the relevant authorities;

5. reviewed with internal auditors all audit reports on the results of the work undertaken together with the recommended action plans and their implementation status;

6. reviewed the related party transactions entered into by the group to ensure that all transactions made were in compliance with the shareholders’ mandates;

7. reviewed the report of the Audit committee and the Statement on internal control for inclusion in this Annual report;

8. reviewed the extent of compliance of the group with the provisions set out under the Malaysian code on corporate governance (code) and the recommendations made to the Board on the action plans to address the identified gaps between the existing corporate governance practices of the group and the prescribed corporate governance principles and best practices under the code; and

9. reviewed the compliance of the group with the provisions of the MMLr and other regulatory authorities and regularly monitored actions taken on issues of non-compliance that were reported to the Board and Bursa Malaysia.

report of auDit Committee Tradewinds (M) Berhad Annual Report 201184

During the financial year ended 31 December 2011, a total of six Audit committee meetings were held.

attenDanCe at meetinGs

members total number of meetings attended

ooi Teik huat# 6 out of 6

Syed Azmin bin Syed nor 5 out of 6

Khalid bin Sufat# 6 out of 6

# members of the Malaysian Institute of Accountants (MIA)

At least one member of the Ac must be a member of the MiA or have at least three years working experience and have passed the examinations specified in Part 1 of the First Schedule of the Accountants Act, 1967 or a member of one of the associations of accountants specified by Part ii of the First Schedule of the Accountants Act, 1967 or fulfils such other requirements as prescribed by the MMLr. The chairman, Mr. ooi Teik huat, has the necessary qualification as a member of the Ac as he is a member of the MiA and cPA Australia.

internal auDit

The company has an internal Audit Department (iAD) whose primary function is to assist the Ac in discharging its duties and responsibilities. its role is to provide the Ac with independent and objective reports on the state of internal controls within the group and the extent of compliance by such operations with the established policies and procedures of the group.

The internal audit function is guided by its Audit charter and the head of iAD reports to the Ac.

Ac reviews and thereafter, approves the annual internal audit plan at the beginning of each year. iAD adopts a risk-based auditing approach towards the preparation of the audit plan and conduct of audits which is consistent with the framework of the group in designing, implementing and monitoring its internal control system.

Throughout the financial year under review, audit assignments, investigations and follow-ups were carried out on the units of operations and subsidiary companies. These were carried out in accordance with the annual internal audit plan or as special audits. upon completion of the audits, the internal Audit reports were forwarded to the parties concerned for their necessary action before being presented to the Ac for its deliberation.

iAD monitors the progress of implementation of the audit recommendations in order to obtain assurance that all major risks and controls concerns have been duly addressed by the management. Approximately rM1,273,603 was incurred by the group for the internal audit function for the financial year ended 31 December 2011.

Activities undertaken by iAD during the financial year under review were as follows:-

1. carried out 29 regular reviews and one special audit assignment on the business processes to assess the adequacy and effectiveness of internal control, compliance with regulations and the group’s policies and procedures based on the approved audit plan;

2. held exit audit discussions with the Senior Management in respect of audit findings, recommendations, management’s responses and corrective actions to be taken by operating units’ management team;

3. Monitored the status of correct ive act ions and implementations to ensure that all audit issues raised in the internal Audit reports were appropriately addressed by the operating units’ management team; and

4. reported to the Ac on the audit findings, recommendations, management’s responses and corrective actions to be taken by the operating units’ management team on a regular basis.

ooi teiK huatchairman of Audit committee25 April 2012


DireCtors’ report 87

statement by DireCtors 92

statutory DeClaration 92

inDepenDent auDitors’ report 93

statements of finanCial position 95

inCome statements 97

statements of Comprehensive inCome 98

statements of ChanGes in equity 99

statements of Cash flows 101

notes to the finanCial statements 104

DIRECtoRs’ REpoRt

The Directors have pleasure in presenting their report together with 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 are provision of management services and investment holding.

The principal activities of the subsidiary companies are stated in Note 44(a) to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

REsULts

Group Company RM’000 RM’000

Profit for the year 667,807 154,221

Profit for the year attributable to: - Equity holders of the Company 474,917 154,221 - Non-controlling interests 192,890 -

667,807 154,221

DIVIDENDs

The amounts of dividends paid by the Company since 31 December 2010 were as follows:

RM’000

In respect of the financial year ended 31 December 2010, as reported in the directors’ report of that year:

Interim dividend of 20 sen gross per share less 25% income tax declared on 14 January 2011 and paid on 28 February 2011. 44,471

Final dividend of 20 sen gross per share less 25% income tax declared on 28 June 2011 and paid on 29 July 2011. 44,471

In respect of the financial year ended 31 December 2011:

Interim dividend of 20 sen gross per share less 25% income tax declared on 30 September 2011 and paid on 30 November 2011. 44,471

133,413


DIRECtoRs’ REpoRt

DIVIDENDs (CoNtINUED)

At the forthcoming Annual General Meeting on 28 June 2012, a total final dividend of 25 sen gross per share, amounting to net dividend of RM64,680,828, in respect of the current financial year will be proposed for shareholders’ approval.

The total final dividend of 25 sen gross per share is made up of:

RM’000

12.73 sen gross dividend less 25% income taxation 28,310 12.27 sen gross tax exempt dividend under single tier system 36,371

64,681

The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by shareholders, will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 December 2012.

REsERVEs AND pRoVIsIoNs

There was no material transfer to or from reserves and provisions during the financial year other than those disclosed in the financial statements.

IssUE of shAREs AND DEbENtUREs

There was no issue of shares or debentures during the financial year. optIoNs GRANtED oVER UNIssUED shAREs

No option was granted to any person to take up unissued shares of the Company during the financial year.

DIRECtoRs

The Directors who served since the date of the last report are as follows: Dato’ Wira Syed Abdul Jabbar bin Syed Hassan (Chairman)Bakry bin Hamzah (Group Managing Director)Syed Azmin bin Syed NorKhalid bin SufatOoi Teik HuatDatuk Hj. Ismail bin Hj. Hashim Dato’ Izudin bin Ishak (appointed on 26 January 2012)Chuah Seong Tat (resigned on 15 March 2012)


DIRECtoRs’ INtEREsts

Details of holdings in the ordinary shares of the Company or its related corporations by the Directors in office at the end of the financial year, according to the register required to be kept under Section 134 of the Companies Act, 1965, were as follows:

Number of ordinary shares of RM1.00 each As at As at 1.1.2011 bought sold 31.12.2011

Indirect interest:Ordinary shares of the Company - syed Azmin bin syed Nor * 127,388,663 - - 127,388,663

Direct interest: Ordinary shares of the subsidiary companies: Padiberas Nasional Berhad (“Bernas”) - Dato’ Wira syed Abdul Jabbar bin syed hassan 40,000 - - 40,000

Tradewinds Plantation Berhad (“TPB”) - Dato’ Wira syed Abdul Jabbar bin syed hassan 15,000 - - 15,000

* Indirect interest by virtue of shares held by a member of the directors’ family. None of the other Directors holding office at the end of the financial year had any interest in the ordinary shares of the Company or its related corporations during the financial year.

DIRECtoRs’ bENEfIts

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in Note 31 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financial interest other than remuneration received by certain Directors as directors or executives of subsidiary companies and any deemed benefits that may accrue to certain Directors by virtue of transaction negotiated between the Group and companies in which the Directors are the directors of the companies as disclosed in Note 39 to the financial statements.

Neither during nor at the end of the financial year was the Company a party to any arrangement of which the object is to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.


DIRECtoRs’ REpoRt

othER stAtUtoRy INfoRMAtIoN

(a) Before the statements of financial position and statements of comprehensive income 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 values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the Directors are not aware of any circumstances: (i) that would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial

statements of the Group and of the Company inadequate to any substantial extent; or

(ii) that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading; or

(iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(c) No contingent or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations when they fall due.

(d) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

(e) At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

(f) In the opinion of the Directors:

(i) the results of the operations of the Group and of the Company for the financial year ended 31 December 2011 have not been substantially affected by any item, transaction or event of a material and unusual nature; and

(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction

or event of a material and unusual nature likely to substantially affect the results of the operations of the Group and of the Company for the financial year in which this report is made.


sIGNIfICANt AND sUbsEqUENt EVENts

The significant and subsequent events are disclosed in Note 43 to the financial statements.

AUDItoRs

The auditors, Ernst & Young, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors dated 26 April 2012.

DAto’ WIRA syED AbDUL JAbbAR bIN syED hAssAN ooI tEIK hUAt


stAtEMENt by DIRECtoRspURsUANt to sECtIoN 169(15) of thE CoMpANIEs ACt, 1965

stAtUtoRyDECLARAtIoNpURsUANt to sECtIoN 169(16) of thE CoMpANIEs ACt, 1965

We, Dato’ Wira Syed Abdul Jabbar bin Syed Hassan and Ooi Teik Huat, being two of the Directors of Tradewinds (M) Berhad, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 95 to 220 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the 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. The information set out in Note 48 to the financial statements have been prepared in accordance with the 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. Signed on behalf of the Board in accordance with a resolution of the Directors dated 26 April 2012.

DAto’ WIRA syED AbDUL JAbbAR bIN syED hAssAN ooI tEIK hUAt

I, Mohd Nazri bin Md. Shariff, being the officer primarily responsible for the financial management of Tradewinds (M) Berhad, do solemnly and sincerely declare that the financial statements set out on pages 95 to 221 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 Mohd Nazri bin Md. Shariff at Kuala Lumpur in the Federal Territory on 26 April 2012 MohD NAzRI bIN MD. shARIff

Before me,

R. VAsUGI AMMAL, PJK

No: W480


INDEpENDENt AUDItoRs’ REpoRt

to thE MEMbERs of tRADEWINDs (M) bERhAD (INCoRpoRAtED IN MALAysIA)

REpoRt oN thE fINANCIAL stAtEMENts

We have audited the financial statements of Tradewinds (M) Berhad, which comprise the statements of financial position as at 31 December 2011 of the Group and of the Company, and the income statements, 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 95 to 220.

Directors’ responsibility for the financial statements

The Directors of the Company are responsible for the preparation of 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 of 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 judgment, 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 Company’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 Company’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 (“Act”) in Malaysia, we also report on 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 of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the independent auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 44(a) to the financial statements, being financial statements that have been included in the consolidated financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.


othER REpoRtING REpoNsIbILItIEs The supplementary information set out in Note 48 on page 221 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. 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 The financial statements of the Group and of the Company for the year ended 31 December 2010 were audited by another auditor who expressed an unmodified opinion on those statements on 28 April 2011.

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 any responsibility to any other person for the content of this report.

ERNst & yoUNG AhMAD zAhIRUDIN bIN AbDUL RAhIMAF: 0039 No. 2607/12/12(J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia 26 April 2012

INDEpENDENt AUDItoRs’ REpoRt to thE MEMbERs of tRADEWINDs (M) bERhAD

(INCoRpoRAtED IN MALAysIA) (CoNtINUED)


stAtEMENts offINANCIALposItIoN

As At 31 DECEMbER 2011

Group Company

Note 2011 2010 2011 2010Assets RM’000 RM’000 RM’000 RM’000

Non-current assetsProperty, plant and equipment 3 2,221,556 1,986,825 5,319 3,949Biological assets 4 1,245,066 1,142,407 - -Investment properties 5 3,334 - - -Land held for property development 6 87,412 87,412 - -Investment in subsidiary companies 7 - - 1,603,567 1,603,667Investment in associated companies 8 378,035 242,363 - -Investment in a jointly controlled entity 9 23,525 13,489 - -Other investments 10 40,905 5,143 3,263 3,055Intangible assets 11 266,753 309,011 - -Deferred tax assets 12 59,581 86,740 - -

4,326,167 3,873,390 1,612,149 1,610,671

Current assetsInventories 13 1,373,061 1,043,996 - -Trade receivables 14 717,144 630,916 - -Other receivables 15 601,075 698,732 65,063 65,496Amount owing by subsidiary companies 16 - - 3,178 59,168Amount owing by associated companies 17 48,323 20,480 - -Derivatives 18 218 - - -Tax recoverable 62,740 22,707 29,631 33,346Other investments 10 19,827 - 247,985 244,785Cash and bank balances 19 812,588 475,256 27,166 65,840

3,634,976 2,892,087 373,023 468,635

total assets 7,961,143 6,765,477 1,985,172 2,079,306


Group Company

Note 2011 2010 2011 2010Equity and liabilities RM’000 RM’000 RM’000 RM’000

Current liabilitiesTrade payables 20 213,323 175,540 - -Other payables 21 341,388 287,698 10,609 8,721Amount owing to subsidiary companies 16 - - 889 45,093Amount owing to associated companies 17 777 304 - -Hire purchase and finance lease payables 22 2,977 2,815 - -Borrowings 23 1,717,984 1,291,809 160,107 144,107Retirement benefit obligations 24 6,190 4,719 - -Derivatives 18 2,964 - - -Tax payable 39,934 50,245 - -

2,325,537 1,813,130 171,605 197,921

Non-current liabilitiesHire purchase and finance lease payables 22 6,488 4,901 - -Borrowings 23 1,768,535 1,586,449 509,650 582,458Deferred tax liabilities 12 377,404 365,212 476 16,500Retirement benefit obligations 24 75,514 71,645 - -

2,227,941 2,028,207 510,126 598,958

total liabilities 4,553,478 3,841,337 681,731 796,879

Equity attributable to equity holders of the CompanyShare capital 25 296,471 296,471 296,471 296,471Reserves 26 2,064,484 1,722,534 1,006,970 985,956

2,360,955 2,019,005 1,303,441 1,282,427Non-controlling interests 1,046,710 905,135 - -

Total equity 3,407,665 2,924,140 1,303,441 1,282,427

total equity and liabilities 7,961,143 6,765,477 1 ,985,172 2,079,306

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

stAtEMENts of fINANCIAL posItIoN As At 31 DECEMbER 2011


INCoMEstAtEMENts

foR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011

Group Company

Note 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Revenue 27 6,933,456 5,551,379 247,986 291,795Other income 28 70,369 93,053 19,998 146Changes in inventories of finished goods and work in progress 201,842 39,456 - -Raw materials and consumables used 29 (4,988,725) (3,750,654) - -Staff costs 30 (416,497) ( 387,761) (14,121) (9,747)Amortisation of biological assets 4 (51,008) (51,066) - -Depreciation of property, plant and equipment 3 (126,509) (114,970) (1,262) (612)Depreciation of investment properties 5 (111) - - -Amortisation of intangible assets 11 (42,415) (42,411) - -Other expenses (581,784) ( 455,940) (36,384) ( 25,290)

Profit from operations 31 998,618 881,086 216,217 256,292Finance costs 32 (135,252) ( 109,627) (43,055) ( 43,018)

863,366 771,459 173,162 213,274Share of results of associated companies 8(c) 28,631 33,870 - -Share of results of a jointly controlled entity 9(c) 5,036 1,266 - -

Profit before taxation 897,033 806,595 173,162 213,274Taxation 33 (229,226) ( 179,781) (18,941) ( 53,254)

profit for the year 667,807 626,814 154,221 160,020

profit attributable to:- Equity holders of the Company 474,917 481,139 154,221 160,020- Non-controlling interests 192,890 145,675 - -

667,807 626,814 154,221 160,020

Earnings per share attributable to equity holders of the Company (sen):- Basic 34 160.19 162.29



stAtEMENts ofCoMpREhENsIVE INCoME foR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

profit for the year 667,807 626,814 154,221 160,020 other comprehensive income:

Exchange differences on translation of foreign operations 739 (1,250) - - Available-for-sale financial assets: - Transfer to profit or loss on disposal (114) - - - - (Loss)/Gain on fair value changes of available-for-sale financial assets (179) 603 206 (483)

Other comprehensive income/ (expense) for the year, net of tax 446 (647) 206 (483)

total comprehensive income for the year 668,253 626,167 154,427 159,537

total comprehensive income attributable to: Equity holders of the Company 475,363 480,492 154,427 159,537 Non-controlling interests 192,890 145,675 - -

668,253 626,167 154,427 159,537



stAtEMENts ofChANGEs IN

EqUItyfoR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011

Attributable to equity holders of the Company Non-Distributable Distributable

Available- Non- share share Capital Exchange for-sale Capital Retained controlling total capital premium reserves reserves reserves reserves profits total interests equity Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2010At 1 January 296,471 84,171 3,684 10,923 (143) 2,077 1,174,683 1,571,866 1,074,990 2,646,856 Total comprehensive income - - - (1,250) 603 - 481,139 480,492 145,675 626,167 Accretion of interest in subsidiary companies (Note 7(e)) - - - - - - - - (277,327) (277,327) Acquisition of subsidiary companies (Note 7(c)(iii)) - - - - - - - - 11,294 11,294 Dividends paid - - - - - - (33,353) (33,353) (49,497) (82,850)

At 31 December 296,471 84,171 3,684 9,673 460 2,077 1,622,469 2,019,005 905,135 2,924,140

2011At 1 January 296,471 84,171 3,684 9,673 460 2,077 1,622,469 2,019,005 905,135 2,924,140 Total comprehensive income - - - 739 (293) - 474,917 475,363 192,890 668,253 Acquisition of subsidiary companies (Note 7(b)) - - - - - - - - 8,216 8,216 Dividends paid - - - - - - (133,413) (133,413) (59,531) (192,944)

At 31 December 296,471 84,171 3,684 10,412 167 2,077 1,963,973 2,360,955 1,046,710 3,407,665



Non- Distributable Distributable

Available- share share for-sale Capital Retained Company capital premium reserves reserves profits total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2010 At 1 January 296,471 84,171 (30) 497 775,134 1,156,243 Total comprehensive income - - (483) - 160,020 159,537 Dividends paid (Note 35) - - - - (33,353) (33,353)

At 31 December 296,471 84,171 (513) 497 901,801 1,282,427

2011 At 1 January 296,471 84,171 (513) 497 901,801 1,282,427 Total comprehensive income - - 206 - 154,221 154,427 Dividends paid (Note 35) - - - - (133,413) (133,413)

At 31 December 296,471 84,171 (307) 497 922,609 1,303,441


stAtEMENts of ChANGEs IN EqUItyfoR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011


stAtEMENts ofCAsh fLoWs

foR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011

Group Company

Note 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesProfit before taxation 897,033 806,595 173,162 213,274Adjustments for:

Amortisation of biological assets 4 51,008 51,066 - -Amortisation of intangible assets 11 42,415 42,411 - -Bad debts written off 9 - - -Fair value changes on quoted loan stocks - - (3,200) 4,800Depreciation of property, plant and equipment 3 126,509 114,970 1,262 612Depreciation of investment properties 5 111 - - -Dividend income 27 (27) - (239,869) (283,902)Excess of fair value of net assets acquired over purchase consideration (bargain purchase gain) 28 (18,427) (55,856) - -Fair value gain on derivative instruments (3,852) - - -Impairment loss/(Writeback of) on:- investment in subsidiary companies 31 - - 100 -- trade receivables 31 1,393 10,667 - -- other receivables 31 9 - 17 -- amount owing by subsidiary companies 31 - - 450 13,410- amount owing by associated companies 17 - (268) - -Inventories written off 31 39 - - -Inventories written down 31 8,486 209 - -Interest expense 32 135,252 109,627 43,055 43,018Interest income (17,603) (8,624) (6,917) (6,693)Gains on disposals of:- investment in associated companies (5,045) - - -- other investments (176) - - -- property, plant and equipment (3,352) (257) (2) (146)- non-current assets held for sale (net) - (86) - -Distribution of investment management funds (299) - - -Property, plant and equipment written off 3 12,464 5,977 - -Biological assets written off 4 - 16 - -Net provision for retirement benefits 24 9,557 9,491 - -Reversal of late payment charges 9,919 - - -Sales volume incentive 7,572 - - -Provision for unutilised leave 196 - 196 -Share of results of associated companies 8 (28,631) (33,870) - -Share of results of a jointly controlled entity 9 (5,036) (1,266) - -Waiver of debts from a subsidiary company 28 - - (12,234) -Unrealised loss/(gain) on foreign exchange 6,796 (2,398) - -

Operating profit/(loss) before working capital changes (carried forward) 1,226,320 1,048,404 (43,980) (15,627)


stAtEMENts of CAsh fLoWsfoR thE fINANCIAL yEAR ENDED 31 DECEMbER 2011

Group Company

Note 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000Cash flows from operating activities (continued)Operating profit/(loss) before working capital changes (brought forward) 1,226,320 1 ,048,404 (43,980) (15,627)

Inventories (57,236) (33,886) - -Receivables 57,724 (178,680) 55,955 (904)Payables (13,250) (85,534) 1,451 (47,997)Associated companies 128,498 11,596 - -

115,736 (286,504) 57,406 (48,901)

Cash generated from/(used in) operations 1,342,056 761,900 13,426 (64,528)

Net tax (paid)/refund (245,392) (178,315) 6,140 5,513Retirement benefits paid 24 (6,759) (6,467) - -

(252,151) (184,782) 6,140 5,513

Net cash from/(used in) operating activities 1,089,905 577,118 19,566 (59,015)

Cash flows from investing activitiesAcquisition of subsidiary companies, net of cash acquired (112,782) (250,440) - (217,567)Additions to property, plant and equipment 3(c) (219,125) (179,478) (2,632) (4,318)Additions to biological assets 4(b) (131,990) (126,578) - -Additions to investment in associated companies (74,663) - - -Dividends received 29,064 18,319 202,477 168,579Interest received 17,603 8,624 6,917 5,102Distribution of investment management funds received 299 - - -Proceeds received from termination of sub-lease agreement 28,520 20,725 - -Purchase of other investments (56,300) (210) - (71)Proceeds from disposal of:- property, plant and equipment 5,725 3,697 2 193- assets held for sale - 5,740 - -- other investments 416 2 - -Subcription of redeemable convertible preference shares (5,000) - - -

Net cash (used in)/generated from investing activities (518,233) (499,599) 206,764 (48,082)


Group Company

Note 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Cash flows from financing activitiesDrawdown of term loans 121,000 303,860 - 217,567Repayment of term loans (196,420) (173,718) (72,807) (74,799)Net (repayment)/drawdown of revolving credits, trade financing and other short term borrowings (130,052) (353,218) 16,000 (61,500)Net issuance of Murabahah Commercial Papers/Medium Term Notes - 50,000 - -Net issuance of Sukuk Ijarah 314,378 373,372 - -Net repayment of hire purchase and finance lease payables (76) (3,934) - -Withdrawal of deposits held on trust for the benefit of the Islamic Securities Investors 814 - - -Changes in fixed deposits pledged with licensed banks (8,918) 23,470 - -Decrease/(Increase) in sinking fund account 37,925 (40,300) 37,925 (40,300)Amount owing (by)/to subsidiary companies - - (31,970) 107,313Amount owing to/(by) a jointly controlled entity 10,098 (10,634) - -Amount owing to an affiliated company (4,456) - - -Interest paid (156,493) (123,348) (42,814) (37,036)Dividends paid (192,944) (82,850) (133,413) (33,353)

Net cash (used in)/generated from financing activities (205,144) (37,300) (227,079) 77,892

Net increase/(decrease) in cash and cash equivalents 366,528 40,219 (749) (29,205)Effect of exchange rate changes 510 (1) - -Cash and cash equivalents at beginning of financial year 395,517 355,299 25,540 54,745

Cash and cash equivalents at end of financial year 762,555 395,517 24,791 25,540

Cash and cash equivalents at end of financial year comprise:

Fixed deposits 609,003 231,733 10,156 -Cash and bank balances 203,585 243,523 17,010 65,840

19 812,588 475,256 27,166 65,840Less: Islamic deposits held on trust for the benefit of the Islamic Securities Investors 19(a) (5,911) (6,725) - -Less: Fixed deposits pledged to licensed banks 19(b) (37,506) (28,480) - -Less: Sinking fund account 19(c) (2,375) (40,300) (2,375) (40,300)Less: Bank overdraft 23 (4,241) (4,234) - -

762,555 395,517 24,791 25,540



NotEs tothE fINANCIALstAtEMENts31 DECEMbER 2011

1. CoRpoRAtE 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 registered office and the principal place of business of the Company is located at Level 12, Menara HLA, No.3, Jalan Kia Peng, 50450 Kuala Lumpur.

The principal activities of the Company are provision of management services and investment holding. The principal activities of the subsidiary companies are stated in Note 44(a) to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

2. sIGNIfICANt ACCoUNtING poLICIEs

(a) basis of preparation

The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise stated in the accounting policies below and in accordance with Financial Reporting Standards (“FRSs”) and the Companies Act, 1965 in Malaysia.

Changes in accounting policies and future accounting standards are disclosed in Note 42.

(b) functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency. All financial information presented in RM has been rounded to the nearest thousand (RM’000), unless otherwise stated.

(c) significant accounting estimates, assumptions and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation or uncertainty at the reporting date, 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 as follows:

(i) Impairment of goodwill

Impairment of goodwill is determined by the Group on an annual basis. This requires an estimation of the value-in-use of the cash-generating units (“CGU”) to which the goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to opt for suitable discount rates in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill as at 31 December 2011 is disclosed in Note 11(a).


2. sIGNIfICANt ACCoUNtING poLICIEs (CoNtINUED)

(c) significant accounting estimates, assumptions and judgements (continued)

(ii) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters are different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The carrying amount of the Group’s tax payable and tax recoverable as at 31 December 2011 were RM39,934,000 and RM62,740,000 (2010: RM50,245,000 and RM22,707,000), respectively.

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unutilised capital agriculture and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses and capital agriculture and reinvestment allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The total amounts of recognised/unrecognised tax losses and capital, agriculture allowances and reinvestment allowances of the Group as at 31 December 2011 are disclosed in Note 12.

(iv) Depreciation of property, plant and equipment, investment properties and amortisation of biological assets

The costs of property, plant and equipment, investment properties and biological assets are depreciated or amortised on a straight-line basis over their useful lives. Management estimates the useful lives of the property, plant and equipment, investment properties and biological assets as stated in Note 2(e), Note 2(f) and Note 2(h), respectively. These are common life expectancies applied in the industries. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges and amortisation expenses could be revised. The carrying amount of the Group and of the Company’s property, plant and equipment, investment properties and biological assets as at 31 December 2011 are stated in Note 3, Note 4 and Note 5, respectively.

(v) Retirement benefits

The determination of the obligation and cost for pension and other retirement benefits is dependent on the selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions, which include amongst others discount rates and rates of salary increase, are described in Note 24. In accordance with FRS 119 “Employee Benefits”, actual results that differ from the assumptions are accumulated and amortised over future periods and therefore, generally affect the recognised expense and recorded obligation in such future periods. While the Group believes that the assumptions are reasonable and appropriate, significant differences in the actual experience or significant changes in the assumptions may materially affect the retirement benefit obligations.



(c) significant accounting estimates, assumptions and judgements (continued)

(vi) Impairment of loans and receivables

The Group makes allowance for impairment losses based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of allowance for doubtful debts. Where expectations differ from the original estimates, the differences will impact the carrying amount of receivables.

(vii) Write-down for obsolete or slow-moving inventories

The Group writes down its obsolete or slow-moving inventories based on assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses sales trend and current economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow-moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories.

(viii) Contingent liabilities

As disclosed in Note 38 to the financial statements, the Group has several pending litigation with various parties as at current financial year end. The Board of Directors, after due consultation with the Group’s solicitors, assess the merit of each case, and makes the necessary provision for liabilities in the financial statements if its crystallisation is deemed to be probable.

(ix) Classification of leasehold land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in determining the extent to which risks and rewards incidental to its ownership lie. Despite the fact that there will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the land, management considered that the present value of the minimum lease payments approximated to the fair value of the land at the inception of the lease. Accordingly, management judged that the Group has acquired substantially all the risks and rewards incidental to the ownership of the land through a finance lease.

(d) basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiary companies as at the reporting date. The financial statements of the subsidiary companies used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

NotEs to thE fINANCIAL stAtEMENts31 DECEMbER 2011



(d) basis of consolidation (continued)

Acquisitions of subsidiary companies are accounted for by applying the purchase method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in other comprehensive income. The cost of a business combination is measured as the aggregate of thefair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the business combination. Any excess of the cost of business combination over the Group’s share in the net fair value of the acquired subsidiary company’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the statement of financial position. The accounting policy for goodwill is set out in Note 2(k)(i). Any excess of the Group’s share in the net fair value of the acquired subsidiary company’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in profit or loss on the date of acquisition. When the Group acquires a business, embedded derivatives separated from the host contract by the acquiree are reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Subsidiary companies 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.

(i) subsidiary companies

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investment in subsidiary companies is accounted for at cost less impairment losses.

(ii) Non-controlling interests

Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in profit or loss of the Group and within equity in the consolidated statements of financial position, separately from parent shareholders’ equity. Transactions with non-controlling interests are accounted for using the entity concept method, whereby, transactions with non-controlling interests are accounted for as transactions with owners. On acquisition of non-controlling interests, the difference between the consideration and book value of the share of the net assets acquired is recognised directly in equity. Gain or loss on disposal to non-controlling interests is also recognised directly in equity.

(iii) Associated companies

An associated company is an entity, not being a subsidiary company or a joint venture, in which the Group has significant influence. An associated company is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associated company.

The Group’s investment in associated companies is accounted for using the equity method. Under the equity method, the investment in associated companies is measured in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the associated companies. Goodwill relating to associated companies is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the associated companies’ identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associated companies’ profit or loss for the period in which the investment is acquired.





(iii) Associated companies (continued)

When the Group’s share of losses in an associated companies equals or exceeds its interest in the associated companies, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated companies.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associated companies. The Group determines at each reporting date whether there is any objective evidence that the investment in the associated companies is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associated companies and its carrying value and recognises the amount in profit or loss.

The financial statements of the associated companies are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

In the Company’s separate financial statements, investment in associated companies is stated at cost less impairment losses. On disposal of such investment, the difference between net disposal proceeds and their carrying amount is included in profit or loss.

(iv) Jointly controlled entities

A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entities over which there is contractually agreed sharing of joint control over the economic activity of the entity. Joint control exists when the strategic financial and operational decisions relating to the activity require the unanimous consent of all the parties sharing control.

Investment in jointly controlled entities is stated at cost less accumulated impairment losses, if any. Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in the income statements.

The investment in jointly controlled entity is accounted for in the consolidated financial statements using the equity method of accounting. The Group’s share of results in the jointly controlled entity during the financial year is included in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases.

The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the other venturers. The Group does not recognise its share of results from the joint venture that results from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment loss. When necessary, in applying the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with those of the Group.

Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to the extent of the Group’s interest in the jointly controlled entity. Unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred.




(v) transactions eliminated on consolidation

Intra-group balances including any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(vi) transaction costs

Costs directly attributable to an acquisition are included as part of the cost of acquisition except for acquisitions after 1 July 2010, where the professional fees are expensed off immediately to income statement.

(e) property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(i). When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Freehold land and capital work-in-progress are not depreciated. Land held on long lease is held on a lease with an unexpired period of 50 years or more. A lease of less than 50 years is described as a short lease. Leasehold land is amortised on a straight line method over the period of the lease. Other property, plant and equipment are depreciated on a straight line basis to write off the cost of the assets to their residual values over their estimated useful lives as follows:

Leasehold land 55 to 999 years (over lease period)Buildings and infrastructure 10 to 40 yearsPlant and machinery 5 to 20 yearsMotor vehicles 5 yearsOffice equipment and renovations 3 to 10 yearsFurniture and fittings 5 to 10 yearsCollection stations 5 to 10 yearsTransport and field equipment 5 to 10 yearsRoads, bridges and fencing 20 years Depreciation methods, useful lives and residual values are reassessed at the reporting date.

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits will flow to the Group and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred.

Gains or losses on disposals are determined by comparing net disposal proceeds with carrying amount and are recognised in the income statements.




(f) Investment properties

Investment property, which is property held to earn rentals and/or for capital appreciation (including property under construction for such purposes), is measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and any impairment losses. Freehold land is not depreciated and buildings are depreciated on a straight-line basis to write-down the cost of each building to their residual values over their estimated useful lives. The principal annual depreciation rate of buildings is 2% per annum. The residual values, useful lives and depreciation method are reviewed at each financial year end 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 investment property.

(g) Leases

(i) Classification

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets. All leases that do not transfer substantially all the risks and rewards are classified as operating lease.

Assets acquired by way of finance leases or hire purchase are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases less accumulated depreciation and impairment losses. The corresponding liability is included in the statements of financial position as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.

(ii) finance leases

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the income statements over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life and the lease term.

(iii) operating lease – the Group as lessee

Operating lease payments are recognised as an expense on a straight line basis over the term of the relevant lease. The aggregate benefit of incentives as provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight line basis.

(iv) operating lease - the Group as lessor

Assets leased out under operating leases are presented on the statements of financial positions according to the nature of the assets. Rental income from operating lease is recognised on a straight line basis over the term of the relevant lease.



(h) biological assets

Mature plantations are stated at cost less accumulated amortisation and any impairment losses. The policy of recognition and measurement of impairment losses is in accordance with Note 2(j). Amortisation is charged to the income statements so as to write off the cost of mature plantations, using the straight-line method, over the estimated useful lives of 25 years, representing the economic useful lives of the crops.

Costs incurred in the preparation of the nursery, purchase of seedlings and their maintenance are stated at cost. The accumulated costs will be capitalised as biological assets at the time of planting.

Immature plantations are stated at cost. The costs of immature plantations consist mainly of the accumulated cost of land clearing, planting, fertilising and maintaining the plantation, borrowing costs and other indirect overhead costs up to the time the trees are harvestable and to the extent appropriate.

The residual values and useful lives of biological assets are reviewed and adjusted as appropriate, at each reporting date.

(i) property development activities

(i) Land held for property development

Land held for property development is stated at costs less accumulated impairment losses, if any. Such land is classified as non-current asset when no significant development work has been carried out or where development activities are not expected to be completed within the normal operating cycle.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Land held for property development is reclassified as property development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

(ii) property development costs

Property development costs comprise all costs that are directly attributable to the development activities or that can be allocated on a reasonable basis to such activities. They comprise the cost of land under development, construction costs and other related development costs common to the whole project including professional fees, stamp duties, commissions, conversion fees and other relevant levies as well as borrowing costs.

Interest costs incurred on financing the development of the projects are capitalised and included as part of development expenditure.

The Group considers that portion of property development expenditure on which significant development work

has been done and which is expected to be completed within the normal operating cycle of two to three years as current assets .

Property development costs not recognised as an expense are recognised as an asset measured at the lower of cost and net realisable value.

When revenue recognised in the income statements exceeds progress billing to purchasers, the balance is classified as accrued billings under current assets. When progress billings exceed revenue recognised in the income statements, the balance is classified as progress billings under current liabilities.




(j) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed 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. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.

(k) Intangible assets

(i) Goodwill

Goodwill arising from consolidation represents the excess of the purchase price over the Group’s interest in the fair value of the identifiable assets and liabilities of subsidiary companies at the date of acquisition.

After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested 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.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s CGU expected to benefit from synergies of the business combination. An impairment loss is recognised in the consolidated income statement when the carrying amount of CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less cost to sell and value-in-use. The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU. Impairment loss on goodwill is not reversed in a subsequent period.

Goodwill arising on acquisition of an associated company is the excess of cost of investment over the Group’s share of the net fair value of the associated company’s identifiable assets, liabilities and contingent liabilities at the date of acquisition.

Goodwill relating to the associated company is included in the carrying amount of the investment and is not amortised. The excess of the Group’s share of the net fair value of the associated company’s identifiable assets, liabilities and contingent liabilities over the cost of investment is included as income in the determination of the Group’s share of the associated company’s results in the period in which the investment is acquired.



(k) Intangible assets (continued)

(ii) trademarks Trademarks were acquired through business combinations. The useful life of trademarks is estimated to be indefinite

because based on the current market share of the brands, management believes there is no foreseeable limit to the period over which the brands are expected to generate net cash flows to the Group. Trademarks are stated at cost less accumulated impairment losses, if any. Trademarks are not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

(iii) Concession rights Concession assets represent exclusive rights relating to import and distribution of rice in Malaysia. The cost of

concession assets acquired in a business combination is their fair values as at the date of acquisition. After the initial recognition, concession rights are stated at cost less accumulated amortisation and impairment losses.

The concession rights are amortised on a straight line method over its estimated economic useful life of 73 months. The policy for recognition and measurement of impairment losses is in accordance with Note 2(j).

(iv) patents

Patent costs comprise the purchase cost of a patent for the process of eliminating the traditional rubber odour from processed raw natural rubber. The patent is amortised on a straight line basis over its estimated economic useful life of 20 years and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date.

(l) financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include loans and receivables and available-for-sale financial assets.

(i) financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or noncurrent. Financial assets held primarily for trading purposes are presented as current whereas financial assets not held primarily for trading purposes are presented as current or noncurrent based on the settlement date.




(l) financial assets (continued)

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are unquoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. Loans and receivables in the statements of financial position comprise trade and other receivables, amount owing by subsidiary and associated companies, and fixed deposits and cash and cash equivalents.

Subsequent to initial recognition, loans and receivables are carried at amortised cost using the effective interest method. Gains and losses are recognised in statements of comprehensive income when the loans and receivables are derecognised or impaired, and through the amortisation process.

(iii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose off the investment within 12 months of the reporting date.

Investments are initially recognised at fair value plus transaction costs that are directly attributable to their acquisitions. Investment in equity instruments whose fair value cannot be reliably measured are valued at cost less impairment loss.

After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains and losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in income statements. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group and the Company’s right to receive payment is established.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in income statements.

Gains or losses arising from changes in the fair value of the financial assets at fair value through profit or loss category are presented in the income statements in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the income statements as part of other income when the Group’s right to receive payment is established.

(m) Derivative financial instruments

Derivative financial instruments that do not qualify for hedge accounting are accounted for as financial assets at fair value through profit or loss according to Note 2(l)(i) or as financial liabilities at fair value through profit or loss in accordance to Note 2(o)(i) depending upon the Group’s derivative position as at the reporting date.

(n) Impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.



(n) Impairment of financial assets (continued)

(i) trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group and the Company’s past experience of payments collection, an increase in the number of delayed payments in the portfolio beyond the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(ii) Available-for-sale (“Afs”) financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as AFS financial assets are impaired.

If an AFS financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

(o) financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of FRS 139, are 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 financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.




(o) financial liabilities (continued)

(i) financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

(ii) other financial liabilities

The Group and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(p) financial guarantee contracts

A financial guarantee contract is a contract which 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 recognised as financial liabilities at the date the guarantee is issued. Liabilities arising from financial guarantee contracts, including company guarantees of subsidiary companies through deeds of cross guarantee, are initially recognised at fair value and subsequently at the higher of the amount determined in accordance with the measurement requirements of a provision of liabilities in Note 2(s) and the amount initially recognised less cumulative amortisation.

The fair value of the financial guarantee is determined as the present value of the difference in net cash flows between the contractual payments under the debt instrument, and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligation.

Where guarantees in relation to loans or other payables of subsidiary companies or associated companies are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of investment in the financial statements of the Group.



(q) Inventories

Inventories are stated at the lower of cost and net realisable value after adequate allowance has been made for all deteriorated, damaged, obsolete or slow-moving inventories.

Cost of inventories comprises the original cost of purchase plus the cost of bringing the inventories to their intended location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Cost of raw materials and consumables are determined on the weighted average basis except for raw materials for rubber processing activities which are determined as a first-in, first-out basis.

The accounting policies for specific commodities products are as follows:

(i) oil palm and rubber products

The cost of oil palm products includes the cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the production facilities.

Cost of consumables comprises all costs of purchase and cost of nursery consists of the original cost of purchase, direct labour and other related overheads.

The cost of rubber finished goods includes direct materials, direct labour and variable production overheads determined principally on a first-in, first-out basis.

(ii) Livestock

Cost of livestock consists of original cost of purchase and other attributable costs in nurturing the livestock to their saleable condition.

(iii) paddy and rice

The cost of paddy and rice comprise costs of purchase. The costs of finished goods comprise costs of paddy and rice, direct materials, direct labour, other direct costs and appropriate proportions of production overheads based on normal operating capacity. Pre-cropping expenditure incurred in respect of paddy planting is included as inventories and expensed upon harvesting.

(iv) sugar products

Cost of raw sugar comprises the cost of purchase and incidental costs incurred in bringing the raw sugar to its present condition and location.

Cost of refined sugar comprises cost of raw sugar and all direct expenditures incurred in the refinery process and include labour and appropriate production overheads.

Cost of transhipment stocks comprises the weighted average cost of raw sugar purchased and all direct expenditures and incidentals incurred in bringing the raw sugar to saleable condition and location.

The Group is vested with the duty to maintain and manage the Government Rice Stockpile of 239,000 metric tonnes (2010: 239,000 metric tonnes). The inventories of paddy and rice of the Group are disclosed net of the Government Stockpile.




(r) Cash and cash equivalents

Cash and cash equivalents include cash on hand and at banks, deposits and other short term highly liquid investments that are readily convertible to cash and are subject to insignificant risk of changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts, pledged deposits and sinking fund account for the purpose of term loan repayments.

(s) provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the effect of the time value of money is material, the amount of provisions will be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provisions will be reversed.

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

(t) Contingent assets and contingent liabilities

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but disclose its existence where inflows of economic benefits are probable, but not virtually certain.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

In the acquisition of subsidiary companies by the Group under business combinations, contingent liabilities assumed are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest.

(u) borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

When the borrowings are made specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of funds drawndown from that borrowing facility.

When the borrowings are made generally, and used for the purpose of obtaining a qualifying asset, the borrowing costs eligible for capitalisation are determined by applying a capitalisation rate which is the weighted average of the borrowing costs applicable to the borrowings that are outstanding during the financial year.

All other borrowing costs are recognised as an expense in the income statements in the period in which they are incurred.



(v) foreign currencies

Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the reporting date are translated into Ringgit Malaysia at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts are used. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in the income statements in the period in which they arise. 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 for presentation currency purposes.

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;

(ii) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

(iii) all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings, are taken to statements of comprehensive income. When a foreign operation is sold or dissolved, such exchange differences are recognised in the income statements as part of the gain or loss on sale or dissolution. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

(w) Income tax

(i) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.




(w) Income tax (continued)

(ii) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

– where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

– in respect of taxable temporary differences associated with investments in subsidiary companies, associated companies and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary difference, and the carry forward of unused tax credits and unused tax losses can be utilised except:

– where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

– in respect of deductible temporary differences associated with investments in subsidiary companies, associated companies and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the

asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.



(x) Employee benefits

(i) short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) termination benefits

Termination benefits are payments due to employees as a result of the termination of employment before the normal retirement date or to encourage voluntary redundancy. They are recognised as a liability and as an expense when the Group has a detailed formal plan for termination with no realistic possibility of withdrawal. In the case of voluntary redundancy, the benefits are accounted for based on the number of employees expected to accept the offer.

(iii) Defined contribution plans

The Group’s contributions to defined contribution plans are charged to the income statements in the period to which they relate. Once the contributions have been paid, the Group has no further payment obligations. As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiary companies make contribution to their respective countries’ statutory pension schemes. Such contributions are recognised as an expense in the income statement as incurred.

(iv) Defined benefit plans

Actuarial gains and losses are recognised as income or expense over the expected average remaining working lives of the participating employees when the cumulative recognised actuarial gains or losses for the scheme exceed 10% of the higher of the present value of the defined benefit obligations and for funded defined benefit plans, the fair value of the plan assets. Past service cost is recognised immediately to the extent that the benefits are already vested. Otherwise, it will be amortised on a straight-line basis over the average period until the amended benefits become vested.

The amount recognised in the statements of financial position represents the present value of the defined benefit obligations adjusted for recognised actuarial gains and losses and recognised past service cost, and reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the net total of any recognised actuarial losses and past service cost, and the present value of any economic benefits in the form of refunds or reductions in future contributions to the plan. The scheme is valued by independent actuaries every three years.

(v) Unfunded discretionary retirement contribution scheme

Provision is made in respect of a discretionary unfunded retirement contribution scheme for eligible factory workers who have been in service for more than one year. It is accrued over their period of service.




(y) Revenue recognition

(i) Revenue from sale of goods is measured at the fair value of the consideration receivable net of sales taxes, returns and discounts, if applicable, and is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Property development revenue is recognised in respect of all development units that have been sold. Revenue recognition commences when the sale of the development unit is effected, upon the commencement of development and construction activities and when the financial outcome can be reliably estimated. The attributable portion of property development cost is recognised as an expense in the period in which the related revenue is recognised. The amount of such revenue and expenses recognised is determined by reference to the stage of completion of development activity at the reporting date. The stage of completion is measured by reference to the proportion that property development costs incurred for work performed to date bear to the estimated total property development cost.

When the financial outcome of a development activity cannot be reliably estimated, the property development revenue is recognised only to the extent of property development costs incurred that is probable to be recoverable and the property development costs on the development units sold are recognised as an expense in the period in which they are incurred.

Any expected loss on a development project is recognised as an expense immediately, including costs to be incurred over the defects liability period.

(iii) Revenue from services rendered is recognised in the income statements upon performance of services and is measured at the fair value of the consideration receivable.

(iv) Interest income is recognised on a time proportion basis that takes into account the effective yield on the asset.

(v) Dividend income is recognised when the shareholder’s right to receive payment is established.

(vi) Rental income is recognised on an accrual basis over the term of an ongoing lease.

(vii) Management fees charged to related companies are recognised on an accrual basis.

(viii) Premises running cost reimbursement fees charged to related companies is recognised on an accrual basis.

(z) segment Reporting

For management purposes, the Group is organised into operating segments based on their products and services/business activities. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, who will make decisions to allocate resources to the segments and assess the segment performance.

(aa) Earnings per share

The Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period.



(bb) Equity instruments

Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

3. pRopERty, pLANt AND EqUIpMENt

furniture, plant, fittings, buildings machinery, office Roads, and transport equipment bridges Capital freehold Leasehold infra- and field Motor and and work-in-Group land land structure equipment vehicles renovations fencing progress total2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost At 1.1.2011 125,779 1,076,980 454,789 845,288 113,106 142,488 136,994 122,309 3,017,733Additions - 7,488 18,929 35,630 18,246 9,923 13,068 119,813 223,097Acquisition of subsidiary companies 11,784 63,452 71,844 107,288 7,544 8,880 - 7,860 278,652Disposals - (468) - (4,495) (2,011) (657) - - (7,631)Write-off - - (31) (925) (1,010) ( 24,491) (7) (14) ( 26,478)Exchange differences (61) (239) (1,241) (1,247) (64) (45) - (69) (2,966)Reclassification - - 42,912 16,868 397 1,710 13,171 (75,058) -

At 31.12.2011 137,502 1,147,213 587,202 998,407 136,208 137,808 163,226 174,841 3,482,407

Accumulated depreciation At 1.1.2011 - 105,024 193,973 520,490 81,026 93,043 37,352 - 1,030,908Charge for the financial year - 15,072 20,414 57,590 11,202 18,577 7,213 - 130,068Acquisition of subsidiary companies - 1,542 32,340 74,325 5,063 6,935 - - 120,205Disposals - (36) - (3,045) (1,863) (314) - - (5,258)Write-off - - (23) (882) (1,010) ( 12,099) - - ( 14,014)Exchange differences - (68) (389) (541) (31) (29) - - (1,058)

At 31.12.2011 - 121,534 246,315 647,937 94,387 106,113 44,565 - 1,260,851

Carrying amountAt 31.12.2011 137,502 1,025,679 340,887 350,470 41,821 31,695 118,661 174,841 2,221,556

Depreciation charges:Recognised in income statements 126,509Capitalised to biological assets 3,559

130,068



3. pRopERty, pLANt AND EqUIpMENt (CoNtINUED)

furniture, plant, fittings, buildings machinery, office Roads, and transport equipment bridges Capital freehold Leasehold infra- and field Motor and and work-in-Group land land structure equipment vehicles renovations fencing progress total2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost At 1.1.2010 125,779 1,063,909 432,163 804,627 104,590 128,141 95,007 87,339 2,841,555Additions - 2,743 13,401 38,455 12,222 17,844 21,872 75,654 182,191Acquisition of subsidiary companies - 11,369 3,936 4,052 1,895 4,981 - 574 26,807Disposals - (1,041) (77) (6,568) (3,796) (3,682) - - (15,164)Write-off - - (385) (6,598) (2,219) (8,454) - - (17,656)Reclassification - - 5,751 11,320 414 3,658 20,115 (41,258) -

At 31.12.2010 125,779 1,076,980 454,789 845,288 113,106 142,488 136,994 122,309 3,017,733

Accumulated depreciation At 1.1.2010 - 89,495 175,660 473,636 75,991 84,920 31,569 - 931,191Charge for the financial year - 14,778 17,881 52,838 9,514 16,935 5,783 - 117,729Acquisition of subsidiary companies - 780 562 1,986 635 1,428 - - 5,391Disposals - (29) (50) (4,869) (3,343) (3,433) - - (11,724)Write-off - - (81) (2,623) (2,168) (6,807) - - (11,679)Reclassification - - 1 (478) 477 - - - -

At 31.12.2010 - 105,024 193,973 520,490 81,026 93,043 37,352 - 1,030,908

Carrying amountAt 31.12.2010 125,779 971,956 260,816 324,798 32,080 49,445 99,642 122,309 1,986,825

Depreciation charges:Recognised in income statements 114,970Capitalised to biological assets 2,759

117,729



furniture fittings Motor and office vehicles equipment Renovations total

Company RM’000 RM’000 RM’000 RM’000

2011Cost At 1.1.2011 855 2,678 2,077 5,610 Additions 2,052 468 112 2,632 Disposals - (20) - (20)

At 31.12.2011 2,907 3,126 2,189 8,222

Accumulated depreciation At 1.1.2011 775 644 242 1,661 Charge for the financial year 281 561 420 1,262 Disposals - (20) - (20)

At 31.12.2011 1,056 1,185 662 2,903

Carrying amount At 31.12.2011 1,851 1,941 1,527 5,319

2010Cost At 1.1.2010 1,158 1,222 - 2,380 Additions - 2,241 2,077 4,318 Disposals (303) (785) - (1,088)

At 31.12.2010 855 2,678 2,077 5,610

Accumulated depreciation At 1.1.2010 1,048 1,042 - 2,090 Charge for the financial year 30 340 242 612 Disposals (303) (738) - (1,041)

At 31.12.2010 775 644 242 1,661

Carrying amount At 31.12.2010 80 2,034 1,835 3,949




(a) The net carrying amount of property, plant and equipment charged to licensed banks for credit facilities granted to the Group, as disclosed in Note 23 are as follows:

Group

2011 2010 RM’000 RM’000

Freehold land 23,063 27,658 Leasehold land 706,995 470,714 Buildings and infrastructure 72,732 46,473 Plant and machinery 65,455 56,273 Capital work-in-progress 2,766 - Motor vehicles 894 -

871,905 601,118

(b) The remaining period of lease term for the leasehold land ranges from 27 years to 876 years (2010: 28 years to 877 years).

(c) Additions in property, plant and equipment:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Additions to property, plant and equipment 223,097 182,191 2,632 4,318 Less : Hire purchase and finance lease arrangement (3,972) (2,713) - -

Cash payments on additions to property, plant and equipment 219,125 179,478 2,632 4,318

(d) The net carrying amount of property, plant and equipment held under hire purchase and finance lease arrangements are as follows:

Group

2011 2010 RM’000 RM’000

Motor vehicles 2,965 3,587 Plant and machinery 3,317 4,003

6,282 7,590

Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 22.

(e) Included in property, plant and equipment are some temporarily idle assets with net carrying amount of RM20,952,000 (2010 : None) of certain subsidiaries whose processing factories were closed.


4. bIoLoGICAL AssEts

Group

2011 2010 RM’000 RM’000

Cost At 1 January 1,515,511 1,387,955 Additions 153,810 143,058 Disposals (238) - Write-off - (16) Assets retired from use (2,123) (15,486)

At 31 December 1,666,960 1,515,511

Accumulated amortisation At 1 January 373,104 337,524 Charge for the financial year 51,008 51,066 Disposals (95) - Assets retired from use (2,123) (15,486)

At 31 December 421,894 373,104

Carrying amount At 31 December 1,245,066 1,142,407

(a) Included in additions of biological assets for the financial year are the following:

Group

2011 2010 RM’000 RM’000

Depreciation of property, plant and equipment 3,559 2,759 Interest on borrowings 18,261 13,721 Raw materials and consumables used 318 40,608 Staff costs 28,292 17,118 Net income from scout harvesting - (2,801)

Included in staff costs are attributable contributions made to a defined contribution plan amounting to RM2,167,000 (2010: RM665,000).



4. bIoLoGICAL AssEts (CoNtINUED)

(b) Additions of biological assets :

Group

2011 2010 RM’000 RM’000

Additions to biological assets 153,810 143,058 Less : Depreciation capitalised (3,559) (2,759) Less : Interest capitalised (18,261) (13,721)

Cash payments on additions to biological assets 131,990 126,578

(c) Assets retired from use comprises biological assets capitalised on oil palm which had reached the end of its normal life cycle and had been replanted.

(d) The net carrying amount of biological assets charged to licensed banks for credit facilities granted to the Group as disclosed in Note 23 is RM1,002,241,000 (2010: RM867,440,000).

5. INVEstMENt pRopERtIEs

freeholdGroup land buildings total2011 RM’000 RM’000 RM’000

At cost At 1 January - - - Acquisition of subsidiary companies 370 12,371 12,741

At 31 December 370 12,371 12,741

Accumulated depreciation At 1 January - - - Acquisition of subsidiary companies - 9,296 9,296 Charge for the financial year - 111 111

At 31 December - 9,407 9,407

Net carrying amount 370 2,964 3,334

fair value 370 3,075 3,445

Included in investment properties are some temporarily idle assets with net carrying amount of RM492,000 (2010: None) of certain subsidiary companies whose processing factories were closed. The freehold land is pledged as securities for borrowings granted to a fellow subsidiary company.


6. LAND hELD foR pRopERty DEVELopMENt

Group

2011 2010 RM’000 RM’000

Long term leasehold land at cost At 1 January/31 December 87,412 87,412

An approved master plan for the long term leasehold land had been obtained for the development of the second border town between Malaysia and Thailand known as ‘Bandar Sempadan Kota Putra’.

7. INVEstMENt IN sUbsIDIARy CoMpANIEs

Company

2011 2010 RM’000 RM’000

Quoted shares, at cost 1,300,706 1,300,706 Unquoted shares, at cost 302,961 302,961

1,603,667 1,603,667 Accumulated impairment loss (100) -

1,603,567 1,603,667

Quoted shares, at market value 2,667,217 2,718,958

(a) Details of the subsidiary companies and shareholdings therein are shown in Note 44(a).

(b) Acquisition of subsidiary companies during the financial year

On 30 October 2009, Prisma Spektra Sdn Bhd (“PSSB”), a wholly-owned subsidiary company of Tradewinds Plantation Berhad (“TPB”), entered into a conditional Share Sale Agreement with Semi Bayu Sdn Bhd (“SBSB”) for the acquisition of 125,709,000 ordinary shares of RM1.00 each in MARDEC Berhad (“Mardec”), representing the entire issued and paid-up ordinary share capital of Mardec, for a total purchase consideration of RM150,000,000 (“Proposed Acquisition of Mardec”).

The initial period for the fulfillment and satisfaction of the conditions precedent to the Proposed Acquisition of Mardec (“Prescribed Period”) expired on 29 April 2010. On 30 April 2010 and 1 November 2010, respectively, SBSB and PSSB agreed to extend the Prescribed Period by a period of six months to 30 October 2010 and by a further period of six months to 30 April 2011.



7. INVEstMENt IN sUbsIDIARy CoMpANIEs (CoNtINUED)

(b) Acquisition of subsidiary companies during the financial year (continued)

On 25 February 2011, PSSB and SBSB entered into a supplemental agreement to revise the purchase consideration for the Proposed Acquisition of Mardec as provided in the Share Sale Agreement from RM150,000,000 to RM140,000,000, which shall be payable in the following manner:

(i) a first instalment of RM42,000,000 or 30% of the revised purchase consideration to be paid on the completion date; and

(ii) a second instalment of RM98,000,000 or 70% of the revised purchase consideration to be paid within 3 months of the completion date.

The revised purchase consideration is arrived at based on Ernst & Young’s appraisal of the fair value of the Mardec Group by using the Hybrid Methodology, which is a combination of Income and Asset Approaches of valuation, which ranges between RM135,000,000 and RM155,000,000.

On 28 April 2011, SBSB and PSSB agreed to extend the Prescribed Period by a further period of six months to 30 October 2011.

The Proposed Acquisition of Mardec was approved by the shareholders of TPB at the extraordinary general meeting held on 14 July 2011.

On 4 October 2011, PSSB entered into and executed:

(i) a Novation Agreement with the Government of Malaysia, the Minister of Finance and SBSB for the novation of all SBSB’s rights, liabilities, benefits, interests, duties and obligations under and in respect of the Sale and Purchase of Shares Agreement dated 16 January 2003 between the Government of Malaysia, the Minister of Finance and SBSB (the “MARDEC SPA”) to PSSB; and

(ii) a Supplemental Agreement with the Government of Malaysia and the Minister of Finance as a supplement to the MARDEC SPA for the purpose of amending the provisions of the MARDEC SPA.

With the execution of the aforesaid Novation Agreement and Supplemental Agreement, all conditions precedent to the Proposed Acquisition of Mardec have been deemed fulfilled and satisfied and that the Share Sale Agreement has become unconditional with effect from 4 October 2011.

On 10 October 2011, PSSB completed the acquisition of 125,709,000 ordinary shares of RM1.00 each in Mardec, representing the entire issued and paid-up ordinary share capital of Mardec, for a total purchase consideration of RM140,000,000.

The acquisition of Mardec is synergistic to the Group’s plan to expand its rubber activities downstream into the processing and marketing of rubber products.




The fair value of assets acquired and liabilities assumed at the date of acquisition are as follows:

RM’000

Current assetsInventories 277,986Trade receivables 129,975Other receivables 134,672Tax recoverable 5,281Derivative assets 111Cash and cash equivalents 42,735

Non-current assetsProperty, plant and equipment 158,447Investment properties 3,445Investment in associated companies 56,227Intangible assets 157Deferred tax assets 6,469

Current liabilitiesTrade payables (45,458)Other payables (20,370)Amount owing by associated companies (122)Derivative liabilities (10,372)Tax payable (2,786)Provision for retirement benefits (353)Short term borrowings (544,710)

Non-current liabilitiesLong term borrowings (9,107)Provision for retirement benefits (2,207)Deferred tax liabilities (13,377)

Total net assets 166,643Less: Non-controlling interests (8,216)

Group’s share of net assets 158,427Bargain purchase gain (18,427)

Total cost of acquisition 140,000





Net cash outflow on acquisition of subsidiary companies is as follows:

RM’000

Consideration paid in cash 140,000 Less: Cash and cash equivalents acquired (27,218)

Net cash outflow on acquisition 112,782

The acquired subsidiary company has contributed the following results to the Group during the financial year: RM’000

Revenue 503,965 Profit for the year 2,090

If the acquisition had occurred on 1 January 2011, the Group’s results for the current financial year would have been as follows:

RM’000

Revenue 8,790,457 Profit for the year 678,752

(c) Additional interest in subsidiary company, Ban Heng Bee Holdings Sdn Bhd (“BHBH”)

On 11 November 2011, Bernas entered into a Master Agreement with Jelapang Jati Sdn Bhd (“Jelapang Jati”) and BHBH for the proposed increase of Bernas’ equity holding in BHBH from 20% to 49% for a total consideration of RM110.66 million which comprise of the following documents:

(i) A Share Swap Agreement for the disposal of Bernas’ entire 920,000 ordinary shares of RM1.00 each representing 40% equity interest in Serba Wangi Sdn Bhd (“Serba Wangi”) to BHBH which will be satisfied through the allotment and issuance of 981,997 new ordinary shares of RM1.00 each in BHBH to Bernas for a consideration of RM36.0 million;

(ii) A Share Sale Agreement for the acquisition by Bernas of 409,165 ordinary shares of RM1.00 each in BHBH from Jelapang Jati for a cash consideration of RM15.0 million; and

(iii) A Subscription Agreement for the subscription by Bernas of 1,627,483 new ordinary shares of RM1.00 each in BHBH for a cash consideration of RM59.7 million.



(d) Acquisition of subsidiary companies during the previous financial year

(i) Acquisition of the remaining 60% equity interest in Hak JTOP Sdn Bhd (“Hak JTOP”)

On 9 June 2010, Tradewinds Plantation Berhad, a subsidiary company of the Company, acquired the remaining 60% equity interest in Hak JTOP Sdn Bhd (“Hak JTOP”) for a cash consideration of RM3.2 million. Consequently, Hak JTOP became a wholly-owned subsidiary of JTOP.

The effect of the acquisition on the financial results of the Group in the previous financial year was as follows:

RM’000

Revenue - Loss for the period (23)

There was no material effect to the Group’s financial results for the financial year if the acquisition had been completed on 1 January 2010.

The assets acquired and liabilities assumed as at date of acquisition were as follows:

fair value Acquiree’s recognised carrying on amount acquisition RM’000 RM’000

Property, plant and equipment - 3,292 Other payables (92) (92)

Group’s share of net assets/purchase consideration discharged by cash (92) 3,200

(ii) Acquisition of 75% equity interest in Bernas Logistics Sdn Bhd (“BLSB”)

On 2 December 2009, Bernas, a subsidiary company of the Company, entered into a conditional Share Sale and Purchase

Agreement (“SSA”) with Johor Port Berhad (“JPB”) for the acquisition of 12,000,000 ordinary shares of RM1.00 each which is equivalent to 75% of equity interest in BLSB from JPB for a purchase consideration of RM11,760,000. Upon completion of the SSA on 31 May 2010, BLSB became a wholly-owned subsidiary company of Bernas.

The effect of the acquisition on the financial results of the Group in the financial year was as follows: RM’000

Revenue 58,563 Loss for the period 305

The acquisition of BLSB was completed on 31 May 2010. However, if the acquisitions of BLSB had been completed on 1 January 2010, the Group’s revenue and profit for the financial year would have been RM5.58 billion and RM626.7 million, respectively for the financial year ended 31 December 2010.



(d) Acquisition of subsidiary companies during the previous financial year (continued)

(iii) Acquisition of 75% equity interest in Bernas Logistics Sdn Bhd (“BLSB”) (continued)

The fair value of assets acquired and liabilities assumed as at date of acquisition were as follows:

RM’000

Property, plant and equipment 186 Deferred tax assets 47 Trade and other receivables 30,302 Cash and cash equivalents 345

30,880 Trade and other payables 13,950

Net identifiable assets 16,930

Total cost of business combination The total cost of business combination is as follows:

RM’000

Cash paid (for entire 100% equity interest held) 13,510

The effect of the acquisition on cash flows is as follows: Total cost of business combination 13,510 Less: Cash and cash equivalents of subsidiary company acquired (345)


RM’000

Total cost of business combination 13,510 Less : Net identifiable assets as at date of acquisition (16,930)Add : Profit sharing to date as an associated company 2,926

Excess of fair value of net assets acquired over purchase consideration (494)

Fair value of net identifiable assets 16,930 Profit sharing to date as an associated company (2,926)Excess of fair value of net assets acquired over purchase (494)

Cost of business combination 13,510





(iii) Acquisition of additional 30% equity interest in Liansin Trading Sdn Bhd (“Liansin”)

On 30 June 2010, Bernas’ wholly-owned subsidiary company, Beras Corporation Sdn Bhd (“BCSB”), entered into Second Subscription Agreement, Supplemental Shareholders Agreement and Supplemental Performance Guarantee Reward Scheme with Liansin and the remaining shareholders of Liansin namely SBE Resources Holding Sdn Bhd, Liansin Resources Holdings Sdn Bhd and Lian Giat Holdings Sdn Bhd in respect of the proposed subscription of 401,068 ordinary shares in Liansin for a subscription price of RM12,634,000. Upon completion of those agreements on 30 September 2010, Bernas’ equity interest in Liansin increased from 30% to 60% and Liansin became a subsidiary company of Bernas.

The fair value of assets acquired and liabilities assumed as at date of acquisition were as follows:

RM’000

Property, plant and equipment 17,938 Inventories 15,048 Trade and other receivables 20,567 Tax recoverable 535 Cash and cash equivalents 2,733

56,821

RM’000

Trade and other payables 11,839 Borrowings 15,678 Deferred tax liabilities 1,070

28,587

Net assets 28,234 Less : Non-controlling interests (11,294)

Net identifiable assets 16,940





(ii) Acquisition of additional 30% equity interest in Liansin Trading Sdn Bhd (“Liansin”) (continued) The total cost of business combination is as follows:

RM’000

Cash paid (for the entire 60% equity interest held) 14,511

The effect of the acquisition on cash flows is as follows: Total cost of business combination 14,511 Less: Cash and cash equivalents of subsidiary acquired -


Total cost of business combination 14,511 Less : Net identifiable assets as at date of acquisition (16,940)Add : Profit sharing to date as an associate company 2,096


Fair value of net identifiable assets 16,940 Profit sharing to date as an associate company (2,096)Excess of fair value of net assets acquired over purchase consideration (333)

Cost of business combination 14,511

(iv) Acquisition of 100% equity interest in Subur Majubumi Sdn Bhd (“SMSB”) and Berkat Beringin Sdn Bhd (“BBSB”)

On 8 December 2010, Bernas completed the acquisition of the entire equity interest in two subsidiary companies,

SMSB and BBSB, both incorporated in Malaysia on 10 October 2010 with an issued and paid-up capital of RM2.00 divided into 2 ordinary shares of RM1.00 each, respectively. The intended principal activities are as investment holding company and rice milling, respectively. These subsidiaries have yet to commence business as at the financial year ended 31 December 2010.



(e) Accretion of interest in subsidiary companies during the previous financial year

(i) Acquisition of additional 22.24% equity interest in Bernas.

The Company had, on 28 August 2009, entered into conditional share sale agreements with the following parties:

(1) Wang Tak Company Limited to acquire 148,281,100 ordinary shares of RM1.00 each in Bernas (“Bernas Shares”) representing 31.52% equity interest in Bernas for a total cash consideration of RM308,424,688 on the basis of RM2.08 per Bernas Share (“Acquisition 1”); and

(2) Gandingan Bersepadu Sdn Bhd (“GBSB”) to acquire 104,599,485 Bernas Shares representing 22.24% equity interest in Bernas for a total cash consideration of RM217,566,928.80 on the basis of RM2.08 per Bernas Share (“Acquisition 2”) pursuant to a dividend-in-specie exercise of Bernas Shares by a subsidiary of GBSB, namely Budaya Generasi (M) Sdn Bhd (“BGSB”) which was a substantial shareholder of Bernas.

GBSB and BGSB were parties acting in concert (“PAC”) with the Company pursuant to the Malaysian Code on Take-overs and Mergers, 1998 (“Code”) and upon completion of Acquisition 1, the Company and its PAC collectively hold 62.31% equity interest in Bernas. Accordingly, pursuant to Section 33A of the Securities Commission Act, 1993 and Section 6 of the Code, the Company extended an unconditional mandatory general offer (“MGO”) for the remaining 322,120,400 Bernas Shares not yet owned by the Company when Acquisition 1 became unconditional on 28 October 2009 at RM2.08 per Bernas Share. Acquisition 1 was completed on 2 November 2009.

The MGO was closed on 9 December 2009. As at the closing date, the Company received acceptances to the offer of

18.81% of the Bernas Shares and Bernas became a subsidiary company of the Company in the previous financial year with a total controlling interest of 50.33%.

On 20 January 2010, Acquisition 2 was completed and an excess of fair value of net assets acquired over purchase consideration amounting to RM54.564 million was recognised in the Consolidated Income Statement during the financial year after taking into account the necessary fair value adjustments. With the completion of Acquisition 2, the Company now owns 72.57% equity interest in Bernas.

(ii) Acquisition of additional 45% equity interest in Sabarice Sdn Bhd (“Sabarice”)

On 21 May 2010, a wholly-owned subsidiary company of Bernas, Beras Corporation Sdn Bhd (“BCSB”), entered into a

Share Sale Agreement (“SSA”) with Tan Kien Chong Sdn Bhd (“TKCSB”) for the acquisition of 697,500 ordinary shares of RM1.00 each which is equivalent to 45% equity interest in Sabarice from TKCSB for a purchase consideration of RM4,730,000.

Upon completion of the SSA on 16 June 2010, the equity interest of BCSB in Sabarice increased from 55% to 100%.

The additional acquisition of 30% interest in Sabarice had the following effect on the Group’s financial results for the previous year:

RM’000

Purchase consideration 4,730 Less: Share of net assets acquired (5,195)


The above accretion of interest in subsidiary companies had resulted in the dilusion of non-controlling interest of

approximately RM277,270,000 during the previous financial year.



(f) Disposal of subsidiary companies during the previous financial year

(i) On 6 April 2010, Bernas dissolved the following wholly-owned subsidiary companies:

i. Bernas Realty & Development Sdn Bhd; ii. Bernas-KME Sdn Bhd; and iii. Bernas Fisheries Sdn Bhd

The dissolution of the above subsidiary companies did not have any material effect on the net assets per share and earning per share of the Group for the previous financial year. The dissolution had the following effect on the Group’s financial results for the previous year:

2010 RM’000

Net loss for the year (23)

The dissolution had the following effects on the financial position of the Group as at the end of year:

2010 RM’000

Trade and other receivables 17 Trade and other payables (5)

12

(ii) Change in Group composition

On 30 June 2010, Dayabest Sdn Bhd (“Dayabest”), a wholly-owned subsidiary company of BCSB, entered into a

Share Sale Agreement (“SSA”) with Liansin for the proposed disposal of its entire investment of 153,000 ordinary shares representing 51% shareholding in Tong Seng Huat Rice Trading Sdn Bhd to Liansin for a cash consideration of RM5,176,000 .

The transaction was within the Group and did not have any significant effect on the financial results and financial position of the Group for the previous financial year.

The SSA was completed on 30 September 2010.



8. INVEstMENt IN AssoCIAtED CoMpANIEs

Group

2011 2010 RM’000 RM’000

Unquoted shares, at cost- outside Malaysia 48,358 528- in Malaysia 216,177 100,596

264,535 101,124Share of post acquisition reserves 115,800 143,539

380,335 244,663Less: Accumulated impairment losses (2,300) (2,300)

378,035 242,363

(a) Details of the associated companies and shareholdings therein are shown in Note 44(b).

The financial year end of the associated companies are coterminous with those of the Group unless stated otherwise in Note 44(b) where they have to conform with their holding company’s financial year end. For the purpose of applying the equity method of accounting, the financial statements of those associated companies have been used and appropriate adjustments have been made for the effects of significant transactions between that date and 31 December 2011.

(b) On 11 November 2011, Bernas entered into a Master Agreement with Jelapang Jati Sdn Bhd (“Jelapang Jati”) and Ban Heng Bee Holdings Sdn Bhd (“BHBH”) for the proposed increase of Bernas’ equity holding in BHBH from 20% to 49% for a total consideration of RM110.66 million which comprise of the following:

(i) A Share Swap Agreement for the disposal of Bernas’ entire 920,000 ordinary shares of RM1.00 each representing 40% equity interest in Serba Wangi Sdn Bhd (“Serba Wangi”) to BHBH which will be satisfied through the allotment and issuance of 981,997 new ordinary shares of RM1.00 each in BHBH to Bernas for a consideration of RM36.0 million;

(ii) A Share Sale Agreement for the acquisition by Bernas of 409,165 ordinary shares of RM1.00 each in BHBH from Jelapang Jati for a cash consideration of RM15.0 million; and

(iii) A Subscription Agreement for the subscription by Bernas of 1,627,483 new ordinary shares of RM1.00 each in BHBH for a cash consideration of RM59.7 million.

The Proposed Equity Restructuring was completed on 9 December 2011 and Bernas now holds 49% equity interest in BHBH.



8. INVEstMENt IN AssoCIAtED CoMpANIEs (CoNtINUED)

(c) The summarised financial information of the associated companies are as follows:

Group

2011 2010 RM’000 RM’000

Assets and liabilities

Total assets 1,601,030 1,415,035

Total liabilities 1,011,769 995,231

Group’s share of net assets 378,035 242,363

Results

Revenue 3,288,303 2,832,551

Profit for the financial year 78,624 101,617

Group’s share of results 28,631 33,870

9. INVEstMENt IN A JoINtLy CoNtRoLLED ENtIty

Group

2011 2010 RM’000 RM’000

Unquoted shares, at cost:- ordinary shares 10,000 10,000- redeemable convertible preference shares (“RCPS”) 10,000 5,000

20,000 15,000Share of post-acquisition reserves 3,525 (1,511)

23,525 13,489

(a) On 19 October 2009, Tradewinds Plantation Berhad (“TPB”) entered into a supplemental agreement to the Shareholders Agreement dated 1 August 2008 with CB Industrial Product Holding Berhad (“CBIP”) to subscribe equally for 20,000,000 RCPS of RM1 each at an issue price of RM1 each in the jointly controlled entity, Pride Palm Oil Mill Sdn Bhd (“PPOM”). There was no effect on the equity interest held by TPB subsequent to the subscription.

On 29 October 2009 and 30 June 2011, PPOM issued 10,000,000 RCPS of RM1 each and the remaining 10,000,000 RCPS of RM1 each, which were subscribed equally by TPB and CBIP.


9. INVEstMENt IN A JoINtLy CoNtRoLLED ENtIty (CoNtINUED)

(b) Details of the jointly controlled entity are as follows:

Country Effective principalName of Company incorporation Interest activity 2011 2010 % %

Pride Palm Oil Mill Sdn Bhd Malaysia 50% 50% Investment holding

(c) The summarised financial information of the jointly controlled entity is as follows:

Group

2011 2010 RM’000 RM’000

Assets and liabilitiesCurrent assets 17,712 9,894Non-current assets 88,281 45,791

Total assets 105,993 55,685

Current liabilities 23,943 17,196Non-current liabilities 35,000 25,000

Total liabilities 58,943 42,196

Group’s share of net assets 23,525 13,489

ResultsIncome 68,484 29,042Expenses (58,412) (27,776)

Groups’ share of results 5,036 1,266


10. othER INVEstMENts

quoted Unquoted Group investments investments total 2011 RM’000 RM’000 RM’000

Non-current assetsAvailable-for-sale financial assets:- in Malaysia 37,154 559 37,713- outside Malaysia 3,192 - 3,192

40,346 559 40,905

Current assetsFinancial assets at fair value through profit or loss:- in Malaysia 19,827 - 19,827

19,827 - 19,827

Represented as:At cost - 81 81At fair value 60,173 478 60,651

60,173 559 60,732

2010

Non-current assetsAvailable for sale financial assets:- in Malaysia 1,032 1,127 2,159- outside Malaysia 2,984 - 2,984

4,016 1,127 5,143

Represented by:At cost - 259 259At fair value 4,016 868 4,884

4,016 1,127 5,143

Included in the Group’s available-for-sale unquoted investments is unit trust funds at fair value of RM36,462,000 (2010: RM Nil)

Furthermore, there is an investment management funds that is classified as financial assets at fair value through profit or loss amounting to RM19,827,000 (2010: RM Nil). This investment represents funds placed with licensed fund managers. The portfolio of securities managed by the fund managers comprises the money market funds and corporate bonds which are not subject to significant changes in value.



10. othER INVEstMENts (CoNtINUED)

quoted Unquoted Company investments investments total 2011 RM’000 RM’000 RM’000

Non-current assetsAvailable-for-sale financial assets:- outside Malaysia 3,192 71 3,263


251,177 71 251,248

Represented as:At cost - 71 71At fair value 251,177 - 251,177

251,177 71 251,248

2010

Non-current assetsAvailable-for-sale financial assets:- outside Malaysia 2,984 71 3,055


247,769 71 247,840

Represented as:At cost - 71 71At fair value - - -

- 71 71

Included in the Company’s available-for-sale quoted investments is Irredeemable Convertible Unsecured Loans Stocks (“ICULS”) at fair value of RM247,985,000 (2010: RM247,769,000). The ICULS bear coupon at a fixed rate of 3.0% per annum receivable annually. The ICULS are not redeemable and will be convertible into new ordinary shares on any market day commencing from the third anniversary from the date of issuance of the ICULS by tendering the ICULS on the basis of RM1.60 nominal value of the ICULS for every one (1) new ordinary share of RM1 each in the Company. Interest income on the ICULS is calculated on the effective yield basis by applying the effective interest rate of 6% (2010: 6%) per annum.



10. othER INVEstMENts (CoNtINUED) The movements of other investments of the Group and of the Company during the financial year were as follows:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Carrying amountAt 1 January 5,143 4,332 247,840 253,083Additions 56,300 210 - 71Disposals (418) (2) - -Fair value movements- Fair value through profit or loss - - 3,200 (4,800)- Available-for-sale (293) 603 - (514)Reversal of impairment loss - - 208 -

At 31 December 60,732 5,143 251,248 247,840

11. INtANGIbLE AssEts

Group

2011 2010 RM’000 RM’000

At 1 January 309,011 351,422Acquisition of subsidiary companies 157 -Amortisation of intangible assets (42,415) (42,411)

At 31 December 266,753 309,011

Analysed as:Goodwill on acquisition 93,282 93,282Trademarks 140 140Concession rights 173,178 215,589Patent 153 -

266,753 309,011


11. INtANGIbLE AssEts (CoNtINUED)

(a) Goodwill

Key assumptions used in value-in-use calculations of goodwill:

(i) Plantation subsidiary companies

For the purpose of impairment testing, the recoverable amount of a Cash Generating Unit (“CGU”) is based on its value in use determined by discounting the pre-tax cash flows based on financial projections approved by management covering up to 25 years which represents the full life cycle period of the oil palms.

The key assumptions on which the Management has based its cash flow projections to undertake impairment testing of goodwill are:

- Discount rate of 5.00% representing the pre-tax cost of debt of the Group as at 31 December 2011 (2010: 5.80%).

- Fresh fruit bunches yield ranging from 8 to 31 (2010: 8 to 28) MT/hectare obtained from the Malaysian Palm Oil Board published average yield applicable to the age of the respective estates and also based on management’s best estimates on the estate’s performance after taking into account existing achievements.

- Crude palm oil price of RM2,800 (2010: RM2,500 to RM2,700) per metric tonne and palm kernel price of RM1,700 (2010: RM1,500 to RM1,625) per metric tonne.

- Oil extraction rate ranging from 20.00% to 21.50% (2010: 21.00% to 21.65%) and kernel extraction rate ranging from 4.50% to 5.75% (2010: 5.00% to 5.60%) based on management’s best estimates after taking into account the age of the respective estates and existing achievements.

- Average increase in plantation maintenance expenses of 1% to 3% (2010: 1% to 3%) per hectare. Based on these calculations, the Directors are of the view that no additional impairment loss is required during the financial year as the recoverable amount determined is higher than the carrying amounts of the CGUs.

The Management believes that there is no reasonably possible change in the key assumptions on which the Management has based its determination of the CGU’s recoverable amount which would cause the CGU’s carrying amount to materially exceed its recoverable amount.

(ii) Manufacturing subsidiary companies

The key assumptions on which the Management has based its cash flow projections to undertake impairment test of goodwill are:

2011 2010

Average budgeted gross margin 14% 10% Average growth rate 7% 7% Pre-tax discount rate applied to cash flow projections 13% 5%

The Management has determined the growth rate based on past performance and its expectations of market development. The average growth rate is consistent with the trends and expectation of the Group. The discount rate used is the Group’s overall weighted pre-tax average cost of capital for that industry.

If the estimated projected gross margin has been 20% lower than management’s estimate or if the estimated pre-tax discount rate had been 20% higher than management’s estimate, the recoverable amount of the CGU will still be higher than the CGU’s net assets including the goodwill and therefore, there would still be no impairment on goodwill.



11. INtANGIbLE AssEts (CoNtINUED)

(a) Goodwill (continued)

(iii) Factors contributing to the recognition of goodwill are as follows:

(1) Location of the CGUs which are nearby to one another is expected to provide greater synergistic benefits to the Group, in terms of

- stronger bargaining power through bulk purchase; and - economies of scales from internal chain of supply and sharing of facilities.

(2) Sharing of common management expertise and knowledge.

(b) Trademarks

Trademarks are obtained through business combination of which, have been assessed as having indefinite useful life. The bases for annual impairment of the Group’s trademarks are as follows:

(i) Allocation of trademarks Trademarks are allocated to the CGU in the rice business segment.

(ii) Key assumption used in value-in-use calculation The recoverable amount is determined based on value-in-use calculations using cash flow projections extrapolated

based on a discount rate of 8%.

(iii) Sensitivity to change in assumption The management is of the opinion that there is no reasonable possible change in any key assumptions mentioned in (i)

and (ii) would cause the carrying value of the CGU to materially exceed their recoverable amounts.

(c) Concession rights Concession assets represent exclusive rights relating to import and distribution of rice in Malaysia. The rights enable the

Group to amongst others, procure, import, process and distribute rice in Malaysia. The rights also include the maintenance of the rice stockpile, the distribution of paddy price subsidies to farmers on behalf of the Government, the management of the Bumiputra Rice Millers Scheme and acting as a buyer of last resort at the Guaranteed Minimum Price of paddy. Since concession rights are intangible assets with finite life, the impairment assestment is only performed when there is an indication that there is an impairment on the performed assets and such indication does not exist during the financial year.

(d) Patent

Patent costs comprise the purchase cost of a patent for the process of eliminating the traditional rubber odour from processed raw natural rubber. The patent is amortised on a straight-line basis over its estimated economic useful life of 20 years and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date.


12. DEfERRED tAXAtIoN

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Net deferred tax liabilities:At 1 January 278,472 287,366 16,500 4,012Recognised in income statements (Note 33) 38,687 (7,625) (16,361) 12,489(Under)/Over provision in prior year (Note 33) (6,373) (2,292) 337 (1)Acquisition of subsidiary companies 6,908 1,023 - -Exchange differences 129 - - -

At 31 December 317,823 278,472 476 16,500

Presented after appropriate offsetting as follows:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Deferred tax liabilities (“DTL”) 377,404 365,212 476 16,500Deferred tax assets (“DTA”) (59,581) (86,740) - -

317,823 278,472 476 16,500

The components and movements of deferred tax liabilities and assets of the Group and of the Company during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group:

Accelerated capital fair value allowances adjustments others total RM’000 RM’000 RM’000 RM’000

At 1 January 2011 316,492 221,123 1,373 538,988Acquisition of subsidiary companies 2,682 10,618 - 13,300Over provision in prior year 240 - - 240Recognised in income statement 35,461 (13,639) (778) 21,044

At 31 December 2011 354,875 218,102 595 573,572


12. DEfERRED tAXAtIoN (CoNtINUED)

Deferred tax liabilities of the Group: (continued)

Accelerated capital fair value allowances adjustments others total RM’000 RM’000 RM’000 RM’000

At 1 January 2010 279,134 237,402 (438) 516,098Acquisition of subsidiary companies 1,070 - - 1,070Over/(Under) provision in prior year 3,603 (305) - 3,298Recognised in income statement 32,685 (15,974) 1,811 18,522

At 31 December 2010 316,492 221,123 1,373 538,988

Deferred tax assets of the Group:

Unutilised Unused capital and tax agriculture losses allowances others total RM’000 RM’000 RM’000 RM’000

At 1 January 2011 69,681 129,094 61,741 260,516Acquisition of subsidiary companies 3,441 - - 3,441Under provision in prior year - 406 - 406Recognised in income statement 8,003 (4,946) (11,671) (8,614)

At 31 December 2011 81,125 124,554 50,070 255,749

At 1 January 2010 62,261 122,788 43,683 228,732Acquisition of subsidiary companies 47 - - 47Under provision in prior year 3,018 2,316 3 5,337Recognised in income statement 4,355 3,990 18,055 26,400

At 31 December 2010 69,681 129,094 61,741 260,516




Deferred tax liabilities of the Company:

Accelerated capital Dividend allowances receivables total RM’000 RM’000 RM’000

At 1 January 2011 25 16,475 16,500Recognised in income statement 451 (16,475) (16,024)

At 31 December 2011 476 - 476

At 1 January 2010 1 4,125 4,126Recognised in income statement 24 12,350 12,374

At 31 December 2010 25 16,475 16,500

Deferred tax assets of the Company:

Unutilised provisions capital and others allowance total RM’000 RM’000 RM’000

At 1 January 2011 - - -Recognised in income statement 49 - -

At 31 December 2011 49 - -

At 1 January 2010 - 114 114Recognised in income statement - (114) (114)

At 31 December 2010 - - -

Deferred tax assets have not been recognised in respect of the following items:

Group

2011 2010 RM’000 RM’000

Unused tax losses 245,945 229,202Unutilised capital and agriculture allowances 4 4,265 19,393Other deductible temporary differences 4,653 -

294,863 248,595



Deferred tax assets have not been recognised in respect of the following items: (continued)

The unused tax losses and unutilised capital and agriculture allowances are available indefinitely for offset against future taxable profits of the subsidiary companies in which those items arose. Deferred tax assets have not been recognised in respect of these items as they are not available for offset against taxable profits of other subsidiary companies in the Group and they have arisen in subsidiary companies that have a recent history of business losses. The unused tax losses, unutilised capital and agriculture allowances and other deductible temporary differences do not expire under the current tax legislation.

The recognition of the deferred tax assets is dependent on future taxable profits in excess of profits arising from the reversal of existing taxable temporary differences. The evidence used to support this recognition is based on the management’s budget and relevant business plans, which shows that it is probable that the deferred tax assets would be recognised in future years.

13. INVENtoRIEs

Group

2011 2010 RM’000 RM’000

At cost Raw sugar 190,024 281,112Refined sugar 34,750 51,854Stock-in-transit 55,609 59,272Oil palm products 35,537 25,643Spares and consumables 94,314 41,888Cattles - 2,467Nurseries 12,751 7,868Paddy and rice 739,667 535,712Raw materials 74,661 5,107Finished goods - non-rice 10,181 32,306Finished goods - oil palm 43,048 -Work-in-progress 5,402 -

1,295,944 1,043,229At net realisable valueFinished goods - rubber products 76,414 -Cattles 703 767

1,373,061 1,043,996

The inventories above are net of inventories written down to net realisable value and inventories written off amounting to RM8,486,000 and RM39,000 (2010: RM209,000 and RM Nil), respectively.

The Group manages the Government Rice Stockpile of 239,000 metrics tonnes. The stockpile rice held on behalf of the Government is excluded from the inventories of the Group.



14. tRADE RECEIVAbLEs

Group

2011 2010 RM’000 RM’000

Trade receivables 792,329 704,708Less: Allowance for impairment losses (75,185) (73,792)

717,144 630,916

The Group’s normal trade credit terms range from 7 to 90 days (2010: 7 to 90 days). Other credit terms are assessed and approved on a case-by-case basis.

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows:

Group

2011 2010 RM’000 RM’000

Neither past due nor impaired 475,216 400,961Past due but not impaired:-- 1 to 30 days 81,037 21,553- 31 to 60 days 33,792 48,803- 61 to 90 days 12,161 6,535- more than 90 days 66,819 136,204

193,809 213,095Impaired 123,304 90,652

792,329 704,708

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

More than 85% (2010: 85%) of the Group’s trade receivables in the rice segment arise from the customers with more than four years of experience with the Group and losses have occurred infrequently.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.


14. tRADE RECEIVAbLEs (CoNtINUED)

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM193,809,000 (2010: RM213,095,000) that are past due at the reporting date but not impaired as these receivables arose from creditworthy debtors with no history of default in payments. Based on past experience and no adverse information to date, the Directors of the Group are of the opinion that no allowance for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are stillconsidered fully recoverable. These balances however relate mainly to customers who have never defaulted on payments but are slow paymaster and are hence, periodically monitored.

None of the Group’s trade receivables that are past due but not impaired have been renegotiated during the financial year.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Group

2011 2010 RM’000 RM’000

Movement in allowance accounts:Gross amounts of impaired trade receivables 123,304 90,652Less: Allowance for individual impairment losses (75,185) (73,792)

48,119 16,860

Allowance for individual impairment losses:At 1 January 73,792 63,179Recognised in the income statements 1,393 10,667Bad debts written off - (54)

At 31 December 75,185 73,792

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

Included in the above gross trade receivables are amounts owing by related parties as follows:

Group

2011 2010 RM’000 RM’000

Bukhary Sdn Bhd 5,000 96,362Solar Green Sdn Bhd 2,233 2,228Felda Marketing Services Sdn Bhd 9,884 8,852

17,117 107,442



14. tRADE RECEIVAbLEs (CoNtINUED)

Receivables that are impaired (continued)

The relationships with the above parties are disclosed in Note 39.

In addition to the above, included in the Group trade receivables is an aggregate amount of RM1,884,000 (2010: RM2,131,000) owing by Recent Giant Sdn Bhd (“RGSB”), Benua Haulage Sdn Bhd (“BHSB”), Fragstar Corporation Sdn Bhd (“FCSB”), Firma Rena Sdn Bhd (“FRSB”), Kien Fatt Rice Mill Sdn Bhd (“KFRMSB”) and Ban Seng Heng Rice Mill Sdn Bhd (“BSH”), companies in which certain Directors of YHL Holding Sdn Bhd, a subsidiary company of Padiberas Nasional Berhad (“Bernas”), are related byvirtue of their family relationships with the directors of RGSB, BHSB and BSH.

The Group has no significant credit risk that may arise from exposure to a single receivable or to groups of receivables except for the above amounts owing by related parties.

15. othER RECEIVAbLEs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Sundry receivables 142,436 147,597 33 31Dividend receivables - - 60,200 60,200Prepayments 3,899 2,776 - 4,285Deposits 5,437 8,682 847 980Interest receivables - 311 4,000 -Advance payment to suppliers 2,879 - - -Advance to farmers 32,755 28,405 - -Insurance claims recoverable 1,309 - - -Subsidies receivable from government 417,718 516,310 - -

606,433 704,081 65,080 65,496Allowance for impairment losses (5,358) (5,349) (17) -

601,075 698,732 65,063 65,496

Allowance for individual impairment lossesAt 1 January 5,349 5,628 - -Recognised in income statements 9 - 17 -Bad debts written off - (279) - -

At 31 December 5,358 5,349 17 -

Included in other receivables is an amount of RM5,960,000 (2010: RM5,960,000) being rental deposit and prepaid rental paid to Yew Poe Hai and Yew Chor Khooi, where the former is an alternate director of YHL Holding Sdn Bhd (“YHL”), a subsidiary company of Bernas, and the latter is connected to certain directors of YHL by virtue of his family relationship.

Subsidies receivable from the Government of Malaysia are in relation to the government assistance received to reduce the cost of raw materials and consumables as disclosed in Note 29.

Other than the above receivables, the Group is not exposed to a single debtor or to groups of debtors that resulted in significant concentration of credit risk from other receivables to the Group.



16. AMoUNt oWING by/to sUbsIDIARy CoMpANIEs

Company

2011 2010 RM’000 RM’000

Amount owing by subsidiary companies 37,122 93,797Less: Allowance for impairment losses (33,944) (34,629)

3,178 59,168

Amount owing to subsidiary companies 889 45,093

(a) The amount owing by subsidiary companies represents unsecured advances which are repayable on demand. Interest is charged at rate of 5.0% (2010: 5.0%) per annum.

(b) The amount owing to subsidiary companies represents unsecured interest free advances which are repayable on demand.

17. AMoUNt oWING by/to AssoCIAtED CoMpANIEs

Group

2011 2010 RM’000 RM’000

Amount owing by associated companies 73,322 45,479Less: Allowance for impairment losses (24,999) (24,999)

48,323 20,480

Analysed as:Trade 26,351 19,351Non-trade 21,972 1,129

48,323 20,480

Amount owing to associated companies:Trade 335 -Non-trade 442 304

777 304

Allowance for impairment lossesAt 1 January 24,999 25,267Recognised in the income statements - (268)

At 31 December 24,999 24,999

The amount owing by/to associated companies arising from non-trade transaction represents unsecured interest free advances, and is repayable on demand.


18. DERIVAtIVEs

Group

2011 2010 RM’000 RM’000

Derivative assets Fair value of foreign exchange forward contracts 218 -

Derivative liabilities Fair value of foreign exchange forward contracts (2,964) -

foreign exchange forward contracts Nominal value 183,201 -

Foreign exchange forward contracts are used to hedge the Group’s sales and purchases denominated in United States Dollars and Euros for which firm commitments existed at the reporting date.

During the financial year, the Group recognised a net gain of RM3,852,000 (2010: None) arising from fair value changes of derivatives. The fair value changes are attributable to changes in foreign exchange spot and forward rates. The method and assumptions applied in determining the fair values of derivatives are disclosed in Note 41.

19. CAsh AND bANK bALANCEs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Fixed deposits with:

- licensed banks 510,092 143,080 10,156 -- other licensed financial institutions 98,911 88,653 - -

609,003 231,733 10,156 -Cash and bank balances 203,585 243,523 17,010 65,840

812,588 475,256 27,166 65,840

(a) The fixed deposits above include Islamic deposits amounted to RM5,911,000 (2010: RM6,725,000) in relation to the Islamic Debts Securities obtained by the Group as detailed in Note 23(b).

The Islamic deposits are held in trust for the benefit of the Islamic Securities Investors and therefore are not available for use by the Group. The deposits comprise the next profit payment in respect of the Sukuk Al-Ijarah of RM5,911,000 (2010: RM6,725,000).

(b) Included in fixed deposits above is RM37,506,000 (2010: RM28,480,000) pledged to licensed banks for banking facilities granted to certain subsidiary companies as disclosed in Note 23.


19. CAsh AND bANK bALANCEs (CoNtINUED)

(c) Included in cash and bank balances is an interest bearing sinking fund account amounting to RM2,375,000 (2010: RM40,300,000) for the purpose of the Company’s annual repayment of term loan principal amount as and when it falls due.

(d) The interest rates and maturities of other deposits range from 2.30% to 14.00% (2010: 1.02% to 3.45%) per annum and 1 to 365 days (2010: 4 to 365 days), respectively.

20. tRADE pAyAbLEs

The normal trade credit terms granted to the Group ranges from 30 to 90 days (2010: 7 to 90 days).

Included in trade payables are amounts due to related parties as follows:

Group

2011 2010 RM’000 RM’000

Bukhary Sdn Bhd 121 163SKS Transport Sdn Bhd 14 4

21. othER pAyAbLEs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Sundry payables 255,326 224,887 449 311Interest payables 5,742 9,906 5,742 5,982Accruals 80,118 52,836 4,219 2,362Deposits 3 3 - -Dividend payables 199 66 199 66

341,388 287,698 10,609 8,721

These amounts are unsecured, interest-free and are payable on demand in cash and cash equivalents.



22. hIRE pURChAsE AND fINANCE LEAsE pAyAbLEs

Group

2011 2010 RM’000 RM’000

(a) Minimum hire purchase and lease payments Payable within one year 4,304 3,172 Payable between one and two years 2,769 2,200 Payable between two and five years 4,017 4,105

11,090 9,477 Less: Future finance charges (1,625) (1,761)

Present value of hire purchase and finance lease liabilities 9,465 7,716

b) Present value of hire purchase and finance lease liabilities Payable within one year 2,977 2,815 Payable between one and two years 3,739 1,952 Payable between two and five years 2,749 2,949

9,465 7,716

Analysed as: Repayable within twelve months 2,977 2,815 Repayable after twelve months 6,488 4,901

9,465 7,716

Interest is charged at rates between 2.50% and 7.42% (2010: 1.75% and 7.80%) per annum.



23. boRRoWINGs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

short term borrowings: Revolving credits- secured 176,868 156,000 - -- unsecured 158,300 150,664 87,300 71,300

335,168 306,664 87,300 71,300

Term loans (secured) 186,032 198,985 72,807 72,807

521,200 505,649 160,107 144,107

Bill payables, bankers’ acceptance and other trade financing - secured 44,963 - - - - unsecured 1,017,580 746,926 - -

Bank overdraft - secured 1,994 - - - - unsecured 2,247 4,234 - -

Islamic debts securities: - Sukuk Al-Ijarah (secured) 30,000 35,000 - -

Islamic debts securities: - Murabahah Commercial Papers/Medium Term Notes (“Murabahah CP/MTN”) (secured) 100,000 - - -

1,717,984 1,291,809 160,107 144,107

Long term borrowings:

Term loans (secured) 900,785 938,077 509,650 582,458

Islamic debts securities: - Sukuk Al-Ijarah (secured) 120,000 150,000 - - - Sukuk Al-Ijarah (unsecured) 747,750 398,372 - - - Murabahah Commercial Papers/Medium Term Notes (“Murabahah CP/MTN”) (secured) - 100,000 - -

1,768,535 1,586,449 509,650 582,458


23. boRRoWINGs (CoNtINUED)

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

total borrowings:

Revolving credits 335,168 306,664 87,300 71,300Term loans 1,086,817 1,137,062 582,457 655,265Bill payables, bankers’ acceptance and other trade financing 1,062,543 746,926 - -Bank overdraft 4,241 4,234 - -Islamic debts securities 997,750 683,372 - -

3,486,519 2,878,258 669,757 726,565

(a) In 2009, the Company obtained term loan facilities up to RM1.0 billion (“the TL Facility”) to finance the acquisition of Bernas.

The TL Facility is secured by way of:

(i) Memorandum of deposit of up to four hundred and seventy million (470,000,000) issued and fully paid ordinary shares of RM1 each in Bernas;

(ii) Memorandum of deposit of up to three hundred and sixty nine million (369,000,000) issued and fully paid ordinary shares of RM1 each in TPB;

(iii) Memorandum of up to one hundred and fifty million (150,000,000) Irredeemable Convertible Unsecured Loan Stock in TPB;

(iv) Memorandum of deposit over the entire paid-up capital in Central Sugars Refinery Sdn Bhd (“CSR”) of thirty three million (33,000,000) ordinary shares of RM1.00 each; and

(v) First legal charge over the revenue and sinking fund accounts.

In addition, the Company shall observe the following security covenants in respect of the TL Facility:

(i) The aggregate value of the securities pledged shall not be less than 2 times (“minimum threshold”) of the loan outstanding at all times;

(ii) The value of CSR shares shall be based on CSR’s net assets, which shall not be lower than RM7.50 per share at all times; (iii) The shareholders’ fund is not less than RM1,000,000,000 at all times; and

(iv) The gearing ratio is to be maintained at all times at not more than 1.0 times.

In the event the security value falls below the minimum threshold, the Company shall pledge additional security to maintain the minimum threshold within five working days, failing which, an additional interest charge of one percent (1%) per annum shall be imposed by the lender above the interest rate.



(b) The Sukuk of RM750 million nominal value of Islamic Commercial Papers (“ICP”) and/or Medium Term Notes (“MTNs”) is issued under the Islamic principle of Musyarakah which is a partnership contract (“Sukuk”) obtained by Bernas. As at 31 December 2011, Bernas has issued RM750,000,000 ICP/MTN programme. This Sukuk will mature on 20 January 2014 (RM350,000,000) and 7 September 2015 (RM400,000,000).

The Sukuk is initially stated at cost, being the fair value of the consideration received. After initial recognition, the profit element attributable to the Sukuk in each period is recognised as an expense at a constant rate to its maturity. The profit is payable semi-annually in arrears.

(c) In 2008, the Group had obtained the approval of the Securities Commission for the issuance of the Islamic Debt Securities via Tradewinds Plantation Capital Sdn Bhd (“TPCSB”), a special purpose company set up to facilitate the issuance of the Islamic Debt Securities.

The Islamic Debt Securities comprise the following:

(i) RM210 million Sukuk Al-Ijarah which was issued on 18 December 2007, of which RM60 million was redeemed up to 31 December 2011; and

(ii) Up to RM190 million Murabahah Commercial Papers/Medium Term Notes Programme (“Murabahah CP/MTN”).

The Islamic Debt Securities are secured by the first and second legal charges over the freehold land, leasehold land and palm oil mills owned by certain subsidiary companies. Fixed and floating charges over plantation assets of certain subsidiary companies.

The Islamic Debt Securities are repayable by installments of varying amounts over the periods as disclosed in Note 23(g).

(d) Secured revolving credits are secured by fixed charges over a certain long term leasehold land of certain subsidiary companies.

(e) Other secured term loans are secured by way of:

(i) the first and second legal charges over the freehold land, leasehold land, building, plantations and palm oil mill owned by certain subsidiary companies of the Company; and

(ii) Fixed deposits placed with licensed bank as disclosed in Note 19.

(f) The range of interest or profit rates on borrowings during the financial year is as follows:

Group Company

2011 2010 2011 2010 % p.a. % p.a. % p.a. % p.a.

Term loans- fixed rate 5.20-7.50 3.20-7.80 - -- floating rate 4.26-10.25 3.20-5.80 5.56-5.99 5.11-5.80Revolving credits (floating) 4.00-10.25 2.92-5.80 3.71-4.95 2.96-4.54Bill payables, bankers’ acceptance and other trade financing (floating) 2.96-10.25 2.43-4.72 - -Islamic debts securities:- Sukuk Al-Ijarah (fixed) 4.70-5.70 4.95-5.70 - -- Murabahah Commercial Papers (floating) 4.45-4.55 4.45-4.55 - -Bank overdraft (floating) 7.10-9.60 6.30-8.55 8.30-8.60 7.05-8.30




(g) Contractual terms of borrowings are as follows:

Maturity profile total carrying Group Interest/ < 1 year 1 – 2 years 2 – 5 years > 5 years amount 2011 profit RM’000 RM’000 RM’000 RM’000 RM’000

Unsecured - Revolving credits Floating rate 341,946 - - - 341,946 - Bill payables, bankers’ acceptance and other trade financing Floating rate 833,934 - - - 833,934 - Bank overdraft Floating rate 2,247 - - - 2,247 secured - Term loans Floating rate 161,762 138,385 639,652 79,198 1,018,997 - Term loans Fixed rate 24,270 43,550 - - 67,820 - Islamic debts securities - Sukuk Al-Ijarah Fixed rate 30,000 30,000 837,750 - 897,750 - Murabahah Commercial Papers Floating rate 100,000 - - 100,000 - Revolving credits Floating rate 173,402 - - - 173,402- Bill payables, bankers’ acceptance and other trade financing Floating rate 48,429 - - - 48,429 - Bank overdraft Floating rate 1,994 - - - 1,994

1,717,984 211,935 1,477,402 79,198 3,486,519

2010

Unsecured- Revolving credits Floating rate 150,664 - - - 150,664 - Bill payables, bankers’ acceptance and other trade financing Floating rate 746,926 - - - 746,926 - Bank overdraft Floating rate 4,234 - - - 4,234 secured - Term loans Floating rate 154,749 139,250 368,300 356,496 1,018,795 - Term loans Fixed rate 44,236 26,476 46,039 1,516 118,267 - Islamic debts securities - Sukuk Al-Ijarah Fixed rate 35,000 30,000 503,372 15,000 583,372 - Murabahah Commercial Papers Floating rate - 100,000 - - 100,000 - Revolving credits Floating rate 156,000 - - - 156,000

1,291,809 295,726 917,711 373,012 2,878,258




(g) Contractual terms of borrowings are as follows: (continued)

Maturity profile total carrying Company Interest/ < 1 year 1 – 2 years 2 – 5 years > 5 years amount 2011 profit RM’000 RM’000 RM’000 RM’000 RM’000

Unsecured - Revolving credits Floating rate 87,300 - - - 87,300 secured - Term loan Floating rate 72,807 72,807 436,843 - 582,457

160,107 72,807 436,843 - 669,757

2010 Unsecured - Revolving credits Floating rate 71,300 - - - 71,300 secured - Term loan Floating rate 72,807 72,807 218,421 291,230 655,265

144,107 72,807 218,421 291,230 726,565

24. REtIREMENt bENEfIt obLIGAtIoNs

A subsidiary company, CSR, operates a funded, defined benefit Retirement Benefit Scheme (“the Funded Scheme”) for its eligible employees. Contributions to the Funded Scheme are to be made to a separately administered fund. Under the Funded Scheme, eligible employees are entitled to retirement benefits of 7.5% of cumulative salary on attainment of the retirement age of 55. The defined benefit fund is actuarially valued not less than once in every 3 years. The latest valuation by an independent professional actuary was carried out on 10 February 2012.

Certain subsidiary companies provide an unfunded, defined benefit Retirement Benefit Scheme (“the Unfunded Scheme”) for its eligible employees. Under the Unfunded Scheme, full provision has been made for retirement benefits payable to all eligible employees who have completed their qualifying period of service of 10 years, based on their last drawn salaries as set out in the policies. Should an employee leave after completing the qualifying period of service but before attaining the retirement age, the provision made for the employee is written back. The latest valuation by independent professional actuaries were carried out on 29 March and 23 December 2009.


24. REtIREMENt bENEfIt obLIGAtIoNs (CoNtINUED)

(a) The amounts recognised in the statement of financial position are determined as follows:

Group

2011 2010 RM’000 RM’000

Present value of funded defined benefit obligations 5,432 4,972Present value of unfunded defined benefit obligations 80,759 77,834Discretionary unfunded defined benefits 2 ,321 -Fair value of plan assets (8,257) (6,907)

80,255 75,899Unrecognised actuarial gain/(loss) 1,357 (42)Unrecognised net transition asset 92 507

Net liability 81,7047 6,364

Analysed as: Current liabilities 6 ,190 4,719Non-current liabilities 75,514 71,645

81,704 76,364

(b) The amounts recognised in the income statements are as follows:

Group

2011 2010 RM’000 RM’000

Current service cost 5,551 5,478 Interest cost 4,932 4,632 Expected return on plan assets (309) (229)Amortisation of actuarial loss 70 75 Net transition asset recognised during the financial year (466) (465)Reversal of provision for discretionary unfunded retirement benefit obligations (221) -

Total (included in staff costs) 9,557 9,491




(c) Movements in the net liability during the financial year are as follows:

Group

2011 2010 RM’000 RM’000

At 1 January 76,364 73,340 Acquisition of subsidiary companies 2,560 - Recognised in the income statements 9,557 9,491 Exchange difference (18) - Benefits paid (6,759) (6,467)

At 31 December 81,704 76,364

(d) Changes in the present value of funded defined benefit obligations during the financial year are as follows:

Group

2011 2010 RM’000 RM’000

At 1 January 4,972 4,767 Service cost 459 390 Interest cost 316 304 Benefits paid (421) (546)Actuarial gain due to actual experience 106 57

At 31 December 5,432 4,972

(e) Changes in the present value of unfunded defined benefit obligations during the financial year are as follows:

Group

2011 2010 RM’000 RM’000

At 1 January 77,834 74,613 Service cost 4,998 5,284 Interest cost 4,616 4,329 Benefits paid (6,759) (6,467)Amortisation of actuarial loss 70 75

At 31 December 80,759 77,834



(f) Changes in provision for discretionary unfunded defined retirement obligations:

Group

2011 2010 RM’000 RM’000

At 1 January - - Arising from acquisition of subsidiary companies 2,560 -Reversal during the year (221) -Exchange differences (18) -

At 31 December 2,321 -

Analysed as:Current:Not later than 1 year 371 -

Non-current:Later than 1 year and not later than 5 year 674 -More than 5 years 1,276 -

1,950 -

2,321 -

(g) Changes in the fair value of plan assets of funded defined benefits plan during the financial year are as follows:

Group

2011 2010 RM’000 RM’000

At 1 January 6,907 5,385Expected return on plan assets 309 229Benefits paid (421) (546)Actuarial gain on plan assets 1,462 1,839

At 31 December 8,257 6,907




(g) Changes in the fair value of plan assets of funded defined benefits plan during the financial year are as follows: (continued)

Principal actuarial assumptions used:

Group

2011 2010 % %

Discount rate 6.0 - 6.3 6.0 - 6.6Expected return on plan assets 5.0 4.6Price inflation 3.5 3.5Expected rate of salary increase 5.0 - 7.0 5.0 - 7.0

25. shARE CApItAL

2011 2010

Number Number of shares Amount of shares Amount ’000 RM’000 ’000 RM’0000

Ordinary shares of RM1 each at the beginning and end of financial year:

Authorised 500,000 500,000 500,000 500,000

Issued and fully paid 296,471 296,471 296,471 296,471

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regards to the Company’s residual assets.


26. REsERVEs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Non-distributable: Share premium 84,171 84,171 84,171 84,171 Capital reserves 3,684 3,684 - - Exchange reserves 10,412 9,673 - - Available-for-sale reserves 167 460 (307) (513)

Distributable: Retained profits 1,963,973 1,622,469 922,609 901,801 Capital reserves 2,077 2,077 497 497

2,064,484 1,722,534 1,006,970 985,956

The movements in each category of reserve are reflected in the statements of changes in equity.

(a) Share premium

Share premium represents the surplus of the proceeds from the issuance of ordinary shares of the Company over the nominal value of those issued shares.

(b) Capital reserves (i) Distributable capital reserve comprises surpluses arising from disposals of quoted investments and government

acquisitions of land in previous years. (ii) Non-distributable capital reserve represents a transfer from revenue reserve arising from the issuance of bonus issue by

certain subsidiary companies in previous years. (c) Exchange translation reserves The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the

financial statements of foreign operations whose functional currencies are different from the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(d) Available-for-sale reserves Fair value gains or losses arising on financial assets classified as available-for-sale represents the cumulative fair value

changes, net of tax, of available-for-sale financial assets until they are disposed of or impaired.


26. REsERVEs (CoNtINUED)

(e) Retained profits Under the single-tier system which came into effect from year of assessment 2008, companies are not required to have tax

credits under Section 108 of the Income Tax Act, 1967 (“Section 108”) for dividend payment purposes. Dividends under this system are tax exempt in the hands of the shareholders.

Companies with Section 108 credits as at 31 December 2007 may continue to pay franked dividends until the Section 108

is exhausted or up to the maximum allowed time frame until 31 December 2013, whichever is earlier, unless they opt to disregard the Section 108 credits to pay single-tier dividend under the special transitional provisions of the Finance Act 2008.

Subject to agreement by the Inland Revenue Board, the Company has sufficient tax credit under Section 108 available to frank dividend payments of approximately RM28.3 million (2010: RM117.3 million) out of its retained profits as at 31 December 2011. The remaining profits of RM894.3 million (2010: RM784.5 million) can be distributed as exempt dividends under the single-tier tax system.

27. REVENUE

Revenue of the Company includes dividend income, interest income and management fees.

Revenue of the Group includes sales of palm products, sales of refined sugar and molasses, sales of rubber products, sales of rice, interest income, rental income and management fees.

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Analysis of revenue

Sales of goods:- rice products 3,530,732 3,172,973 - -- plantation products 1,824,233 1,021,929 - -- sugar products 1,571,952 1,353,172 - -Management fees receivable from:- subsidiary companies - - 1,200 1,200- associated companies 4,335 1,082 - -Interest income from:- subsidiary companies - - 53 1,591- quoted loan stocks - - 4,800 4,800- others 2,064 302 2,064 302Rental income from third parties 113 - - -Dividends from shares held in:- subsidiary companies - - 239,869 283,902- others 27 - - -Property development revenue - 1,921 - -

6,933,456 5,551,379 247,986 291,795



28. othER INCoME

Other income includes:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Gains on disposals of :- other investments 176 - - -- property, plant and equipment 3,352 257 2 146- assets held for sale (net) - 86 - -- associated companies 5,045 - - -Rental income 3,218 1,652 - -Interest income from fixed deposit 17,603 8,322 - -Distribution from investment management funds 299 - - -Premises running cost reimbursement income - - 4,558 -Waiver of debts from a subsidiary company - - 12,234 -Reversal of provision for retirement benefits 221 - - -Excess of fair value of net assets acquired over purchase consideration (bargain purchase gain) 18,427 55,856 - -Fair value gain on derivative instrument 3,852 - - -Scrap sales 7,938 7,909 - -

29. RAW MAtERIALs AND CoNsUMAbLEs UsED

Raw materials and consumables used is arrived at after crediting:

Group

2011 2010 RM’000 RM’000

Government subsidies 584,482 776,258

The above subsidies received during the current and previous financial years are to subsidise the price of refined sugar and as claims over part of cost on the Government Subsidised Rice (“GSR”) programme.


30. stAff Costs

Staff costs include:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Pension costs:- defined contribution plan 29,950 17,527 1,925 1,227- defined benefit plan 9,778 17,754 - -Termination benefits 47 177 - -

Included in the staff costs are the remuneration of key management personnel of the Company (excluding the Directors of the Company) as follows:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Short term employee benefits 5,781 4,561 3,907 3,124Post employment benefits:- defined contribution plan 902 643 662 469

6,683 5,204 4,569 3,593

Key management personnel other than the Directors are executives of the Group and of the Company, who have authority and responsibility for planning, directing and controlling the activities of the Group and of the Company either directly or indirectly.



31. pRofIt fRoM opERAtIoNs

Profit from operations is arrived at after charging/(crediting):

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Statutory audit fees:- auditors of the Company 1,054 257 126 70- others 563 1,081 - -Other non-audit fees:- auditors of the Company 231 51 183 48- others 888 545 32 65Company Director (Executive):- fees 93 89 40 -- other emoluments 1,788 972 1,416 896- benefits-in-kind 35 12 35 -Company Directors (Non-executive):- fees 703 671 410 386- other emoluments 1,538 1,058 518 484- benefits-in-kind 55 49 30 24Charitable contributions for Albukhary International University - 15,000 - -Fair value changes on quoted loan stocks - - (3,200) 4,800Contributions for zakat 16,224 5,049 4,052 1,054Property, plant and equipment written off 12,464 5,977 - -Biological assets written off - 16 - -Impairment loss/(Writeback of) on:- investment in subsidiary companies - - 100 -- trade receivables 1,393 10,667 - -- other receivables 9 - 17 -- amount owing by subsidiary companies - - 450 13,410- amount owing by associated companies - (268) - -Inventories written off 39 - - -Inventories written down 8,486 209 - -Bad debts written off 9 - - -Rental expenses:- premises 54,162 55,634 2,450 2,009- other equipment and vehicles 6,214 5,370 - -Net loss/(gain) on foreign exchange:- realised 30 686 - -- unrealised 6,796 (2,398) - -Provision for retirement benefits 9,557 9,491 - -



32. fINANCE Costs

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Interest expense on:- borrowings 135,232 109,241 41,835 43,009- hire purchase and finance lease 20 386 - -- amount owing to subsidiary companies - - 1,220 9

135,252 109,627 43,055 43,018

33. tAXAtIoN

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Tax expense for the financial year:- Malaysian income tax 197,563 203,860 35,969 43,000- real property gains tax 19 - - -

Deferred tax (Note 12):- relating to origination and reversal of temporary differences 38,687 (7,625) (16,361) 12,489

(Over)/under provision in prior years:- Malaysian income tax (670) (14,162) (1,004) (2,234)- deferred tax (Note 12) (6,373) (2,292) 337 (1)

(7,043) (16,454) (667) (2,235)

Total income tax expense 229,226 179,781 18,941 53,254

Malaysian income tax is calculated at the Malaysian statutory tax rate of 25% (2010: 25%) of the estimated assessable profit for the financial year.


33. tAXAtIoN (CoNtINUED)

A reconciliation of income tax expense applicable to profit before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Profit before taxation 897,033 806,595 173,162 213,274

Taxation at statutory tax rate of 25% (2010: 25%) 224,258 201,649 43,290 53,318Income not subject to tax (9,151) (16,355) (26,435) (3,901)Double deduction expenses ( 95) - - -Expenses not deductible for tax purposes 20,685 18,077 2,753 6,072Utilisation of current year reinvestment allowance (3,494) (6,097) - -Utilisation of previously unrecognised tax losses and capital allowances (458) (446) - -Deferred tax assets not recognised 11,567 9,550 - -Over provision of taxation in prior years (670) (14,162) (1,004) (2,234)(Over)/ Under provision of deferred taxation in prior years (6,373) (2,292) 337 (1)Effect of lower tax rates in other countries (1,038) (743) - -Tax incentive - (848) - -Share of results of associated companies (7,158) (8,468) - -Share of results in joint venture (1,259) (316) - -Reversal of deferred tax liability on revaluation surplus upon realisation of leasehold land (108) - - -Real property gains tax 19 - - -Current year loss not eligible to be carried forward 2,501 232 - -

Tax expense for the financial year 229,226 179,781 18,941 53,254


34. EARNINGs pER shARE AttRIbUtAbLE to EqUIty hoLDERs of thE CoMpANy

(a) basic Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the

Company by the weighted average number of ordinary shares in issue during the financial year.

2011 2010 RM’000 RM’000

Profit net of tax attributable to equity holders of the Company used in computation of basic earnings per share 474,917 481,139

Number of ordinary shares in issue (in ‘000) 296,471 296,471

Basic earnings per share for the year (sen) 160.19 162.29

(b) Diluted

Diluted earnings per share is not presented as the Company has no potentially dilutive shares in issue.

35. DIVIDENDs

Company

2011 2010 RM’000 RM’000

Interim dividend of 20 sen gross per share less 25% income tax in respect of the financial year ended 31 December 2010, declared on 14 January 2011, and paid on 28 February 2011. 44,471 -

Final dividend of 20 sen gross per share less 25% income tax in respect of the financial year ended 31 December 2010, declared on 28 June 2011, and paid on 29 July 2011. 44,471 -

Interim dividend of 20 sen gross per share less 25% income tax in respect of the financial year ended 31 December 2011, declared on 30 September 2011, and paid on 3 November 2011. 44,471 -

Interim dividend of 10 sen gross per share less 25% income tax in respect of the financial year ended 31 December 2009, declared on 23 February 2010, and paid on 21 May 2010. - 22,235

Final dividend of 5 sen gross per share less 25% income tax in respect of the financial year ended 31 December 2009, declared on 22 June 2010, and paid on 30 July 2010. - 11,118

133,413 33,353



35. DIVIDENDs (CoNtINUED)

At the forthcoming Annual General Meeting on 28 June 2012, a total final dividend of 25 sen gross per share, amounting to net dividend of RM64,680,828 in respect of the current financial year will be proposed for shareholders’ approval.

The total final gross dividend of 25 sen per share is made up of:

RM’000

12.73 sen gross dividend less 25% income taxation 28,31012.27 sen gross tax exempt dividend under single-tier system 36,371

64,681

The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by shareholders, will be accounted for in equity as an appropriation of retained profits in the financial year ending 31 December 2012.

36. pADDy pRICE sUbsIDy ACCoUNt

Pursuant to an agreement between Bernas and the Government of Malaysia dated 12 January 1996 (“Bernas Agreement”), the Government shall deposit the funds under the Paddy Price Subsidy Scheme into bank accounts with licensed banks or financial institutions and operated by Bernas for the sole purpose of disbursement of subsidies to the farmer. The unutilised portion of the fund is to be placed into fixed deposits accounts with licensed banks or financial institutions approved by the Government.

Bernas is vested with the responsibility to administer the Government’s Paddy Price Subsidy Scheme. The movement of the paddy price subsidy account which represents the paddy price subsidy to be distributed to the registered paddy farmers on behalf of the Government are as follows:

Group

2011 2010 RM’000 RM’000

Balance at 1 January 5,515 7,407Add: Government subsidy funds received 627,103 468,000 Interest income 907 525Less: Payments made during the financial year (456,066) (470,417)

Balance at 31 December 177,459 5,515

The amounts were not included in the assets and liabilities of the Group.



37. CApItAL CoMMItMENts

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Property, plant and equipment:- authorised and contracted for 140,602 177,590 - -- authorised but not contracted for 321,817 339,353 696 2,680

Plantation development expenditure:- authorised and contracted for 48,760 77,575 - -- authorised but not contracted for 64,896 46,303 - -

Acquisition of subsidiary companies:- authorised and contracted for - 140,000 - -

Intangible assets - patent- authorised and contracted for 300 - - -

Subscription of redeemable convertible preference shares in a jointly controlled entity:- authorised and contracted for 5,000 5,000 - -

Share of capital commitment of a jointly controlled entity- authorised and contracted for 1,112 379 - -

Share of capital commitment of associated companies- authorised and contracted for 2,754 3,065 - -- authorised but not contracted for 705 657 - -

Gas piping contribution- authorised and contracted for 9,160 - - -

595,106 789,922 696 2,680


38. MAtERIAL LItIGAtIoNs AND CoNtINGENt LIAbILItIEs

(a) Bernas was served with a Writ of Summons and Statement of Claim dated 5 May 2006 initiated by A Halim bin Hamzah and 291 others (“the Plaintiffs”). The civil suit is brought by the Plaintiffs against Bernas and 24 others (“the Defendants”) for, inter alia, the following claims:

(i) A declaration that the 2000 Voluntary Separation Scheme initiated by Bernas is void and of no effect;

(ii) A declaration that the Defendants had, by unlawful means, conspired and combined together to defraud or injure the Plaintiffs;

(iii) Alternatively, a declaration that the Defendants had acted in furtherance of a wrongful conspiracy to injure the Plaintiffs;

(iv) Damages to be assessed; and

(v) Interest and costs;

In relation to the suit filed by the Plaintiffs against the Defendants, Bernas had filed Summons in Chambers pursuant to Order 12 Rule 7 and/or Order 18 Rule 19 of the Rules of the High Court 1980 (“the Bernas’ Application”) for the following:

(i) That the Writ and Statement of Claim as against the said Defendants be struck out as it discloses no reasonable course of actions, scandalous, frivolous, vexatious and/or is an abuse of process of the Court;

(ii) That the cost of the said Order is to be borne by the Plaintiffs; and

(iii) Such further or other orders as the Court deemed fit.

The Court has granted Order In Terms for Bernas’ Application to strike out the 21st Defendant with cost payable to Bernas but dismissed the Company’s application to strike out the 2nd to 12th Defendants on 3 September 2007. On 3 March 2008, the Court dismissed Bernas’ application to strike out the 2nd to 12th Defendants from being the party to the suit. Bernas’ solicitors had on 17 April 2008, filed Statements of Defence for 2nd to 12th Defendants. The matter went for hearing from 13 to 16 March 2012. The Court has fixed 30 April 2012 for decision of the said matter.

(b) On 6 June 2006, Bernas was served with a sealed copy of Originating Summons and Affidavit in Support (“the Plaintiffs Application”) affirmed by Zainon binti Ahmad for and on behalf of the 690 others (“the Plaintiffs”) for the following claims:

(i) A declaration that the Plaintiffs as employees of Bernas whose service of employment has been terminated before

attaining the age of 55 due to reasons other than that of compulsory retirement, optional retirement, death or a disability are entitled to the Retirement/Termination Benefits provided for in clause 7.3 of the ‘Terma dan Syarat Perkhidmatan Kumpulan Eksekutif dan Kumpulan Bukan Eksekutif’ and in clause 5.5 of the ‘Buku Panduan Kumpulan Eksekutif dan Bukan Eksekutif’;

(ii) An order that Bernas pays the Retirement/Termination benefits due to the Plaintiffs as follows:

- for those Plaintiffs who have attained the age of retirement of 55 years as at the date of the order, the Retirement/Termination Benefits be paid directly to them; and

- for those Plaintiffs who have not attained the age of retirement of 55 years as at the date of the order, the

Retirement/Termination Benefits be paid into their accounts at the Employees Provident Fund;



38. MAtERIAL LItIGAtIoNs AND CoNtINGENt LIAbILItIEs (CoNtINUED)

(b) On 6 June 2006, Bernas was served with a sealed copy of Originating Summons and Affidavit in Support (“the Plaintiffs Application”) affirmed by Zainon binti Ahmad for and on behalf of the 690 others (“the Plaintiffs”) for the following claims: (continued)

(iii) Interest at the rate of 8% per annum from 1 January 2004 to the date of payments as ordered by the Court;

(iv) Such further orders, directions or relief that the Court deems fit and appropriate; and

(v) Costs to be paid by Bernas to the Plaintiffs. The Court had, on 13 March 2008, allowed Plaintiff’s Application with cost and Bernas had instructed its solicitors to file

Grounds of Appeal to the Court of Appeal. The Court of Appeal had on 24 August 2009 allowed Bernas’ application to amend the Memorandum of Appeal and the Notice of Appeal. The Court of Appeal fixed 18 January 2011 as the hearing date for the appeal and that the decision of the same fixed for 8 February 2011. Matter came up for decision on 7 February 2011 wherein the Court of Appeal allowed the Bernas’ appeal and set aside the High Court order with no order as to costs. Plaintiffs had, through their solicitors, filed an application for leave to appeal to the Federal Court on 7 March 2011 against the entire decision of the Court of Appeal given on 7 February 2011. The Plaintiffs application for leave to appeal at the Federal Court has been allowed. The matter came up for hearing on 13 March 2012 at the Federal Court and the court had reserved their judgement until further notice.

(c) On 4 January 2010, Bernas was served with a sealed copy of Originating Summons and Affidavit in Support (“the Plaintiffs

Application”) affirmed by Rahman bin Samud for and on behalf of the 242 others (“the Plaintiffs”) for the following claims:

(i) A declaration that the Plaintiffs as employees of Bernas whose service of employment has been terminated before

attaining the age of 55, due to reasons other than that of compulsory retirement, optional retirement, death or a disability are entitled to the Retirement/Termination Benefits provided for in clause 7.3 of the ‘Terma dan Syarat Perkhidmatan Kumpulan Eksekutif dan Kumpulan Bukan Eksekutif’ and in clause 5.5 of the ‘Buku Panduan Kumpulan Eksekutif dan Bukan Eksekutif’;

(ii) An order that Bernas pays the Retirement/Termination Benefits due to the Plaintiffs as follows:

- for those Plaintiffs who have attained the age of retirement of 55 years as at the date of the order, the Retirement/Termination Benefits be paid directly to them; and

- for those Plaintiffs who have not attained the age of retirement of 55 years as at the date of the order, the Retirement/Termination Benefits be paid into their accounts at the Employees Provident Fund;

(iii) Interest at the rate of 8% per annum from 1 January 2004 to the date of payment as ordered by the Court;

(iv) Such further orders, directions or relief that the Court deems fit and appropriate; and

(v) Costs to be paid by Bernas to the Plaintiffs.

Bernas had filed its affidavit in reply to the Affidavit in Support affirmed by the Plaintiffs. The matter came up for mention on 5 October 2010,wherein the court fixed for 15 December 2010 for further case management pending the disposal of the appeal in the Court of Appeal in relation to the civil suit filed by Zainon binti Ahmad and 690 others against Bernas. The case has been fixed for mention on 10 May 2012.

No provision was made in the financial statements of Bernas as at 31 December 2011 for the matters set out in Notes (a), (b) and (c) above as the board of Bernas, after due consultation with the Bernas’ solicitors, believes that Bernas may have a reasonable prospect of success against the Plaintiffs’ claims.


38. MAtERIAL LItIGAtIoNs AND CoNtINGENt LIAbILItIEs (CoNtINUED)

(d) During the year, Mardec Yala Co Ltd was subject to a compensation claim of Thai Baht (BHT)110.0 million (approximately RM11.039 million) for alleged wrongful transfer of shares. On 3 December 2007, the Court had dismissed the claim and issued a written judgment. However, the claimant filed an appeal against the Court decision on 3 December 2007 which was also dismissed by the Court. The claimant has again filed a second appeal to the Supreme Court on 30 July 2010. Pending the outcome of the second appeal expected to be concluded by the end of 2013, no provision has been made in the financial statements.

(e) The Company had guaranteed the bank credit facilities of a subsidiary company for RM150,000,000 (2010: RM150,000,000)

of which the outstanding balance is RM116,079,000 (2010: RM134,029,000).

39. sIGNIfICANt RELAtED pARtIEs tRANsACtIoNs

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Dividend income from:- Subsidiary companies - - 239,869 283,902

Interest income from:- Subsidiary companies - - 53 1,591- Quoted loan stocks issued by a subsidiary company - - 4,800 4,800- Bukhary Sdn Bhd iv,v - 1,961 - -

Interest expenses paid to:- Subsidiary companies - - 1,220 9

Management and agency fees from:- Subsidiary companies - - 1,200 1,200- Bukhary Sdn Bhd iv,v 3,379 4,389 - -- Solar Green Sdn Bhd i 1,222 989 - -


39. sIGNIfICANt RELAtED pARtIEs tRANsACtIoNs (CoNtINUED)

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year: (continued)

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Premise/Office rental paid to:- Zelan Corporation Sdn Bhd vii - 15 - 15- Asian Net Sdn Bhd xii 871 871 - -- Southern Edipro Packaging Sdn Bhd xiv 1,161 1,161 - -- Sin Hock Soon Trading Sdn Bhd xiv 234 234 - -- Eternal Promenade Sdn Bhd xiv 1,354 1,354 - -- TSH Realty Sdn Bhd xv 200 174 - -- Joo Seng Edar Sdn Bhd xi 330 330 - -- Kualiti Supremasi Sdn Bhd xx 456 - - -- Yew Chye Seng xvii 300 300 - -- Lim Swee Keat and Lim Eng Giap xxi 330 330 - -

Payment of volume incentive to:- Bukhary Sdn Bhd iv,v 7,572 - - -

Provision of agency services for the sale and marketing of refined sugar from:- Bukhary Sdn Bhd iv,v 8,075 6,490 - -

Purchase from:- Associated companies 306,304 100,132 - -- Tradewinds International Insurance Brokers Sdn Bhd iii 7,708 6,026 88 132- FPM Sdn Bhd xvi 1,433 - - -- Felda Agricultural Services Sdn Bhd xvi 489 423 - -- Gas Malaysia Berhad iv 34,868 33,337 - -- Euromobil Sdn Bhd xix 5,619 479 2,052 -- Rabhan Enterprise xx 283 67 - -- Faiza Marketing Sdn Bhd viii 4,418 3,073 - -- Jasmine Rice Mill (Kerpan) Sdn Bhd x 5,094 3,794 - -- Faiza Food Industries Sdn Bhd xxiv 209 84 - -- Figure Diversified Sdn Bhd xxv 798 2,381 - -- Tijarati Sdn Bhd xxvi 368 57 - -- Ikatan Supremasi Sdn Bhd xx 204 143 - -- Farhan Food Sdn Bhd xx 546 - - -





Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Provision of logistics and transportation services from:- JP Logistics Sdn Bhd vii 6,708 6,850 - -- SKS Transport Sdn Bhd vi 5,895 4,369 - -- Iman Cargo Transportation and Freight Sdn Bhd ix 599 230 - -- Sin Hock Soon Transport Sdn Bhd xiv 3,577 3,367 - -- Melia Best Sdn Bhd ix,vii 1,984 3,500 - -- Nagoya Agency xiii 4,302 4,363 - -- Joo Seng Edar Sdn Bhd xi 503 587 - -- Racktop Transport Sdn Bhd ix 5,252 5,198 - -

Trading of rice, rental of godown, machinery and wooded planks from:- Hock Chiong Co Sdn Bhd xxiii 124 134 - -- Naturewood Sdn Bhd xxiii 60 60 - -

Sales to:- Associated companies 425,918 329,494 - -- Solar Green Sdn Bhd i 21,342 17,954 - -- Bukhary Sdn Bhd iv, v - 120,662 - -- Felda Marketing Services Sdn Bhd xvi 70,510 58,846 - -- Felda Kernel Products Sdn Bhd xvi 10,641 7,976 - -- Mardec Processing Sdn Bhd xviii 5,825 - - -- DRB-Hicom Defence Technologies Sdn Bhd xix 158 - - -- Recent Giant Sdn Bhd xiv 6,794 9,517 - -- JS Sasaran Trading and Aroma Beras Edar xi 182 1,018 - -- Joo Seng Enterprise and Chop Joo Seng Sdn Bhd xi 1,279 2,038 - -- Pasar Mini Syarikat Faiza viii 440 582 - -- Ban Say Tong Sdn Bhd xxiii 1,560 1,409 - -

Reversal of late payment penalty in favour of:- Bukhary Sdn Bhd iv, v 9,919 - - -





The transactions have been entered into in the normal course of business and have been established on commercial terms that are not materially different from those obtainable in transactions with unrelated parties:

(i) Solar Green Sdn Bhd (“SGSB”) is a subsidiary of Pride Palm Oil Mill Sdn Bhd, a jointly controlled entity of the Group;

(ii) PPB Group Berhad (“PPB”) had an indirect interest in the Company through its subsidiary company, FFM Berhad

(“FFM”) and associated company, Grenfell Holdings Sdn Bhd. Pursuant to Section 6A of the Companies Act, 1965, PPB was deemed as a major shareholder of the Company until 6 January 2010;

(iii) Tradewinds International Insurance Brokers Sdn Bhd (“TIIBSB”) is a company in which a major shareholder of the Company has interest;

(iv) Gas Malaysia Berhad is a subsidiary company of MMC Corporation Berhad which is 51.76% owned by Seaport Terminal (Johore) Sdn Bhd, a wholly-owned subsidiary company of Indra Cita Sdn Bhd whose major shareholder is Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor (with 99.99% equity interest).

Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor is a director and substantial shareholder, holding 99.99% equity interest in Restu Jernih Sdn Bhd, the holding company of Perspective Lane (M) Sdn Bhd. Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor is deemed a Major Shareholder of the Company by virtue of his interests in Kelana Ventures Sdn Bhd (“Kelana Ventures”), Seaport Terminal (Johore) Sdn Bhd (“Seaport Terminal”), Restu Jernih Sdn Bhd (“Restu Jernih”) and Perspective Lane (M) Sdn Bhd (“Perspective Lane”). The total direct and indirect shareholdings of Kelana Ventures, Seaport Terminal, Restu Jernih and Perspective Lane in the Company is 42.97%;

(v) Tuan Syed Azmin bin Syed Nor is the brother of Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor and a non-independent non-executive director of the Company. Tuan Syed Azmin bin Syed Nor is also a director of KHSB Equity Sdn Bhd (“KHSB Equity”).

Bukhary Sdn Bhd (“BSB”) is an indirect subsidiary company of KHSB Equity. Mr. Chuah Seong Tat, a former non-independent non-executive director of the Company during the financial year and Encik Ahmed Kamil bin PM Mustafa Kamal, a director of Gula Padang Terap Sdn Bhd, a subsidiary company of the Company, are both directors of BSB. Encik Ahmed Kamil bin PM Mustafa Kamal is also a substantial shareholder and a director of KHSB Equity;

(vi) SKS Transport Sdn Bhd is an indirect subsidiary of KHSB Marketing Sdn Bhd (“KMSB”). KMSB is in turn a 79% subsidiary of KHSB Equity;

(vii) JP Logistics Sdn Bhd is a wholly-owned subsidiary of Johor Port Berhad which in turn is a wholly-owned subsidiary

company of MMC Corporation Berhad.

Tan Sri Dato’ Seri Syed Mokthar Shah bin Syed Nor is deemed to be a substantial shareholder of Tronoh Consolidated Malaysia Berhad due to his direct and indirect interest in Indra Cita Sdn Bhd, Seaport Terminal (Johore) Sdn Bhd and MMC Corporation Berhad pursuant to Section 6A of the Companies Act, 1965. Zelan Corporation Sdn Bhd is a wholly-owned subsidiary company of Zelan Holdings (M) Sdn Bhd which in turn is a wholly-owned subsidiary company of Tronoh Consolidated Malaysia Berhad;

(viii) Faiza Bawumi bt Syed Ahmad and Najwa bt Abu Bakar are directors of Syarikat Faiza Marketing Sdn Bhd, a subsidiary company of Bernas, hold substantial interests in Faiza Marketing Sdn Bhd and an enterprise, namely Pasar Mini Syarikat Faiza;




(ix) Iman Cargo Transportation and Freight Sdn Bhd, Melia Best Sdn Bhd and Racktop Transport Sdn Bhd are companies in which a son of Faiza Bawumi bt Syed Ahmad has substantial financial interests;

(x) Lim Kian Lai@Lim Kean Lai is a director of Jasmine Food Corporation Sdn Bhd, a subsidiary company of Bernas, holds substantial financial interests in Jasmine Rice Mill (Kerpan) Sdn Bhd;

(xi) Tee Sin Joo and Tee Sin Kong are directors of JS Jasmine Sdn Bhd, a subsidiary company of Bernas, hold substantial financial interests in Joo Seng Enterprise, JS Sasaran Trading, Aroma Beras Edar, Chop Joo Seng Sdn Bhd and Joo Seng Edar Sdn Bhd;

(xii) Asian Net Sdn Bhd is a company in which certain directors of Jasmine Food Corporation Sdn Bhd, a subsidiary company of Bernas, have substantial financial interests;

(xiii) Nagoya Agency is an entity owned by a person connected to certain directors of Jasmine Rice Mill (Tunjang) Sdn Bhd and Jasmine Rice Products Sdn Bhd, subsidiary companies of Bernas;

(xiv) Recent Giant Sdn Bhd, Sin Hock Soon Transport Sdn Bhd, Eternal Promenade Sdn Bhd, Xeng Heng Sdn Bhd, Sin Hock Soon Trading Sdn Bhd and Southern Edipro Packaging Sdn Bhd are companies connected to certain directors of YHL Holding Sdn Bhd, a subsidiary company of Bernas, by virtue of their family relationships;

(xv) Tan Gee Huat and Tho Lai Hock are directors of Tong Seng Huat Rice Trading Sdn Bhd, a subsidiary company of Bernas, hold substantial interests in TSH Realty Sdn Bhd;

(xvi) Felda Marketing Services Sdn Bhd (“FMSSB”), Felda Kernel Products Sdn Bhd (“FKPSB”), Felda Palm Industries Sdn

Bhd (“FPISB”), FPM Sdn Bhd (“FPMSB”) and Felda Agricultural Services Sdn Bhd (“FASSB”).

FMSSB, FKPSB, FPISB, FPMSB and FASSB are subsidiary companies of Felda Holdings Berhad (“Felda Holdings’).

Felda Global Ventures Holdings Bhd, who is deemed as a major shareholder of the Company, has 49% equity interest in Felda Holdings;

(xvii) Yew Chye Seng is a director of YHL Holding Sdn Bhd, a subsidiary company of Bernas; (xviii) Mardec Processing Sdn Bhd (“MPSB”) is a wholly-owned subsidiary company of Mardec Berhad which in turn was

a wholly-owned subsidiary of Semi Bayu Sdn Bhd (“SBSB”).

Bakry bin Hamzah, a director of the Company, is a shareholder of Damai Akrab Sdn. Bhd. (“DASB”) having a 57% equity interest in DASB. DASB in turn has a 55% equity interest in SBSB. He is also a director of Restu Jernih Sdn Bhd, an indirect major shareholder of the Company.

With effect from 10 October 2011, MPSB became an indirect subsidiary company of the Company pursuant to the completion of the acquisition of Mardec Berhad as disclosed in Note 7(b);

(xix) DRB-Hicom Defence Technologies Sdn Bhd (“Deftech”) and Euromobil Sdn Bhd are subsidiary companies of DRB-HICOM Berhad (“DRB-Hicom) of which Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor is deemed a major shareholder by virtue of his direct and indirect equity interest in Etika Strategi Sdn Bhd (“ESSB”). ESSB is a major shareholder holding 55.92% in DRB-Hicom;





(xx) Fikri bin Abu Bakar is a director of Syarikat Faiza Sdn Bhd, a subsidiary company of Bernas, holds substantial interests in Kualiti Supremasi Sdn Bhd, Rabhan Enterprise, Ikatan Supremasi Sdn Bhd and Farhan Food Sdn Bhd;

(xxi) Lim Swee Keat and Lim Eng Giap are directors of Jasmine Food Corporation Sdn Bhd, a subsidiary company of Bernas;

(xxii) Datuk Lau Hieng Ing and Datin Wong Puo Siong are directors of Hock Chiong Foodstuff Sdn Bhd, a subsidiary company of Bernas hold substantial financial interests in Hock Chiong Co Sdn Bhd and Naturewood Sdn Bhd;

(xxiii) Kueh Peng Ho is a director and substantial shareholder of Ban Say Tong Sdn Bhd, a subsidiary company of Bernas;

(xxiv) Faiza Bawumi bt Syed Ahmad and Salwa bt Abu Bakar are directors of Syarikat Faiza Sdn Bhd, a subsidiary company of Bernas hold interests in Faiza Food Industries Sdn Bhd;

(xxv) Radwa bt Abu Bakar is a director of Syarikat Faiza Sdn Bhd, a subsidiary company of Bernas hold interests in Figure Diversified Sdn Bhd; and

(xxvi) Jadwa bt Abu Bakar is a director of Syarikat Faiza Sdn Bhd, a subsidiary company of Bernas hold interests in Tijarati Sdn Bhd.

(b) Information regarding outstanding balances arising from related party transactions is disclosed in Note 14, Note 15, Note

16, Note 17 and Note 20.

40. sEGMENt INfoRMAtIoN – GRoUp

(a) Segment information is primarily presented in respect of the Group’s business segments which are based on the Group’s management and internal reporting structure.

The reportable business segments of the Group comprise the following:

Rice Procure, collect, process, import, export, purchase rice, paddy and other grains, including activities in relation to the distribution of rice.

Plantation Cultivation of oil palm, processing and sale of palm products, manufacturing and trading of rubber

products and the provision of plantation management and advisory services.

Sugar Manufacture and sale of refined sugar. Investment holding Investment holding and provision of management services.


40. sEGMENt INfoRMAtIoN – GRoUp (CoNtINUED)

(a) Segment information is primarily presented in respect of the Group’s business segments which are based on the Group’s management and internal reporting structure. (continued)

Investment holding/ Rice plantation sugar other Elimination Consolidated

2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueExternal revenue 3,530,732 1,828,708 1,571,952 2,064 - 6,933,456Intra-segment revenue - 31,595 - - (31,595) -Inter-segment revenue - - 58,294 245,922 (304,216) -

Total revenue 3,530,732 1,860,303 1,630,246 247,986 (335,811) 6 ,933,456

ResultsOperating results 268,619 566,935 249,479 191,157 (277,572) 998,618Share of results of associated companies 27,012 1,619 - - - 28,631Share of results of a jointly controlled entity - 5,036 - - - 5,036

Segment results 295,631 573,590 249,479 191,157 (277,572) 1,032,285Finance costs (56,898) (35,983) (5,387) (43,055) 6,071 (135,252)

Profit before taxation 238,733 537,607 244,092 148,102 (271,501) 897,033

AssetsSegment assets 2,448,659 4,097,275 1,038,331 378,428 (525,432) 7,437,261Investment in associated companies - 23,525 - - - 23,525Investment in a jointly controlled entity 320,672 57,364 - - - 378,036

Segment assets 2,769,331 4,178,164 1,038,331 378,428 (525,432) 7,838,822

Tax assets 122,321

Total assets 7,961,143

LiabilitiesSegment liabilities 1,611,763 1,590,623 313,772 681,256 (61,274) 4,136,140Tax liabilities 417,338

Total liabilities 4,553,478



(a) Segment information is primarily presented in respect of the Group’s business segment which is based on the Group’s management and internal reporting structure. (continued)


2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

other informationCapital expenditure 67,380 219,696 65,378 2,632 - 355,086

Depreciation and amortisation 41,404 94,216 42,297 1,260 40,866 220,043

Finance income 10,363 1,415 4,912 2,132 (1,219) 17,603

2010

RevenueExternal revenue 3,172,973 1,024,932 1,353,172 302 - 5,551,379Intra-segment revenue - 9,536 - - (9,536) -Inter-segment revenue - - - 291,493 (291,493) -

Total revenue 3,172,973 1,034,468 1,353,172 291,795 (301,029) 5,551,379

ResultsOperating results 240,235 373,057 271,672 256,047 (259,925) 881,086Share of results of associated companies 33,870 - - - - 33,870Share of results of a jointly controlled entity - 1,266 - - - 1,266

Segment results 274,105 374,323 271,672 256,047 (259,925) 916,222Finance costs (28,324) (39,315) (5,339) (43,017) 6,368 (109,627)

Profit before taxation 245,781 335,008 266,333 213,030 (253,557) 806,595




(a) Segment information is primarily presented in respect of the Group’s business segment which is based on the Group’s management and internal reporting structure. (continued)


2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

AssetsSegment assets 2,095,150 3,377,903 1,003,846 171,685 (248,406) 6 ,400,178Investment in associated companies 242,363 - - - - 242,363Investment in a jointly controlled entity - 13,489 - - - 13,489

Segment assets 2,337,513 3,391,392 1,003,846 171,685 (248,406) 6,656,030

Tax assets 109,447

Total assets 6,765,477

LiabilitiesSegment liabilities 1,219,148 1,196,741 368,795 780,378 (139,182) 3,425,880Tax liabilities 415,457

Total liabilities 3,841,337

other informationCapital expenditure 53,377 225,500 42,054 4,318 - 325,249

Depreciation and amortisation 83,213 104,651 21,517 612 (1,546) 208,447




(b) Geographical segments

In determining the geographical segments of the Group, segment revenue is based on the geographical locations of customers. Segment assets and segment capital expenditure are based on geographical locations of the assets.

hong south Malaysia Indonesia singapore Kong Korea others total RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2011 Revenue 6,340,898 19,554 306,365 85,261 61,279 120,099 6,933,456 Assets 4,266,369 44,196 - - - 15,602 4,326,167

2010 Revenue 5,319,614 67,755 79,142 50,164 - 34,704 5,551,379 Assets 6,750,416 9,047 1,197 - - 4,817 6,765,477

(c) Major customers

Based on FRS 8 Operating Segments, there was no transaction with a single customer or group of customers that amounted to 10% or more of the Group’s total revenue.


41. fINANCIAL INstRUMENts

(a) Classification of financial instruments

Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The principal accounting policies in Note 2(l) and 2(o) describe how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised. The following table analyses the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they are assigned, and therefore by the measurement basis:

financial instruments at fair value Available- through other Loans and for-sale profit or financial

Group receivables investments loss liabilities total2011 RM’000 RM’000 RM’000 RM’000 RM’000

financial assets:Other investments- non-current - 40,905 - - 40,905- current - - 19,827 - 19,827Trade receivables 717,144 - - - 717,144Other receivables (excluding deposits and prepayments) 591,739 - - - 591,739Amount owing by associated companies 48,323 - - - 48,323Derivatives - - 218 - 218Fixed deposits 609,003 - - - 609,003Cash and bank balances 203,585 - - - 203,585

2,169,794 40,905 20,045 - 2,230,744

financial liabilities:Trade payables - - - 213,323 213,323Other payables (excluding provisions and accruals) - - - 261,270 261,270Amount owing to associated companies - - - 777 777Borrowings - - - 3,486,519 3,486,519Derivatives - - 2,964 - 2,964

- - 2,964 3,961,889 3,964,853



41. fINANCIAL INstRUMENts (CoNtINUED)

(a) Classification of financial instruments (continued)


Group receivables investments loss liabilities total2010 RM’000 RM’000 RM’000 RM’000 RM’000

financial assets:Other investments- non-current - 5,143 - - 5,143- current - - - - -Trade receivables 630,916 - - - 630,916Other receivables (excluding deposits and prepayments) 687,274 - - - 687,274Amount owing by associated companies 20,480 - - - 20,480Fixed deposits 231,733 - - - 231,733Cash and bank balances 243,523 - - - 243,523

1,813,926 5,143 - - 1,819,069

financial liabilities:Trade payables - - - 175,540 175,540Other payables (excluding provisions and accruals) - - - 234,862 234,862Amount owing to associated companies - - - 304 304Borrowings - - - 2,878,258 2,878,258

- - - 3,288,964 3,288,964

Company2011

financial assets:Other investments- non-current - 3,263 - - 3,263- current - - 247,985 - 247,985Other receivables (excluding deposits and prepayments) 60,216 - - - 60,216Amount owing by subsidiary companies 3,178 - - - 3,178Fixed deposits 10,156 - - - 10,156Cash and bank balances 17,010 - - - 17,010

90,560 3,263 247,985 - 341,808



(a) Classification of financial instruments (continued)


Company receivables investments loss liabilities total2011 RM’000 RM’000 RM’000 RM’000 RM’000

financial liabilities:Other payables (excluding provisions and accruals) - - - 6,390 6,390Amount owing to subsidiary companies - - - 889 889Borrowings - - - 669,757 669,757

- - - 677,036 677,036

2010

financial assets:Other investments- non-current - 3,055 - - 3,055- current - - 244,785 - 244,785Other receivables (excluding deposits and prepayments) 60,231 - - - 60,231Amount owing by subsidiary companies 59,168 - - - 59,168Cash and bank balances 65,840 - - - 65,840

185,239 3,055 244,785 - 433,079

financial liabilities:Other payables (excluding provisions and accruals) - - - 6,359 6,359Amount owing to subsidiary companies 45,093 - - - 45,093Borrowings - - - 726,565 726,565

45,093 - - 732,924 778,017



(b) financial risk management objectives and policies

The Group’s financial risk management policy is to ensure that adequate financial resources are available for the development of the Group’s operations whilst managing its financial risks, namely market risk (including foreign currency exchange risk, interest rate risk and price fluctuation risk) credit risk, liquidity and cash flow risk.

(c) foreign currency exchange risk

Foreign currency exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the respective functional currencies of the Group entities, primarily the Malaysian Ringgit, Thai Bahts, Vietnam Dong, Indian Rupees and Indonesian Rupiahs. The foreign currencies in which these transactions are denominated are mainly United States Dollars (“USD”) and Singapore Dollars (“SGD”).

The Group maintains a natural hedge, whenever possible, by borrowing in currencies that match the future revenue stream to be generated from its investments.

Certain operating entities use forward currency contracts to minimise the currency exposures for which receipt is anticipated after the Group has entered into a firm commitment for a sale. For those entities, the forward currency contracts must be in the same currency as the hedged item. It is the Group’s policy to negotiate the terms of the hedge derivatives to match the terms of the hedged items to maximise hedge effectiveness. Although the derivatives have not been designated in a hedge relationship, they act as a commercial hedge and will offset the underlying transactions when they occur.

At 31 December 2011, the Group had hedged approximately all of its foreign currency denominated sales for which firm commitments existed at the reporting date.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax and equity to a reasonably possible change in the USD exchange rate against the functional currency of the affected group companies (“RM”) with all other variables held constant.

Group

2011 2010 Effect on Effect on profit after profit after tax/equity tax/equity RM’000 RM’000

USD/RM - strengthening 3% (2010: 5%) 11,802 17,388SGD/RM - strengthening 3% (2010: 5%) 12 -

A 3% weakening for the above currencies at the end of the reporting period would have had an equal but opposite effect profit after tax and equity.

The Group is also exposed to currency translation risk arising from its net investments in foreign operations, including Indonesia, Thailand, Singapore, Vietnam and Cambodia. The Group’s net investments are not hedged.




(d) Interest rate risk

The Group’s income and operating cash flows are substantially independent of the changes in market interest rates. Interest rate exposure arises from the Group’s investment management funds, borrowings and deposits.

The Group’s primary interest rate risk relates to interest-bearing debt as at 31 December 2011. The investments in financial assets are mainly short term in nature and they are placed at fixed rates and management endevour to obtain the best rate available in the market.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group actively reviews its debt portfolio, taking into account the investment holding period and nature of its assets. This strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against rate hikes.

The information on maturity dates and effective interest rates of financial assets and liabilities are disclosed in their respective notes.

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity of the Group’s profit net of tax and equity to a reasonably possible change in the interest rates of the affected Group companies with all other variables held constant. The assumed movement in basis points for interest rate sensitivity analysis is based on a prudent estimate of the current market environment.

Group Company

2011 2010 2011 2010 Effect on Effect on Effect on Effect on profit after profit after profit after profit after tax/equity tax/equity tax/equity tax/equity RM’000 RM’000 RM’000 RM’000

Interest rates 50 basis points higher 9,454 12,337 2,512 3,323

Had interest rates been 50 basis point lower at the end of the reporting period there would have been an equal but opposite effect on profit after tax and equity.

(e) Credit risk

The Group’s exposure to credit risk arises mainly from receivables. Receivables are monitored on an ongoing basis via management reporting procedures and action is taken to recover debts when due. For cash and bank balances, the Group minimises credit risk by dealing exclusively with financial institutions that have high credit ratings.

At the reporting date, there was no other significant concentration of credit risk other than those disclosed in Note 14 and Note 15. The maximum exposure to credit risk for the Group is the carrying amount of the financial assets shown in the statement of financial position and the nominal amount of RM150,000,000 relating to the corporate guarantee provided by the Company to a bank on a subsidiary company’s bank borrowings.



(e) Credit risk (continued)

Financial assets that are neither past due nor impaired

Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 14. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 14.

(f) Liquidity and cash flow risk

The Group seeks to achieve a flexible and cost effective borrowing structure to ensure that the projected net borrowing needs are covered by available committed and standby credit facilities. Debt maturities are structured in such a way to ensure that the amount of debt maturing in any one year is within the Group’s ability to repay and/or refinance so that the Group is not exposed to liquidity risk arising from mismatches in maturities of its financial assets and liabilities.

The Group also maintains a certain level of cash and cash convertible investments to meet its working capital requirements.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.

on demand one to or within five More than one year years five years total

2011 RM’000 RM’000 RM’000 RM’000

Groupfinancial liabilities:Trade payables 213,323 - - 213,323Other payables 341,388 - - 341,388Hire purchase and finance lease payables 4,304 2,769 4 ,017 11,090Borrowings 1,759,076 1,858,524 87,867 3,705,467Derivative liabilities 2,964 - - 2,964

Total undiscounted financial liabilities 2,321,055 1,861,293 91,884 4,274,232

Companyfinancial liabilities:Other payables 10,609 - - 10,609Borrowings 194,822 605,115 - 799,937

Total undiscounted financial liabilities 205,431 605,115 - 810,546




(f) Liquidity and cash flow risk (continued)

on demand one to or within five More than one year years five years total

2010 RM’000 RM’000 RM’000 RM’000

Groupfinancial liabilities:Trade payables 175,540 - - 175,540Other payables 287,698 - - 287,698Hire purchase and finance lease payables 3,172 2,200 4,105 9,477Borrowings 1,371,248 1,473,505 404,323 3,249,076

Total undiscounted financial liabilities 1,837,658 1,475,705 408,428 3,721,791

Companyfinancial liabilities:Other payables 8,721 - - 8,721Borrowings 182,113 401,022 308,120 891,255

Total undiscounted financial liabilities 190,834 401,022 308,120 899,976

(g) Market price risk

The Group’s exposure to market risk arises mainly from changes in equity prices. The Group does not use derivative financial instruments to manage equity price risk. The risk of loss in value is minimised via thorough analysis before making the investments and continuous monitoring of the performance and risk of the investments made. Equity investments classified as non-current assets are held for the long-term. Changes in market values of long-term investments, except where an impairment occurs or a permanent loss in value can be foreseen, do not affect the carrying amounts of the investments.



(g) Market price risk (continued)

Sensitivity analysis for market price risk

At 31 December 2011, if the market value of the financial assets stated at fair value had been 5% (lower)/higher, with all other variables held constant, the effect on equity and profit after tax are as follows:

Group Company

Effect on Effect on Available- Effect on Available- Effect on for-sales profit after for-sales profit after reserves tax reserves tax RM’000 RM’000 RM’000 RM’000 (Decrease)/Increase

Available-for-sale investmentsQuoted shares of entities other than subsidiary companies (194)/194 - (160)/160 -Unit trust funds (1,823)/1,823 - - -

Fair value through profit or lossQuoted loan stocks - - - (9,299)/9,299Investment management fund - (22)/22 - -

A 5% reduction in market value above on the price as at 31 December 2011 would have equal opposite effect on the equity and profit after tax to the amounts shown above.

(h) price fluctuation risk

The Group, in the normal course of business, is exposed to price fluctuation risk on its traded commodities particularly rice, palm oil, rubber products and sugar. The Group mitigates its risk to the price volatility through constantly monitoring the movement of the commodities prices, and where deemed prudent, selling forward in the physical market and by entering into foreign exchange contracts.

(i) fair values

The fair values of financial instruments refer to the amounts at which the instruments could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction. Fair values have been arrived at based on prices quoted in an active, liquid market or estimated using certain valuation techniques such as discounted future cash flows based upon certain assumptions. Amounts derived from such methods and valuation techniques are inherently subjective and therefore do not necessarily reflect the amounts that would be received or paid in the event of immediate settlement of the instruments concerned.

On the basis of the amounts estimated from the methods and techniques as mentioned in the preceding paragraph, the carrying amount of the various financial assets and financial liabilities reflected on the statements of financial position approximate their fair values.




(i) fair values (continued)

Methods and assumptions used to estimate fair value of financial instruments

(i) Financial instruments whose carrying amounts are a reasonable approximation of fair value

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, trade and other receivables, amount owing by/to subsidiary companies and associated companies, trade and other payables and borrowings with floating interest rate, are reasonable approximations of fair value, either due to their relatively 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.

It is not practicable to estimate the fair value of contingent liabilities reliably due to the uncertainties of timing, cost and eventual outcome.

(ii) Fixed rate borrowings

The fair values of fixed rate borrowings are estimated based on future contractual cash flows discounted at market lending rate for similar types of lending or borrowing arrangements at the reporting date.

(iii) Quoted shares, quoted loan stocks, unit trust funds and investment management fund

Fair value is determined directly by reference to their published market price at the reporting date.

(iv) Unquoted shares

Fair value is estimated using a relative valuation technique based on the price earnings ratio of a public listed entity with similar business activities obtained from the market, discounted by 20% to reflect its listing premium. Management believes that the estimated fair value resulting from this valuation technique is reasonable and the most appropriate at the end of the reporting period.

(v) Financial guarantees

The Company provides guarantees to banks for credit facilities extended to certain subsidiary companies. The fair value of such financial guarantees is determined based on probability weighted discounted cash flow method. The probability has been estimated and assigned for the following key assumptions:

- The likelihood of the guaranteed party defaulting within the guaranteed period;

- The exposure on the portion that is not expected to be recovered due to the default; and

- The estimated loss exposure if the party guaranteed were to default.

The fair value of such financial guarantees is not expected to be material as the probability of the subsidiary companies defaulting on the credit facilities is remote.

(vi) Derivatives

Derivatives namely forward currency contracts are valued using a valuation technique with market observable inputs. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates.




Methods and assumptions used to estimate fair value of financial instruments (continued)

(vii) Contingent liabilities

It is not practicable to estimate the fair value of contingent liabilities reliably due to uncertainties of timing, cost and eventual outcome.

The fair value measurement hierarchies used to measure the financial assets carried at fair value in the statements of financial position as at 31 December 2011 are as follows:

Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 : Inputs other than quoted prices included in level 1, that are observeable for assets or liability, either directly or indirectly.

Level 3 : Inputs for the asset or liability, that are not based on observeable market data (unobserveable inputs)

The level within which the fair value measurement is categorised is based on the lowest level of input to the investment’s valuation that is significant to the fair value measurement in its entirety.

fair value

Group Level 1 Level 2 Level 3 total2011 RM’000 RM’000 RM’000 RM’000

financial assetsAvailable-for-sale financial assets:- quoted shares 3,884 - - 3,884- unquoted shares - - 478 478- unit trust funds 36,462 - - 36,462

Financial assets at fair value through profit or loss:- investment management funds 19,827 - - 19,827- forward foreign exchange contracts - 218 - 218

financial liabilitiesFinancial liabilities at fair value through profit/loss:- forward foreign exchange contracts - 2,964 - 2,964

Company2011financial assetsAvailable-for-sale financial assets:- quoted shares 3,192 - - 3,192

Financial assets at fair value through profit or loss:- investment in quoted loan stocks 247,985 - - 247,985





The fair value measurement hierarchies used to measure the financial assets carried at fair value in the statements of financial position as at 31 December 2011 are as follows: (continued)

Pursuant to paragraph 44(g) of the Amended FRS 7 Financial Instruments: Disclosures, the Group and the Company are not required to disclose the comparatives relating to the level in the fair value hierarchy above.

During the reporting period ended 31 December 2011, there were no transfers between Level 1 and Level 3 fair value measurement.

Reconciliation of Level 3 fair value measurements of financial assets

Group RM’000

Available-for-sale unquoted shares at fair value Balance as at 1 January 2011 868 Loss recognised in other comprehensive income (390)

Balance as at 31 December 2011 (Note 10) 478

Although the Group believes that its estimates of fair value are appropriate, the use of different assumptions could lead to different measurements of fair value. A discounted price earnings ratio has been used as a critical assumption or input for fair value measurement in Level 3. If this input was 5% higher/lower while all other variables were held constant, the carrying amount of the unquoted shares would increase/decrease by RM35,000 (2010: RM52,000).

Fair value of financial instruments by classes that are not carried at fair values and whose carrying amount are not reasonable approximations of fair value including the following financial liabilities.

Group

Amount fair value RM’000 RM’000

financial liabilities

At 31 December 2011:Hire purchase and finance lease liabilities 9 ,202 8,820Term loan 26,085 23,370Sukuk Al-Ijarah 747,750 763,303

At 31 December 2010:Hire purchase and finance lease liabilities 7,716 7,061Term loan 10,985 8,045Sukuk Al-Ijarah 398,372 406,658


42. NEW fRss, AMENDMENts to fRs AND IC INtERpREtAtIoN

(a) Changes in accounting policies

On 1 January 2011, the Group and the Company adopted the following new and amended FRS and Issues Committee (“IC”) Interpretations which are mandatory for the current financial year.

Effective for annual period beginning onDescription or after

FRS 1: First-time Adoption of Financial Reporting Standards 1 July 2010 Amendments to FRS 2: Share-based Payment 1 July 2010FRS 3: Business Combinations 1 July 2010 Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations 1 July 2010Amendments to FRS 127: Consolidated and Separate Financial Statements 1 July 2010 Amendments to FRS 138: Intangible Assets 1 July 2010Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives 1 July 2010IC Interpretation 12: Service Concession Arrangements 1 July 2010IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 17: Distributions of Non-cash Assets to Owners 1 July 2010 Amendments to FRS 132: Classification of Rights Issues 1 March 2010 IC Interpretation 18: Transfers of Assets from Customers 1 January 2011 Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011Amendments to FRS 1: Limited Exemptions for First-time Adopters 1 January 2011 IC Interpretation 4: Determining Whether an Arrangement contains a Lease 1 January 2011 Improvements to FRS issued in 2010 1 January 2011

Adoption of the above standards and interpretations did not have any significant effect on the financial performance and position of the Group and the Company except for those discussed below:

(i) Revised FRS 3: Business Combinations and Amendments to FRS 127: Consolidated and Separate Financial Statements

The revised FRS 3 introduces a number of changes in accounting for business combinations occurring after 1 July 2010. These changes impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.

The revised FRS 3 continues to apply the acquisition method to business combinations but with some significant changes. All payments to purchase a business are recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently remeasured through the statement of comprehensive income. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs are expensed.

Under the revised FRS 127, minority interest is referred to as non-controlling interest. The amendments to FRS 127 require that a change in the ownership interest of a subsidiary company (without loss of control) be accounted for as an equity transaction. Therefore, such transactions will no longer give rise to a change in goodwill, nor will they give rise to a gain or loss. Further, losses within a subsidiary company are attributed to the non-controlling interest even if that results in a deficit balance. Prior to 1 January 2011, the allocation of such losses to non-controlling interests would cease when the carrying amount of the non-controlling interests is nil. The subsequent profits attributable to the non-controlling interests would not be added to the carrying amount of the non-controlling interests until all the previous losses have been made good.



42. NEW fRss, AMENDMENts to fRs AND IC INtERpREtAtIoN (CoNtINUED)

(a) Changes in accounting policies (continued) (ii) Amendments to FRS 7: Improving Disclosure about Financial Instruments

The amendments require enhanced disclosures about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a three level fair value hierarchy (Level 1, Level 2 and Level 3), by class, for all financial instruments recognised at fair value. A reconciliation between the beginning and ending balance for Level 3 fair value measurements is required. Any significant transfers between levels of the fair value heirarchy and the reason for those transfers need to be disclosed. The fair value measurement disclosures are presented in Note 41.

(a) standards issued but not yet effective

At the date of authorisation of these financial statements, the Group and the Company have not applied the following FRSs, revised FRSs, IC Interpretations, amendments to FRSs and IC Interpretations that have been issued by MASB but are not yet effective:

Effective date for financial period beginning onDescription or after

IC Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments 1 July 2011Amendments to IC Interpretation 14: Prepayments of a Minimum Funding Requirement 1 July 2011Amendments to FRS 1: Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2012Amendments to FRS 7: Transfers of Financial Assets 1 January 2012Amendments to FRS 112: Deferred Tax: Recovery of Underlying Assets 1 January 2012FRS 124: Related Party Disclosures 1 January 2012Amendments to FRS 101: Presentation of Items of Other Comprehensive Income 1 July 2012FRS 10: Consolidated Financial Statements 1 January 2013FRS 11: Joint Arrangements 1 January 2013FRS 12: Disclosure of interests in Other Entities 1 January 2013FRS 13: Fair Value Measurement 1 January 2013FRS 119: Employee Benefits 1 January 2013FRS 127: Separate Financial Statements 1 January 2013FRS 128: Investment in Associate and Joint Ventures 1 January 2013IC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine 1 January 2013Amendments to FRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014FRS 9: Financial Instruments 1 January 2015 The adoption of the above will have no material impact on the financial statements of the Group and the Company in the period of initial application, except as discussed below:

(i) Amendments to FRS 7: Transfers of Financial Assets The amendments require additional disclosure about financial assets that have been transferred but not derecognised to enable the user of the Group’s financial statements to understand the relationship with those assets that have not been derecognised and their associated liabilities. In addition, the amendments require disclosures about continuing involvement in derecognised assets to enable the user to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognised assets. The amendments affect disclosure only and has no impact on the Group’s financial position or profit or loss.


42. NEW fRss, AMENDMENts to fRs AND IC INtERpREtAtIoN (CoNtINUED)

(a) standards issued but not yet effective (continued)

(iii) Amendments to FRS 101: Presentation of Items of Other Comprehensive Income

The amendments to FRS 101 change the grouping of items presented in Other Comprehensive Income. Items that could be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon derecognition or settlement) would be presented separately from items that will never be reclassified. The amendment affects presentation only and has no impact on the Group’s financial position or performance.

(v) FRS 10: Consolidated Financial Statements

FRS 10 replaces the portion of FRS 127 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. FRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by FRS 10 will require management to exercise significant judgement to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the requirements that were in FRS 127.

(vii) FRS 12: Disclosure of Interests in Other Entities FRS 12 includes all disclosure requirements for interests in subsidiary companies, joint arrangements, associated companies and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Group’s financial position or performance.

(viii) FRS 13: Fair Value Measurement FRS 13 establishes a single source of guidance under FRS for all fair value measurements. FRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under FRS when fair value is required or permitted. The Group is currently assessing the impact of adoption of FRS 13.

(c) Malaysian financial Reporting standards (“MfRs framework”)

On 19 November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (MFRS Framework).

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture (MFRS 141) and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer (herein called ‘Transitioning Entities’).

Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for an additional one year. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2013.

The Group falls within the scope definition of Transitioning Entities and accordingly, 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 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.

Currently, the Group is in the process of assessing the gap between current Group accounting policies and the requirements of MFRS Framework and expects to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2013.



43. sIGNIfICANt AND sUbsEqUENt EVENts

(a) significant events during the financial year

Acquisition of subsidiary and associated companies during the financial year are disclosed in Note 7 and 8, respectively. The other significant events during the financial year are as follows:

(i) New business venture for a subsidiary company of Bernas, Berkat Beringin Sdn Bhd

On 10 January 2011, the wholly-owned subsidiary companies of Bernas, Subur Majubumi Sdn Bhd (“Subur Majubumi”) and Berkat Beringin Sdn Bhd (“Berkat Beringin”) had entered into a Shareholders’ Agreement with KNC Masyhur Sdn Bhd (“KNC Masyhur”). Berkat Beringin, the joint venture vehicle would be carrying out the business which involves paddy procurement, drying and milling, and rice processing and packaging. The intended business activities have yet to commence pending licence to be issued by Bahagian Kawalselia Padi dan Beras, Ministry of Agriculture and Agro-based Industry.

(ii) Memorandum of understanding with Lembaga Kemajuan Pertanian Muda (“MADA”)

On 8 March 2011, Bernas had signed a Memorandum of Understanding (“MOU”) with Lembaga Kemajuan Pertanian Muda (“MADA”) to establish the principles of understanding to jointly undertake the commercial activities of Entry Point Project (“EPP”) 10: Scaling up and Strengthening Productivity of Paddy Farming in MADA Area under the National Key Economic Area (“NKEA”) programme with a view to enter into a joint venture agreement, shareholders’ agreement and other related agreements thereto, and to negotiate the terms and conditions of the Joint Venture Agreement and the Shareholders’ Agreement and other related agreements to regulate the parties’ and/or their related entities’ obligations in undertaking the commercial activities of EPP 10.

The MOU shall be effective for a period of 12 months from the execution date and may be extended as mutually agreed by the parties or upon the execution of the Joint Venture Agreement and the Shareholders’ Agreement, whichever is earlier.

(iii) Extension of the Bernas Agreement between Bernas and the Government of Malaysia dated 12 January 1996 (“Bernas Agreement”)

On 22 April 2011, Bernas received a letter dated 20 April 2011 from the Public Private Partnership Unit under the Prime Minister’s Department on the extension of the Bernas Agreement where the Government has agreed to extend the Bernas Agreement for a period of 10 years commencing from 11 January 2011 to 10 January 2021 subject to the terms and conditions to be mutually agreed between both parties. The Government has also agreed to grant an Interim Period of six (6) months from 11 January 2011 to 10 July 2011 (“Interim Period”). On 27 September 2011, the Government has further extended the Interim Period commencing from 10 July 2011 until the finalisation of the terms and conditions of the new Bernas Agreement and the execution thereof.

(b) subsequent events after the balance sheet date

(i) Disposal of associated company, R1 International Pte Ltd (“R1”)

On 8 February 2012, Mardec International Sdn Bhd (“MISB”), an indirect wholly-owned subsidiary of TPB, and the other shareholders of R1 International Pte Ltd (“R1”) have entered into a conditional Share Sale Agreement with Hainan State Farms Investment Limited (“HSF”) and Hainan Rubber Group (Singapore) Pte Ltd (“Hainan Rubber”) for the disposal of 6,300,000 ordinary shares of USD1 each, representing 90% of the equity interest in R1, for a total cash consideration of USD51,725,016 (“Disposal Price”).

Pursuant to the Share Sale Agreement, MISB shall dispose 3,150,000 ordinary shares of USD1 each, representing its entire 45% equity interest in R1 to HSF for a cash consideration of USD25,862,508 or approximately RM77.1 million.


43. sIGNIfICANt AND sUbsEqUENt EVENts (CoNtINUED)

(b) subsequent events after the balance sheet date (continued)

(i) Disposal of associated company, R1 International Pte Ltd (“R1”) (continued)

The Disposal Price represents 90% of the total valuation of R1’s equity of USD57,472,240 which represents the price to book ratio of 1.6575 based on R1 Group’s unaudited net tangible assets (“NTA”) as at 31 December 2011. The Disposal Price is conditional upon R1 Group’s audited NTA at 31 December 2011 being not less than USD34,674,051 and will be adjusted in the event of lower audited NTA by using the same price to book ratio. The proposed disposal of R1 is conditional upon the satisfactory fulfillment of the following key conditions precedent within a period of 60 days from the date of the Share Sale Agreement or such longer period as the parties agree:

(1) the approval of the board of directors of each of the selling shareholders for the sale of their respective equities in R1;

(2) the approval of the board of directors and shareholders of R1;

(3) the completion of the business, financial and legal due diligence investigations into the R1 Group Companies and the satisfactory resolution and determination of any issues arising from the due diligence investigations by both HSF and Hainan Rubber; and

(4) other requisite conditions stated in the Share Sale Agreement.

(ii) Structure reorganisation involving Retus Plantation Sdn Bhd

On 29 March 2012, the Company entered into a conditional Share Sale Agreement with Amalan Penaga (M) Sdn Bhd (“APSB”), a wholly-owned subsidiary company of TPB, for the disposal of 11,259,523 ordinary shares of RM1.00 each in Retus Plantation Sdn Bhd (“RPSB”) (“Disposal of Shares”), representing 60% of its issued and paid-up share capital, for a purchase consideration of an amount equal to 60% of the net tangible asset value (“NTAV”) of RPSB Group (“Proposed Disposal of RPSB”). Under the Share Sale Agreement, NTAV is defined as the total tangible assets of RPSB Group (having regard to the market value of RPSB’s oil palm estates and palm oil mill as at 1 December 2011 of RM366,041,000, as appraised by CH Williams Talhar & Wong Sdn Bhd, a firm of independent licensed valuers) less the total liabilities of RPSB Group calculated on the last day of the month which precedes the issue of the notice for completion by APSB.

For illustration purposes, the sale consideration based on the adjusted NTAV of RPSB Group as at 31 December 2011 amounts to RM125,395,390.

The Proposed Disposal of RPSB is conditional upon the fulfilment and/or satisfaction of the following conditions precedent:

(1) the Company obtaining the approval of the financiers of RPSB for the Disposal of Shares to APSB;

(2) the Company obtaining the written confirmation from Assar Plantations Holding Sdn Bhd (“Assar”), the other shareholder in RPSB, waiving any rights of pre-emption that Assar has in respect of the Disposal of Shares to APSB upon terms and conditions acceptable to APSB;

(3) the approvals of the shareholders of TPB at a general meeting to be convened; and

(4) other requisite approvals, if any.

The conditions precedent is to be fulfilled within 6 months from the date of the Share Sale Agreement or upon the expiry thereof, such longer period as the parties mutually agree.



43. sIGNIfICANt AND sUbsEqUENt EVENts (CoNtINUED)

(b) subsequent events after the balance sheet date (continued) (iii) Deregistration of a subsidiary company, Croesus Limited (“Croesus”)

Croesus, a wholly-owned subsidiary company of Delta Delights Sdn Bhd (“DDSB”) which in turn is a wholly-owned subsidiary company of the Company, by a resolution made in accordance with its Articles of Association and in accordance with the relevant laws of Hong Kong, has filed an application for deregistration of Croesus with the Companies Registry in Hong Kong on 23 November 2011 (the “Deregistration”).

The Deregistration is in line with the Company’s rationalisation efforts to wind up inactive/dormant subsidiary companies.

The Deregistration was completed on 5 April 2012 following the publication of the Gazette Notice by the Hong Kong Companies Registry notifying the Deregistration and dissolution of Croesus on even date. Accordingly, Croesus ceased to become a subsidiary company of the Company, effective 5 April 2012.

(iv) Acquisition of building

On 18 April 2012, a wholly-owned subsidiary company of the Company, Sovereign Place Sdn Bhd, has entered into a conditional sale and purchase agreement (“SPA”) with Skyline Atlantic Sdn Bhd, a wholly-owned subsidiary company of Tradewinds Corporation Berhad (“TCB”) in which a major shareholder of the Company has interest, for the proposed acquisition of 31 floors of strata office space (with a net lettable area of 439,800 square feet) with 440 car park bays of the proposed building (“MTR 2 Building”) to be developed for a total cash consideration of RM510,000,000 (the “Proposed Acquisition”).

The Proposed Acquisition is conditional upon the following approvals being obtained from:

(1) the shareholders of the Company at an extraordinary general meeting (“EGM”) to be convened by the Company;

(2) the shareholders of TCB at an EGM to be convened by TCB;

(3) the procurement by TCB of the existing chargee for the land on which the MTR 2 Building will be constructed, to be procured by TCB; and

(4) any other relevant authorities/parties, if required.

Barring unforeseen circumstances, the completion of the construction of the MTR 2 Building and the delivery of vacant possession of the Property is expected to take place in 2016. Nonetheless, based on the terms of the SPA, the completion of the SPA shall be the date the purchase consideration is paid in full to TCB.



44. sUbsIDIARy AND AssoCIAtED CoMpANIEs

(a) the subsidiary companies and shareholdings therein are as follows:

Group’s effective Country of interest Name of Company incorporation (%) principal activities 2011 2010

Direct holding: * Central Sugars Refinery Malaysia 100 100 Sugar refining Sdn Bhd

* Gula Padang Terap Sdn Bhd Malaysia 100 100 Sugar refining

* Delta Delights Sdn Bhd Malaysia 100 100 Investment holding and management services

* Retus Plantation Sdn Bhd Malaysia 60 60 Investment holding, cultivation of oil palm and production of crude palm oil

* Sovereign Place Sdn Bhd Malaysia 100 100 Dormant

* Tradewinds Plantation Berhad Malaysia 70 70 Investment holding and provision of+ management services

+ Padiberas Nasional Berhad Malaysia 73 73 Procure, collect, import, export, # process, store, package, purchase, @ distribute rice, paddy and other grains, which include activities in relation to the rice and related products and investment holding

Indirect holding:

subsidiary companies of Delta Delights sdn bhd:

* Delta Delights (Cambodia) Cambodia 100 100 Dormant Co Ltd

* Tradewinds Cambodia Co Ltd Cambodia 100 100 Dormant

* Tradewinds Realty Co Ltd Cambodia 100 100 Property development

* Croesus Limited Hong Kong 100 100 Dormant subsidiary company of Retus plantation sdn bhd:

* Masretus Oil Palm Plantation Malaysia 60 60 Dormant Sdn Bhd


44. sUbsIDIARy AND AssoCIAtED CoMpANIEs (CoNtINUED)

(a) the subsidiary companies and shareholdings therein are as follows: (continued) Group’s effective

Country of interest Name of Company incorporation (%) principal activities 2011 2010

Indirect holding: (continued) subsidiary companies of tradewinds plantation bhd: * Amalan Penaga (M) Sdn Bhd Malaysia 70 70 Investment holding

* Bahtera Bahagia Sdn Bhd Malaysia 49 49 Cultivation of oil palm

* Barisan Tekad Sdn Bhd Malaysia 49 49 Cultivation of oil palm

* Binu Plantations Sdn Bhd Malaysia 70 70 Cultivation of oil palm and production of crude palm oil

* Ibok Plantation Sdn Bhd Malaysia 70 70 Cultivation of oil palm

* Johore Tenggara Oil Palm Malaysia 70 70 Investment holding Berhad

* Kumpulan Kris Jati Sdn Bhd Malaysia 49 49 Cultivation of oil palm and production of crude palm oil

* Ladang Chendana Sdn Bhd Malaysia 70 70 Cultivation of oil palm

* Ladang Mawar Sdn Bhd Malaysia 70 70 Cultivation of oil palm

* Ladang Permai Sdn Bhd Malaysia 70 70 Cultivation of oil palm and production of crude palm oil

* Ladang Serasa Sdn Bhd Malaysia 70 70 Cultivation of oil palm and production of crude palm oil

* Northern Intergrated Malaysia 49 49 Property development Agriculture Sdn Bhd

* Prisma Spektra Sdn Bhd Malaysia 70 70 Investment holding

* Quek Shin & Sons Pte Ltd Singapore 70 70 Cultivation of oil palm

* Syarikat Ladang Sawit Cherul Malaysia 70 70 Cultivation of oil palm Sdn Bhd

* Teon Choon Realty Company Malaysia 70 70 Cultivation of oil palm Sdn Berhad

* Tradewinds Agro Services Malaysia 70 70 Plantation management Sdn Bhd and advisory services





Indirect holding: (continued) subsidiary companies of tradewinds plantation bhd: (continued)

* Tradewinds Plantation Services Malaysia 70 70 Ceased operations Sdn Bhd

* Tradewinds Plantation Malaysia 70 70 Plantation management and Management Sdn Bhd advisory services

* Tradewinds Plantation Capital Malaysia 70 70 Sole and specific purpose of Sdn Bhd undertaking Islamic Securities transactions

* Tradewinds Plantech Sdn Bhd Malaysia 70 70 Plantation management and advisory services

* Tradewinds Corridor Sdn Bhd Malaysia 70 70 Cultivation of oil palm and rubber trees

subsidiary companies of prisma spektra sdn bhd:

@ MARDEC Berhad Malaysia 70 - Property and investment holding and provision of management services.

subsidiary companies of Amalan penaga (M) sdn bhd:

* Amalan Pelita Pasai Sdn Bhd Malaysia 42 42 Cultivation of oil palm * Arah Bersama Sdn Bhd Malaysia 49 49 Cultivation of oil palm * Melur Gemilang Sdn Bhd Malaysia 49 49 Cultivation of oil palm and production of crude palm oil * Senandung Masyhur Sdn Bhd Malaysia 59 59 Cultivation of oil palm * Tradewinds Tanjung Alan Malaysia 49 49 Cultivation of oil palm Plantation Sdn Bhd * Trans Kenyalang Sdn Bhd Malaysia 59 59 Cultivation of oil palm * Usaha Wawasan Sdn Bhd Malaysia 49 49 Cultivation of oil palm






Indirect holding: (continued) subsidiary companies of Johore tenggara oil palm berhad: * Agromaju Landscape Sdn Bhd Malaysia 70 70 Ceased operations * Agromaju Sdn Bhd Malaysia 70 70 Cultivation of oil palm * Barisan Perangsang Sdn Bhd Malaysia 36 36 Ceased operations * Hak JTOP Sdn Bhd Malaysia 70 70 Investment holding but is currently dormant * Ladang Petri Tenggara Sdn Bhd Malaysia 70 70 Cultivation of oil palm and production of crude palm oil * M.P. Plantation Sdn Bhd Malaysia 70 70 Investment holding * Permodalan Pelangi Sdn Bhd Malaysia 70 70 Cultivation of oil palm * Pertanian Johor Tenggara Malaysia 70 70 Cultivation of oil palm Sdn Bhd * Semai Segar Sdn Bhd Malaysia 70 70 Cultivation of oil palm * Tanah Semai Sdn Bhd Malaysia 70 70 Cultivation of oil palm * Uni-Agro Plantations Malaysia 70 70 Cultivation of oil palm (Trengganu) Sdn Bhd subsidiary company of M.p. plantation sdn bhd:

* Ladang Sungai Relai Sdn Bhd Malaysia 49 49 Cultivation of oil palm subsidiary companies of Northern Integrated Agriculture sdn bhd: * NIA Development Sdn Bhd Malaysia 34 34 Dormant * NIA Infrastructure Sdn Bhd Malaysia 34 34 Dormant





Indirect holding: (continued)

subsidiary companies of MARDEC berhad: * Mardec Processing Sdn Bhd Malaysia 70 - Purchasing and processing of rubber from smallholder, and selling of processed rubber

* Mardec International Sdn Bhd Malaysia 70 - Investment holding

* Mardec Polymers Sdn Bhd Malaysia 70 - Investment holding

* Mardec Industrial Latex Malaysia 70 - Manufacturing and processing of Sdn Bhd natural rubber latex, prevulcanised rubber latex and processing aid rubbers

* Mardec Fertilizer Sdn Bhd Malaysia 70 - Dormant

* Regal Mardec Sdn Bhd Malaysia 70 - Dormant

* Syarikat Perusahaan Kamar Malaysia 70 - Dormant Sdn Bhd

subsidiary companies of Mardec polymers sdn bhd: * M-Pol Plastic Products Malaysia 70 - Inactive since October 2009 Sdn Bhd * M-Pol Defence Sdn Bhd Malaysia 70 - Manufacturing of moulded, (formerly known as M-Pol extruded and other custom-made Rubber Products Sdn Bhd) rubber products.

* M-Pol Microguard Sdn Bhd Malaysia 49 - Ceased operations

* M-Pol Precision Products Malaysia 70 - Manufacturing and sale of Sdn Bhd moulded, extruded and other custom-made rubber product

* M-Pol Industrial Plastics Malaysia 70 - Ceased operations Sdn Bhd







subsidiary companies of Mardec polymers sdn bhd: (continued) * M-Pol Industrial Products Malaysia 70 - Ceased operations Sdn Bhd

* Plaat Industries Madras Pvt Ltd India 70 - Dormant subsidiary companies of Mardec International sdn bhd: @ Mardec Saigon Rubber Co Ltd Vietnam 70 - Purchasing, processing and marketing of natural rubber and latex

* Mardec-Yala Co Ltd Thailand 70 - Purchasing, processing and marketing of natural rubber and latex

* PT Mardec Nusa Riau Indonesia 36 - Purchasing, processing and marketing of natural rubber and latex. Ceased operations during the current financial year

@ PT Mardec Musi Lestari Indonesia 36 - Purchasing, processing and marketing of natural rubber

@ PT Mardec Siger Way Kanan Indonesia 39 - Purchasing, processing and marketing of natural rubber subsidiary companies of padiberas Nasional berhad: @ Bernas Production Sdn Bhd Malaysia 73 73 Rice processing

@ Era Bayam Kota Sdn Bhd Malaysia 44 44 Trader, distributor and supplier of rice

@ Syarikat Faiza Sdn Bhd Malaysia 38 38 Trader, distributor and supplier of rice






subsidiary companies of padiberas Nasional berhad: (continued)

@ Consolidated Bernas United Malaysia 73 73 Dormant Distributors Sdn Bhd

@ Jasmine Food Corporation Malaysia 45 45 Trader, distributor and supplier Sdn Bhd of rice

@ YHL Holding Sdn Bhd Malaysia 38 38 Investment holding

@ Bernas Seed Pro Sdn Bhd Malaysia 73 73 Paddy seed production @ Bernas Agrotech Sdn Bhd Malaysia 73 73 Investment holding @ Beras Corporation Sdn Bhd Malaysia 73 73 Processing and trading of rice @ Bernas Dominals Sdn Bhd Malaysia 73 73 Investment holding @ Edaran Bernas Nasional Malaysia 58 58 Trader, distributor and supplier Sdn Bhd of rice

@ Bernas Overseas (L) Limited Malaysia 73 73 Offshore investment holding company * Bernas Logistics Sdn Bhd Malaysia 73 73 Provision of logistics services @ Bernas Engineering & Malaysia 73 73 Dormant Technology Sdn Bhd @ P.B Construction & Supplies Malaysia 73 73 Dormant Sdn Bhd @ Bernas Utama Sdn Bhd Malaysia 73 73 Dormant @ Bernas Perdana Sdn Bhd Malaysia 73 73 Dormant @ Belikmat Corporation Sdn Bhd Malaysia 73 73 Dormant

@ Bernas (Sabah) Sdn Bhd Malaysia 73 73 Dormant

@ Bernas (Sarawak) Sdn Bhd Malaysia 73 73 Dormant







subsidiary companies of padiberas Nasional berhad: (continued)

@ Bernas Agrogreen Sdn Bhd Malaysia 73 73 Dormant @ Bernas Project & Development Malaysia 73 73 Retails Sdn Bhd @ Bernas International Thailand 70 70 Processing and trading of rice Trading Ltd and other related food products @ Subur Majubumi Sdn Bhd Malaysia 73 73 Dormant @ Berkat Beringin Sdn Bhd Malaysia 73 73 Dormant subsidiary company of Consolidated bernas United Distributors sdn bhd: @ Machind Realty Sdn Bhd Malaysia 73 73 Dormant subsidiary companies of Jasmine food Corporation sdn bhd: @ Jasmine Food (Ipoh) Sdn Bhd Malaysia 45 45 Trader, distributor and supplier of rice @ Jasmine Food (Alor Setar) Malaysia 45 45 Trader, distributor and supplier of Sdn Bhd rice @ Jasmine Food (Johor Bahru) Malaysia 45 45 Trader, distributor and supplier of Sdn Bhd rice @ Jasmine Khidmat & Harta Malaysia 45 - Letting of properties Sdn Bhd

@ JS Jasmine Sdn Bhd Malaysia 23 - Trader, distributor and supplier of rice

@ Jasmine Food (Seremban) Malaysia 45 - Trader, distributor and supplier of Sdn Bhd rice



(a) the subsidiary companies and shareholdings therein are as follows: (continued)



subsidiary companies of Jasmine food Corporation sdn bhd: (continued) @ Jasmine Food (Prai) Sdn Bhd Malaysia 45 - Trader, distributor and supplier of rice @ Jasmine Rice Mill (Tunjang) Malaysia 45 - Rice miller and rice trader Sdn Bhd @ Jasmine Food (Kuantan) Malaysia 45 - Trader, distributor and supplier of Sdn Bhd rice subsidiary companies of yhL holding sdn bhd: @ YHL Trading (KL) Sdn Bhd Malaysia 38 38 Trader, distributor and supplier of rice @ YHL Trading (Johor) Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice @ YHL Trading (Segamat) Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice

@ YHL Trading (Kedah) Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice @ YHL Trading (Melaka) Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice @ YHL Trading (Terengganu) Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice @ YHL (Kuantan) Sdn Bhd Malaysia 38 38 Dormant

subsidiary company of Jasmine Rice Mill (tunjang) sdn bhd: @ Jasmine Rice Products Malaysia 45 45 Manufacturing and sale of vermicelli Sdn Bhd




(a) the subsidiary companies and shareholdings therein are as follows: (continued)


Indirect holding: (continued) subsidiary company of bernas Agrotech sdn bhd: @ Padi Gedong Sdn Bhd Malaysia 45 45 Dormant subsidiary companies of beras Corporation sdn bhd: @ Sazarice Sdn Bhd Malaysia 70 70 Trader, distributor and supplier of rice @ Dayabest Sdn Bhd Malaysia 73 73 Investment holding @ Sabarice Sdn Bhd Malaysia 73 73 Trader, distributor and supplier of rice

@ Liansin Trading Sdn Bhd Malaysia 44 44 Wholesale and trading of rice and rice related products

subsidiary companies of Dayabest sdn bhd:

@ Haskarice Food Sdn Bhd Malaysia 38 38 Trader, distributor and supplier of rice @ Hock Chiong Foodstuff Malaysia 38 38 Trader, distributor and supplier of Sdn Bhd rice @ Ban Say Tong Sdn Bhd Malaysia 38 38 Trader, distributor and supplier of rice subsidiary company of bernas Dominals sdn bhd: @ Bernas Chaff Products Malaysia 38 38 Dormant Sdn Bhd

subsidiary companies of Liansin trading sdn bhd: @ Liangtye Trading Sdn Bhd Malaysia 44 44 General trading and rice wholesaler





Indirect holding: (continued) subsidiary companies of Liansin trading sdn bhd: (continued)

@ Liansin Trading (Bintulu) Malaysia 44 44 Trader, distributor and supplier of Sdn Bhd rice @ Liansin Trading (Miri) Sdn Bhd Malaysia 44 44 Dormant

@ Tong Seng Huat Rice Trading Malaysia 22 38 Trader, distributor and supplier of Sdn Bhd rice * Companies not audited by Ernst & Young

+ Companies listed on Bursa Malaysia Securities Berhad

@ Companies audited by member firm of Ernst & Young Global

# The Government of Malaysia (“Special Shareholder”) holds one (1) unit of Special Rights Redeemable Preference Share (“Special Share”) at RM1 each in this subsidiary company. The main features of the Special Shares are as follows:

(i) The Special Share may only be held by or transferred to the Minister of Finance Incorporated or its successor or any Minister, representative or any person acting on behalf of the Special Shareholder;

(ii) The Special Shareholder has the right to veto any resolution proposed to be passed by the board of directors or the shareholders of the subsidiary company purporting to amend the provisions of the Memorandum and Articles of Association of the subsidiary company which affects the rights or any matter relating to the Special Share or the rights attaching to the Special Share;

(iii) The Special Shareholder has the right to require the subsidiary company to redeem the Special Share at par at any time by serving written notice upon the subsidiary company and delivering the relevant share certificate;

(iv) Certain matters which vary the rights attached to the Special Share can only be effective with the consent in writing of the Special Shareholder, in particular matters relating to the amendment or removal or alteration of the effect of the Special Share, the creation and issue of additional shares which carry different voting rights, the dissolution of the subsidiary company, substantial disposal of assets, amalgamation, merger and take over;

(v) The Special Shareholder has the right to review all policies, programmes, projects and commercial activities undertaken or proposed to be undertaken by the subsidiary company, the right to veto any resolution proposed to be passed by the board of directors or the shareholders of the subsidiary company if the Government considers that it is necessary to do so in the national interest and security of Malaysia; and

(vi) The Special Shareholder has the right to veto any resolution proposed to be passed by the board of directors or the shareholders of the subsidiary company purporting to amend the provisions of the Memorandum and Articles of Association of the subsidiary company which affects the rights or any matter relating to the Special Share or the rights attaching to the Special Share.




(b) the associated companies and shareholdings therein are as follows:


Associated companies of padiberas Nasional berhad: Gardenia Bakeries (KL) Sdn Bhd Malaysia 22 22 Bread manufacturing and bakery Kilang Beras Fajar Sdn Bhd Malaysia 36 36 Dormant Formula Timur Sdn Bhd Malaysia 29 29 Dormant Ban Heng Bee Holdings Sdn Bhd Malaysia 36 15 Rice miller Serba Wangi Sdn Bhd ** Malaysia - 38 Trader, distributor and supplier of ^ rice

OEL Realty Holdings Sdn Bhd Malaysia 22 22 Investment holding United Malayan Flour Malaysia 33 33 Manufacturing and trading of (1996) Sdn Bhd wheat flour (Financial year end (“FYE”) 31 July) Associated company of bernas Dominals sdn bhd:

Bernas Feedstuff Malaysia 36 36 Trading in all kinds of rice bran Sdn Bhd and broken rice subsidiary companies of serba Wangi sdn bhd: Serba Wangi (KL) Sdn Bhd ** Malaysia 36 38 Trader, distributor and supplier of rice Serba Wangi (JH) Sdn Bhd Malaysia 18 20 Trader, distributor and supplier of rice Serba Wangi (PG) Sdn Bhd Malaysia 32 34 Trader, distributor and supplier of rice Serba Wangi (Perak) Sdn Bhd ** Malaysia 36 30 Trader, distributor and supplier of rice

Eng Chuan Chan Sdn Bhd Malaysia 18 30 Trader, distributor and supplier of rice



(b) the associated companies and shareholdings therein are as follows: (continued) Group’s effective


subsidiary companies of serba Wangi sdn bhd: (continued)

Serba Wangi ML Sdn Bhd Malaysia 18 20 Trader, distributor and supplier of rice

SW Transport Sdn Bhd * Malaysia 36 30 Provision of transport services

subsidiary companies of oEL Realty holdings sdn bhd:

OEL Distribution Malaysia 22 22 Trader, distributor and supplier of (Kedah) Sdn Bhd rice OEL Distribution Malaysia 22 22 Trader, distributor and supplier of (Perak) Sdn Bhd rice

OEL Origin (Kedah) Sdn Bhd Malaysia 22 22 Trader, distributor and supplier of rice OEL Distribution Malaysia 22 22 Trader, distributor and supplier of (Penang) Sdn Bhd rice

OEL Distribution Malaysia 22 22 Trader, distributor and supplier of (Johor) Sdn Bhd rice

OEL Distribution Malaysia 13 13 Trader, distributor and supplier of (Selangor) Sdn Bhd rice OEL Distribution (KL) Sdn Bhd Malaysia 13 13 Trader, distributor and supplier of rice OEL Food Manufacturing Malaysia 22 22 Manufacturing of health drinks Sdn Bhd subsidiary companies of Gardenia bakeries (KL) sdn bhd: Gardenia Sales & Distribution Malaysia 22 22 Sales and distribution of bread Sdn Bhd

Everday Bakery & Confectionery Malaysia 22 22 Bread manufacturing and Sdn Bhd bakery




(b) the associated companies and shareholdings therein are as follows: (continued) Group’s effective


Associated company of bernas overseas (L) Limited:

Irfan Noman Bernas (Pvt) Pakistan 15 15 Rice trading Limited

Associated companies of Mardec berhad:

Filati Lastex (Malaysia) Sdn Bhd Malaysia 22 - Ceased operations (FYE 30 June) Alfagomma-Mardec Sdn Bhd Malaysia 14 - Manufacturing and selling of (FYE 31 December) mandrell built hydraulic wire braided rubber hoses R1 International Pte Ltd Singapore 32 - Trading of natural rubber and latex (FYE 30 September) Mardec RK Latex Pvt Ltd ^^ India 21 - Purchasing, processing and (FYE 31 March) marketing natural rubber and latex

** The Group regards these companies as associated companies by virtue of its partly indirect shareholdings through another associated company, Ban Heng Bee Holding Sdn Bhd.

^ Serba Wangi Sdn Bhd became a subsidiary company of Ban Heng Bee Holdings Sdn Bhd during the year.

^^ The year end of 31 March is a statutory requirement in India.

45. CApItAL MANAGEMENt

The primary objective of the Group’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2011 and 31 December 2010. The Group and the Company monitor capital using a gearing ratio which is the amount of total borrowings (Note 23) divided by equity attributable to equity holders of the Company. The Group and the Company policies aim to keep the gearing ratio within manageable levels.


45. CApItAL MANAGEMENt (CoNtINUED)

At the reporting date, the Group’s and the Company’s gearing ratios are 1.48 and 0.51 (2010: 1.43 and 0.57) times, respectively as shown below.

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Total borrowings (excluding hire purchase and finance lease arrangements) 3,486,519 2,878,258 669,757 726,565

Equity attributable to equity holders of the Company 2,360,955 2,019,005 1,303,441 1,282,427

Gearing ratio (times) 1.48 1.43 0.51 0.57

With respect to the term loan that the Company has with the financial institution, the Company is committed to ensure that the maximum gearing ratio limit of 1.0 times calculated by dividing the amount of borrowings (Note 23) over the shareholder equity of the Company. A subsidiary company of the Company, Tradewinds Plantation Berhad (“TPB”) is committed to maintain a gearing ratio of not more than 1.75 times calculated by dividing the amount of borrowings over shareholders equity attributable to owners of TPB with respect to the banking facilities with certain financial institutions and the Sukuk Ijarah and Murabahah CP/MTN facilities. Both the Company and TPB are in compliance with the above gearing requirements.

46. CoMpARAtIVEs

(a) The following comparative amounts as at 31 December 2010 have been reclassified to conform with current year’s presentation: As previously stated Adjustments As restated Income statement RM’000 RM’000 RM’000

Group As at 31 December 2010

Other income 99,827 (6,774) 93,053 Raw materials and consumables (3,756,113) 5,459 (3,750,654) Other expenses (457,255) 1,315 (455,940)

(b) The comparatives were audited by a firm of chartered accountants other than Ernst & Young.

47. DAtE of AUthoRIsAtIoN foR IssUE

The financial statements of the Group and of the Company for the financial year ended 31 December 2011 were authorised for issue in accordance with a resolution of the Board of Directors on 26 April 2012.



48. sUppLEMENtARy INfoRMAtIoN oN REALIsED AND UNREALIsED pRofIts oR LossEs

The breakdown of the retained profits of the Group and of the Company as at 31 December 2011 into realised and unrealised is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2011 and prepared 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.

Group Company

2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000

Total retained profits of the Company and its subsidiaries: - realised 3,264,259 2,714,122 923,086 918,301 - unrealised (113,450) (112,433) (476) (16,500)

3,150,809 2,601,689 922,610 901,801 Total share of retained profits from a jointly controlled entity:

- realised 3,761 (1,274) - - - unrealised (237) (237) - - 3,524 (1,511) - - Total share of retained profits from associated companies: - realised (5,053) 121,095 - - - unrealised 6,672 1,660 - - 1,619 122,755 - -

Less: Consolidation adjustments (1,191,979) (1,100,464) - -

Retained profits as per financial statements 1,963,973 1,622,469 922,610 901,801


ProPerties of the grouPtoP – 10 Based on the highest net Book Value

Melur geMilang sdn Bhd ladang gemilangladang Melur ladang sg. krangladang tg. Melanoladang sg. Mangga &ladang sg. tersak

Lot 1224, Sedilu-Gedong Land District, Samarahan, Sarawak

Lot 2978, Melikin Land District Samarahan, Sarawak



Lot 1225, Sedilu-Gedong Land District, SamarahanSarawak

Lot 34, Punda-Sabal Land District, SamarahanSarawak

Lot 33, Punda-Sabal Land District, SamarahanSarawak

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

7,493

780

280

250

1,650

720

4,420

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

2000

2000

2000

2000

2000

2000

2000

328,080

Leasehold for a term of 60 yearsexpiring on 16 February 2060


Leasehold for a term of 60 yearsexpiring on 22 April 2062



Leasehold for a term of 60 years expiring on22 April 2062

Leasehold for a term of 60 yearsexpiring on22 April 2062

address description area existing tenure date of net book (hectares) use acquisition value as at 31.12.2011 (rM’000)


tradeWinds Corridorsdn Bhdladang sg. tekailadang sg. serayaladang Batu hitam ladang tanah Merahladang sg. ahning &ladang Bukit ketapang

HS(D) 1/87 and 2/87PT No. 245 and 246Mukim Padang Terap KiriDistrict of Padang Terap, Kedah

HS(D) 5/92 and 9/92PT No. 334 to 338Mukim Padang Terap KiriDistrict of Padang Terap, Kedah

HS(D) 235 and 237PT No. 692 to 694Mukim Padang Terap KiriDistrict of Padang Terap, Kedah

HS(D) 253, PT No. 1286Mukim Padang Terap KiriDistrict of Padang Terap, Kedah

HS(D) 249 to 250PT No. 776 to 777Mukim Padang Terap KananDistrict of Padang Terap, Kedah

HS(D) 1/92 to 2/92PT No. 229 to 230Mukim Padang Terap KananDistrict of Padang Terap, Kedah

HS(D) 10/92 to 14/92PT No. 351 to 355Mukim Batang Tunggang KiriDistrict of Padang Terap, Kedah

HS(D) 4 to 7PT No. 379 to 283Mukim Batang Tunggang KiriDistrict of Padang Terap, Kedah

Oil Palm andRubber Plantation








1,328.87

354.89

661.44

140.11

35.79

817.68

1,402.88

792.65

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

2008

2008

2008

2008

2008

2008

2008

2008

313,855

Leasehold for a term of 60 yearsexpiring on 26 November 2055










ProPerties of the grouP



HS(D) 252, PT No. 879Mukim Batang Tunggang KiriDistrict of Padang Terap, Kedah

HS(D) 2 to 3PT No. 136 to 152Mukim Batang Tunggang KananDistrict of Padang Terap, Kedah

HS(D) 15/92, PT No. 1468Mukim PeduDistrict of Padang Terap, Kedah

HS(D) 16/92 to 18/92PT No. 1476 to 1478Mukim PeduDistrict of Padang Terap, Kedah

HS(D) 1, PT No. 1569Mukim PeduDistrict of Padang Terap, Kedah

HS(D) 19/92, PT No. 4479Mukim TekaiDistrict of Padang Terap, Kedah













116.06

19.74

79.17

1,327.48

197.26

1,633.54

187.84

1,447.69

48.78

3.14

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

2008

2008

2008

2008

2008

2008

2008

2008

2008

2008


Leasehold for a term of 60 yearsexpiring on26 November 2055











HS(D) 408/89, PT No. 2333Mukim Bukit LadaDistrict of Padang Terap, Kedah

HS(D) 389, PT No. 805Mukim Kuala NerangDistrict of Padang Terap, Kedah

HS(D) 2158, PT No. 363Mukim Bandar Pokok SenaDistrict of Padang Terap, Kedah

HS(D) 251, PT No. 1705Mukim TolakDistrict of Padang Terap, Kedah

aMalan Pelita Pasai sdn Bhd ladang Pelitanah

Lot 16, Block D Oya-Dalat Land District Sibu, Sarawak

ladang PerMai sdn Bhd ladang Permai &ladang tengah nipah

Lot No. 116291920 Locality of Silabukan District of Lahad Datu, Sabah

CL No. 115347852 Locality of Tengah Nipah District of Lahad Datu, Sabah

CL No. 115345867 Locality of Segama District of Lahad Datu, Sabah





Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

249.39

7.99

634.81

8.38

13,980

5,100

194

354

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

2008

2008

2008

2008

2001

1984

1995

1995

137,627

127,337






Leasehold for a term of 99 yearsexpiring on 31 December 2080





Country Lease 115349383 District of Lahad Datu, Sabah










Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

18.05

18.15

17.85

18.01

18.1

18.23

18.24

18

18.17

18

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

1999

1999

1999

1999

1999

1999

1999

1999

1999

1999


Leasehold for a term of 99 yearsexpiring on31 December 2078
















ladang Batu Putih & ladang tinabau

Lot No. 075104335 Locality of SekongDistrict of Sandakan, Sabah

Lot No. 075109385 Locality of SekongDistrict of Sandakan, Sabah

Lot No. 075359385 Locality of Sg. SekongDistrict of Sandakan, Sabah

Lot No. 075409068 Locality of SepagayaDistrict of Sandakan, Sabah


Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

18.15

17.71

5,948

179.8

3,550

1,012

167

16

14

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

1999

1999

1999

1999

1993

1993

1993

1994

1993

120,166





Leasehold for a term of 999 yearsexpiring in 2887

Leasehold for a term of 999 yearsexpiring in 2887










Lot No. 075409059Locality of SepagayaDistrict of Sandakan, Sabah

Lot No. 075353374Locality of Sg. SekongDistrict of Sandakan, Sabah




Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

16

16

16

16

14

111

87

202

15

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

1993

1993

1993

1993

1994

1993

1993

1993

1993













kuMPulan kris Jati sdn Bhd ladang trusan & ladang intan

Lot 490 and 492 Trusan Land DistrictLimbang Division, Sarawak

Lot 493 Trusan Land DistrictLimbang Division, Sarawak

ladang simunjan & ladang ladong

Lot 737, Sebangan-Kepayang Land District Samarahan, Sarawak



Lot 1223, Sedilu-Gedong Land DistrictSamarahan, Sarawak

ladang Petri tenggara sdn Bhdladang ulu sebol

PTD 4428 HS(D) 17845Mukim Ulu Sg Johor, Daerah Kota Tinggi, Johor

PTD 4444 HS(D) 17846Mukim Ulu Sg Johor, Daerah Kota Tinggi, Johor

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

6,140

446

187

463

2,281

2,187

3,500.53

364.21

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

1996

1997

2000

2000

2000

2000

N/A

N/A

123,246

114,072

105,468

Leasehold for a term of 60 yearsexpiring on 7 August 2056

Leasehold for a term of 60 yearsexpiring on 30 March 2057

Leasehold for a term of 60 yearsexpiring on 25 January 2060

Leasehold for a term of 60 yearsexpiring on 19 June 2060







ladang sungai relai sdn Bhdladang sg. relai

GM 53/99, PT 3294Mukim RelaiDaerah Gua Musang, Kelantan






PT 3252, HS (D) 432Mukim RelaiDaerah Gua Musang, Kelantan



6.02

12.41

7.57

170.12

288.4

4,681.1

1,067

2,023

224.3

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

Plantation

1999

1999

1999

1999

1999

1999

2000

2000

2000

100,824










Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation





Binu Plantations sdn Bhd ladang Binu & ladang Jelai

Lot 199, Bakong Land DistrictMiri, Sarawak

Lot 111, Block 4 Bukit Kisi Land District Miri, Sarawak

77.96

4,648

584

Plantation

Plantation

Plantation

2000

2000

2000

89,333




Oil Palm Plantation

Oil Palm Plantation

Oil Palm Plantation



ShareholdingStatiSticSaS at 30 april 2012

Authorised Capital : RM500,000,000Issued and Paid-up Capital : RM296,470,484Class of Shares : Ordinary Shares of RM1.00 eachVoting Rights : One vote for each ordinary shareNo. of Shareholders : 5,964

analyS iS by Size of ShareholdingS

Size of holdings no. of shareholders % no. of shares %

Less than 100 566 9.49 11,809 0.00 100 to 1,000 2,253 37.78 1,570,128 0.53 1,001 to 10, 000 2,502 41.95 10,970,258 3.70 10, 001 to 100,000 540 9.05 20,014,120 6.75 100,001 to less than 5% of issued shares 100 1.68 89,291,409 30.12 5% and above of issued shares 3 0.05 174,612,760 58.90

total 5,964 100.00 296,470,484 100.00

breakdown of ShareholdingS

Size of holdings no. of shareholders % no. of shares %

1 Government Agency 4 0.07 148,310 0.05 2 Bumiputra a. Individuals 261 4.38 1,220,084 0.41 b. Companies 38 0.64 206,461,815 69.64 c. Nominees Company 331 5.55 19,676,061 6.64 3 Non-Bumiputra a. Individuals 4,650 77.97 26,863,960 9.06 b. Companies 138 2.31 11,718,183 3.95 c. Nominees Company 294 4.93 8,933,441 3.01

MalaySian total 5,716 95.84 275,021,854 92.77

4 Foreign a. Individuals 85 1.43 657,545 0.22 b. Companies 10 0.17 154,500 0.05 c. Nominees Company 153 2.57 20,636,585 6.96

foreign total 248 4.16 21,448,630 7.23

grand total 5,964 100.00 296,470,484 100.00


additionalinforMation of

ShareholderS aS at 30 april 2012

additionalinforMation of

ShareholderS aS at 30 april 2012

SubStantial ShareholderS

direct interest indirect interest

no. Shareholders no. of shares % no. of shares %

1. Perspective Lane (M) Sdn Bhd 89,048,663 30.04 – –

2. Felda Global Ventures Holdings Berhad 59,294,097 20.00 – –

3. Kelana Ventures Sdn Bhd 26,270,000 8.86 – –

4. Restu Jernih Sdn Bhd – – 89,048,663 (1) 30.04

5. Tan Sri Dato’ Seri Syed Mokhtar Shah bin Syed Nor – – 127,388,663 (2) 42.97

notes:

(1) Deemed interested by virtue of its interest in Perspective Lane (M) Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.(2) Deemed interested by virtue of his interests in Kelana Ventures Sdn Bhd, Seaport Terminal (Johore) Sdn Bhd and Restu Jernih Sdn

Bhd pursuant to Section 6A of the Companies Act, 1965. Seaport Terminal (Johore) Sdn Bhd holds 12,070,000 (4.07%) shares in Tradewinds (M) Berhad.


top thirtyShareholderSaS at 30 april 2012

no. Shareholders Shareholdings %

1 PERSPECTIVE LANE (M) SDN BHD 89,048,663 30.04 2 FELDA GLOBAL VENTURES HOLDINGS BERHAD 59,294,097 20.00 3 KELANA VENTURES SDN BHD 26,270,000 8.86 4 SEAPORT TERMINAL (JOHORE) SDN BHD 12,070,000 4.07 5 MAYBAN NOMINEES (TEMPATAN) SDN BHD 11,033,800 3.72 MAYBAN TRUSTEES BERHAD FOR PUBLIC ITTIKAL FUND (N14011970240)

6 ACARA KREATIF SDN BHD 6,390,000 2.16 7 AMANAHRAYA TRUSTEES BERHAD 4,804,900 1.62 PUBLIC ISLAMIC SECTOR SELECT FUND

8 AMANAHRAYA TRUSTEES BERHAD 4,486,700 1.51 PUBLIC ISLAMIC SELECT TREASURES FUND

9 HSBC NOMINEES (ASING) SDN BHD 3,692,700 1.25 EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (NORGES BK LEND)

10 JOHAN ENTERPRISE SDN BHD 3,642,740 1.23 11 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 3,000,800 1.01 EMPLOYEES PROVIDENT FUND BOARD

12 GRENFELL HOLDINGS SDN BHD 2,655,402 0.90 13 AMSEC NOMINEES (TEMPATAN) SDN BHD 2,560,700 0.86 AMTRUSTEE BERHAD FOR CIMB ISLAMIC DALI EQUITY GROWTH FUND (UT-CIMB-DALI)

14 AMANAHRAYA TRUSTEES BERHAD 2,405,200 0.81 PUBLIC ISLAMIC DIVIDEND FUND

15 MAYBANK NOMINEES (TEMPATAN) SDN BHD 2,190,900 0.74 MAYBANK TRUSTEES BERHAD FOR PUBLIC REGULAR SAVINGS FUND

(N14011940100) 16 HDM NOMINEES (ASING) SDN BHD 2,016,200 0.68 EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (CLIENTS)

17 HSBC NOMINEES (ASING) SDN BHD 1,976,560 0.67 EXEMPT AN FOR HSBC PRIVATE BANK (SUISSE) S.A. (SPORE TST ACCL)

18 CITIGROUP NOMINEES (ASING) SDN BHD 1,945,300 0.66 CBNY FOR DIMENSIONAL EMERGINGS MARKETS VALUE FUND

19 YEOH KEAN HUA 1,850,690 0.62 20 PPB GROUP BERHAD 1,493,750 0.50


no. Shareholders Shareholdings %

21 LYE KOK LOONG 1,383,600 0.47 22 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 1,337,200 0.45 EMPLOYEES PROVIDENT FUND BOARD (PHEIM)

23 GOH PHAIK LYNN 1,200,000 0.40 24 AFFIN NOMINEES (TEMPATAN) SDN BHD 1,040,086 0.35 PLEDGED SECURITIES ACCOUNT FOR MOGEMS SDN BHD

25 HSBC NOMINEES (ASING) SDN BHD 833,693 0.28 TNTC FOR LSV EMERGING MARKETS EQUITY FUND L.P.

26 LEONG KOK WAH 750,000 0.25 27 HSBC NOMINEES (ASING) SDN BHD 697,000 0.24 EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (AUSTRALIA)

28 HEXARICH SDN BHD 679,000 0.23 29 HSBC NOMINEES (ASING) SDN BHD 605,400 0.20 EXEMPT AN FOR JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (U.S.A)

30 HSBC NOMINEES (ASING) SDN BHD 591,200 0.20 EXEMPT AN FOR THE BANK OF NEW YORK MELLON (MELLON ACCT)

total 251,946,281 84.98

inforMation ondirectorS’

ShareholdingS aS at 30 april 2012

direct interest indirect interest

no. Shareholders no. of shares % no. of shares %

1. Syed Azmin bin Syed Nor – – 127,388,663(1) 42.97

total – – 127,388,663 42.97

note:

(1) Deemed interested pursuant to section 6A of the Companies Act, 1965 by virtue of his family relationship with a major shareholder of the Company.


corporate directory

tradewindS (M) berhad

Level 12, Menara HLANo. 3, Jalan Kia Peng50450 Kuala LumpurTel : 603-2179 7777Fax : 603-2161 1632

central Sugars refinery Sdn bhdP.O. Box 7213Batu Tiga, Shah AlamSelangorTel : 603-5519 1414Fax : 603-5519 8792

gula padang terap Sdn bhd45KM, Jalan Padang Senai06300 Kuala NerangKedahTel : 604-790 4235Fax : 604-786 4242

retus plantation Sdn bhdMasretus oil palm plantation Sdn bhdLevel 9, Menara HLANo. 3, Jalan Kia Peng50450 Kuala LumpurTel : 603-2177 9999Fax : 603-2161 1887

Sovereign place Sdn bhddelta delight Sdn bhdtradewinds cambodia co. ltd.tradewinds realty co. ltd.delta delights (cambodia) co. ltd.Level 12, Menara HLANo. 3, Jalan Kia Peng50450 Kuala Lumpur Tel : 603-2179 7777Fax : 603-2161 1632

tradewindS plantation berhad

Level 9, Menara HLANo. 3, Jalan Kia Peng50450 Kuala Lumpur.Tel : 603-2177 9999Fax : 603-2161 1701

tradewinds plantation Management Sdn bhdLevel 9, Menara HLANo. 3, Jalan Kia Peng50450 Kuala LumpurTel : 603-2177 9999Fax : 603-2161 1701

tradewinds plantation academyNo. 27, 1st FloorLorong Endah Timur 3Jalan Teku, 96000 SibuSarawakTel : 6084-319 248, 318 248Fax : 6084-317 248

tradewinds research & development centreNo. 29, Ground FloorLorong Endah Timur 3Jalan Teku, 96000 SibuSarawakTel : 6084-346 213, 322 213Fax : 6084-349 281

kedah proJect

regional office KM 45, Jalan Padang Sanai06300 Kuala NerangKedahTel : 604-790 4129 Fax : 604-786 9292

ladang batu hitamladang bukit ketapangladang Sungai Serayaladang Sungai tekailadang tanah Merahladang Sungai ahningladang durian burungKM 45, Jalan Padang Sanai06300 Kuala NerangKedahTel : 604-790 4113 (Batu Hitam &

Sg. Ahning) 604-790 4136 (Bkt Ketapang &

Sg Tekai) 604-790 4134 (Sg.Seraya) 604-790 4135 (Tanah Merah

& Durian Burung )Fax : 604-786 4854 (Batu Hitam,

Bkt Ketapang, Sg. Seraya, Sg. Tekai, Tanah Merah, Sg. Ahning & Durian Burung)

nothern peninSular region

regional officeP.O. Box 06Pejabat Pos Kuala Krai18000 Kuala KraiKelantanTe : 609-915 0212Fax : 609-915 0213

ladang Sungai relai (north)ladang Sungai relai (South)ladang Sungai relai (east)P.O. Box 42Pos Besar Gua Musang18300 Gua MusangKelantanTel : 609-915 0214 (Sg Relai North) 609-915 0200 (Sg Relai South) 609-915 0201 (Sg. Relai East)Fax : 609-915 0205 (Sg Relai North) 609-915 0203 (Sg Relai South East)


ladang Serasaladang Sg bayuSerasa palm oil MillP.O. Box 1218000 Kuala KraiKelantan Tel : 6019-959 1810 (Serasa) 6019-983 0256 (Sg. Bayu) 6019-917 9603/ (Serasa Palm 609-914 0603 Oil Mill)Fax : 6019-953 5520 (Serasa) 6019-984 0256 (Sg. Bayu) 6019-983 0674 (Serasa Palm

Oil Mill)

ladang Mawarladang Sri angkasaladang chendana P.O. Box 40Bandar Seri Bandi24007 KemamanTerengganuTel : 609-867 5612Fax : 609-867 5613

ladang Sawit cherulladang ibokladang perkasaladang bukit Sah P.O. Box 40Bandar Seri Bandi24007 KemamanTerengganuTel : 609-867 5551Fax : 609-867 5552

Southern peninSular region

regional officeKomplek SisekKM 20 Lebuhraya Kota Tinggi-Kluang81907 Kota TinggiJohor Tel : 607-889 481/84/85Fax : 607-889 2553

ladang JayaP.O. Box 22Bandar Seri Perani81900 Kota TinggiJohorTel : 607-891 1158Fax : 607-891 1792

ladang ulu papanP.O. Box 6681900 Kota TinggiJohorTel : 607-823 6070Fax : 607-823 5660

ladang Sg lebak, P.O. Box 8ladang Sg. kachur, P.O. Box 11ladang Semai Segar, P.O. Box 11Bandar Petri Jaya81900 Kota TinggiJohorTel : 012-994 5863 (Sg. Kachur) 607-890 4144 (Sg Lebak) 607-890 4118 (Semai Segar)Fax : 607-890 4144 (Sg. Kachur, Sg. Lebak, Semai Segar)

Sg kachur palm oil MillP.O. Box 48KM 22 Jalan Kota Tinggi-Kluang81907 Kota TinggiJohorTel : 607-890 5810/5052Fax : 607-890 4887

ladang penawarP.O. Box 10Bandar Penawar81930 Kota TinggiJohorTel : 607-832 8291Fax : 607-832 8253

ladang SisekP.O. Box 1681907 Kota TinggiJohorTel : 607-889 2220Fax : 607-889 2220

animal husbandary & cultivation unitKompleks SisekKM 20 Lebuhraya Kota Tinggi-Kluang81900 Kota Tinggi Johor Tel : 607-889 4585Fax : 607-884 2553

ladang air ManisKM 51, JB-Air Hitam RoadP.O. Box 11081000 KulaiJohorTel : 607-656 1246Fax : 607-656 1685

ladang ulu Sebol aP.O. Box 26Bandar Tenggara81440 Bandar TenggaraJohorTel : 607-684 0010Fax : 607-896 1260

ladang ulu Sebol bP.O. Box 25Bandar Tenggara81400 Bandar TenggaraJohorTel : 607- 896 1235Fax : 607- 896 1260

ulu Sebol palm oil MillKarung Berkunci 201Bandar Tenggara81440 Bandar TenggaraJohorTel : 607- 896 1211Fax : 607- 896 1263

ladang agromajuP.O. Box 8Bandar Tenggara81440 Bandar TenggaraJohorTel : 607-896 5451Fax : 607-896 5451


ladang paklohBatu 11 ½ Jalan MersingKarung Berkunci 51686009 KluangJohorTel : 607-774 6255Fax : 607-774 6733 607-705 6733

ladang pelangiladang Sembrong kiriP.O. Box 1586700 KahangKluang, JohorTel : 607-780 0064Fax : 607-780 0068

kuching region:

regional officeLevel 23 Gateway KuchingNo. 9, Jalan Bukit Mata93100 KuchingSarawakTel : 6082-412 909/413 909Fax : 6082-248 909/238909

ladang Melurladang gemilangP.O. Box 93594700 SerianSarawakTel : 6082-895 531 (Melur) 6082-895 969 (Gemilang)Fax : 6082-895 969 (Gemilang)

ladang Sg krangP.O. Box 101094700 SerianSarawakTel : 6082-895 193Fax : 6082-895 642

ladang Sg Manggaladang tg Melanoladang Sg tersakP.O. Box 93194700 SerianSarawakTel : 6082-895 182 (Sg Mangga) 6082-895 405 (Tg Melano) 6082-895 624 (Sg Tersak)

Melur gemilang palm oil MillP.O. Box 95294700 SerianSarawakTel : 6082-895 130 / 896 182Fax : 6082-896 967

ladang Simunjanladang ladongladang SebuyauP.O. Box 2494800 SimunjanSarawakTel : 6082-809 089Fax : 6082-809 113

Sibu region:

regional officeP.O. Box 50496007 SibuSarawakTel : 6084-350 454/455Fax : 6084-350 453

ladang linggaladang pelitanah 1ladang pelitanah 2ladang pelitanah 3ladang pelitanah 4ladang pelitanah 5CDT 17496000 SibuSarawakTel : 6083-480 102 (Lingga) 6084-366 957 (Pelitanah 1,2) 6084-228 057 (Pelitanah 3) 6084-228 055 (Pelitanah 4) 6084-350 750 (Pelitanah 5)Fax : 6083-480 139 (Lingga) 6084-366 782 (Pelitanah 1,2)

Mukah region

regional officeNo. 92, 1st FloorLot 1167, Block EMukah New TownshipPhase II, 96400 MukahSarawakTel : 6084-874 053Fax : 6084-874 062

ladang Judanladang petianJudan palm oil MillP.O. Box 19796400 MukahSarawakTel : 6084-875 413 (Judan) 6084-875 432 (Petian) 6084-875 792 (Judan Palm Oil Mill)Fax : 6084-875 022 (Judan Palm Oil

Mill)

ladang tanjung alan 1ladang tanjung alan 2Matu-Daro Roadc/o Post Office96200 DaroSarawakTel : 6084-813 002Fax : 6084-813 004

ladang Jemoreng 1ladang Jemoreng 2c/o Post Office96200 DaroSarawakTel : 6084-823 209 (Jemoreng 1) 6084-823 036 (Jemoreng 2)Fax : 6084-823 210 (Jemoreng 1) 6084-823 034 (Jemoreng 2)

Miri region:

regional officec/o Ladang BinuP.O. Box 137498008 MiriSarawakTel : 6085-739 708

ladang binuladang Jelaibinu palm oil MillP.O. Box 137498008 Miri SarawakTel : 6085-710 308 (Binu) 6085-710 797 (Jelai) 6085-739 288 (Binu Palm Oil Mill)Fax : 6085-710 217 (Binu & Jelai) 6085-739 287 (Binu Palm Oil Mill)

corporate directory Tradewinds (M) Berhad Annual Report 2011238

ladang kuala Suailadang tg payungladang Mutiarakuala Suai palm oil MillP.O. Box 166Pejabat Pos Mini Batu NiahBatu Niah Bazaar98200 MiriSarawakTel : 6085- 739 257/6085-739 157 (Kuala Suai & Kuala Suai Palm Oil Mill) 6085- 739 002 (Tg. Payung) 6085- 739 334 (Mutiara)Fax : 6085- 739 257 (Kuala Suai, Kuala Suai Palm Oil Mill & Tg Payung) 6085- 739 334 (Mutiara)

ladang Sg kladladang SibutiP.O. Box 217998009 MiriSarawakTel : 6085-739 811 (Sg. Klad) 6085-739 909 (Sibuti)Fax : 6085-739 901 (Sg Klad) 6085-739 908 (Sibuti)

Sabah/lawaS region:

regional office1st Floor, Lot 26 MDLD 3291Fajar CentreP.O. Box 6032291100 Lahad Datu SabahTel : 089-881 051/052Fax : 089-881 053

ladang permailadang tengah nipahpermai palm oil MillP.O. Box 6083491107 Lahad DatuSabahTel : 089-887 063 (Permai) 089-887 064 (Tengah Nipah) 089-886 011 (Permai Palm Oil

Mill)Fax : 089-887 063 (Permai 089-887 064 (Tengah Nipah) 089-886 012 (Permai Palm Oil

Mill)

ladang batu putihladang tinabaubatu putih palm oil MillW.D.T 125Kota Kinabatangan90200 Sandakan SabahTel : 089-566 111/2 (Batu Putih) 089-566 114 (Tinabau) 089-565 963/563 288 (Batu Putih Palm

Oil Mill)Fax : 089-566 188 (Batu Putih) 089-566 115 (Tinabau) 089-677 178 (Batu Putih Palm

Oil Mill)

ladang trusanladang intanKM 15, Jalan TrusanP.O. Box 29298857 LawasSarawakTel : 6085-282 030 (Trusan) 6085-290 980 (Intan) Fax : 6085-201 030 (Trusan) 6085-290 981 (Intan)

ladang MerapokKM25, Jalan Lawas-MerapokLot 435, Merapok Land District P.O. Box 44498857 LawasSarawakTel : 6085-282 062Fax : 6085-282 062

trusan palm oil MillKM 15, Jalan TrusanSimpang SundarP.O. Box 45598857 LawasSarawakTel : 6085-282 120Fax : 6085-282 788

Mardec berhad

Mardec processing Sdn bhd (MpSb)Bangunan Mardec Jalan Kerja Ayer Lama68000 AmpangSelangorTel : 603-4256 7055Fax : 603-4252 8430

MpSb balingBatu 38, Kg CheneraiKuala Pegang 09110 Baling KedahTel : 604-476 6055/5330Fax : 604-476 5888

MpSb botaBota Kanan32600 BotaPerakTel : 605-376 4155Fax : 605-376 1261

MpSb MentakabBatu 5, P.O. Box 628407 Mentakab PahangTel : 609-277 9055Fax : 609-277 5679

MpSb kuala berang21700 Kuala BerangTerengganu Tel : 609-682 5055Fax : 609-682 5053


Mardec industrial latex Sdn bhdKM 4, Jalan Stesyen 35000 TapahPerakTel : 605-401 7055Fax : 605-401 1560

Lot 913/63, Ulu Ara70300 MambauNegeri SembilanTel : 606-631 9105Fax : 606-631 1891

Mardec polymers Sdn bhdPlot 11 & 12 Non Free Trade Zone11900 Bayan LepasPenangTel : 604-644 8055Fax : 604-643 4887

alfagomma-Mardec Sdn bhdPLO 344, Jalan Perak 4Kawasan Perindustrian 81700 Pasir GudangJohorTel : 607-251 7055/0407Fax : 607-251 0408

Mardec international Sdn bhdBangunan MardecJalan Kerja Ayer Lama68000 AmpangSelangorTel : 603-4256 7055Fax : 603-4257 8675

Mardec Saigon rubber co ltdVillage 3, Tru Van Tho CommuneBen Cat District Binh Duong ProvinceVietnamTel : 0084-650 355 2492Fax : 0084-650 358 6241

Mardec –yala company limited 93-94 Moo 2, Tambol ParonAmphur Muang YalaYala ProvinceThailand 95160Tel : 0066-73-252 642/252 644Fax : 0066-73-252 172

pt Mardec Siger way kananJl. Lintas Tengah SumateraKM 215, Kampung Gunung SangkaranKecamatan Blambagan Umpu KabupatenWay Kanan, Lampung IndonesiaTel : 0062- 723 700 7708Fax : 0062-723 700 7706

pt Mardec nusa riauKebun PTPN VAfdeling VI Tandun, Desa Kasikan Kabupaten Kampar, RiauIndonesia 28464Tel : 0062-8137 875 9086

pt Mardec Musi lestariJalan Raya Tanjung Api-ApiKM 10 Desa GasingKecamatan Talang KelapaKabupaten Banyuasin, PalembangSumatera Selatan, IndonesiaTel : 0062-8153 270 3978

Mardec r.k. latex pte ltdAnamallais House AnnexeThrissur-680 020 Kerala StateIndiaTel : 91-487-233 8524

padiberaS naSional berhad

Level 27, Menara HLANo. 3, Jalan Kia Peng50450 Kuala LumpurTel : 603-2174 9777 Fax : 603-2161 1887

bernas production Sdn bhdPejabat BERNAS Wilayah UtaraLevel 4, Souq Al-Bukhary Commercial Centre, Jalan Langgar, Alor Setar Kedah Tel : 604-774 0100 Fax : 604-735 2944

beras corporation Sdn bhdIbu Pejabat Wilayah Sabah Lot 2-8-2, 7th Floor Wisma San Hin Wawasan Plaza, Coastal Highway P.O. Box 13311, 88837 Kota Kinabalu SabahTel : 6088-257 510 Fax : 6088-253 517 Ibu Pejabat Wilayah Sarawak No.96-M, Lot 2654-2656Block 195 KNLD, Jalan Green93150 KuchingSarawak Tel : 6082-243 002 Fax : 6082-234 000 ban Say tong Sdn bhd No. 2, Jalan PedadaP.O. Box 2897007 BintuluSarawak Tel : 6086-335 316 Fax : 6086-355 002/317 ban heng bee holdings Sdn bhd450, 1st Floor, Jalan Raja05000 Alor SetarKedah Tel : 604-735 5620 Fax : 604-730 6620 edaran bernas nasional Sdn bhd Level 29, Menara HLANo. 3, Jalan Kia Peng50450 Kuala Lumpur Tel : 603-2161 1803 Fax : 603-2161 1812 era bayam kota Sdn bhdLot PT 4154Kawasan Perindustrian Pengkalan Chepa 11, Padang Tembak 16100 Kota BharuKelantan Tel : 609-773 0878/5878 Fax : 609-744 7878 hock chiong foodstuff Sdn bhd No. 17, Jalan Bank96000 SibuSarawak Tel : 6084-330 476 Fax : 6084-330 964


Jasmine food corporation Sdn bhd Lot No. 5, Jalan 25/124, Section 2540000 Shah AlamSelangor Tel : 603-5122 3188 Fax : 603-5122 3288 liansin trading Sdn bhdLot 2041, Section 66, Jalan Kisar Bintawa Industrial Estate93450 KuchingSarawak Tel : 6082-333 555 Fax : 6082-335 599 oel realty holding Sdn bhdLot 54623, Jalan Kuala Kangsar31200 IpohPerak Tel : 605-291 5555 Fax : 605-291 2233 Sabarice Sdn bhd Lot 5, Likas Bharu (Nountun)Lorong Anggur, Visa Industrial Estate 88450 Kota KinabaluSabah Tel : 6088-381 252/381 253 Fax : 6088-433 539 Sazarice Sdn bhd Lot 85Kompleks Perindustrian SEDCO Likas 88999 Kolombong, InanamKota KinabaluSabah Tel : 6088-433 586/640 Fax : 6088-433 539 Serba wangi Sdn bhd 450, 1st Floor, Jalan Raja05000 Alor Setar Kedah Tel : 604-759 6620 Fax : 604-759 0264 Syarikat faiza Sdn bhd PLO 442, Jalan Wawasan 16Kawasan Perindustrian Sri Gading83300 Batu Pahat Johor Tel : 607-455 6900 Fax : 607-455 7900

tong Seng huat rice trading Sdn bhd 58A, Merbau Road98000 MiriSarawak Tel : 6085-431 037 Fax : 6085-415 643 yhl holding Sdn bhd No. 39-45, Jalan P4/6Bandar Teknologi KajangBatu 18, Jalan Semenyih 43500 Semenyih, KajangSelangor Tel : 603-8724 3368/3792 Fax : 603-8724 3763 other buSineSS bernas feedstuff Sdn bhd Lot PT 4132 & 4133Kawasan Perindustrian Pengkalan Chepa II, Mukim Panchor16100 Kota BharuKelantanTel : 609-773 3232 Fax : 609-774 2252 gardenia bakeries (kl) Sdn bhd Lot 3, Jalan Pelabur 23/140300 Shah AlamSelangor Tel : 603-5542 3228 Fax : 603-5542 3213 united Malayan flour (1996) Sdn bhd 4826, Jalan Permatang Pauh13400 ButterworthPulau Pinang Tel : 604-333 2499 Fax : 604-331 7557

oVerSeaS VentureS irfan noman bernas (pvt) limited QNB House, Bahria Complex-1Ground GloorM.T. Khan Road, Karachi 74000 Pakistan Tel : 00 9221-561 0132 Fax : 00 9221-561 0226

bernaS rice MillerS

perlis & kedah (north 1) arau KBB Arau02600 ArauPerlis Tel : 604-986 4558 Fax : 604-986 3770 utan aji KBB Utan Aji01000 KangarPerlis Tel : 604-976 1133 Fax : 604-976 5155 Simpang empat KBB Simpang Empat02700 Simpang EmpatPerlis Tel : 604-980 7244 Fax : 604-980 7191 kuala perlis KBB Kuala Perlis02000, Kuala PerlisPerlis Tel : 604-985 4133 Fax : 604-985 5487 kodiang KBB Kodiang06100 KodiangKedah Tel : 604-925 5346 Fax : 604-925 2877 Jerlun KBB Jerlun06150 Alor SetarKedah Tel : 604-794 0229 Fax : 604-794 9669 Megat dewa KBB Megat Dewa06510 Alor SetarKedah Tel : 604-925 1349 Fax : 604-925 1679


Jitra KBB Jitra06000 JitraKedah Tel : 604-917 1235 Fax : 604-917 3032 Sungai baru KBB Sg. Baru06250 Alor SetarKedah Tel : 604-733 0896 Fax : 604-733 2173 pering KBB Pering, Jalan Sanglang06000 KodianKedah Tel : 604-925 2673 Fax : 604-925 3526 kerpan KBB Kerpan06510 Alor SetarKedah Tel : 604-794 0228 Fax : 604-794 9671 kedah & pulau pinang (north 2) guar chempedak KBB Guar Chempedak08800 GurunKedah Tel : 604-468 0694 Fax : 604-468 1618 bukit besar KBB Bukit Besar06800 Alor SetarKedah Tel : 604-769 1297 Fax : 604-769 3414 bukit raya KBB Bukit Raya06700 PendangKedah Tel : 604-759 6227 Fax : 604-759 7429

kangkong KBB Kangkong06650 Alor SetarKedah Tel : 604-764 1278 Fax : 604-764 2137 Sungai limau KBB Sungai Limau06910 YanKedah Tel : 604-769 3616 Fax: 604-769 3617 paya keladi KBB Paya Keladi13200 Kepala BatasPulau Pinang Tel : 604-575 7558 Fax : 604-575 1148 telok kechai KBB Telok Kechai06600, Kuala KedahKedah Tel : 604-762 1844 Fax : 604-762 1103 perak Sungai Manik KBB Sungai Manik36000 Telok IntanPerak Tel : 605-623 4542 Fax : 605-621 2551 changkat lada KBB Changkat Lada36800 Kampong GajahPerak Tel : 605-655 1872 Fax : 605-655 1875 Sungai ranggam KBB Sungai Ranggam36800 Kampong GajahPerak Tel : 605-655 1428 Fax : 605-655 1608

Simpang lima KBB Simpang Lima34200 Parit BuntarPerak Tel : 605-716 1279 Fax : 605-716 4795 kelantan & terengganu (east) tumpat KBB Tumpat16200 TumpatKelantan Tel : 609-725 7377 Fax : 609-725 7334 peringat KBB Peringat16400 Melor, Kota BharuKelantan Tel : 609-712 8389 Fax : 609-712 7310 pasir putih KBB Pasir Putih16800 Pasir PutihKelantan Tel : 609-786 6330 Fax : 609-786 9927 bukit kenak KBB Bukit Kenak22000 JertehTerengganu Tel : 609-697 1221 Fax : 609-697 1412 pahang & Selangor (central) Sungai besar KBB Sungai Besar45300 Sungai BesarSelangor Tel : 603-3224 2204 Fax : 603-3224 1601 kuala rompin KBB Rompin26800 Kuala RompinPahang Tel : 609-414 6575 Fax : 609-414 5793


Seri tiram Jaya KBB Seri Tiram Jaya45500 Tanjung KarangSelangor Tel : 603-3269 8101 Fax : 603-3269 8568 Sekinchan KBB Sekinchan45400 SekinchanSelangor Tel : 603-3241 0001 Fax : 603-3241 1300 bagan terap KBB Bagan Terap45300 Sungai BesarSelangor Tel : 603-3216 4240 Fax : 603-3224 7025/1601

bahagian pengurusan benih langgar KBB Langgar06650 LanggarKedah Tel : 604-787 6571 Fax : 604-787 7116

bernaS diStribution centreS/warehouSeS central gudang bSS 1 Lot 30,Lengkongan Sultan Hishamuddin 1, Bandar Sultan Sulaiman42000 Pelabuhan KlangSelangor Tel : 603-3176 0361 Fax : 603-3176 0375 gudang bSS 2 (century 1) No. 7, Jalan Hishamuddin 2Kawasan 2042000 Pelabuhan KlangSelangor Tel : 603-3176 4763 Fax : 603-3176 4791

gudang ebn Lot 30, Lengkongan Sultan Hishamuddin 1, Bandar Sultan Sulaiman42000 Pelabuhan KlangSelangor Tel : 603-3176 3311 Fax : 603-3176 2154

gudang century (dc4) Lot 4, Solok Sultan Hishamuddin 8Kawasan 20, Bandar Sultan Sulaiman42000 Pelabuhan KlangSelangor Tel : 603-3176 0739 Fax : 603-3176 0740 gudang Markono Lot 12, Jalan Sultan Mohamad 6Kawasan Perindustrian Bandar Sultan Sulaiman, 42000 Pelabuhan KlangSelangor Tel : 603-3176 0214 Fax : 603-3176 0224 gudang itg PT 119979 & 119980Jalan Canang Emas8/KS10, Telok Gong42000 Pelabuhan KlangSelangor Tel : 603-3167 3520 Fax : 603-3167 3526 gudang tamadam Lot 23, Solok Hishamuddin 4Kawasan Perusahaan Selat Kelang Utara 42000 Pelabuhan KlangSelangor Tel : 603-3176 0739 Fax : 603-3176 0740

gudang global grit Lot 11778 & 11780Jalan Mata Ikan DuyungTelok Gong 42000Pelabuhan KlangSelangor Tel : 603-3134 1243 Fax : 603-3134 1242 gudang bSS 4 (gubahan Jaya) Lot 8980, Jalan Ikan BawalOff Jalan Telok Gong42000 Pelabuhan KlangSelangor Tel : 603-3167 3520 Fax : 603-3167 3526

north/utara gudang bernaS pr/dc (1,2) Lot 331, MK 1, Solok Perusahaan 4 Perindustrian PraiSeberang Prai Tengah13600 PraiPulau Pinang Tel : 604-397 3287 Fax : 604-397 2148 gudang bernaS pr/dc (3,4,5) Lot 331, MK 1, Solok Perusahaan 4 Perindustrian PeraiSeberang Prai Tengah13600 PraiPulau Pinang Tel : 604-399 0801 Fax : 604-397 2148 gudang bernaS pr/ray (a&b) 2521, Tingkat Perusahaan 6Perai Industrial Estate13600 Prai Pulau PinangTel : 604-398 7923 Fax : 604-398 7904

gudang bernaS pr/ray (c&d) Mukim 1, 1026 Lorong Perusahaan 2Kawasan Perindustrian PraiSeberang Prai Tengah13600 PraiPulau Pinang Tel : 604-390 0566 Fax : 604-390 0584 paSir gudang gudang bernaS pgu/dc (1,2,3,4,5) Lot 86, Jalan Pasir Putih81707 Pasir GudangJohor Tel : 607-252 9798 Fax : 607-251 5457 gudang bernaS pgu/Jyp-a Lot 259, Jalan Tembaga 2Pasir Gudang Industrial Area81700 Pasir GudangJohor Tel : 607-254 6195 Fax : 607-254 6196


gudang bernaS pgu/Jyp-b Lot 306, Jalan Tembaga 2Pasir Gudang Industrial Area81700 Pasir GudangJohor Tel : 607-254 6195 Fax : 607-254 6196 gudang pgu/dn Plot 271, Jalan Gangsa81700 Pasir GudangJohor Tel : 607-251 5300 Fax : 607-251 5300 gudang bernaS pgu/uSb-a Blok A, HSD 444056PTD 194763 Mukim PlentongJohor BahruJohor Tel : 607-386 1581 Fax : 607-386 1582 gudang pasir gudang Blok B, HSD 444056PTD 194763 Mukim PlentongJohor BahruJohor Tel : 607-386 1581 Fax : 607-386 1582 weSt MalaySia gudang lendu a & b (ebn) Lot 451, Mukim Kelemak78000 Alor GajahMelaka Tel : 06-556 2868 Fax : 06-556 2505 gudang kempas a, b & c (ebn) Lot 6600, Jalan Kempas Baru81200 Johor Tel : 607-234 4526 Fax : 607-254 4527 gudang chendering a & b (ebn) Gudang EBN, Jalan Kubang Ikan21080 Kuala TerengganuTerengganu Tel : 609-616 1551 Fax : 609-616 1552

gudang bukit raya (bernaS) Lot PT S28 & 30Mukim Bukit RayaPendangKedah Tel : 604-759 6227 Fax : 604-759 7429 eaSt MalaySia/tiMur Sabah

gudang kota kinabalu (1) Gudang Bandar (B5)Kota KinabaluSabah Tel : 6088-423 267 Fax : 6088-422 322

gudang kota kinabalu (2) BCSB, Lot 85Komplek Perindustrian SedcoLikas Inanam Kota KinabaluSabah Tel : 6088-423 267 Fax : 6088-422 322 gudang kota kinabalu (3) BCSB, Batu 17 1/2, Kg NongkolodJalan Tuaran, Tuaran Sabah Tel : 6088-423 267 Fax : 6088-422 322 gudang Sandakan (1) BCSB, Gdg By 3 ABC, Jalan BombaBt 3, Jalan LabukSandakanSabah Tel : 6089-213 500 Fax : 6089-219 311 gudang Sandakan (2) BCSB, Gdg Bandar JKRJalan Dewan MasyarakatSandakanSabah Tel : 6089-213 500 Fax : 6089-219 311

gudang tawau BCSB, TB 1774, Gdg Apas, KM 5.5Jalan Apas, TawauSabah Tel : 6089-911 017 Fax : 6089-912 952 gudang lahad datu BCSB, MDLD 2637 KK 5Jln Kastam BaruLahad DatuSabah Tel : 6089-881 452 Fax : 6089-881 411 gudang labuan BCSB, Lot 12, Jln Arshat Ranca-Ranca Wilayah Persekutuan LabuanTel : 6087-424 493 Fax : 6087-421 929 gudang kudat BCSB, Jln Pantai BandarWDT 33, KudatSabah Tel : 6088-612 987 Fax : 6088-621 214 Sarawak gudang kuching BCSB, Lot 895Jalan Belian BiawakKuching, Sarawak Tel : 6082-349 672 Fax : 6082-343 745 gudang Sibu BCSB, Lot 478Jalan Lanang UluSibu, Sarawak Tel : 6084-212 733 Fax : 6084-216 251

gudang bintulu BCSB, Lot 1019Kaw. Perindustrian KidurongSarawak Tel : 6086-253 934 Fax : 6086-253 842


FORM OF PROXY

I / We _________________________________________________________________________________________________________________(FULL NAME IN BLOCK LETTERS)

of ____________________________________________________________________________________________________________________ (ADDRESS IN FULL)

being a member/members of TRADEWINDS (M) BERHAD, hereby appoint _______________________________________________________ (FULL NAME IN BLOCK LETTERS)

of ____________________________________________________________________________________________________________________ (ADDRESS IN FULL)

as my/our proxy failing which the Chairman of the meeting* to vote for me/us and on my/our behalf at the 38th Annual General Meeting of the Company to be held at Mahkota Ballroom 2, Ballroom Level, Hotel Istana Kuala Lumpur, 73 Jalan Raja Chulan, 50200 Kuala Lumpur on Thursday, 28 June 2012 at 10.00 a.m.

My/our proxy is to vote as indicated below:-

AGENDA For Against

1. To consider the Audited Financial Statements and the Reports of the Directors and N/A N/A Auditors thereon

RESOLUTIONS

2. To declare a Final Dividend of 25 sen per ordinary share comprising 12.73 sen RESOLUTION 1 franked dividend and 12.27 sen exempt dividend for the financial year ended 31 December 2011

3. To approve the payment of Directors’ fees RESOLUTION 2

4. To re-elect Director – Khalid bin Sufat RESOLUTION 3

5. To re-elect Director – Datuk Hj. Ismail bin Hj. Hashim RESOLUTION 4

6. To re-elect Director – Dato’ Izudin bin Ishak RESOLUTION 5

7. To reappoint Director - Dato’ Wira Syed Abdul Jabbar bin Syed Hassan RESOLUTION 6

8. To reappoint Messrs Ernst & Young as auditors of the Company for the ensuing RESOLUTION 7 year and to authorise the Directors to fix their remuneration

9. Proposed Shareholders’ Mandate for the Company and its subsidiary companies to RESOLUTION 8 enter into Recurrent Related Party Transactions of a Revenue or Trading Nature

(Please indicate with an “X” in the appropriate spaces provided above as to how you wish your votes to be cast. Failing to do so, the proxy will vote or abstain from voting at his/her discretion).

Dated this ___________ day of ___________________2012

_________________________________________________

Signature of Member(s)/Seal of Shareholder(s)

*Delete the words ‘The Chairman of the meeting’ if you wish to appoint some other person to be your proxy.

Notes:-1. In respect of deposited securities, only members whose names appear in the Record

of Depositors on 21 June 2012 shall be eligible to attend the meeting;2. A member of the Company entitled to attend and vote at the meeting is entitled to

appoint any one person to be his/her proxy without limitation to attend and vote in his/her stead and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. A proxy may but need not be a member of the Company;

3. Where a member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appoint one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account;

4. This Form of Proxy to be valid, must be deposited with the Share Registrar, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor, on or before Tuesday, 26 June 2012 at 10.00 a.m being not less than 48 hours before the time fixed for holding the meeting or at any adjournment thereof;

5. In the case of a corporate member, the proxy appointed must be in accordance with the Memorandum and Articles of Association and the Form of Proxy should be given under its common seal or under the hand of its attorney; and

6. Unless voting instructions are indicated in the spaces provided above, the proxy may vote as he/she thinks fit.

No. of shares held

SYMPhONY ShARE REGISTRARS SDN BhDLevel 6, Symphony House

Pusat Dagangan Dana 1, Jalan PJU 1A/46

47301 Petaling Jaya, Selangor

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Documents

Tradewinds annual Report