LEEKEE INDUSTRIES (M) SDN - teo seng capital berhad

DRAFT 2 – 14/06/11/IDA 

DRAFT 3 – 08/07/11/IDA 

DRAFT 4 – 12/07/11/IDA 

DRAFT 5 – 21/07/11/IDA 

DRAFT 6 – 25/07/11/LCL 

TEO SENG CAPITAL BERHAD 

(Incorporated In Malaysia) 

Company No. : 732762 - T 

ANNUAL REPORT 

for the financial year ended 

31 March 2011 

CONTENTS 

Page 

Directors' Report 1-7 

Statement by Directors 8 

Statutory Declaration 9 

Independent Auditors' Report 10-12 

Statements of Financial Position 13-14 

Statements of Comprehensive Income 15 

Statements of Changes in Equity 16-17 

Statements of Cash Flows 18-19 

Notes to the Financial Statements 20-101



Company No : 732762 - T 

DIRECTORS’ REPORT 

The directors have pleasure in submitting their report together with the audited financial statements of 

the Group and of the Company for the financial year ended 31 March 2011. 

PRINCIPAL ACTIVITIES 

The principal activities of the Company is investment holding and provision of management services. 

The principal activities of its subsidiaries are disclosed in Note 7 to the financial statements. 

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

year. 

RESULTS 

Group 

Company 

Profit after tax for the financial year 22,105,649 3,965,981 

Attributable to : 

Owners of the Company 22,105,649 3,965,981 

RM 

RM 

In the opinion of the directors, the results of the operations of the Group and of the Company during 

the financial year have not been substantially affected by any item, transaction or event of a material 

and unusual nature other than the effects arising from the changes in accounting policies as 

disclosed in Note 4.3 to the financial statements. 

Page 1





DIVIDENDS 

Dividends paid or declared by the Company since the end of the previous financial year were as 

follows : 

(i) 

A final single tier dividend of 4.25% equivalent to 0.85 sen per ordinary share approximately of 

RM 1,700,000 which was proposed in respect of the financial year ended 31 March 2010 and 

dealt with in the previous director’s report, was declared on 22 July 2010 and subsequently paid 

on 16 November 2010. The payment was made to the shareholders whose name appeared in 

the Company’s Records of Depositors on 8 November 2010. 

(ii) An interim single tier dividend of 4.25% equivalent to 0.85 sen per ordinary share approximately 

of RM 1,700,000 in respect of the financial year ended 31 March 2011 which was declared on 6 

January 2011 and subsequently paid on 17 February 2011. The payment was made to the 

shareholders whose name appeared in the Company’s Records of Depositors on 24 January 

2011. 

The Board of Directors proposed a final single tier dividend of 7.00% approximately of RM 2,800,000 

in respect of the financial year ended 31 March 2011. The dividend is subject to the approval of 

shareholders at the forthcoming Annual General Meeting of the Company and has not been included 

as a liability in the financial statements. Such dividend, if approved by the shareholders, will be 

accounted for in equity as an appropriation of retained profits for the financial year ending 31 March 

2012. 

RESERVES AND PROVISIONS 

There was no material transfers to or from reserves and provisions during the financial year save as 

disclosed in the financial statements. 

ISSUES OF SHARES AND DEBENTURES 

There was no issue of shares and debentures during the financial year. 

OPTIONS GRANTED OVER UNISSUED SHARES 

No options have been granted by the Company to any person to take up any unissued shares of the 

Company during the financial year. 

Page 2





HOLDING COMPANIES 

The Company is a subsidiary of Advantage Valuations Sdn. Bhd., a company incorporated in 

Malaysia. The intermediate holding company is Leong Hup Holdings Berhad, a company 

incorporated in Malaysia and listed on the Main Market of the Bursa Malaysia Securities Berhad. The 

directors regard to Leong Hup Management Sdn. Bhd., a company incorporated in Malaysia, as the 

ultimate holding company. 

DIRECTORS 

The directors who served since the date of last report are : 

Tan Sri Lau Tuang Nguang 

Lau Jui Peng 

Lau Joo Han 

Nam Yok San 

Na Yok Chee 

Loh Wee Ching 

Choong Keen Shian 

Frederick Ng Yong Chiang 

Dato’ Koh Low @ Koh Kim Toon 

Dato’ Zainal Bin Hassan 

Page 3





DIRECTORS’ INTERESTS 

According to the register of directors’ shareholdings, the interests of the directors in office at the end 

of the financial year in the shares of the Company, its holding company or related corporations were 

as follows : 

The Company 

Number Of Ordinary Shares Of RM 0.20 Each 

Balance At Balance At 

01.04.2010 Bought Sold 31.03.2011 

Tan Sri Lau Tuang Nguang - Indirect 212,800 - - 212,800 

Lau Jui Peng - Direct 413,200 - (413,200) - 

- Indirect 111,230,838 - (111,230,838) - 

Lau Joo Han - Direct 200,000 110,100 (310,100) - 

- Indirect - 310,100 (310,100) - 

Nam Yok San - Direct 951,450 - (951,450) - 

- Indirect 102,254,001 951,450 (951,450) 102,254,001 

Na Yok Chee - Direct 951,450 - (950,000) 1,450 

- Indirect 102,246,001 - - 102,246,001 

Loh Wee Ching - Direct 170,000 - (170,000) - 

Immediate Holding Company – Advantage Valuations Sdn. Bhd. 


Balance At 

Balance At 

01.04.2010 Bought Sold 31.03.2011 

Lau Jui Peng - Indirect 5,100 - (5,100) - 

Nam Yok San - Indirect 4,900 - - 4,900 

Na Yok Chee - Indirect 4,900 - - 4,900 

Page 4





DIRECTORS’ INTERESTS (CONT’D) 

Intermediate Holding Company – Leong Hup Holdings Berhad 


Balance At Balance At 

01.04.2010 Bought Sold 31.03.2011 

Tan Sri Lau Tuang Nguang - Direct 13,000 - - 13,000 

- Indirect 178,000 - - 178,000 

Lau Jui Peng - Direct 330,700 - (237,000) 93,700 

- Indirect 79,545,566 1,860,000 (81,405,566) - 

Lau Joo Han - Direct 55,000 - (10,000) 45,000 

Other than as disclosed above, none of the directors in office at the end of the financial year had any 

other interest in the shares of the Company, its holding company or related corporations during the 

financial year. 

DIRECTORS’ BENEFITS 

Since the end of the previous financial year, none of the directors has received or become entitled to 

receive any benefit (other than benefits included in the aggregate amount of emoluments received or 

due and receivable by directors as disclosed in Note 22(a) 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 the 

director is a member, or with a company in which the director has a substantial financial interest save 

as disclosed in Note 32(a) to the financial statements. 

During and at the end of the financial year, no arrangements subsisted to which the Company was a 

party, whereby the directors of the Company might acquire benefits by means of the acquisition of 

shares in, or debentures of, the Company or any other body corporate. 

Page 5





OTHER STATUTORY INFORMATION 

(a) 

Before the financial statements of the Group and of the Company were made out, the directors 

took reasonable steps : 

(i) 

(ii) 

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 have satisfied themselves that all 

known bad debts had been written off and that adequate allowance had been made for 

doubtful debts ; and 

to ensure that any current assets which were unlikely to realise their values as shown in 

the accounting records in the ordinary course of business had been written down to an 

amount which they might be expected so to realise. 

(b) At the date of this report, the directors are not aware of any circumstances : 

(i) 

(ii) 

(iii) 

(iv) 

which would render the amount written off for bad debts or the additional allowance for 

doubtful debts in the financial statements of the Group and of the Company inadequate 

to any substantial extent ; or 

which would render the values attributed to current assets in the financial statements of 

the Group and of the Company misleading ; or 

which have arisen which would render adherence to the existing method of valuation of 

assets or liabilities of the Group and of the Company misleading or inappropriate ; or 

not otherwise dealt with in this report or financial statements of the Group and of the 

Company which would render any amount stated in the financial statements misleading. 

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

(i) 

(ii) 

any charge on the assets of the Group and of the Company which has arisen since the 

end of the financial year and which secures the liabilities of any other person ; or 

any contingent liability in respect of the Group and of the Company which has arisen 

since the end of the financial year. 

(d) In the opinion of the directors : 

(i) 

(ii) 

no contingent or other liability has become enforceable, or is likely to become 

enforceable within the period of twelve months after the end of the financial year which 

will or may affect the ability of the Group and of the Company to meet their obligations 

as and when they fall due ; and 

no item, transaction or event of a material and unusual nature has arisen in the interval 

between the end of the financial year and the date of this report which is likely to affect 

substantially the results of the operations of the Group and of the Company for the 

financial year in which this report is made. 

Page 6





SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 

The significant events during the financial year are disclosed in Note 34 to the financial statements. 

SUBSEQUENT EVENTS 

Details of subsequent events are disclosed in Note 35 to the financial statements. 

AUDITORS 

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office. 

Signed on behalf of the Board in accordance with a resolution of the directors : 

LAU JUI PENG 

Director 

NAM YOK SAN 

Director 

Muar, Johor Darul Takzim 

Date : 26 July 2011 

Page 7




STATEMENT BY DIRECTORS 

We, the undersigned, being two of the directors of Teo Seng Capital Berhad, do hereby state that, in 

the opinion of the directors, the financial statements set out on pages 13 to 100 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 state of affairs of the Group and of the Company at 31 March 2011 

and of their results and cash flows for the financial year ended on that date. 

The supplementary information set out in Note 37, which is not part of the financial statements, is 

prepared in all material respects, 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 and the directive of Bursa Malaysia Securities Berhad. 

Signed on behalf of the Board in accordance with a resolution of the directors : 

LAU JUI PENG 

Director 

NAM YOK SAN 

Director 



Page 8




STATUTORY DECLARATION 

I, NAM YOK SAN, the director primarily responsible for the financial management of Teo Seng 

Capital Berhad, do solemnly and sincerely declare that the financial statements and supplementary 

information set out on pages 13 to 101 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 NAM YOK SAN at 

Muar in the state of Johor Darul Takzim 

on 26 July 2011 

Before me : 

Commissioner for Oaths 

NAM YOK SAN 

Page 9

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF 




REPORT ON THE FINANCIAL STATEMENTS 

We have audited the financial statements of Teo Seng Capital Berhad, which comprise the 

statements of financial position at 31 March 2011 of the Group and of the Company, and the 

statements of comprehensive income, statements of changes in equity and statements of cash 

flows of the Group and of the Company for the financial year then ended, and a summary of 

significant accounting policies and other explanatory information, as set out on pages 13 to 100. 

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 the approved standards on auditing in Malaysia. Those 

standards require that we comply with ethical requirements and plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial statements. The procedures selected depend on our judgement, 

including the assessment of risks of material misstatement of the financial statements, whether due 

to fraud or error. In making those risk assessments, we consider internal control relevant to the 

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 at 31 March 2011 and of their financial 

performance and cash flows for the financial year then ended. 

Page 10


TEO SENG CAPITAL BERHAD (CONT’D) 



REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS 

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the 

following : 

(a) 

(b) 

(c) 

(d) 

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. 

We have considered the financial statements and the auditors’ reports of all the subsidiaries of 

which we have not acted as auditors, which are indicated in Note 7 to the financial statements. 

We are satisfied that the financial statements of the subsidiaries that have been consolidated 

with the Company’s financial statements are in form and content appropriate and proper for 

the purposes of the preparation of the financial statements of the Group and we have received 

satisfactory information and explanations required by us for those purposes. 

The auditors’ reports on the financial statements of the subsidiaries did not contain any 

qualification or any adverse comment made under Section 174(3) of the Act. 

The supplementary information set out in Note 37 on page 101 is disclosed to meet the requirement 

of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are 

responsible for the preparation of the supplementary information in accordance with Guidance on 

Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of 

Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the 

Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities 

Berhad. In our opinion, the supplementary information is prepared, in all material respects, in 

accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. 

Page 11


TEO SENG CAPITAL BERHAD (CONT’D) 



OTHER MATTERS 

This report is made solely to the members of the Company, as a body, in accordance with Section 

174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume 

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

Crowe Horwath 

Firm No.: AF 1018 

Chartered Accountants 

Ng Kim Kiat 

Approval No.: 2074/10/12 (J) 

Chartered Accountant 



Page 12




STATEMENTS OF FINANCIAL POSITION AT 31 MARCH 2011 

Group 

Company 

Note 2011 31 March 2010 1 April 2009 2011 2010 

RM RM RM RM RM 

Restated Restated 

ASSETS 

Non-Current Assets 

Property, plant and equipment 5 104,162,544 92,133,023 82,355,940 662,412 477,582 

Investment property 6 476,112 - - - - 

Investment in subsidiaries 7 - - - 66,798,407 63,558,402 

Other investments 8 5,080 3,024 3,024 - - 

Goodwill on consolidation 9 - 3,084,411 3,084,411 - - 

104,643,736 95,220,458 85,443,375 67,460,819 64,035,984 

Current Assets 

Inventories 10 30,884,561 28,145,990 28,135,244 - - 

Trade and other receivables 11 25,019,176 16,060,900 12,808,050 1,271,733 352,623 

Deposits, bank and cash balances 12 22,891,142 8,842,924 10,117,098 925,813 521,534 

78,794,879 53,049,814 51,060,392 2,197,546 874,157 

TOTAL ASSETS 183,438,615 148,270,272 136,503,767 69,658,365 64,910,141 

The annexed notes form an integral part of these financial statements. ` Page 13




STATEMENTS OF FINANCIAL POSITION AT 31 MARCH 2011 

Group 

Company 

Note 2011 31 March 2010 1 April 2009 2011 2010 


Restated Restated 

EQUITY AND LIABILITIES 

Equity Attributable To Owners Of The Company 

Share capital 13 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 

Reserves 14 59,557,919 40,891,734 29,077,278 20,307,432 19,741,451 

TOTAL EQUITY 99,557,919 80,891,734 69,077,278 60,307,432 59,741,451 

Non-Current Liabilities 

Bank borrowings 15 3,846,291 2,046,213 3,251,051 - - 

Hire purchase payables 16 3,961,261 4,328,767 3,618,643 - - 

Deferred tax liabilities 17 8,729,508 8,130,508 7,268,508 - - 

16,537,060 14,505,488 14,138,202 - - 

Current Liabilities 

Trade and other payables 18 18,804,964 16,690,753 14,159,584 9,350,933 5,160,603 

Derivative liabilities 19 948 - - - - 

Bank borrowings 15 43,830,194 32,351,342 36,326,922 - - 

Hire purchase payables 16 4,378,494 3,711,667 2,728,883 - - 

Tax payable 329,036 119,288 72,898 - 8,087 

67,343,636 52,873,050 53,288,287 9,350,933 5,168,690 

TOTAL LIABILITIES 83,880,696 67,378,538 67,426,489 9,350,933 5,168,690 

TOTAL EQUITY AND LIABILITIES 183,438,615 148,270,272 136,503,767 69,658,365 64,910,141 

The annexed notes form an integral part of these financial statements. ` Page 14




STATEMENTS OF COMPREHENSIVE INCOME 

FOR THE FINANCIAL YEAR ENDED 31 MARCH 2011 

Group 

Company 

Note 2011 2010 2011 2010 

RM RM RM RM 

REVENUE 20 207,490,392 167,961,127 6,460,000 14,260,000 

INVESTMENT REVENUE 21 84,654 80,499 33,891 61,129 

OTHER INCOME 1,388,836 787,689 - - 

CHANGES IN INVENTORIES 2,612,868 10,746 - - 

PURCHASE OF TRADING MERCHANDISE, 

RAW MATERIALS, LIVESTOCKS AND 

POULTRY FEEDS (130,122,631) (110,521,200) - - 

STAFF COSTS 23 (21,299,621) (16,077,151) (823,945) (132,736) 

DEPRECIATION (7,413,714) (6,692,192) - - 

FINANCE COSTS 24 (2,315,058) (1,936,800) - - 

OTHER EXPENSES (23,699,117) (14,860,583) (710,095) (357,759) 

PROFIT BEFORE TAX 25 26,726,609 18,752,135 4,959,851 13,830,634 

TAX EXPENSE 26 (4,620,960) (3,594,680) (993,870) (774,500) 

PROFIT AFTER TAX 22,105,649 15,157,455 3,965,981 13,056,134 

OTHER COMPREHENSIVE INCOME, NET OF TAX 

- Fair value changes of available-for-sale 

financial assets 1,770 - - - 

- Foreign currency translation (14,566) - - - 

(12,796) - - - 

TOTAL COMPREHENSIVE INCOME FOR 

THE FINANCIAL YEAR 22,092,853 15,157,455 3,965,981 13,056,134 

PROFIT AFTER TAX ATTRIBUTABLE TO : 

Owners of the Company 22,105,649 15,157,455 3,965,981 13,056,134 

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO : 

Owners of the Company 22,092,853 15,157,455 3,965,981 13,056,134 

EARNINGS PER ORDINARY SHARE (SEN) 

Basic 27 11.05 7.58 

The annexed notes form an integral part of these financial statements. 

` 

Page 15




STATEMENTS OF CHANGES IN EQUITY 


Group 

Attributable to Owners of The Company 

Non-Distributable 

Distributable 

Foreign 

Exchange Reverse 

Share Fair Value Translation Acquisition Revaluation 

Note Share Capital Premium Reserve Reserve Reserve Reserve Retained Profits Total Equity 

RM RM RM RM RM RM RM RM 

At 1 April 2009 40,000,000 8,010,827 - - (26,078,000) 4,174,856 42,969,595 69,077,278 

Effect of changes in tax rate - - - - - (143,000) - (143,000) 

Total comprehensive income for the 

financial year - - - - - - 15,157,455 15,157,455 

Dividends 29 - - - - - - (3,199,999) (3,199,999) 

At 31 March 2010 

- as previously reported 40,000,000 8,010,827 - - (26,078,000) 4,031,856 54,927,051 80,891,734 

- effect of adopting FRS 139 4.3(c) - - 286 - - - (26,954) (26,668) 

At 1 April 2010 - as restated 40,000,000 8,010,827 286 - (26,078,000) 4,031,856 54,900,097 80,865,066 

Total comprehensive income for the 

financial year - - 1,770 (14,566) - - 22,105,649 22,092,853 

Dividends 29 - - - - - - (3,400,000) (3,400,000) 

At 31 March 2011 40,000,000 8,010,827 2,056 (14,566) (26,078,000) 4,031,856 73,605,746 99,557,919 

The annexed notes form an integral part of these financial statements. Page 16




STATEMENTS OF CHANGES IN EQUITY 


Company 

Attributable To Owners Of The Company 


Distributable 

Note Share Capital Share Premium Retained Profits Total Equity 

RM RM RM RM 

At 1 April 2009 40,000,000 8,010,827 1,874,489 49,885,316 

Total comprehensive income for the financial year - - 13,056,134 13,056,134 

Dividends 29 - - (3,199,999) (3,199,999) 

At 31 March 2010 40,000,000 8,010,827 11,730,624 59,741,451 

Total comprehensive income for the financial year - - 3,965,981 3,965,981 

Dividends 29 - - (3,400,000) (3,400,000) 

At 31 March 2011 40,000,000 8,010,827 12,296,605 60,307,432 





STATEMENTS OF CASH FLOWS 


Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Restated 

CASH FLOWS FROM OPERATING ACTIVITIES 

Profit before tax 26,726,609 18,752,135 4,959,851 13,830,634 

Adjustments for : 

Allowance for slow moving inventories - 12,146 - - 

Bad debts written off - 1,008 - - 

Depreciation 7,409,826 6,692,192 - - 

Depreciation - investment property 3,888 - - - 

Dividend income (193) (107) (6,100,000) (13,900,000) 

Fair value gain on derivative (26,006) - - - 

Gain on disposal of property, plant and 

equipment (25,000) (76,500) - - 

Goodwill on consolidation written off 4,170,652 - - - 

Impairment losses on trade receivables 175,341 181,159 - - 

Inventory written off 192,802 - - - 

Property, plant and equipment written off - 35,750 - - 

Reversal of impairment losses on trade 

receivables (77,603) (22,185) - - 

Unrealised gain on foreign exchange (166,184) (88,117) - - 

Interest expenses 2,315,058 1,936,800 - - 

Interest income (84,654) (80,499) (33,891) (61,129) 

OPERATING PROFIT/(LOSS) BEFORE WORKING 

CAPITAL CHANGES 40,614,536 27,343,782 (1,174,040) (130,495) 

Changes In Working Capital 

Inventories (2,806,013) (22,892) - - 

Trade and other receivables (4,864,572) (2,805,650) (662,380) 6,542,621 

Trade and other payables (2,780,300) 1,984,941 4,506,732 (8,229,500) 

CASH GENERATED FROM/(ABSORBED INTO) 

OPERATIONS 30,163,651 26,500,181 2,670,312 (1,817,374) 

Interest paid (2,315,058) (1,936,800) - - 

Interest received 84,654 80,499 33,891 61,129 

Tax paid (4,873,511) (3,370,828) (33,687) (64,311) 

NET CASH FROM/(USED IN) OPERATING 

ACTIVITIES 23,059,736 21,273,052 2,670,516 (1,820,556) 

CARRIED FORWARD 23,059,736 21,273,052 2,670,516 (1,820,556) 





STATEMENTS OF CASH FLOWS 


Group 

Company 

Note 2011 2010 2011 2010 

RM RM RM RM 

Restated 

BROUGHT FORWARD 23,059,736 21,273,052 2,670,516 (1,820,556) 

CASH FLOWS FROM INVESTING ACTIVITIES 

Dividend received 193 107 4,875,000 15,050,000 

Acquisition of subsidiary, net of cash and 

cash equivalents acquired 28 341,137 - (240,005) (2) 

Subscription of additional shares in 

subsidiaries - - (3,000,000) (10,034,000) 

Proceeds from disposal of property, plant 

and equipment 25,000 76,500 - - 

Purchase of property, plant and 

equipment 5(d) (15,423,796) (11,408,797) (501,232) (161,180) 

NET CASH (USED IN)/FROM INVESTING 

ACTIVITIES (15,057,466) (11,332,190) 1,133,763 4,854,818 

CASH FLOWS FROM FINANCING ACTIVITIES 

Net (increase)/decrease in fixed deposits 

pledged (19,288) 1,066,478 - - 

Net movements in bankers' acceptances 12,826,000 (5,386,000) - - 

Proceeds from term loans 3,000,000 - - - 

Repayment of term loans (1,179,938) (1,707,051) - - 

Repayment of hire purchase payables (3,936,154) (2,857,092) - - 

Dividends paid (3,400,000) (3,199,999) (3,400,000) (3,199,999) 

NET CASH FROM/(USED IN) FINANCING 

ACTIVITIES 7,290,620 (12,083,664) (3,400,000) (3,199,999) 

NET INCREASE/(DECREASE) IN CASH AND 

CASH EQUIVALENTS 15,292,890 (2,142,802) 404,279 (165,737) 

EFFECT OF EXCHANGE DIFFERENCES 103,172 22,473 - - 

CASH AND CASH EQUIVALENTS AT 

BEGINNING OF THE FINANCIAL YEAR 4,711,262 6,831,591 521,534 687,271 

CASH AND CASH EQUIVALENTS AT END OF 

THE FINANCIAL YEAR 30 20,107,324 4,711,262 925,813 521,534 





NOTES TO THE FINANCIAL STATEMENTS 


1. GENERAL INFORMATION 

The Company was incorporated in Malaysia as a public limited liability company. It is domiciled 

in Malaysia and is listed on the Main Market of the Bursa Malaysia Securities Berhad. 

The registered office and principal place of business are as follows : 

Registered office : 201-203, Jalan Abdullah 

84000 Muar 

Johor Darul Takzim 

Principal place of business : Lot PTD 25740, Batu 4 

Jalan Air Hitam 

83700 Yong Peng 

Johor Darul Takzim 

The financial statements were authorised for issue by the Board of Directors in accordance with 

a resolution of the directors dated 26 July 2011. 

2. PRINCIPAL ACTIVITIES 

The principal activities of the Company is investment holding and provision of management 

services. The principal activities of its subsidiaries are disclosed in Note 7. There have been no 

significant changes in the nature of these principal activities during the financial year. 

3. HOLDING COMPANIES 

The Company is a subsidiary of Advantage Valuations Sdn. Bhd., a company incorporated in 

Malaysia. The intermediate holding company is Leong Hup Holdings Berhad, a company 

incorporated in Malaysia and listed on the Main Market of the Bursa Malaysia Securities 

Berhad. The directors regard to Leong Hup Management Sdn. Bhd., a company incorporated in 

Malaysia, as the ultimate holding company. 

Page 20






4. ACCOUNTING POLICIES AND STANDARDS 

4.1 Basis of Preparation of Financial Statements 

(a) 

(b) 

(c) 

The financial statements of the Group and of the Company have been prepared in 

accordance with Financial Reporting Standards (“FRSs”) and the Companies Act, 

1965 in Malaysia. At the beginning of current financial year, the Group and the 

Company have adopted new/revised FRSs which are mandatory for financial period 

beginning on or after 1 April 2010 as disclosed in Note 4.3. 

The financial statements of the Group and of the Company have been prepared 

under the historical cost convention, unless otherwise indicated in the summary of 

significant accounting policies. 

The preparation of financial statements requires management to make judgements, 

estimates and assumptions that affect the application of accounting policies and the 

reported amounts of assets, liabilities, income and expenses. Actual results may 

differ from these estimates. 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions 

to accounting estimates are recognised in the period in which the estimate is revised 

and in any future periods affected. 

In particular, information about significant areas of estimation uncertainty and critical 

judgements in applying accounting policies that have the most significant effect on 

the amount recognised in the financial statements are described in Note 4.5. 

(d) 

The financial statements of the Group and of the Company are measured using the 

currency of the primary economic environment in which the entities operates (“the 

functional currency”). All the financial statements are presented in Ringgit Malaysia 

(“RM”) and the figures have been rounded to nearest RM, unless otherwise stated. 

Page 21






4. ACCOUNTING POLICIES AND STANDARDS (CONT’D) 

4.2 Summary of Significant Accounting Policies 

(a) 

Subsidiaries and basis of consolidation 

(i) 

Subsidiaries 

Subsidiaries are entities over which the Group has the ability to control the 

financial and operating policies so as to obtain benefits from their activities. The 

existence and effect of potential voting rights that are currently exercisable or 

convertible are considered when assessing whether the Group has such power 

over another entity. 

In the Company’s separate financial statements, investments in subsidiaries 

are stated at cost less impairment losses. On disposal of such investments, the 

difference between net disposal proceeds and their carrying amounts is 

recognised in profit or loss. 

(ii) 

Basis of consolidation 

The consolidated financial statements comprise the financial statements of the 

Company and its subsidiaries at the reporting date. The financial statements of 

the subsidiaries are prepared for the same reporting date as the Company. 

Subsidiaries are consolidated from the date of acquisition, being the date on 

which the Group obtains control, and continue to be consolidated until the date 

that such control ceases. In preparing the consolidated financial statements, 

intragroup balances, transactions and unrealised gains or losses are eliminated 

in full. Uniform accounting policies are adopted in the consolidated financial 

statements for like transactions and events in similar circumstances. 

Acquisitions of subsidiaries are accounted for using the purchase method. The 

cost of an acquisition is measured as the aggregate of the fair 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 acquisition. 

Any excess of the cost of the acquisition over the Group’s interests in the net 

fair value of the identifiable assets, liabilities and contingent liabilities 

represents goodwill. 

Any excess of the Group’s interests in the net fair value of the identifiable 

assets, liabilities and contingent liabilities over the cost of acquisition is 

recognised in profit or loss on the date of acquisition. 

Page 22







4.2 Summary of Significant Accounting Policies (Cont’d) 

(b) 

Intangible assets 

Goodwill 

Goodwill is identified as any excess of the consideration paid over the Group’s share 

of fair value of the identifiable assets, liabilities and contingent liabilities acquired at 

the date of acquisition. Where the consideration is lower than the Group’s share of 

net fair value of the identifiable assets, liabilities and contingent liabilities acquired, 

the difference is recognised as negative goodwill. Negative goodwill is recognised 

immediately in profit or loss. 

Positive goodwill is carried at cost less any accumulated impairment loss. Goodwill is 

subjected to impairment test annually or more frequently if events or changes in 

circumstances indicate that the carrying amount might be impaired. The policy for 

the recognition and measurement of impairment losses is in accordance with Note 

4.2(f)(ii). Gains and losses on the disposal of an entity include the carrying amount of 

goodwill relating to the equity sold. 

(c) 

Property, plant and equipment and depreciation 

Items of property, plant and equipment are stated at cost less any accumulated 

depreciation and any accumulated impairment losses. 

Cost includes expenditures that are directly attributable to the acquisition of the asset 

and any other costs directly attributable to bringing the asset to working condition for 

its intended use, and the costs of dismantling and removing the items and restoring 

the site on which they are located. The cost of self-constructed assets also includes 

the cost of materials and direct labour. Purchased software that is integral to the 

functionality of the related equipment is capitalised as part of that equipment. 

The cost of replacing part of an item of property, plant and equipment is recognised 

in the carrying amount of the item if it is probable that the future economic benefits 

embodied within the part will flow to the Group and its cost can be measured reliably. 

The carrying amount of the replaced part is derecognised. The costs of the day-today 

servicing of property, plant and equipment are recognsied in profit or loss as 

incurred. 

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. 

Page 23








(c) 

Property, plant and equipment and depreciation (cont’d) 

Freehold land, farm and poultry buildings are stated at cost or revalued amounts, 

being the fair value at the date of revaluation, less any subsequent accumulated 

depreciation and subsequent accumulated impairment losses. 

For freehold land and factory buildings, revaluations are performed with sufficient 

regularity such that the carrying amount does not differ materially from that which 

would be determined using fair values at the reporting date. 

Surplus arising on revaluation are credited to revaluation reserve. Any deficit arising 

from revaluation is charged against the revaluation reserve to the extent of a 

previous surplus held in the revaluation reserve for the same property, plant and 

equipment. In all other cases, a decrease in carrying amount is charged to profit or 

loss. Subsequent to revaluation, any addition is stated at cost whilst disposal is 

stated at cost or valuation as appropriate. 

Freehold land is not depreciated whilst capital work-in-progress are not depreciated 

until they are completed and put into use. Leased assets are depreciated over the 

shorter of the lease term and their useful lives unless it is reasonably certain that the 

Group will obtain ownership by the end of the lease term. Other property, plant and 

equipment are depreciated on a straight-line basis to write off the cost of each asset 

to its residual value over the estimated useful lives. The principal annual rates of 

depreciation used are as follows : 

Farm and poultry buildings 2% - 20% 

Factory buildings 1% - 2% 

Plant and machinery 5% - 10% 

Egg layer conveyor and cages system 5% 

Motor vehicles, electrical installation, furniture, fittings, 

equipment, renovation and hostel 2% - 33.3% 

Page 24








(c) 

Property, plant and equipment and depreciation (cont’d) 

The residual values, useful lives and depreciation method are reviewed at the end of 

each reporting period to ensure that the amount, method and period of depreciation 

are consistent with previous estimates and the expected pattern of consumption of 

the future economic benefits embodied in the items of property, plant and equipment. 

The carrying amounts of property, plant and equipment are reviewed for impairment 

when events or changes circumstances indicate that the carrying amounts may not 

be recoverable. The policy for the recognition and measurement of impairment 

losses is in accordance with Note 4.2(f)(ii). 

An item of property, plant and equipment is derecognised upon disposal or when no 

future economic benefits are expected from its use or disposal. The difference 

between the net disposal proceeds, if any, and the carrying amount is recognised in 

profit or loss and the unutilised portion of the revaluation surplus on that item, if any, 

is transferred directly to retained profits. 

In the previous financial year, leasehold land that normally had an indefinite 

economic live and title was not expected to pass to the lessee by the end of the 

lease term was treated as an operating lease. The payment made on entering into or 

acquiring leasehold land that was accounted for as an operating lease represents 

prepaid lease payments. 

During the financial year, the Group adopted the amendments made to FRS 117 – 

Leases in relation to the classification of leasehold land. The Group’s leasehold land 

which in substance is a finance lease has been reclassified as property, plant and 

equipment and measured as such retrospectively. 

(d) 

Assets under hire purchase 

Assets acquired under hire purchase are capitalised in the financial statements and 

are depreciated in accordance with the policy set out in Note 4.2(c) above. Each hire 

purchase payment is allocated between the liability and finance charges so as to 

achieve a constant rate on the finance balance outstanding. Finance charges are 

recognised in profit or loss over the period of the respective hire purchase 

agreements. 

Page 25








(e) 

Investment property 

Investment property is property held either to earn rental income or for capital 

appreciation or for both. Initially, investment property is measured at cost including 

transaction costs, less accumulated depreciation and impairment losses, consistent 

with the accounting policy for property, plant and equipment. 

Investment property is derecognised when they have either disposed off or when the 

investment property is permanently withdrawn from use and no future economic 

benefit is expected from its disposal. Any gains or losses on the retirement or 

disposal of an investment property are recognised in profit or loss in the year in 

which they arise. 

The annual depreciation rate for building is 1.62% calculated on the straight-line 

basis based on the remaining lease period. 

The residual values and depreciation method of investment property are reviewed at 

each year end, with the effect of any changes in estimates accounted for 

prospectively. 

Page 26








(f) 

Impairment 

(i) 

Impairment of financial assets 

All financial assets (other than those categorised at fair value through profit or 

loss), are assessed at the end of each reporting period whether there is any 

objective evidence of impairment as a result of one or more events having an 

impact on the estimated future cash flows of the asset. For an equity 

instrument, a significant or prolonged decline in the fair value below its cost is 

considered to be objective evidence of impairment. 

An impairment loss in respect of held-to-maturity investments and loans and 

receivables financial assets is recognised in profit or loss and is measured as 

the difference between the asset’s carrying amount and the present value of 

estimated future cash flows, discounted at the financial asset’s original effective 

interest rate. 

An impairment loss in respect of available-for-sale financial assets is 

recognised in profit or loss and is measured as the difference between its cost 

(net of any principal payment and amortisation) and its current fair value, less 

any impairment loss previously recognised in the fair value reserve. In addition, 

the cumulative loss recognised in other comprehensive income and 

accumulated in equity under fair value reserve, is reclassified from equity to 

profit or loss. 

With the exception of available-for-sale equity instruments, if, in a subsequent 

period, the amount of the impairment loss decreases and the decrease can be 

related objectively to an event occurring after the impairment was recognised, 

the previously recognised impairment loss is reversed through profit or loss to 

the extent that the carrying amount of the investment at the date the 

impairment is reversed does not exceed what the amortised cost would have 

been had the impairment not been recognised. In respect of available-for-sale 

equity instruments, impairment losses previously recognised in profit or loss 

are not reversed through profit or loss. Any increase in fair value subsequent to 

an impairment loss made is recognised in other comprehensive income. 

Page 27








(f) 

Impairment (cont’d) 

(ii) 

Impairment of non-financial assets 

The carrying amounts of assets, other than those to which FRS 136 – 

Impairment of Assets does not apply, are reviewed at the end of each reporting 

period for impairment when there is an indication that the assets might be 

impaired. Impairment is measured by comparing the carrying amounts of the 

assets with their recoverable amounts. The recoverable amount of the assets is 

the higher of the assets’ fair value less costs to sell and their value-in-use, 

which is measured by reference to discounted future cash flow. 

An impairment loss is recognised in profit or loss immediately unless the asset 

is carried at its revalued amount. Any impairment loss of a revalued asset is 

treated as a revaluation decrease to the extent of a previously recognised 

revaluation surplus for the same asset. 

In respect of assets other than goodwill, and when there is a change in the 

estimates used to determine the recoverable amount, a subsequent increase in 

the recoverable amount of an asset is treated as a reversal of the previous 

impairment loss and is recognised to the extent of the carrying amount of the 

asset that would have been determined (net of amortisation and depreciation) 

had no impairment loss been recognised. The reversal is recognised in profit or 

loss immediately, unless the asset is carried at its revalued amount. A reversal 

of an impairment loss on a revalued asset is credited to other comprehensive 

income. However, to the extent that an impairment loss on the same revalued 

asset was previously recognised as an expense in the statements of 

comprehensive income, a reversal of that impairment loss is recognised as 

income in the statements of comprehensive income. 

Page 28








(g) 

Inventories 

Inventories are stated at the lower of cost and net realisable value. Cost is 

determined on the weighted average or first-in-first-out bases, as applicable. 

Layer and pullet inventories are stated at cost (determined on “weighted-average” 

method) adjusted for amortisation (calculated based on their economic egg-laying 

lives less net realisable value). Costs of layer and pullet inventories comprise the 

original purchase price plus growing cost, which include costs of raw materials, direct 

labour and a proportion of farm overheads. 

Costs of eggs include costs of raw materials, direct labour and an appropriate 

proportion of farm overheads. Costs of egg trays and work-in-progress comprise the 

costs of raw materials, direct labour and a proportion of factory overheads. 

Costs of poultry feeds, trading merchandise, raw materials (determined on “first-infirst-out” 

method), consumable supplies and medication (determined on “weightedaverage” 

method), comprise the original purchase price plus the costs incurred in 

bringing the inventories to their present location and condition. 

Net realisable value represents the estimated selling price in the ordinary course of 

business less selling and distribution costs and all other estimated costs to 

completion. 

Where necessary, due allowance is made for all damaged, obsolete and slow 

moving items. 

(h) 

Financial instruments 

Financial instruments are recognised in the statements of financial position when the 

Group has become a party to the contractual provisions of the instruments. 

Financial instruments are classified as liabilities or equity in accordance with the 

substance of the contractual arrangement. Interest, dividends, gains and losses 

relating to a financial instrument classified as a liability, are reported as an expense 

or income. Distributions to holders of financial instruments classified as equity are 

charged directly to equity. 

Financial instruments are offset when the Group has a legally enforceable right to 

offset and intends to settle either on a net basis or to realise the asset and settle the 

liability simultaneously. 

Page 29








(h) 

Financial instruments (cont’d) 

A financial instrument is recognised initially, at its fair value plus, in the case of a 

financial instrument not at fair value through profit or loss, transaction costs that are 

directly attributable to the acquisition or issue of the financial instrument. 

Financial instruments recognised in the statements of financial position are disclosed 

in the individual policy statement associated with each item. 

(i) 

Financial assets 

On initial recognition, financial assets are classified as either financial assets at 

fair value through profit or loss, loans and receivables, held-to-maturity 

investments, or available-for-sale financial assets, as appropriate. 

Financial assets at fair value through profit or loss 

Financial assets are classified as financial assets at fair value through profit 

or loss when the financial asset is either held for trading or is designated to 

eliminate or significantly reduce a measurement or recognition inconsistency 

that would otherwise arise. Derivatives are also classified as held for trading 

unless they are designated as hedges. 

Financial assets at fair value through profit or loss are stated at fair value, 

with any gains or losses arising on remeasurement recognised in profit or 

loss. Dividend income from this category of financial assets is recognised in 

profit or loss when the Group’s right to receive payment is established. 

Held-to-maturity investments 

Held-to-maturity investments are non-derivative financial assets with fixed or 

determinable payments and fixed maturities that the management has the 

positive intention and ability to hold to maturity. Held-to-maturity investments 

are measured at amortised cost using the effective interest method less any 

impairment loss, with revenue recognised on an effective yield basis. 

Page 30








(h) 


(i) 

Financial assets (cont’d) 

 

Loans and receivables financial assets 

Trade receivables and other receivables that have fixed or determinable 

payments that are not quoted in an active market are classified as loans 

and receivables financial assets. Loans and receivables financial assets 

are measured at amortised cost using the effective interest method, less 

any impairment loss. Interest income is recognised by applying the effective 

interest rate, except for short-term receivables when the recognition of 

interest would be immaterial. 

 

Available-for-sale financial assets 

Available-for-sale financial assets are non-derivative financial assets that 

are designated in this category or are not classified in any of the other 

categories. 

After initial recognition, available-for-sale financial assets are remeasured 

to their fair values at the end of each reporting period. Gains and losses 

arising from changes in fair value are recognised in other comprehensive 

income and accumulated in the fair value reserve, with the exception of 

impairment losses. On derecognition, the cumulative gain or loss previously 

accumulated in the fair value reserve is reclassified from equity into profit or 

loss. 

Dividends on available-for-sale equity instruments are recognised in profit 

or loss when the Group’s right to receive payments is established. 

Investments in equity instruments whose fair value cannot be reliably 

measured are measured at cost less accumulated impairment losses, if 

any. 

Page 31








(h) 


(ii) 

Financial liabilities 

All financial liabilities are initially at fair value plus directly attributable 

transaction costs and subsequently measured at amortised cost using the 

effective interest method other than those categorised as fair value through 


Fair value through profit or loss category comprises financial liabilities that are 

either held for trading or are designated to eliminate or significantly reduce a 

measurement or recognition inconsistency that would otherwise arise. 

Derivatives are also classified as held for trading unless they are designated as 

hedges. 

(iii) Equity instruments 

Ordinary shares are classified as equity. Incremental costs directly attributable 

to the issue of new shares or options are shown in equity as a deduction, net of 

tax, from proceeds. 

Dividends on ordinary shares are recognised as liabilities when approved for 

appropriation. 

(iv) Financial guarantee contracts 

A financial guarantee contract is a contract that requires the issuer to make 

specified payments to reimburse the holder for a loss it incurs because a 

specific debtor fails to make payment when due. 

Financial guarantee contracts are recognised initially as liabilities at fair value, 

net of transaction costs. Subsequent to initial recognition, financial guarantee 

contracts are recognised as income in profit or loss over the period of the 

guarantee or, when there is no specific contractual period, recognised in profit 

or loss upon discharge of the guarantee. If the debtor fails to make payment 

relating to a financial guarantee contract when it is due and the Company, as 

the issuer, is required to reimburse the holder for the associated loss, the 

liability is measured at the higher of the best estimate of the expenditure 

required to settle the present obligation at the end of the reporting period and 

the amount initially recognised less cumulative amortisation. 

Page 32








(i) 

Borrowing costs 

Borrowing costs, directly attributable to the acquisition and construction of property, 

plant and equipment are capitalised as part of the cost of those assets, until such 

time as the assets are ready for their intended use or sale. Capitalisation of 

borrowing costs is suspended during extended periods in which active development 

is interrupted. 

All other borrowing costs are recognised in profit or loss as expenses in the period in 

which they incurred. 

(j) 

Income tax 

Income tax for the year comprises current and deferred tax. 

Current tax is the expected amount of income taxes payable in respect of the taxable 

profit for the year and is measured using the tax rates that have been enacted or 

substantively enacted at the end of the reporting period. 

Deferred tax is provided in full, using the liability method, on temporary differences 

arising between the tax bases of assets and liabilities and their carrying amounts in 

the financial statements. 

Deferred tax liabilities are recognised for all taxable temporary differences other than 

those that arise from goodwill or excess of the acquirer’s interest in the net fair value 

of the acquiree’s identifiable assets, liabilities and contingent liabilities over the 

business combination costs or from the initial recognition of an asset or liability in a 

transaction which is not a business combination and at the time of the transaction, 

affects neither accounting profit nor taxable profit. 

Deferred tax assets are recognised for all deductible temporary differences, unused 

tax losses and unused tax credits to the extent that it is probable that future taxable 

profits will be available against which the deductible temporary differences, unused 

tax losses and unused tax credits can be utilised. The carrying amounts of deferred 

tax assets are reviewed at the end of each reporting period and reduced to the 

extent that it is no longer probable that sufficient future taxable profits will be 

available to allow all or part of the deferred tax assets to be utilised. 

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

apply in the period when the asset is realised or the liability is settled, based on the 

tax rates that have been enacted or substantively enacted at the end of the reporting 

period. 

Page 33








(j) 

Income tax (cont’d) 

Deferred tax assets and liabilities are offset when there is a legally enforceable right 

to set off current tax assets against current tax liabilities and when the deferred 

income taxes relate to the same taxation authority. 

Deferred tax relating to items recognised outside profit or loss is recognised outside 

profit or loss. Deferred tax items are recognised in correlation to the underlying 

transactions either in other comprehensive income or directly in equity and deferred 

tax arising from a business combination is included in the resulting goodwill or 

excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable 

assets, liabilities and contingent liabilities over the business combination costs. 

(k) 

Cash and cash equivalents 

Cash and cash equivalents comprise cash in hand, bank balances, demand 

deposits, deposits pledged with financial institutions, bank overdrafts and short-term, 

highly liquid investments that are readily convertible to known amounts of cash and 

which are subject to an insignificant risk of changes in value. 

(l) 

Revenue recognition 

Revenue is measured at the fair value of the consideration received or receivable 

and represents amounts receivable for goods and services provided in the normal 

course of business, net of returns and trade discounts after eliminating sales within 

the Group. 

(i) 

Sale of goods 

Revenue is recognised when the following conditions are satisfied : 

the Group has transferred to the buyer the significant risks and rewards of 

ownership of the goods ; 

the Group retains neither continuing managerial involvement to the degree 

usually associated with ownership nor effective control over the goods sold ; 

the amount of revenue can be measured reliably ; 

it is probable that the economic benefits associated with the transactions will 

flow to the entity ; and 

the cost incurred or to be incurred in respect of the transaction can be 

measured reliably. 

Page 34








(l) 

Revenue recognition (cont’d) 

(ii) 

Dividend income 

Dividend income is recognised when the shareholder’s right to receive payment 

is established. 

(iii) Interest income 

Interest income is recognised on a time proportion basis that reflects the 

effective yield on the asset. 

(iv) Rental income 

Rental income is recognised on accrual basis unless collectability is in doubt, in 

which case the recognition of such income is suspended. Subsequent to 

suspension, income is recognised on the receipt basis until all arrears have 

been paid. 

(m) Employee benefits 

(i) 

Short-term benefits 

Wages, salaries, paid annual leave, paid sick leave, bonuses, social security 

costs and non-monetary benefits are recognised as expenses in the profit or 

loss in the period in which the associated services are rendered by employees 

of the Group. 

(ii) 

Defined contribution plans 

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 subsidiaries make contributions to their respective countries’ statutory 

pension schemes. Such contributions are recognised as an expense in the 

profit or loss as incurred. 

Page 35








(n) 

Related parties 

A party is related to an entity if :- 

(i) directly, or indirectly through one or more intermediaries, the party :- 

controls, is controlled by, or is under common control with, the entity (this 

includes parents, subsidiaries and fellow subsidiaries) ; 

has an interest in the entity that gives it significant influence over the entity ; 

or 

has joint control over the entity. 

(ii) the party is an associate of the entity ; 

(iii) the party is a joint venture in which the entity is a venturer ; 

(iv) 

(v) 

(vi) 

the party is a member of the key management personnel of the entity or its 

parent ; 

the party is a close member of the family of any individual referred to in (i) or 

(iv) ; 

the party is an entity that is controlled, jointly controlled or significantly 

influenced by, or for which significant voting power in such entity resides with, 

directly or indirectly, any individual referred to in (iv) or (v) ; or 

(vii) the party is a post-employment benefit plan for the benefit of employees of the 

entity, or of any entity that is a related party of the entity. 

Close members of the family of an individual are those family members who may be 

expected to influence, or be influenced by, that individual in their dealings with the 

entity. 

Page 36








(o) 

Functional and foreign currencies 

(i) 

Functional currency 

The management has determined the currency of the primary economic 

environment in which the Group operates i.e. functional currency to be in 

Ringgit Malaysia (“RM”). 

(ii) 

Transactions and balances in foreign currencies 

Transactions in foreign currencies during the financial year are converted into 

RM at rates of exchange ruling at the dates of transactions unless hedged by 

forward foreign exchange contracts, in which case the rates specified in such 

forward foreign exchange contracts are used. Monetary assets and liabilities in 

foreign currencies at the end of the reporting period are translated into RM at 

rates of exchange ruling at that date unless hedged by forward foreign 

exchange contracts, in which case the rates specified in such forward foreign 

exchange contracts are used. 

All gains or losses arising from the settlement of foreign currency transactions 

and from translating foreign monetary assets and liabilities are recognised in 


(iii) Translation of foreign currency financial statements 

Assets and liabilities of foreign operations are translated to RM at the rates of 

exchange ruling at the end of the reporting period. Revenues and expenses of 

foreign operations are translated at exchange rates ruling at the dates of the 

transactions. All exchange differences arising from translation are taken directly 

to other comprehensive income and accumulated in equity under the 

translation reserve. On the disposal of a foreign operation, the cumulative 

amount recognised in other comprehensive income relating to that particular 

foreign operation is reclassified from equity to profit or loss. 

Goodwill and fair value adjustments arising from the acquisition of foreign 

operations are treated as assets and liabilities of the foreign operations and are 

recorded in the functional currency of the foreign operations and translated at 

the closing rate at the end of the reporting period. 

Page 37








(p) 

Operating segments 

An operating segment is a component of the Group that engages in business 

activities from which it may earn revenues and incur expenses, including revenues 

and expenses that relate to transactions with any of the Group’s other components. 

An operating segment’s operating results are reviewed regularly by the chief 

operating decision maker to make decisions about resources to be allocated to the 

segment and assess its performance, and for which discrete financial information is 

available. 

Page 38







4.3 Changes in Accounting Policies and Effects Arising from Adoption of New/Revised 

Financial Reporting Standards (“FRSs”) 

During the current financial year, the Group has adopted the following new/revised 

accounting standards and interpretations (including the consequential amendments) :- 

FRSs and IC Interpretations (including the Consequential Amendments) 

FRS 4 

FRS 7 

FRS 8 

FRS 101 (Revised) 


FRS 139 

Amendments to FRS 1 

and FRS 127 

Amendments to FRS 2 

: Insurance Contracts 

: Financial Instruments : Disclosures 

: Operating Segments 

: Presentation of Financial Statements 

: Borrowing Costs 

: Financial Instruments : Recognition and Measurement 

: Cost of an Investment in a Subsidiary, Jointly Controlled 

Entity or Associate 

: Vesting Conditions and Cancellations 

Amendments to FRS 7, FRS 139 and IC Interpretation 9 

Amendments to FRS 101 : Puttable Financial Instruments and Obligations Arising on 

and FRS 132 

Liquidation 

Amendments to FRS 132 : Classification of Rights Issues and the Transitional Provision 

in Relation to Compound Instruments 

IC Interpretation 9 





: Reassessment of Embedded Derivatives 

: Interim Financial Reporting and Impairment 

: FRS 2 : Group and Treasury Share Transactions 

: Customer Loyalty Programmes 

: FRS 119 : The Limit on a Defined Benefit Asset, Minimum 

Funding Requirements and their Interaction 

Annual Improvements to FRSs (2009) 

Page 39








Financial Reporting Standards (“FRSs”) (Cont’d) 

The adoption of the above accounting standards and interpretations (including the 

consequential amendments) did not have any material impact on the Group’s financial 

statements, other than the following :- 

(a) 

FRS 7 requires additional disclosures about the financial instruments of the Group. 

Prior to 1 April 2010, information about financial statements was disclosed in 

accordance with the requirements of FRS 132 – Financial Instruments : Disclosures 

and Presentation. FRS 7 requires the disclosure of qualitative and quantitative 

information about exposure to risks arising from financial instruments, including 

specified minimum disclosures about credit risk, liquidity risk and market risk, 

including sensitivity analysis to market risk. 

The Group has applied FRS 7 prospectively in accordance with the transitional 

provisions. Accordingly, the new disclosures have not been applied to the 

comparatives and are included throughout the financial statements for the current 


(b) 

FRS 101 (Revised) introduces the statement of comprehensive income, with all 

items of income and expense recognised in profit or loss, together with all other 

items of recognised income and expense recognised directly in equity, either in one 

single statement, or in two linked statements. The Group has elected to present this 

statement as one single statement. 

The revised standard also separates owner and non-owner changes in equity. The 

statement of changes in equity includes only details of transactions with owners, with 

all non-owner changes in equity presented in the statement of comprehensive 

income as other comprehensive income. 

In addition, a statement of financial position is required at the beginning of the 

earliest comparative period following a change in accounting policy, the correction of 

an error or the classification of items in the statement. 

FRS 101 (Revised) also requires the Group to make new disclosures to enable users 

of the financial statements to evaluate the Group’s objectives, policies and 

processes for managing capital. This new disclosures is made in Note 36.2. 

Comparative information has been re-presented so that it is in conformity with the 

requirements of this revised standard. 

Page 40









(c) 

The adoption of FRS 139 (including the consequential amendments) has resulted in 

several changes to accounting policies relating to recognition and measurements of 

financial instruments. 

The financial impact to the financial statements is summarised as follows : 

Group 

At 01.04.2010 

Note 

RM 

Retained profits 

Recognition of derivatives previously not recognised (i) (26,954) 

Fair value reserve 

Fair value of quoted shares (ii) 286 

Note : 

(i) 

(ii) 

Prior to the adoption of FRS 139, all derivative financial instruments were 

recognised in the financial statements only upon settlement. These instruments 

do not qualify for hedge accounting and hence, upon adoption of this standard, 

all derivatives held by the Group at 1 April 2010 are recognised at their fair 

values and are classified as financial assets at fair value through profit or loss. 

Prior to 1 April 2010, investments in non-current quoted shares were stated at 

cost less allowance for diminution in value which is other than temporary. With 

the adoption of FRS 139, these quoted investments are designated as 

available-for-sale financial assets and are measured at their fair values at the 

end of each reporting period. The adjustment to the previous carrying amounts 

is recognised to the fair value reserve. 

Page 41









(iii) 

During the current and prior years, the Company provided financial guarantees 

to banks in connection with bank loans and other banking facilities granted to 

its subsidiaries. Prior to 1 April 2010, the Company did not recognise such 

guarantees as financial liabilities unless it was more likely than not that the 

guarantees would be called upon. The guarantees were disclosed as 

contingent liabilities. Upon the adoption of FRS 139, all unexpired financial 

guarantees issued are recognised as financial liabilities and are measured at 

their initial fair value less accumulated amortisation. At 1 April 2010, the 

financial guarantees issued by the Company have not been recognised since 

the fair value on initial recognition was not material. 

All these financial impacts are recognised as an adjustment to the opening balance of 

retained profits or another appropriate reserve upon the adoption of FRS 139. 

Comparatives are not adjusted/represented by virtue of the exemption given in this 

standard. 

Page 42









(d) The Group has adopted the amendments made to FRS 117 – Leases pursuant to the 

Annual Improvements to FRSs (2009). The Group has reassessed and determined 

that the leasehold land of the Group is in substance a finance lease and has been 

reclassified as property, plant and equipment. This change in accounting policy has 

been made retrospectively in accordance with the transitional provisions of the 

amendments. Impact of the above amendments to the closing balances in the 

consolidated statement of financial position at 31 March 2010 is summarised as 

follows : 

Effect of 

adopting 

As previously Amendments 

stated to FRS 117 As restated 

RM RM RM 

31 March 2010 

Property, plant and equipment 90,278,025 1,854,998 92,133,023 

Prepaid lease payments 1,854,998 (1,854,998) - 

1 April 2009 

Property, plant and equipment 80,482,160 1,873,780 82,355,940 

Prepaid lease payments 1,873,780 (1,873,780) - 

Page 43







4.4 New/Revised Financial Reporting Standards (“FRSs”) That Are Not Yet Effective 

The Group has not applied in advance the following accounting standards and 

interpretations (including the consequential amendments) that have been issued by the 

Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current 

financial year :- 

FRSs and IC Interpretations 

(including the Consequential Amendments) 

Effective date 

FRS 1 (Revised) : First-time Adoption of Financial Reporting 1 July 2010 

Standards 

FRS 3 (Revised) : Business Combinations 1 July 2010 

FRS 124 (Revised) : Related Party Disclosures 1 January 2012 

FRS 127 (Revised) : Consolidated and Separate Financial 1 July 2010 

Statements 

Amendments to FRS 1 : Limited Exemption from Comparative 1 January 2011 

(Revised) 

FRS 7 Disclosures for First-time Adopters 

Amendments to FRS 1 : Additional Exemptions for First-time 1 January 2011 

Adopters 

Amendments to FRS 2 : Scope of FRS 2 and FRS 3 (Revised) 1 July 2010 

Amendments to FRS 2 : Group Cash-settled Share-based 1 January 2011 

Payment Transactions 

Amendments to FRS 5 : Plan to Sell the Controlling Interest in a 1 July 2010 

Subsidiary 

Amendments to FRS 7 : Improving Disclosures about Financial 1 January 2011 

Instruments 

Amendments to FRS 138 : Consequential Amendments Arising from 1 July 2010 


Amendments to : Prepayments of a Minimum Funding 1 July 2011 

IC Interpretation 14 Requirement 

Amendments to : Scope of IC Interpretation 9 and FRS 3 1 July 2010 

IC Interpretation 9 (Revised) 

IC Interpretation 4 : Determining Whether an Arrangement 1 January 2011 

Contains a Lease 

IC Interpretation 12 : Service Concession Arrangements 1 July 2010 

IC Interpretation 15 : Agreements for the Construction of 1 January 2012 

Real Estate 

IC Interpretation 16 : Hedges of a Net Investment in a Foreign 1 July 2010 

Operation 

Page 44







4.4 New/Revised Financial Reporting Standards (“FRSs”) That Are Not Yet Effective 

(Cont’d) 

FRSs and IC Interpretations 

(including the Consequential Amendments) 

Effective date 

IC Interpretation 17 : Distributions of Non-cash Assets to 1 July 2010 

Owners 

IC Interpretation 18 : Transfers of Assets from Customers 1 January 2011 

IC Interpretation 19 : Extinguishing Financial Liabilities with 1 July 2011 

Equity Instruments 

Annual Improvements to FRSs (2010) 1 January 2011 

The above accounting standards and interpretations (including the consequential 

amendments) are not relevant to the Group's operations except as follows :- 

(a) FRS 3 (Revised) introduces significant changes to the accounting for business 

combinations, both at the acquisition date and post acquisition, and requires greater 

use of fair values. In addition, all transaction costs, other than share and debt issue 

costs, will be expensed as incurred. This revised standard will be applied 

prospectively and therefore there will not have any financial impact on the financial 

statements of the Group for the current financial year but may impact the accounting 

for future transactions or arrangements. 

(b) FRS 127 (Revised) requires accounting for changes in ownership interests by the 

Group in a subsidiary, while maintaining control, to be recognised as an equity 

transaction. When the Group loses control of a subsidiary, any interest retained in the 

former subsidiary will be measured at fair value with the gain or loss recognised in 

profit or loss. The revised standard also requires all losses attributable to the minority 

interest to be absorbed by the minority interest instead of by the parent. The Group 

will apply the major changes of FRS 127 (Revised) prospectively and therefore there 

will be no financial impact on the financial statements of the Group for the current 

financial year but may impact the accounting of its future transactions or 

arrangements. 

Page 45







4.5 Critical Accounting Estimates and Judgements 

The key assumptions concerning the future and other key sources of estimation 

uncertainty at the end of the reporting period, that have significant risk of causing a 

material adjustment to the carrying amount of assets and liabilities within the next financial 

year, are discussed below : 

(a) 

Depreciation of property, plant and equipment 

The estimates for the residual values, useful lives and related depreciation charges 

for the property, plant and equipment are based on commercial factors which could 

change significantly as a result of technical innovations and competitors’ actions in 

response to the market conditions. 

The Group anticipates that the residual values of its property, plant and equipment 

will be insignificant. As a result, residual values are not being taken into 

consideration for the computation of the depreciable amount. 

Changes in expected level of usage and technological development could impact the 

economic useful lives and the residual values of these assets, therefore future 

depreciation charges could be revised. 

(b) 

Income tax 

Significant judgement is required in determining the capital allowances and 

deductibility of certain expenses during the estimation of the provision for income 

taxes. There are many transactions and calculations for which the ultimate tax 

determination is uncertain during the ordinary course of business. The Group 

recognises liabilities for tax based on estimates of assessment of the tax liability due. 

Where the final tax outcome of these matters is different from the amounts that were 

initially recorded, such differences will impact the income tax and deferred tax 

provisions where applicable, in the period in which such determination is made. 

Page 46







4.5 Critical Accounting Estimates and Judgements (Cont’d) 

(c) 

Impairment of non-financial assets 

When the recoverable amount of an asset is determined based on the estimate of 

the value-in-use of the cash-generating unit to which the asset is allocated, the 

management is required to make an estimate of the expected future cash flows from 

the cash-generating unit and also to apply a suitable discount rate in order to 

determine the present value of those cash flows. 

(d) 

Allowance for inventories 

Reviews are made periodically by management on damaged, obsolete and slowmoving 

inventories. These reviews require judgement and estimates. Possible 

changes in these estimates could result in revisions to the valuation of inventories. 

(e) 

Classification between investment property and owner-occupied properties 

The Group determines whether a property qualifies as an investment property, and 

has developed a criteria in making that judgement. Investment property is a property 

held to earn rentals or for capital appreciation or both. Therefore, the Group 

considers whether a property generates cash flows largely independent of the other 

assets held by the Group. 

Some properties comprise a portion that is held to earn rentals or for capital 

appreciation and another portion that is held for use in the production or supply of 

goods or services or for administrative purposes. If these portions could be sold 

separately (or leased out separately under a finance lease), the Group accounts for 

the portions separately. If the portions could not be sold separately, the property is 

an investment property only if an insignificant portion is held for use in the production 

or supply of goods or services or for administrative purposes. 

Judgement is made on an individual property basis to determine whether ancillary 

services are so significant that a property does not qualify as investment property. 

Page 47








(f) 

Impairment of trade and other receivables 

An impairment loss is recognised when there is objective evidence that a financial 

asset is impaired. Management specifically reviews its loans and receivables 

financial assets and analyses historical bad debts, customer concentrations, 

customer creditworthiness, current economic trends and changes in the customer 

payment terms when making a judgement to evaluate the adequacy of the allowance 

for impairment losses. Where there is objective evidence of impairment, the amount 

and timing of future cash flows are estimated based on historical loss experience for 

assets with similar credit risk characteristics. If the expectation is different from the 

estimation, such difference will impact the carrying amount of receivables. 

(g) 

Revaluation of properties 

Certain properties of the Group are reported at valuation which is based on 

valuations performed by independent professional valuers. 

The independent professional valuers have exercised judgement in determining 

discount rates, estimates of future cash flows, capitalisation rate, terminal year value, 

market freehold rental and other factors used in the valuation process. Also, 

judgement has been applied in estimating prices for less readily observable external 

parameters. Other factors such as model assumptions, market dislocations and 

unexpected correlations can also materially affect these estimates and the resulting 

valuation estimates. 

(h) 

Impairment of available-for-sale financial assets 

The Group reviews its available-for-sale financial assets at the end of each reporting 

period to assess whether they are impaired. The Group also records impairment loss 

on available-for-sale equity investments when there has been a significant or 

prolonged decline in the fair value below their cost. The determination of what is 

“significant” or “prolonged” requires judgement. In making this judgement, the Group 

evaluates, among other factors, historical share price movements and the duration 

and extent to which the fair value of an investment is less than its cost. 

Page 48








(i) 

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. 

(j) 

Fair value estimates for certain financial assets and liabilities 

The Group carries certain financial assets and liabilities at fair value, which requires 

extensive use of accounting estimates and judgement. While significant components 

of fair value measurement were determined using verifiable objective evidence, the 

amount of changes in fair value would differ if the Group uses different valuation 

methodologies. Any changes in fair value of these assets and liabilities would affect 

profit and/or equity. 

Page 49






5. PROPERTY, PLANT AND EQUIPMENT 

Group - At 31 March 2011 

Motor 

vehicles, 

electrical 

* Leasehold installation, 

land, furniture, 

* Freehold freehold Egg layer fittings, 

land, farm land and conveyor equipment, Capital 

and poultry factory Plant and and cages renovation work-inbuildings 

buildings machinery system and hostel progress Total 

RM RM RM RM RM RM RM 

At cost / valuation 

At 1 April 2010 

(as previously reported) 54,762,469 10,551,266 29,880,087 24,105,256 18,357,653 3,274,847 140,931,578 

Effect of adopting of 

amendments to FRS 117 - 1,878,243 - - - - 1,878,243 

At 1 April 2010 (as restated) 54,762,469 12,429,509 29,880,087 24,105,256 18,357,653 3,274,847 142,809,821 

Additions 4,149,998 56,400 1,178,260 2,633,524 3,511,987 7,815,915 19,346,084 

Disposals - - - - (99,745) - (99,745) 

Transfer to investment 

property (Note 6) - - - - - (480,000) (480,000) 

Acquisition of subsidiary - - - - 681,173 - 681,173 

Reclassification 3,735,134 960,573 1,237,404 2,130,488 258,002 (8,321,601) - 

Foreign exchange 

difference - - - - 9,669 - 9,669 

At 31 March 2011 62,647,601 13,446,482 32,295,751 28,869,268 22,718,739 2,289,161 162,267,002 

Representing : 

At valuation - 10,512,166 - - - - 10,512,166 

At cost 62,647,601 2,934,316 32,295,751 28,869,268 22,718,739 2,289,161 151,754,836 

62,647,601 13,446,482 32,295,751 28,869,268 22,718,739 2,289,161 162,267,002 

Less : Accumulated 

depreciation 


(as previously reported) 15,604,296 114,143 15,064,056 9,115,002 10,756,056 - 50,653,553 


amendments to FRS 117 - 23,245 - - - - 23,245 

At 1 April 2010 (as restated) 15,604,296 137,388 15,064,056 9,115,002 10,756,056 - 50,676,798 

Charge for the financial 

year 1,975,990 147,242 2,002,966 1,280,780 2,002,848 - 7,409,826 

Disposals - - - - (99,745) - (99,745) 

Acquisition of subsidiary - - - - 115,134 - 115,134 

Foreign exchange 

difference - - - - 2,445 - 2,445 

At 31 March 2011 17,580,286 284,630 17,067,022 10,395,782 12,776,738 - 58,104,458 


At valuation - 219,790 - - - - 219,790 

At cost 17,580,286 64,840 17,067,022 10,395,782 12,776,738 - 57,884,668 

17,580,286 284,630 17,067,022 10,395,782 12,776,738 - 58,104,458 

Page 50






5. PROPERTY, PLANT AND EQUIPMENT (CONT’D) 

Group - At 31 March 2011 (cont'd) 

Carrying amount 

Motor 

vehicles, 

electrical 








At 31 March 2011 45,067,315 13,161,852 15,228,729 18,473,486 9,942,001 2,289,161 104,162,544 


At valuation - 10,292,376 - - - - 10,292,376 

At cost 45,067,315 2,869,476 15,228,729 18,473,486 9,942,001 2,289,161 93,870,168 

45,067,315 13,161,852 15,228,729 18,473,486 9,942,001 2,289,161 104,162,544 

Page 51







* The freehold land, leasehold land, farm and poultry buildings and factory buildings of the 

Group consists of : 

Freehold land, farm and poultry buildings 

Leasehold land, freehold land and factory buildings 

Farm and 

Freehold poultry Freehold Leasehold Factory 

land buildings Total land land buildings Total 




(as previously reported) 12,214,712 42,547,757 54,762,469 4,343,530 - 6,207,736 10,551,266 


amendments to FRS 117 - - - - 1,878,243 - 1,878,243 


Additions 3,498,280 651,718 4,149,998 - - 56,400 56,400 

Reclassification - 3,735,134 3,735,134 - - 960,573 960,573 

At 31 March 2011 15,712,992 46,934,609 62,647,601 4,343,530 1,878,243 7,224,709 13,446,482 


At valuation - - - 4,343,530 - 6,168,636 10,512,166 

At cost 15,712,992 46,934,609 62,647,601 - 1,878,243 1,056,073 2,934,316 

15,712,992 46,934,609 62,647,601 4,343,530 1,878,243 7,224,709 13,446,482 


depreciation 


(as previously reported) - 15,604,296 15,604,296 - - 114,143 114,143 


amendments to FRS 117 - - - - 23,245 - 23,245 

At 1 April 2010 (as restated) - 15,604,296 15,604,296 - 23,245 114,143 137,388 


year - 1,975,990 1,975,990 - 22,752 124,490 147,242 

At 31 March 2011 - 17,580,286 17,580,286 - 45,997 238,633 284,630 


At valuation - - - - - 219,790 219,790 

At cost - 17,580,286 17,580,286 - 45,997 18,843 64,840 

- 17,580,286 17,580,286 - 45,997 238,633 284,630 


At 31 March 2011 15,712,992 29,354,323 45,067,315 4,343,530 1,832,246 6,986,076 13,161,852 


At valuation - - - 4,343,530 - 5,948,846 10,292,376 

At cost 15,712,992 29,354,323 45,067,315 - 1,832,246 1,037,230 2,869,476 

15,712,992 29,354,323 45,067,315 4,343,530 1,832,246 6,986,076 13,161,852 

Page 52







Group - At 31 March 2010 

Motor 

vehicles, 

electrical 










(as previously reported) 46,862,081 10,512,166 28,866,716 20,017,404 16,036,739 2,430,295 124,725,401 


amendments to FRS 117 - 1,878,243 - - - - 1,878,243 


Additions 4,088,827 39,100 908,485 3,985,426 2,571,042 4,912,145 16,505,025 

Disposals - - - - (233,848) - (233,848) 

Write-off - - - - (65,000) - (65,000) 

Reclassification 3,811,561 - 104,886 102,426 48,720 (4,067,593) - 

At 31 March 2010 54,762,469 12,429,509 29,880,087 24,105,256 18,357,653 3,274,847 142,809,821 


At valuation - 10,512,166 - - - - 10,512,166 

At cost 54,762,469 1,917,343 29,880,087 24,105,256 18,357,653 3,274,847 132,297,655 

54,762,469 12,429,509 29,880,087 24,105,256 18,357,653 3,274,847 142,809,821 


depreciation 


(as previously reported) 13,828,660 - 13,199,904 7,997,576 9,217,101 - 44,243,241 


amendments to FRS 117 - 4,463 - - - - 4,463 

At 1 April 2009 (as restated) 13,828,660 4,463 13,199,904 7,997,576 9,217,101 - 44,247,704 


year (as restated) 1,775,636 132,925 1,864,152 1,117,426 1,802,053 - 6,692,192 

Disposals - - - - (233,848) - (233,848) 

Write-off - - - - (29,250) - (29,250) 

At 31 March 2010 15,604,296 137,388 15,064,056 9,115,002 10,756,056 - 50,676,798 


At valuation - 113,920 - - - - 113,920 

At cost 15,604,296 23,468 15,064,056 9,115,002 10,756,056 - 50,562,878 

15,604,296 137,388 15,064,056 9,115,002 10,756,056 - 50,676,798 


At 31 March 2010 39,158,173 12,292,121 14,816,031 14,990,254 7,601,597 3,274,847 92,133,023 


At valuation - 10,398,246 - - - - 10,398,246 

At cost 39,158,173 1,893,875 14,816,031 14,990,254 7,601,597 3,274,847 81,734,777 

39,158,173 12,292,121 14,816,031 14,990,254 7,601,597 3,274,847 92,133,023 

Page 53







* The freehold land, leasehold land, farm and poultry buildings and factory buildings of the 

Group consists of : 

Freehold land, farm and poultry buildings 

Leasehold land, freehold land and factory buildings 

Farm and 

Freehold poultry Freehold Leasehold Factory 

land buildings Total land land buildings Total 




(as previously reported) 8,599,628 38,262,453 46,862,081 4,343,530 - 6,168,636 10,512,166 


amendments to FRS 117 - - - - 1,878,243 - 1,878,243 


Additions 3,615,084 473,743 4,088,827 - - 39,100 39,100 

Reclassification - 3,811,561 3,811,561 - - - - 

At 31 March 2010 12,214,712 42,547,757 54,762,469 4,343,530 1,878,243 6,207,736 12,429,509 


At valuation - - - 4,343,530 - 6,168,636 10,512,166 

At cost 12,214,712 42,547,757 54,762,469 - 1,878,243 39,100 1,917,343 

12,214,712 42,547,757 54,762,469 4,343,530 1,878,243 6,207,736 12,429,509 


depreciation 


(as previously reported) - 13,828,660 13,828,660 - - - - 


amendments to FRS 117 - - - - 4,463 - 4,463 

At 1 April 2009 (as restated) - 13,828,660 13,828,660 - 4,463 - 4,463 


year (as restated) - 1,775,636 1,775,636 - 18,782 114,143 132,925 

At 31 March 2010 - 15,604,296 15,604,296 - 23,245 114,143 137,388 


At valuation - - - - - 113,920 113,920 

At cost - 15,604,286 15,604,286 - 23,245 223 23,468 

- 15,604,286 15,604,286 - 23,245 114,143 137,388 


At 31 March 2010 12,214,712 26,943,461 39,158,173 4,343,530 1,854,998 6,093,593 12,292,121 


At valuation - - - 4,343,530 - 6,054,716 10,398,246 

At cost 12,214,712 26,943,461 39,158,173 - 1,854,998 38,877 1,893,875 

12,214,712 26,943,461 39,158,173 4,343,530 1,854,998 6,093,593 12,292,121 

Page 54







Company - At 31 March 2011 

Capital 

work-in-progress 

RM 

At cost 

At 1 April 2010 477,582 

Additions 184,830 

At 31 March 2011 662,412 

Less : Accumulated depreciation 

At 1 April 2010 - 

Charge for the financial year - 

At 31 March 2011 - 


At 31 March 2011 662,412 

Company - At 31 March 2010 

Capital 

work-in-progress 

RM 

At cost 

At 1 April 2009 - 

Additions 477,582 

At 31 March 2010 477,582 

Less : Accumulated depreciation 

At 1 April 2009 - 

Charge for the financial year - 

At 31 March 2010 - 


At 31 March 2010 477,582 

Page 55







(a) The freehold land and factory buildings of certain subsidiaries were last revalued by the 

directors on 31 March 2009 based on a valuation carried out by an independent firm of 

professional valuers. The valuation was based on market value using comparison and cost 

methods of valuation. Had these revalued properties been carried under the cost model, 

the carrying amount would have been as follows : 

Group 

2011 2010 

RM 

RM 

Carrying Amount 

Freehold land 1,483,205 1,483,205 

Factory buildings 4,406,098 4,481,926 

5,889,303 5,965,131 

(b) Certain property, plant and equipment of certain subsidiaries with carrying amount of RM 

21,889,303 (2010 : RM 19,616,662) are charged against banking facilities (Note 15(a)). 

(c) The property, plant and equipment with carrying amount of RM 16,036,019 (2010 : RM 

13,348,491) are acquired under hire purchase instalment plans (Note 16). 

(d) Purchase of property, plant and equipment are as follows : 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Aggregate cost of property, plant 

and equipment acquired 19,346,084 16,505,025 184,830 477,582 

Finance via hire purchase (4,032,315) (5,450,000) - - 

Finance via hire purchase in 

respect of acquisition in 

previous financial year - 900,000 - - 

Unpaid balance included under 

sundry payables (Note 18(c)) (1,298,582) (1,457,695) - (316,402) 

Cash paid in respect of acquisition 

in previous financial year 1,408,609 911,467 316,402 - 

Cash paid during the financial 

year 15,423,796 11,408,797 501,232 161,180 

Page 56






6. INVESTMENT PROPERTY 

Group 

2011 2010 

RM 

RM 

At Cost 

At 1 April - - 

Transfer from property, plant and equipment (Note 5) 480,000 - 

At 31 March 480,000 - 

Less : Accumulated Depreciation 

At 1 April - - 

Charge for the financial year 3,888 - 

At 31 March 3,888 - 

Carrying Amount 476,112 - 

Included in the above is : 

Leasehold shophouse 476,112 - 

Page 57






7. INVESTMENTS IN SUBSIDIARIES 

Company 

2011 2010 

RM 

RM 

Unquoted shares - at cost 66,798,407 63,558,402 

The details of the subsidiaries are shown as below : 

Country of 

Percentage of 

Name of company incorporation Principal activities ownership 

2011 2010 

Teo Seng Farming Malaysia Investment holding and poultry 100% 100% 

Sdn. Bhd. 

farming. 

Teo Seng Feedmill Malaysia Manufacturing and marketing 100% 100% 

Sdn. Bhd. 

of animal feeds. 

Success Century Malaysia Poultry farming. 100% 100% 

Sdn. Bhd. 

Ritma Prestasi Sdn. Bhd. Malaysia Distribution of pet food, 100% 100% 

medicine and other related 

products. 

Teo Seng Paper Products Malaysia Manufacturing and trading of 100% 100% 

Sdn. Bhd. 

egg trays. 

Liberal Energy Sdn. Bhd. Malaysia Dormant 100% 100% 

Premium Egg Products Singapore Wholesaler, importers, exporters 100% - 

Pte. Ltd. (formerly known 

of daily products. 

as Lee Say Egg Products 

Pte. Ltd.) * 

Subsidiary of Ritma Prestasi Sdn. Bhd. 

B-Tech Aquaculture Malaysia Dormant 100% 100% 

Sdn. Bhd. (formerly known 

as Biotech Consortium 

Sdn. Bhd.) 

* Audited by firm other than Crowe Horwath. 

Page 58






7. INVESTMENTS IN SUBSIDIARIES (CONT’D) 

(a) On 2 March 2011, the Company acquired 10% of the total issued and paid-up share capital 

of Premium Egg Products Pte. Ltd. (formerly known as Lee Say Egg Products Pte. Ltd.) 

(“PEP”) for a total cash consideration of SGD 10,000, approximately RM 24,000. 

The Company has subsequently entered into a Share Sale Agreement on 4 March 2011 to 

acquire the remaining 90,000 ordinary shares of SGD 1.00 each equivalent to 90% of the 

issued and paid-up share capital of PEP for a total cash consideration of SGD 90,002, 

approximately RM 216,005. 

In consequent thereof, PEP became a wholly-owned subsidiary of the Company. 

(b) During the financial year, the Company subscribed to the following subsidiaries, new 

ordinary shares of RM 1.00 at par for cash : 

Teo Seng Feedmill Sdn. Bhd. 2,000,000 

Ritma Prestasi Sdn. Bhd. 1,000,000 

RM 

3,000,000 

(c) During the financial year, Ritma Prestasi Sdn. Bhd., a wholly-owned subsidiary of the 

Company, subscribed 4,998 new ordinary shares of RM 1.00 each in B-Tech Aquaculture 

Sdn. Bhd. (formerly known as Biotech Consortium Sdn. Bhd.)(“B-Tech”) representing 100% 

of the issued and paid-up share capital of B-Tech at par for cash. 

8. OTHER INVESTMENTS 

Group 

2011 2010 

RM 

RM 

Quoted shares in Malaysia 

- at cost - 3,024 

- at fair value 5,080 - 

5,080 3,024 

Market value of quoted shares in Malaysia 5,080 3,310 

Upon adoption of FRS 139 during the financial year, the Group designated its investments in 

quoted shares that were previously measured using the cost model as available-for-sale 

financial assets and are measured at fair value. 

Page 59






9. GOODWILL ON CONSOLIDATION 

Group 

2011 2010 

RM 

RM 

At 1 April 3,084,411 3,084,411 

Goodwill arising from acquisition of subsidiary 1,086,241 - 

4,170,652 3,084,411 

Write-off (4,170,652) - 

At 31 March - 3,084,411 

Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating 

units that are expected to benefit from that business combination. The carrying amount of 

goodwill had been allocated as follows : 

Group 

2011 2010 

RM 

RM 

Trading of pet food, medicine and other related products - 1,696,291 

Poultry farming - 1,378,481 

Investment holding - 9,639 

- 3,084,411 

Determining whether goodwill is impaired requires an estimation of the value in use of the cashgenerating 

units to which goodwill has been allocated. 

During financial year 2010, the value in use calculation are based on the discounted net cash 

projections covering a 5 years period and a discount rate of 7.22% reflecting the weighted 

average cost of capital. The directors believe that an average of 10% per annum growth rate is 

reasonable for cash projections purposes. 

Page 60






10. INVENTORIES 

Group 

2011 2010 

RM 

RM 

At Cost 

Layers 15,932,378 16,016,394 

Pullets 3,925,358 2,449,520 

Raw materials 3,846,644 3,177,434 

Trading merchandise 4,667,091 4,875,716 

Poultry feeds 726,026 533,315 

Egg trays 198,069 157,528 

Eggs 622,567 437,013 

Medication 343,624 256,611 

Consumable supplies 230,125 228,873 

Work-in-progress 224,013 175,732 

Others 201,665 - 

30,917,560 28,308,136 

Less : Allowance for slow moving inventories (32,999) (162,146) 

30,884,561 28,145,990 

Page 61






11. TRADE AND OTHER RECEIVABLES 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Trade Receivables 

Amount due from related 

companies 1,434,475 1,608,850 - - 

Amount due from related 

parties 1,418,069 988,681 - - 

Other trade receivables 16,983,857 11,626,685 - - 

19,836,401 14,224,216 - - 

Less : Allowance for 

impairment losses (680,895) (583,157) - - 

19,155,506 13,641,059 - - 

Other Receivables 

Amount due from subsidiaries - - 1,011,767 352,623 

Deposits 1,911,208 388,129 - - 

Prepayments 1,734,697 870,381 3,236 - 

Tax recoverable 1,992,265 978,226 256,730 - 

Sundry receivables 225,500 183,105 - - 

5,863,670 2,419,841 1,271,733 352,623 

25,019,176 16,060,900 1,271,733 352,623 

Allowance for impairment losses : 

At 1 April (583,157) (424,183) - - 

Additions during the financial 

year (175,341) (181,159) - - 

Reversal of allowances no longer 

required 77,603 22,185 - - 

At 31 March (680,895) (583,157) - - 

Page 62






11. TRADE AND OTHER RECEIVABLES (CONT’D) 

(a) The Group’s normal trade terms range from cash term to 150 days (2010 : cash term to 

150 days) from the date of invoices. Other credit terms are assessed and approved on a 

case-by-case basis. 

(b) The amount due from subsidiaries are unsecured, interest free and repayable on demand 

except for the advances of RM 581,763 (2010 : RM 101,646) which bear interest at 3.2% 

(2010 : 2.5% to 2.8%) per annum. 

12. DEPOSITS, BANK AND CASH BALANCES 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Bank and cash balances 20,786,357 6,767,410 515,234 119,561 

Fixed deposits placed with 

licensed banks 2,104,785 2,075,514 410,579 401,973 

22,891,142 8,842,924 925,813 521,534 

(a) Fixed deposits placed with licensed banks of the Group of RM 1,515,135 (2010 : RM 

1,495,847) are pledged against banking facilities (Note 15(a)). 

(b) The average effective interest rate of fixed deposits placed with licensed banks of the 

Group and of the Company at the end of the reporting period are 2.5% (2010 : 2.0%) and 

2.3% (2010 : 2.0%) per annum respectively. 

(c) The maturity period of fixed deposits placed with licensed banks of the Group and of the 

Company at the end of the reporting period are 30 to 365 days (2010 : 30 to 365 days) and 

90 days (2010 : 90 days) respectively. 

Page 63






13. SHARE CAPITAL 

Group And Company 

2011 2010 

RM 

RM 

Authorised : 

Ordinary shares of RM 0.20 each 50,000,000 50,000,000 

Issued and fully paid : 

Ordinary shares of RM 0.20 each 40,000,000 40,000,000 

14. RESERVES 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 


Fair value reserve 2,056 - - - 

Foreign exchange translation 

reserve (14,566) - - - 

Revaluation reserve 4,031,856 4,031,856 - - 

Reverse acquisition reserve (26,078,000) (26,078,000) - - 

Share premium 8,010,827 8,010,827 8,010,827 8,010,827 

(14,047,827) (14,035,317) 8,010,827 8,010,827 

Distributable 

Retained profits 73,605,746 54,927,051 12,296,605 11,730,624 

59,557,919 40,891,734 20,307,432 19,741,451 

Page 64






14. RESERVES (CONT’D) 

(a) Fair value reserve 

The fair value reserve represents the cumulative fair value changes (net of tax, where 

applicable) of available-for-sales financial assets until they are disposed of or impaired. 

(b) Foreign exchange translation reserve 

The foreign exchange translation reserve comprises all foreign exchange differences 

arising from the translation of the financial statements of foreign subsidiary. 

(c) Revaluation reserve 

The revaluation reserve represent the surpluses arising from the revaluation of certain 

property, plant and equipment. 

(d) Share premium 

Share premium of the Group and of the Company arose from allotment of ordinary shares 

at premium net of share issue expenses. 

(e) Retained profits 

Retained profits are those available for distribution by way of dividends. 

Finance Act 2007 (Act 683) introduced a single-tier company income tax system with effect 

from the Year of Assessment 2008. Under this system, tax on a company’s profit is a final 

tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the 

previous imputation system, the recipient of the dividend would no longer be able to claim 

any tax credit. 

Companies without Section 108 tax credit balance will automatically move to a single tier 

tax system on 1 January 2008. 

Page 65






15. BANK BORROWINGS 

Group 

2011 2010 

RM 

RM 

Current 

Secured - Bank overdrafts 571,277 2,336,850 

- Bankers' acceptances 15,744,000 20,035,000 

- Term loans 921,185 451,053 

Unsecured - Bank overdrafts 697,406 298,965 


- Term loans 279,326 729,474 

43,830,194 32,351,342 

Non-Current 

Secured - Term loans 3,846,291 1,766,036 

Unsecured - Term loans - 280,177 

3,846,291 2,046,213 

47,676,485 34,397,555 

Total Bank Borrowings 

Secured - Bank overdrafts 571,277 2,336,850 


- Term loans 4,767,476 2,217,089 

Unsecured - Bank overdrafts 697,406 298,965 


- Term loans 279,326 1,009,651 

47,676,485 34,397,555 

(a) The secured bank borrowings of the Group are secured by the following : 

(i) 

Certain property, plant and equipment of certain subsidiaries (Note 5(b)). 

(ii) Fixed deposits placed with licensed banks of certain subsidiaries (Note 12(a)). 

(iii) Debenture on present and future fixed and floating assets of certain subsidiaries. 

(iv) Guarantee by intermediate holding company, the Company and a subsidiary. 

Page 66






15. BANK BORROWINGS (CONT’D) 

(b) The unsecured bank borrowings of the Group are guarantee by the intermediate holding 

company and covered by negative pledge on a subsidiary’s assets. 

(c) The average effective interest rate (% per annum) at the end of the reporting period for 

bank borrowings were as follows : 

Group 

2011 2010 

% % 

Bank overdrafts 7.7 7.1 

Bankers' acceptances 4.3 3.8 

Term loans 5.7 5.7 

(d) The term loans are repayable by 60 to 84 monthly instalments (2010 : 60 to 84 monthly 

instalments). At the end of the reporting period, they are repayable as follows : 

Group 

2011 2010 

RM 

RM 

Current 

Not later than one year 1,200,511 1,180,527 

Non-Current 

Later than one year and not later than two years 820,660 757,315 

Later than two years and not later than five years 2,467,196 949,708 

Later than five years 558,435 339,190 

3,846,291 2,046,213 

5,046,802 3,226,740 

Page 67






16. HIRE PURCHASE PAYABLES 

Group 

2011 2010 

RM 

RM 

Minimum hire purchase payments 


Later than one year and not later than two years 3,226,133 3,107,005 

Later than two years and not later than five years 1,093,450 1,760,473 

9,241,298 9,067,306 

Less : Future finance charges (901,543) (1,026,872) 

Present value of hire purchase payables 8,339,755 8,040,434 

The net hire purchase payables are repayable as follow : 

Current 


Non-current 

Later than one year and not later than two years 2,941,645 2,805,823 

Later than two years and not later than five years 1,019,616 1,522,944 

3,961,261 4,328,767 

8,339,755 8,040,434 

(a) The hire purchase payables of the Group of RM 4,642,714 and RM 1,312,376 (2010 : RM 

3,748,731 and RM 2,651,921) are guaranteed by the Company and intermediate holding 

company respectively. 

(b) The effective interest rate of hire purchase payables are ranging from 3.2% to 7.5% (2010 : 

3.2% to 8.8%) per annum. 

Page 68






17. DEFERRED TAX LIABILITIES 

(a) Recognised deferred tax liabilities 

Group 

2011 2010 

RM 

RM 

(i) Movements of deferred tax liabilities 

At 1 April 8,130,508 7,268,508 

Acquisition of subsidiary 48,000 - 

Effect of changes in tax rate - 153,000 

Recognised in profit or loss 558,740 213,000 

Foreign exchange differences (740) - 

(Over)/Underprovision in prior years (7,000) 496,000 

At 31 March 8,729,508 8,130,508 

(ii) Components of deferred tax liabilities 

Revaluation surplus of properties 1,126,000 1,194,000 

Excess of capital allowances over corresponding 

book depreciation 8,447,508 7,513,508 

Unused tax losses (173,000) (111,000) 

Unabsorbed capital allowances (593,000) (394,000) 

Other temporary differences (78,000) (72,000) 

8,729,508 8,130,508 

(b) Unrecognised deferred tax assets 

Deferred tax assets have not been recognised in respect of the following items : 

Group 

2011 2010 

RM 

RM 

Unused tax losses 464,000 - 

Unabsorbed capital allowances 192,000 - 

656,000 - 

The deductible temporary differences do not expire under current tax legislation. Deferred 

tax assets have not been recognised in respect of these items as it is not probable that 

future taxable profits of the subsidiary will be available against which the deductible 

temporary differences can be utilised. 

Page 69






18. TRADE AND OTHER PAYABLES 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Trade payables 

Amount due to related 

companies 1,409,046 1,139,816 - - 

Amount due to related parties 575,478 3,136,566 - - 

Other trade payables 9,854,165 8,271,619 - - 

11,838,689 12,548,001 - - 

Other payables 

Amount due to intermediate 

holding company 6,559 11,707 13 36 

Amount due to immediate holding 

company 199,997 - 199,997 - 

Amount due to subsidiary - - 9,050,104 4,753,631 

Amount due to related company 1,467,891 - - - 

Amount due to related parties 179,499 123,950 - - 

Accruals 1,805,957 1,423,093 89,230 83,296 

Sundry payables 3,306,372 2,584,002 11,589 323,640 

6,966,275 4,142,752 9,350,933 5,160,603 

18,804,964 16,690,753 9,350,933 5,160,603 

(a) The normal trade terms granted to the Group range from cash term to 90 days (2010 : cash 

term to 90 days) from the date of invoices. 

(b) The non-trade amounts due to intermediate holding company, immediate holding company, 

subsidiary, related company and related parties are unsecured, interest free and repayable 

on demand. 

(c) Included in sundry payables of the Group and of the Company is an amount of RM 

1,298,582 and RM NIL (2010 : RM 1,457,695 and RM 316,402) respectively payable for 

the purchase of property, plant and equipment (Note 5(d)). 

Page 70






19. DERIVATIVE LIABILITIES 

Contract/ 

notional 

amount 

Group 

Liabilities 

2011 2011 

RM 

RM 

Forward foreign exchange contract 309,326 948 

(a) Forward foreign exchange contracts are used to hedge the Group’s purchases 

denominated in United States Dollar (“USD”) for which firm commitments existed at the end 

of the reporting period. The settlement dates on forward foreign exchange contracts is 4 

days after the end of the reporting period. The Group does not apply hedge accounting. 

(b) During the financial year, the Group recognised a gain of RM 26,006 arising from fair value 

changes of derivative liabilities. The fair value changes are attributable to changes in 

foreign exchange spot and forward rate. The method and assumptions applied in 

determining the fair value of derivative are disclosed in Note 36.4(v). 

20. REVENUE 

Revenue of the Group and of the Company comprises the following amounts : 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Sale of goods 207,490,199 167,961,020 - - 

Dividend income from : 

Subsidiaries - - 6,100,000 13,900,000 

Other investments 193 107 - - 

Management fee - - 360,000 360,000 

207,490,392 167,961,127 6,460,000 14,260,000 

Page 71






21. INVESTMENT REVENUE 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Interest income from : 

Fixed deposits 83,874 78,767 13,580 13,185 

Advance to subsidiaries - - 20,311 47,944 

Others 780 1,732 - - 

84,654 80,499 33,891 61,129 

Page 72






22. DIRECTORS’ REMUNERATION 

(a) The details of remuneration receivable by directors of the Company and of the Group 

during the financial year are as follows : 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Executive directors of the Company 

Salaries and other emoluments 2,443,850 1,449,000 446,000 60,000 

Pension costs - defined contribution 

plan 165,645 122,850 66,900 9,000 

Social security costs 2,302 1,550 1,151 310 

2,611,797 1,573,400 514,051 69,310 

Non-executive directors of the Company 

Fee 240,000 174,000 240,000 174,000 



plan 62,778 58,236 - - 

Social security costs 1,240 1,240 - - 

2,151,639 1,363,050 410,000 206,000 

4,763,436 2,936,450 924,051 275,310 

Executive directors of the subsidiaries 

Salaries and other emoluments 4,170,619 2,481,060 - - 


plan 346,830 261,780 - - 

Social security costs 3,984 4,132 - - 

4,521,433 2,746,972 - - 

Non-executive directors of the subsidiaries 

Fee 72,000 48,000 - - 

Salaries and other emoluments 669,000 34,000 - - 

741,000 82,000 - - 

5,262,433 2,828,972 - - 

10,025,869 5,765,422 924,051 275,310 

Page 73






22. DIRECTORS’ REMUNERATION (CONT’D) 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Analysed as follow : 

Total executive directors' 

remuneration 7,133,230 4,320,372 514,051 69,310 

Total non-executive directors' 

remuneration 2,892,639 1,445,050 410,000 206,000 

10,025,869 5,765,422 924,051 275,310 

(a) Key management personnel are defined as those persons having authority and 

responsibility for planning, directing and controlling the activities of the Group and of the 

Company whether directly or indirectly. 

(b) The number of directors of the Company whose total remuneration of the Group during the 

financial year in bands of RM 150,000 is analysed as below : 

Number Of Directors 

2011 2010 

Executive directors : 

RM 450,001 - RM 600,000 - 1 

RM 1,050,001 - RM 1,200,000 1 1 

RM 1,350,001 - RM 1,500,000 1 - 

Non-executive directors : 

RM 1 - RM 150,000 4 5 

RM 150,001 - RM 300,000 1 1 

RM 300,001 - RM 450,000 2 1 

RM 750,001 - RM 900,000 - 1 

RM 1,050,001 - RM 1,200,000 1 - 

Page 74






23. STAFF COSTS 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Executive directors' 

remuneration (Note 22) 7,133,230 4,320,372 514,051 69,310 

Other staff costs : 



plan 1,081,786 780,023 30,558 5,806 


Other staff related expenses 798,798 773,832 22,575 8,705 

14,166,391 11,756,779 309,894 63,426 

Total staff costs 21,299,621 16,077,151 823,945 132,736 

24. FINANCE COSTS 

Group 

2011 2010 

RM 

RM 

Interest on : 

Bank overdrafts 121,493 113,071 

Bankers' acceptances 1,491,296 1,167,133 

Hire purchase 518,287 444,367 

Term loans 178,232 211,846 

Others 5,750 383 

2,315,058 1,936,800 

Page 75






25. PROFIT BEFORE TAX 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Restated 

This is arrived at after charging : 

Allowance for slow moving 

inventories - 12,146 - - 

Auditors' remuneration : 

Statutory audit : 

- current 72,908 60,000 12,000 12,000 

- under/(over)provision in prior 

years - 5,000 - (3,000) 

Bad debts written off - 1,008 - - 

Depreciation : 

- property, plant and equipment 7,409,826 6,692,192 - - 

- investment property 3,888 - - - 

Goodwill on consolidation written off 4,170,652 - - - 

Impairment losses on trade 

receivables 175,341 181,159 - - 

Inventory written off 192,802 - - - 

Land rental 6,831 - - - 

Property, plant and equipment 

written off - 35,750 - - 

Rental of hostel 8,400 8,400 - - 

Rental of machinery and vehicle 3,656 24,900 - - 

Rental of premises 79,244 29,470 - - 

And crediting : 

Fair value gain on derivative (26,006) - - - 

Gain on disposal of property, plant 

and equipment (25,000) (76,500) - - 

Insurance compensation : 

- loss on theft - (49,500) - - 

- others (60,000) - - - 

Rental income (18,173) - - - 

Reversal of impairment losses on 

trade receivables (77,603) (22,185) - - 

Realised gain on foreign 

exchange (799,480) (408,177) - - 

Unrealised gain on foreign 

exchange (166,184) (88,117) - - 

Page 76






26. TAX EXPENSE 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

(a) Components of tax expense 

Current tax expense : 

- Malaysian income tax 4,286,000 2,910,800 1,032,000 773,800 

- Effect of changes in tax rate - 10,000 - - 

- (Over)/Underprovision in prior 

years (216,780) (35,120) (38,130) 700 

4,069,220 2,885,680 993,870 774,500 

Deferred tax expense : 

- Relating to origination of 

temporary differences 558,740 213,000 - - 

- (Over)/Underprovision in prior 

years (7,000) 496,000 - - 

4,620,960 3,594,680 993,870 774,500 

(b) Reconciliation of effective tax rate 

Profit before tax 26,726,609 18,752,135 4,959,851 13,830,634 

Tax at Malaysian statutory income 

tax rate of 25% 6,682,000 4,688,000 1,240,000 3,458,000 

Effect of changes in tax rate - 10,000 - - 

Differential in tax rates (19,500) - - - 

Tax effect of non-taxable income (700) - (300,000) (2,750,000) 

Tax effect of non-deductible 

expenses 478,300 450,800 92,000 65,800 

Effect of tax incentive (2,207,000) (2,015,000) - - 

Deferred tax assets not recognised 

during the financial year (88,360) - - - 

(Over)/Underprovision in prior years : 

- current tax expense (216,780) (35,120) (38,130) 700 

- deferred tax expense (7,000) 496,000 - - 

4,620,960 3,594,680 993,870 774,500 

(c) Subject to the agreement of the Inland Revenue Board, at 31 March, the Group has 

unutilised reinvestment allowances of approximately RM 2,100,000 (2010 : RM 5,026,000) 

available for offsetting against future taxable profits. 

Page 77






27. EARNINGS PER ORDINARY SHARE 

(a) Basic earnings per ordinary share 

Basic earnings per ordinary share is calculated based on profit for the financial year 

attributable to owners of the Company divided by the weighted average number of ordinary 

shares in issue during the financial year. 

Group 

2011 2010 

RM 

RM 

Profit attributable to owners of the Company 22,105,649 15,157,455 

Group 

2011 2010 

Units Units 

Number of ordinary shares in issue at 1 April 200,000,000 200,000,000 

Weighted average number of ordinary shares in issue 200,000,000 200,000,000 

Basic earnings per ordinary share (sen) 11.05 7.58 

(b) Diluted earnings per ordinary share 

There is no dilutive potential ordinary shares in issue at the end of the reporting period. 

Page 78






28. ACQUISITION OF A SUBSIDIARY 

During the financial year, the Group acquired entire equity interest in Premium Egg Products 

Pte. Ltd. (formerly known as Lee Say Egg Products Pte. Ltd.) (“PEP”). 

The fair values of the identifiable assets and liabilities of PEP as at the date of acquisition were : 

Carrying 

Amount 

Property, plant and equipment 566,039 

Trade and other receivables 3,092,331 

Inventories 125,360 

Cash and cash equivalents 581,142 

Trade and other payables (4,959,948) 

Deferred tax liabilities (48,000) 

Hire purchase payables (203,160) 

Net identifiable assets and liabilities (846,236) 

Add : Goodwill on acquisition 1,086,241 

Total purchase consideration 240,005 

Less : Cash and cash equivalents of subsidiary acquired 581,142 

Net cash inflow for acquisition of subsidiary (341,137) 

RM 

The acquired subsidiary has contributed the following results to the Group : 

2011 

Revenue 6,579,917 

Loss after tax (197,227) 

RM 

Page 79






29. DIVIDENDS 

Group And Company 

2011 2010 

RM 

RM 

In respect of the financial year ended 31 March 2009 

Final single tier dividend of 4.25% on 200,000,000 

ordinary shares of RM 0.20 each - 1,699,999 


Interim single tier dividend of 3.75% on 200,000,000 

ordinary shares of RM 0.20 each - 1,500,000 

Final single tier dividend of 4.25% on 200,000,000 

ordinary shares of RM 0.20 each 1,700,000 - 


Interim single tier dividend of 4.25% on 200,000,000 

ordinary shares of RM 0.20 each 1,700,000 - 

3,400,000 3,199,999 

The Board of Directors proposed a final single tier dividend of 7.00% approximately of RM 

2,800,000 in respect of the financial year ended 31 March 2011. 

The dividend is subject to the approval of shareholders at the forthcoming Annual General 

Meeting of the Company and has not been included as a liability in the financial statements. 

Such dividend, if approved by the shareholders, will be accounted for in equity as an 

appropriation of retained profits for the financial year ending 31 March 2012. 

Page 80






30. CASH AND CASH EQUIVALENTS 

Cash and cash equivalents included in the statements of cash flows comprise the following 

amounts : 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Deposits, bank and cash 

balances 22,891,142 8,842,924 925,813 521,534 

Less : Bank overdrafts (1,268,683) (2,635,815) - - 

21,622,459 6,207,109 925,813 521,534 

Less : Non-cash and cash 

equivalents 

Fixed deposits pledged to 

banks as collateral (1,515,135) (1,495,847) - - 

20,107,324 4,711,262 925,813 521,534 

31. CAPITAL COMMITMENTS 

At 31 March, the Group and the Company had the following capital commitments in respect of 

property, plant and equipment : 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Contracted but not 

provided for 11,833,000 2,112,000 - 462,000 

Approved but not 

contracted for 1,134,000 11,809,000 - - 

Page 81






32. RELATED PARTY DISCLOSURES 

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and 

the Company had the following significant transactions with related parties during the 


Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 

Intermediate holding company 

- IT service payable 9,278 9,278 - - 

- Secretarial fee 6,720 5,040 - - 

Subsidiaries 

- Dividend income 

received/receivables - - (6,100,000) (13,900,000) 

- Management fee - - (360,000) (360,000) 

- Interest income - - (20,311) (47,944) 

Other related companies 

- Sale of goods (18,336,179) (6,463,978) - - 

- Purchase of goods 5,817,545 4,203,426 - - 

- Laboratory charges 49,848 32,873 - - 

- Transport charges 1,874 3,457 - - 

Related parties 

- with companies where Lau Brothers 

are directors/shareholders 

- Sale of goods (5,059,457) (3,582,201) - - 

- Purchase of goods 11,594,852 30,940,886 - - 

- Professional fee 4,368 14,250 - - 

- with company where spouse of 

Mr. Nam Yok San is a director 

- Transport charges 2,798,673 2,361,183 - - 

- Purchase of property, plant 

and equipment 18,000 - - - 

# Lau Brothers are Dato’ Lau Bong Wong, Lau Chia Nguang, Datuk Lau Chir Nguan, Dato’ 

Lau Eng Guang, Lau Hai Nguan and Tan Sri Lau Tuang Nguang collectively. 

Page 82






32. RELATED PARTY DISCLOSURES (CONT’D) 

(b) Information regarding outstanding balances arising from related party transactions at 31 

March 2011 are disclosed in Note 11 and Note 18. 

(c) Compensation of key management personnel 

The compensation of key management personnel who are the executive directors of the 

Group and of the Company are detailed in Note 22(a). 

Group 

Company 

2011 2010 2011 2010 

RM RM RM RM 


Pension costs - 

defined contribution plan 512,475 384,630 66,900 9,000 


7,133,230 4,320,372 514,051 69,310 

Page 83






33. OPERATING SEGMENTS 

Operating segments are prepared in a manner consistent with the internal reporting provided to 

the Group Executive Committee as its chief operating decision maker in order to allocate 

resources to segments and to assess their performance. For management purposes, the Group 

is organised into business units based on their products and services provided. 

The Group is organised into 3 main business segments as follows : 

(i) 

Investment holding. 

(ii) Trading of pet food, medicine and other related products. 

(iii) Poultry farming. 

The Group Executive Committee assesses the performance of the operating segments based 

on operating profit or loss which is measured differently from those disclosed in the consolidated 

financial statements. 

Group financing (including finance costs) and income taxes are managed on a group basis and 

are not allocated to operating segments. 

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the 

operating segments are presented under unallocated items. Unallocated items comprise mainly 

investments and related income, loans and borrowings and related expenses, corporate assets 

(primarily the Company’s headquarters) and head office expenses. 

Inter-segment sales comprise sales of eggs, animal feeds and egg trays under poultry farming 

based on agreed terms between the companies in the Group. 

Page 84






33. OPERATING SEGMENTS (CONT’D) 

Business Segments 

Group - 31 March 2011 

Revenue 

Trading of 

pet food, 

medicine and 

Investment other related Poultry 

holding products farming Others Eliminations Consolidated 

RM RM RM RM RM RM 

- External sales - 28,590,588 178,899,804 - - 207,490,392 

- Inter-segment sales 6,460,000 7,881,540 210,179,123 - (224,520,663) - 

Total revenue 6,460,000 36,472,128 389,078,927 - (224,520,663) 207,490,392 

Segment results 4,925,960 5,030,667 29,691,974 - (10,671,198) 28,977,403 

Unallocated corporate expenses (20,390) 

Investment revenue 84,654 

Finance costs (2,315,058) 

Profit before tax 26,726,609 

Tax expense (4,620,960) 

Profit after tax 22,105,649 

Segment assets 68,991,056 23,135,316 222,662,514 - (138,776,685) 176,012,201 

Unallocated corporate assets 3,324,284 

Income producing assets 2,109,865 

Tax recoverable 1,992,265 

Consolidated total assets 183,438,615 

Segment liabilities 9,350,933 9,474,324 75,908,166 - (70,541,555) 24,191,868 

Unallocated corporate liabilities 3,343,552 

Borrowings 56,016,240 

Tax payable 329,036 

Consolidated total liabilities 83,880,696 

Other information 

Capital expenditure 184,830 861,253 15,972,342 3,127,659 (800,000) 19,346,084 

Depreciation - 269,274 7,135,372 - 9,068 7,413,714 

Non-cash items (other than 

depreciation) - 262,912 (154,501) - 4,135,591 4,244,002 

Page 85







Business Segments (cont’d) 

Group - 31 March 2010 

Revenue 

Trading of 

pet food, 

medicine and 

Investment other related 

holding products Poultry farming Eliminations Consolidated 


- External sales - 18,200,884 149,760,243 - 167,961,127 

- Inter-segment sales 14,260,000 4,768,579 159,699,900 (178,728,479) - 

Total revenue 14,260,000 22,969,463 309,460,143 (178,728,479) 167,961,127 

Segment results 13,769,505 3,831,979 17,104,482 (14,093,650) 20,612,316 

Unallocated corporate expenses (3,880) 

Investment revenue 80,499 

Finance costs (1,936,800) 

Profit before tax 18,752,135 

Tax expense (3,594,680) 

Profit after tax 15,157,455 

Segment assets 64,508,168 14,906,733 160,255,851 (94,487,248) 145,183,504 

Unallocated corporate assets 30,004 

Income producing assets 2,078,538 

Tax recoverable 978,226 

Consolidated total assets 148,270,272 

Segment liabilities 5,160,603 4,066,239 48,542,615 (32,982,076) 24,787,381 

Unallocated corporate liabilities 33,880 

Borrowings 42,437,989 

Tax payable 119,288 

Consolidated total liabilities 67,378,538 

Other information 

Capital expenditure 477,582 352,951 16,534,492 (860,000) 16,505,025 

Depreciation - 154,584 6,516,664 20,944 6,692,192 

Non-cash items (other than 

depreciation) - 23,173 (42,568) 62,656 43,261 

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Geographical Information 

Revenue 

Non-Current Assets 

2011 2010 2011 2010 

RM RM RM RM 

Malaysia 148,340,403 131,587,304 103,881,111 95,220,458 

Singapore 57,898,042 33,718,060 762,625 - 

Others 1,251,947 2,655,763 - - 

Major Customers 

207,490,392 167,961,127 104,643,736 95,220,458 

During the financial year, there were no revenue from one single customer that contributed to 

more than 10% of the Group’s revenue. 

34. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR 

On 25 March 2011, Ritma Prestasi Sdn. Bhd. (“Ritma”), a wholly-owned subsidiary of the 

Company, has signed a new distributorship agreement with Bayer Co. (Malaysia) Sdn. Bhd.. 

(“Bayer Malaysia”) to replace the previous distributorship agreement with Bayer Thai Co. Ltd, 

whereby Ritma is granted the sole exclusive rights to sell the agreement products (referring to 

some health care products catered for farm and pet animals) in the territory of Malaysia and 

Brunei. 

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35. SUBSEQUENT EVENTS 

(a) On 22 April 2011, Teo Seng Farming Sdn. Bhd. (“TSF”), a wholly-owned subsidiary of the 

Company, has entered into a Sale and Purchase of Shares Agreement to acquire 150,002 

ordinary shares of RM 1.00 each in Forever Best Supply Sdn. Bhd. (“Forever”) representing 

60% of the issued and paid-up capital of Forever for a total cash consideration of RM 

1,076,482.60. As such, Forever became a 60% owned indirect subsidiary of the Company. 

(b) On 27 May 2011, Teo Seng Feedmill Sdn. Bhd., a wholly-owned subsidiary of the 

Company, acquired the entire equity interest comprising of two (2) ordinary shares of RM 

1.00 each in Laskar Suria Sdn. Bhd. for a cash consideration of RM 2.00. 

Page 88






36. FINANCIAL INSTRUMENTS 

The Group’s activities are exposed to a variety of market risks (including foreign currency risk, 

interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial 

risk management policy focuses on the unpredictability of financial markets and seeks to 

minimise potential adverse effects on the Group’s financial performance. 

36.1 Financial Risk Management Policies 

The Group’s policies in respect of the major areas of treasury activity are as follows : 

(a) Market risk 

(i) 

Foreign currency risk 

The Group is exposed to foreign currency risk on transactions and balances that are 

denominated in currencies other than Ringgit Malaysia. The currencies giving rise to 

this risk are primarily Singapore Dollar (“SGD”) and United States Dollar (“USD”). 

Foreign currency risk is monitored closely on an ongoing basis to ensure that the net 

exposure is at an acceptable level. On occasion, the Group enters into forward foreign 

exchange contracts to hedge against its foreign currency risk. 

The Group’s exposure to foreign currency is as follows : 

Singapore United States Ringgit 

Dollar Dollar Others Malaysia Total 


Group - 2011 


Trade and other receivables 6,819,405 424 - 18,199,347 25,019,176 

Deposits, bank and cash balances 4,885,441 2,510 19,105 17,984,086 22,891,142 

11,704,846 2,934 19,105 36,183,433 47,910,318 


Trade and other payables (1,943,835) (2,644,913) (17,500) (14,198,716) (18,804,964) 

Bank borrowings - - - (47,676,485) (47,676,485) 

Hire purchase payables (253,749) - - (8,086,006) (8,339,755) 

(2,197,584) (2,644,913) (17,500) (69,961,207) (74,821,204) 

Net financial assets/(liabilities) 9,507,262 (2,641,979) 1,605 (33,777,774) (26,910,886) 

Less : Net financial (assets)/liabilities 

denominated in the respective 

entities functional currencies (1,936,047) - - 33,777,774 31,841,727 

Forward foreign exchange contracts 

(contracted notional principal) - 309,326 - - 309,326 

Currency exposure 7,571,215 (2,332,653) 1,605 - 5,240,167 

Page 89






36. FINANCIAL INSTRUMENTS (CONT’D) 

36.1 Financial Risk Management Policies (Cont’d) 

(a) Market risk (cont’d) 

(i) 

Foreign currency risk (cont’d) 

Singapore United States Ringgit 

Dollar Dollar Others Malaysia Total 


Group - 2010 


Trade and other receivables 1,368,698 - - 14,692,202 16,060,900 

Deposits, bank and cash balances 3,021,617 4,940 17,804 5,798,563 8,842,924 

4,390,315 4,940 17,804 20,490,765 24,903,824 


Trade and other payables (375,690) (2,676,467) - (13,638,596) (16,690,753) 

Bank borrowings - - - (34,397,555) (34,397,555) 

Hire purchase payables - - - (8,040,434) (8,040,434) 

(375,690) (2,676,467) - (56,076,585) (59,128,742) 

Net financial assets/(liabilities) 4,014,625 (2,671,527) 17,804 (35,585,820) (34,224,918) 

Less : Net financial (assets)/liabilities 

denominated in the respective 

entities functional currencies - - - 35,585,820 35,585,820 

Forward foreign exchange contracts 

(contracted notional principal) - 1,451,666 - - 1,451,666 

Currency exposure 4,014,625 (1,219,861) 17,804 - 2,812,568 

Page 90









(i) 

Foreign currency risk (cont’d) 

Foreign currency risk sensitivity analysis 

The following table details the sensitivity analysis to a reasonably possible change in 

the foreign currencies at the end of the reporting period, with all other variables held 

constant : 

Effects on profit after tax 

Group 

2011 

Increase/(Decrease) 

United States Dollar 

- strengthened by 5% (87,474) 

- weakened by 5% 87,474 

Singapore Dollar 

- strengthened by 5% 283,920 

- weakened by 5% (283,920) 

RM 

Page 91









(ii) Interest rate risk 

Interest rate risk is the risk that the fair value or future cash flows of a financial 

instrument will fluctuate because of changes in market interest rates. The Group’s 

exposure to interest rate risk arises mainly from interest-bearing financial assets and 

liabilities. The Group’s policy is to obtain the most favourable interest rates available. 

Any surplus funds of the Group will be placed with licensed financial institutions to 

generate interest income. 

Information relating to the Group’s exposure to the interest rate risk of the financial 

liabilities is disclosed in Note 36.1(c). 

Interest rate risk sensitivity analysis 

A 50 basis points increase/decrease in the interest rate at the end of the reporting 

period would have immaterial impact on the profit or loss. This assumes that all other 

variables remain constant. 

Page 92









(iii) Equity price risk 

(b) Credit risk 

The Group’s principal exposure to equity price risk arises mainly from changes in 

quoted investment prices. The Group manages its exposure to equity price risks by 

maintaining a portfolio of equities with different risk profiles. 

Equity price risk sensitivity analysis 

A 50 basis points increase/decrease in the equity price risk at the end of the reporting 

period would have immaterial impact on the profit or loss. This assumes that all other 

variables remain constant. 

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly 

from trade and other receivables. The Group manages its exposure to credit risk by the 

application of credit approvals, credit limits and monitoring procedures on an ongoing basis. 

For other financial assets (including quoted investments, cash and bank balances and 

derivatives), the Group minimises credit risk by dealing exclusively with high credit rating 

counterparties. 

The Group establishes an allowance for impairment that represents its estimate of incurred 

losses in respect of the trade and other receivables as appropriate. The main components 

of this allowance are a specific loss component that relates to individually significant 

exposures, and a collective loss component established for groups of similar assets in 

respect of losses that have been incurred but not yet identified. Impairment is estimated by 

management based on prior experience and the current economic environment. 

The Company’s exposure to credit risk arises from unsecured financial guarantee provided 

to licensed institutions for credit facilities granted to its subsidiaries. The Company monitors 

on an ongoing basis the results of the subsidiaries and repayments made by the 

subsidiaries. 

Credit risk concentration profile 

At the end of the reporting period, there were no significant concentrations of credit risk 

other than the trade amount due from related parties of RM 2,852,544 (2010 : RM 

2,597,531). The maximum exposure to credit risk is represented by the carrying amount of 

each financial asset in the statements of financial position. 

Page 93








(b) Credit risk (cont’d) 

Exposure to credit risk 

At the end of the reporting period, the Group’s maximum exposure to credit risk is 

represented by : 

(i) 

The carrying amount of each class of financial assets recognised in the statements of 

financial position. 

(ii) A nominal amount of RM 44,800,000 (2010 : RM 10,851,000) relating to financial 

guarantee provided by the Company to licensed institutions for credit facilities granted 

to its subsidiaries. 

The exposure of credit risk for Group’s trade receivables by geographical region is as 

follows : 

Group 

2011 2010 

RM 

RM 

Malaysia 12,449,259 12,272,361 

Singapore 6,705,823 1,368,698 

Others 424 - 

19,155,506 13,641,059 

Page 94








(b) Credit risk (cont’d) 

Ageing analysis 

The ageing analysis of Group’s trade receivables at 31 March 2011 is as follows : 

Gross Individual Carrying 

amount impairment amount 

RM RM RM 

Group - 2011 

Not past due 17,032,336 - 17,032,336 

Past due : 

- less than 3 months 1,531,426 (963) 1,530,463 

- 3 to 6 months 500,865 (34,658) 466,207 

- over 6 months 771,774 (645,274) 126,500 

19,836,401 (680,895) 19,155,506 

At the end of the reporting period, trade receivables that are individually impaired were 

those in significant financial difficulties and have defaulted on payments. These receivables 

are not secured by any collateral or credit enhancement. 

Trade receivables that are past due but not impaired 

The Group believes that no impairment allowance is necessary in respect of these trade 

receivables. They are substantially companies with good collection track record and no 

recent history of default. 

Trade receivables that are neither past due nor impaired 

A significant portion of trade receivables that are neither past due nor impaired are regular 

customers that have been transacting with the Group. The Group use ageing analysis to 

monitor the credit quality of the trade receivables. Any receivables having significant 

balances past due or more than 150 days, which are deemed to have higher credit risks, 

are monitored individually. 

Page 95








(c) Liquidity risk 

Liquidity risk arises mainly from general funding and business activities. The Group 

practises prudent risk management by maintaining sufficient cash balances and the 

availability of funding through certain committed credit facilities. 

The following table sets out the maturity profile of the financial liabilities at the end of the 

reporting period based on contractual undiscounted cash flows (including interest payments 

computed using contractual rates or, if floating, based on the rates at the end of the 

reporting period) : 

Average 

Contractual 

effective Carrying undiscounted 

interest rate amount cash flows Within 1 year 1-5 years Over 5 years 

% RM RM RM RM RM 

Group - 2011 

Trade and other 

payables - 18,804,964 18,804,964 18,804,964 - - 

Bank borrowings 

- Bank overdrafts 7.7 1,268,683 1,268,683 1,268,683 - - 

- Bankers' 

acceptances 4.3 41,361,000 41,361,000 41,361,000 - - 

- Term loans 5.7 5,046,802 5,308,220 1,359,818 3,444,402 504,000 

Hire purchase 

payables 3.2 to 7.5 8,339,755 9,241,298 4,921,715 4,319,583 - 

74,821,204 75,984,165 67,716,180 7,763,985 504,000 

Group - 2010 

Trade and other 

payables - 16,690,753 16,690,753 16,690,753 - - 

Bank borrowings 

- Bank overdrafts 7.1 2,635,815 2,635,815 2,635,815 - - 

- Bankers' 

acceptances 3.8 28,535,000 28,535,000 28,535,000 - - 

- Term loans 5.7 3,226,740 3,384,817 1,343,938 2,040,879 - 

Hire purchase 

payables 3.2 to 8.8 8,040,434 9,067,306 4,199,828 4,867,478 - 

59,128,742 60,313,691 53,405,334 6,908,357 - 

Page 96








(c) Liquidity risk (cont’d) 

Company - 2011 

Trade and other payables 

Contractual 

undiscounted 

Carrying amount cash flows Within 1 year 

RM RM RM 

9,350,933 9,350,933 9,350,933 

Company - 2010 

Trade and other payables 

5,160,603 5,160,603 5,160,603 

Page 97







36.2 Capital Risk Management 

The Group manages its capital to ensure that entities within the Group will be able to maintain 

an optimal capital structure so as to support their businesses and maximise shareholder(s) 

value. 

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies are 

unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt 

divided by total equity. Net debt is calculated as borrowings plus trade and other payables less 

cash and cash equivalents. 

The debt-to-equity ratio of the Group as at the end of the reporting period was as follows : 

Group 

2011 2010 

RM 

RM 

Hire purchase payables 8,339,755 8,040,434 

Bank borrowings 47,676,485 34,397,555 

Trade and other payables 18,804,964 16,690,753 

74,821,204 59,128,742 

Less : Deposits, bank and cash balances (22,891,142) (8,842,924) 

Net debt 51,930,062 50,285,818 

Total equity 99,557,919 80,891,734 

Debt-to-equity ratio 0.52 0.62 

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required 

to maintain a consolidated shareholders’ equity (total equity attributable to owners of the 

Company) equal to or not less than the 25% of the issued and paid-up share capital (excluding 

treasury shares) and such shareholder’s equity is not less than RM 40 million. The Company 

has complied with this requirement. 

Page 98







36.3 Classification Of Financial Instruments 

Group Company 

2011 2011 

RM 

RM 


Available-for-sale financial assets 

Other investment, at fair value 5,080 - 

Loans and receivables financial assets 

Trade and other receivables 25,019,176 1,271,733 

Deposits, bank and cash balances 22,891,142 925,813 

47,910,318 2,197,546 


Fair value through profit or loss 

Derivative liabilities 948 - 

Other financial liabilities 

Trade and other payables 18,804,964 9,350,933 

Bank borrowings 47,676,485 - 

Hire purchase payables 8,339,755 - 

74,821,204 9,350,933 

Page 99







36.4 Fair Values Of Financial Instruments 

The carrying amounts of the financial assets and financial liabilities reported in the financial 

statements approximated their fair values based on the methods summarised as follows : 

(i) 

The carrying amounts of cash and cash equivalents, receivables, payables and short-term 

bank borrowings approximately their fair values due to the relatively short-term maturity of 

the financial instruments. 

(ii) The fair value of quoted investments is estimated based on their quoted market prices as at 

the end of the reporting period. 

(iii) The carrying amounts of hire purchase payables are reasonably approximate their fair 

values due to insignificant impact of discounting. 

(iv) The carrying amounts of the term loans approximated their fair values as these instruments 

bear interest at variable rates. 

(v) The fair value of forward foreign exchange contracts is estimated by discounting the 

difference between the contractual forward price and the current forward price for the 

residual maturity of the contract using a risk-free interest rate. 

Page 100






37. SUPPLEMENTARY INFORMATION – DISCLOSURE OF REALISED AND UNREALISED 

PROFITS/LOSSES 

The breakdown of the retained profits of the Group and of the Company at the end of the 

reporting period into realised and unrealised profits are presented in accordance with the 

directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with 

Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses 

in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing 

Requirements, as issued by the Malaysian Institute of Accountants, as follows : 

Group 

Company 

2011 2011 

RM 

RM 

Total retained profits : 

- realised 98,310,212 12,296,605 

- unrealised (8,895,692) - 

89,414,520 12,296,605 

Less : Consolidation adjustments (15,808,774) - 

At 31 March 73,605,746 12,296,605 

Page 101

LEEKEE INDUSTRIES (M) SDN - teo seng capital berhad

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