annual report 2009 - malaysiastock.biz - 0342595214323...dec 14, 2009 · of the director who is...

Annual Report 2

009

LOCAL RESOURCES

GLObAL PRESEnCE

1 Algeria2 Angola3 Australia4 Bahrain5 Bangladesh6 Belgium7 Botswana8 Brunei9 Canada10 Chile11 Cyprus12 Czech Republic13 Denmark14 Dominican Republic15 Egypt16 El Salvador17 Estonia18 Fiji20 Finland20 France

21 French Polynesia22 Germany23 Greece24 Guatemala25 Guinea26 Honduras27 Hong Kong28 Hungary29 India30 Ireland31 Italy32 Japan33 Jordon34 Kenya35 Kuwait36 Liberia37 Madagascar38 Maldives39 Martinique40 Mauritius

41 Mexico42 Morocco43 Mozambique44 Namibia45 Netherlands46 New Zealand47 Nicaragua48 Nigeria49 Oman50 Palestine51 Panama52 Papua New Guinea53 Peru54 Puerto Rico55 Philippines56 Poland57 Qatar58 Reunion59 Russia60 Saudi Arabia

61 Singapore62 Slovakia63 South Africa64 South Korea65 Spain66 Sri Lanka67 Sweden68 Taiwan69 Tanzania70 Trinidad & Tobago71 Uganda72 Ukraine73 United Arab Emirates74 United Kingdom75 United States76 Zambia

CONTENTS2 Notice of Annual General Meeting

3 Statement Accompanying Notice of Annual General Meeting

4 Corporate Information

5 Corporate Structure

6 Profile of Directors

9 Chairman’s Statement

11 Corporate Governance Statement

18 Statement on Internal Control

19 Audit Committee Report

22 Corporate Social Responsibility

23 Analysis of Shareholdings and Warrantholdings

29 List of Properties

31 Financial Statements

Proxy Form

002 SYF RESOURCES BERHAD (364372-H)

NOTICE IS HEREBY GIVEN that the FOURTEENTH ANNUAL GENERAL MEETING of the Company will be held at the Ballroom, Prescott Metro Inn, Wisma Metro Kajang, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan on Monday, 4 January 2010 at 10.00 a.m. for the following purposes:-

A ORDINARY BUSINESS

1 To receive the Audited Financial Statements for the financial year ended 31 July 2009 together with the Reports of the Directors and Auditors thereon.

2 To approve the payment of Directors’ fees for the financial year ended 31 July 2009.

3 To elect Mr. Foo Lee Khean who retires pursuant to Article 93 of the Company’s Articles of Association.

4 To re-elect Datuk Chee Hong Leong who retires pursuant to Article 106 of the Company’s Articles of Association.

5 To re-appoint Messrs UHY Diong as Auditors of the Company and to authorise the Directors to fix their remuneration.

B SPECIAL BUSINESS

6 To consider and if thought fit, to pass , with or without modifications, the following resolution:-

AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors of the Company be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions for such purposes as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed ten percent (10%) of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company unless revoked or varied by the Company at a general meeting.”

C OTHER BUSINESS

7 To transact any other business of which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

By Order of the Board LIM POH YEN (MAICSA 7009745)NG YEN HOONG (LS 008016)Company Secretaries

Kuala Lumpur14 December 2009

nOTICE OF AnnUAL GEnERAL MEETInG

(See Note 2)

(Ordinary Resolution 1)





003Annual Report 2009

nOTICE OF AnnUAL GEnERAL MEETInG

NOTES:-

1. APPOINTMENT OF PROXY

(i) A member entitled to attend and vote at this meeting is entitled to appoint a proxy (or in the case of a corporation, a duly authorized representative) to attend and vote in his/her stead. A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1) (a) and (b) of the Companies Act, 1965 shall not apply to the Company.

(ii) A member appoints the maximum of two (2) proxies to attend and vote at the same meeting, such appointment shall be invalid unless

the member specifies the proportion of his/her shareholdings to be represented by each proxy. (iii) Where a member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act, 1991,

it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(iv) The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or if

the appointer is a corporation/company, either under its common seal or under the hand of officer or attorney duly authorised.

(v) The instrument appointing a proxy must be deposited at the registered office of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time set for the meeting or any adjournment thereof.

2. AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 JULY 2009 The Audited Financial Statements in Agenda 1 is meant for discussion only as the approval of shareholders is not required pursuant to the

provision of Section 169(1) of the Companies Act, 1965. Hence, this Agenda is not put forward for voting by shareholders of the Company. 3. EXPLANATORY NOTES ON SPECIAL BUSINESS Ordinary Resolution 5 – Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Proposed Ordinary Resolution 5 is a renewal of the general mandate pursuant to Section 132D of the Companies Act, 1965 (“General Mandate”) obtained from the shareholders of the Company at the previous Annual General Meeting and, if passed, will empower the Directors of the Company to issue new shares in the Company from time to time provided that the aggregate number of shares issued pursuant to the General Mandate does not exceed 10% of the issued share capital of the Company for the time being.

The General Mandate, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the Thirteenth Annual General Meeting held on 15 January 2008 and which will lapse at the conclusion of the Fourteenth Annual General Meeting.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s) and working capital.

STATEMEnT ACCOMPAnYInG nOTICE OF THE FOURTEEnTH AnnUAL GEnERAL MEETInG

Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the details of the Director who is seeking for election in Agenda 3 of the Notice of the Fourteenth Annual General Meeting of the Company are set out in the Profile of Directors appearing on pages 6 to 8 of this Annual Report.


SECRETARIES

Lim Poh Yen (MAICSA 7009745)

ng Yen Hoong (LS 008016)

REGISTERED OFFICE

Level 18, The Gardens North TowerMid Valley City, Lingkaran Syed Putra59200 Kuala LumpurTel : 03-2264 8888Fax : 03-2264 8997/8Email : [email protected]

REGISTRAR

Tricor Investor Services Sdn Bhd (formerly known as Tenaga Koperat Sdn Bhd)Level 17, The Gardens North TowerMid Valley City, Lingkaran Syed Putra59200 Kuala LumpurTel : 03-2264 3883Fax : 03-2282 1886Email : [email protected]

PRINCIPAL PLACE OF BUSINESS

Kawasan Perindustrian Sungai LalangLot 971, Jalan Vill, Mukim Semenyih43500 Semenyih Selangor Darul EhsanTel : 03-8723 4535Fax : 03-8723 3500

AUDITORS

UHY Diong (AF 1411)Suite 11.05, Level 11The Gardens South TowerMid Valley City, Lingkaran Syed Putra59200 Kuala LumpurTel : 03 - 2279 3088Fax : 03 - 2279 3099 STOCk EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad Stock Name : SYFStock Code : 7082 PRINCIPAL BANkERS

Public Bank BerhadBank Kerjasama Rakyat Malaysia BerhadAlliance Bank Malaysia BerhadMalayan Banking Berhad

CORPORATE InFORMATIOn

BOARD OF DIRECTORS

ng Ah Chai Executive Chairman & Chief Executive Officer

Datuk Chee Hong Leong Independent Non-Executive Director

Dr. Roslan bin A. Ghaffar Independent Non-Executive Director

Foo Lee Khean Independent Non-Executive Director

Cheong Yee Kiong Executive Director


Board of directors

Ng Ah Chai Executive Chairman & Chief Executive Officer

Datuk Chee Hong Leong Independent Non-Executive Director

Dr. Roslan Bin A. Ghaffar Independent Non-Executive Director

Foo Lee Khean Independent Non-Executive Director

Cheong Yee Kiong Executive Director

CORPORATE STRUCTURE-ACTIVE COMPANIES ONLY

-AS AT 8 DECEMBER 2009

100%Seng Yip

Furniture Sdn Bhd

100%Tomisho Sdn Bhd

51%Furniwood Industries

(M) Sdn Bhd

(364372-H)

MaNUfactUriNG

100%SYF Venture Sdn Bhd

tradiNG


PROFILE OF DIRECTORS

NG AH CHAIExecutive Chairman & Chief Executive OfficerNon-Independent/ExecutiveMalaysian

Mr. Ng Ah Chai, aged 47, was appointed to the Board on 1 February 2001 and assumed the post of Group Managing Director of the Company on 4 August 2003. On 28 September 2005, he was re-designated as Executive Chairman and Chief Executive Officer.

His involvement in the timber trade began in 1985 when he started a saw milling business on a partnership basis. In 1991, he expanded his business into manufacturing tropical wood furniture for the local market. Ceasing the saw milling business in 1993, he co-founded Seng Yip Furniture Sdn Bhd (“Seng Yip”) which started as a kiln drying and timber processing business. With his vast experience and leadership skill, Seng Yip expanded into manufacturing furniture components and semi-finished parts in 1995. Subsequently in 1998, he ventured into finished rubber wood furniture.

He is the Chairman of the ESOS Committee and Risk Management Committee of the Company.

He is a substantial shareholder of the Company with a direct shareholding of 25,711,600 ordinary shares of RM1.00 each in the Company together with 13,658,100 warrants, besides his entitlement under the ESOS. He has no interest in the shares of the subsidiaries of the Company.

He has no family relationship with any other director and/or substantial shareholder of the Company, neither has he entered into any transaction which has a conflict of interest with the Company nor any convictions for any offences within the past ten years.

DATUk CHEE HONG LEONGDirectorIndependent/Non-ExecutiveMalaysian

Datuk Chee Hong Leong, aged 45, was appointed to the Board on 13 March 2003. He graduated with a Bachelor of Engineering (Computer) in 1987 and a Master of Business Administration in 1989 both from McMaster University, Hamilton, Ontario, Canada. He began his career in 1990 coordinating the development in corporate and annual strategic plans for Leisure Holidays Group of Companies. In 1992, he ventured into various businesses which involved designing and building individual bungalows for landowners of various housing projects in the Klang Valley as well as building and operating a 100,000 sq. ft. Information Technology Incubation Centre in University Putra Malaysia. Subsequently, he joined Tanco Resort Berhad from 1998-2002 where he held various positions from General Manager to Executive Director/Chief Operating Officer. Currently, he manages a software house that focuses on Customer Relationship Management and Membership Services.

Presently, he is Chairman of the Nominating Committee and Remuneration Committee and a member of the Audit Committee and ESOS Committee of the Company.

He does not have any interest in the shares of the Company and its subsidiaries.


Apart from the Company, he is also an independent non-executive director of Mithril Berhad and Priceworth Wood Products Berhad.


PROFILE OF DIRECTORS(COnT’D)

DR. ROSLAn bIn A. GHAFFARDirectorIndependent/Non-ExecutiveMalaysian

Dr. Roslan Bin A. Ghaffar, aged 57, was appointed to the Board on 5 September 2008. He holds a Bachelor of Science degree from the Louisiana State University, Baton Rouge, USA and obtained his Ph.D. from University of Kentucky, Lexington, USA. He was attached to University Putra Malaysia as a Lecturer in 1984 and Associate Professor in 1991. In 1992-1993, he was with the University of Kentucky, Lexington as Visiting Professor. On various occasions while at the University Putra Malaysia, he had served as consultant to various international and national organizations which included the World Bank, Asian Development Bank, Winrock International and the Economic Planning Unit of the Prime Minister’s Department. On 1 August 1994, Dr Roslan was appointed as Director, Investment and Economic Research Department, Employees’ Provident Fund (“EPF”). He was promoted to the position of Senior Director in 1996 and as Deputy Chief Executive Officer of the EPF from July 2002 until his retirement on 1 September 2007.

He is Chairman of the Audit Committee and a member of the Nominating Committee and Remuneration Committee of the Company.

Apart from the Company, Dr. Roslan is also a Director of ING Funds Berhad, Malaysian Resources Corporation Berhad, DMDI Finance House Berhad, Grand Inizio Berhad and Cagamas Berhad.



FOO LEE KHEAnDirectorIndependent/Non-ExecutiveMalaysian

Mr. Foo Lee Khean, aged 46, joined the Board on 15 October 2009. He is a Fellow of the Chartered Institute of Management Accountants and a member of the Malaysian Institute of Accountants. His professional career path has seen him gaining invaluable experience working with Coopers and Lybrand, Price Waterhouse, Arthur Andersen and Ernst & Young while specializing in corporate recovery, advisory and restructuring. In 2005, he left Ernst & Young as the director of corporate finance to join Strategic Capital Advisory Sdn Bhd where he is currently a director. Concurrently, he is also serving as an adviser to Ferrier Hodgson MH Monteiro & Heng. In both capacities, he continues to specialize in corporate advisory and restructuring.

He is a member of the Audit Committee, Nominating Committee, Remuneration Committee and ESOS Committee of the Company.

Apart from the Company, Mr. Foo is also an independent non-executive director of SMIS Corporation Berhad.




PROFILE OF DIRECTORS(COnT’D)

Cheong Yee KiongExecutive DirectorNon-Independent/ExecutiveMalaysian

Mr. Cheong Yee Kiong, aged 48, is a professionally qualified accountant as a member of the Malaysian Institute of Accountants. He completed his professional studies at the Tunku Abdul Rahman College, graduating with a Diploma in Commerce (management accounting) in 1984 and completing the examinations of the Chartered Institute of Management Accountants.

He joined SYF in early 2003 as Financial Controller and eventually assumed the positions of Director of Finance and Company Secretary before joining the board of directors on 18 November 2008. During his career, he had gained experience in corporate and financial matters as financial controller with two other locally listed companies involved in construction and property development. Apart from that, he had also been a dealer’s representative in the stockbroking industry.

Mr. Cheong is also an independent non-executive director of Digistar Corporation Berhad.

Other than his entitlement under the ESOS, he does not have any interest in the shares of the Company and its subsidiaries.

He has no family relationship with any other director and/or major shareholder of the Company, neither has he entered into any transaction which has a conflict of interest with the Company nor any convictions for any offences within the past ten years.


CHAIRMAn’S STATEMEnT

The sub-prime crisis that erupted in mid-2008 has since evolved into a full-blown financial and economic crisis resulting in world-wide recession that has not been seen in the last thirty years. Most of the countries which the Group exports to were affected resulting in lower demand for our furniture products. On the home front, business conditions became increasingly difficult with higher defaults and slower collections. Under these conditions, it was a year to consolidate and to be resilient for future recovery.

FINANCIAL RESULTS

The Group’s turnover of RM190.6 million for the financial year 2009 showed a reduction of 17% from the RM229.9 million for the previous year. In addition to lower export demand, turnover was reduced due to lower revenue from the general trading activity while there was no revenue recognized from property development.

Loss after tax attributable to shareholders was recorded at RM18.4 million as compared to RM14.1 million in the previous year. The loss for the year was due to lower turnover, foreign exchange loss and year-end provisions in respect of impairment of unquoted subordinated bonds, goodwill written off and doubtful debt.

REVIEW OF OPERATIONS

During the year, the Group focused on its core activities of rubber wood timber milling and treatment, processing into furniture component parts, and manufacture of finished products for export consisting mainly of dining and bedroom furniture. The commencement of the veneer lamination activity in the previous year has broadened the materials product range and is progressing satisfactorily. In the export market, efforts were directed towards product and customer development with the aim of achieving better margins.

In order to conserve resources to concentrate on core activities, the Group ceased its general trading activity during the year and its property development activity subsequent to year end.

PROSPECTS AND FUTURE OUTLOOk

The global economic outlook remains highly uncertain with the economies of many countries remaining in recession. Although some stability has returned to the financial and stock markets, it may not necessarily be a prelude to a meaningful economic recovery. In the foreign exchange market, the United States Dollar (“USD”) may face further downward pressure as the world’s trading nations consider alternatives to avoid over-dependence on the USD.

Dear Shareholders,

On behalf of the Board of Directors, I present the Annual Report and Financial Statements of the Group and Company for the year ended31 July 2009.


CHAIRMAn’S STATEMEnT (COnT’D)

In light of current conditions, the outlook for the financial year ending 31 July 2010 remains very challenging particularly with regard to the maturity of the Company’s collateralized loan obligation of RM35 million in September 2010. All possible avenues will be pursued in order to meet this impending financial commitment.

In the face of these adversities, the Group will continue with its strategy to focus on its core activities in order to surmount the challenges ahead.

BOARD CHANGES

The Board would like to accord their appreciation of the services of Mr Leong Choon Meng who resigned subsequent to year end while a warm welcome is extended to his replacement, Mr Foo Lee Khean.

DIVIDEND

No dividend has been proposed due to the losses incurred during the year.

CONCLUSION

On behalf of the Board, I extend my appreciation to the shareholders, statutory and government bodies, customers, suppliers, financiers, professional consultants and advisers for their continued support and assistance during the year.

To the Board members, I am grateful for their professional advice and support. My thanks also go to the staff for their unfailing dedication and commitment in these trying times.

Thank you.

For and On Behalf of the Board

Ng Ah ChaiExecutive Chairman & Chief Executive Officer


CORPORATE GOVERnAnCE STATEMEnT

INTRODUCTION

In line with the present corporate regime, the Board of Directors of SYF Resources Berhad (“the Board”) strives to ensure that the Company is mindful and abides by the code of corporate governance in its organization, activities and operations. In directing and managing the activities of the Company towards achieving business objectives and realizing shareholders’ value, the Board is fully committed to corporate accountability and taking into account the interest of other stakeholders.

In order to meet the stakeholders’ expectation on sound Corporate Governance Practices, the Board assumes the responsibility to ensure that the Principles and Best Practices of Good Governance as set out in the Malaysian Code on Corporate Governance (“the Code”) are adhered to.

The Company firmly believes that good corporate governance will contribute towards its continued viability and prospects by maintaining the trust and confidence of shareholders, employees, customers and other people with whom it interacts and does business, as well as the communities in which it operates.

A. THE BOARD OF DIRECTORS (“BOARD”)

1. Composition of the Board

The Board consists of five (5) members comprising an Executive Chairman & Chief Executive Officer, an Executive Director and three (3) Independent/Non-Executive Directors. This composition reflects a balance of executive directors and non-executive directors which is appropriate and effective for the control of the Group’s business. No individual or a group of individuals dominates the decision making of the Board and therefore, the Board is able to effectively discharge its responsibilities as set out in the Code. A brief description of the background of each Director is presented on pages 6 to 8 of this Annual Report.

The Board, with their different background and specialization in various professional fields, collectively bring with them a broad range of experience, leadership and expertise to meet the ever increasing challenges in the business and operating environment.

The executive directors are responsible for the implementation of the Board’s policies and decisions, monitoring the operations, managing the development and implementation of business and corporate strategies, as well as the running of the daily businesses. The non-executive directors are independent of management and free from any business relationship, which could materially interfere with their independent judgment. Their role is to provide independent view, advice and judgment to ensure a balanced and an unbiased decision making process as well as to safeguard the interest of public shareholders.

2. Board Responsibilities

The Board has the overall responsibility for leading and controlling the Group, focusing mainly on the Group’s strategic business plans, financial performance, critical business issues, risk management, systems of internal control and overseeing the investments and operations of the Group. Generally, the Board must ensure that the Company is being managed and its business being conducted in accordance with the appropriate standards of accountability and transparency. Together, they bring a wide range of competencies, capabilities, technical skills and relevant business experience to drive the Group in its activities.

The Board is primarily responsible for:-

a. Reviewing, adopting and monitoring the progress of the Company’s strategies, plans and policies.b. Overseeing the conduct of the company’s business to evaluate whether the business is being properly

managed.c. Considering the management’s recommendations on key issues including acquisitions and divestment,

restructuring, funding and significant capital expenditure.


d. Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks.e. Reviewing the adequacy and the integrity of the Company’s internal control systems and management

information systems including systems for compliance with applicable laws, regulations, rules, directives and guidelines.

The Board has delegates certain authorities and responsibilities to several Board committees, namely the Audit Committee, Nominating Committee, Remuneration Committee, Employees’ Share Option Scheme (“ESOS”) Committee and Risk Management Committee to support and assist in discharging its fiduciary duties and responsibilities. The Board Committees will deliberate in greater detail and examine the issues within their respective terms of reference as set out by the Board and make the necessary recommendations to the Board which retains full responsibility. At the operating level, the Occupational Safety and Health Committee has also been set up and actively conducts activities in the interest of its workers.

3. Board Meetings

The Board meets at least once every quarter and on other occasions, as and when necessary, to inter-alia approve quarterly financial results, statutory financial statements, the annual report, business plans and to review the performance of the Company and its operating subsidiaries, governance matters and other business development activities.

Senior management and external advisers may be invited to attend the Board and Board Committee meetings, where necessary, to advise and provide additional information and insights on the relevant agenda items to enable the Board and its committees to arrive at a considered decision.

The Board met four (4) times during the financial year ended 31 July 2009. Details of each director’s attendance for the financial year ended 31 July 2009 are as follows:

Name of Directors Attendance

Ng Ah Chai 4/4Datuk Chee Hong Leong 4/4Dr. Roslan Bin A. Ghaffar 4/4Cheong Yee Kiong (appointed on 18/11/08) 3/3Leong Choon Meng (resigned on 15/10/2009) 4/4Foo Lee Khean (appointed on 15/10/09) N/A

4. Supply of Information

The Board has full and unrestricted access to all information pertaining to the business and affairs of the Group to enable them to discharge their duties effectively.

Prior to the Board or Board Committee meetings, each Board member is provided with an agenda together with the full set of written reports and supporting information, including operating results, review and analysis, board paper in relation to corporate proposals (if any), one week ahead of each Board meeting. This is issued in sufficient time to enable the Directors to obtain further explanations, where necessary in order to be briefed properly before the meeting. In furtherance of their duties, the Directors also have direct access to the advice and services of the Company Secretary and may seek professional independent advice if deemed reasonable and necessary, at the expense of the Company.

The Directors are notified of any disclosures/corporate announcements made to Bursa Malaysia Securities Berhad (“Bursa”). They are also notified of the impending restriction in dealing with the securities of the Company at least one month prior to the release of the quarterly financial results announcement.

The proceedings and resolutions reached at each Board meeting are recorded in the Minutes Book kept at the registered office. Besides Board meetings, the Board also exercises control on matters that require its approval through the circulation of Directors’ resolutions.

CORPORATE GOVERnAnCE STATEMEnT(COnT’D)



5. Directors’ Training

The Board fully supports the need for its members to continuously enhance their skills and knowledge to keep abreast with the developments in the economy, industry and technology in order to effectively carry out their duties and responsibilities as directors in compliance with the Listing Requirements of Bursa (“LR”). The Board is regularly updated on new statutory and regulatory requirements relating to their duties and responsibilities as Directors.

All Directors have attended and completed the Mandatory Accreditation Program (“MAP”) prescribed by Bursa and the Board will continue to evaluate and determine the training needs of its Directors on an on-going basis. During the financial year under review, the Directors have attended various seminars or briefings covering areas including corporate governance, relevant industry updates and global business developments which they have collectively or individually considered as useful in discharging their stewardship responsibilities.

Among the seminars or briefings attended by one or more Directors during the financial year are:-

• GettinguptoSpeedonCorporateGovernance• InvestorRelation–ANecessity,NotaChoice• TechnicalBriefing–MainMarketListingRequirements• CorporateGovernanceandEthics–StrengtheningProfessionalismthroughEthics• CorporateStrategyAnalytics1–EssentialsofCorporateProposalsAnalysis• CorporateGovernanceGuideandNewFrameworkforListingsandEquityFundRaisings• EnhancingBoardEffectivenessinaTurbulentEnvironment• GettingtheRightBoardBehavioursinNavigatingDelicateIssues• CEOandBoardSuccessionPlanning• CompetitiveStrategyvsRedundantStrategy• APECSMESummit2009–Engagethethoughtleaders;Thriveinturbulenttimes

6. Appointments to the Board

The Nominating Committee is responsible for recommending the right candidates with the necessary mix of skill, experience and competency to be appointed to the Board and Board Committees through a formal and transparent selection process. Upon appointment, new Directors are advised of their legal and statutory responsibilities. All Directors are also regularly being updated on new requirements affecting their responsibility and are constantly reminded of their obligations.

The Company Secretary will ensure that all appointments are properly made and that legal and regulatory obligations are met.

7. Re-election

In accordance with the Company’s Articles of Association, at the First Annual General Meeting (“AGM”), all Directors shall retire from office. At subsequent AGMs, all Directors shall retire from office at least once in every three (3) years by rotation. The Directors retiring from office shall be eligible for re-election. Pursuant to the LR, each member of the Board holds not more than ten directorships in public listed companies and no more than fifteen directorships in non-public listed companies. The Directors standing for re-election/election at the forthcoming AGM are Datuk Chee Hong Leong and Mr Foo Lee Khean.

8. Board Committees

The Board, in discharging its fiduciary duty, has delegated specific responsibilities to five (5) committees namely, Audit Committee, Nominating Committee, Remuneration Committee, ESOS Committee and Risk Management Committee. These Committees have the authority to examine particular issues and will report to the Board with their recommendations. The Board, however, makes the final decision on all matters in the best interest of the Company.



(i) Audit Committee (“AC”)

Composition of the AC, its terms of reference and a summary of its activities are set out on pages 19 to 21 of this Annual Report.

(ii) Nominating Committee (“NC”)

The NC comprises three (3) members as follows:-

1. Datuk Chee Hong Leong - Chairman,Independent/Non-Executive Director2. Dr. Roslan Bin A. Ghaffar - Member, Independent/Non-Executive Director3. Foo Lee Khean - Member, Independent/Non-Executive Director

The terms of reference of the NC are as follows:-

1. Annual review of the required mix of skills and experience and other qualities, including core competencies which non-executive and executive directors should have.

2. Assessment on an annual basis, the effectiveness of the Board as a whole, the committees of the Board and the contribution of each individual director.

3. Identification and nomination of suitable candidates to fill vacancies on the Board and formulation of succession plans where and when appropriate.

4. Review of the Board structure, size and composition with appropriate recommendations to the Board.

(iii) Remuneration Committee (“RC”)

The RC consists of three (3) members as follows:-

1. Datuk Chee Hong Leong - Chairman,Independent/Non-Executive Director2. Dr. Roslan Bin A. Ghaffar - Member, Independent/Non-Executive Director3. Foo Lee Khean - Member, Independent/Non-Executive Director

Under the terms of reference, the RC shall:-

1. Review, assess and recommend to the Board of Directors the remuneration packages of the executive directors and to secure formal and informal consultations from independent consultants, if necessary, to ensure that the remuneration policies of the Company are competitive.

2. Review the directors’ performance in line with the corporate objectives.

(iv) ESOS Committee

The ESOS Committee is primarily responsible for administering the Company’s ESOS in accordance with the approved ESOS Bye-Laws and regulations.

There are three (3) members as follows:-

1. Ng Ah Chai - Chairman, Executive Chairman & Chief Executive Officer2. Datuk Chee Hong Leong - Member, Independent/Non-Executive Director3. Foo Lee Khean - Member, Independent/Non-Executive Director



(v) Risk Management Committee (“RMC”)

The RMC was set up to ensure that a risk management structure is embedded throughout the Group and risk management policies consistently adopted. The RMC reports to the AC and comprises the following members:-

1. Ng Ah Chai - Chairman, Executive Chairman & Chief Executive Officer2. Cheong Yee Kiong - Member, Executive Director3. Tseu Chin Foo - Member, Head of Production, Timber Processing 4. Lim Kok Seong - Member, Head of Production, Bedroom Division5. Chee Ah Kuan - Member, Credit Controller6. Lee Oon Kar - Member, Senior Finance Manager7. Lim Siew Mei - Member, Senior Manager, Human Resources8. Boon Kee Suan - Member, Safety & Health Compliance Manager

The primary task of the RMC is to identify and assess the various risks inherent in its operating environment and review the adequacy of controls implemented to mitigate such risks.

B. DIRECTORS’ REMUNERATION

The Board believes that remuneration should be sufficient to attract, retain and motivate Directors of the necessary calibre, expertise and experience to lead the Group.

The details of the remuneration of the directors of the Company for the financial year under review are as follows:-

1. Aggregate remuneration of the Directors categorized into appropriate components:-

Salaries and Other Fees Emoluments Benefits-in-kind Total (RM) (RM) (RM) (RM)

Executive Directors - 1,211,688 47,900 1,259,588

Non-Executive Directors 93,000 - - 93,000

2. The number of directors whose total remuneration fall within the following bands:

Number of Directors Range of Remuneration Executive Non-Executive

Below RM50,000 3

RM350,001 to RM400,000 1

RM850,001 to RM900,000 1



C. SHAREHOLDERS

1. Relationship with Shareholders and Investors

The Company recognizes the importance of transparency and accountability in disclosure of the Group’s business activities to its shareholders. The Board has maintained an effective communication policy that enables the Board to convey information with regard to the Group’s performance, corporate strategy and other matters that affect shareholders’ interests.

This is achieved through timely announcements and disclosures made to Bursa during the financial year under review, including the release of financial results on a quarterly basis. In addition to various announcements made during the financial year, the Company has established its website, www.syf.com.my which allows shareholders and the public, access to corporate information, financial statements, news and events relating to the Group.

2. Annual General Meeting (“AGM”)

The AGM represents the principal forum for dialogue with shareholders. Besides the usual agenda for the AGM, the Board encourages shareholders to participate through questions on the business activities of the Group. The Directors and external auditors are available to respond to questions from the shareholders during the meeting.

A full explanatory statement of the effects of the proposed resolutions will accompany each item of special business as mentioned in the notice of meeting.

D. ACCOUNTABILITY AND AUDIT

1. Financial Reporting

In presenting the annual audited financial statements and quarterly announcements of results to shareholders, the Directors take responsibilities to present a balanced and meaningful assessment of the Group’s position and prospect and to ensure that the financial statements are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable accounting standards in Malaysia. The AC assists the Board in scrutinizing information disclosed to ensure accuracy and completeness. The statement of directors’ responsibilities in respect of the audited financial statements pursuant to the LR of Bursa is set out in the ensuing pages of this annual report.

2. Internal Control

The Company has a sound internal control system in place to achieve its objectives within an acceptable risk profile as well as to safeguard shareholders’ investment and the Group’s assets. An overview of the state of internal control within the Group is set out in the Statement on Internal Control on page 18 of this Annual Report.

3. Relationship with Auditors

The Board has, through the AC, established a formal and transparent relationship with the external and internal Auditors.

The role of the AC in relation to the external and internal auditors is explained in the AC Report as set out in this Annual Report.


E. STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE AUDITED FINANCIAL STATEMENTS

The Board is responsible for ensuring the financial statements of the Group are drawn up in accordance with the Companies Act 1965 and Approved Accounting Standards in Malaysia.

In preparing the financial statements, the Company has adopted appropriate accounting policies, consistently applied and supported by reasonable and prudent judgments and estimates to give a true and fair assessment of the Company’s position and prospects.

The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

F. DEVIATION FROM BEST PRACTICES

The Executive Chairman, Mr. Ng Ah Chai, has also assumed the role of Chief Executive Officer. The dual role is counterbalanced by the strong independent element on the Board to ensure a balance of power and authority.

G. OTHER INFORMATION REQUIRED BY THE LR OF BURSA

1. Share Buy-Back Subsequent to the renewal of the share buy-back scheme as approved by shareholders at the Twelfth AGM held on 11 January 2008, there were no shares purchased pursuant to the scheme for the financial year under review. As approval of the shareholders was not sought at the Thirteenth AGM held on 15 January 2009, the scheme had since lapsed.

2. Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities exercised in respect of the financial year under review.

3. Non-Audit Fees There were no non-audit fees paid to the Company’s external auditors during the financial year under review.

4. Material Contracts

There were no material contracts entered into by the Company and its subsidiary companies involving directors’ and major shareholders’ interests still subsisting at the end of the financial year or entered into since the end of the previous financial year except for the following two tenancy agreements with the Executive Chairman & Chief Executive Officer:-

1. Rental of factory land known as Lot 1226, Mukim Semenyih, with a land area of 1.2899 hectares at a monthly rental of RM13,800/-. This tenancy is for a three year period expiring on 30 June 2010 with an option for another three years renewal.

2. Rental of factory land and building known as Lot 1085, Mukim Semenyih, with a land area of 2.1195 hectares and built-up area of 62,400 sf. The monthly rental is RM30,000/- for a period of three years expiring on 30 June 2010 with an option for another three years renewal.



INTRODUCTION

The Board of Directors (“Board”) acknowledges the importance of maintaining a sound system of internal controls to safeguard shareholders’ investments and the Group’s assets. The Board is pleased to outline the state of internal control of the Group for the financial year ended 31 July 2009 pursuant to Paragraph 15.27 (b) of the Listing Requirements of Bursa Malaysia Securities Berhad.

Board’s Responsibilities

The Board acknowledges its responsibilities in establishing and maintaining the Group’s internal control system and risk management, with the objective to protect shareholders’ investment and the assets entrusted under its custody. Due to the limitations that are inherent in any system of internal control, the system is designed to manage rather than eliminate the risks that may impede the achievement of the Group’s business objectives. The system, by its nature, can only provide reasonable and not absolute assurance against material misstatement or loss.

Risk Management Framework

There is in place a continuous process for identifying, evaluating and managing the significant risks faced by the Group. This process is assumed by the Risk Management Committee comprising senior management who will meet to discuss and deal with the risk issues identified. The Group’s risk management principles are documented and communicated to all the senior employees, setting out the Board’s appetite to risks in the achievement of the business objectives, with the corresponding internal controls to manage these risks.

The Management is responsible for the identification and evaluation of key risks applicable to their areas of business activities on a continuous basis. Risks identified are reported on a timely manner during the periodic management meetings to enable corrective actions to be taken.

Internal audit

The risk management framework seeks to identify significant risks of the Group and review the adequacy of corresponding internal controls implemented. The system of internal controls involves the management of risk inherent in each major operating division in the Group.

The key processes that the Directors have established in reviewing the adequacy and integrity of the system of internal control are as follows:-

1. The Group’s internal audit function reports to the Audit Committee. The Audit Committee, on behalf of the Board, reviews and holds discussions with Management on the action taken on internal control issues identified in reports prepared by the internal auditor, the external auditors and the Management.

2. An accounting system which ensures that all financial transactions are recorded, collated and consolidated into the monthly and quarterly management financial statements, allowing Management to focus on areas of material change. A data backup system is in place to ensure recovery of information in the event of untoward incidents.

3. Investment decisions are governed by a procedure covering the acquisition or disposal of business operations, acceptance of projects, application of capital expenditure and approval on borrowings.

4. Staff recruitment goes through a process and there is a performance appraisal system as well as training and development programs in place to achieve the objective of ensuring staffs are competent to carry out their duties and responsibilities.

5. Authority limits are defined for board members and senior management within an appropriate organization structure.

Arising from the fire incidents in the past, there are now well maintained fire protection systems at all facilities to safeguard the assets and records of the Group. These include a trained firefighting squad and security team.

The internal audit function, which is outtsourced to Raja Salleh, Lim & Co, assists the Board in the review and evaluation of the adequacy and integrity of the system of internal control. Review of the Group’s internal control system is carried out on a systematic and cyclic basis and is reported to the Audit Committee on a semi-annual basis.

During the financial year, the internal audit covered the cash and treasury function of the major subsidiary. Subsequent to year end, the internal auditors reviewed the control of the Group’s fixed assets. Where weaknesses were identified, recommended procedures have been or are being put in place to strengthen controls.

There were no material losses incurred during the financial year under review as a result of weaknesses in internal control. The Board and Management will continue its efforts to strengthen and enhance the control environment.

STATEMEnT On InTERnAL COnTROL


AUDIT COMMITTEE REPORT

Members

The Audit Committee (“AC”) consists of the following members whose attendance record at the four (4) AC meetings held during the financial year under review is as follows:-

Number of meetings attended

Chairman

Dr. Roslan Bin A. Ghaffar 4/4

Members

Datuk Chee Hong Leong 4/4 Leong Choon Meng (resigned on 15/10/09) 4/4Foo Lee Khean (appointed on 15/10/09) N/A

Summary of Activities of the AC

During the financial year under review, the AC undertook the following activities:-

1. Review of the unaudited quarterly reports on the consolidated results of the Group prior to submission to the Board for its approval before the quarterly announcements to Bursa Malaysia Securities Berhad (“Bursa”) were made.

2. Review of the audit plan as proposed by the external auditors, in terms of the nature and extent of the audit procedures, significant accounting and audit issues, impact of new or proposed changes in the accounting standards and any other regulatory requirements.

3. Review of the internal auditor’s programmes and internal audit plans for the financial year under review. 4. Review of the year-end financial statements together with external auditors’ report in relation to their audit findings

and the accounting issues arising from the audit of the Company’s and of the Group’s annual financial results before submitting its recommendation to the Board for approval.

5. Review of pertinent issues raised by the internal auditor. 6. Review of the terms of related party transactions, if any, entered into by the Group. Summary of Activities of the Internal Audit Function

The internal audit function is outsourced and independent of the operations of the Group. It provides reasonable assurance that the Group’s system of internal control is satisfactory and operating efficiently. The internal auditor adopts a risk-based approach towards the planning and conduct of audits that is consistent with the Group’s framework in designing, implementing and monitoring of its internal control system.

Upon completion of the audits, the internal auditor is to closely monitor the implementation progress of the recommendations made in order to assure that the Management has duly addressed all major risks and control issues. All audit reports on the results of work undertaken together with the recommended action plans and the implementation status were presented to the Management and the AC. A number of internal control weaknesses were identified during the financial year, all of which have been appropriately addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report.

The internal audit function is currently outsourced to the firm of Raja Salleh, Lim & Co.

Review of Share Option Scheme

The AC was satisfied that the allocation of share options pursuant to the Employees’ Share Option Scheme (“ESOS”) during the financial year ended 31 July 2009 was in compliance with the criteria set out in the ESOS Bye-Laws and approved by the ESOS Committee.


AUDIT COMMITTEE REPORT(COnT’D)

TERMS OF REFERENCE OF THE AC

Composition of Members

The Board shall elect the AC members from amongst themselves, comprising no fewer than three (3) directors all of whom shall be non-executive. In addition, the majority of the AC members shall be independent directors as defined under Bursa’s Listing Requirements. Each member of the AC shall serve for a term of two (2) years and may be re-nominated and re-appointed by the Board. An alternate director shall not be appointed as a member of the AC.

At least one (1) member of the AC must be:-

a. AmemberoftheMalaysiaInstituteofAccountants(MIA);

b. If he is not a member of MIA, he must have at least three (3) years of working experience and:- i. HemusthavepassedtheexaminationsspecifiedinPartIoftheFirstScheduleoftheAccountantsAct1967;orii. He must be a member of one of the associations of the accountants specified in Part II of the First Schedule of the

AccountsAct1967;or

c. Fulfill such other requirements as prescribed by Bursa. If a member of the AC resigns, dies, or for any reason ceases to be a member with the result that the number of members is reduced to below three (3), the Board shall within three (3) months of the event appoint such number of new members as may be required to fill the vacancy.

The Chairman of the AC, elected from amongst the AC members, shall be an independent director. The Board of Directors shall approve the appointment of Chairman of the AC.

The secretary of the AC shall be the Company Secretary.

Meetings

The AC normally meets four (4) times annually on a quarterly basis although additional meetings may be called at any time whenever necessary. Representatives from the internal auditor and external auditors will attend the meetings, if required. Other Board members may attend the meeting upon invitation of the AC.

Each AC member receives written reports and supporting information, including operating results, comprehensive review and analysis, at least one week ahead of the AC meeting. Prior to each meeting, the members are provided with an agenda and a full set of AC papers for each agenda item to be discussed at the meeting. This is issued in sufficient time to enable the members to obtain further explanations, where necessary, in order to be briefed properly before the meeting.

The quorum shall consist of a majority of members present being independent non-executive directors.

Authority The AC shall:-

1. havetheauthoritytoinvestigateanymatterwithinthetermsofreference;2. haveandbeabletomobilizetherequiredresourcestoperformitsduties;3. havefullandunrestrictedaccesstoanyinformationwithintheGroup;4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function

oractivity(ifany);5. beabletoobtainindependentprofessionalorotheradvice;and6. be able to convene meetings with the external auditors whenever deemed necessary, without the presence of executive

members of the Board.


AUDIT COMMITTEE REPORT(COnT’D)

Duties and Responsibilities

The duties and responsibilities of the AC are:-

1. To do the following in relation to the external audit function:- i. Considertheappointmentofexternalauditors,theauditfeeandanyquestionsofresignationordismissal;ii. Discuss with external auditors before the audit commences, the nature and scope of audit, and ensure coordination

wheremorethanone(1)auditfirmisinvolved;iii. Discuss issues, problems and reservations arising from the interim and final audit, and any matter the auditors may

wishtodiscuss(intheabsenceofthemanagement,wherenecessary)and;iv. Review external auditors’ management letters and the management’s response.

2. To do the following in respect of the internal audit function:-

i. Review the adequacy of the scope, functions and resources of the internal auditors, and that it has necessary authoritytocarryoutitswork;and

ii. Review the internal audit programme and results of the internal audit process and where necessary ensure that appropriate action is taken on the recommendations of the internal auditors.

3. To review the quarterly and year-end financial statements of the Group and the Company, focusing particularly on any

changes in or implementation of major accounting policies and procedures, significant adjustments arising from the audit, the going concern assumption and compliance with applicable approved accounting standards and other legal and regulatory requirements.

4. To consider any related party transactions and conflict of interest situation that may arise within the Group, including

any transaction, procedure or course of conduct that raises questions of management integrity. 5. To review the ESOS allocation to ensure that it is in compliance with the criteria as approved by the ESOS Committee

and set out in the Bye-Laws. 6. To consider the major findings of internal investigation and the management’s response.

7. To consider any other topics and issues as directed by the Board.


CORPORATE SOCIAL RESPOnSIbILITY

In pursuing its corporate goals, SYF embraces its responsibility as a good corporate citizen in its interactions with customers and suppliers and contribution to the community and environment. Equally important, SYF is committed towards providing safe and healthy work conditions for all its employees. The Environment

Due care is taken to ensure that environmental concerns are not compromised in any of our manufacturing facilities. Employees are constantly reminded to maintain responsible work etiquette while machinery and equipment are regularly serviced and maintained in good working order to avoid environmental damage or untoward accidents.

Resources are allocated to maintain SYF’s facilities which have been landscaped with greenery for a more conducive environment.

Work Place

In acknowledging that safety and health are primary concerns at the work place, SYF has set up its occupational safety and health committee to ensure that sufficient attention and resources are allocated for such concerns. The committee is tasked with the maintenance of firefighting equipment and electrical installations, the routine training of the in-house firefighting squad and security team, organizing activities and training for workers in areas such as first aid, safety training for forklift drivers and general awareness of industrial safety.

Occasionally, “gotong-royong” campaigns are organized to mobilize the workers for cleaning up of their hostels and living areas.

Society

For society in general, SYF does its part to assist those less fortunate by participating in charitable activities, having courtesy visits and giving donations to retirement homes, orphanages and welfare homes.

In promoting field technical knowledge and encouraging information sharing, SYF has allowed and accommodated study tours and field trips organized by various institutions to its production facilities.


AnALYSIS OF SHAREHOLDInGS AnD WARRAnTHOLDInGS

ANALYSIS OF SHAREHOLDINGS AS AT 19 NOVEMBER 2009

SHAREHOLDINGS STATISTICS

Authorised Share Capital : RM200,000,000.00Issued and Fully Paid-Up Share Capital : RM84,029,603.00 (excluding 40,000 shares bought back)Class of Shares : Ordinary shares of RM1.00 eachTotal No. of Shareholders : 3,384Voting Rights - On Show of Hand : One vote - On a Poll : One vote for each share held

DISTRIBUTION SCHEDULE OF SHAREHOLDINGS

Size of Holdings No. of Holders No. of Shares % of Shares

Less than 100 6 233 0.00100 to 1,000 1,170 1,144,798 1.361,001 to 10,000 1,529 7,136,912 8.4910,001 to 100,000 600 18,229,460 21.70100,001 to less than 5% of issued shares 76 36,706,600 43.685% and above of issued shares 3 20,811,600 24.77

Total 3,384 84,029,603 100.00

SUBSTANTIAL SHAREHOLDER

According to the register required to be kept under Section 69L of the Companies Act, 1965, the following is the substantial shareholder (excluding bare trustees) of the Company:-

Direct Shareholdings Indirect Shareholdings Name No. of Shares % of Shares No. of Shares % of Shares

1. Ng Ah Chai 25,711,600 30.60 - -

STATEMENT ON DIRECTORS’ INTERESTS IN THE SECURITIES OF THE COMPANYAS AT 19 NOVEMBER 2009

DIRECTORS’ SHAREHOLDINGS

Direct Shareholdings Indirect Shareholdings Name No. of Shares % of Shares No. of Shares % of Shares

1. Ng Ah Chai 25,711,600 30.60 - -2. Datuk Chee Hong Leong - - - -3. Dr. Roslan bin A. Ghaffar - - - -4. Foo Lee Khean - - - -5. Cheong Yee Kiong - - - -


AnALYSIS OF SHAREHOLDInGS AnD WARRAnTHOLDInGS(COnT’D)

THIRTY LARGEST SHAREHOLDERS

Name No. of Shares % of Shares

1. Bank Kerjasama Rakyat Malaysia Berhad 8,000,000 9.52 Pledged Securities Account For Ng Ah Chai

2. JF Apex Nominees (Tempatan) Sdn. Bhd. 6,924,000 8.23 Pledged Securities Account For Ng Ah Chai

3. EB Nominees (Tempatan) Sendirian Berhad 5,887,600 7.00 Pledged Securities Account For Ng Ah Chai

4. Cimsec Nominees (Tempatan) Sdn. Bhd. 3,200,000 3.80 CIMB Bank For Ng Ah Chai

5. RHB Capital Nominees (Tempatan) Sdn. Bhd. 3,000,000 3.57 Pledged Securities Account For Yong Ah Pee

6. M.I.T Nominees (Tempatan) Sdn. Bhd. 2,382,000 2.83 Pledged Securities Account For Lau Hock Lee

7. RHB Capital Nominees (Tempatan) Sdn. Bhd. 2,115,000 2.51 Pledged Securities Account For Lee Shee

8. RHB Capital Nominees (Tempatan) Sdn. Bhd. 1,810,000 2.15 Lee Leong Lai

9. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 1,700,000 2.02 Pledged Securities Account For Ng Ah Chai

10. Yeoh Huan Sui @ Yeoh Phuay 1,039,000 1.23

11. Yeoh Kean Hua 1,020,000 2.52

12. Amsec Nominees (Tempatan) Sdn. Bhd. 1,012,700 1.20 Pledged Securities Account For Yap Choong

13. RHB Capital Nominees (Tempatan) Sdn. Bhd. 1,000,000 1.19 Chong Vun Kon

14. Public Nominees (Tempatan) Sdn. Bhd. 822,500 0.97 Pledged Securities Account For Yeo Chee Min

15. Susan Karen Radzi @ Rodziah Dato’ Radzi 785,000 0.93

16. JF Apex Nominees (Tempatan) Sdn. Bhd. 708,100 0.84 Pledged Securities Account For Chee Chik Eng

17. Lau Hock Lee 705,000 0.83

18. Kamarudin Bin Meranun 661,000 0.78



THIRTY LARGEST SHAREHOLDERS (CONT’D)

Name No. of Shares % of Shares

19. Abd. Hamid Bin Ibrahim 655,400 0.77

20. Yong Ah Pee 650,000 0.77

21. Ng Aik Hooi 627,000 0.74

22. Lee Kim Song 560,000 0.66

23. Amsec Nominees (Asing) Sdn. Bhd. 521,000 0.62 Amfraser Securities Pte Ltd For Ramesh S/O Pritamdas Chandiramani

24. Rozman Bin Omar 429,000 0.51

25. Amsec Nominees (Tempatan) Sdn. Bhd. 420,000 0.49 Pledged Securities Account For Aik Yun Kim @ Yek Yue Kiew

26. Public Nominees (Tempatan) Sdn. Bhd. 402,000 0.47 Pledged Securities Account For Tan Chia Hong @ Gan Chia Hong

27. Kenanga Nominees (Tempatan) Sdn. Bhd. 400,000 0.47 Pledged Securities Account For Lim Chong Ee

28. Tan Geok Swee @ Tan Chin Huat 398,000 0.47

29. AIBB Nominees (Tempatan) Sdn. Bhd. 392,500 0.46 Pledged Securities Account For Lim Hock Ho

30. Ng Choi 381,000 0.45



ANALYSIS OF 2003/2013 WARRANTHOLDINGS AS AT 19 NOVEMBER 2009

WARRANTHOLDINGS STATISTICS

No. of Warrants Issued : 36,290,700No. of Warrants Converted Into Ordinary Shares : 1,806,400No. of Warrants Outstanding : 34,484,300Total No. of Warrantholders : 888Voting Rights - On Show of Hand : One vote - On a Poll : One vote for each warrant held

DISTRIBUTION SCHEDULE OF WARRANTHOLDINGS

Size of Holdings No. of Holders No. of Warrants % of Warrants

Less than 100 0 0 0.00100 to 1,000 90 84,300 0.241,001 to 10,000 444 2,680,400 7.7710,001 to 100,000 329 11,219,500 32.54100,001 to less than 5% of issued warrants 24 7,554,900 21.915% and above of issued warrants 1 12,945,200 37.54

Total 888 34,484,300 100.00

SUBSTANTIAL WARRANTHOLDER

The following is the substantial warrantholder (excluding bare trustees) of the Company:-

Direct Warrantholdings Indirect Warrantholdings Name No. of Warrants % of Warrants No. of Warrants % of Warrants

1. Ng Ah Chai 13,658,100 39.61 - -

STATEMENT ON DIRECTORS’ INTERESTS IN THE SECURITIES OF THE COMPANYAS AT 19 NOVEMBER 2009

DIRECTORS’ WARRANTHOLDINGS

Direct Warrantholdings Indirect Warrantholdings Name No. of Warrants % of Warrants No. of Warrants % of Warrants

1. Ng Ah Chai 13,658,100 39.61 - -2. Datuk Chee Hong Leong - - - -3. Dr. Roslan bin A. Ghaffar - - - -4. Foo Lee Khean - - - -5. Cheong Yee Kiong - - - -



THIRTY LARGEST WARRANTHOLDERS

Name No. of Warrants % of Warrants

1. Ng Ah Chai 12,945,200 37.54

2. JF Apex Nominees (Tempatan) Sdn. Bhd. 1,272,500 3.69 Pledged Securities Account For Chee Chik Eng

3. Cimsec Nominees (Tempatan) Sdn. Bhd. 1,171,900 3.39 Exempt An for CIMB Securities (HK) Limited

4. JF Apex Nominees (Tempatan) Sdn. Bhd. 712,900 2.07 Pledged Securities Account For Ng Ah Chai

5. Amsec Nominees (Asing) Sdn. Bhd. 699,900 2.02 Amfraser Securities Pte Ltd For Ramesh S/O Pritamdas Chandiramani

6. RHB Capital Nominees (Tempatan) Sdn. Bhd. 350,000 1.01 Lee Leong Lai

7. Ng Choi 319,500 0.92

8. Cimsec Nominees (Tempatan) Sdn. Bhd. 285,000 0.82 Exempt An For CIMB-GK Securities Pte Ltd

9. Mayban Nominees (Tempatan) Sdn. Bhd. 245,000 0.71 Pledged Securities Account For Ting Tie Hau

10. Mayban Nominees (Tempatan) Sdn. Bhd. 218,900 0.63 Pledged Securities Account For Kong Ah Then

11. Amsec Nominees (Tempatan) Sdn. Bhd. 211,000 0.61 Pledged Securities Account for Ng Aik Hooi

12. Ng Yoke Lan 210,000 0.60

13. Mayban Securities Nominees (Tempatan) Sdn. Bhd. 199,500 0.57 Pledged Securities Account for Diong Gew Koong

14. Lim See Teok 185,000 0.53

15. AIBB Nominees (Tempatan) Sdn. Bhd. 165,000 0.47 Pledged Securities Account for Ng Aik Hooi

16. Lee Soo Seng 152,000 0.44

17. Yong Kok Pew 150,000 0.43

18. JF Apex Nominees (Tempatan) Sdn. Bhd. 145,000 0.42 Pledged Securities Account for Ngoh Cheng Loong



THIRTY LARGEST WARRANTHOLDERS (CONT’D)

Name No. of Warrants % of Warrants

19. Ng Bee Lan 135,000 0.39

20. Soo Kun Ching 135,000 0.39

21. HDM Nominees (Tempatan) Sdn. Bhd. 128,000 0.37 Pledged Securities Account for Goh Bon Kian

22. Tan Lee Chin 121,000 0.35

23. Ngoo Ah Choo @ Ngoo Kay Choo 120,500 0.34

24. Public Nominees (Tempatan) Sdn. Bhd. 117,300 0.34 Pledged Securities Account for Ng Nyuk Yong

25. Mayban Securities Nominees (Tempatan) Sdn. Bhd. 105,000 0.30 Pledged Securities Account for Lai Yook Kheng

26. Chew Chin Swee 100,000 0.28

27. Dang Chin Ang 100,000 0.28

28. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd. 100,000 0.28 Pledged Securities Account for Lai Ee Fong

29. Koh Peng Cheong 100,000 0.28

30. Lee Kim Haow 100,000 0.28


LIST OF PROPERTIES AS AT 31 JULY 2009

Owner, Title/Location Tenure Approx. Age

(years) Description/Existing Use

Size(Sq ft.)

NBV @ 31.07.09 RM’000

Year ofAcquisition

Seng Yip Furniture Sdn Bhd Lot 971, Mukim SemenyihJalan Sungai Lalang43500 SemenyihSelangor

Freehold 13 Land, office, factory and warehouse

413,820 22,793 1996

Seng Yip Furniture Sdn BhdLot 1224, Mukim Semenyih Jalan Sungai Lalang43500 SemenyihSelangor

Freehold 13 Land, factory and warehouse

120,473 5,363 1996

Seng Yip Furniture Sdn BhdLot 1225, Mukim Semenyih Jalan Sungai Lalang43500 SemenyihSelangor


120,516 5,357 2000

Seng Yip Furniture Sdn Bhd Lot 1338, Mukim Semenyih Jalan Sungai Lalang43500 SemenyihSelangor


123,929 3,726 1993

Seng Yip Furniture Sdn Bhd Lot 974, Mukim Semenyih Jalan Sungai Lalang43500 SemenyihSelangor


878,551 25,318 2006

Seng Yip Furniture Sdn BhdLot 739, Pekan Nilai Jalan ZamrudNilai Industrial Park II71800 NilaiNegeri Sembilan

Leasehold 2 Land, factory and warehouse

191,976 3,622 2008

SYF Trading Sdn Bhd No.S2.140B, 2nd FloorThe Summit Subang USJSubang JayaSelangor

Freehold 11 Retail 36,361 6,400 1998


Owner, Title/Location Tenure Approx. Age

(years) Description/Existing Use

Size(Sq ft.)

NBV @ 31.07.09 RM’000

Year ofAcquisition

Tomisho Sdn Bhd Lot 44711, Mukim Kapar Jalan Kapar, 42200 KlangSelangor


98,131 9,681 2005

Furniwood Industries (M) Sdn Bhd 7-3, 7th Floor, Menara KLHPusat Perdagangan KLHBandar Puchong Jaya47100 PuchongSelangor

Leasehold 13 Office 2,117 383 1996

Twenty-One SJ Sdn Bhd PT 31678, Mukim Semenyih Jalan Sungai Lalang43500 SemenyihSelangor


59,395 2,878 2007

LIST OF PROPERTIES AS AT 31 JULY 2009 (COnT’D)


FiNaNCial STaTEmENTS32 Directors’ Report

36 Statement by Directors

36 Statutory Declaration

37 Independent Auditors’ Report

39 Balance Sheets

40 Income Statements

41 Statements of Changes in Equity

43 Cash Flow Statements

45 Notes to the Financial Statements


DIRECTORS’ REPORT

The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 July 2009.

PRINCIPAL ACTIVITIES

The principal activity of the Company is that of investment holding. The principal activities of the subsidiary companies are disclosed in Note 7 to the financial statements.

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

FINANCIAL RESULTS

Group Company RM’000 RM’000

Loss before taxation (18,014) (4,886)Taxation (300) -

Loss for the financial year (18,314) (4,886)

Attributable to: Shareholders of the Company (18,422) (4,886) Minority interests 108 -

(18,314) (4,886)

In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen during the financial year nor in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the Company for the current financial year.

DIVIDEND

No dividend has been paid or declared by the Company since the end of previous financial year.

The Board of Directors does not recommend any dividend in respect of the financial year under review.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year under review other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

There were no issues of shares or debentures during the financial year under review.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year under review, except for the Employees’ Share Option Scheme.


DIRECTORS’ REPORT(COnT’D)

EMPLOYEES’ SHARE OPTION SCHEME

The Company’s Employees’ Share Option Scheme (“ESOS”) was approved by the shareholders at the Extraordinary General Meeting held on 23 May 2003. At all times, the ESOS shall not exceed 10% of the issued share capital and shall be granted to eligible Directors and employees of the Group. The ESOS shall be in force for a period of five (5) years and lapse on 31 July 2008.

On 21 July 2008, pursuant to the existing bye-laws governing the ESOS, the Company extended the expiry date of the existing ESOS, which expired on 31 July 2008, for a further period of five (5) years until 31 July 2013.

The salient features and other terms of the ESOS are disclosed in Note 31 to the financial statements.

Details of the options granted to Directors are disclosed in the section on Directors’ Interests in this report.

DIRECTORS

The Directors who served since the date of the last report are as follows:-

Ng Ah ChaiDatuk Chee Hong LeongDr. Roslan Bin A. GhaffarCheong Yee KiongFoo Lee Khean (Appointed on 15 October 2009)Leong Choon Meng (Resigned on 15 October 2009)

DIRECTORS’ INTERESTS

Details of holdings and deemed interests in the share capital, warrants and options of the Company or its related corporations by the Directors in office at the end of the financial year, according to the register required to be kept under Section 134 of the Companies Act, 1965, were as follows:-

No. of ordinary shares of RM1.00 each At At 1.8.2008 Acquired Disposed 31.7.2009

SYF Resources BerhadDirect interest Ng Ah Chai 25,711,600 - - 25,711,600

No. of Warrants At At 1.8.2008 Acquired Disposed 31.7.2009

SYF Resources BerhadDirect interest Ng Ah Chai 12,945,200 712,900 - 13,658,100

No. of options over ordinary shares of RM1.00 each At At 1.8.2008 Granted Exercised 31.7.2009

SYF Resources BerhadDirect interest Ng Ah Chai 780,000 - - 780,000 Cheong Yee Kiong 320,000 - - 320,000


By virtue of his interest in the shares of the Company, Ng Ah Chai is also deemed to have interests in the shares of all the subsidiary companies to the extent the Company has an interest.

None of the other Directors holding office at the end of the financial year had any interest in the ordinary shares of the Company and of its related corporations during the financial year under review.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments and rental received or due and receivable by Directors as shown in 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.

Neither during nor at the end of the financial year, was the Company a party to any arrangement the object of which is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share option granted under the Company’s ESOS.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the Directors took reasonable steps:-

(i) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written-off and that adequate allowancehadbeenmadefordoubtfuldebts;and

(ii) to ensure that any current assets which were unlikely to realise their value in the ordinary course of business were 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 which would render:-

(i) the amount written-off for bad debts or the amount of allowance for doubtful debts in the financial statements of theGroupandoftheCompanyinadequatetoanysubstantialextent;

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

(iii) anyamountstatedinthefinancialstatementsoftheGroupandoftheCompanymisleading;and

(iv) adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(c) In the opinion of the Directors:-

(i) No contingent or other liabilities have become enforceable, or are likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the abilityoftheCompanyoritssubsidiarycompaniestomeettheirobligationsasandwhentheyfalldue;and

(ii) 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 or of the Company for the current financial year.




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

(i) any charge on the assets of the Company and its subsidiary companies which have arisen since the end of the financialyeartosecuretheliabilitiesofanyotherperson;and

(ii) any contingent liability in respect of the Company and its subsidiary companies which have arisen since the end of the financial year.

SUBSEQUENT EVENTS

The subsequent events are disclosed in Note 37 to the financial statements.

AUDITORS

The auditors, UHY Diong, have expressed their willingness to accept re-appointment.

Signed in accordance with a resolution of the Directors.

NG AH CHAI

CHEONG YEE kIONG

KUALA LUMPUR

3 NOVEMBER 2009


STATEMEnT bY DIRECTORSPURSUAnT TO SECTIOn 169(15) OF THE COMPAnIES ACT, 1965

STATUTORY DECLARATIOnPURSUAnT TO SECTIOn 169(16) OF THE COMPAnIES ACT, 1965

I, LEE OON KAR, being the Officer primarily responsible for the financial management of SYF RESOURCES BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 39 to 84 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 LEE OON KAR at KUALA LUMPUR in the Federal Territory this 3 November 2009.

LEE OON kAR

Before me,

ARSHAD ABDULLAH (W550)

COMMISSIONER FOR OATHS

We, NG AH CHAI and CHEONG YEE KIONG, being two of the Directors of SYF RESOURCES BERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 39 to 84 are drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 July 2009 and of their financial performance and cash flows for the financial year then ended.

Signed in accordance with a resolution of the Directors.

NG AH CHAI

CHEONG YEE kIONG

KUALA LUMPUR

3 NOVEMBER 2009


InDEPEnDEnT AUDITORS’ REPORT TO THE MEMbERS OF SYF RESOURCES bERHAD

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of SYF Resources Berhad, which comprise the balance sheet as at 31 July 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes as set out on pages 39 to 84.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 judgment, including the assessment of risk 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 and fair presentation of the financial statements 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 estimate made by the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 July 2009 and of their financial performance and cash flows for the financial year then ended.


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiary companies have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the accounts of the subsidiary companies 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.

(c) Our audit reports on the accounts of the subsidiary companies did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

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.

UHY DIONG TEE GUAN PIANFirm Number: AF 1411 Approved Number: 1886/05/10 (J/PH)Chartered Accountants Chartered Accountant

KUALA LUMPUR

3 NOVEMBER 2009

InDEPEnDEnT AUDITORS’ REPORT TO THE MEMbERS OF SYF RESOURCES bERHAD (COnT’D)


bALAnCE SHEETSAS AT 31 JULY 2009

Group Company2009 2008 2009 2008

Note RM’000 RM’000 RM’000 RM’000

Non-Current AssetsProperty, plant and equipment 3 106,953 109,868 - -Prepaid lease payments 4 2,338 2,098 - -Intangible assets 6 1,017 11,501 - -Investments in subsidiary companies 7 - - 49,058 50,515Other investments 8 - 2,194 - 2,194Land held for property development 9 205 203 - -

110,513 125,864 49,058 52,709

Current AssetsProperty development costs 9 8,518 1,752 - -Inventories 10 28,857 32,588 - -Trade receivables 11 17,623 16,151 - -Other receivables 12 3,247 6,145 - -Tax recoverable 618 1,619 528 528Amount owing by subsidiary companies 13 - - 67,915 67,868Fixed deposits with licensed banks 14 274 816 - -Cash and bank balances 15 1,920 2,115 93 158

61,057 61,186 68,536 68,554Non-current assets held for sale 16 9,278 8,010 - -

70,335 69,196 68,536 68,554

Total Assets 180,848 195,060 117,594 121,263

EquityShare capital 17 84,070 84,070 84,070 84,070Reserves 18 (49,024) (30,602) (26,005) (21,119)Equity attributable to shareholders of the Company 35,046 53,468 58,065 62,951Minority interests 2,180 2,309 - -Total Equity 37,226 55,777 58,065 62,951

Non-Current LiabilitiesOther payables 19 - 2,700 - -Bank borrowings 20 70,037 65,784 55,000 55,000Hire purchase payables 21 229 309 - -Deferred tax liabilities 22 4,880 4,814 - -

75,146 73,607 55,000 55,000

Current LiabilitiesTrade payables 23 24,616 16,993 - -Other payables 19 16,705 16,896 2,701 3,077Amount owing to subsidiary companies 13 - - 1,828 235Bank borrowings 20 25,543 28,992 - -Hire purchase payables 21 254 271 - -Bank overdrafts 24 1,268 2,143 - -Tax payable 90 381 - -

68,476 65,676 4,529 3,312

Total Liabilities 143,622 139,283 59,529 58,312

Total Equity and Liabilities 180,848 195,060 117,594 121,263

The accompanying notes form an integral part of the financial statements.


InCOME STATEMEnTSFOR THE FInAnCIAL YEAR EnDED 31 JULY 2009

Group Company2009 2008 2009 2008

Note RM’000 RM’000 RM’000 RM’000

Revenue 25 190,580 229,867 4,833 9,833Cost of sales (176,653) (215,658) - -

Gross profit 13,927 14,209 4,833 9,833Other operating income 8,430 3,748 188 147Distribution expenses (2,991) (2,862) - -Administrative expenses (20,781) (12,547) (5,464) (1,974)Other operating expenses (9,902) (9,866) - (39,550)

(11,317) (7,318) (443) (31,544)Finance costs 26 (6,697) (6,792) (4,443) (4,445)

Loss before taxation 27 (18,014) (14,110) (4,886) (35,989)Taxation 28 (300) 413 - -

Loss for the financial year (18,314) (13,697) (4,886) (35,989)

Attributable to:Shareholders of the Company (18,422) (14,082) (4,886) (35,989)Minority interests 108 385 - -

(18,314) (13,697) (4,886) (35,989)

Loss per share attributable to shareholders of the Company (sen)

Basic 29(a) (21.9) (16.8)



STATEMEnTS OF CHAnGES In EQUITYFOR THE FInAnCIAL YEAR EnDED 31 JULY 2009

----

----

----

----

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Acc

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To

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Min

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RM’0

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RM’0

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At 1

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84,0

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15,3

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66

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67,6

16

2,65

5 70

,271

Dis

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sub

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- -

- -

(66)

- (6

6) -

(66)

Net

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- -

- -

- (1

4,08

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385

(13,

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-

- -

- -

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(731

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31)

At 3

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84,

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15,

374

11,5

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53

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2,

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55,

777

----

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Net

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- -

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(18,

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108

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Inve

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- -

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(228

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At 3

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84,

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(39)

15

,374

11,

571

(75,

930)

35

,046

2,

180

37,2

26


STATEMEnTS OF CHAnGES In EQUITYFOR THE FInAnCIAL YEAR EnDED 31 JULY 2009 (COnT’D)

-------------- Non-distributable --------------- Distributable

Company

ShareCapital

RM’000

TreasuryShares

RM’000

SharePremium

RM’000

AccumulatedLosses

RM’000 Total

RM’000

At 1 August 2007 84,070 (39) 15,374 (465) 98,940

Net loss for the financial year - - - (35,989) (35,989)

At 31 July 2008 84,070 (39) 15,374 (36,454) 62,951

At 1 August 2008 84,070 (39) 15,374 (36,454) 62,951

Net loss for the financial year - - - (4,886) (4,886)

At 31 July 2009 84,070 (39) 15,374 (41,340) 58,065



CASH FLOW STATEMEnTSFOR THE FInAnCIAL YEAR EnDED 31 JULY 2009

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cash Flows From Operating ActivitiesLoss before taxation (18,014) (14,110) (4,886) (35,989)Adjustments for:

Allowance for diminution in value of- investment in subsidiaries - - 1,457 25,000- other investment 2,194 2,550 2,194 2,550

Allowance for doubtful debts 2,225 - - -Allowance for doubtful debts no longer required (2,274) - - -Amortisation of prepaid lease payments 29 22 - -Bad debts recovered (367) - - -Deposit written off 19 - - -Depreciation of investment properties - 220 - -Depreciation of property, plant and equipment 6,317 6,446 - -Dividend income - - - (5,000)Gain on disposal of investment properties - (75) - -Goodwill written off 10,484 2,120 - -Impairment loss on goodwill - 1,431 - -Impairment loss on non-current assets held for sale 1,610 770 - -Interest expense 6,697 6,792 4,443 4,445Interest income (72) (68) - (66)Loss on assignment of debt 2,656 - - -Loss on disposal of property, plant and equipment 249 78 - -Property, plant and equipment written off 37 344 - -Reversal of provision for onerous contract (3,600) - - -Unrealised loss on foreign exchange - 105 - -

Operating profit/(loss) before working capital changes 8,190 6,625 3,208 (9,060)

(Increase)/Decrease in working capitalInventories 3,731 (351) - -Property development costs (6,768) 1,886 - -Trade receivables (3,712) 2,138 - -Other receivables 2,825 4,986 - 27Amount due by / (to) subsidiary companies - - 1,546 8,020Trade payables 7,623 2,626 - -Other payables 709 689 (376) (62)

4,408 11,974 1,170 7,985


CASH FLOW STATEMEnTFOR THE FInAnCIAL YEAR EnDED 31 JULY 2009 (COnT’D)

Group Company2009 2008 2009 2008

Note RM’000 RM’000 RM’000 RM’000

Cash Flows From Operating Activities (Cont’d)Cash generated from/(used in) operations 12,598 18,599 4,378 (1,075)Tax paid (387) (182) - -Income taxes refund 917 - - 810

Net cash generated from/(used in) operating activities 13,128 18,417 4,378 (265)

Cash Flows From Investing ActivitiesInterest income 72 68 - 66Acquisition of property, plant and equipment (8,622) (8,257) - -Acquisition of prepaid lease payment (269) (2,120) - -Acquisition of minority interest in subsidiaries - (1,431) - -Proceeds from disposal of investment properties - 2,500 - -Proceeds from disposal of property, plant and equipment

2,056 751 - -

Decrease in fixed deposits pledged with licensed banks 542 270 - -Dividend received - - - 4,688

Net cash (used in)/ generated from investing activities (6,221) (8,219) - 4,754

Cash Flows From Financing ActivitiesDividend paid to minority interest (228) (731) - -Disposal of a subsidiary company (9) - - -Interest paid (6,697) (6,792) (4,443) (4,445)Proceeds from term loans and other borrowings 1,676 19,287 - -Repayment of term loans and other borrowings (872) (21,520) - -Repayment of hire purchase payables (97) (1,070) - -

Net cash used in financing activities (6,227) (10,826) (4,443) (4,445)

Net increase/(decrease) in cash and cash equivalents 680 (628) (65) 44Cash and cash equivalents at beginning of the financial year (28) 600 158 114

Cash and cash equivalents at end of the financial year 652 (28) 93 158

Cash and cash equivalents at end of the financial year comprise:Fixed deposits with licensed banks 274 816 - -Cash and bank balances 1,920 2,115 93 158Bank overdrafts (1,268) (2,143) - -

926 788 93 158Less: Fixed deposits pledged with licensed banks 14 (274) (816) - -

652 (28) 93 158



nOTES TO THE FInAnCIAL STATEMEnTS

1. CORPORATE INFORMATION

The principal activity of the Company is that of investment holding. The principal activities of the subsidiary companies are disclosed in Note 7 to the financial statements.

The Company is a public limited liability company, incorporated in Malaysia under the Companies Act, 1965 and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

The principal place of business of the Company is located at Kawasan Perindustrian Sungai Lalang, Lot 971, Jalan Vill, Mukim Semenyih, Jalan Sungai Lalang, 43500 Semenyih, Selangor Darul Ehsan.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting

The financial statements of the Group and of the Company have been prepared on the historical cost convention except as disclosed in the notes to the financial statements and in compliance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia.

The Group and the Company have not adopted the following new FRS and Amendments to FRSs which have been issued as at the date of authorisation of these financial statements but are not yet effective for the Group and the Company:-

Effective date for financial periods beginning on or after

FRS 8 Operating Segments 1 July 2009FRS 4 Insurance Contracts 1 January 2010FRS 7 Financial Instruments : Disclosures 1 January 2010FRS 123 Borrowing Costs 1 January 2010FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010Amendment to FRS 1 First-time Adoption of Financial Reporting Standards 1 January 2010Amendment to FRS 2 Share-based Payment : Vesting 1 January 2010 Conditions and CancellationsAmendment to FRS 5 Non-current Assets Held for Sale and 1 January 2010 Discontinued OperationsAmendment to FRS 7 Financial Instruments : Disclosures 1 January 2010Amendment to FRS 8 Operating Segments 1 January 2010Amendment to FRS 101 Presentation of Financial Statements 1 January 2010Amendment to FRS 107 Statement of Cash Flows 1 January 2010Amendment to FRS 108 Accounting Policies, Changes in 1 January 2010 Accounting Estimates and ErrorsAmendment to FRS 110 Events after the Reporting Period 1 January 2010Amendment to FRS 116 Property, Plant and Equipment 1 January 2010Amendment to FRS 117 Leases 1 January 2010Amendment to FRS 118 Revenue 1 January 2010Amendment to FRS 119 Employee Benefits 1 January 2010Amendment to FRS 120 Accounting for Government Grants and 1 January 2010 Disclosure of Government Assistance


nOTES TO THE FInAnCIAL STATEMEnTS(COnT’D)

Effective date for financial periods beginning on or after

Amendment to FRS 123 Borrowing Costs 1 January 2010Amendment to FRS 127 Consolidated and Separate Financial Statements : 1 January 2010 Cost of an Investment in a Subsidiary, Jointly Controlled Entity or AssociateAmendment to FRS 127 Consolidated and Separate Financial Statements 1 January 2010Amendment to FRS 128 Investments in Associates 1 January 2010Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies 1 January 2010Amendment to FRS 131 Interests in Joint Venture 1 January 2010Amendment to FRS 132 Financial Instruments : Presentation 1 January 2010Amendment to FRS 134 Interim Financial Statements 1 January 2010Amendment to FRS 136 Impairment of Assets 1 January 2010Amendment to FRS 138 Intangible Assets 1 January 2010Amendment to FRS 139 Financial Instruments : Recognition and Measurement 1 January 2010Amendment to FRS 140 Investment Property 1 January 2010

(i) FRS 8 Operating Segments

This new standard replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which segment information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard only impacts the form and content of disclosures presented in the financial statements of the Group. This FRS is expected to have no material impact on the financial statements of the Group upon its initial application.

(ii) FRS 7 Financial Instruments : Disclosures

This new standard requires disclosures in financial statements that enable users to evaluate the significance of financial instruments for the entity’s financial position and performance, and the nature and extent of risks arising from financial instruments to which an entity is exposed and how these risks are managed. This standard requires both qualitative disclosures describing management’s objectives, policies and processes for managing those risks, and quantitative disclosures providing information about the extent to which an entity is exposed to risk, based on information provided internally to the entity’s key management personnel.

(iii) FRS 123 Borrowing Costs

This new standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale.

(iv) FRS 139 Financial Instruments : Recognition and Measurement

This new standard establishes the principles for the recognition, derecognition and measurement of an entity’s financial instruments and for hedge accounting. The impact of applying FRS 139 on the financial statements upon first adoption of this standard as required by paragraph 30(b) of FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors is not required to be disclosed by virtue of exemptions provided under paragraph 103AB of FRS 139.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Basis of accounting (cont’d)




(a) Basis of accounting (cont’d)

FRS 4, Amendment to FRS 1, Amendment to FRS 2, Amendment to FRS 120 and Amendment to FRS 129 are not relevant to the Group’s and to the Company’s operations.

The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 7 and FRS 139.

The initial applications of the above applicable new FRSs and Amendments to FRSs are not expected to have any material impact on the financial statements of the Group and the Company.

(b) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.

(c) Significant accounting estimates and judgements

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

The key assumptions concerning the future and other key sources of estimation or uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below:

(i) Depreciation of property, plant and equipment

The costs of property, plant and equipment of the Group are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the property, plant and equipment to be within 5 to 50 years as stated in Note 2(e)(iv). These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could have impact on the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s property, plant and equipment as at 31 July 2009 is disclosed in Note 3 to the financial statements.

(ii) Amortisation of prepaid lease payments

The costs of prepaid lease payments of the Group is amortised on a straight-line basis over the useful lives of the assets. These are common life expectancies applied in the industry. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future amortisation charges could be revised. The carrying amount of the Group’s prepaid lease payments at 31 July 2009 is disclosed in Note 4 to the financial statements.




(c) Significant accounting estimates and judgements (cont’d)

(iii) Property development costs

The Group recognises property development revenue and expenses in the income statement by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred, for work performed to date bear to the estimated total property development costs. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience and by relying on the work of specialists. The carrying amount of the Group’s property development costs as at 31 July 2009 is disclosed in Note 9 to the financial statements.

(iv) Impairment of goodwill on consolidation

The Group determines whether goodwill is impaired at least on an annual basis, in accordance with the accounting policy stated in Note 2(j).This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill on consolidation as at 31 July 2009 is disclosed in Note 6 to the financial statements.

(v) Income taxes

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

(d) Basis of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiary companies from the date that control effectively commences until the date that control effectively ceases through equity accounting which are made up to the end of the financial year.

(i) Subsidiary companies

Subsidiary companies are those companies in which the Group has long term equity interest and has the power, directly or indirectly, to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanying a shareholding of more than one half of the voting rights.

The purchase method of accounting is used to account for the acquisition of subsidiary companies. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.




(d) Basis of consolidation (cont’d)

(i) Subsidiary companies (cont’d)

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the date of acquisition, irrespective of the extent of any minority interest. The difference between the acquisition cost and the fair values of the subsidiary companies’ net assets is reflected as goodwill or reserve on consolidation as appropriate. The accounting policy on goodwill on acquisition of subsidiary companies is set out in Note 2(j). Reserve on consolidation is recognised immediately in income statement.

Subsidiaries are consolidated from the date on which control is transferred to the Group to the date on which that control ceases.

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

The gain or loss on disposal of a subsidiary company is the difference between net disposal proceeds and the Group’s share of its net assets together with any unimpaired balance of goodwill which were not previously recognised in the consolidated income statement.

Minority interest is measured at the minorities’ share of the fair value of identifiable assets and liabilities at the date of acquisition by the Group and the minorities’ share of changes in equity since the date of acquisition, except when the losses applicable to the minority in a subsidiary exceed the minority interest in the equity of that subsidiary. In such cases, the excess and further losses applicable to the minority are attributed to the equity holders of the Company.

(ii) Changes in Group composition

Where a subsidiary issues new equity shares to minority interests for cash consideration and the issue price has been established at fair value, the reduction in the Group’s interests in the subsidiary is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in the income statement.

When a group purchases a subsidiary’s equity shares from minority interests for cash consideration and the purchase price has been established at fair value, the accretion of the Group’s interests in the subsidiary is accounted for as a purchase of equity interest for which the acquisition accounting method of accounting is applied.

The Group treats all other changes in group composition as equity transactions between the Group and its minority shareholders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

(e) Property, plant and equipment

(i) Recognition and measurement

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(q).




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

(i) Recognition and measurement (cont’d)

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, 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. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

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.

(ii) Reclassification to investment property

Property that is being constructed for future use as investment property is accounted for as property, plant and equipment until construction or development is complete, at which time it is reclassified as investment property and accounted for in accordance with Note 2(g).

When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property and accounted for in accordance with Note 2(g).

(iii) Subsequent costs

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 costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.

(iv) Depreciation

Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:-

Freehold land -Buildings 50 yearsLeasehold improvement 10 yearsOffice equipment, furniture and fittings 5 to 20 yearsRenovation and electrical upgrade 5 to 50 yearsTools and machinery 10 to 12.5 yearsMotor vehicles 5 years

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at each financial year end.

Upon disposal of an asset, the difference between the net disposal proceeds and the carrying amount of the assets is charged or credited to the income statement. On disposal of a revalued asset, the attributable revaluation surplus remaining in the revaluation reserve is transferred to distribution reserve.




(f) Land and property development costs

(i) Land held for property development

Land held for property development consists of land held for future development activities where no significant development has been undertaken or where development activities are not expected to be completed within normal operating cycle. Such land is classified as non-current asset and is stated at cost less any accumulated impairment losses. The policy of recognition and measurement of impairment losses is in accordance with Note 2(q).

Land held for property development is reclassified as current asset when the development activities have been commenced or development activities are expected to commence within the period of twelve months after the end of financial year and where it can be demonstrated that the development activities can be completed within the normal operating cycle.

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

(ii) Property development costs

Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

Property development costs shall be classified as non-current asset where no development activities have been carried out or development activities are expected to commence within the period of twelve months after the end of financial year or where development activities are not expected to be completed within the normal operating cycle.

Property development costs shall be reclassified to current asset when the development activities have been commenced or development activities are expected to commence within the period of twelve months after the end of financial year or where the activities are expected to be completed within the normal operating cycle.

When the financial outcome of development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.

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

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

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

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




(g) Investment properties

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. Properties that are occupied by the Group are accounted for as owner-occupied rather than as investment properties. Investment properties are stated at cost less accumulated depreciation and impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy note 2(e).

Depreciation is charged to the income statement on a straight-line basis over the estimated useful life of 50 years for buildings. Freehold land is not depreciated.

(h) Prepaid lease payments

Leasehold land that normally has an indefinite economic life and its title is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted as prepaid lease payments that is amortised over the lease term except for leasehold land classified as investment property. The land and building elements of a lease of land and buildings are considered separately for the purposes of lease classification.

(i) Investments in subsidiary companies

Investments in subsidiary companies are stated at cost less accumulated impairment losses. The policy of the recognition and measurement of impairment losses is in accordance with Note 2(q).

On disposal of such investments, the difference between net disposal proceeds and their carrying amount is recognised in the income statement.

(j) Goodwill arising on consolidation

Goodwill arising on consolidation represents the difference between the costs of the acquisition over the fair value of the net identifiable assets of subsidiary companies acquired at the date of acquisition. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

Following the initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is no longer amortised but instead, it is reviewed for impairment annually or more frequent when there is objective evidence that the carrying value may be impaired, in accordance with Note 2(q).

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(k) Other investments

Other investments are stated at cost less accumulated impairment losses. The policy for the recognition and measurement of impairment losses is in accordance with Note 2(q).

On disposal of an investment, the difference between the net disposal proceeds and its carrying amount is charged or credited to the income statement.




(l) Inventories

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

The cost of inventories is based on the first-in first-out method and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress, manufactured inventories and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.

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

(m) Trade and other receivables

Trade and other receivables are initially recognised at their cost when the contractual right to receive cash or another financial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

(n) Trade and other payables

Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(o) Hire purchase

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incident to ownership. All other leases are treated as operating leases.

Assets acquired by way of hire purchase are stated at an amount equal to the lower of their fair values and the present value of the minimum hire purchase payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as liabilities. In calculating the present value of the minimum hire purchase payments, the discount factor used is the interest rate implicit in the lease,whenitispracticaltodetermine;otherwise,theGroup’sincrementalborrowingrateisused.

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

The depreciation policy for assets acquired under hire purchase is consistent with that for depreciable property, plant and equipment which are owned.

Lease rental under operating lease is charged to the income statement on a straight line basis over the term of the relevant lease.




(p) Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in accordance with applicable FRSs. Then, on initial classification as held for sale, non-current asset is measured in accordance with FRS 5, Non-current Assets held for Sale and Discontinued Operations, which is at the lower of carrying amount and fair value less costs to sell. Any differences are included in profit or loss.

A component of the Group is classified as a discontinued operation when the criteria to be classified as held for sale have been met or is a subsidiary or associated company acquired exclusively with a view to resale.

(q) Impairment of assets

The carrying amounts of assets are reviewed at each reporting date to determine whether there is any indication of impairment.

If any such indication exists then the asset’s recoverable amount is estimated. For goodwill that has indefinite useful lives, recoverable amount is estimated at each reporting date or more frequently when indications of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the income statement in the period in which it arises. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (groups of units) on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.

(r) Borrowing costs

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




(r) Borrowing costs (cont’d)

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

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

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

(s) Foreign currencies

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using historical rate as at the date of acquisition and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined.

(t) Revenue recognition

(i) Property development

Revenue derived from property development activities is recognised based on the percentage of completion method. The stage of completion is determined based on the total actual costs incurred to date over the estimated total property development costs.

(ii) Goods sold and services rendered

Revenue from sales of goods and services measured at the fair value of the consideration receivable and is recognised when significant risk and rewards have been transferred to the buyer, if any, or upon performance of services, net of sales taxes and discounts.

(iii) Dividend income

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

(iv) Rental income

Rental income is recognised as it accrues unless ability to collect is in doubt.

(u) Income taxes

Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been enacted at the balance sheet date.




(u) Income taxes (cont’d)

Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an assets or liabilities in the balance sheet and its tax base at the balance sheet date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill 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 asset and liability is measured at the tax rates that are expected to apply to 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 balance sheet date. The carrying amount of a deferred tax asset is reviewed at each balance sheet date and is reduced to the extent that it becomes probable that sufficient future taxable profit will be available.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

(v) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short term highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. For the purpose of the cash flow statements, cash and cash equivalents are presented net of bank overdrafts and exclude fixed deposits, sinking funds account and cash collateral account pledged to secure banking facilities, if any.

(w) Financial instruments

Financial instruments carried on the balance sheet include cash and bank balances, deposits, marketable securities, other investments, receivables, payables and borrowings. Financial instruments are recognised in the balance sheet when the Group and the Company has become a party to the contractual provisions of the instrument.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group and the Company 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.

The particular recognition method adopted for financial instruments recognised on the balance sheet is disclosed in the individual accounting policy statements associated with each item.

(x) Share capital

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Cost directly attributable to the issuance of the shares is accounted for as deduction from share premium, otherwise, it is charged to the income statement.




(x) Share capital (cont’d)

When shares are repurchased, the amount of consideration paid, including directly attributable costs, is measured at cost and set off against equity. Shares repurchased and not cancelled are classified as treasury shares. Where treasury shares are reissued by re-sale in the open market, the difference between the sale consideration and the carrying amount is recognised in equity.

Dividends on ordinary shares, when declared or proposed by the Director of the Company are disclosed in the notes to the financial statements. Upon approval and when paid, such dividends will be accounted for in the shareholders’ equity as an appropriation of unappropriated profit in the financial year in which the dividends are paid.

(y) Employee benefits

(i) Short term employee benefits

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

The expected cost of accumulating compensated absences is measured as additional amount expected to be paid as a result of the unused entitlement that has accumulated at the balance sheet date.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as an expense in the income statement in the period to which they relate.

(z) Earnings per share

The Group presents basis and diluted earnings per share (EPS) data for its ordinary shares. Basis EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees.

(aa) Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

(bb) Provision for liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation.



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

(i) Certain freehold land, buildings and tool and machinery of the Group with carrying amount of RM64,107,000 (2008: RM38,768,000) have been pledged to licensed banks as security for credit facilities granted to the Group.

(ii) Included in the property, plant and equipment of the Group are plant and machinery under hire purchase with carrying amount of RM559,000 (2008: RM716,000).

(iii) The freehold land and buildings of the Group were revalued in 2007 by independent professional qualified valuers using the open market value method.

(iv) The net book value of revalued assets had they been carried at cost would have been as follows:-

Group 2009 2008 RM’000 RM’000 Freehold land 2,966 2,966 Buildings 30,018 28,303

32,984 31,269

4. PREPAID LEASE PAYMENTS

Group 2009 2008 RM’000 RM’000

CostAt 1 August 2,120 -Addition 269 2,120

At 31 July 2,389 2,120

Accumulated amortisationAt 1 August 22 -Amortisation during the financial year 29 22

At 31 July 51 22

Carrying amount 2,338 2,098

Certain leasehold land of the Group with carrying amount of RM2,073,000 (2008: RM2,098,000) have been pledged to licensed banks as security for term loan facility as disclosed in Notes 20 and 24 to the financial statements.

The long term leasehold land of the Group has an unexpired lease period of more than 50 years.



5. INVESTMENT PROPERTIES

Group 2009 2008 Note RM’000 RM’000

CostAt 1 August - 23,316Disposal - (5,317)Transfer to assets classified as held for sale 16 - (17,999)

At 31 July - -

Accumulated depreciation and impairment lossAt 1 August - 11,891Depreciation charge for the financial year - 220Disposals - (2,892)Transfer to assets classified as held for sale 16 - (9,219)

At 31 July - -

Carrying amount - -

6. INTANGIBLE ASSETS

Group 2009 2008 RM’000 RM’000

CostAt 1 August 14,215 14,904Addition during the financial year - 1,431Written off (10,484) (2,120)

At 31 July 3,731 14,215

Accumulated impairment lossAt 1 August 2,714 1,283Impairment loss for the financial year - 1,431

At 31 July 2,714 2,714

Carrying amount 1,017 11,501



6. INTANGIBLE ASSETS (CONT’D)

The carrying amounts of goodwill to the Group’s cash-generating units (“CGUs”) are as follows:-

Group 2009 2008 RM’000 RM’000

Carrying amountRubberwood furniture 1,017 11,323Property development - 178

1,017 11,501

For the purpose of impairment testing, goodwill is allocated to the business units acquired, at which the goodwill is monitored for internal management purposes. The goodwill impairment test was based on value in use and was determined by the management.

The value in use was determined by discounting the future cash flows generated from the business units and was based on certain assumptions. The values assigned to the assumptions represent management’s assessment of future trends in the business units’ principal activities and are based on internal sources.

The Group recognised an impairment loss of Nil (2008: RM1,431,000) and write off RM10,484,000 (2008: RM2,120,000) during the financial year in respect of the goodwill.

7. INVESTMENTS IN SUBSIDIARY COMPANIES

(a) Investments in subsidiary companies Company 2009 2008 RM’000 RM’000 Unquoted shares, at cost 77,615 77,615 Less: Accumulated impairment loss (28,557) (27,100)

49,058 50,515



7. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT’D)

(a) Investments in subsidiary companies (cont’d)

Details of the subsidiary companies are as follows:-

Name of company Country of Effective Principal activity incorporation interest 2009 2008 % %

DIRECT HOLDING

Seng Yip Furniture Sdn. Bhd. Malaysia 100 100 Manufacture and export of moulded timber, furniture products and timber treatment processing

Tomisho Sdn. Bhd. Malaysia 100 100 Manufacture and export of furniture and component parts

SYF Venture Sdn. Bhd. Malaysia 100 100 Investment holding

SYF Properties Sdn. Bhd. Malaysia 100 100 Dormant

All Star Wood Products Sdn. Bhd. Malaysia 100 100 Investment holding

SYF Wood Tech Sdn. Bhd. Malaysia 100 100 Dormant

Apota Furnishing Sdn. Bhd. Malaysia 100 100 Dormant

INDIRECT HOLDING

Subsidiary company ofTomisho Sdn. Bhd. :* Shinawood International Sdn. Bhd. Malaysia - 60 Dormant

Subsidiary companies ofSYF Venture Sdn. Bhd. :C&L Lumber Sdn. Bhd. Malaysia 100 100 Processing and trading of rubber woods

Twenty-One SJ Sdn. Bhd. Malaysia 100 100 Manufacture and export of wooden furniture products

Furniwood Industries (M) Sdn. Bhd. Malaysia 51 51 Trading of domestic, commercial and industrial furniture

SYF Trading Sdn. Bhd. Malaysia 100 100 General trading

Wira Cheras Development Sdn. Bhd. Malaysia 51 51 Property development and management and construction

* During the financial year, one of the subsidiary companies, Shinawood International Sdn. Bhd., was placed under members’ voluntary liquidation. However, the liquidation of the said subsidiary company does not have any material effect on the financial statements of the Group.



7. INVESTMENTS IN SUBSIDIARY COMPANIES (CONT’D)

(b) Acquisition of a subsidiary company

On 13 March 2008, a subsidiary company, SYF Venture Sdn. Bhd., acquired the remaining 49% equity interest in C&L Lumber Sdn. Bhd. for a consideration of RM300,000 satisfied by cash. The resulting goodwill from acquisition of RM300,000 was fully written off in the previous financial year.

8. OTHER INVESTMENTS

Group / Company 2009 2008 RM’000 RM’000

Unquoted bonds, at cost 5,500 5,500Less: Allowance for diminution in value (5,500) (3,306)

- 2,194

9. LAND AND PROPERTY DEVELOPMENT COSTS

GroupNon-Current 2009 2008 RM’000 RM’000

Land Held for Development At 1 August 203 200 Addition during the financial year 2 3

At 31 July 205 203

Current

Freehold land, at cost At 1 August 522 5,802 Transferred to income statement - (5,280) Reclassified to development cost (522) -

At 31 July - 522

Property development costs At 1 August 1,230 4,254 Addition during the financial year 6,766 3,641 Transferred to income statement - (6,665) Reclassified from land costs 522 -

At 31 July 8,518 1,230

Less: Costs recognised in the income statementAt 1 August - 6,418Addition - 5,527

- 11,945Less: Completed project - (11,945)

At 31 July - -

8,518 1,752



9. LAND AND PROPERTY DEVELOPMENT COSTS (CONT’D)

Included in the property development costs of the Group for the financial year are the following:-

Group 2009 2008 Note RM’000 RM’000

Finance costs 26 - 38Rental of vacant land 10 -

10 38

10. INVENTORIES

Group 2009 2008 RM’000 RM’000

Raw Materials 8,645 12,895Consumables 895 -Work-in-progress 13,466 13,956Manufactured inventories 5,851 5,737

28,857 32,588

11. TRADE RECEIVABLES

Group 2009 2008 RM’000 RM’000

Trade receivables 21,814 20,391Less : Allowance for doubtful debts (4,191) (4,240)

17,623 16,151

The Group’s normal trade credit terms ranges from 1 to 90 days (2008: 1 to 90 days). Other credit terms are assessed and approved on a case by case basis.

The foreign currency exposure profile is as follows:-

Group 2009 2008 RM’000 RM’000

United States Dollar (USD) 15,348 8,344



12. OTHER RECEIVABLES

Group Company 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Other receivables 3,217 6,076 786 786Less: Allowance for doubtful debts (1,358) (1,358) (786) (786)

1,859 4,718 - -Deposits 678 833 - -Prepayments 710 594 - -

3,247 6,145 - -

13. AMOUNT OWING BY/(TO) SUBSIDIARY COMPANIES

Amount owing by/(to) subsidiary companies represents unsecured advances, interest free and with no fixed term of repayment.

14. FIXED DEPOSITS WITH LICENSED BANkS

The fixed deposits of the Group have been pledged with licensed banks as security for credit facilities granted to certain subsidiary companies as disclosed in Notes 20 and 24 to the financial statements.

The interest rates and maturities of deposits range from 3.05% to 3.70% (2008: 3.05% to 3.70%) per annum and 30 to 365 days (2008: 30 to 365 days) respectively.

15. CASH AND BANk BALANCES


Group 2009 2008 RM’000 RM’000

United States Dollar (USD) 13 23Japanese Yen (JPY) - 4Pound Sterling (GBP) 2 2

16. NON-CURRENT ASSETS HELD FOR SALE

Group 2009 2008 Note RM’000 RM’000

At 1 August 8,010 -Transfer from property, plant and equipment 3 2,878 -Transfer from investment properties 5 - 8,780Less: Accumulated impairment loss (1,610) (770)

At 31 July 9,278 8,010

Certain assets classified as held for sale of the Group with carrying amount of RM6,400,000 (2008: RM8,010,000) have been pledged to licensed banks as security for bank borrowings as disclosed in Notes 20 and 24 to the financial statements.



17. SHARE CAPITAL

Group / Company 2009 2008 RM’000 RM’000

Ordinary shares of RM1.00 eachAuthorised 200,000 200,000

Issued and fully paid 84,070 84,070

18. RESERVES


Non-distributable:Share premium 15,374 15,374 15,374 15,374Revaluation reserves 11,571 11,571 - -Treasury shares (39) (39) (39) (39)

26,906 26,906 15,335 15,335

Distributable:Accumulated losses (75,930) (57,508) (41,340) (36,454)

(49,024) (30,602) (26,005) (21,119)

There were no shares repurchased during the year. No resale, cancellation or distributions of treasury shares were made during the financial year.

19. OTHER PAYABLES


Non-currentProvision for onerous contract - 2,700 - -

Total Non-Current - 2,700 - -

CurrentOther payables 7,506 9,215 105 381Accruals 5,468 3,709 2,124 1,424Deposits 3,259 1,800 - -Provision for corporate guarantee 472 1,272 472 1,272Provision for onerous contract - 900 - -

Total Current 16,705 16,896 2,701 3,077

Total Other Payables 16,705 19,596 2,701 3,077



20. BANk BORROWINGS


SecuredFloating rates Term loans 17,384 18,549 - - Bills payables and revolving credit 23,196 21,227 - -

40,580 39,776 - -

Unsecured:Fixed rates Term loans 55,000 55,000 55,000 55,000

55,000 55,000 55,000 55,000

Total borrowings 95,580 94,776 55,000 55,000

Analysed as:

Repayable within twelve months Secured Floating rates Term loans 2,347 7,765 - - Bills payables and revolving credit 23,196 21,227 - -

25,543 28,992 - -

Repayable after twelve months Secured Floating rates Term loans 15,037 10,784 - -

UnsecuredFixed rates Term loans 55,000 55,000 55,000 55,000

70,037 65,784 55,000 55,000

95,580 94,776 55,000 55,000

The credit facilities of the Group obtained from licensed banks are secured on the following:-

(a) Legalchargeoncertainproperty,plantandequipment;

(b) Legalchargeoncertainprepaidleasepayments;

(c) Legalchargeoncertainassetsclassifiedasheldforsale;and

(d) Legal charge on deposits placement of the Group.



20. BANk BORROWINGS (CONT’D)

Maturity of borrowings is as follows:-


Within one year 25,543 28,992 - -Between one and two years 40,127 4,525 35,000 -Between two and five years 28,196 58,644 20,000 55,000After five years 1,714 2,615 - -

95,580 94,776 55,000 55,000

Range of interest rates during the financial year is as follows:-

Group Company 2009 2008 2009 2008 % % % %

Fixed rates Term loans 7.55 - 8.38 7.55 - 8.38 7.55 - 8.38 7.55 - 8.38

Floating rates Term loans 2.80 - 9.05 4.19 - 9.25 - - Bills payables and revolving credit 3.56 - 7.95 3.65 - 8.75 - -

21. HIRE PURCHASE PAYABLES

Group 2009 2008 RM’000 RM’000

(a) Future minimum payments Payable within one year 272 293 Payable between one and five years 245 237 Payable after five years - 82

517 612 Less : Future finance charges (34) (32)

483 580

(b) Present value of hire purchase liabilities Repayable within one year 254 271 Repayable between one and five years 229 228 Repayable after five years - 81

483 580

Analysed as: Repayable within twelve months 254 271 Repayable after twelve months 229 309

483 580

Interest is charged at rates ranging from 2.28% to 3.50% (2008: 2.28% to 4.00%) per annum.



22. DEFERRED TAX LIABILITIES

Group 2009 2008 RM’000 RM’000

At 1 August 4,814 3,935Recognised in income statement 66 879

At 31 July 4,880 4,814

The components and movements of deferred tax liabilities of the Group prior to offsetting are as follows:-

Deferred tax liabilities of the Group:- Property Property, plant revaluation and equipment reserve Total RM’000 RM’000 RM’000

At 1 August 2008 1,473 3,341 4,814Recognised in income statement 66 - 66

At 31 July 2009 1,539 3,341 4,880

At 1 August 2007 4,310 3,707 8,017Recognised in income statement (2,837) (366) (3,203)

At 31 July 2008 1,473 3,341 4,814

Deferred tax assets of the Group:-

Unutilised capital Allowance allowance for doubtful and unused debts tax losses Total RM’000 RM’000 RM’000

At 1 August 2007 (301) (3,781) (4,082)Recognised in income statement 301 3,781 4,082

At 31 July 2008 - - -



22. DEFERRED TAX LIABILITIES (CONT’D)

Deferred tax assets/(liabilities) have not been recognised in respect of the following temporary differences:-


Accelerated capital allowances (24,044) - - -Unused tax losses 37,528 28,001 4,637 1,947Unutilised capital allowances 19,317 14,318 - -Unutilised reinvestment allowances 36,992 32,508 - -Taxable temporary differences - (23,400) - -Deductible temporary differences 7,033 5,016 35,590 32,463

76,826 56,443 40,227 34,410

23. TRADE PAYABLES

Group 2009 2008 RM’000 RM’000

Trade payable 21,295 16,697Progress billing 3,321 296

24,616 16,993

The normal trade credit term granted to the Group ranges from 1 to 90 days (2008: 1 to 90 days).


Group 2009 2008 RM’000 RM’000

United States Dollar (USD) 7,423 3,033Euro (EUR) 10 298

24. BANk OVERDRAFTS

The bank overdrafts obtained from licensed banks are secured on the following:-

(a) Legalchargeoncertainproperty,plantandequipment;

(b) Legalchargeonprepaidleasepayment;



24. BANk OVERDRAFTS CONT’D)

(c) Legalchargeonassetclassifiedasheldforsale;and

(d) Legal charge on deposits placement of the Group.

Interest is charged at rates ranging from 6.55% to 7.55% (2008: 7.75% to 8.75%) per annum.

25. REVENUE


Sale of goods - Trading products 6,186 18,905 - - - Manufactured products 184,394 204,502 - -Sale of property units - 6,460 - -Dividend income - - - 5,000Interest income - - 4,833 4,833

190,580 229,867 4,833 9,833

26. FINANCE COSTS

Group Company 2009 2008 2009 2008 Note RM’000 RM’000 RM’000 RM’000

Interest expenses on: Term loans 5,349 5,155 4,443 4,445 Bank overdrafts 202 305 - - Bills payables and revolving credits 1,112 1,258 - - Late payment 1 - - - Hire purchase 33 112 - -

6,697 6,830 4,443 4,445

Less: Interest capitalised in property development costs 9 - (38) - -

6,697 6,792 4,443 4,445



27. LOSS BEFORE TAXATION

Loss before taxation is derived after charging/(crediting):-


Auditors’ remuneration - statutory 181 196 42 46 - others 1 - - - - under provision in prior year 2 99 - 12Allowance for diminution in value of investment in subsidiaries - - 1,457 25,000Allowance for diminution in value of other investments 2,194 2,550 2,194 2,550Allowance for doubtful debts 2,225 1,354 - -Allowance for doubtful debts no longer required (2,274) - - -Amortisation of prepaid lease payments 29 22 - -Bad debts recovered (367) - - -Company’s Directors - fee 861 819 93 51 - salaries and other emoluments 1,404 1,263 986 825 - EPF 169 150 118 97 - Benefits-in-kind 48 48 48 48Deposits written off 19 - - -Depreciation of: - property, plant and equipment 6,317 6,446 - - - investment properties - 220 - -Gain on disposal of investment properties - (75) - -Goodwill written off 10,484 2,120 - -Grossdividendincome–subsidiaries - - - (5,000)Impairment loss on goodwill - 1,431 - - Impairment loss on non-current assets held for sale 1,610 770 - -Insurance compensation on consequential loss - (800) - -Intercompany balances written off - - - 12,000Interest income (72) (68) - (66)Investment in subsidiaries written off - - - 155Loss on assignment of debt 2,656 - - -Loss on disposal of property, plant and equipment 249 78 - -Loss on foreign exchange - unrealised - 105 - -Property, plant and equipment written off 37 344 - -



27. LOSS BEFORE TAXATION (CONT’D)


Provision for onerous contract - 3,600 - -Realised loss/(gain) on foreign exchange 3,015 (376) - -Rental income from investment properties (359) (359) - -Rental of land and premises 1,088 1,399 72 72Rental of office equipment 2 2 - -Rental of plant and machinery - 26 - -Reversal of allowance for diminution in value of investment in subsidiaries - - - (155)Reversal of provision for onerous contract (3,600) - - -

28. TAXATION


Tax expense for the financial year: Current tax provision 265 831 - - Over provision in prior years (85) (2,123) - -

180 (1,292) - -

Deferred tax: Relating to origination and reversal of temporary differences 111 (62) - - Adjustment of opening deferred tax resulting from reduction in tax rate (1) - - - Under provision in prior year 10 941 - -

120 879 - -

300 (413) - -

Current income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the financial year.

In the previous financial year, pursuant to Paragraph 2A, Schedule 1, Part 1 of the Income Tax Act 1967, the statutory income tax rate is 20% for the first RM500,000 and 26% on the balance of chargeable income for small and medium enterprises with paid-up capital of RM2,500,000 and below.

However, pursuant to Paragraph 2B, Schedule 1 of the Income tax Act 1967 which was introduced with effect from the year of assessment 2009, the subsidiary companies no longer qualify for the above preferential rate.



28. TAXATION (CONT’D)

A reconciliation of income tax expense applicable to loss before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:-

Group 2009 2008 RM’000 RM’000

Loss before taxation (18,014) (14,110)

Taxation at statutory tax rate of 25% (2008: 26%) (4,504) (3,669)Income not subject to tax (1,546) -Expenses not deductible for tax purposes 4,890 1,197Deferred tax assets not recognised 1,137 3,392Utilisation of previous unrecognised tax losses and capital allowances (151) -Reversal of deferred tax not recognised 374 -Permanent loss not recognised during the financial year 176 -Reduction in deferred taxes resulting from reduction in tax rate (1) -Over provision of taxation in prior years (85) (2,123)Over provision of deferred taxation in prior years 10 941Others - (151)

Tax expense for the financial year 300 (413)

Company 2009 2008 RM’000 RM’000

Loss before taxation (4,886) (35,989)

Taxation at statutory tax rate of 25% (2008: 26%) (1,221) (9,357)Expenses not deductible for tax purposes 576 3,184Income not subject to tax - (988)Deferred tax assets not recognised during the financial year 645 6,784Others - 377

Tax expense for the financial year - -

The Group has estimated unused tax losses, unutilised capital allowances and unutilised reinvestment allowances of RM37,528,000 (2008: RM28,001,000), RM19,317,000 (2008: RM14,318,000) and RM36,992,000 (2008: RM32,508,000) respectively carried forward available for set-off against future taxable profit.



29. LOSS PER SHARE

(a) Basic loss per share

The loss per share has been calculated based on the consolidated loss for the financial year attributable to the equity holders of the parent of RM18,422,000 (2008: RM14,082,000) and the weighted average number of ordinary shares in issue during the financial year of 84,030,000 (2008: 84,030,000).

Group 2009 2008 RM’000 RM’000

Loss for the financial year attributable to the shareholders of the Company (18,422) (14,082)

Weighted number of ordinary shares in issue 84,030 84,030

(b) Diluted earnings per share

The outstanding warrants and options under the Company’s Employees’ Share Option Scheme (“ESOS”) do not have an impact on the diluted earnings per share as the exercise prices of the warrants and the options exceed the average market price of the Company’s ordinary shares.

30. STAFF COSTS


Staff costs (excluding Directors) 18,959 21,330 272 682

Included in the total staff costs above are contributions made to the Employees Provident Fund under a defined contribution plan for the Group and the Company amounting to RM437,000 and RM24,000 (2008 : RM327,000 and RM56,000) respectively.

31. EMPLOYEES’ SHARE OPTION SCHEME

The Company’s Employees’ Share Option Scheme (“ESOS”) was approved by the shareholders at the Extraordinary General Meeting held on 23 May 2003. At all times, the ESOS shall not exceed 10% of the issued share capital and shall be granted to eligible Directors and employees of the Group. The ESOS shall be in force for a period of five (5) years and lapse on 31 July 2008.

On 21 July 2008, pursuant to the existing bye-laws governing the ESOS, the Company extended the expiry date of the existing ESOS, which expired on 31 July 2008, for a further period of five (5) years until 31 July 2013.

The salient features and other terms of the ESOS are as follows:-

(i) Eligible employees are those who have been confirmed in writing as employees of the Group.

(ii) The option is personal to the grantee and is non-assignable.



31. EMPLOYEES’ SHARE OPTION SCHEME (CONT’D)

(iii) The option price shall be at a discount of not more than ten percent from the weighted average of the market price of the Company’s ordinary shares as shown in the daily official list issued by Bursa Malaysia Securities Berhad for the five trading days preceding the respective dates of the offer in writing to the grantee or at the par value of the ordinary shares of the Company, whichever is higher.

(iv) The options granted may be exercised by the grantee by notice in writing to the Company in the prescribed form from time to time during the option period in respect of all or any part of the new Company’s shares comprised in the option, provided that where an option is exercised in respect of a part of the new ordinary shares comprised therein, the number of the new Company’s shares of which such option may be exercised shall not be less than one hundred and shall be in multiples of one hundred.

Movements in the number of share options outstanding are as follows:-

----------------------------------------------------- No. of Share Options ----------------------------------------------------- Outstanding Outstanding Exercisable at ---------------- Movements during the year --------------- at at 1 August Granted Exercised Forfeited Lapsed 31 July 31 July RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

2009First Grant 3,792 - - - (673) 3,119 3,119

2008First Grant 4,174 - - - (382) 3,792 3,792

32. RELATED PARTY DISCLOSURES

(a) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:-

2009 2008 RM’000 RM’000

Group Rental paid to a Director of the Company 526 526 Management fees paid to Directors of a subsidiary company 48 48

CompanySubsidiary companies: Dividend income received/receivable - 5,000 Interest income received/receivable 4,833 4,833 Management fee received/receivable 80 80 Rental paid to a subsidiary company 72 72

These transactions have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.



32. RELATED PARTY DISCLOSURES (CONT’D)

(b) Information regarding outstanding balances arising from related party transactions as at 31 July 2009 is disclosed in Note 13 to the financial statements.

(c) Information regarding compensation of key management personnel is as follows:-


Short-term employee benefits 3,289 2,232 1,197 973Benefits-in-kind 48 48 48 48

3,337 2,280 1,245 1,021

Key management personnel include personnel having authority and responsibility for planning, directing and controlling the activities of the entity, including any Director of the Company.

33. SEGMENT INFORMATION

Segment information is primarily presented in respect of the Group’s business segment which is based on the Group’s management and internal reporting structure.

Segment revenue, results, assets and liabilities include items directly attributable to a segment and those where a reasonable basis of allocation exists. Unallocated items mainly comprise interest-earning assets and revenue, interest-bearing borrowings and expenses, and corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the financial year to acquire segment assets that are expected to be used during more than one year.

The accounting policies of the segments are consistent with the accounting policies of the Group.

(a) Business segments

The main business segments of the Group comprise the following:-

Rubberwood furniture Manufacture and trading of rubberwood furniture and component parts

General trading Sale of consumer products

Property development Development of residential and commercial properties

Others Rental of investment properties and investment holding



33. SEGMENT INFORMATION (CONT’D) Rubberwood General Property Consolidation furniture trading development Others Elimination Total2009 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueRevenue from external customers 184,394 6,186 - - - 190,580Inter-segment 31,511 - - - (31,511) -

215,905 6,186 - - (31,511) 190,580ResultsSegment results (3,737) (1,145) (538) (5,969) - (11,389)Finance costs (2,254) - - (4,443) - (6,697)Interest income 18 4 50 - - 72

Loss before taxation (18,014)Taxation (300)

Loss for the financial year (18,314)

AssetsSegment assets 158,700 1,476 9,376 110 - 169,662Intangible assets 1,017 - - - - 1,017Unallocated assets 10,169

Total assets 180,848

LiabilitiesSegment liabilities 80,474 504 4,644 3,000 - 88,622Unsecured term loans 55,000 - - - - 55,000

Total liabilities 143,622

Other informationCapital expenditure 8,614 269 8 - - 8,891Allowance for doubtful debts 81 2,144 - - - 2,225Allowance for doubtful debts no longer required (49) (2,225) - - - (2,274)Amortisation of prepaid lease payment 26 3 - - - 29Bad debts recovered - (357) - (10) - (367)Depreciation on property, plant and equipment 6,263 34 20 - - 6,317Goodwill written off - - - 10,484 - 10,484 Impairment losses on assets classified as held for sale 1,610 - - - - 1,610Loss on disposal of property, plant and equipment 230 19 - - - 249Property, plant and equipment written off 5 32 - - - 37



33. SEGMENT INFORMATION (CONT’D)

Rubberwood General Property Consolidation furniture trading development Others Elimination Total2008 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

RevenueRevenue from external customers 204,502 18,905 6,460 - - 229,867Inter-segment 45,665 - - 10,948 (56,613) -

250,167 18,905 6,460 10,948 (56,613) 229,867ResultsSegment results 4,657 (631) 587 (31,272) 19,273 (7,386)Finance costs (6,785) (436) - (4,443) 4,872 (6,792)Interest income 2 - 40 66 (40) 68

Loss before taxation (14,110)Taxation 413

Loss for the financial year (13,697)

AssetsSegment assets 166,242 5,874 5,078 130,155 (126,949) 180,400Intangible assets 11,323 - - 178 - 11,501Other investments - - - 2,194 - 2,194Unallocated assets 965

Total assets 195,060

LiabilitiesSegment liabilities 134,969 14,001 1,595 22,820 (89,102) 84,283Unsecured term loans 55,000 - - - - 55,000

Total liabilities 139,283

Other informationCapital expenditure 10,390 23 4 - - 10,417Impairment losses on assets classified as held for sale - 770 - - - 770Impairment losses on goodwill 1,423 - 8 - - 1,431Depreciation on property, plant and equipment 6,389 37 20 - - 6,446 Depreciation on investment properties - 220 - - - 220Property, plant and equipment written off 344 - - - - 344Goodwill written off 2,120 - - - - 2,120

All the inter-segment transactions were carried out on normal commercial basis and in the ordinary course of business.



33. SEGMENT INFORMATION (CONT’D)

(b) Geographical segments

In determining the geographical segments of the Group, segment revenue is based on the geographical location of customers. Segment assets and segment capital expenditure are based on geographical location of assets.

(i) Revenue by geographical market

2009 2008 RM’000 RM’000

Malaysia 61,691 82,933Asia Pacific and other Asian countries 8,027 12,710Europe 20,677 28,064North America 87,884 92,340Others 12,301 13,820

190,580 229,867

(ii) Segment assets and additions to capital expenditure by geographical location of assets.

Additions to Segment assets capital expenditure 2009 2008 2009 2008 RM’000 RM’000 RM’000 RM’000

Malaysia 180,848 195,060 8,891 10,417

34. CONTINGENT LIABILITIES


Guarantee given for banking facilities granted to subsidiary companies - - 44,927 45,181

35. COMMITMENTS

Group 2009 2008 RM’000 RM’000

Future minimum lease payments: Within one year 526 736 Between one and five years 1,533 2,057

2,059 2,793



36. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives and policies

The Group and the Company’s financial risk management policy is to ensure that adequate financial resources are available for the development of the Group and of the Company’s operations whilst managing its financial risks, including foreign currency exchange risk, interest rate risk, market risk, credit risk, liquidity risk and cash flow risk. The Group and the Company operate within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative transactions.

(b) Foreign currency exchange risk

The Group and the Company are exposed to foreign currency risk on borrowings that are denominated in a currency other than Ringgit Malaysia. The currency giving rise to this risk is US dollars.

As at the end of the financial year, the Group has contracted the following amount of forward contracts:-

Contracted Average Currency Amount contract rate Equivalent USD’000 RM’000

2009 Trade Receivables USD 4,102 3.5427 14,532

2008Trade Receivables USD 10,823 3.2170 34,818

(c) Interest rate risk

The Group and the Company’s income and operating cash flows are substantially independent of changes in market interest rates. Interest rate exposure arises from the Group and the Company’s borrowings and deposits. The Group and the Company does not hedge the interest rate risk.

(d) Credit risk

The Group and the Company’s exposures to credit risk arises mainly from receivables. Receivables are monitored on an ongoing basis via Group management reporting procedure and action will be taken for long outstanding debts.

At balance sheet date, there was no significant concentration of credit risk. The maximum exposure to credit risk associated with recognised financial assets is the carrying amount shown in the balance sheet.

(e) Liquidity and cash flow risk

The Group and the Company seek to achieve a flexible and cost effective borrowing structure to ensure that the projected net borrowing needs are covered by available committed facilities. Debt maturities are structured in such a way to ensure that the amount of debt maturing in any one year is within the Group’s ability to repay and refinance.

The Group and the Company also maintain a certain level of cash and cash convertible investments to meet its working capital requirements.



36. FINANCIAL INSTRUMENTS (CONT’D)

(f) Fair values

Recognised financial instruments

(i) The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables and short term borrowings approximate fair value due to the relatively short term nature of these financial instruments.

(ii) The aggregate fair values of the other financial assets and liabilities carried on the balance sheet are as follows:-

2009 2008 Carrying Fair Carrying Fair amount value amount value Group RM’000 RM’000 RM’000 RM’000

Financial assetsUnquoted bonds - - 2,194 2,194

Financial liabilitiesHire purchase payables 483 459 580 557Secured term loans 17,384 17,384 18,549 18,549Unsecured term loans 55,000 42,033 55,000 42,033

CompanyFinancial liabilitiesUnsecured term loans 55,000 46,106 55,000 42,033

The fair values of hire purchase payables and secured term loans are estimated by discounting the expected future cash flows using the current interest rates for liabilities with similar risk profiles.

Unrecognised financial instruments

The carrying amounts of secured term loans approximate their fair values as they are subject to variable interest rates which in turn approximate the current market interest rates for similar facilities at balance sheet date.

The valuation of financial instruments not recognised in the balance sheet reflects their current market rates at the balance sheet date.

The fair values of financial instruments not recognised in the balance sheet at 31 July are as follows:-

2009 2008 Contracted Fair Contracted Fair amount value amount valueGroup RM’000 RM’000 RM’000 RM’000

Forward foreign exchange contracts (in USD) 14,532 - 34,818 498



37. SUBSEQUENT EVENTS

On 24 August 2009, one of the subsidiary companies, SYF Venture Sdn. Bhd. disposed of its 51% equity interest of 1,071,000 ordinary shares of RM1.00 each in Wira Cheras Development Sdn Bhd. (“WCD”) to the minority shareholders of WCD for a consideration of RM1,624,350.

38. COMPARATIVE INFORMATION

The financial statements of the previous financial year which are presented for comparative purposes were examined and reported on by another firm of auditors.

39. DATE OF AUTHORISATION FOR ISSUE

The financial statements of the Group and of the Company for the financial year ended 31 July 2009 were authorised for issue in accordance with a resolution of the Board of Directors on 3 November 2009.

FORM OF PROXYNo. of shares held

I / We …………………………………………………………. NRIC No. :………………………………………………… (Please Use Block Capital)

of……………………………………………………………………………………………………………………………..…….(Full address)

a member/members of SYF RESOURCES BERHAD hereby appoint* ………….…………………………….…………………

……………………………………………………………of ……………………………………….……………….……………

…………………………………………………………………………………….……………………………………………….

or failing him/her …………………………………………..………………………………….……………..……………………

of ……………………………………………………………………………………….………………………………………….

or the Chairman of the Meeting as *my/our proxy/proxies to attend and vote for *me/us on *my/our behalf, at the Fourteenth (14th) Annual General Meeting of the Company to be held at the ballroom, Prescott Metro Inn, Wisma Metro Kajang, Jalan Semenyih, 43000 Kajang, Selangor Darul Ehsan on Monday, 4 January 2010 at 10.00 a.m. and at any adjournment thereof, to vote as indicated below :-

RESOLUTIONS FOR AGAINST

Ordinary Resolution 1 Approval of Directors’ Fees for the financial year ended 31 July 2009.

Ordinary Resolution 2 Election of Mr. Foo Lee Khean as Director pursuant to Article 93 of theCompany’s Articles of Association

Ordinary Resolution 3 Re-election of Datuk Chee Hong Leong as Director pursuant to Article 106 of the Company’s Articles of Association

Ordinary Resolution 4 Re-appointment of Messrs UHY Diong as Auditors of the Company.

SPECIAL BUSINESS

Ordinary Resolution 5 Issue of shares pursuant to Section 132D of the Companies Act, 1965.

(Please indicate with an “X” in the space provided above on how you wish your vote to be cast. If you do not do so, the Proxy will vote or abstain from voting at his discretion.)

Dated this ............................... day of .............................. 2009/2010 ................................................................................................. Signature of Member/Common Seal

NOTES:-

(i) A member entitled to attend and vote at this meeting is entitled to appoint a proxy (or in the case of a corporation, a duly authorized representative) to attend and vote in his/her stead. A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1) (a) and (b) of the Companies Act, 1965 shall not apply to the Company.

(ii) A member appoints the maximum of two (2) proxies to attend and vote at the same meeting, such appointment shall be invalid unless the member specifies the proportion of his/her shareholdings to be represented by each proxy.

(ii) Where a member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(iii) The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or if the appointer is a corporation/company, either under its common seal or under the hand of officer or attorney duly authorised.

(iv) The instrument appointing a proxy must be deposited at the registered office of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time set for the meeting or any adjournment thereof.

(Incorporated in Malaysia)(364372-H)

Company Secretary SYF RESOURCES BERHAD (364372-H)

Level 18, The Gardens North TowerMid Valley City, Lingkaran Syed Putra

59200 Kuala Lumpur

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Annual Report 2

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annual report 2009 - malaysiastock.biz - 0342595214323...dec 14, 2009 · of the director who is...

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