apollo annualreport2013

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CONTENTS

Page No.

NOTICE OF ANNUAL GENERAL MEETING AND CLOSURE OF BOOKS 2

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING 11

GROUP STRUCTURE 12

FINANCIAL HIGHLIGHTS 13

CORPORATE INFORMATION 14

STATEMENT ON CORPORATE GOVERNANCE 15

DIRECTORS’ RESPONSIBILITY STATEMENT 24

AUDIT COMMITTEE’S REPORT 25

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL 33

DIRECTORS’ PROFILE 36

CHAIRMAN’S STATEMENT 38

FINANCIAL STATEMENTS 40

ANALYSIS OF SHAREHOLDINGS 109

LIST OF PROPERTIES 112

FORM OF PROXY 114

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OXY 115

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NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 19th Annual General Meeting of Apollo Food Holdings Berhad (Co. No. 291471-M) will be held at Delima Room, Level 2, The Puteri Pacific Hotel, Jalan Abdullah Ibrahim, 80730 Johor Bahru, Johor Darul Takzim on Thursday, 24 October 2013 at 10.00 a.m. for the following purposes:-

AGENDA

Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 30 April 2013 and the Reports of the Directors and Auditors thereon

(Please referto ExplanatoryNote 1)

2. To declare a first and final single tier dividend of 25% for the financial year ended 30 April 2013

Resolution 1

3. To approve the payment of Directors’ Fees for the financial year ended 30 April 2013

Resolution 2

4. To re-appoint the following Director who is over the age of 70, pursuant to Section 129(6) of the Companies Act, 1965:

(i) Datuk P. Venugopal A/L V. K. Menon Resolution 3

5. To re-elect the following Directors retiring in accordance with Article 116 of the Articles of Association of the Company:

(i) Mr. Liang Chiang Heng; and Resolution 4

(ii) Datin Paduka Hjh. Aminah Binti Hashim Resolution 5

6. To appoint Auditors for the financial year ending 30 April 2014 and to authorise the Directors to fix their remuneration

Resolution 6

Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965, a copy of which is annexed hereto and marked “Annexure A” has been received by the Company for the nomination of Messrs BDO who have given their consent to act, for appointment as Auditors and of the intention to propose the following ordinary resolution:

“THAT Messrs BDO having consented to act as Auditors be and are hereby appointed as Auditors of the Company for the financial year ending 30 April 2014 in place of Messrs Reanda LLKG International who does not wish to seek for re-appointment and Messrs BDO shall hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the directors.”

Special Business

To consider and, if thought fit, to pass with or without any modification(s), the following Ordinary and Special Resolutions:

7. ORDINARY RESOLUTION

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

Resolution 7

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NOTICE OF ANNUAL GENERAL MEETING (Continued)

“THAT pursuant to Section 132D of the Companies Act, 1965, Articles of Association of the Company and the Listing Requirements of the Bursa Malaysia Securities Malaysia (“Bursa Malaysia”), the Directors be and are hereby empowered to issue shares in the Company at any time at such price and upon such terms and conditions and for such purposes and to such person or persons whomsoever as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares so issued does not exceed 10% of the issued share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval of the Bursa Malaysia for listing of and quotation for the additional shares so issued and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

8. ORDINARY RESOLUTION

CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

(i) “THAT authority be and is hereby given to Mr. Ng Chet Chiang @ Ng Chat Choon who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

(ii) “THAT authority be and is hereby given to En. Abdul Rahim Bin Bunyamin who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting of the Company.”

Resolution 9

9. SPECIAL RESOLUTION

PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION Resolution 10

“THAT the proposed amendments to the Articles of Association of the Company as contained in “Annexure B” attached to the Annual Report be and is hereby approved and adopted;

AND THAT the Directors and Secretary of the Company be and are hereby authorised to take all steps as are necessary and expedient in order to implement, finalise and give full effect to the proposed amendments to the Company’s Articles of Association.”

10. To transact any other business for 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 APOLLO FOOD HOLDINGS BERHAD

Woo Min Fong (MAICSA 0532413) Yap Wai Bing (MAICSA 7023640) Company Secretaries

Johor Bahru 2 October 2013

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NOTES:-

1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company.

2. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.

3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where the Proxy Form is executed by a corporation, it must be either under its Common Seal or under the hand of an officer or attorney duly authorised.

6. The Proxy Form must be deposited with the Company Secretary at the Registered Office, Suite 1301, 13th Floor, City Plaza, Jalan Tebrau, 80300 Johor Bahru, Johor Darul Takzim not less than 48 hours before the time set for the Meeting.

7. For the purpose of determining a member who shall be entitled to attend the 19th Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 81(2) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a general meeting Record of Depositor as at 14 October 2013. Only a depositor whose name appears therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his stead.

Explanatory Notes:

Ordinary Business

1. Item 1 of the Agenda Explanatory Note 1

Agenda 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Articles of Association of the Company does not require a formal approval of the Shareholders. Hence, this Agenda is not put forward for voting.

Special Business

1. Item 7 of the Agenda Ordinary Resolution

Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 The Resolution 7 proposed in the Agenda 7, if passed, will empower the Directors of the Company from the date of the above meeting until the next Annual General Meeting, unless earlier revoked or varied at a general meeting, to issue shares in the Company up to an aggregate number not exceeding 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the interest of the Company.

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Explanatory Notes: (Continued)

Special Business (continued)

1. Item 7 of the Agenda Ordinary Resolution (continued)

The renewal of the general mandate is to provide flexibility to the Company to issue new securities without the need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of bank borrowings, acquisitions and/or for issuance of shares as settlement of purchase consideration.

The Company did not issue any shares under the mandate granted to the Directors at the last Annual General Meeting of the Company held on 25 October 2012 and which will lapse at the conclusion of the 19th Annual General Meeting of the Company.

2. Item 8 of the Agenda Ordinary Resolution

Continuing in office as Independent Non-Executive Directors The Nomination Committee had assessed the independence of Mr. Ng Chet Chiang @ Ng Chat Choon and En. Abdul Rahim Bin Bunyamin who each has served on the Board as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years. However, Mr. Ng Chet Chiang @ Ng Chat Choon and En. Abdul Rahim Bin Bunyamin has met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements. The length of their service does not interfere with Mr. Ng Chet Chiang @ Ng Chat Choon and En. Abdul Rahim Bin Bunyamin ability and exercise of independent judgment as Independent Directors. Therefore, the Board has recommended that the approval of the shareholders be sought to continue to act as the Independent Non-Executive Directors of the Company.

3. Item 9 of the Agenda Special Resolution

Proposed Amendments to the Articles of Association (“Proposed Amendments”)The Proposed Amendments are to streamline the Company’s Articles of Association to be aligned with the amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.Please refer to Annexure B of the 2013 Annual Report for more information.

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CLOSURE OF BOOKS

To determine shareholders’ entitlement to the dividend payment, if approved at the 19th Annual General Meeting of the Company, the Share transfer books and Register of Members will be closed on 12 December 2013.

The dividend, if approved, will be paid on 9 January 2014 to shareholders whose names appear in the Register of Members and Record of Depositors at the close of business on 12 December 2013.

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

(a) shares transferred into the depositor’s securities account before 4.00 p.m. on 12 December 2013 in respect of ordinary transfers; and

(b) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

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ANNEXURE AKEYNOTE CAPITAL SDN BHD46-02, Jalan Tun Abdul Razak,Susur Satu, 80000 Johor Bahru, Johor, Malaysia

Date: 18 September 2013

The Board of DirectorsAPOLLO FOOD HOLDINGS BERHAD(Co. No. 291471-M)Suite 1301, 13th Floor, City Plaza, Jalan Tebrau,80300 Johor Bahru, Johor, Malaysia

Dear Sirs,

NOTICE OF NOMINATION OF AUDITORS

We, KEYNOTE CAPITAL SDN BHD, a member of the Company holding 51.31% of the total voting shares of the Company, hereby give notice, pursuant to Section 172(11) of the Companies Act, 1965 of our nomination of Messrs BDO as auditors of the Company in place ofthe retiring auditors Messrs Reanda LLKG International and of our intention to propose the following as an ordinary resolution at the forthcoming Annual General Meeting:

ORDINARY RESOLUTIONCHANGE OF AUDITORS

“THAT Messrs BDO having consented to act as Auditors be and are hereby appointed as Auditors of the Company for the financial year ending 30 April 2014 in place of Messrs Reanda LLKG International who does not wish to seek for re-appointment and Messrs BDO shall hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined by the directors.”

Yours faithfully,

LIANG CHIANG HENGCorporate Representative of Keynote Capital Sdn Bhd

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ANNEXURE BProposed Amendment to Articles of Association of Apollo Food Holdings Berhad

Article No. Existing Article Amended Article Rationale

To insert a new “Definition” in Article 2 immediately after item (bb)

None (bb)(i) “Share Issuance Scheme” means a scheme involving a new issuance of shares to the employees.

Pursuant to Para 1.01 of the Main Market Listing Requirements (“MMLR”)

To amend Article 4. (2)

Issue of Shares

(a) no Director shall participate in an issue of shares or options to employees of the Company unless shareholders in general meeting have approved of the specific allotment to be made to such Director. A non-executive Director may so participate in an issue of shares pursuant to a public issue or offer for sale;

Issue of Shares

(a) no Director shall participate in aShare Issuance Scheme foremployees of the Company unless shareholders in general meeting have approved of the specific allotment to be made to such Director. A non-executive Director may so participate in an issue of shares pursuant to a public issue or offer for sale;

Pursuant to Para 7.03 of MMLR

To amend Article 100.

(1) Instrument appointing proxy to be in writing

The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing or if the appointer is a corporation either under its common seal, or the hand of its officer or its duly authorised attorney. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand or join in demanding a poll on behalf of the appointer. Aproxy may but need not be a member of the Companyand the provisions of Section 149(1)(b) of the Act shall not apply to the Company.

(1) Instrument appointing proxy to be in writing

The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing or if the appointer is a corporation either under its common seal, or the hand of its officer or its duly authorised attorney. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand or join in demanding a poll on behalf of the appointer. Aproxy need not be a member of the Company. There shall be no restriction as to the qualification of the proxy and the provisions of Section149(1)(b) of the Act shall not apply to the Company.

To add clarity and pursuant to Para 7.21A of MMLR

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ANNEXURE B (cont’d)Proposed Amendment to Articles of Association of Apollo Food Holdings Berhad (cont’d)


To amend Article 100. by insertion item (a), (b), (c) and (d)

(3) Appointment of proxy by authorised nominee

Where a Member of the Company is an authorised nominee as defined under the Central Depositories Act,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.

(3) Appointment of Proxies by Member of the Company

(a) Where a Member of the Company is an authorised nominee as defined in theSecurities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint not more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

For clarity

(b) Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

An exempt authorised nominee refers to an authorised nominee defined under SICDA which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

(c) Where a Member or the authorized nominee appoints two (2) proxies, or where an exempt authorized nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

Pursuant to Para 7.21 (1) of MMLR

Pursuant to Para 7.21 (2) of MMLR

For clarity

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Pursuant toPara 7.21 (2)of MMLR

For clarity

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ANNEXURE B (cont’d)Proposed Amendment to Articles of Association of Apollo Food Holdings Berhad (cont’d)


To amend Article 100. by insertion item (a), (b), (c) and (d) (cont’d)

None (d) A proxy appointed to attend and vote at a meeting of the company shall have the same rights as the Member to speak at the meeting.

Pursuant to Para 7.21A of MMLR

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STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

Name of Directors standing for re-election:

1. Mr. Liang Chiang Heng (Executive Chairman cum Managing Director) 2. Datin Paduka Hjh. Aminah Binti Hashim (Independent Non-Executive Director)

Profile of Directors standing for re-election:

Please refer to the section on Profile of Directors on pages 36 to 37 of the Annual Report 2013.

Details of attendance of Directors at Board Meetings:

Please refer to the Statement of Corporate Governance on pages 15 to 23 of the Annual Report 2013.

Nineteenth (19th) Annual General Meeting of Apollo Food Holdings Berhad:

Place : The Puteri Pacific Hotel Delima Room, Level 2 Jalan Abdullah Ibrahim 80730 Johor Bahru Johor Darul Takzim

Date and Time : Thursday, 24 October 2013 at 10.00 a.m.

Securities holdings in the Company and its subsidiaries by the directors standing for re-election

The shareholdings as at 2 September 2013 of the directors standing for re-election:-

Ordinary shares of RM 1.00 each

Name of Directors Direct Interest Deemed Interest

No % No %Mr. Liang Chiang Heng 220,000 0.28 41,048,415

*1 51.31Datin Paduka Hjh. Aminah Binti Hashim - - - -

Note :*1

By virtue of his interest in the shares held by Keynote Capital Sdn. Bhd.

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GROUP STRUCTURE

APOLLO FOOD HOLDINGS BERHAD (291471-M)

Apollo Food Industries(M) Sdn Bhd

(189274-V)

100%

Hap Huat FoodIndustries Sdn Bhd

(29228-W)

100%

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FINANCIAL HIGHLIGHTS

Turnover (RM Million )

0153045607590

105120135150165180195210225240

13 12 11 10 09

Profit Before Tax(RM Million)

02468

101214161820222426283032343638404244

13 12 11 10 09

Earnings Per Share (Sen)

0

10

20

30

40

50

13 12 11 10 09

Net Assets(RM Million)

020406080

100120140160180200220240

13 12 11 10 09

Group 2013 2012 2011 2010 2009

Financial results (RM'000)Turnover 222,746 200,548 176,292 159,531 175,337Profit Before Tax 42,450 28,597 22,577 32,248 25,442Profit After Tax 32,083 21,744 17,854 24,677 20,918Profit Attributable to Members 32,083 21,744 17,854 24,677 20,918Dividends 16,000 16,000 15,400 12,000 9,000

Financed by (RM'000)

Shareholders' Funds 230,183 214,214 208,396 205,785 188,962Net Assets 230,183 214,214 208,396 205,785 188,962

Statistics

Earnings Per Share (Sen) 40.10 27.18 22.32 30.85 26.15Gross Dividend Per Share (Sen) 20.00 20.00 25.00 20.00 15.00Net Assets Per Share (RM) 2.88 2.68 2.60 2.57 2.36

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ANNUAL REPORT 2013

CORPORATE INFORMATION

BOARD OF DIRECTORS Mr. Liang Chiang Heng (Executive Chairman cum Managing Director)Mr. Liang Kim Poh (Executive Director)Mr. Ng Chet Chiang @ Ng Chat Choon (Independent Non-Executive Director) Datuk P. Venugopal A/L V. K. Menon (Non-Independent Non-Executive Director) Encik Abdul Rahim Bin Bunyamin (Independent Non-Executive Director) Datin Paduka Hjh. Aminah Binti Hashim (Independent Non-Executive Director) COMPANY SECRETARIESMs. Woo Min Fong (MAICSA 0532413) Mr. Yap Wai Bing (MAICSA 7023640)

REGISTERED OFFICE Suite 1301, 13th Floor, City Plaza, Jalan Tebrau, 80300 Johor Bahru, Johor, Malaysia Tel: 07-3322088 Fax: 07-3328096

PRINCIPAL PLACE OF BUSINESS 70, Jalan Langkasuka, Larkin Industrial Area, 80350 Johor Bahru, Johor. Tel: 07-2365096 / 2365097 Fax: 07-2374748 E-mail: [email protected]

SHARE REGISTRAR TRICOR INVESTOR SERVICES SDN BHD (118401 – V)Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra,59200 Kuala Lumpur, MalaysiaTel: 03-22643895 Fax: 03-22821886 Email: [email protected]

AUDITORS REANDA LLKG INTERNATIONAL(AF 1082)Suite 9-6, Level 9,Wisma UOA II, Jalan Pinang,50450 Kulal Lumpur, MalaysiaTel: 03-21662303 Fax: 03-21668303

PRINCIPAL BANKERS AmBank Berhad AmInvestment Services BerhadOCBC Bank (Malaysia) Berhad RHB Bank Berhad Malayan Banking Berhad

STOCK EXCHANGE LISTING Main Market of the Bursa Malaysia Securities Berhad

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STATEMENT OF CORPORATE GOVERNANCE

The Board recognises the importance of good governance to support the Group’s continued growth and success. It is committed to continuously improving and enhancing the Group’s procedures from time to time to ensure that the principles and best practices in corporate governance recommended in the Malaysian Code on Corporate Governance 2012 (“the Code”) are applied within the group to protect and enhance its shareholders’ value.

The Group has complied substantially with the principles and best practices outline in the Code. The extent of the Group’s application is shown as follows:

BOARD OF DIRECTORS

Board Responsibilites

The Board has an overall responsibility for the proper conduct of the Company’s business and plays an active role in directing management in an effective and responsible manner.

The Board has assumed most of the recommendations as prescribed in the “Code” to effectively lead the Group and retains full and effective control of the Group. This includes responsibility for determining the Group’s overall strategic direction, development and control. Key matters, such as reviewing the performance of the Group, overseeing the corporate governance and conduct of the Group’s business,approval of annual and quarterly results, acquisitions and disposals of assets, as well as material agreements, major capital expenditures, budgets, long range plans and succession planning for top management are reserved for the Board.

The Board had delegated certain responsibilities to the Audit Committee, the Nomination Committee and the Remuneration Committee. These Committees have the authority to examine specific issues and forward their recommendations to the Board which is ultimately responsible for making the final decision.

The Group’s code of conduct will be incorporated in the Board Charter which is currently being formalised and will be published in the Company’s website in due course.

Board Composition and Balance

The Board currently consists of six (6) Directors:

Two (2) Executive Directors (including the Executive Chairman cum Managing Director) One (1) Non- Independent Non-Executive Director Three (3) Independent Non-Executive Directors

The concept of independence adopted by the Board is in tandem with the definition of an Independent Director in the Listing Requirements. The key element of fulfilling the criteria is the appointment of an Independent Director, who is not a member of the management (a Non-Executive Director) and is free of any relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company and shareholders.

More than one-third of the Board are Independent Non-Executive Directors thereby bringing objective, independent judgement to the decision making process. As and when conflict of interest arises, the Director concerned would declare his/her interest and abstain from the decision-making process and remain in a position to fulfil his/her responsibility to provide a check and balance.

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STATEMENT OF CORPORATE GOVERNANCE (Continued)

Board Composition and Balance (Continued)

The Board comprises an appropriate balance of Directors with diverse experience and expertise required for the effective stewardship of the Group and independence in decision making at Board level. The Board is headed by an Executive Chairman who is also the Managing Director responsible for implementing decisions of the Board. The Board is mindful of the convergence of the two roles and the Chairman being a Non-Independent Director, but is of the view that there are sufficient experienced and independent minded Directors on the Board to provide the assurance that there is adequate check and balance. Given that there is a balanced Board with three experienced Independent Directors, there is a strong independent element on the Board to exercise independent judgement. The Chairman has considerable experience in the Group’s business and provide leadership for the Board in considering and setting the overall strategies and objectives of the Group. The Board is of the view that it is in the interest of the Group to maintain the above arrangement so that the Group could have the benefit of a chairman who is well versed about the Group’s business and is capable to guide discussion and brief the Board in a timely manner on key issues and developments.

The Code recommends the tenure of an independent director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent Director may continue to serve on the Board subject to re-designation as a Non-Independent Director. Two Directors, Mr Ng Chet Chiang @ Ng Chat Choon and Encik Abdul Rahim Bin Bunyamin will continue to be independent Directors of the Company, notwithstanding having served as Independent directors on the Board for more than nine (9) years. These Directors remain independent and objective in their deliberations and decision making of the Board and Board Committees and that each of them is independent of the Company’s management and free from any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the interest of the Group. The Board holds the view that their length of services does not interfere with their exercise of independent judgement and in discharging their roles as independent directors. The Group benefits from long serving Directors, who possess detailed knowledge of the Group’s business and have proven commitment, experience and competence to advise and oversee management.

The Code recommends that the Board should ensure women participation on the Board to reach 30% by year 2016. Presently, the Group does not have a formal boardroom diversity, including gender diversity. The Board believes it is of utmost important to recruit and retain the best qualified individual who possess the requisite skills, knowledge, experience, independence, foresight and good judgement to contribute effectively to the Board, regardless of age, gender, race or religion.

The Board of Directors comprise of six members, out of which one is a women Director, representing 16.7% of the Board composition.

No senior Independent Director was nominated as the Board is of the view that all Directors should shoulder the responsibility collectively.

A brief profile of each Director is presented on pages 36 and 37.

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Board Meetings

All Board meetings are scheduled in advance at the beginning of each financial year to enable Directors to plan ahead and maximise their attendance. The Board normally meet 4 times a year with additional meetings convened as and when necessary. During the year ended 30 April 2013, the Board met 4 times, where it deliberated upon and considered a variety of matters including the Group’s financial results, major investments, strategic decisions, business plan and direction of the Group. All the Directors have compiled with the minimum 50% attendance as required by Paragraph 15.05 of the Bursa Malaysia Berhad’s Listing Requirements. The Company Secretary attends all Board meetings and all proceedings and conclusions from the Board meetings are minuted and signed by the Chairman.

In the periods between the Board Meetings, Board approvals were sought via circular resolutions, which were attached with sufficient information required to make informed decision.

Details of Board members attendance at Board meetings are as follows:

Name Number of Board meetings held during the year

Number of meetings

attended by Directors

Liang Chiang Heng 4 4Liang Kim Poh 4 4Ng Chet Chiang @ Ng Chat Choon 4 4Datuk P. Venugopal A/L V. K. Menon 4 4Abdul Rahim Bin Bunyamin 4 4Datin Paduka Hjh. Aminah Binti Hashim 4 4

Supply of Information

Notices, agendas and Board papers of each meeting are issued in a timely manner prior to the meetings to enable Directors to obtain further explanations/ clarifications, where necessary, in order to be properly briefed before the meeting.

All Directors have access to the advice and services of the Company Secretary in carrying out their duties. If necessary, the Directors may seek external advice and call for additional clarification and data to assist them in forming their opinion and findings in the lead up to Board decisions

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Directors’ Training

All Directors have completed the Mandatory Accreditation Programme (MAP). Directors are encouraged to attend seminars and education programmes to further enhance their skills and knowledge and to keep abreast with relevant changes and developments in the market place to assist them in the discharge of their duties as Directors.

Details of the training programmes attended by the Directors during the financial year ended 30 April 2013 were as follows:

Name Courses Attended

Liang Chiang Heng 2013 Budget Updates & Highlights of Recent Tax Development

International Bakeries Exhibition (IBA) 2012

Liang Kim Poh 2013 Budget Updates & Highlights of Recent Tax Development

Ng Chet Chiang @ Ng Chat Choon 2013 Budget Updates & Highlights of Recent Tax Development

Limited Liability Partnership (LLP) Regulations

Datuk P. Venugopal A/L V.K.Menon 2013 Budget Updates & Highlights of Recent Tax Development

Abdul Rahim Bin Bunyamin 2013 Budget Updates & Highlights of Recent Tax Development

Datin Paduka Hjh. Aminah Binti Hashim 2013 Budget Updates & Highlights of Recent Tax Development

All Directors will continue to attend relevant seminars and programmes as a continuous process as recommended by Bursa Malaysia Securities Berhad.

Appointment and Re-election of Directors

The Nomination Committee is responsible for the identification and making recommendations on any nomination to the Board new Directors and ensuring the appointments of individuals with appropriate experience and knowledge to fulfil the duties of a Director. There is a familiarisation programme in place for new Directors, which included visit to the factory, meeting with the senior management as appropriate, to facilitate their understanding of the Company’s business and operations.

In accordance with the Company’s Articles of Association, nearest to one third (1/3) of the Directors,including the Managing Director, shall retire from office at every Annual General Meeting but shall be eligible for re-election provided always that each Director shall retire at least once every three years.

Directors who are appointed by the Board during the financial year are subject to re-election by the shareholders at the next Annual General Meeting held following their appointments.

Director(s) over seventy years of age are required to submit himself/themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

The names of Directors seeking for re-appointment and re-election at the forthcoming Annual General Meeting are disclosed in the Notice of Annual General Meeting in this Annual Report.

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Remuneration Committee

The Remuneration Committee was established on 29 June 2000 with clear terms of reference. It comprises three Independent Non-Executive Directors, one Non-Independent Non-Executive Director and one Executive Chairman cum Managing Director and its composition is as follows:-

Chairman Ng Chet Chiang @ Ng Chat Choon – Independent Non-Executive Director

Members Liang Chiang Heng – Executive Chairman cum Managing Director

Datuk P. Venugopal A/L V.K Menon – Non-Independent Non-Executive Director

Abdul Rahim Bin Bunyamin – Independent Non-Executive Director

Datin Paduka Hjh. Aminah Binti Hashim – Independent Non-Executive Director

The Committee meets at least once a year. The Remuneration Committee reviews and makes recommendations to the Board as to the remuneration and other entitlements of the Executive Directors to ensure that they are rewarded appropriately for their contribution to the Group’s growth and profitability. Remuneration of Non-Executive Directors is linked to their level of responsibilities.

The Executive Directors play no part in the deliberations and decisions on their remuneration. The remuneration and entitlements of Non-Executive Directors are decided by the Board with the Director concerned abstaining from deliberations and voting on decisions in respect of his remuneration.

The Directors’ fees are subject to shareholders’ approval at the Annual General Meeting.

Aggregate remuneration of the Directors categorised into appropriate components for the financial year ended 30th April 2013 are as follows:

Executive DirectorsRM

Non-Executive DirectorsRM

Salaries, bonus and allowances 3,982,496 27,750Other emoluments 179,297 16,000Pension – defined contribution plans 484,528 -Fees 66,000 124,000TOTAL 4,712,321 167,750

The number of Directors whose total remuneration falls within the respective band are as follows:

No of DirectorsRange of remuneration Executive Directors Non Executive DirectorsBelow RM 50,000 - 4RM 1,500,001 - RM1,550,000 1 -RM 3,200,001 - RM3,250,000 1 -TOTAL 2 4

The Remuneration Committee met once during the financial year, attended by all its members.

20


Nomination Committee

The Nomination Committee was established on 23 March 2000 with clear defined terms of reference. It comprises three Independent Non-Executive Directors and one Non-Independent Non-Executive Director and its composition is as follows:

Chairman

Ng Chet Chiang @ Ng Chat Choon – Independent Non-Executive Director

Members

Datuk P. Venugopal A/L V.K Menon – Non-Independent Non-Executive Director

Abdul Rahim Bin Bunyamin – Independent Non-Executive Director

Datin Paduka Hjh. Aminah Binti Hashim – Independent Non-Executive Director

The Committee is responsible for making recommendations to the Board on appointment of all new members to the Board and Committees of the Board and it provides a formal and transparent procedure for such appointments. The Committee will review at least once a year the performance of the individual Directors, Board and Board Committees as well as the required mix of skills and experience of the Directors on the Board in determining the appropriate balance and size of Executive and Non-Executive participation.

The Nomination Committee met once during the financial year, attended by all its members.

The Code recommends that the Chairman of the Nomination Committee should be the Senior Independent Director. As no individual director was nominated to assume the role of Senior Independent Non-Executive Director, the Chairman of the Nomination is not a Senior Independent Director. However, by virtue of his vast experience, the Board believes that the existing Chairman of the Nomination Committee is competent and capable to lead the Nomination Committee in ensuring that the Board composition meets the needs of the Group.

Audit Committee

The composition of membership and the terms of reference of the Audit Committee and other pertinent information about the Audit Committee and its activities are highlighted in the Audit Committee Report set out on Pages 25 and 32 of the Annual Report.

ACCOUNTABILITY AND AUDIT

Financial ReportingIn presenting the annual financial statements and quarterly announcement of results to shareholders, the Directors take responsibility to present a balanced and accurate assessment of the Group’s position and prospects. The Audit Committee assists the Board in scrutinising the information for disclosure to ensure accuracy and transparency.

21


Risk Management and Internal Controls The Board acknowledges its responsibility of maintaining a sound system in of internal controls covering not only financial controls but also operational and compliance controls as well as risk assessments. The internal control system is designed to meet the Group’s particular needs and to manage and minimise the risks to which it is exposed. This system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, and not absolute, assurance against material misstatement, fraud or loss. Ongoing reviews are continuously being carried out to ensure the effectiveness, adequacy and integrity of the risk management framework and internal control systems in safeguarding the Group’s assets and therefore shareholders’ investment in the Group.

The internal auditors report independently to the Audit Committee. The Statement of Risk Management and Internal Control is set out on Pages 33 to 35 of the Annual Report.

Relationship with external auditors The role of the Audit Committee in relation to the external auditors is described in the Audit Committee Report. The Company maintained a formal and transparent relationship with its auditors in seeking professional advice and ensuring compliance with the applicable accounting standards in Malaysia.

During the year, the Audit Committee met 2 times with the external auditors without the presence of the Executive Directors and Management.

Shareholders Relations The Company maintains a regular policy of disseminating information that is material for shareholders’ attention through announcements and release of financial results on a quarterly basis, which provide the shareholders and the investing public with an overview of the Group’s performance and operations.

At the Annual General Meeting of the Company, the Directors welcome the opportunity to gather the views of shareholders. Notices of each meeting are issued on a timely manner to all, and in the case of special business, a statement explaining the effect of the proposed resolutions is provided. Upon request, the Directors will also meet up with institutional investors, press and investment analysts to explain to them the Group’s operations so as to give them a better understanding of the Group’s business. While conducting interviews, the Board takes necessary precautions to ensure that price sensitive and information regarded as material undisclosed information about the Group is not revealed until after the prescribed announcement has been made to Bursa Securities.

Corporate social responsibility

The Group is committed to be a successful and responsible corporate citizen by not just delivering quality products and services and generating attractive returns to our customers and shareholders, we also recognise that it is our corporate social responsibility to ensure that we conduct our business in an ethical, professional and socially responsible manner. As we strive to achieve this aim, we recognise our responsibility to our employees, business associates and community within which we conduct our business as well as the environment we operate in.

Recognising its employees as an important asset to the Group, it has always endeavored to safeguard the welfare of its employees. Occupational Safety and Health Programme have been established to provide a safe and healthy workplace and environment for the employees and visitors.

22


Corporate social responsibility (Continued)

Employees are also provided with the necessary training on an ongoing basis to further enhance their skills and knowledge. This includes participation in various job related training organised by external parties.

On community welfare, the Group has from time to time donated cash and sponsored company products to various organisations, associations and schools for them to carry out their various activities.

The Group adheres strictly to all applicable environmental laws and regulations. Production process are being constantly monitored and upgraded to ensure compliance with any changes in the environmental laws and regulations. Operation and office resources are been utilised without much wastage and recycling are being encouraged at all times. The Group is committed to seek continuous improvements in its operations to minimise any negative impact on the environment.

ADDITIONAL COMPLIANCE INFORMATION

In compliance with the Bursa Securities Listing Requirements, the following additional information is provided:-

(a) Recurrent Related Party Transactions (RRPT) The Company did not have any recurrent related party transactions of revenue nature for the financial year ended 30 April 2013.

(b) Share Buybacks There were no share buybacks by the Company during the financial year.

(c) Utilisation of Proceeds No proceeds were raised by the Company from any corporate proposal during the financial year.

(d) Depository Receipts/Global Depository ReceiptsThe Company did not sponsor any Depository Receipts or Global Depository Receipts programme during the financial year.

(e) Profit Estimate, Forecast or Projection The Company did not release any profit estimate, forecast or projection for the financial year.

(f) Profit Guarantee There was no profit guarantee given by the Company during the financial year.

(g) Options, warrants or convertible securities There were no options, warrants or convertible securities issued during the financial year.

(h) Deviation in Financial Results There was no material deviation between the results for the financial year and the unaudited results previously announced.

(i) Sanctions and Penalties

There were no sanctions or penalties imposed on the Company and its subsidiaries by Bursa Securities, Securities Commission and the relevant regulatory bodies during the financial year.

(j) Non-audit fee The amount of the Group’s non-audit fee paid to external auditors and its affiliated companyduring the financial year ended 30 April 2013 is RM18,500 being tax compliance fee and meeting allowance.

23


ADDITIONAL COMPLIANCE INFORMATION (Continued)

(k) Material ContractsThere were no material contracts outside the ordinary course of business, including contract relating to loan, entered into by the Company and/or its subsidiaries involving Directors and major shareholders that are still subsisting at the end of the financial year or which were entered into since the end of the previous financial year.

(l) Revaluation Policy

There were no revaluation performed on all properties of the Group during the financial year.

24

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each financial year which have been made out in accordance with the applicable Financial Reporting Standards in Malaysia and to give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company for the financial year.

During the preparation of the financial statements for the financial year ended 30 April 2013 the Directors have ensured that:

The Group and the Company have used appropriate accounting policies which are consistently applied;

Reasonable judgements and estimates that are prudent and reasonable have been made;

All applicable Financial Reporting Standards in Malaysia have been followed;

The accounting and other records required by the Act are properly kept and disclosed with reasonable accuracy on the financial position of the Group and of the Company which enable them to ensure that the financial statements comply with the Act.

The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group and of the Company, and to prevent and detect fraud and other irregularities and material misstatements. Such systems, by their nature, can only provide reasonable and not absolute assurance against material misstatement, loss and fraud.

25

AUDIT COMMITTEE’S REPORT

The Audit Committee (Committee) adopted the revised terms of reference on 27 March 2008 as set out on page 25 to 32 of the annual report.

COMPOSITION OF MEMBERS

For the financial year ended 30 April 2013, the Committee comprised the following members:-

Chairman

Mr Ng Chet Chiang @ Ng Chat Choon (Independent Non-Executive Director)

Members

Datuk P. Venugopal A/L V.K. Menon (Non-Independent Non-Executive Director) Encik Abdul Rahim Bin Bunyamin (Independent Non-Executive Director) Datin Paduka Hjh. Aminah Binti Hashim (Independent Non-Executive Director)

TERMS OF REFERENCE

Objectives

The objectives of the Audit Committee are as follows:

(1) To provide assistance to the Board in fulfilling its fiduciary responsibilities relating to corporate accounting and reporting practices for the Company;

(2) To maintain, through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as the internal auditors;

(3) To avail to the external and internal auditors a private and confidential audience at any time they desire and to request such audience through the Chairman of the Committee, with or without the prior knowledge of Management;

(4) To act upon the Board’s request to investigate and report on any issue of concern with regard to the management of the Company; and

(5) To ensure compliance with any such changes / amendments / updates / insertions of the listing requirements and any other applicable laws and regulations, arising thereof from time to time.

26

AUDIT COMMITTEE’S REPORT (Continued)

TERMS OF REFERENCE (Continued)

Composition

The Audit Committee shall be appointed by the Board from amongst their members and shall consist of not less than three (3) members. All the audit committee members must be non-executive directors with a majority of them being Independent Directors.

At least one member of the Audit Committee:

(i) must be a member of the Malaysian Institute of Accountants (MIA); or

(ii) he must have at least 3 years’ working experience and:

(a) he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or

(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or

(iii) he must fulfil such other requirements as prescribed or approved by the Exchange.

No alternate directors shall be appointed as a member of the Committee.

The members of the Committee shall among them elect a Chairman from whom shall be anIndependent Director.

The terms of office and the performance of each member shall be reviewed at least once every three years.

27



Meetings

The Committee shall meet at least four (4) times a year and as many times as the Committee deems necessary.

The quorum for a meeting shall be two (2) members, and only if only two members present both of them must be Independent Directors. If the number of members present for the meeting is more than two (2), the majority of members present must be Independent Directors.

The Company Secretary shall be the Secretary to the Audit Committee.

The Group Accountant will normally attend the meetings to brief and highlight to the Committee on the Group performance through the quarterly financial reports and any significant control issues / concerns. Other Board members and employees may attend meetings upon the invitation of the Committee. The presence of the external auditors will be by invitation as and whenrequired.

Minutes of each meeting shall be kept by the Secretary as evidence that the Committee had discharged its functions. The Chairman of the Committee will report to the Board after each Audit Committee meeting. The approved minutes of Audit Committee meetings are forwarded to Board members for information.

In the absence of the Chairman of the Committee, members present shall elect a Chairman for the meeting from amongst the Independent Directors.

A committee member shall be deemed to be present at a meeting of the Committee if he participates by instantaneous telecommunication device and all members of the Committee participating in the meeting of the Committee are able to hear each other and recognize each other’s voice, and for this purpose, participation constitutes prima facie proof of recognition. For the purposes of recording attendance, the Chairman or Secretary of the Committee shall mark on the attendance sheet that the committee member was present and participating by instantaneous telecommunication device.

A committee member may not leave the meeting by disconnecting his instantaneous telecommunication device unless he has previously obtained the express consent of the Chairman of the meeting and a committee member will be conclusively presumed to have been present and to have formed part of the quorum at all times during the committee meeting by instantaneous telecommunication device unless he has previously obtained the express consent of the Chairman of the committee meeting to leave the meeting.

Minutes of the proceedings at a committee meeting by instantaneous telecommunication device will be sufficient evidence of such proceedings and of the observance of all necessary formalities if certified as correct minutes by the Chairman of the committee meeting. Instantaneous telecommunication device means any telecommunication conferencing device with or without visual capacity.

A resolution in writing signed or approved by a majority of the Committee and who are sufficient to form a quorum shall be as valid and effectual as if it had been passed at a meeting of the Committee duly called and constituted.

28



Authority

The Committee shall, in accordance with a procedure to be determined by the Board and at the cost of the Company:-

1. have explicit authority to investigate any matters of the Company and its subsidiaries, within its terms of reference, where it deems necessary, investigate any matter referred to it or that it has come across in respect of a transaction that raises questions of management integrity, possible conflict of interest, or abuse by a significant or controlling shareholder;

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

3. have full and unrestricted access to the Chief Executive Officer and Chief Financial Officer and to any information pertaining to the Company which it requires in the course of performing its duties;

4. (i) have direct communication channels with the external auditors; (ii) have direct authority over the internal audit function of which is independent from

management and operations;

5. be able to obtain and seek outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers necessary; and

6. be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company.

29



Functions and Duties

1. (i) To consider and recommend the appointment of the external auditors, the audit fee, and any questions of resignation or dismissal, and inquire into the staffing and competence of the external auditors in performing their work and assistance given by the Company’s officers to the external auditors.

(ii) Where the external auditors are removed from office or give notice to the Company of their desire to resign as external auditors, the Committee shall ensure that the Company immediately notify Bursa Malaysia Securities Bhd (“the Exchange”) and forward to the Exchange a copy of any written representations or written explanations of the resignation made by the external auditors at the same time as copies of such representations or explanations are submitted to the Registrar of Companies pursuant to section 172A of the Companies Act 1965.

2. (i) To discuss with the external auditors before the audit commences the nature, scope and any significant problems that may be foreseen in the audit, ensure adequate tests to verify the accounts and procedures of the Company and ensure co-ordination where more than one audit firm is involved; and

(ii) To ensure and confirm that the management has placed no restriction on the scope of the audit.

3. To review the quarterly announcements to Bursa Malaysia Securities Berhad and financial statements before submission to the Board, focusing particularly on:-

any changes in accounting policies and practice; major judgmental areas; significant adjustments resulting from the audit;

any significant transactions which are not a normal part of the Group’s business; the going concern assumptions; compliance with the accounting standards; compliance with stock exchange and legal requirements;

assess the quality and effectiveness of the internal control system and the efficiency of the Company operations;

the quality and effectiveness of the entire accounting and internal control systems; and the adequacy the disclosure of information essential to a fair and full presentation of the

financial affairs of the Group.

4. To discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of the management where

necessary).

5. To review all areas of significant financial risks and the arrangements in place to contain these risks to acceptable levels.

30



Functions and Duties (Continued)

6. For the internal audit function, to:-

(a) Review the adequacy of the competency of the internal audit function including the scope and resources of the internal audit functions and ensuring that the internal auditors have the necessary authority to carry out their work;

(b) Review internal audit program;

(c) Ensure co-ordination of external audit with internal audit;

(d) Consider major findings of internal audit investigations and management’s response, and ensure that appropriate actions are taken on the recommendations of the internal audit function;

(e) If the internal audit function is outsourced:-

` To consider and recommend the appointment or termination of the internal auditors, the fee and inquire into the staffing and competence of the internal auditors in performing their work.

(f) If the internal audit function is performed in-house, to

(i) To review any appraisal or assessment of the performance of the staff of the internal audit function;

(ii) To approve any appointment or termination of senior staff member of the internal audit function; and

(iii) To inform itself of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his/her reason of resignation.

7. To review the external auditors’ management letter and management’s response.

31



Functions and Duties (Continued)

8. To consider:-

any related party transactions that may arise within the Company or the Group and to ensure that Directors report such transactions annually to shareholders via the annual report; and

in respect of the recurrent related party transactions of revenue or trading nature which are subject of a shareholder’s mandate, prescribe guidelines and review procedures to ascertain that such transactions are in compliance with the terms of the shareholders’ mandate.

9. To report to Bursa Malaysia Securities Berhad (“Bursa”) on matters reported by it to the Board that has not been satisfactorily resolved resulting in a breach of the Listing

Requirements of Bursa.

ACTIVITIES OF THE COMMITTEE

During the financial year ended 30 April 2013, the Committee met four times. The attendance of each Committee member is as follows:

Total Number of meetings held during the year

Number of meetings

attended by Directors

Ng Chet Chiang @ Ng Chat Choon 4 4Datuk P. Venugopal A/L V.K. Menon 4 4Abdul Rahim Bin Bunyamin 4 4Datin Paduka Hjh. Aminah Binti Hashim 4 4

32


ACTIVITIES OF THE COMMITTEE (Continued)

The summary of the activities of the Audit Committee in the discharge of its duties and responsibilities for the financial year under review included the following:-

i. Reviewed the external auditors’ scope of work and audit plan for the year;

ii. Reviewed and recommended to the Board the re-appointment of external auditors and the audit fee thereof;

iii. Reviewed the Corporate Governance Statement and Statement on Internal Control prior to the Board’s approval for inclusion in the Company’s annual report;

iv. Reviewed the draft audited financial statements prior to submission to the Board for their consideration and approval;

v. Reviewed the Group’s unaudited quarterly reports and announcements before recommendingthem for the Board’s consideration and approval;

vi. Met with the external auditors without the presence of any executive board members andmanagement personnel;

vii. Reviewed internal audit plan, internal audit reports with recommendations by the internal auditors, management’s response and follow-up actions taken by the management;

viii. Reported to and updated the Board on significant issues and concerns discussed during the Committee and where appropriate made the necessary recommendations to the Board; and

ix. Discussed any other matters raised during the meeting.

INTERNAL AUDIT FUNCTION

The role of the internal audit function is to assist the Audit Committee and the Board of Directors in monitoring and managing risks and internal controls of the Group. A systematic and disciplined approach will be used to evaluate and improve the effectiveness of risk management, operationaland internal controls, and compliance with laws and regulations.

The Group’s internal audit function is outsourced to a professional service provider firm to assist the Committee in discharging its duties and responsibilities more effectively. The expenses incurred for internal audit amounted to RM 39,762 for the year ended 30 April 2013.

The Group’s Statement on Risk Management and Internal Control is set out on page 33 to 35 of the Annual Report to provide an overview on the state of risk management and internal control.

33

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

Pursuant to paragraph 15.26(b) and Practice Note 9 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements in relation to requirement to prepare statement about the state of risk management and internal control of the listed issuer as a group, and as guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (“the Guidelines”), the Board is pleased to present the statement on the state of risk management and internal control of the Group for the financial year ended 30 April 2013.

BOARD RESPONSIBILITY

The Board of Directors (“the Board”) affirms its overall responsibility for maintaining a sound risk management and internal control system and for reviewing their adequacy and effectiveness so as to safeguard all its stakeholders’ interests and protecting the Group’s assets. The system of internal controls covers inter-alia, risk assessment as well as financial, operational, environmental and compliance controls. However, in view of the limitations that are inherent in any system of internal controls, the system of internal controls is designed to manage, rather than to eliminate, the risk of failure to achieve the Group’s business objectives. Accordingly, the system of internal controls can only provide reasonable and not absolute assurance against material misstatement of losses and fraud.

RISK MANAGEMENT

The Board maintains an on-going commitment for identifying, evaluating and managing significant risks faced by the Group during the financial year under review. The Board had put in place riskmanagement framework and internal control system in order to manage key business risks faced by the Group adequately and effectively. The responsibility for the identification, evaluation and management of the key business risk delegated to the Executive Board and Senior Management.

The Group’s Risk Management is embedded into key processes at all level of organisation structure whereby respective head of departments are delegated with the responsibility to continuously identify, evaluate and manage the existing and emerging risks, resulting from changes to internal and external environment, faced by the Group under their scope of responsibility by formulating and implementing adequate internal control to manage the risk exposure identified.

The Executive Directors and Senior Management manage key business risks faced by the Group through constant communication among themselves and with respective head of departments during daily management of operation and through scheduled management meetings. Changes in the key business risks faced by the Group or emergence of new key business risks are highlighted to the Board for deliberation and decision making.

The above process has been practiced by the Group for the financial year under review and up to the date of approval of this statement.

34

STATEMENT ON RISK MANAGEMNET AND INTERNAL CONTROL (Continued)

INTERNAL CONTROL SYSTEM

The key features of the Group’s internal control system are described below:

Board Committees (i.e. Audit Committee, Remuneration Committee and Nomination Committee) being established to carry out duties and responsibilities delegated by the Board, governed by written terms of reference;

Meetings of Board of Directors and respective Board Committees are carried out on scheduled basis to review the performance of the Group, from financial and operational perspective, and to carry out its fiduciary duties and responsibilities. Potential business strategies proposed by the Executive Directors for the Board’s review and approval, after taking into risk consideration and responses;

Clearly defined and structured lines of reporting and responsibility for key business units/departments within the Group;

Policies and standard operating procedures to regulate key processes in compliance withInternational Organisation for Standardisation (“ISO”) certification;

Regular management meetings, supported by comprehensive operation reports prepared by respective departments and key indicators, to assess the Group’s performance and risks for formulation and implementation of mitigating controls; and

Executive Directors’ close and direct involvement in operations, regular reviews of operational data including production, and marketing and financial data.

INTERNAL AUDIT

The Group relies on internal audit mechanisms to provide the management with the required level of assurance that its business is operating adequately and effectively in order to provide reasonable assurance that the business objectives of the Group are achievable.

The Group’s internal audit function is outsourced to an independent professional firm who provides the Audit Committee with much of the assurance it requires regarding the adequacy and integrity of the Group’s system of internal control. The outsourced internal audit function reports functionally to Audit Committee and administratively to the Managing Director.

The outsourced internal audit function adopts a risk based approach for prioritisation of internal audit activities, with consultation with the Executive Directors, for Audit Committee’s review and approval. Regular internal audit reviews are performed based on the internal audit plan approved by Audit Committee and, upon the completion of the internal audit work, the internal audit reports are presented to the Audit Committee during its meetings. During the presentation, the internal audit findings, its potential risks and recommendations as well as management response and action plans are presented and deliberated. Update on the status of action plans as identified in the previous internal audit reports were also presented during the financial year under review for Audit Committee to ensure action plans are implemented to address the individual risks associated with the findings. During the financial year under review, the outsourced internal audit function conducted two (2) internal audit cycles and reported of the same to the Audit Committee per approved internal audit plan and subsequent management request approved by Audit Committee.

In addition to the above, for the purpose of compliance with ISO 22000:2005 Food Safety Management Systems, Internal quality audits are carried out by in-house independent personnel and surveillance audit is conducted by an independent certification body to provide assurance of compliance with established ISO procedures.

35

STATEMENT ON RISK MANAGEMNET AND INTERNAL CONTROL (Continued)

ASSURANCE PROVIDED BY EXECUTIVE DIRECTORS

During the meeting of Board of Directors during the financial year under review, the performance of the Group were reviewed and deliberated by the Board, including, but not limited to, the adequacy and effectiveness of risk management and internal control system in relation to the strategic objectives of the Group.

Through these board meetings, Executive Directors, being the collective body responsible for the setting and achievement of the corporate objectives and for the observance of management authorities as well as financial affairs management, provided the Board with the confirmation of adequacy and effectiveness of system of internal controls, in material aspects, on potential risks exposure deliberated during such meetings.

In response to the Paragraph 42 of the Guidelines, the Board undertakes to seek assurance from Executive Directors on the adequacy and effectiveness of risk management and internal control system of the Group on annual basis during the financial year ending 30 April 2014.

CONCLUSION

The Board is of the view that the existing risk management and internal control system put in place is operating satisfactorily to safeguard the interest of the stakeholders and the Group’s assets, based on the existing nature of business and scale of operations of the Group. The Board recognises the need for the risk management and internal control system to be subjected to continuous review in line with the growth of the Group and the Board is committed towards striving for continuous improvements to further enhance the Group’s risk management and internal control system.

36

DIRECTORS’ PROFILE

Liang Chiang Heng (63 years of age – Singaporean)

Non-Independent and Executive Director. Has been with the Apollo Group since 1979 and appointed

as Managing Director on 20 March 1996 as the Executive chairman as well on 21 July 1998. The

Group’s business has grown and expanded within the short period of time under his leadership. He

was awarded an Honorary PhD in Business Administration from the Wisconsin International

University. He also sits on the Board of several private companies. He is also a member of the

Remuneration Committee.

Liang Kim Poh (52 years of age – Singaporean)

Non-Independent and Executive Director. Initially appointed as an alternate director on 20 March

1996 and subsequently to the Board on 21 July 1998. Presently, he serves as the Sales Director of

the Group and also sits on the Board of several private companies.

Ng Chet Chiang @ Ng Chat Choon (64 years of age – Malaysian)

Independent and Non-Executive Director. Appointed to the Board on 20 March 1996. A licensed

company secretary, he started his career as a tax officer with the Inland Revenue Board before

setting up his own tax and secretarial practices in 1982. He is an associate member of Malaysian

Institute of Taxation. Appointed as Chairman of the Audit Committee on 9 May 1996. Member of the

Remuneration and Nomination Committees and also sits on the Board of several private companies.

Datuk P.Venugopal A/L V.K. Menon (70 years of age – Malaysian)

Non-Independent and Non-Executive Director. Graduated with a BA (Hons.) from the University of

Malaya and a Masters in Public Administration from Harvard University. Appointed to the Board on 12

October 1998. He was an officer of the Malaysian Administrative and Diplomatic Service for over 32

years of which 26 were with the Prime Minister’s Department in various capacities. Datuk is a

Member of the Audit, Remuneration and Nomination Committees.

37

DIRECTORS’ PROFILE (Continued)

Abdul Rahim Bin Bunyamin (60 years of age – Malaysian)

Independent and Non-Executive Director. Fellow Member of The Association of Chartered Certified

Accountants, UK (ACCA). Appointed to the Board on 14 December 2001. He has extensive corporate

finance experience having been attached with a reputable merchant bank and several companies in

the commercial sector. Member of the Audit, Remuneration and Nomination Committees.

Datin Paduka Hjh. Aminah Binti Hashim (65 years of age – Malaysian)

Independent and Non-Executive Director. Graduated with Bachelor of Arts (Economics) from

University of Malaya. Datin served in various Johor State Government Department, namely, The

Johor State Secretary Office, Batu Pahat Land Office, Batu Pahat Local Council Office, Johor State

Treasury Office, Johor State Islamic Development Corporation and Johor Lands and Mines Office

from 1972 to 2003. She held different positions, her last post being the Director General of Lands

and Mines, Johor Lands and Mines Office. She is also a committee member of Puspanita Johor,

Pemadam Johor and Mawar Johor. Member of the Audit, Remuneration and Nomination Committees.

She also sits on the Board of a private company.

OTHER INFORMATION

a) None of the Directors have any family relationships with each other and/or major shareholders except Mr Liang Chiang Heng and Mr Liang Kim Poh are brothers.

b) The Directors’ interests in the shares of the Company as at 2 September 2013 are shown on page 109.

c) None of the Directors have been convicted of any offences within the past 10 years other than traffic offences, if any.

d) None of the Directors have any conflict of interest with the Company.

38

CHAIRMAN’S STATEMENTOn behalf of the Board of Directors, I am pleased to present the Annual Report and the Audited Financial Statements of Apollo Food Holdings Berhad Group for the financial year ended 30 April 2013.

Financial Performance

The Group registered a turnover of RM222.75 million for the financial year ended 30 April 2013, an increase of 11.07% as compared to RM200.55 million in 2012. This was mainly due to the improvement of demand in both export and domestic markets.

The profit after tax increased by 47% to RM32.08 million from RM21.74 million as recorded in the previous financial year. Similarly the Group’s earning per share also increased from 27.18 sen to 40.10 sen over the same period. The higher revenue and improved cost structure had contributed to the higher profit.

Despite the continuing economic uncertainties globally, the Malaysian economy remained resilient and the Malaysia’s Gross Domestic Product (“GDP”) grew 5.6% in 2012 compared with 5.1% in 2011. Despite the political unrest in certain regions and slowing growth in the emerging markets, the markets in which the Group operates remain relatively stable.

Although the prices of major materials consumed by Group were less volatile this year verses 2012, the volatile raw material prices are expected to continue in the forthcoming year. Coupled with the uncertainties in the global economy, we expect the forthcoming year to be another challenging year. In facing these challenges, the Group will monitor the raw material prices closely and review its business strategies to adapt to the changes in the market for the forthcoming year.

Dividend

Your Board of Directors is recommending a first and final dividend of 25 sen under the single tier system (tax exempt) for the financial year ended 30 April 2013, for the shareholders’ approval at the forthcoming Annual General Meeting to be held on 24 October 2013. If approved, the dividend will be paid on 9 January 2014.

Operations Review and Prospects

Continuous improvement on our production planning, stringent quality control and investment on newer and modern production machineries with higher output and more automation to use less labour are the pre-requisites for our Group to remain competitive in this very challenging marketenvironment. We will therefore continue to focus our efforts in this direction on improving our overall performance. Our long term strategies shall include the seeking of new business opportunities and diversifying our revenue streams. We shall continue to train our employees to improve their operational, marketing, management and industrial skills to enhance our competitiveness in this industry.

The Board is confident of maintaining the Group’s financial performance under the prevailing challenging business environment. The Group will strive to ensure that it continues to achieve satisfactory results by implementing prudent measures and improving operational efficiency so as to sustain the current margin while remaining focused on product and service quality.

39

CHAIRMAN’S STATEMENT (Continued)

Award

In recognition of its extraordinary achievements in quality management, the Company was declared the winner of the “International Diamond Prize for Excellence in Quality” in the Gold Category awarded by the European Society for Quality Research, Belgium, in December 2012.

Appreciation

On behalf of the Board of Directors, we wish to convey our heartfelt appreciation to our loyal shareholders and customers for their continued support and confidence in the Group. We also would like to express our utmost gratitude to our management team and employees for their hard work and dedication over the past year. We look forward to your continued support as we move steadily forward.

Lastly, I extend my sincere appreciation to my colleagues on the Board for the continued support, guidance and insight provided as we work together to achieve our vision of making the Group one of the leaders in this industry.

LIANG CHIANG HENG

Executive Chairman 30 August 2013

40

FINANCIAL STATEMENTS

PAGE NO.

DIRECTORS’ REPORT 41 – 45

STATEMENT BY DIRECTORS 46

STATUTORY DECLARATION 46

INDEPENDENT AUDITORS’ REPORT 47 - 49

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 50

COMPANY STATEMENT OF FINANCIAL POSITION 51

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 52

COMPANY STATEMENT OF CHANGES IN EQUITY 53

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 54

COMPANY STATEMENT OF COMPREHENSIVE INCOME 55

CONSOLIDATED STATEMENT OF CASH FLOW 56

COMPANY STATEMENT OF CASH FLOW 57

NOTES TO THE FINANCIAL STATEMENTS 58 - 108

41

DIRECTORS’ REPORT30 APRIL 2013

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 30 April 2013.

PRINCIPAL ACTIVITIES

The principal activities of the Company are investment holding and provision of management services to subsidiaries.

The principal activities of the subsidiaries are described in Note 15 to the financial statements.

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

RESULTS

Group CompanyRM RM

Profit before tax 42,449,536 19,883,117Income tax expense (10,366,391) (275,686)

Profit for the year 32,083,145 19,607,431

Profit for the year attributable toOwners of the Parent 32,083,145 19,607,431

DIVIDEND

Since the end of the previous year, the amount of dividends paid or proposed by the Company were as follows:

RM

In respect of the year ended 30 April 2012 :

Final tax exempt (single tier) dividend of 20 sen on 80,000,000 ordinary shares paid on 9 January 2013 16,000,000

The Directors have proposed a single tier final dividend of 25 sen per ordinary share amounting to RM20,000,000 in respect of the current financial year. The proposed final dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements.

RESERVES AND PROVISIONS

There were no material transfers to and from reserves and provisions during the financial year except as disclosed in the financial statements.

42

DIRECTORS’ REPORT (Continued)

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any shares or debentures during the financial year.

DIRECTORS

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

Liang Chiang Heng Liang Kim Poh Ng Chet Chiang @ Ng Chat Choon Datuk P. Venugopal A/L V.K. Menon Abdul Rahim Bin Bunyamin Datin Paduka Hjh. Aminah Binti Hashim

DIRECTORS’ INTERESTS

According to the register of Directors’ shareholdings, the interests of Directors in office at the end of the financial year in the shares of the Company and its related corporations during the financial year were as follows:

Number of ordinary shares of RM1 each in the Company

1 May 2012 Acquired Disposed 30 Apr 2013Shareholdings in the name of the Directors:Liang Chiang Heng 220,000 - - 220,000Liang Kim Poh 225,000 - - 225,000Ng Chet Chiang @ Ng Chat Choon 20,000 - - 20,000Datuk P.Venugopal A/L V.K. Menon 25,000 - - 25,000Abdul Rahim Bin Bunyamin 15,000 - - 15,000

43


DIRECTORS’ INTERESTS (Continued)

Number of ordinary shares of RM1 each in the Company

1 May 2012 Acquired Disposed 30 Apr 2013Shareholdings in which the Directors are deemed to have an interest:Liang Chiang Heng *41,048,415 - - *41,048,415Liang Kim Poh *41,048,415 - - *41,048,415Datuk P.Venugopal A/L V.K. Menon **10,000 - - **10,000

* By virtue of the shares held by Keynote Capital Sdn Bhd

** By virtue of the shares held by their spouses Number of ordinary shares of RM1 each in Keynote Capital Sdn Bhd

1 May 2012 Acquired Disposed 30 Apr 2013Shareholdings in the name of the Directors:Liang Chiang Heng 270,350 - - 270,350Liang Kim Poh 232,506 - - 232,506

Liang Chiang Heng and Liang Kim Poh, by virtue of their interests in the shares of the Company, are also deemed interested in the shares of all the subsidiaries of the Company to the extent the Company has an interest.

Other than as disclosed above, none of the other Directors held any interest in shares in the Company and its related corporations during the financial year.

DIRECTORS’ BENEFITS

During and at the end of the financial year, no arrangements subsisted to which the Company or its subsidiaries is a party with the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive benefits (other than benefits included in the aggregate amount of emoluments received or due and receivable by the Directors or the fixed salary of a full time employee of the Company as disclosed in Note 21 to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, except as disclosed in Note 28 to the financial statements.

44


OTHER STATUTORY INFORMATION

(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and no provision for doubtful debts was necessary; and

(ii) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the Directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts in the financial statements of the Group and of the Company inadequate to any substantial extent or to make any provision for doubtful debts in respect of the financial statements of the Group and of the Company;

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

(iii) which has arisen which would render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; and

(iv) not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

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

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

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

(d) In the opinion of the Directors:

(i) the results of the Group’s and Company’s operations during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature;

(ii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and

(iii) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may substantially affect the ability of the Group or of the Company to meet their obligations when they fall due.

45


HOLDING COMPANY

The Company is a subsidiary of KEYNOTE CAPITAL SDN BHD, a company incorporated in Malaysia, which is also regarded by the Directors as the ultimate holding company.

AUDITORS

The auditors, Reanda LLKG International, retire and do not wish to seek re-appointment.

Signed on behalf of the Board in accordance with a resolution of the Directors

LIANG CHIANG HENG LIANG KIM POH

Johor Bahru30 August 2013

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46

STATEMENT BY DIRECTORS Pursuant to Section 169 (15) of the Companies Act, 1965

We, the undersigned, being two of the Directors of APOLLO FOOD HOLDINGS BERHAD, do hereby state that in the opinion of the Directors, the accompanying financial statements set out on pages 50 to 108 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of 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 30 April 2013 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the supplementary information set out on page 108 is prepared, in all material respects, in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board in accordance with a resolution of the Directors

LIANG CHIANG HENG LIANG KIM POH

Johor Bahru 30 August 2013

STATUTORY DECLARATION Pursuant to Section 169 (16) of the Companies Act, 1965

I, LIANG CHIANG HENG, the Director primarily responsible for the financial management of APOLLO FOOD HOLDINGS BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 50 to 108 are in my opinion, 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 above-named LIANG CHIANG HENG ) at Johor Bahru in the State of Johor ) on 30 August 2013 ) LIANG CHIANG HENG Before me:

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47

INDEPENDENT AUDITORS’ REPORTTO THE MEMEBERS OF APOLLO FOOD HOLIDNGS BERHAD

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of APOLLO FOOD HOLDINGS BERHAD, which comprise of the statements of financial position as at 30 April 2013 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes as set out on pages 50 to 108.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

Branch &CorrespondenceAddress

Head Office

46-03, Jalan Tun Abdul Razak, Susur Satu, 80000 Johor Bahru, Johor, Malaysia.Tel : +607-222 0688 Fax : +607-222 0689 E-mail : [email protected]

Suite 9-5, Level 9, Wisma UOA ll, Jalan Pinang, 50450 Kuala Lumpur, Malaysia.Tel : +603-2166 2303 (Hunting Line) Fax : +603-2166 8303 E-mail : [email protected]

Malaysian Institute of Accountants

Institut Akauntan Malaysia(Established under the Accountants Act 1967)

(Diperbadamkan di bawah Akta Akauntan 1967)

A Firm Registered with the Malaysian Institute of Accountants

MEMBERS

48

REANDA LLKG INTERNATIONAL (AF1082) (Continuation Sheet)


REPORT ON THE FINANCIAL STATEMENTS (Continued)

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 April 2013 and of their financial performance and cash flows for year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

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

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

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 108 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“the MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

49

REANDA LLKG INTERNATIONAL (AF1082) (Continuation Sheet)


OTHER MATTERS (Continued)

a) As stated in Note 2.1(a) to the financial statements, the Group adopted Malaysian Financial Reporting Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”) on 1 May 2012 with a transition date of 1 May 2011. These standards were applied retrospectively by Directors to the comparative information in these financial statements, including the statements of financial position as at 30 April 2012 and 1 May 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended 30 April2012 and related disclosures. We were not engaged to report on the comparative information that it is prepared in accordance with MFRS and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and the Company for the year ended 30 April 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 May 2012 do not contain misstatements that materially affect the financial position as of 30 April 2013 and financial performance and cash flows for the year then ended.

b) 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.

REANDA LLKG INTERNATIONAL KOONG LIN LOONG, JPAF 1082 1824/04/15 (J)CHARTERED ACCOUNTANTS PARTNER

Kuala Lumpur

30 August 2013

50

CONSOLIDATED STATEMENT OF FINANCIAL POSITION30 APRIL 2013

NOTE 30.04.2013 30.04.2012 01.05.2011RM RM RM

ASSETS

Non Current AssetsProperty, plant and equipment 3 115,364,749 118,048,075 117,691,129Investment properties 4 13,739,051 13,952,841 14,165,224Leasehold land use rights 5 1,115,385 1,230,770 1,346,155Available-for-sale investments 6 4,129,169 2,835,298 899,820Deferred tax assets 13 88,100 93,400 36,000

Total non current assets 134,436,454 136,160,384 134,138,328

Current AssetsInventories 7 19,893,955 17,221,363 18,866,856Trade receivables 8 31,535,322 26,221,654 23,152,108Other receivables and deposits 8 4,844,448 2,528,621 964,972Prepayments 350,627 114,172 93,164Tax recoverable 349,209 383,986 1,205,418Cash and cash equivalents 9 64,862,901 56,591,062 55,350,629

Total current assets 121,836,462 103,060,858 99,633,147

TOTAL ASSETS 256,272,916 239,221,242 233,771,475

EQUITY AND LIABILITIES

Shareholders' EquityEquity attributable to owners of the parentShare capital 10 80,000,000 80,000,000 80,000,000Reserves 11 150,182,760 134,213,905 128,395,593

Total equity 230,182,760 214,213,905 208,395,593

Non Current LiabilitiesRetirement benefits obligations 12 1,533,201 1,411,747 1,308,168Deferred tax liabilities 13 15,709,259 15,983,840 15,977,172

Total non current liabilities 17,242,460 17,395,587 17,285,340

Current LiabilitiesTrade payables 14 2,921,227 3,703,319 4,290,539Other payables and accruals 14 4,198,419 3,594,711 3,538,628Retirement benefits obligations 12 84,600 51,673 66,743Income tax payable 1,643,450 262,047 194,632

Total current liabilities 8,847,696 7,611,750 8,090,542

Total liabilities 26,090,156 25,007,337 25,375,882

TOTAL EQUITY AND LIABILITIES 256,272,916 239,221,242 233,771,475

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

51

COMPANY STATEMENT OF FINANCIAL POSITION30 APRIL 2013

NOTE 2013 2012RM RM

ASSETS

Non Current AssetsInvestments in subsidiaries 15 39,378,234 39,378,234Available-for-sale investments 6 4,128,169 2,834,298Deferred tax assets 13 12,740 35,700

Total non current assets 43,519,143 42,248,232

Current AssetsOther receivables and deposits 8 152,224 44,091Prepayments 13,333 13,333Amount due from subsidiaries 16 30,106,084 30,383,219Tax recoverable 349,209 272,577Cash and cash equivalents 9 35,691,293 33,380,561

Total current assets 66,312,143 64,093,781

TOTAL ASSETS 109,831,286 106,342,013

EQUITY AND LIABILITIES

Shareholders' EquityEquity attributable to owners of the CompanyShare capital 10 80,000,000 80,000,000Reserves 11 29,404,254 25,911,113

Total equity 109,404,254 105,911,113

Current Liabilities

Other payables and accruals 14 427,032 430,900

Total current liabilities 427,032 430,900

TOTAL EQUITY AND LIABILITIES 109,831,286 106,342,013


52

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFINANCIAL YEAR ENDED 30 APRIL 2013

DistributableShare Share Revaluation Fair value Retained

Group NOTE Capital Premium Reserves Reserves Profits Total

RM RM RM RM RM RM

At 1 May 2012 80,000,000 4,325,454 - 312,980 129,575,471 214,213,905

Total comprehensive income for the year - - - (114,290) 32,083,145 31,968,855Transactions with owners Dividends on ordinary shares 17 - - - - (16,000,000) (16,000,000)

At 30 April 2013 80,000,000 4,325,454 - 198,690 145,658,616 230,182,760

At 1 May 2011As previously stated 80,000,000 4,325,454 7,450,383 238,973 116,463,490 208,478,300Effect of adopting MFRS 1 - - (7,450,383) - 7,367,676 (82,707)

As restated 80,000,000 4,325,454 - 238,973 123,831,166 208,395,593

Total comprehensive income for the year - - - 74,007 21,744,305 21,818,312Transactions with owners Dividends on ordinary shares 17 - - - - (16,000,000) (16,000,000)

At 30 April 2012 80,000,000 4,325,454 - 312,980 129,575,471 214,213,905

<----------Non-distributable----------->


53

COMPANY STATEMENT OF CHANGES IN EQUITY FINANCIAL YEAR ENDED 30 APRIL 2013

Distributable

Share Share Fair value RetainedCompany NOTE Capital Premium reserve Profits Total

RM RM RM RM RM

At 1 May 2012 80,000,000 4,325,454 312,980 21,272,679 105,911,113Total comprehensive income for the year - - (114,290) 19,607,431 19,493,141Transactions with owners Dividends on ordinary shares 17 - - - (16,000,000) (16,000,000)

At 30 April 2013 80,000,000 4,325,454 198,690 24,880,110 109,404,254

At 1 May 2011 80,000,000 4,325,454 238,973 23,379,384 107,943,811Total comprehensive income for the year - - 74,007 13,893,295 13,967,302Transactions with owners Dividends on ordinary shares 17 - - - (16,000,000) (16,000,000)

At 30 April 2012 80,000,000 4,325,454 312,980 21,272,679 105,911,113

<----Non-distributable---->


54

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FINANCIAL YEAR ENDED 30 APRIL 2013

NOTE 2013 2012

RM RM

REVENUE 18 222,745,970 200,548,462

COST OF SALES 19 (160,125,385) (155,451,965)

GROSS PROFIT 62,620,585 45,096,497

OTHER INCOME 2,665,277 2,870,847

ADMINISTRATIVE EXPENSES (12,210,019) (11,013,658)

SELLING AND DISTRIBUTION EXPENSES (9,149,703) (8,356,522)

OTHER OPERATING EXPENSES (1,476,604) -

PROFIT BEFORE TAX 20 42,449,536 28,597,164

INCOME TAX EXPENSE 22 (10,366,391) (6,852,859)

PROFIT FOR THE YEAR 32,083,145 21,744,305

OTHER COMPREHENSIVE (LOSS)/INCOMEFair value gain on available-for-sale investments (114,290) 288,431Reclassification to profit or loss upon disposal - (214,424)

(114,290) 74,007

OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR (114,290) 74,007

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 31,968,855 21,818,312

PROFIT FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT 32,083,145 21,744,305

TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT 31,968,855 21,818,312

EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE PARENT (sen) :Basic, for profit for the year 23 40.10 27.18

Diluted, for profit for the year 23 Not Applicable Not Applicable

Dividend per share (Sen) 17 20.00 20.00


55

COMPANY STATEMENT OF COMPREHENSIVE INCOME FINANCIAL YEAR ENDED 30 APRIL 2013

NOTE 2013 2012RM RM

REVENUE 18 19,440,016 13,740,010

OTHER INCOME 1,146,483 1,255,784

ADMINISTRATIVE EXPENSES (703,382) (724,244)

PROFIT BEFORE TAX 20 19,883,117 14,271,550

INCOME TAX EXPENSE 22 (275,686) (378,255)

PROFIT FOR THE YEAR 19,607,431 13,893,295

OTHER COMPREHENSIVE (LOSS)/INCOMEFair value gain on available-for-sale investments (114,290) 288,431Reclassification to profit or loss upon disposal - (214,424)

OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR (114,290) 74,007

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 19,493,141 13,967,302

PROFIT FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE COMPANY 19,607,431 13,893,295

TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE COMPANY 19,493,141 13,967,302


56

CONSOLIDATED STATEMENT OF CASH FLOW FINANCIAL YEAR ENDED 30 APRIL 2013

NOTE 2013 2012RM RM

OPERATING ACTIVITIESProfit before tax 42,449,536 28,597,164Adjustments for:

Depreciation of property, plant and equipment 9,122,175 9,335,815Depreciation of investment properties 213,790 212,383Amortisation of leasehold land use rights 115,385 115,385Unrealised (gain)/loss on foreign currency translations (329,344) (121,152)Provision for retirement benefits 194,034 160,992Property, plant and equipment written off 119 20Inventories written off 202,793 219,398Bad debts written off 2,353 35,945

Gain on disposal of available-for-sale investments - (214,424)Interest income (1,676,110) (1,579,998)Rental income from investment properties (164,400) (314,400)Dividend income (158,666) (106,881)(Gain)/loss on disposal of property, plant and equipment (7,496) 7,550

Operating cash flows before working capital changes 49,964,169 36,347,797Changes in working capital

Inventories (2,875,385) 1,426,095Receivables (7,839,931) (4,648,627)Payables (178,384) (531,137)

Cash flows from operations 39,070,469 32,594,128Interest received 1,784,151 1,591,745Income taxes refunded 622,954 -Income taxes paid (9,842,446) (6,014,744)Payment of retirement benefits 12 (39,653) (72,483)

Net cash flows from operating activities 31,595,475 28,098,646

INVESTING ACTIVITIESPurchase of available-for-sale investments (1,408,161) (2,454,906)Proceeds from disposal of available-for-sale investments - 807,859Rental received from investment properties 164,400 314,400Dividends received 158,666 106,881Purchase of property, plant and equipment 3 (6,438,972) (9,703,331)Proceeds from disposal of property, plant and equipment 7,500 3,000

Net cash used in investing activities (7,516,567) (10,926,097)

FINANCING ACTIVITYDividends paid on ordinary shares 17 (16,000,000) (16,000,000)

Net cash used in financing activity (16,000,000) (16,000,000)

NET INCREASE IN CASH AND CASH EQUIVALENTS 8,078,908 1,172,549Currency translation differences 192,931 67,884

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 56,591,062 55,350,629

CASH AND CASH EQUIVALENTS AT END OF YEAR 9 64,862,901 56,591,062


57

COMPANY STATEMENT OF CASH FLOW FINANCIAL YEAR ENDED 30 APRIL 2013

NOTE 2013 2012RM RM

OPERATING ACTIVITIES

Profit before tax 19,883,117 14,271,550Adjustments for:

Bad debt written off - 340Dividend income (19,358,157) (13,606,456)

Gain on disposal of available-for-sale investments - (214,424)Interest income (988,342) (934,914)

Operating cash flows before working capital changes (463,382) (483,904)

Changes in working capitalReceivables (216,267) (15,617)Payables (3,868) 78,951

Cash flows from operations (683,517) (420,570)Income taxes paid (329,358) (210,267)Interest received 1,096,476 942,722

Net cash flows from operating activities 83,601 311,885

INVESTING ACTIVITIESPurchase of available-for-sale investments (1,408,161) (2,454,906)Proceeds from disposal of available-for-sale investments - 807,859Dividends received 19,358,157 13,606,456Net repayment from/(advances to) subsidiaries 277,135 17,853,866

Net cash flows from investing activities 18,227,131 29,813,275

FINANCING ACTIVITYDividends paid on ordinary shares 17 (16,000,000) (16,000,000)

Net cash flows used in financing activity (16,000,000) (16,000,000)

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,310,732 14,125,160

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 33,380,561 19,255,401

CASH AND CASH EQUIVALENTS AT END OF YEAR 9 35,691,293 33,380,561


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NOTE TO FINANCIAL STATEMENTS 30 APRIL 2013

1 GENERAL INFORMATION

The principal activities of the Company are investment holding and provision of management services to subsidiaries.

The principal activities of the subsidiaries are described in Note 15 to the financial statements.

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

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

The registered office of the Company is located at Suite 1301, 13th Floor, City Plaza, Jalan Tebrau, 80300 Johor Bahru, Johor.

The principal place of business is located at 70, Jalan Langkasuka, Larkin Industrial Area, 80350 Johor Bahru, Johor.

The financial statements of the Group and the Company have been approved by the Board of Directors for issuance on 30 August 2013.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation of Financial Statements

(a) The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have been prepared on the historical cost basis and modified to include other bases of valuation as disclosed in other sections under significant accounting policies.

For all periods up to and including the year ended 30 April 2012, the Group prepared its financial statements in accordance with Financial Reporting Standards in Malaysia (“FRS”). These financial statements for the year ended 30 April 2013 are the first that the Group has prepared in accordance with MFRS and MFRS 1: First-Time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”) had been applied.

In preparing its opening MFRS Consolidated Statement of Financial Position as at 1 May 2011 (which is also the date of transition), the Group has adjusted the amounts previously reported in financial statements prepared in accordance with FRS. An explanation of how the transition from FRS to MFRS affected the Group’s financial position, financial performance and cash flows is set out in Note 2.1(b) below. These notes included reconciliations of equity and total comprehensive income for the comparative period and of equity at the date of transition under MFRS. The transition from FRS to MFRS has not had a material impact on the statements of cash flows.

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NOTES TO FINANCIAL STATEMENTS (Continued)

2 SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.1 Basis of Preparation of Financial Statements (Continued)

(a) The preparation of financial statements in conformity with MFRS and the provisions of the Companies Act, 1965 requires the Directors to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported financial year. It also requires Directors to exercise their judgements in the process of applying the Company’s accounting policies. Although these judgements and estimates are based on Directors’ best knowledge of current events and actions, actual results could differ from those judgements and estimates.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2.1(e).

(b) Application of MFRS 1

The audited financial statements of the Group for the year ended 30 April 2012 were prepared in accordance with FRS. Except for certain differences, the requirement under FRS and MFRS are similar. MFRS 1 also provide certain prohibitions and exemptions when initially adopting Malaysian Financial Reporting Standards. The significant accounting policies adopted in preparing these consolidated financial statements are consistent with those of the audited financial statements for the year ended 30 April 2012 except as discussed below:

Property, plant and equipment

The Group has previously recorded its land and buildings at revalued amount, which is the fair value at the date of the revaluation less accumulated depreciation and any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed at least once in every five years to ensure that the carrying amount does not differ materially from the fair value of the land and buildings at the reporting date.

Upon transition to MFRS, the Group has elected to apply the optional exemption and measure all its property, plant land equipment at cost model under MFRS 116 Property, Plant and Equipment. At the date of transition to MFRS, the Group uses previous revaluation at or before the date of transition as deemed cost as these amounts were broadly comparable to fair value at that date. Accordingly, the revaluation surplus has been transferred to retained profits.

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(c) Reclassification of Leasehold Land Use Rights

In September 2012, the Group had obtained an extension for certain of its Leasehold Land Use Rights to 99 years and had accordingly transferred these to Property, Plant and Equipment in accordance with MFRS 117. Certain comparative balances have been reclassified accordingly for comparison purpose.

The reconciliations of Consolidated Statement of Financial Position, Consolidated Statement of Comprehensive Income and Consolidated Statement of Cash Flow for comparative periods and Consolidated Statement of Financial Position at the date of transition reported under FRS to those reported for those periods at the date of transition under MFRS and the reclassification are provided below:

Consolidated Statement of Financial Position

Reconciliation as at 1 May 2011Effect of

FRS as at transition MFRS as at 01.05.2011 to MFRS Reclassification 01.05.2011

RM RM RM RMReserves - Reserves attributable to capital 12,014,810 (7,450,383) 4,564,427 - Retained profits 116,463,490 7,367,676 123,831,166Deferred tax liabilities 15,894,465 82,707 15,977,172Property, plant and equipment 116,473,752 - 1,217,377 117,691,129Leasehold land use rights 2,563,532 - (1,217,377) 1,346,155

Reconciliation as at 30 April 2012Effect of

FRS as at transition MFRS as at 30.04.2012 to MFRS Reclassification 30.04.2012

RM RM RM RMReserves - Reserves attributable to capital 12,768,841 (8,130,407) - 4,638,434 - Retained profits 122,364,512 7,210,959 - 129,575,471Deferred tax liabilities 16,290,795 (306,955) - 15,983,840Property, plant and equipment 118,105,558 (1,226,403) 1,168,920 118,048,075Leasehold land use rights 2,399,690 - (1,168,920) 1,230,770.

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Consolidated Statement of Comprehensive Income

Reconciliation for the year ended 30 April 2012

FRS for the MFRS for theyear ended Effect of transition year ended30.04.2012 to MFRS 30.04.2012

RM RM RM

Cost of sales (155,455,466) 3,501 (155,451,965)Profit before tax 28,593,663 3,501 28,597,164Income tax expense (6,852,338) (521) (6,852,859)Profit for the year 21,741,325 2,980 21,744,305

Consolidated Statement of Cash Flow

Reconciliation for the year ended 30 April 2012

FRS for the Effect ofMFRS for

theyear ended transition year ended30.04.2012 to MFRS Reclassification 30.04.2012

RM RM RM RMDepreciation of property, plant and equipment 9,290,859 (3,501) 48,457 9,335,815Amortisation of leasehold land use rights 163,842 - (48,457) 115,385

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2 SIGNIFICANT ACCOUNTING POLICIES (Continued)2.1 Basis of Preparation of Financial Statements (Continued)

(d) Standards and interpretations issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s and the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

Effective for financial periods beginning on or after 1 July 2012:

Amendments to MFRS 101 Presentation of Items of Other Comprehensive Income

Effective for financial periods beginning on or after 1 January 2013:

MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004)

MFRS 10 Consolidated Financial Statements

MFRS 11 Joint Arrangements

MFRS 12 Disclosure of Interests in Other Entities

MFRS 13 Fair Value Measurement

MFRS 119 Employee Benefits

MFRS 127 Separate Financial Statements

MFRS 127 Consolidated and Separate Financial Statements (IAS 27 revised by IASB in December 2003)

MFRS 128 Investment in Associates and Joint Ventures

Amendments to MFRS 1 Government Loans

Amendments to MFRS 1 Annual Improvement 2009-2011 Cycle

Amendments to MFRS 7 Disclosures - Offsetting Financial Assetsand Financial Liabilities

Amendments to MFRS 10 Consolidated Financial Statements : Transition Guidance

Amendments to MFRS 11 Joints Arrangements : Transition Guidance

Amendments to MFRS 12 Disclosure of Interests in Other Entities : Transition Guidance





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2 SIGNIFICANT ACCOUNTING POLICIES (Continued)2.1 Basis of Preparation of Financial Statements (Continued)

(d) Standards and interpretations issued but not yet effective (Continued)


IC Interpretation 20 Stripping Costs in the Production Phase ofa Surface Mine

Amendments to IC Interpretations 2 Annual Improvement 2009-2011 Cycle


Amendments to MFRS 10, MFRS 12 and MFRS 127

Investment Entities

Amendments to MFRS 132 Offsetting Financial Assets and Financial Liabilities


MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009 and October 2010)

The Directors are of opinion that the standards and interpretations above will have no material impact on the financial statement in the year of initial adoption.

(e) Use of Estimates and Judgements

As mentioned in Note 2.1 (a), the Directors make their estimates based on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:

(i) Critical judgement made in applying accounting policies Note 4 - Classification of investment properties

(ii) Areas of estimation uncertainty Note 3 - Depreciation of property, plant and equipment

Note 22 - Income tax expense

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2.2 Summary of Significant Accounting Policies

(a) Subsidiaries and Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.

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

(ii) Basis of Consolidation

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

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similarcircumstances.

Acquisitions of subsidiary companies are accounted for using the purchase method. The cost of the business combination is measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for the recognition under MFRS 3 Business Combinations are recognised at their fair values at the acquisition date.

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2.2 Summary of Significant Accounting Policies (Continued)

(a) Subsidiaries and Basis of Consolidation (Continued)

(ii) Basis of Consolidation (Continued)

Any excess of the cost of business combination over the Group's share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group's share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business combination is recognised as income in the profit or loss on the date of acquisition.

(b) Property, Plant and Equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are recognised in profit or loss as incurred. Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any.

Freehold land has an unlimited useful life and therefore is not depreciated. Building in progress will be depreciated when the property, plant and equipment are ready for their intended use. Leasehold land is amortised on a straight-line basis over the period of the respective leases whilst depreciation of other property, plant and equipment is computed using the straight-line basis so as to write off their depreciable amounts over their estimated useful lives. The principal annual rates of depreciation used are:

Buildings and improvement 2% - 20%Plant, machinery, tools and equipment 4% - 10%Motor vehicles 20%Office equipment, furniture and fittings 10%Renovation 2% - 20%

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(b) Property, Plant and Equipment (Continued)

Depreciation of property, plant and equipment commences when it is available for use and does not cease when the asset become idle or is retired from active use unless the asset is fully depreciated.

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between the net sale proceeds, and the carrying amount of the asset and is recognised in the profit or loss.

(c) Investment Properties

Investment properties are properties which are held to earn rental income or capital appreciation or for both. These include land held for a currently undetermined future use. Investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of the investment properties. The estimated useful lives of the buildings are between 14 to 50 years. Freehold land is not depreciated as it has an unlimited useful life.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year of retirement or disposal.

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(d) Leasehold land use rights

Leasehold land use rights are initially measured at cost. Following initial recognition, leasehold land use rights are measured at cost less accumulated amortisation and accumulated impairment losses. The leasehold land use rights are amortised over their lease terms.

(e) Financial assets

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

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

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.

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

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

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

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(e) Financial assets (Continued)

(i) Financial assets at fair value through profit or loss (Continued)

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

(ii) Loans and receivables

Financial assets include trade and other receivables with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(iii) Held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current.

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(e) Financial assets (Continued)

(iv) Available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.

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

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

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

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the Company commit to purchase or sell the asset.

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(f) Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or group of financial assets is impaired.

(i) Available-for-sale financial assets

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

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

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

(ii) Unquoted equity securities carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss onfinancial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

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(f) Impairment of financial assets (Continued)

(iii) Trade and other receivables and other financial assets carried at amortised cost

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

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

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

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

(g) Impairment of Non Financial Assets

At each reporting date, the Group reviews the carrying amounts of its non financial assets (excluding inventories and deferred tax assets) to determine whether there is any indication of impairment by comparing its carrying amount with its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).

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(g) Impairment of Non Financial Assets (Continued)

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

Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

(h) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using first-in, first-out as the basis and includes all costs in bringing the inventories to their present location and condition. The cost of work in progress and finished goods comprises raw materials, direct labour, other direct costs and an appropriate portion of production overheads. Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost to completion and estimated costs necessary to make the sale.

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(i) Financial liabilities

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

Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

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

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

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

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

(ii) Other financial liabilities

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

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

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

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(i) Financial liabilities (Continued)

(ii) Other financial liabilities (Continued)

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

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(j) Equity Instruments

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

(k) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

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(l) Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the consolidated statement of financial position of the Group.

(m) Income Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the Company and the amount of the revenue can be measured reliably. The following specific recognition criteria must be met before revenue is recognised: (i) Sales of goods

Revenue from sales of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer and measured net of sales tax.

(ii) Dividend incomeDividend income is recognised when the Group’s right to receive payment is established.

(iii) Interest incomeInterest is recognised on an accrual basis using the effective interest method.

(iv) Rental incomeRental income is recognised on straight-line basis over the lease terms.

(v) Management fee incomeManagement fees are recognised when services are rendered.

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(n) Foreign Currencies

(i) Functional and Presentation CurrencyThe individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currencies”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency.

(ii) Foreign Currency TransactionsTransactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.

All exchange differences are recognised in profit or loss.

(o) Income Tax

Income tax expense represents the sum of the tax currently payable and deferredtax.(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statements of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s and the Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting date.

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(o) Income Tax (Continued)

(ii) Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which deductible temporary differences, unused tax losses and unused tax credits can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

(iii) Current and deferred tax for the period

Current and deferred tax are recognised in profit or loss in the statements of comprehensive income, except when they relate to items credited or debited directly to equity, in which case the tax is also recognised directly in equity.

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(o) Income Tax (Continued)

(iv) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

- Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales taxincluded.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

(p) Employee Benefits

Short-term benefits

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

79




(p) Employee Benefits (Continued)

Defined contribution plans

The Group’s contributions to the Employee’s Provident Fund in Malaysia, a defined contribution pension scheme are recognised as an expense in the year in which the related service is performed. Once the contributions have been paid, the Group has no further payment obligations.

The Group operates an unfunded retirement benefits plan for its eligible Directors and employees. The liabilities in respect of the retirement benefits are based on a plan benefit formula. The Group’s obligations under the plan are calculated using the Projected Credit Unit Method through which the amount of benefit that employees and Directors have earned in return for their service in the current and prior years is estimated. That benefit is discounted in order to determine its present value.

The discount rate is yield at the reporting date on high quality corporate bonds or government bonds.

(q) Cash and Cash equivalents

Cash and cash equivalents comprise cash and bank balances, demand deposits, 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.

(r) Segmental Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments and making strategic decisions. Additional disclosures on each of these segments are shown in Note 29.

80


3 PROPERTY, PLANT AND EQUIPMENT Plant, Office

Buildings Long term Building machinery, equipment,and Leasehold in tools and Motor furniture

Group improvements land progress equipment vehicles and fittings Renovation Total2013 RM RM RM RM RM RM RM RM

At cost1 May 2012 20,720,756 22,143,842 4,208,404 149,156,451 2,043,900 4,016,355 2,299 202,292,007Additions - 589,215 1,017,997 2,930,549 - 861,530 1,039,681 6,438,972Written off - - - (434,139) - (28,100) - (462,239)Disposals - - - (25,115) - - - (25,115)

30 April 2013 20,720,756 22,733,057 5,226,401 151,627,746 2,043,900 4,849,785 1,041,980 208,243,625

Accumulated depreciation1 May 2012 2,912,426 758,080 - 75,728,790 1,836,982 3,005,355 2,299 84,243,932Charge for the year 959,155 253,257 - 7,503,555 83,986 248,189 74,033 9,122,175Written off - - - (434,032) - (28,088) - (462,120)Disposals - - - (25,111) - - - (25,111)

30 April 2013 3,871,581 1,011,337 - 82,773,202 1,920,968 3,225,456 76,332 92,878,876

Carrying Amount30 April 2013 16,849,175 21,721,720 5,226,401 68,854,544 122,932 1,624,329 965,648 115,364,749

81


3 PROPERTY, PLANT AND EQUIPMENT (Continued) Plant, Office

Buildings Long term Building machinery, equipment,and Leasehold in tools and Motor furniture

Group improvements land progress equipment vehicles and fittings Renovation Total2012 RM RM RM RM RM RM RM RM

At cost/Valuation 1 May 2011 At cost - - 2,762,302 143,594,815 2,043,900 4,047,812 2,299 152,451,128 At valuation 20,720,756 18,648,000 - - - - - 39,368,756

As previously stated 20,720,756 18,648,000 2,762,302 143,594,815 2,043,900 4,047,812 2,299 191,819,884Transfer from leasehold land use rights - 1,379,907 - - - - - 1,379,907

1 May 2011 (As restated) 20,720,756 20,027,907 2,762,302 143,594,815 2,043,900 4,047,812 2,299 193,199,791Additions - 2,115,935 1,446,102 6,061,329 - 79,965 - 9,703,331Written off - - - (464,693) - (102,922) - (567,615)Disposals - - - (35,000) - (8,500) - (43,500)

30 April 2012 20,720,756 22,143,842 4,208,404 149,156,451 2,043,900 4,016,355 2,299 202,292,007

Representing: At cost 20,720,756 22,143,842 4,208,404 149,156,451 2,043,900 4,016,355 2,299 202,292,007 At valuation - - - - - - - -

20,720,756 22,143,842 4,208,404 149,156,451 2,043,900 4,016,355 2,299 202,292,007

Accumulated depreciation1 May 2011 1,221,044 254,953 - 69,271,589 1,725,437 2,871,152 1,957 75,346,132Transfer from leasehold land use rights - 162,530 - - - - - 162,530

1 May 2011 (As restated) 1,221,044 417,483 - 69,271,589 1,725,437 2,871,152 1,957 75,508,662Charge for the year (Restated) 1,691,382 340,597 - 6,949,595 111,545 242,354 342 9,335,815Written off - - - (464,686) - (102,909) - (567,595)Disposals - - - (27,708) - (5,242) - (32,950)

30 April 2012 2,912,426 758,080 - 75,728,790 1,836,982 3,005,355 2,299 84,243,932

Carrying Amount30 April 2012 17,808,330 21,385,762 4,208,404 73,427,661 206,918 1,011,000 - 118,048,075

Negative pledges for RM10 million (2012: RM10 million) over all movable and immovable property, plant and equipment are given to a local bank to secure banking facilities extended to a subsidiary as disclosed in Note 25.

Property, plant and equipment are depreciated on a straight line method over their estimated useful lives as specified under note 2.2(b). Any changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these property, plant and equipment; therefore future depreciation charges could be re-estimated and revised.

82


4 INVESTMENT PROPERTIES

2013 2012RM RM

Cost ModelAt 1 May 17,627,833 17,627,833Additions - -At 30 April 17,627,833 17,627,833

Accumulated depreciation/impairment At 1 May - Accumulated depreciation 2,575,746 2,363,363- Accumulated impairment 1,099,246 1,099,246

3,674,992 3,462,609

Charge for the year (Note 20) 213,790 212,383

3,888,782 3,674,992

At 30 April- Accumulated depreciation 2,789,536 2,575,746

- Accumulated impairment 1,099,246 1,099,246

3,888,782 3,674,992

Carrying amount

At 30 April 13,739,051 13,952,841

Group

The Group has developed certain criteria based on MFRS 140 in making judgement whether a property qualifies as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both. In making judgement, the Group considers whether a property generates cash flows largely independently of other assets held by the Group. Owner occupied properties generate cash flows that are attributable not only to the properties, but also to other assets used in the production and supply of goods and services. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

The estimated fair value of the investment properties as at 30 April 2013 is approximately RM17,800,000 (2012: RM14,600,000). The fair value for the year was obtained from observable market information, determined by reference to similiar industrial land and properties which have been offered for sale.

83


5 LEASEHOLD LAND USE RIGHTS

2013 2012RM RM

At 1 May - As previously stated 1,500,000 2,879,907Transfer to property, plant and equipment - (1,379,907)

At 1 May - As restated 1,500,000 1,500,000Additions - -At 30 April 1,500,000 1,500,000

Accumulated amortisation

At 1 May - As previously stated 269,230 316,375Transfer to property, plant and equipment - (162,530)

At 1 May - As restated 269,230 153,845Charge for the year (Note 20) 115,385 115,385

At 30 April 384,615 269,230

Carrying AmountAt 30 April 1,115,385 1,230,770

Analysed as:- unexpired period less than 50 years 1,115,385 1,230,770

Group

6 AVAILABLE-FOR-SALE INVESTMENTS Group Company

2013 2012 2013 2012RM RM RM RM

Shares in corporation: Quoted in Malaysia 4,128,169 2,834,298 4,128,169 2,834,298Unquoted in Malaysia 1,000 1,000 - -

Carrying Amount 4,129,169 2,835,298 4,128,169 2,834,298

Fair value of quoted investments 4,128,169 2,834,298 4,128,169 2,834,298

84


7 INVENTORIES Group

At Cost2013

RM2012

RM

Finished goods 6,547,823 6,101,655Work in progress 966,013 987,104Raw materials 6,514,164 5,783,223Packaging materials 5,865,955 4,349,381

19,893,955 17,221,363

8 TRADE RECEIVABLES, OTHER RECEIVABLES AND DEPOSITS The Group's trading terms with its customers are mainly on credit. The credit term is generally for a period of 30 to 90 days (2012: 30 to 90 days) and are non-interest bearing. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Past due trade receivables

The Group’s past due trade receivables are as follows:

Group2013

RM2012

RM1 - 30 days past due but not impaired 199,025 89,77831 – 60 days past due but not impaired 11,891 2,37761 – 90 days past due but not impaired 12,122 31,54391 - 120 days past due but not impaired 4,630 7,082More than 121 days past due but not impaired 1,965 146

Total 229,633 130,926

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM229,633 (2012: RM130,926) that are past due at the reporting date but not impaired.

The Group seeks to maintain strict control over its outstanding receivables and overdue balances are reviewed regularly by senior management to minimise credit risk. The Group has not provided for impairment loss on these trade receivable accounts that are past due as there has not been a significant change in credit quality and the amounts are still considered recoverable.

85


8 TRADE RECEIVABLES, OTHER RECEIVABLES AND DEPOSITS (Continued)

Other receivables and deposits consist of: -

Group Company2013 2012 2013 2012

RM RM RM RMOther receivables 109,856 97,251 1,350 1,350Deposits 4,583,016 2,388,017 2,150 2,150Interest receivable from short term deposits 151,576 43,353 148,724 40,591

4,844,448 2,528,621 152,224 44,091

Included in deposits for the Group is an amount of RM4,377,386 (2012: RM1,605,122) being deposit paid for acquisition of plant and machinery.

9 CASH AND CASH EQUIVALENTS

Group Company2013 2012 2013 2012

RM RM RM RMShort-term deposits placed with licensed - commercial banks 40,430,487 35,699,717 35,669,442 33,169,597- investment banks 4,710,693 6,230,172 - -

45,141,180 41,929,889 35,669,442 33,169,597Cash and bank

balances 19,721,721 14,661,173 21,851 210,96464,862,901 56,591,062 35,691,293 33,380,561

10 SHARE CAPITAL

Ordinary shares of RM1 each

2013

RM

2012

RM

AUTHORISED

As at 1 May / 30 April

100,000,000 shares (2012: 100,000,000 shares) 100,000,000 100,000,000

ISSUED AND FULLY PAID UP

As at 1 May / 30 April

80,000,000 shares (2012: 80,000,000 shares) 80,000,000 80,000,000

86


11 RESERVES

Group Company2013 2012 2013 2012

RM RM RM RM

Non-distributable:Share premium 4,325,454 4,325,454 4,325,454 4,325,454 Fair value adjustment reserve 198,690 312,980 198,690 312,980

4,524,144 4,638,434 4,524,144 4,638,434 Distributable: Retained profits 145,658,616 129,575,471 24,880,110 21,272,679

150,182,760 134,213,905 29,404,254 25,911,113

Movements of reserves are shown in the Statements of Changes in Equity.(i) Fair Value Reserve

Fair value reserve represents the cumulative fair value changes of available-for-sale investments until they are disposed or impaired.

(ii) Retained Profits

As at 30 April 2013, the Company has elected for the single tier tax system. Hence, the Company may distribute dividends out of its entire retained profits as at 30 April 2013 under the single tier system.

(iii) Share Premium

Share premium represents the excess of the consideration received over the nominal value of share issued by the Company. It is not to be distributed by way of cash dividends and its utilisation shall be in the method set out in Section 60 (3) of the Companies Act, 1965 in Malaysia.

87


12 RETIREMENT BENEFITS OBLIGATIONS

The Group operates an unfunded defined benefits retirement plan for its eligible employeesand Directors. Under the plan, employees and executive Directors with a minimum period of five years services with the Group are entitled to retirement benefits based on last drawn final salary and length of service on attainment of the retirement age of 55 and 60 respectively.

The amount recognised in the statements of financial position represents the present value of the unfunded defined benefit obligations, analysed as follows:

2013 2012Group RM RMAt 1 May 1,463,420 1,374,911Recognised in profit or loss 194,034 160,992Payments during the financial year (39,653) (72,483)At 30 April 1,617,801 1,463,420

Analysed:-Current liabilities 84,600 51,673Non current liabilities: 1,533,201 1,411,747

1,617,801 1,463,420

(a) The amounts recognised in the profit or loss is as follows:

2013RM

2012RM

Current year service cost 63,869 70,776Interest cost 130,165 90,216

194,034 160,992

(b) Principal actuarial assumptions used:

2013%

2012%

Discount rate 5.0 5.0

Expected rate of salary increases 5.5 5.5

88


13 DEFERRED TAXGroup Company

2013 2012 2013 2012RM RM RM RM

At 1 May 15,890,440 15,941,172 (35,700) (36,000)Recognised in profit or loss (Note 22) (269,281) (50,732) 22,960 300

At 30 April 15,621,159 15,890,440 (12,740) (35,700)

Deferred tax assets and liabilities are offset when there is legally enforceable right to set off current tax assets against current tax liabilities and when the deferred tax relate to the same tax authority. The following amounts, determined after appropriate offsetting, are shown in the statements of financial position:

Group Company2013 2012 2013 2012

RM RM RM RMDeferred tax liabilities 15,709,259 15,983,840 37,130 10,100 Deferred tax assets (88,100) (93,400) (49,870) (45,800)At 30 April 15,621,159 15,890,440 (12,740) (35,700)

The components and movements of deferred tax liabilities and assets:

Deferred Tax Liabilities of the Group:

GroupAt

1 May 2012

Recognised In profit or

lossAt

30 April 20132013 RM RM RMProperty, plant and equipment 16,492,840 (250,297) 16,242,543Others 10,100 27,030 37,130

16,502,940 (223,267) 16,279,673

Offsetting (570,414)

After offsetting 15,709,259

89

89


13 DEFERRED TAX (Continued)

Deferred Tax Assets of the Group

Group Provisions

Property, plant and

equipment Total2013 RM RM RMAt 1 May 2012 (581,000) (31,500) (612,500)

Recognised in profit or loss (28,104) (17,910) (46,014)At 30 April 2013 (609,104) (49,410) (658,514)

Offsetting 570,414 - 570,414

After offsetting (38,690) (49,410) (88,100)

Deferred Tax Liabilities of the Group:

GroupAt

1 May 2011

Recognised In profit or

lossAt

30 April 20122012 RM RM RMProperty, plant and equipment 16,728,965 (236,125) 16,492,840Others 2,000 8,100 10,100

16,730,965 (228,025) 16,502,940

Offsetting (519,100)

After offsetting 15,983,840

Deferred Tax Assets of the Group

Group Provisions

Property, plant and

equipment Total2012 RM RM RMAt 1 May 2011 (789,793) - (789,793)Recognised in profit or loss 208,793 (31,500) 177,293

At 30 April 2012 (581,000) (31,500) (612,500)Offsetting 519,100 - 519,100

After offsetting (61,900) (31,500) (93,400)

90


13 DEFERRED TAX (Continued)

The following are the movements of deferred tax assets and liabilities during the financial year prior to offsetting are as follows:

Deferred Tax Liabilities of the Company:

Company Others2013 RMAt 1 May 2012 10,100Recognised in profit or loss 27,030At 30 April 2013 37,130

Deferred Tax Assets of the Company:

Company Provisions2013 RMAt 1 May 2012 (45,800)Recognised in profit or loss (4,070)

At 30 April 2013 (49,870)

Deferred Tax Liabilities of the Company:

Company Others2012 RMAt 1 May 2011 2,000Recognised in profit or loss 8,100

At 30 April 2012 10,100

Deferred Tax Assets of the Company:

Company Provisions2012 RMAt 1 May 2011 (38,000)Recognised in profit or loss (7,800)

At 30 April 2012 (45,800)

91


14 TRADE PAYABLES, OTHER PAYABLES AND ACCRUALS

Trade payables are non-interest bearing and are normally settled on from 7 to 60 daysterms (2012: 7 to 60 days).

Other payables and accruals consist of: -

Group Company2013 2012 2013 2012

RM RM RM RMOther payables 622,849 553,245 - -Accruals 3,445,070 2,993,966 427,032 430,900Deposit received 130,500 47,500 - -

4,198,419 3,594,711 427,032 430,900

15 INVESTMENTS IN SUBSIDIARIES

Company2013

RM2012

RM

Unquoted shares, at cost 39,378,234 39,378,234

Details of the wholly-owned subsidiaries (all incorporated in Malaysia) are:

Name of Company Principal Activities

Apollo Food Industries (M) Sdn Bhd Manufacture of and trading in compound chocolates and chocolate confectionery products and cakes.

Hap Huat Food Industries Sdn Bhd Distribution and marketing of compound chocolates and chocolate confectionery products and cakes.

92


16 AMOUNT DUE FROM SUBSIDIARIES

The amount due from subsidiaries are non-trade, unsecured, interest free, repayable on demand and to be settled in cash.

17 DIVIDEND

Amount of dividend

2013RM

2012RM

Recognised and paid during the financial year

Dividend paid on ordinary shares: - Final (single-tier) dividend for 2011:

20 sen per share - 16,000,000 - Final (single-tier) dividend for 2012:

20 sen per share 16,000,000 -

16,000,000 16,000,000

Proposed but not recognised as a liability as at 30 April: - Final (single-tier) dividend for 2013:

25 sen per share 20,000,000 - - Final (single-tier) dividend for 2012:

20 sen per share - 16,000,000

20,000,000 16,000,000

The Directors have proposed a single tier final dividend of 25 sen per ordinary share amounting to RM20,000,000 in respect of the current financial year. The proposed final dividend is subject to approval by the shareholders at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements.

18 REVENUE

Group Company2013

RM2012

RM2013

RM2012

RMSales of goods, net of discounts, returns and sales tax 222,745,970 200,548,462 - -

Dividends received from subsidiaries - - 19,200,016 13,500,010

Management fees received from subsidiaries - - 240,000 240,000

222,745,970 200,548,462 19,440,016 13,740,010

93


19 COST OF SALES

Cost of sales represents cost of inventories sold.

20 PROFIT BEFORE TAX

Group Company2013 2012 2013 2012

RM RM RM RMThis is stated after charging/(crediting):Employment benefits

- Wages and salaries 16,195,726 15,148,882 248,761 236,610- Pension costs :

- defined contribution plans 1,192,889 1,148,022 28,570 26,328- Social security costs 166,330 168,746 2,478 2,477- Retirement benefits 164,478 116,916 - -- Short-term accumulating

compensated absences 43,921 7,140 - -Property, plant and equipment:

- Depreciation 9,122,175 9,335,815 - -- Written off 119 20 - -- (Gain)/loss on disposal of

property, plant and equipment (7,496) 7,550 - -

Amortisation of leasehold land use rights 115,385 115,385 - -

Investment properties:- Depreciation 213,790 212,383 - -

Directors’ remuneration [representing key management personnel]

(Note 21)

6,042,548 5,384,666 244,250 281,000

Foreign exchange differences:- Realised 1,805,948 (42,343) - -- Unrealised (329,344) (121,152) - -

Rental of premises 40,800 22,700 - -Bad debts written off 2,353 35,945 - 340

94


20 PROFIT BEFORE TAX (Continued)

Group Company2013 2012 2013 2012

RM RM RM RMThis is stated after charging/(crediting): Auditors remuneration

- statutory auditcurrent provision 70,000 62,500 18,000 15,000

- other services 18,500 18,100 5,300 6,200Direct operating expenses

arising from investment properties: -that generated rental

income 20,887 20,981 - --that did not generate

rental income 16,793 16,829 - -Inventories written off 202,793 219,398 - -Interest income (1,676,110) (1,579,998) (988,342) (934,914)Bad debts recovered - (3,719) - -Rental income from investment properties (164,400) (314,400) - -Gain on disposal of available-for-sale investments - (214,424) - (214,424)

Gross dividends income:- Quoted Malaysian shares (158,141) (106,446) (158,141) (106,446)- Unquoted Malaysian shares

- subsidiaries - - (19,200,016) (13,500,010)- others (525) (435) - -

95


21 DIRECTORS’ REMUNERATION

The members of key management personnel of the Group and of the Company comprise the Executive Directors and Directors of subsidiary companies. Key management personnel are defined as those persons having authority and responsibility for planning, directing, and controlling the activities of the Group and of the Company whether directly or indirectly. Details on the compensation for these key management personnel are disclosed as follows:

Group Company2013 2012 2013 2012

RM RM RM RMDirectors of the CompanyExecutive:

- Fees 66,000 74,000 66,000 74,000- Salaries, bonus and

allowances 3,982,496 3,487,089 10,500 10,500

- Other short-term employee benefits 159,258 155,757 - -

- Retirement benefits 20,039 27,516 - -- Pension costs:

- defined contribution plans 484,528 440,610 - -

4,712,321 4,184,972 76,500 84,500

Non-executive:- Fees 124,000 140,000 124,000 140,000- Provision for gratuities 16,000 32,000 16,000 32,000- Allowances 27,750 24,500 27,750 24,500

167,750 196,500 167,750 196,500

Director of Subsidiary- Fee 13,000 17,000 - -- Salary, bonus and

allowance 995,479 845,431 - -

- Other short-term employee benefits 24,677 21,456 - -

- Retirement benefits 9,517 16,560 - -- Pension costs:

- defined contribution plans 119,804 102,747 - -

1,162,477 1,003,194 - -

Total 6,042,548 5,384,666 244,250 281,000

96


21 DIRECTORS’ REMUNERATION (Continued)

The number of Directors of the Company whose total remuneration during the year fall within the following bands is as follows:

Number of Directors2013 2012

Executive Directors:RM1,350,001 – RM1,400,000 - 1RM1,500,001 – RM1,550,000 1 -RM2,950,001 – RM3,000,000 - 1RM3,200,001 – RM3,250,000 1 -

Non-Executive Directors:RM50,001 – RM100,000 - 1Below RM50,000 4 3

22 INCOME TAX EXPENSE

Group Company2013 2012 2013 2012

RM RM RM RMIncome tax:Current year 10,711,438 6,854,468 252,726 300,920(Over)/under provision in

prior years (75,766) 49,123 - 77,035

10,635,672 6,903,591 252,726 377,955

Deferred tax: (Note 13)Relating to origination and

reversal of temporary differences (269,281) 360,517 22,960 (6,158)

(Over)/under provision in prior years - (411,249) - 6,458

(269,281) (50,732) 22,960 300

Total 10,366,391 6,852,859 275,686 378,255

97


22 INCOME TAX EXPENSE (Continued)

Current income tax is calculated at the statutory tax rate of 25% (2012: 25%) of the estimated assessable profit for the year.

A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

Group Company2013

RM2012

RM2013

RM2012

RM

Profit before tax 42,449,536 28,597,164 19,883,117 14,271,550Taxation at Malaysian

statutory tax rate of 25%(2012: 25%) 10,612,384 7,149,291 4,970,779 3,567,888

Tax effect of :Non-deductible expenses 339,360 777,869 116,201 116,053Income not subject to tax (70,849) (64,828) (4,811,294) (3,389,179)

(Over)/under provision of income tax expense in prior years (75,766) 49,123 - 77,035

(Over)/under provision of deferred tax in prior years - (411,249) - 6,458

Tax incentives (438,738) (647,347) - -Income tax expense for the year 10,366,391 6,852,859 275,686 378,255

Significant judgement is made in determining the qualifying costs and non qualifying costs of the capital expenditure and deductibility of certain expenses during the estimation of current year’s tax expense. These are transactions, accounts classifications and computations for which the ultimate tax determination is highly judgemental. When the final tax outcome of these matters is different from the amounts that were previously estimated and recognised, such differences will pose an impact on the tax expense and deferred tax in the year in which they are finalised.

98


23 EARNINGS PER SHARE

The earnings per share is calculated by dividing profit for the year attributable to owners of the parent by the weighted average number of ordinary shares in issue during the financial year.

Group 2013 2012

Profit attributable to owners of the parent (RM) 32,083,145 21,744,305

Weighted average number of ordinary shares in issue 80,000,000 80,000,000

Basic earnings per share (sen) 40.10 27.18

Diluted earnings per share is not presented as there were no potential dilutive ordinary shares.

24 HOLDING COMPANY

The holding company is Keynote Capital Sdn Bhd, a company incorporated in Malaysia, which is also regarded by the Directors as the ultimate holding company.

25 BANKING FACILITIES (Secured)

A subsidiary was extended the following banking facilities by a local bank:

2013RM

2012RM

Trade credit facilities 8,000,000 8,000,000

The above facilities are secured by negative pledges over all movable and immovable properties, plant and equipment of a subsidiary and guaranteed by the Company.

The trade credit facilities of the Group bears interest at 1% (2012: 1%) above the bank’s base lending rate per annum. The trade credit facilities were not utilised as at the reporting date.

26 CONTINGENT LIABILITIES

The Company has given corporate guarantee to a bank for bank guarantee and banking facilities extended to a subsidiary. None of the banking facilities were utilised as at the reporting date and the outstanding bank guarantee as at the reporting date is RM693,750(2012: RM883,750).

The value of financial guarantees provided by the Company to its subsidiary is determined by reference to the difference in the interest rates, by comparing the actual rates charged by the bank if these guarantees have not been available. The Directors have assessed the fair value of these financial guarantees to have no material financial impact on the results and the retained profits of the Company.

99


27 CAPITAL COMMITMENTS

Commitments for capital expenditure:

Group2013

RM2012

RM

Authorised and contracted 1,303,538 3,198,494

Authorised and not contracted - 2,897,061

1,303,538 6,095,555

Analysed as follows:

- Plant and machinery 667,636 5,309,653- Building work in progress 635,902 785,902

1,303,538 6,095,555

28 RELATED PARTY DISCLOSURES

For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individual or other entities.

Significant transactions with related parties other than those disclosed elsewhere in the financial statements are as follows:

Company2013

RM2012

RMSubsidiaries

Management fees received 240,000 240,000Dividend income 19,200,016 13,500,010

The Group does not have any other significant transactions with key management personnel other than as disclosed in Note 21.

100


29 SEGMENTAL REPORTING

(i) Segment information is presented in respect of the Group’s geographical segments. The primary format of geographical segments is based on the Group’s management and internal reporting structures. The Group’s business segment, as the Group is primarily engaged in the manufacture of and trading in compound chocolate confectionery products and cakes. Management monitors the operating results of its geographical segments separately for the purpose of making decisions about resource allocation and performance assessment.

Segment results and assets include items directly attributable to a segment as well as those that can be allocated at a reasonable basis.

(ii) The Directors are of the opinion that all inter-segment transactions have been entered into the normal course of business and have been established on market terms and conditions.

(iii) Geographical segments

The Group is organised into two geographical segments as follows:

(a) Local (b) Export

The segment information for the reportable segments is as follows:

Net revenue by geographical segments

2013 2012RM RM

Export 212,088,015 190,347,015Local 115,328,269 107,544,493Less: Inter-segment revenue (104,670,314) (97,343,046)

Total consolidated revenue 222,745,970 200,548,462

Group

Included in export revenue is an amount of RM 54,187,030 (2012: RM37,242,932) pertaining to an external group of companies with common control.

101


29 SEGMENTAL REPORTING (Continued)


Segment results by geographical segments and reconciliation to consolidated profit after tax:

2013 2012RM RM

Export 34,752,307 21,043,984Local 5,735,334 5,406,577

Total for reportable segments 40,487,641 26,450,561Other income 2,665,277 2,870,847Unallocated corporate expenses (703,382) (724,244)

Total consolidated profit before tax 42,449,536 28,597,164Income tax (10,366,391) (6,852,859)

Total consolidated profit for the year 32,083,145 21,744,305

Group

Segment results is arrived after charging/(crediting) the following material items:

Depreciation Foreign and Interest Rental Exchange

amortisation income income DifferencesGroup-2013 RM RM RM RM

Export 9,223,227 (610,606) (14,400) 1,476,604Local 228,123 (77,162) (150,000) -

Total for reportable segments 9,451,350 (687,768) (164,400) 1,476,604Unallocated corporate income - (988,342) - -Total consolidated 9,451,350 (1,676,110) (164,400) 1,476,604

Group-2012 RM RM RM RM

Export 9,411,467 (568,453) (14,400) (163,495)Local 252,116 (76,631) (300,000) -

Total for reportable segments 9,663,583 (645,084) (314,400) (163,495)Unallocated corporate income - (934,914) - -

Total consolidated 9,663,583 (1,579,998) (314,400) (163,495)

102


29 SEGMENTAL REPORTING (Continued)


Total assets for reportable segments are reconciled to the total assets as follows:

Total assets2013 2012

RM RMExport 148,767,801 144,382,638Local 19,141,610 18,339,224

167,909,411 162,721,862

Total assets for reportable segments 167,909,411 162,721,862Unallocated corporate assets 88,363,505 76,499,380

Total consolidated 256,272,916 239,221,242

Total liabilities for reportable segments are reconciled to the total liabilities as follows:

Total liabilities2013 2012

RM RMExport 7,893,257 8,011,989Local 417,158 318,561

8,310,415 8,330,550

Total liabilities for reportable segments 8,310,415 8,330,550Unallocated corporate liabilities 17,779,741 16,676,787

Total consolidated 26,090,156 25,007,337

Non current assets include the following additions as follows:Purchase of property, plantand equipment

Group-2013 RM

Export 6,438,972Local -

Total consolidated 6,438,972

Group-2012 RMExport 9,703,331Local -

Total consolidated 9,703,331

103


30 FINANCIAL INSTRUMENTS

Financial Risk Management Objectives and Policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and market price risk.

The Board of Directors reviews and agrees on policies and procedures for the management of these risks. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

The following sections provide details regarding the Group's and the Company's exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks.

Credit Risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. At the reporting date, the Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investments in equity instruments and cash and bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures. Credit evaluations are performed on customers requiring credit exceeding a certain amount and by limiting the Group’s business associations to parties with high credit worthiness. Trade receivables are monitored on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

Exposure to credit risk

At the reporting date, the Group's and the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Credit risk concentration profile

Approximately 24% (2012: 12%) of the Group’s trade and other receivables were due from a customer.


30 FINANCIAL INSTRUMENTS (Continued)

Credit Risk (Continued)

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year. Investment in equity instruments and deposits with banks are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

There is no other class of financial assets that is past due and/or impaired except for trade receivables which are disclosed in Note 8.

Foreign Exchange Risk

The Group is exposed to foreign exchange risk as a result of the foreign currency denominated transactions entered into by a subsidiary during the course of business. The foreign exchange exposures are monitored on an ongoing basis and kept to an acceptable level.

The currency exposure of the financial assets of the Group is as follows:

Currency exposureat 30.4.2013

Currency exposureat 30.4.2012

US DollarSingapore

Dollar US DollarSingapore

DollarFunctional currency- Ringgit Malaysia

RM RM RM RM- Cash at banks 13,028,849 - 8,063,831 -- Trade receivables 10,587,072 19,817 6,328,158 11,210

23,615,921 19,817 14,391,989 11,210

105



Foreign Exchange Risk (Continued)

Sensitivity analysis of foreign exchange rate changes

2013 2012

RM/United States Dollar (USD) exchange rate +/- 2.00% +/- 5.00%

Impact on profit net of tax (RM) +/-354,400 +/-539,700

RM/Singapore Dollar (SGD) exchange rate +/- 2.00% +/- 5.00%

Impact on profit net of tax (RM) +/-300 +/-420

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of the Group's and the Company's financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to market risk for changes in interest rates is related primarily to the Group’s and the Company’s cash deposits placed with licensed commercial banks and investment banks and the Group and the Company had no interest bearing debts at the reporting date.

The Group’s and the Company’s income and operating cash flows are substantially independent of changes in market interest rate. The investment in financial assets are mainly short-term in nature and are not held for speculative purposes but are placed in fixed deposits and money market funds.

The exposure of financial assets of the Group and the Company to interest rate risk is as follows:

GroupRM

Company RM

Effectiveinterest rate

At the reporting date

Financial assets

Short term deposits with licensed commercial banks and investment banks (maturity within 1 year) 45,141,180 35,669,442 2.70% - 3.45%

106



Interest Rate Risk (Continued)

Sensitivity analysis for interest rate risk

At the reporting date, if interest rates had been 15 basis points higher/lower, with all other variables held constant, the Group's and the Company's profit net of tax would have been RM48,601 and RM40,128 higher/lower respectively, arising mainly as a result of higher/lower interest income from placements of fund in short term deposits and fixed deposits.

Liquidity and Cash Flow Risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.

The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all commitments and funding needs are met.

As part of its overall prudent liquidity management, it is the Group policy to ensure its future cash obligations by forecasting its cash commitments and maintaining sufficient level of cash and cash equivalents to meet its working capital requirements.

The table below summarises the maturity profile of the Group’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

Group

2013 2012

RM RM

Trade and other payables – On demand or within 1 year 3,544,076 4,256,564

Market Risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

107



Market Risk (Continued)

The Group and Company is exposed to equity securities price risk arising from investments in quoted equity comprising mainly quoted shares listed on Bursa Malaysia Securities Berhad held by the Group and Company that are classified as available-for-sale investments. The risk of loss in value is minimised by performing proper investment decision and continuously monitoring the performance of investments held and assessing market risk relevant to which the investment operate. The Group and the Company manage the investment with a view to optimising returns on realisation. The management considers that the changes in the Bursa Malaysia equity index will not have any material impact on the Group’s and Company’s fair value adjustment reserve.

Fair Values

The carrying amounts of cash and cash equivalents, trade and other receivables/payables approximate fair values due to the relatively short term maturity of these financial instruments.

Fair Value Hierarchy

The fair value of quoted investments is based on Level 1 valuation, that is, based on the quoted prices in active markets for identical assets and liabilities.

31 CAPITAL MANAGEMENT

The Group’s objectives of managing capital are to safeguard the Group’s ability to continue in operations as a going concern in order to provide fair returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain the optimal capital structure, the Group may, from time to time, adjust the dividend payout to shareholders, return capital to shareholders and issue new shares, where necessary. For capital management purposes, the Group considers shareholders’ equity and total liabilities to be the key components in the Group’s capital structure. The Group monitors capital on the basis of the gearing ratio. The ratio is calculated as the total liabilities to total equity. Total equity is the sum of total equity attributable to shareholders.

The gearing ratio as at 30 April 2013 and 2012, which are within the Group’s objectives for capital management, are as follows:

2013 2012RM RM

Total liabilities 26,090,156 25,007,337Total equity 230,182,760 214,213,905Total capital 80,000,000 80,000,000Gearing ratio 11% 12%

108


32 SUPPLEMENTARY INFORMATION – BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED

The breakdown of the retained profits of the Group and of the Company as at 30 April 2013 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March, 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group2013

Company 2013

RM RM

Total Retained Profits of the Company and its subsidiaries :

- Realised 196,034,263 24,867,370- Unrealised (15,747,125) 12,740

180,287,138 24,880,110Less: Consolidation adjustments (34,628,522) -Retained profits as per financial statements 145,658,616 24,880,110

The disclosure of realised and unrealised profits/(losses) above is solely for compliance with the directive issued by the Bursa Malaysia Securities Berhad and should not be used for any other purpose.

109

ANALYSIS OF SHAREHOLDINGS AS AT 2 SEPTEMBER 2013

Statement of shareholdings according to the record of depositors as at 2 September 2013

Authorised share capital : RM100,000,000 ordinary shares of RM1-00 each Issued and fully paid-up capital : RM80,000,000 divided into 80,000,000 shares Class of shares : Ordinary shares of RM1-00 each No of shareholders : 2,715 Voting rights : One vote per ordinary share

A) List of Substantial Shareholders

Direct Deemed interest in shares No. Name Of Shareholders No. of shares % No. of shares %

1. Keynote Capital Sdn Bhd 41,048,415 51.31 - -2. Liang Chiang Heng 220,000 0.28 41,048,415

*1 51.313. Liang Kim Poh 225,000 0.28 41,048,415

*1 51.314. Tan Song Cheng 66,000 0.08 41,048,415

*1 51.315. Tan Kok Guan - - 41,048,415

*1 51.316. Amanahraya Trustees Berhad

- Skim Amanah Saham Bumiputera

16,072,000 20.09 - -

Note :*1 By virtue of their interest in Keynote Capital Sdn Bhd.

B) List of directors’ shareholdings in the Company

Direct Deemed interest in shares No. Name Of Directors No. of shares % No. of shares %

1. Liang Chiang Heng 220,000 0.28 41,048,415*1 51.31

2. Liang Kim Poh 225,000 0.28 41,048,415*1 51.31

3. Ng Chet Chiang @ Ng Chat Choon

20,000 0.03 - -

4. Datuk P. Venugopal A/L V.K. Menon

25,000 0.03 10,000*2 0.01

5. Abdul Rahim Bin Bunyamin

17,000 0.02 - -

6. Datin Paduka Hjh.Aminah Binti Hashim

- - - -

Note : *1 By virtue of their interest in the shares held by Keynote Capital Sdn Bhd *2 By virtue of the shares held by his spouse

110

ANALYSIS OF SHAREHOLDINGS (Continued)

C) List of 30 largest securities account holders

No. NameNo. of

Shares HeldPercentage

(%)1. Keynote Capital Sdn Bhd 41,048,415 51.312. Amanahraya Trustees Berhad

- Skim Amanah Saham Bumiputera16,072,000 20.09

3. Yap Ah Fatt 1,330,000 1.664. Kam Loong Mining Sdn Bhd 1,220,000 1.535. HSBC Nominees (Asing) Sdn Bhd

- Exempt AN for Credit Suisse (SG BR-TST-ASING)1,028,800 1.29

6. Shoptra Jaya (M) Sdn Bhd 533,200 0.677. Foo Khen Ling 388,000 0.498. Shoptra Jaya (M) Sdn Bhd 353,800 0.449. Citigroup Nominees (Asing) Sdn Bhd

- Exempt AN for Citibank NA, Singapore (JULIUS BAER)352,500 0.44

10. Denver Corporation Sdn Bhd 310,000 0.3911. Affin Nominees (Tempatan) Sdn Bhd

- Lion Group Medical Assistance Fund285,400 0.36

12. Lim Seng Qwee 258,000 0.3213. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad

- Deutsche Trustees Malaysia Berhad for Hong Leong Consumer Products Sector Fund

246,500 0.31

14. Liang Kim Poh 225,000 0.2815. Kam Loong Credit Sdn Bhd 220,000 0.2816. Liang Chiang Heng 220,000 0.2817. Lam Ee Lin 160,000 0.2018. Choy Wee Chiap 154,600 0.1919. Yeoh Kean Hua 154,000 0.1920. Yap Kum Ming 143,000 0.1821. Tan How Kheng 123,000 0.1522. UOB Kay Hian Nominees (Asing) Sdn Bhd

- Exempt AN for UOB Kay Hian (Hong Kong) Limited-A/C Clients

118,600 0.15

23. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad- Deutsche Trustees Malaysia Berhad for Hong Leong Dana Maa’rof

115,300 0.14

24. Sow Tiap 110,000 0.1425. DB (Malaysia) Nominee (Asing) Sdn Bhd

- Deutsche Bank AG Singapore PBD for Shindo Sumidomo100,500 0.13

26. ECML Nominees (Tempatan) Sdn Bhd- Heah Sieu Lay (PCS)

100,000 0.13

27. Eng Sim Leong @ Ng Leong Sing 100,000 0.1328. Low Mei Lan 100,000 0.1329. Public Nominees (Tempatan) Sdn Bhd

- Pledged Securities Account for Lim Hock Fatt (E-SS2)100,000 0.13

30. RHB Nominee (Asing) Sdn Bhd- Kerry Trade Pte Ltd

100,000 0.13

Total 65,770,615 82.26

111

ANALYSIS OF SHAREHOLDINGS (Continued)

D) Distribution of shareholdings

Holdings No. of Holders

Total Holdings

Percentage(%)

Less than 100 49 655 0.00100 to 1,000 606 515,800 0.651,001 to 10,000 1,749 6,579,600 8.2210,001 to 100,000 286 7,633,330 9.54100,001 to less than 5% of issued shares 23 8,150,200 10.195% and above of issued shares 2 57,120,415 71.40

Total 2,715 80,000,000 100.00

112

LIST OF PROPERTIES AS AT 30 APRIL 2013

Location Existing Use Tenure Approximate Age of

Building(Years)

Land Area (sq.m)

Carrying Amount At

30 April 2013

RM'00070, Jalan LangkasukaLarkin Industrial Area80350 Johor Bahru

Corporate office and main factory

99 years leasehold expiring on 08.08.2109 24 7,762 7,133

58, Jalan LangkasukaLarkin Industrial Area80350 Johor Bahru

Factory building rented out

60 yearsleasehold expiring on14.01.2024 22 10,036 2,260

GM170 Lot 138 &GM100 Lot 139Jalan JB – Kota TinggiPlentong81800 Ulu Tiram, Johor

Vacant land

Freehold - 53,595 8,285

HS(M) 2718 PTD 120622, Jalan JB – Kota TinggiPlentong81800 Ulu Tiram, Johor

Vacant land

Freehold - 14,156 2,896

47 & 49, Jalan Saga 14Taman Desa Cemerlang81800 Ulu Tiram, Johor

2 units of intermediate double storey terrace house rented out

Freehold 16 327 299

3, 3A & 3B, Jalan KilangLarkin Industrial Area80350 Johor Bahru

Factory buildingoccupied as second factory

99 yearsleasehold expiring on08.08.2109 44 8,377 4,483

4, 4A & 4B, Jalan PetalingLarkin Industrial Area80350 Johor Bahru

Factory buildingoccupied as main factory

99 years leasehold expiring on08.08.2109 45 7,661 5,041

5, Jalan Kilang Larkin Industrial Area 80350 Johor BahruJohor

Factory buildingoccupied as second factory


Lot 6398, 3 Jalan Asas Larkin Industrial Area 80350 Johor BahruJohor

Factory buildingoccupied as mainfactory

99 years leasehold expiring on 08.08.2109

7 11,914 7,396

Balance c/f to next page 41,399

113

LIST OF PROPERTIES (Continued)AS AT 30 APRIL 2013

Location Existing Use Tenure Approximate Age of

Building(Years)

Land Area (sq.m)

Carrying Amount At

30 April 2013

RM'000

Balance b/f from previous page 41,399HS(D) 15991 TLO 786ALarkin Industrial Area 80350 Johor BahruJohor

Vacant land 99 years leasehold expiring on 17.09.2111

6 4,046 1,713

No. 6, Jalan Petaling, Larkin Industrial Estate, 80350 Johor Bahru, Johor.

To be occupied as factory


No. 1, Jalan Asas, Larkin Industrial Estate, 80350 Johor Bahru, Jonor.

Workshop and store 99 years leasehold expiring on18.12.2110 38 8,093 4,686

No. 8, Jalan Petaling, Larkin Industrial Estate, 80350 Johor Bahru, Johor.

Factory buildingoccupied as main factory


Total 53,419

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115

F O R M O F P R O X YC D S A C C O U N T N O . N O . O F S H A R E S H E L D

I/We_____________________________________________ [NRIC NO: __________________________________]

of____________________________________________________________________________________________

being a member/members of APOLLO FOOD HOLDINGS BERHAD (Co. No. 291471-M) do hereby appoint :- Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %Address

and / or (delete as appropriate)Full Name (in Block) NRIC/Passport No. Proportion of Shareholdings

No. of Shares %Address

failing him, the Chairman of the meeting as * my/our proxy to attend and to vote for * me/us on * my/our behalf at the 19th Annual General Meeting of the Company to be held on Thursday, the 24th day of October, 2013 at 10.00 a.m. at Delima Room, Level 2, The Puteri Pacific Hotel, Jalan Abdullah Ibrahim, 80730 Johor Bahru, Johor Darul Takzim andat any adjournment thereof.* My / our proxy is to vote as indicated below:RESOLUTIONS NO FOR AGAINST Ordinary Business:

1. Declaration of First and Final Single Tier Dividend2. Approval of Directors' Fees 3. Re-appointment of Director - Datuk P. Venugopal A/L V. K. Menon4. Re-election of Director - Mr. Liang Chiang Heng5. Re-election of Director - Datin Paduka Hjh. Aminah Binti Hashim6. Appointment of Messrs BDO as Auditors

Special Business:7. Ordinary Resolution: Authority to Issue Shares pursuant to Section 132D of the

Companies Act, 19658. Ordinary Resolution: Continuing in office as Independent Non-Executive Director -

Mr. Ng Chet Chiang @ Ng Chat Choon9. Ordinary Resolution: Continuing in office as Independent Non-Executive Director -

En. Abdul Rahim Bin Bunyamin10. Special Resolution: Proposed Amendments to the Articles of Association

(Please indicate with a cross (X) in the spaces whether you wish your votes to be cast for or against the resolution. In the absence of such specific directions, your proxy will vote or abstain as he thinks fit.)

Dated this day of 2013 ____________________________Signature of Member(s)/Common Seal

Notes 1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need

not be a member of the Company.2. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to

be represented by each proxy.3. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint not

more than two (2) proxies in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

5. Where the Proxy Form is executed by a corporation, it must be either under its Common Seal or under the hand of an officer or attorney duly authorised.

6. The Proxy Form must be deposited with the Company Secretary at the Registered Office, Suite 1301, 13th Floor, City Plaza, JalanTebrau, 80300 Johor Bahru, Johor Darul Takzim not less than 48 hours before the time set for the Meeting.

7. For the purpose of determining a member who shall be entitled to attend the 19th Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with Article 81(2) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a general meeting Record of Depositor as at 14 October 2013. Only a depositor whose name appears therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his stead.

apollo annualreport2013

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