Silver Bird Annual Report 2008

More than building brands

annual report 2008

Silver Bird ComplexLot 72, Persiaran Jubli Perak

Seksyen 21, 40300 Shah AlamSelangor Darul EhsanTel : 603 - 5192 2888Fax : 603 - 5192 4293

Email : [email protected] Website : www.silverbird.com.my

3 Corporate Information

4 Corporate Structure

5 5-Year Group Financial Highlights

6 Chairman’s Statement

8 Group Managing Director’sMessage

10 Directors’ Profile

15 Senior Management

16 Corporate Social Responsibility

17 Statement On Corporate Governance

23 Audit Committee Report

26 Statement On Internal Control

28 Statement OfDirectors’ Responsibility

29 Financial Statements

74 Analysis Of Ordinary ShareholdingsAnd Warrants

83 Notice Of Annual General Meeting

85 Statement AccompanyingNotice Of Annual General Meeting

Contents

Proxy Form

High 5 is baked in the tradition of the European Master Bakers, where the finest breads originated. Made with the finest ingredients and baked to a unique recipe, High 5 is the delicious Original Sandwich Bread that gives your family the wholesome nutrition they deserve.

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Dato’ Dr Gan Khuan Poh(Chairman/Independent Non-Executive Director)

Dato’ Jackson Tan Han Kook(Group Managing Director)

Ching Siew Cheong(Group Executive Director)

Lim Hock Chye(Independent Non-Executive Director)

Richard George Azlan Bin Abas(Independent Non-Executive Director)

Dato’ Seri Talaat Bin Husain(Independent Non-Executive Director)

Peter John McLoghlin(Non-Independent Non-Executive Director)

Vanda Russell Gould(Non-Independent Non-Executive Director)(Alternate Director to Peter John McLoghlin)

Dato’ Lee Kok Chuan(Non-Independent Non-Executive Director)

Adi Azuan Bin Abdul Ghani(Non-Independent Non-Executive Director)

CorporateInformation

AUDIT COMMITTEE

Richard George Azlan Bin Abas - ChairmanLim Hock Chye - MemberDato’ Lee Kok Chuan - Member

NOMINATION COMMITTEE

Dato’ Dr. Gan Khuan Poh - ChairmanRichard George Azlan Bin Abas - MemberDato’ Seri Talaat Bin Husain - Member

REMUNERATION COMMITTEE

Lim Hock Chye - ChairmanPeter John McLoghlin - MemberRichard George Azlan Bin Abas - Member

COMPANY SECRETARY

Tan Fong Shian @ Lim Fong Shian(MAICSA 7023187)

REGISTERED OFFICE

Silver Bird ComplexLot 72, Persiaran Jubli PerakSeksyen 21, 40300 Shah AlamSelangor Darul EhsanTel : 03 - 5192 2888Fax : 03 - 5192 4293Email : [email protected] : www.silverbird.com.my

AUDITORS

HorwathLevel 16, Tower CMegan Avenue II12 Jalan Yap Kwan Seng50450 Kuala Lumpur

PRINCIPAL BANKERS

Malayan Banking BerhadG-Floor, Bangunan Yayasan SelangorJalan Bukit Bintang55100 Kuala Lumpur

CIMB Bank Berhad10th Floor, Bangunan CIMBJalan SemantanDamansara Heights50490 Kuala Lumpur

Hong Leong Bank BerhadWisma Hong LeongNo. 18, Jalan Perak50450 Kuala Lumpur

United Overseas Bank (M) BerhadMenara UOBJalan Raja LautPO Box 1121250738 Kuala Lumpur

RHB Bank BerhadHead OfficeTower Two & Three, RHB CentreJalan Tun Razak50400 Kuala Lumpur

SHARE REGISTRAR

Berjaya Registration Services Sdn BhdLot 06-03, Level 6 (East Wing)Berjaya Times SquareNo. 1 Jalan Imbi55100 Kuala LumpurTel : 03 - 2145 0533Fax : 03 - 2145 9702

STOCK EXCHANGE LISTING

Main Board of Bursa Securities

BOARD OF DIRECTORS

INTERNATIONALSDN BHD

FOOD (S) PTE LTD

100%

100%

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Corporate Structure

son

son

dard

son

CONFECTIONERYSDN BHD

GROUP SDN BHD

MARKETINGSDN BHD

BAKERIES SDN BHD

SILVER BIRD GROUP BERHAD(OPERATING SUBSIDIARIES)

100% 100%

100% 100%

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Financial Year Ended 31 OctoberRM’000 2008 2007 2006 2005 2004

Restated

Revenue 638,563 606,484 597,991 484,712 363,545Revenue Growth 5% 1% 23% 33% 612%Operating Profits (14,431) 7,615 (26,299) 26,599 21,511(Loss) / Profit Before Tax (23,134) (18,397) (49,548) 17,656 16,647(Loss) / Profit After Tax (21,275) (16,077) (48,370) 22,151 16,763PAT Growth (32%) 67% (318%) 32% 67%Total Shareholders' Fund 141,810 112,612 119,665 171,027 139,587

No. of Share in Issue 314,117 235,538 210,638 210,521 141,596Net Margin (%) (3.3) (2.7) (8.1) 4.6 4.6Net Assets Per Share (sen) 45 48 55.5 79.3 81.3Gearing (net of cash) 0.99 1.34 0.90 0.88 0.94

5-Year GroupFinancial Highlights

RevenueRM’000

363,54504’

484,71205’

597,99106’

606,48407’

(Loss) / Profit Before TaxRM’000

Total Shareholders’ FundRM’000

Net Assets Per ShareSen

16,64704’

17,65605’

(49,548)06’

(18,397)07’

(23,134)08’

139,58704’

171,02705’

119,66506’

112,61207’

141,81008’

81.304’

79.305’

55.506’

4807’

4508’

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

20,000

10,000

0

-10,000

-40,000

200,000

150,000

100,000

50,000

100

80

60

40

20

638,56308’

07’08’ 06’ 05’ 04’ 07’08’ 06’ 05’ 04’

07’08’ 06’ 05’ 04’ 07’08’ 06’ 05’ 04’

-20,000

-30,000

-50,0000

0 0

Chairman'sStatement

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On behalf of theBoard of Directors,I would like topresent the 2008Annual Report andthe AuditedFinancialStatements of SilverBird Group Berhadfor the financialyear ended 31October 2008.

“

”

Chairman'sStatement

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(cont’d)

Financial Highlights

The Malaysian economy registered agrowth of 4.7% (Q2 2008: 6.7%) in thethird quarter of year 2008. Growth in themanufacturing sector, however, moderated1.8% (Q2 2008: 5.6%), partly due todeclining global demand for electricaland electronics (E&E) products.

Prices still remained high, especially forraw materials for the bread and bakeryindustry where flour prices had doubled.However, bakery products are under pricecontrol and approved price increasemoved marginally only toward the end of2007. Hence cost cutting measures

were instituted to remain competitive inthe market. Despite these efforts, theturnover did not perform to expectations.In the face of this challenging businessenvironment, the Group did not performas well as what was forecasted.

For the financial year under review theGroup achieved revenue growthamounting to RM639 million. Despite thiscommendable effort, the Group registereda slightly higher loss after taxation andminority interest of RM21 million comparedto the previous year’s loss. A favourableincreasing trend in turnover is expectedto follow through into the next quarter.

The Group managed to turnaround in thefourth quarter of financial year 2008 dueto a turnaround in sales growth in daily freshbakery products and cost reductionmeasures.

Dividend

The Board of Directors is not recommendingany dividend for the financial year underreview.

Outlook and Prospects

The Group will continue to focus on itscore business in the light of the prospectarising from the consolidation of thebakery market. In addition, the expecteddownward trend of major material cost inthe first quarter of financial year 2009and the continuous cost reductionmeasures undertaken by the Group willtranslate into better results in the comingfinancial year. The Group is also exploringsmart partnerships in some businessprospects that will enhance sales anddistribution.

The Board of Directors is optimisticthat with the commitment to improve

efficiencies in operations, cost cuttingmeasures and marketing and promotion,the aspiration to be one of the nation’sleading players in the consumer foodmarket can be achieved.

Appreciation

On behalf of the Board of Directors,I would like to express my sincereappreciation to our valued customers fortheir continuous support and our businesspartners, bankers, regulatory authoritiesfor their trust, confidence and cooperationgiven to us.

To my fellow directors, management andstaff, I would like to express my gratitudeand appreciation for their hard work,dedication and commitment.

Last but not least, sincere thanks to allvalued shareholders for your continuedsupport and confidence in Silver BirdGroup Bhd.

DATO’ DR GAN KHUAN POHChairman

Group ManagingDirector’s Message

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Group Managing Director’s Message

Despite the challenging conditions for financial yearended 31 October 2008, the Group continued to showimproved results. This was achieved notwithstandingthe major increases in raw materials prices.

Financial Performance

Revenue had increased to RM638 million largely dueto a turnaround in sales growth in daily fresh bakeryproducts and the continuous cost cutting andrationalisation of the Consumer Food Division operationsin Malaysia and Singapore. However, the loss aftertaxation of RM21 million was higher compared withloss after taxation of RM16 million in the previous year.The write back of impairment loss in 2007 contributedto the lower losses.

We are continuously performing research anddevelopment for new products and exploring otherrelated business segment. The Company’s marginwas hit by worldwide high flour price duringbeginning of 2008 with increase in selling pricelagging behind. The Government had subsequentlyapproved the subsidy on white bread whichcommences in the end Q2 2008.

Group ManagingDirector’s Message

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(cont’d)

In May 2008, the Company entered into a StrategicAlliance Agreement with Lembaga Tabung Haji toproduce and market a range of bakery andconfectionary products.

The MultiCom Division on the other hand registereda slower growth rate but continued to make profitcontributions to the Group.

During the financial year, the Group had raisedRM51.8 million through a rights issue with freewarrants exercise. The proceeds were used asthe Group’s working capital.

Singapore’s Operation

In this segment, we had managed to turnaroundSingapore’s operation after the completion of therationalisation of this operation. We will remaincommitted to this market and continue to seekinnovative ways to expand our reach.

We had managed to renew the supply contractto manufacture house brand confectionery productsfor a leading retail chain in Singapore.

Future Prospects

With the expected downward trend of majormaterial costs and the various cost reductioninitiatives undertaken by the Group, this will translateinto positive results for the forthcoming quarters.

The Malaysian economy could still be headed fora contraction despite the announcement of thesecond stimulus package of RM60 billion. A growth

of 3.5% is forecasted for year 2009 and GDPgrowth is expected to be in the range of -1.0%to 1.0%.

We will continue to structure our approach topursue growth, maintaining the Group’scompetitiveness and ensuring the long termgrowth and prospects by expanding into similarand/or complementary businesses wheneveropportunities arise. We are cautious over theuncertainties of fluctuation in the raw material priceswhich may impact the Company’s performancefor the next financial year. Barring any unforseencircumstances, the Board is confident of achievinga much better set of results in 2009.

Acknowledgements

On behalf of the Board of Directors, I would liketo place on record our sincere gratitude andappreciation to the management team and allemployees for their hard work and commitmentthroughout the challenging financial year.

I would also like to express my deepest appreciationto all our valuable customers, business partners,bankers, shareholders and regulatory authoritiesfor their continued support and trust in the Group.

DATO’ JACKSON TAN HAN KOOKGroup Managing Director

During the financial year, theGroup had raised RM51.8 millionthrough a rights issue withfree warrants exercise.The proceeds were used as theGroup’s working capital.

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Directors’Profile

Dato’ Dr Gan Khuan Poh, a Malaysianaged 63, is an Independent Non-ExecutiveChairman of Silver Bird Group Berhad.Dato’ Dr Gan was appointed to theBoard on 27 April 2006. He is also theChairman of the Nomination Committee.He holds a Ph.D and M.A. in Economicsfrom Duke University, NC, USA; M.B.A. inFinance from Cornell University, NY, USAand B.A. (Hons.) in Business Economicsfrom University of Malaya. He started hiscareer as a Government Service Officerin 1967 and had served in variouspositions ranging from the Districtlevel, the National Institute of PublicAdministration (“INTAN”) to the PrimeMinister’s Department as Senior Directorresponsible for Macroeconomics in theEconomic Planning Unit for 31 years.He later joined Pilecon Group of Companies

in 1997 as an Executive Directorresponsible for the Group’s Finance andCorporate Planning and the last positionhe held was as Managing Director beforehe left the Company in year 2000.

He currently sits on the Board ofPermodalan BSN Berhad, TimeEngineering Berhad and PrudentialAssurance Malaysia Berhad.

He is not related to any director and/ormajor shareholders of the Company and there is no business arrangementwith the Company in which he hasa personal interest.

He has not been convicted for anyoffences within the past 10 years otherthan traffic offences, if any.

Dato’ Dr Gan Khuan Poh(“Dato’ Dr Gan”)Chairman

Dato’ Jackson Tan, a Malaysian aged54, is the Group Managing Director ofSilver Bird Group Berhad. He wasappointed to the Board on 5 October1993. He is the founder of StandardConfectionery Sdn Bhd (“StandardConfectionery”) and the prime-mover informulating, nurturing and implementingStandard Confectionery’s strategies sinceits incorporation in 1986. His exposureand involvement in the manufacturingand trading of bakery and confectioneryproducts since the 1970’s assures theGroup of the benefits of his experience inthis field. The Group has grown fromstrength to strength under his leadership,foresight and inherent expertise, and thishas earned him a commendable standingin the local and international businesscommunities in the bakery andconfectionery industries. To keep abreastwith business skills, he had undergonethe Harvard Business School AlumniClub of Malaysia’s Senior ManagementDevelopment Programme in 1994. In hiscontinued efforts to contribute to theGroup’s expansion plans, he is at theforefront of the Group’s marketing plansfor the penetration of the Group’s products

into the South East Asian and MiddleEast countries. Dato’ Jackson Tan isprimarily responsible for the success of theGroup and currently also holdsdirectorships in several private limitedcompanies. Currently, Dato’ Jackson Tan isa council member of theGeneral Council of Malaysian Instituteof Management.

Apart from the Group’s business activities,his participation in and contribution tovarious organisations and charities hasearned him the “Young OutstandingMalaysians Award” given by JayceesMalaysia in 1992.

Dato’ Jackson Tan is the spouse of DatinOng Hooi Siang, a substantial shareholderof the Company. Apart from the aforesaid,he has no family relationship with any otherdirector and/or major shareholder of theCompany and there is no businessarrangement with the Company in whichhe has a personal interest.

He has not been convicted for any offenceswithin the past 10 years other than trafficoffences, if any.

Dato’ Jackson Tan Han Kook(“Dato’ Jackson Tan”)Group Managing Director

Directors’Profile

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(cont’d)

Ching Siew Cheong, a Malaysian aged46, is the Group Executive Director ofSilver Bird Group Berhad. He wasappointed to the Board on 10 June 1997.He joined Standard Confectionery in 1990as Finance and Administration Managerworking closely with Dato’ Jackson Tanin transforming Standard Confectioneryand other subsidiary companies intomodern organisation with proper operatingsystems, budgets and controls. Duringhis 19 years of service with the Group,he played an important and activerole in formulating and implementingbusiness strategies to expand the Group.

He graduated from Strathclyde GraduateBusiness School with a Master in BusinessAdministration in 1996. He also holdsdirectorships in several other privatelimited companies.

He is not related to any director and/or major shareholders of the Companyand there is no business arrangementwith the Company in which he has apersonal interest.


Ching Siew CheongGroup Executive Director

Lim Hock Chye, a Malaysian aged 53,is an Independent Non-Executive Directorof Silver Bird Group Berhad. He is theChairman of the Remuneration Committeeand also a member of the AuditCommittee. He was appointed to theBoard on 20 April 2002. Mr Lim is a lawgraduate with a LLB (Hons) Degree fromthe University of London and holds aCertificate in Legal Practice. Mr Lim wasone of the pioneer consultants with theMalaysian Minority Watchdog Group, an initiative set up by the Ministry ofFinance in 2002 to protect the minorityshareholders’ interest and promotinggood corporate governance and practices.Prior to that, he was a Deputy Editor withThe Star Newspaper, where he wrotefor the Business section.

In addition, he was also a panel speakerfor Bursatra Sdn Bhd. Mr Lim is currentlythe Group Director of Strategic Planning & Corporate Affairs of HELP UniversityCollege, a position he has held sinceApril 2008.

He is a director of TSM Global Berhad,Tamco Corporate Holdings Berhad andNylex (Malaysia) Berhad.



Lim Hock ChyeIndependent Non-Executive Director

Directors’Profile

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(cont’d)

Richard George Azlan Bin Abas, aMalaysian aged 45, is an IndependentNon-Executive Director of Silver BirdGroup Berhad. He is the Chairman of theAudit Committee and also a memberof the Remuneration Committee andNomination Committee. He was appointedto the Board on 21 May 2004. He holdsa Bachelor of Commerce from theUniversity of Western Australia. Heworked for Arthur Andersen & Co. from1984 to 1989 and subsequently servedArab-Malaysian Corporation Berhad from1989 to 1996. From 1997 to 2002, hewas the Group Chief Executive of YayasanPelajaran Johor Holdings Sdn Bhd. He ispresently a partner of Azlan & Co.,Chartered Accountants. He is a Fellow ofthe Institute of Chartered Accountants in

Australia and a Chartered Accountantof the Malaysian Institute of Accountants.In 1995, he attended the Asian Institute ofManagement, Management DevelopmentProgram.

He currently sits on the board of TracomaHoldings Berhad.

He is not related to any director and/or major shareholders of the Companyand there is no business arrangementwith the Company in which he hasa personal interest.

He has not been convicted for any offenceswithin the past 10 years other than trafficoffences, if any.Richard George Azlan Bin Abas

Independent Non-Executive Director

Dato’ Seri Talaat Bin Husain, a Malaysianaged 58, is an Independent Non-ExecutiveDirector of Silver Bird Group Berhad.Dato’ Seri Talaat Bin Husain wasappointed to the Board on 5 March 2007and he is a member of the NominationCommittee. He holds a Masters inProfessional Studies from CornellUniversity, USA majoring in InternationalPlanning. Dato’ Seri Talaat bin Husainhas attended Senior Executive Program,London Business School, United Kingdomand Advanced Management Program,Harvard Business School, U.S.A.

He started his civil service career as anAssistant State Secretary in Penang andhad since then held several vital posts inthe Malaysian Centre for DevelopmentStudies, Socio-Economics ResearchUnit, National Institute for PublicAdministration, National Palace, theMinistry of Education and as Mayorof Ipoh City, Perak.

He also held the position of the SecretaryGeneral of the Ministry of Youth and

Sports and later appointed as theSecretary General of the Ministryof Domestic Trade and Consumer Affairs.Whilst in the government service, he wasthe Chairman of Company Commissionof Malaysia and Board Member ofMalaysia Communication and MultimediaCorporation, Sepang International Circuitand Intellectual Property Corporationof Malaysia.

Currently, he is a director of Shell RefiningCompany (Federation of Malaya) Berhad,Konsortium Logistic Berhad and OutwardBound Trust of Malaysia.



Dato’ Seri Talaat Bin HusainIndependent Non-Executive Director

Directors’Profile

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(cont’d)

Dato’ Lee Kok Chuan, a Malaysian aged49, was appointed to the Board on3 January 2008 as a Non-IndependentNon-Executive Director of Silver Bird GroupBerhad and also a member of the AuditCommittee. He graduated with a Bachelorof Economics (Accounting Major) fromMonash University, Melbourne in 1983 andis a Fellow Member of the Institute ofChartered Accountants in Australia.

He has over 10 years of working experiencein the fields of accounting, auditing andcorporate services with major internationalaccounting firms including Messrs Ernst& Whinney (Kuala Lumpur) (now knownas Ernst & Young), Messrs Arthur Young(Melbourne) and subsequently MessrsErnst & Young (Melbourne). He joinedBerjaya Land Berhad as Senior Manager,Internal Audit in 1994 and was responsiblefor its internal audit functions. He was an

Executive Director of Berjaya Group Berhadfrom January 2000 to September 2001.

He is currently a Director of Berjaya CapitalBerhad and MOL Accessportal Berhad.He also holds directorships in severalother private limited companies in theBerjaya Corporation group of companies.Dato’ Lee Kok Chuan is a representativeof Berjaya Corporation Berhad on theBoard of Silver Bird Group Berhad.



Dato’ Lee Kok ChuanNon-Independent

Non-Executive Director

Adi Azuan Bin Abdul Ghani, a Malaysianaged 38, was appointed to the Board on3 January 2008 as a Non-IndependentNon-Executive Director of Silver BirdGroup Berhad. He graduated with a BSc(Honours) Accounting from Queen’sUniversity of Belfast, United Kingdom in1993 and Association of CharteredCertified Accountants (“ACCA”) fromEmile Woolf College, London, UnitedKingdom in 1995. He is a Fellow Memberof the ACCA and also a member of theMalaysian Institute of Accountants (MIA).

He started his professional career in theauditing and accounting fields withMessrs PricewaterhouseCoopers, KualaLumpur in year 1996. He was thenpromoted to the position of Manager inyear 2002 and involved in the provisionof audit and accounting services mainlyto banking and financial institutions before

joining Lembaga Tabung Haji as theDivisional Head of Group Finance in July2002. Presently, he is the Deputy GroupChief Financial Officer of LembagaTabung Haji.

He is currently also a Director of LityanHoldings Berhad and Y.S.P SoutheastAsia Holding Berhad. Adi Azuan BinAbdul Ghani is a representative of LembagaTabung Haji on the Board of Silver BirdGroup Berhad.

He is not related to any director and/or major shareholders of the Companyand there is no business arrangementwith the Company in which he hasa personal interest.


Adi Azuan Bin Abdul GhaniNon-Independent

Non-Executive Director

Directors’Profile

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(cont’d)

Peter John McLoghlin, an Australianaged 64, was appointed to the Board on3 January 2008 as a Non-IndependentNon-Executive Director of Silver BirdGroup Berhad and a member of theRemuneration Committee. He holds aBachelor of Engineering (Electrical) fromMelbourne University, Australia in 1966and obtained a Master of BusinessAdministration from Monash University,Australia in 1973.

He has an extensive Fast MovingConsumer Goods (“FMCG”) experiencewith Australian and Multinational companiesincluding Mars Confectionary, Kimberly-Clark Australia and the Goodman Fieldergroup. Prior to his current appointment,he joined Green’s Foods Limited

(“Green’s”) as Chief Operating Officer inMay 2002 and was Managing Directorfrom September 2002 until July 2004.He remained as non executive director inthe Green’s Board until early 2007. PeterJohn McLoghlin is a representative ofCVC Limited on the Board of Silver BirdGroup Berhad.



Vanda Russell Gould, an Australianaged 61, was appointed as an alternateDirector to Peter John McLoghlin on3 January 2008. He holds a Bachelor ofCommerce Degree in Accountancy(UNSW) and Master of CommerceDegree in Accounting and FinancialManagement (UNSW)

He is a fellow of The Institute of CharteredAccountants in Australia and Fellow ofCPA, Australia. He is also an AssociateFellow of the Australian Institute ofManagement and holds Australian FinancialServices Licences issued under theFinancial Services Reform Act.

He commenced work as a CharteredAccountant in 1969 and worked forMessrs Ernst & Young and GreenwoodChalloner. He established a firm ofChartered Accountants (now known asGould Ralph) in May 1976, He hasextensive experience in corporaterestructuring and turn-around situations

with specialised knowledge in taxationand law. He is a Registered Liquidatorand Registered Trustee. He was thefounder and executive chairman of CVCLimited (“CVC”) in 1985. CVC was one ofonly two venture capital companies notassociated with a major financial institutionwhich were awarded AustralianGovernment Management and InvestmentCompanies Licences in 1985. He hasestablished a number of commercialbusinesses and initiated more than tensuccessful public company floatations,including CVC and Sunland Group Limited.

He is not related to any director and/ormajor shareholders of the Company andthere is no business arrangement withthe Company in which he has a personalinterest.

He has not been convicted for any offenceswithin the past 10 years other than trafficoffences, if any.

Vanda Russell GouldNon-IndependentNon-Executive DirectorAlternate Director to Peter John McLoghlin

Peter John McLoghlinNon-IndependentNon-Executive Director

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SeniorManagement

from left to right

i Lai Poh MeiGeneral ManagerAccounts & Finance

ii Ong Choon WahGeneral ManagerProduction

iii George TanGeneral ManagerCorporate Finance,Banking & Administration

iv Mohd Hisham HarunGeneral ManagerHalal Integrity

v Goh Wei HorSenior General ManagerConsumer Food

vi Edmond TanHead of MultiCom Division

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CorporateSocial Responsibility

Silver Bird Group Berhad has come up with a programme to donatetwo loaves of bread each to 1,000 households every week in theKlang Valley. The programme was officially launched by YBhgDatuk Faizah Mohd Tahir, Secretary-General of the Ministry ofWomen, Family and Community Development on 15 July 2008.

The families will receive the High 5 bread for a one-year period.The Group worked hand-in-hand with the Social Welfare Departmentto identify families who were in need of the assistance.

Launching of the programme by Datuk Faizah (second from left). From theleft is Social Welfare Department director, Adnan Abu Bakar, director ofSilver Bird Group Berhad, Dato' Seri Talaat and Group Managing Director,Dato' Jackson Tan.

BREAD FOR THE POORFOR A YEAR

A staff serving out some goodies to the recipientsafter the launching ceremony.

Datuk Faizah having a chat with some of therecipients after presenting the aid to them.

Silver Bird Group Berhad's contribution of RM250,000.00 to YayasanHarapan Kanak-Kanak Malaysia (YHKM) in relation to Projek Harapan High5 was made to YHKM during the Ground Breaking ceremony of RumahHarapan Kanak-Kanak Malaysia on 14 February 2008 together with theDeputy Prime Minister, YAB Dato' Seri Mohd Najib Tun Abdul Razak andYABhg Datin Paduka Seri Rosmah Mansor.

The ceremony was held at Kg. Baru Labu Lanjut, Salak Tinggit, SelangorDarul Ehsan.

PROJEK HARAPAN HIGH 5

Statement OnCorporate Governance

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The Board of Directors (“Board”) of Silver Bird Group Berhad remains committed towards ensuring the highest standardof corporate governance is maintained throughout the Company and its subsidiaries (“the Group”). Hence, the Board is fullydedicated to continuously evaluating the Group’s corporate governance practices and procedures to ensure the principles andbest practices in corporate governance as promulgated by the Malaysian Code on Corporate Governance (“the Code”) is appliedand adhered to in the best interests of the stakeholders. The Board is pleased to report to the shareholders the manner in whichthe Group has applied these principles and best practices, and where these best practices of the Code were not adopted duringthe financial year if any, they are explained in the relevant paragraphs.

THE BOARD OF DIRECTORS

(a) Composition and Balance

The Company is led by an effective and experienced Board, encompassing of 9 members, made up of 4 Independent Non-Executive Directors including the Chairman, 3 Non-Independent Non-Executive Directors and 2 Executive Directors. Thiscomposition satisfies the Bursa Securities Listing Requirements that requires at least 2 Directors or 1/3 of the Boardwhichever is higher, are Independent Directors. The profiles of the members of the Board are set out on page 10 to page 14of this Annual Report.

The role of the Independent Non-Executive Directors is to provide objective and independent inputs to the decision makingprocess of the Board so as to provide an effective check and balance. The Board composition brings together group ofextensively experienced Directors who are from diverse backgrounds and have a wide range of skills and experiences inareas relevant to managing and directing the Group’s operations.

The Executive Directors are primarily responsible for the implementation of policies and decisions of the Board, overseeingthe Group’s operations and developing the Group’s business strategies.

The Board did not appoint a Senior Independent Non-Executive Director to whom concerns maybe conveyedas the Chairman of the Board encourages the active participation of each and every Board member in the decision makingprocess.

(b) Duties and Responsibilities

The main focus of the Board is on the overall strategic leadership, identification and management of principal risks anddevelopment and control of the Group. The Board has delegated specific responsibilities to Board Committees, all of whichdischarge the duties and responsibilities within their respective Terms of Reference.

The roles of the Chairman and Group Managing Director are clearly distinct to ensure that there is a balanceof power and authority. The Chairman is primarily responsible for the effective and efficient conduct and working of the Boardwhilst the Group Managing Director is responsible for the daily management of the Group’s operations and implementationof the policies and strategies adopted by the Board.


THE BOARD OF DIRECTORS (cont’d)

(c) Board Meetings

The Board meets regularly on a quarterly basis with additional meetings being convened when necessary.In the meetings, the Board will deliberate on and consider matters relating to the Group’s financial performance, significantinvestments, corporate development, strategic issues and business plan. For the financial year ended 31 October 2008, the Board met 7 times. The meeting attendance records of the Directors who held office are set out below:

Name of Director Designation No. of meetings attended

Dato’ Dr Gan Khuan Poh Independent 7/7(Chairman) Non-Executive Director

Dato’ Jackson Tan Han Kook Group Managing Director 7/7

Ching Siew Cheong Group Executive Director 7/7

Lim Hock Chye Independent 7/7Non-Executive Director

Richard George Azlan Bin Abas Independent 5/7Non-Executive Director

Dato’ Seri Talaat Bin Husain Independent 6/7Non-Executive Director

Adi Aduan Bin Abdul Ghani Non-Independent 4/5(appointed on 3 January 2008) Non-Executive Director

Dato’ Lee Kok Chuan Non-Independent 4/5(appointed on 3 January 2008) Non-Executive Director

Peter John McLoghlin Non-Independent 3/5(appointed on 3 January 2008) Non-Executive Director

Vanda Russell Gould Non-Independent 1/5(Alternate Director to Peter John McLoghlin) Non-Executive Director(appointed on 3 January 2008)

Board meetings are structured with a pre-set agenda which encompass all aspects of matters under discussion. The Boardpapers are circulated to directors well in advance of the board meetings for their deliberation. All meetings of the Board areduly recorded in the Board Minutes.

Senior management may be invited to attend these meetings to explain and clarify matters being tabled.

In furtherance of their duties, the Board has unrestricted access to any information pertaining to the Group as well as to theadvice and services of the Company Secretary and independent professional advisers whenever appropriate at theGroup’s expense.

(d) Appointment and Re-election of Directors

Any new appointments to the Board will require deliberation by the full Board guided by formal recommendations by theNomination Committee. Board members who are appointed by the Board are subject to retirement at the first Annual GeneralMeeting (“AGM”) of the Company subsequent to their appointment. Article 97 of the Company’s Article of Association alsoprovides that at least one-third (1/3) of the Directors shall retire by rotation at each AGM and that all Directors shall retire onceevery three (3) years. A retiring Director shall be eligible for re-election.

Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance withSection 129(6) of the Companies Act, 1965 (“the Act”).

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THE BOARD OF DIRECTORS (cont’d)

(e) Directors’ Training

Throughout the financial year, the Directors have attended various conferences, seminars and programmes, including speakingengagements, to enhance their skills and knowledge. The Board will continue to evaluate and determine the training needsof its Directors on an ongoing basis.

For new Directors, the Nomination Committee ensures that they undergo an orientation program so that they are familiar with theGroup’s operation and current business issues.

BOARD COMMITTEES

Apart from the Audit Committee, there are two other additional committees established to assist the Board in the execution of itsresponsibilities. All the committees are provided with written terms of reference. Details of the Board committees are as follows.

(a) Nomination Committee

The Nomination Committee has three (3) members, all of whom are Independent Non-Executive Directors. The members of theNomination Committee are:

i) ChairmanDato’ Dr Gan Khuan Poh – Independent Non-Executive Director

ii) MembersRichard George Azlan Bin Abas – Independent Non-Executive DirectorDato’ Seri Talaat Bin Husain – Independent Non-Executive Director

The Nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board ofDirectors in their responsibilities in nominating new directors to the Board and Board Committees. The Committee alsoreviews the Board of Directors composition and balance as well as considering the Board of Directors’ succession planning.

The members met twice during the financial year.

The Board considers that the current mix of skills and experience of its members is sufficient for the discharge of its dutiesand responsibilities effectively.

(b) Remuneration Committee

The Remuneration Committee comprises three (3) members with the majority being Independent Directors. TheRemuneration Committee is to assist the Board of Directors in their responsibilities in reviewing and assessing theremuneration packages of the executive directors. The members of the Remuneration Committee are:

i) ChairmanLim Hock Chye – Independent Non-Executive Director

ii) MembersRichard George Azlan Bin Abas – Independent Non-Executive DirectorPeter John McLoghlin – Non-Independent Non-Executive Director

The Remuneration Committee is responsible for recommending to the Board the remuneration framework for theremuneration package of each Executive Director.

This includes recommending remuneration packages necessary to attract, retain and motivate the Directors, and is reflectiveof the Directors’ experience and level of responsibilities.

None of the Executive Directors participate in any way in determining their individual remuneration. The remuneration of theExecutive Directors is to be reviewed annually. The remuneration and entitlements of the Non-Executive Directors shall be amatter to be decided by the Board as a whole.

The Remuneration Committee met once during the financial year. The meeting was attended by all its members to discuss theremuneration package of Directors that commensurate with corporate and individual performance.

(c) Audit Committee

The Board had complied with the changes to the Code which recommends that the Audit Committee should comprisewholly Non-Executive Directors.

The detailed report of the Audit Committee is set out on pages 23 to 25.


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DIRECTORS’ REMUNERATION

The details of the remuneration of each Director during the financial year ended 31 October 2008 are as follows:

(a) Total Remuneration

Executive Non-ExecutiveDirectors Directors TotalRM ‘000 RM ‘000 RM ‘000

Basic Salary 1,478 0 1,478Fees 0 246 246Attendance fee 0 35 35Benefit-in kind 26 0 26

Total 1,504 281 1,785

(b) Directors’ remuneration by bands

The number of Directors whose total remuneration falls within the following bands during the financial year ended 31 October 2008is as follows:

Directors’Remuneration Executive Directors Non-Executive Directors Total

RM1 to RM50,000 - 6 6RM50,001 to RM100,000 - 1 1RM450,000 to RM500,000 1 - 1RM1,050,000 to RM1,100,000 1 - 1

Details of individual Director’s Remuneration are not disclosed in this report as the Board considers that the aboveRemuneration disclosures by band and analysis between Executive and Non-Executive Directors satisfies the accountabilityand transparency aspects of the Code.

SHAREHOLERS

(a) Shareholders and Investors Relations

The Board acknowledges the importance of accountability to the shareholders. Timely release of the financial resultson a quarterly basis, press releases and announcements provide an overview of the Group’s performance and operations toits shareholders.

Information disseminated to the investment community is in accordance to Bursa Malaysia disclosure rules and regulations.The Board has taken steps to ensure that no market sensitive information is disclosed to any party prior to making an officialannouncement to Bursa Securities.

The Group has also established a website at www.silverbird.com.my from which shareholders as well as members of thepublic may access for the latest information on operations and activities of the Group.

During the year, the Executive Directors and senior management hold regular dialogues and briefings with existing andprospective investors and analysts to keep them updated on various announcements relating to the Group’s financialperformance, major corporate proposals and pertinent issues.

(b) Annual General Meeting

The Annual General Meeting (“AGM”) is the principal platform for dialogue with the shareholders. At the AGM, the Boardpresents the progress and performance of the Group to provide shareholders with the opportunity to question the businessissues, concerns and operations in general. The Board will also ensure that each item of special business is included in thenotice of the AGM and will be accompanied by an explanation of the effects of the proposed resolutions.


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ACCOUNTABILITY AND AUDIT

(a) Financial Reporting

In presenting the annual financial statements and quarterly announcements to shareholders, the Directors aim to ensure thatthe financial statements and quarterly announcements are prepared in accordance with the Companies Act, 1965 andapplicable approved accounting standards so as to offer a balanced and comprehensive assessment of the Group’s financialposition and prospects.

A Responsibility Statement by the Directors is set out on page 28 of this Annual Report.

(b) Internal Control

The Group’s Statement on Internal Control is set out on pages 26 to 27 of the annual report to provide an overview on thestate of internal control throughout the year.

In relation to the internal audit function, having considered the Group’s operational requirements, the Board is of the view thatthe Group should still continue to outsource its internal audit function to external consultants. Nevertheless, this outsourcingarrangement shall be reviewed annually to ensure that it continues to meet the Group’s requirements. The outsourced internalauditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency andeffectiveness of the Group’s internal control systems. They report directly to the Audit Committee.

(c) Relationship with Auditors

The Group maintains a professional and transparent relationship with its external auditors. The external auditors will, fromtime to time, highlight to the Audit Committee and the Board of Directors matters that require their attention.

The role of the Audit Committee in relation to the external auditors is explained in the Audit Committee Report set out onpages 23 to 25 of the annual report.

(d) Non-Audit Fees

There was no non-audit fees paid to external auditors by the Group for the financial year ended 31 October 2008.

OTHER INFORMATION

(a) Share Buy-Back

The details of share bought back during the financial year are set out as below:-

Number of TotalSilver Bird Highest Lowest Average amount

Shares Purchased price price price paid*RM RM RM RM

As at 1 November 2007 827,500 0.435 0.375 0.402 324,797.9521 November 2007 1,000 0.900 0.900 0.900 913.36

Total 828,500 325,711.31

* Including brokerage, commission, clearing house fee and stamp duty.

The details treasury shares resold during the financial year are as follows:-

Number of TotalShares Highest Lowest Average consideration

Sold price price price receivedRM RM RM RM

January 2008 528,800 1.01 0.96 0.992 522,780.82February 2008 299,700 1.00 0.94 0.979 292,248,86

Total 828,500 815,029.68

During the financial year, all the treasury shares held by the Company were resold. As at 31 October 2008, the Companydoes not hold any treasury shares.

OTHER INFORMATION (cont’d)

(b) Options, Warrants or Convertible Securities

During the financial year, the Company had issued 50,527 new ordinary shares of RM0.50 each pursuant to the conversionof RM34,360 nominal value of 1% Irredeemable Convertible Unsecured Loan Stocks 2004/2009 at a conversation priceof RM0.68 per new ordinary share.

(c) Material Contracts involving Directors’ Interests

There were no contracts involving directors’ interests which are or may be material, not being contracts entered into in theordinary course of business, which have been entered into by the Company and its subsidiary companies since the endof the previous financial year

(d)

R e


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AuditCommittee Report

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The Board of Directors of Silver Bird Group Berhad is pleased to present the report of the Audit Committee for the financial yearended 31 October 2008.

Composition and Meetings

The members of the Audit Committee and details of their attendance at meetings during the financial year ended 31 October 2008are as follows:

Number of Attendance ofmeetings meetings

Chairman : Richard George Azlan Bin Abas 4 4(Independent Non-Executive Director)

Members : Lim Hock Chye 4 4(Independent Non-Executive Director)

Dato’ Lee Kok Chuan 4 4(Non-Independent Non-Executive Director)

Senior Management staff and the external consultants, to whom the internal audit function was outsourced to,attended the meetings at the invitation of the Audit Committee. The agenda of the meetings and relevantinformation are distributed to its members with sufficient notice. The proceedings of the meetings are formalisedin the form of meeting minutes by the Secretary, who is appointed by the Board, during the Audit Committeemeetings.

Summary of Activities of the Audit Committee

The following activities were undertaken by the Audit Committee during the financial year ended 31 October 2008:-

(a) Reviewed the unaudited quarterly report on the consolidated results of the Group for the quarters ended31 October 2007, 31 January 2008, 30 April 2008 and 31 July 2008.

(b) Reviewed and approved the internal audit plan prepared by the Internal Audit Function.

(c) Reviewed the internal audit reports and ensured the implementation of the action plans are carried out byManagement on a timely basis

(e) Reviewed the audit plan of the external auditors.

(f) Reviewed the annual audited financial statements, external auditors’ reports and their audit findings.

(g) Reviewed related party transactions and considered conflict of interest situation that may arise within the Group.

Summary of Activities of the Internal Audit Function

The activities of the Internal Audit Function during the financial year were as follows:

(a) develop the internal audit plan for year 2008;

(b) execution of the approved internal audit plan;

(c) presentation of the internal audit findings at the quarterly Audit Committee meetings. All findings raised bythe Internal Audit Function have been appropriately addressed by Management; and

(d) conducted follow up reviews to ensure that action plans are properly and appropriately implementedby Management.

The internal audits conducted did not reveal weaknesses which would result in material losses, contingencies oruncertainties that would require disclosure in the annual report.


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TERMS OF REFERENCE OF AUDIT COMMITTEE

1. Composition

The Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members.All the audit committee members must be non-executive directors with a majority of whom shall be independentdirectors and at least one (1) member must be a member of the Malaysian Institute of Accountants orpossess such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad(“Bursa Securities”).

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

In the event of any vacancy with the result that the number of members is reduced to below three (3),the vacancy must be filled within three (3) months.

2. Chairman

The Chairman, who shall be elected by the Audit Committee, shall be an independent non executive director.

3. Secretary

The Company Secretary shall be the Secretary of the Committee and shall be responsible, in conjunction withthe Chairman, for drawing up the agenda and circulating it prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulatingthem to the Committee Members.

4. Meetings

The Committee shall meet at least four (4) times in each financial year. The quorum for a meeting shall be two(2) members, provided that the majority of members present at the meeting shall be independent.

The Committee Members may call for a meeting as and when required with reasonable notice as the CommitteeMembers deem fit. The Committee Members may participate in a meeting by means of conferencetelephone, conference videophone or any similar or other communications equipment by means of which allpersons participating in the meeting can hear each other. Such participation in a meeting shall constitutepresence in person at such meeting.

The internal auditors and external auditors have the right to appear at any meeting of the Audit Committeeand shall appear before the Committee when required to do so by the Committee. The internal auditors andexternal auditors may also request a meeting if they consider it necessary.

5. Rights

The Audit Committee shall:

(a) have authority to investigate any matter within its terms of reference;(b) have the resources which are required to perform its duties;(c) have full and unrestricted access to any information pertaining to the Group;(d) have direct communication channels with the external auditors and person(s) carrying out the internal

audit function or activity;(e) have the right to obtain independent professional or other advice at the Company’s expense;(f) have the right to convene meetings with the internal auditors and external auditors, excluding the

attendance of the executive directors or employees of the Group, whenever deemed necessary; (g) promptly report to the Bursa Securities matters which has not been satisfactorily resolved by the Board

of Directors resulting in a breach of the listing requirements;(h) the Chairman shall call for a meeting upon the request of the internal auditors and external auditors; and(i) have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman

shall have the casting vote should a tie arise.

(cont’d)


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TERMS OF REFERENCE OF AUDIT COMMITTEE (cont’d)

6. Duties

(a) To review with the external auditors on:• the audit plan, its scope and nature;• the audit report;• the results of their evaluation of the accounting policies and systems of internal accounting controls within the

Group; and• the assistance given by the officers of the Company to external auditors, including any difficulties or disputes with

Management encountered during the audit.

(b) To do the following, in relation to internal audit function:• review the adequacy of the scope, functions, competency and resources of the internal audit function, and that

it has the necessary authority to carry out its work;• review the internal audit programme and results of the internal audit process and, where necessary, ensure that

appropriate actions are taken on the recommendations of the internal audit function;• review any appraisal or assessment of the performance of members of the internal audit function;• approve any appointment or termination of senior staff members of the internal audit function; and• take cognisance of resignations of internal audit staff members and provide the resigning staff member an

opportunity to submit his reasons for resigning.

(c) To provide assurance to the Board of Directors on the effectiveness of the system of internal controls and riskmanagement practices of the Group.

(d) To review with management:• audit reports and management letter issued by the external auditors and the implementation of audit recommendations;• interim financial information; and• the assistance given by the officers of the Company to external auditors.

(e) To monitor related party transactions entered into by the Company or the Group and to determine if such transactionsare to be undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to therelated parties than those generally available to the public, and to ensure that the Directors report such transactionsannually to shareholders via the annual report and to review conflict of interest that may arise within the Company or theGroup including any transaction, procedure or course of conduct that raises questions of management integrity.

(f) To review the quarterly reports on consolidated results and annual financial statements prior to submission to the Boardof Directors, focusing particularly on:• changes in or implementation of major accounting policy and practices;• significant and/or unusual issues arising from the audit;• the going concern assumption; • compliance with accounting standards and other legal requirements; and• major judgemental areas.

(g) To consider the appointment and/or re-appointment of internal and external auditors, the audit fee and any questionsof resignation or dismissal including recommending the nomination of person or persons as auditors.

(h) To verify any allocation of options in accordance with the employees share scheme of the Company, at the end of thefinancial year.

Statement OnInternal Control

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INTRODUCTION

Pursuant to paragraph 15.27 (b) of the Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) andas guided by the Bursa Malaysia’s Statement on Internal Control: Guidance for Directors of Public Listed Companies (“the Guidance”),the Board of Directors (“the Board”) of Silver Bird Group Berhad is pleased to include a statement on the state of the Group’sinternal controls in the annual report.

RESPONSIBILITY

The Board acknowledges its responsibility and re-affirms its commitment in maintaining a sound system of internal controlto safeguard shareholders’ investments and the Group’s assets as well as reviewing the adequacy and integrity of the systemof internal control.

However, as there are inherent limitations in any system of internal controls, such systems put into effect by Management canonly reduce but cannot eliminate all risks that may impede the achievement of the Group’s business objectives. Therefore, the internalcontrol system can only provide reasonable and not absolute assurance against material misstatement or loss.

KEY FEATURES OF THE GROUP’S INTERNAL CONTROL SYSTEM

1. CONTROL ENVIRONMENT

• Organisation Structure & Authorisation Procedures

The Group maintains a formal organisation structure with well-defined delegation of responsibilities and accountabilitywithin the Group’s Senior Management. It sets out the roles and responsibilities, appropriate authority limits, review andapproval procedures in order to enhance the internal control system of the Group’s various operations.

• Periodical and/or Annual Budget

Budgetary control for every operations of the Group, where actual performance is closely monitored against budgetsto identify and to address significant variances.

• Group Policies and Procedures

The Group has adequate documented policies and procedures that are regularly reviewed and updated to ensure thatit maintains its effectiveness and continues to support the Group’s business activities at all times as the Group continuesto grow.

• Human Resource Policy

Comprehensive guidelines on the employment and retention of employees are in place, to ensure that the Group has a teamof employees who are well trained and equipped with all the necessary knowledge, skills and abilities to carry out theirresponsibility effectively.

2. RISK MANAGEMENT FRAMEWORK

Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains an on-goingcommitment to enhance the Group’s control environment and processes. The key risks relating to the Group’s operationsand strategic and business plans are addressed at Management’s periodic meetings. Significant risks identified are broughtto the attention of the Board at their scheduled meetings.

During the financial year ended 31 October 2008, Management with the assistance of external consultants has updated theGroup’s key risk profile which has been presented to the Audit Committee in March 2008. Risks identified were prioritised interms of likelihood of their occurrence and the impact on the achievement of the Group’s business objectives/goals.The key risk profile shall be updated on a regular basis to ensure that all key risks are identified and adequate responses aredevised and continue to be relevant in mitigating these risks.

The abovementioned practices/initiatives by Management serves as the on-going process used to identify, evaluate andmanage significant risks.

Statement OnInternal Control

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KEY FEATURES OF THE GROUP’S INTERNAL CONTROL SYSTEM (cont’d)

3. INTERNAL AUDIT FUNCTION

The Group’s internal audit function is outsourced to external consultants. The outsourced internal auditors assist the Boardand the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’sinternal control systems. They report directly to the Audit Committee and internal audit plans are tabled to the AuditCommittee for review and approval to ensure adequate coverage.

On a quarterly basis, the Group’s internal auditors table the results of their review of the business processes of differentoperating units to the Audit Committee at their scheduled meetings. The status of the implementation of corrective actionsto address control weaknesses are also followed up by the internal auditors to ensure that these actions have beensatisfactorily implemented.

During the financial year under review, identified weaknesses in internal controls have been appropriately addressed andSenior Management will continue to ensure that appropriate action is taken to enhance and strengthen the internalcontrol environment.

4. INFORMATION AND COMMUNICATION

Information critical to the achievement of the Group’s business objectives are communicated through established reportinglines across the Group. This is to ensure that matters that require the Board and Senior Management’s attention arehighlighted for review, deliberation and decision on a timely basis.

5. MONITORING AND REVIEW

Scheduled management meetings are held to discuss and review the business planning, budgeting, financial and operationalperformances.

• Financial and Operational Review

The monthly management accounts and the quarterly financial statements containing key financial results, operationalperformance results and comparisons of performance against budget are presented to the Board for their review,consideration and approval.

• Business Planning and Budgeting Review

The Board plays an active role in discussing and reviewing the business plans, strategies, performance and risks facedby the Group.

6. CONCLUSION

The Board is of the view that the Group’s system of internal controls is adequate to safeguard shareholders’ investments andthe Group’s assets. However, the Board is also cognizant of the fact that the Group’s system of internal control and riskmanagement practices must continuously evolve to meet the changing and challenging business environment. Therefore,the Board will, when necessary, put in place appropriate action plans to further enhance the system of internal controls.

This statement was approved by the Board of Directors on 23 February 2009.

Statement OfDirectors’ Responsibility

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The Board is fully accountable to ensure that the financial statements are drawn up in accordance with Companies Act, 1965and the applicable approved accounting standards set by Malaysian Accounting Standards Board so as to give a true and fairview of the state of affairs of the Group and the Company as at 31 October 2008 and of the results and cash flows of the Groupand Company for the financial year ended on that date.

In the process of preparing these financial statements, and other than as disclosed in the notes to the financial statements, theDirectors have reviewed the accounting policies and practices to ensure that they were consistently applied throughout the year.

In cases where judgment and estimates were made, they were based on reasonableness and prudence. Additionally, thedirectors have relied on the system of internal controls to ensure that the information generated for the preparation of the financialstatements from the underlying accounting records is accurate and reliable.

This statement is made in accordance with a resolution of the Board of Directors dated 23 February 2009.

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Directors’ Report Statement By DirectorsStatutory DeclarationIndependent Auditors’ ReportBalance SheetsIncome StatementsStatements Of Changes In EquityCash Flow StatementsNotes To The Financial Statements

Financial Statements303535363739404244

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial yearended 31 October 2008.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding whilst the principal activities of the subsidiaries are set out inNote 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

THE GROUP THE COMPANYRM’000 RM’000

Loss after taxation for the financial year (21,275) (731)Minority interests 66 -

Loss attributable to equity holders of the Company (21,209) (731)

DIVIDENDS

No dividend was declared or paid since the end of the previous financial year and the directors do not recommend the paymentof any dividend for the current financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised share capital of the Company.

(b) the Company increased its issued and paid-up share capital from RM117,769,050.50 to RM157,058,717.50 by way of:-

(i) the conversion of RM34,358 nominal value 1% Irredeemable Convertible Unsecured Loan Stocks into 50,527 ordinaryshares of RM0.50 each, at a conversion price of RM0.68 per new ordinary share; and

(ii) the allotment of 78,528,807 new ordinary shares of RM0.50 each at an issue price of RM0.66 per share through a rightsissue on the basis of 2 new ordinary shares for every 6 existing ordinary shares held for working capital purposes.The shares were issued for cash consideration.

All the new shares issued during the financial year rank pari passu in all respects with the existing shares of the Company.

(c) there were no issues of debentures by the Company during the financial year.

Directors’Report

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1% IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS 2004/2009 (“ICULS”)

Pursuant to a Trust Deed dated 6 February 2004, the Company issued RM20,500,000 nominal value ICULS 2004/2009 as partialdischarge of the purchase consideration for the acquisition of a subsidiary. The principal terms of the ICULS are disclosed in Note 21to the financial statements.

The movements in the ICULS during the financial year are as follows:-

NUMBER OF ICULS OF RM0.50 EACHAT AT

1.11.2007 ISSUED CONVERTED 31.10.2008

ICULS 2004/2009 154,100 - 68,720 85,380

TREASURY SHARES

The movements of treasury shares during the financial year are as follows:-

PRICE PER SHARE TOTALNO. OF CONSIDERATION

DATE LOWEST HIGHEST AVERAGE SHARES RM’000

Balance at 1 November 2007 827,500 323November 2007 0.900 0.900 0.900 1,000 1

828,500 324February 2008 0.970 1.000 0.985 (828,500) (889)

At 31 October 2008 - (565)

During the financial year, all the treasury shares were sold for a total consideration of RM889,000 resulting in a gain of RM565,000which was recognised in the statements of changes in equity.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertainthat action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfiedthemselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would further require the writing off of bad debts,or the additional allowance for doubtful debts in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertainthat any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including theirvalue as shown in the accounting records of the Group and of the Company, have been written down to an amount which theymight be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the currentassets in the financial statements of the Group and of the Company misleading.

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VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to theexisting methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

The contingent liability of the Company is disclosed in Note 44 to the financial statements. At the date of this report, there doesnot exist:-

(i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which securesthe 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.

No contingent or other liability of the Group and of the Company has become enforceable or is likely to become enforceable withinthe period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affectthe ability of the Group and of the Company to meet their obligations when they fall due.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financialstatements of the Group and of the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors,substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or eventof a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of theGroup and of the Company for the financial year.

DIRECTORS

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

DATO’ PROF. DR. GAN MIEW CHEE @ GAN KHUAN POHDATO’ TAN HAN KOOKCHING SIEW CHEONG LIM HOCK CHYERICHARD GEORGE AZLAN BIN ABASDATO’ SERI TALAAT BIN HUSAINADI AZUAN BIN ABDUL GHANIDATO’ LEE KOK CHUANPETER JOHN MCLOGHLINVANDA RUSSELL GOULD (ALTERNATE DIRECTOR TO PETER JOHN MCLOGHLIN)

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DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in sharesin the Company and its related corporations during the financial year are as follows:-

NUMBER OF ORDINARY SHARES OF RM0.50 EACHAT AT

1.11.2007 BOUGHT SOLD 31.10.2008

DIRECT INTERESTS

DATO’ TAN HAN KOOK 34,530,652 11,510,214 - 46,040,866CHING SIEW CHEONG 4,355,581 973,710 - 5,329,291RICHARD GEORGE AZLAN BIN ABAS 100,000 33,333 - 133,333

INDIRECT INTEREST

DATO’ TAN HAN KOOK (1) 6,056,279 2,019,800 - 8,076,079VANDA RUSSELL GOULD (2) - 36,876,666 - 36,876,666

(1) Deemed interests through spouse’s shareholdings.

(2) Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.

NUMBER OF WARRANTSAT AT

1.11.2007 BOUGHT SOLD 31.10.2008

WARRANTS A - 2005/2010

DIRECT INTEREST

CHING SIEW CHEONG 150,065 5,552 - 155,617

INDIRECT INTEREST

DATO’ TAN HAN KOOK (1) 319,769 11,829 - 331,598

WARRANTS B - 2008/2013

DIRECT INTERESTS

DATO’ TAN HAN KOOK - 4,316,330 (659,000) 3,657,330CHING SIEW CHEONG - 372,640 - 372,640RICHARD GEORGE AZLAN BIN ABAS - 12,499 - 12,499

INDIRECT INTERESTS

DATO’ TAN HAN KOOK (2) - 757,425 - 757,425VANDA RUSSELL GOULD (3) - 3,757,187 - 3,757,187

(1) Deemed interests through spouse’s shareholdings as well as through Dato’ Tan Han Kook’s interests in Amble Appeal Sdn. Bhd. and TahakoSdn. Bhd. by virtue of Section 6A of the Companies Act 1965 in Malsysia.

(2) Deemed interests through spouse’s shareholdings.

(3) Deemed interests through CVC Limited by virtue of Section 6A of the Companies Act 1965.

By virtue of his interest in shares in the Company, Dato’ Tan Han Kook is deemed to have interests in shares in its relatedcorporations to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act 1965 in Malaysia.

None of the other directors holding office at the end of the financial year had any interest in shares in the Company or its relatedcorporations during the financial year.

Directors’Report

33

Silver B

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(cont’d)

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefitincluded in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, orthe fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporationwith the director or with a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object isto enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any otherbody corporate.

SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

The significant event during the financial year is disclosed in Note 49 to the financial statements.

SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

The significant event subsequent to the balance sheet date is disclosed in Note 50 to the financial statements.

AUDITORS

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

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 23 FEBRUARY 2009

Dato’ Prof. Dr. Gan Miew Chee @ Gan Khuan Poh

Dato’ Tan Han Kook

Directors’Report

34

Silver B

ird Group B

erhad

(cont’d)

StatementBy Directors

35

Silver B

ird Group B

erhad

We, Dato’ Prof. Dr. Gan Miew Chee @ Gan Khuan Poh and Dato’ Tan Han Kook, being two of the directors of Silver Bird GroupBerhad, state that, in the opinion of the directors, the financial statements set out on pages 37 to 73 are drawn up in accordancewith Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the state ofaffairs of the Group and of the Company at 31 October 2008 and of their results and cash flows for the financial year ended onthat date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORS DATED 23 FEBRUARY 2009

Dato’ Prof. Dr. Gan Miew Chee @ Gan Khuan Poh Dato’ Tan Han Kook

StatutoryDeclaration

I, Ching Siew Cheong, I/C No. 620521-10-7055, being the director primarily responsible for the financial management of SilverBird Group Berhad, do solemnly and sincerely declare that the financial statements set out on pages 37 to 73 are, to the bestof my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and byvirtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared byChing Siew Cheong, I/C No. 620521-10-7055, at Kuala Lumpur in the Federal Territoryon this 23 February 2009

Before meMohd Radzi Bin Yasin Ching Siew CheongNo: W 327Commissioner for Oaths

Report on the Financial Statements

We have audited the financial statements of Silver Bird Group Berhad, which comprise the balance sheets as at 31 October 2008of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and otherexplanatory notes, as set out on pages 37 to 73.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordancewith Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes designing, implementingand maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from materialmisstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accountingestimates that are reasonable in the circumstances.

Auditors’ Responsibility

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

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 financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to theCompany’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accountingestimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and theCompanies 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 of31 October 2008 and of their financial performance and cash flows for the financial year then ended.

Report on Other Legal and Regulatory Requirements

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

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

(b) We have considered the financial statements and the auditors’ reports of the subsidiary of which we have not acted as auditors,which is indicated in Note 6 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse commentmade under Section 174(3) of the Act.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Horwath Lee Kok WaiFirm No: AF 1018 Approval No: 2760/06/10 (J)Chartered Accountants Partner

Kuala Lumpur

23 February 2009

IndependentAuditors’ Report

to the members of Silver Bird Group Berhad(Incorporated in Malaysia) (Company No: 277977-X)

36

Silver B

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THE GROUP THE COMPANY2008 2007 2008 2007

NOTE RM’000 RM’000 RM’000 RM’000

ASSETSNON-CURRENT ASSETSInvestments in subsidiaries 6 - - 105,428 105,428Property, plant and equipment 7 155,412 182,085 - -Other receivable 8 14,842 14,842 14,842 14,842Intangible assets 9 36,733 36,735 - -Long-term loan to subsidiaries 10 - - 130,067 104,465

206,987 233,662 250,337 224,735

CURRENT ASSETSInventories 11 18,841 16,631 - -Trade receivables 12 45,826 45,245 - -Other receivables, deposits

and prepayments 13 35,397 12,590 840 330Amount owing by subsidiaries 14 - - 816 829Tax refundable 136 290 - -Short-term deposit with a

financial institution 15 882 - 882 -Fixed deposits with licensed banks 16 227 219 - -Cash and bank balances 16,640 9,227 76 84

117,949 84,202 2,614 1,243

TOTAL ASSETS 324,936 317,864 252,951 225,978

EQUITY AND LIABILITIESEQUITYShare capital 17 157,059 117,769 157,059 117,769Share premium 18 36,066 24,325 36,066 24,325Merger deficit 19 (5,326) (5,326) - -Capital reserve 20 277 277 - -1% Irredeemable Convertible

Unsecured Loan Stocks (“ICULS”) 21 42 76 42 76Warrants reserve 22 7,363 7,363 7,363 7,363Accumulated losses (51,401) (30,757) (5,034) (4,868)Exchange translation reserve (2,270) (792) - -Treasury shares 23 - (323) - (323)

141,810 112,612 195,496 144,342

MINORITY INTERESTS 277 343 - -

TOTAL EQUITY 142,087 112,955 195,496 144,342

BalanceSheets

at 31 October 2008

37

Silver B

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erhad

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


NOTE RM’000 RM’000 RM’000 RM’000

NON-CURRENT LIABILITIESDeferred taxation 24 - 620 - -Long-term borrowings 25 1,056 1,398 - -Bonds 26 26,373 45,271 26,373 45,271

27,429 47,289 26,373 45,271

CURRENT LIABILITIESTrade payables 27 16,837 26,837 - -Other payables and accruals 28 7,662 16,737 1,028 6,309Amount owing to subsidiaries 14 - - 49 51Provision for taxation 173 - 5 5Commercial Papers 29 30,000 30,000 30,000 30,000Short-term borrowings 30 94,782 83,561 - -Bank overdrafts 31 5,966 485 - -

155,420 157,620 31,082 36,365

TOTAL LIABILITIES 182,849 204,909 57,455 81,636

TOTAL EQUITY AND LIABILITIES 324,936 317,864 252,951 225,978

NET ASSETS PER SHARE 32 45.14 sen 47.96 sen

BalanceSheets

at 31 October 2008

38

Silver B

ird Group B

erhad

(cont’d)



NOTE RM’000 RM’000 RM’000 RM’000

REVENUE 34 638,563 606,483 - -

COST OF SALES (579,520) (541,250) - -

GROSS PROFIT 59,043 65,233 - -

OTHER OPERATING INCOME 4,405 1,058 6,745 4,688

63,448 66,291 6,745 4,688

ADVERTISING ANDPROMOTION EXPENSES (3,780) (4,419) - -

ADMINISTRATIVE EXPENSES (20,485) (28,058) (3,741) (4,023)

SELLING ANDDISTRIBUTION EXPENSES (48,472) (34,852) - -

OTHER OPERATING EXPENSES 35 (5,142) 8,653 - -

(LOSS)/PROFIT FROMOPERATIONS (14,431) 7,615 3,004 665

FINANCE COSTS (8,703) (7,569) (4,974) (4,541)

SHARE OF LOSS OF AJOINTLY CONTROLLED ENTITY - (18,443) - -

LOSS BEFORE TAXATION 36 (23,134) (18,397) (1,970) (3,876)

INCOME TAX EXPENSE 37 1,859 2,320 1,239 -

LOSS AFTER TAXATION (21,275) (16,077) (731) (3,876)

ATTRIBUTABLE TO:-Equity holders of the Company (21,209) (15,939) (731) (3,876)Minority interests (66) (138) - -

(21,275) (16,077) (731) (3,876)

LOSS PER SHARE- Basic 38 (7.3 sen) (7.4 sen)- Diluted 38 N/A N/A

N/A - Not applicable

IncomeStatements

for the financial year ended 31 October 2008

39

Silver B

ird Group B

erhad


Statements OfChanges In Equity


40

Silver B

ird Group B

erhad

The

anne

xed

note

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hese

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tem

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ance

at

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5,31

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conv

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f 1%

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--

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--

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afte

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xatio

n fo

r th

efin

anci

al y

ear

--

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--

(15,

939)

--

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(138

)(1

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ase

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wn

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-(3

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(322

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(322

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ance

at

31.1

0.20

07/1

.11.

2007

117,

769

24,3

25(5

,326

)27

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92)

(323

)11

2,61

234

311

2,95

5

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o:-

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on o

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ICU

LS25

9-

-(3

4)-

--

--

--

- rig

hts

issu

e39

,265

12,5

64-

--

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51,8

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--

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--

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--

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(832

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--

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--

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at

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6

Statements OfChanges In Equity

41

Silver B

ird Group B

erhad

(cont’d)

The

anne

xed

note

s fo

rm a

n in

tegr

al p

art

of t

hese

fina

ncia

l sta

tem

ents

.



NOTE RM’000 RM’000 RM’000 RM’000

CASH FLOWS FOROPERATING ACTIVITIES

Loss before taxation (23,134) (18,397) (1,970) (3,876)

Adjustments for:-Allowance for doubtful debts - 72 - -Amortisation of discount on bonds 1,102 1,102 1,102 1,102Amortisation of intangible assets 2 2 - -Bad debts written off 94 57 - -Depreciation on property, plant

and equipment 23,272 19,031 - -(Gain)/Loss on disposal of

plant and equipment (19) 2,942 - -Interest income (1,940) (87) (6,730) (4,688)Interest expense 7,601 6,468 3,872 3,439Property, plant and equipment

written off - 13 - -Writeback of impairment on

property, plant and equipment - (16,794) - -

Operating profit/(loss) beforeworking capital changes 6,978 (5,591) (3,726) (4,023)

Increase in inventories (2,210) (1,682) - -Decrease/(Increase) in trade

and other receivables 3,519 (555) (1,392) 530(Decrease)/Increase in trade

and other payables (19,075) 1,802 (5,281) 6,120Decrease in amount owing

to a jointly controlled entity - (8,901) - -

CASH (FOR)/FROM OPERATIONS (10,788) (14,927) (10,399) 2,627Interest paid (7,601) (6,468) (3,872) (3,439)Net income tax refunded 1,566 78 1,239 -

NET CASH FOR OPERATINGACTIVITIES/BALANCECARRIED FORWARD (16,823) (21,317) (13,032) (812)

Cash FlowStatements


42

Silver B

ird Group B

erhad



NOTE RM’000 RM’000 RM’000 RM’000

BALANCE BROUGHT FORWARD (16,823) (21,317) (13,032) (812)

CASH FLOWS (FOR)/FROMINVESTING ACTIVITIES

Purchase of plant and equipment 39 (23,583) (34,225) - -Additional investment in subsidiaries - - - (16,364)Interest received 1,940 87 6,730 4,688Net cash outflow on the acquisition

of a subsidiary 40 - (4,120) - -Proceeds from disposal of

plant and equipment 187 7,668 - -Advances to a jointly controlledentity - - - 12Net (advances to)/repayment

from subsidiaries - - (25,591) 17,735

NET CASH (FOR)/FROMINVESTING ACTIVITIES (21,456) (30,590) (18,861) 6,071

CASH FLOWS FROM/(FOR)FINANCING ACTIVITIES

Proceeds from disposal oftreasury shares 889 - 889 -

Treasury shares acquired (1) (322) (1) (322)Proceeds from issuance of

ordinary shares, net of expenses 50,997 10,000 50,997 10,000Net increase in bills payable 11,153 7,422 - -Net drawdown of Commercial

Papers - 5,000 - 5,000Net repayment of hire

purchase obligations (459) (426) - -Repayment of bonds (20,000) (20,000) (20,000) (20,000)

NET CASH FROM/(FOR)FINANCING ACTIVITIES 42,579 1,674 31,885 (5,322)

NET INCREASE/(DECREASE)IN CASH AND CASHEQUIVALENTS 4,300 (50,233) (8) (63)

EFFECTS OF FOREIGN EXCHANGETRANSLATION ON CASH AND CASHEQUIVALENTS (1,478) (792) - -

CASH AND CASH EQUIVALENTSAT BEGINNING OF THEFINANCIAL YEAR 8,961 59,986 84 147

CASH AND CASHEQUIVALENTS AT END OFTHE FINANCIAL YEAR 41 11,783 8,961 76 84

Cash FlowStatements

43

Silver B

ird Group B

erhad

(cont’d)



1. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. Thedomicile of the Company is Malaysia. The registered office and principal place of business is at Lot 72, Persiaran Jubli Perak,Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directorsdated 23 February 2009.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are setout in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during thefinancial year.

3. FINANCIAL RISK MANAGEMENT POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for thedevelopment of the Group’s business whilst managing its market, credit, liquidity and cash flow risks. The Group operateswithin clearly defined guidelines that are established by the Audit Committee and approved by the Board and the policies inrespect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign exchange risk on sales and purchases that are denominated in foreign currencies.It manages its foreign exchange exposure by a policy of matching as far as possible receipts and payments in eachindividual currency.

Surpluses of convertible currencies are either retained in foreign currency or sold for Ringgit Malaysia. The Group’sforeign currency transactions and balances are substantially denominated in Singapore Dollar and United States(“US”) Dollar.

Foreign exchange risk is monitored closely and managed to an acceptable level.

(ii) Interest Rate Risk

The Group obtains financing through bank borrowings. Its policy is to obtain the most favourable interest rates available.

Surplus funds are placed with licensed financial institutions at the most favourable interest rates.

(iii) Price Risk

The Group does not have any quoted investments and hence is not exposed to price risk.

(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. Themaximum exposure to credit risk is represented by the total carrying amount of these financial assets in the balancesheet reduced by the effects of any netting arrangements with counterparties.

The Group does not have any major concentration of credit risk related to any individual customer or counterparty.

The Group manages its exposure to credit risk by investing its cash assets safely and profitably, and by the applicationof credit approvals, credit limits and monitoring procedures on an ongoing basis.

(c) Liquidity and Cash Flow Risk

The Group’s exposure to liquidity and cash flow risks arises mainly from general funding and business activities.

It practises prudent liquidity risk management by maintaining sufficient cash balances and the availability of fundingthrough certain committed credit facilities.

Notes To The Financial Statements


44

Silver B

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erhad

4. BASIS OF PREPARATION

The financial statements of the Group and of the Company are prepared under the historical cost convention and modifiedto include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliancewith Financial Reporting Standards (“FRSs”) and the Companies Act 1965 in Malaysia.

(a) During the current financial year, the Group has adopted the following:

(i) FRSs issued and effective for financial periods beginning on or after 1 July 2007:-

FRS 107 Cash Flow StatementsFRS 111 Construction ContractsFRS 112 Income TaxesFRS 118 RevenueFRS 120 Accounting for Government Grants and Disclosure of Government AssistanceFRS 134 Interim Financial ReportingFRS 137 Provisions, Contingent Liabilities and Contingent Assets

FRS 111 and FRS 120 are not relevant to the Group’s operations. The adoption of the other standards did not haveany material impact on the form and content of disclosures presented in the financial statements.

(ii) Amendment to FRS 121 - The Effects of Changes in Foreign Exchange Rates Net Investment in a Foreign Operationissued and effective for financial periods beginning on or after 1 July 2007. The adoption of this amendment didnot have any material impact on the financial statements of the Group.

(iii) IC Interpretations issued and are effective for financial periods beginning on or after 1 July 2007:-

IC Interpretation 1 Changes in Existing Decommissioning, Restoration and Similar LiabilitiesIC Interpretation 2 Members’ Shares in Co-operative Entities and Similar Instruments IC Interpretation 5 Rights to Interests arising from Decommissioning, Restoration and Environmental

Rehabilitation Funds IC Interpretation 6 Liabilities arising from Participating in a Specific Market - Waste Electrical and

Electronic EquipmentIC Interpretation 7 Applying the Restatement Approach under FRS 1292004 Financial Reporting in

Hyperinflationary Economies IC Interpretation 8 Scope of FRS 2

The above IC Interpretations are not relevant to the Group’s operations.

(b) The Group has not adopted the following FRSs and IC Interpretations that have been issued as at the date of authorisationof these financial statements but are not yet effective for the Group and the Company:

(i) FRS issued and effective for financial periods beginning on or after 1 July 2009:

FRS 8 Operating Segments

FRS 8 replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which segmentinformation is presented on the same basis as that used for internal reporting purposes. The adoption of thisstandard only impacts the form and content of disclosures presented in the financial statements of the Group. ThisFRS is expected to have no material impact on the financial statements of the Group upon its initial application.

(ii) FRSs issued and effective for financial periods beginning on or after 1 January 2010:

FRS 4 Insurance ContractsFRS 7 Financial Instruments: Disclosures FRS 139 Financial Instruments: Recognition and Measurement

FRS 4 is not relevant to the Group’s operations. The possible impacts of applying FRS 7 and FRS 139 on thefinancial statements upon their initial applications are not disclosed by virtue of the exemptions given in thesestandards.

Notes To TheFinancial Statements

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4. BASIS OF PREPARATION (CONT’D)

(iii) IC Interpretations issued and effective for financial periods beginning on or after 1 January 2010:

IC Interpretation 9 Reassessment of Embedded Derivatives

IC Interpretation 10 Interim Financial Reporting and Impairment

IC Interpretation 9 is not relevant to the Group’s operations. IC Interpretation 10 prohibits the impairment lossesrecognised in an interim period on goodwill and investments in equity instruments and in financial assets carried atcost to be reversed at a subsequent balance sheet date. This interpretation is expected to have no material impacton the financial statements of the Group upon its initial application.

5. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant andequipment are based on commercial and production factors which could change significantly as a result oftechnical innovations and competitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its plant and equipment will be insignificant. As a result, residualvalues are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic useful lives andthe residual values of these assets, therefore future depreciation charges could be revised.

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination is uncertain during theordinary course of business. The Group recognises tax liabilities based on estimates of whether additional taxes willbe due. Where the final outcome of these matters is different from the amounts that were initially recognised, suchdifference will impact the income tax and deferred tax provisions in the period in which such determination is made.

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expectedfuture cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine thepresent value of those cash flows.

(iv) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowancesare applied to receivables where events or changes in circumstances indicate that the carrying amounts may notbe recoverable. Management specifically analyses historical bad debt, customer concentrations, customercreditworthiness, current economic trends and changes in customer payment terms when making a judgement toevaluate the adequacy of the allowance for doubtful debts of receivables. Where the expectation is different fromthe original estimate, such difference will impact the carrying value of receivables.

(v) Allowance for Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviewsrequire judgement and estimates.

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


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5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Critical Accounting Estimates And Judgements (Cont’d)

(vi) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain financial assets and liabilities at fair value, which require extensive use of accountingestimates and judgement. While significant components of fair value measurement were determined using verifiableobjective evidence, the amount of changes in fair value would differ if the Group uses different valuationmethodologies. Any changes in fair value of these assets and liabilities would affect profit and equity.

(b) Financial Instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractualprovisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractualarrangement. Interest, dividends, gains and losses relating to financial instruments classified as a liability are reported asan expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either ona net basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated witheach item.

(c) Functional and Foreign Currency

(i) Functional and Presentation Currency

The functional currency of the Group and each of the Group’s entity is measured using the currency of the primaryeconomic environment in which the Company or that entity operates.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functionaland presentation currency.

(ii) Transactions and Balances

Transactions in foreign currency are converted into the respective functional currencies on initial recognition, usingthe exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at thebalance sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities aretranslated using exchange rates that existed when the values were determined. All exchange differences are takento the income statement.

(d) Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries madeup to 31 October 2008.

A subsidiary is defined as an enterprise in which the Company has the power, directly or indirectly, to exercise controlover the financial and operating policies so as to obtain benefits from its activities.

The acquisition method is used to consolidate the results of some of the subsidiaries identified in Note 6 to the financialstatements. Under this method, the results of the subsidiaries acquired or disposed of during the financial year areincluded in the consolidated income statement from the date of acquisition or up to the date of disposal.

For subsidiaries which were acquired by way of the issue of shares as identified in Note 6 to the financial statements,and which satisfy the requirements of FRS 122 - Business Combinations, the merger method is used to consolidate theresults of these subsidiaries. The difference between the acquisition cost and the nominal value of the share capital andreserves of the subsidiaries is taken to the merger reserve.

Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are alsoeliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements ofsubsidiaries to ensure consistency of accounting policies with those of the Group.

Minority interest is measured at the minorities’ share of the post acquisition fair values of the identifiable assets andliabilities of the acquired subsidiary. Separate disclosure is made for minority interest.


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(e) Goodwill on Consolidation

Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group’s shareof the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed forimpairment annually. The impairment value of goodwill is recognised immediately in the consolidated income statement.An impairment loss recognised for goodwill is not reversed in a subsequent period.

If, after reassessment, the Group’s interest in the fair values of the identifiable net assets of the subsidiaries exceeds thecost of the business combinations, the excess is recognised immediately in the consolidated income statement.

(f) Investments in Subsidiaries

Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for impairment atthe end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carryingamount of the investments is taken to the income statement.

(g) Investments

Investments are held on a long-term basis and are stated at cost. Allowance for diminution in value is only made if thedirectors are of the opinion that the diminution is permanent.

(h) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated useful lives.

Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset isfully depreciated. The principal annual rates used for this purpose are:-

Plant and machinery 5% - 10%Gallery 10%Motor vehicles 20%Office equipment, furniture, fittings, renovation, cutlery and crockery 10% - 20%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheetdate to ensure that the amount, method and period of depreciation are consistent with previous estimates and theexpected pattern of consumption of the future economic benefits embodied in the items of the property, plantand equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits areexpected from its use. Any gain or loss arising from derecognition of the asset is included in the income statement inthe year the asset is derecognised.

(i) Impairment of Assets

The carrying amounts of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewedat each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment ismeasured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount ofthe assets is the higher of the assets’ net selling price and their value-in-use, which is measured by reference todiscounted future cash flow.

An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount.Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognisedrevaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverableamount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairmentloss and is recognised to the extent of the carrying amount of the asset that would have been determined (net ofamortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the incomestatement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revaluedasset is credited directly to the revaluation surplus. However, to the extent that an impairment loss on the same revaluedasset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognisedas income in the income statement.



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(j) Trademarks

The purchased trademark is stated at cost less accumulated amortisation and impairment losses, if any. The trademarkis amortised on a straight-line basis over a period of 10 years.

Trademarks are tested for impairment annually or more frequently when indicators of impairment are identified.

(k) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis,and includes all incidentals incurred in bringing the inventories to their present location and condition.

In arriving at net realisable value, due allowance is made for all damaged, obsolete and slow-moving items.

(l) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified.An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

(m) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and servicesreceived.

(n) Assets Under Hire Purchase

Plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated inaccordance with the policy set out in Note 5(h) above. Each hire purchase payment is allocated between the liability andfinance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated tothe income statement over the period of the respective hire purchase agreements.

(o) Income Taxes

Income taxes for the year comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measuredusing the tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases ofassets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill ornegative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combinationand at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax creditsto the extent that it is probable that taxable profit will be available against which the deductible temporary differences,unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the assetis realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the balancesheet date.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directlyin equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a businesscombination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negativegoodwill. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to theextent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred taxassets to be utilised.

(p) Interest-bearing Borrowings

Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.

All borrowing costs are charged to the income statement as expenses in the period in which they are incurred.



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(q) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options areshown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(r) 1% Irredeemable Convertible Unsecured Loan Stocks (“ICULS”)

ICULS give the holders the right to convert the ICULS into ordinary shares of the Company at any time during theconversion period. ICULS that are not converted by the holders at the expiry of the conversion period shall be mandatorilyconverted into shares of the Company at the conversion price. As such, ICULS are recognised in the financialstatements based on the nominal value of the loan stocks and are classified as equity.

(s) Warrants

Warrants issued by the Company are initially recognised based on proceeds received and reflected in the financialstatements as warrants reserve. Upon the exercise of the warrants to subscribe for shares in the Company, the warrantsreserve will be transferred to the share premium account.

(t) Purchase of Own Shares

When the share capital recognised as equity is bought by the Company under the share buy-back programme, the amountof the consideration paid, including directly attributable costs, is recognised as a deduction from equity. Shares boughtthat are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity.

Where such shares are subsequently sold or reissued, any consideration received, net of any direct costs, is includedin shareholders’ equity.

(u) Bonds and Commercial Papers (“CPs”)

Bonds and CPs issued by the Company are initially recognised based on proceeds received, net of issuance expensesincurred and are adjusted in subsequent years for amortisation of discount and/or accretion of premium to maturity,using the effective yield method. The discount amortised and/or premium accreted is recognised in the incomestatement over the period of the bonds and CPs.

(v) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financialinstitutions, bank overdrafts and short term, highly liquid investments that are readily convertible to known amounts of cashand which are subject to an insignificant risk of changes in value.

(w) Employee Benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which theassociated services are rendered by employees of the Group and of the Company.

(ii) Defined Contribution Plans

The Group and the Company’s contributions to defined contribution plans are charged to the income statement inthe period to which they relate. Once the contributions have been paid, the Group and the Company have nofurther liability in respect of the defined contribution plans.

(x) Related Parties

For the purposes of these financial statements, a party is considered to be related if:-

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

• controls, is controlled by, or is under common control with, the entity (this includes parents, subsidiaries andfellow subsidiaries);

• has an interest in the entity that gives it significant influence over the entity; or• has joint control over the entity;

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

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



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(x) Related Parties (Cont’d)

(iv) the party is a member of the key management personnel of the entity or its parent;

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

(vi) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant votingpower in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

(vii) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a relatedparty of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or beinfluenced by, that individual in their dealings with the entity.

(y) Contingent Liabilities and Contingent Assets

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed bythe occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a presentobligation arising from past events that is not recognised because it is not probable that an outflow of economicresources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in theprobability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by theoccurrence or non-occurrence of one or more uncertain events not wholly within the control of the Company.

(z) Revenue Recognition

(i) Sale of Goods and Services

Sales are recognised upon delivery of goods and customers’ acceptance or performance of services and whereapplicable, net of returns and trade discounts.

(ii) Interest Income

Interest income is recognised on an accrual basis, based on the effective yield on the investment.

(iii) Dividend Income

Dividend income from the investment in subsidiaries is recognised upon declaration by the subsidiaries.

Dividend income from the other investment is recognised when the right to receive payment is established.

(aa) Segmental Information

Segment revenue and expenses are those directly attributable to the segments and include any joint revenue and expenseswhere a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principallyof property, plant and equipment (net of accumulated depreciation, where applicable), investment properties, land heldfor development, prepaid land lease payments, inventories, property under development, receivables, and cash andbank balances.

Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not includeincome tax assets, whilst segment liabilities do not include income tax liabilities and borrowings from financial institutions.

Segment revenue, expenses and results include transfers between segments. The prices charged on intersegmenttransactions are based on normal commercial terms. These transfers are eliminated on consolidation.



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(cont’d)

6. INVESTMENTS IN SUBSIDIARIES

THE COMPANY2008 2007

RM’000 RM’000

Unquoted shares, at cost 107,172 107,172Accumulated impairment loss on subsidiaries (1,744) (1,744)

105,428 105,428

Details of the subsidiaries are as follows:-

Country ofName of Company Incorporation Equity Interest Principal Activities

2008 2007

Stanson Bakeries Malaysia 100% 100% Manufacturer of bread.Sdn. Bhd. (“SBSB”) #

Standard Confectionery Malaysia 100% 100% Manufacturer of frozen andSdn. Bhd. (“SCSB”) * daily fresh/shelf-stable

bakery goods.

Stanson Marketing Malaysia 100% 100% Sales and distribution ofSdn. Bhd. (“SMSB”) # bakery goods and

telecommunicationproducts.

Silver Bird Foods (S) Singapore 100% 100% Sales and distribution ofPte. Ltd. (“SBF”) # ~ bakery goods.

Silver Bird International Malaysia 100% 100% Sales and distribution ofSdn. Bhd. (“SBI”) # bakery goods and

telecommunicationproducts.

Inforaire Sdn. Bhd. (“ISB”) # Malaysia 51% 51% Marketing and distributionagent for financial relatedproducts.

Stanson Distribution Malaysia 100% 100% Dormant.Sdn. Bhd. (“SDSB”) #

Stanson Group Malaysia 100% 100% Investment holding.Sdn. Bhd. (“SGSB”) #

Standard Food R & D Malaysia 100% 100% Dormant.Lab Sdn. Bhd. (“SFRD”) #

Madeleine Bakery Malaysia 100% 100% Dormant.Sdn. Bhd. (“MBSB”) *

Madeleine Cafe Malaysia 100% 100% Dormant.Sdn. Bhd. (“MCSB”) *

Madeleine Foods Malaysia 100% 100% Dormant.Sdn. Bhd. (“MFSB”) *

Madeleine PropertySdn. Bhd. (“MPSB”) * Malaysia 100% 100% Dormant.

* Subsidiaries consolidated by way of the merger method.# Subsidiaries consolidated by way of the acquisition method.~ Not audited by Messrs. Horwath.

The Company carried out a review of the recoverable amount of its investments in subsidiaries during the financial year. Asa result of the review, no impairment loss was deemed necessary. The recoverable amount was based on the net asset valueof the subsidiaries.



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Silver B

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(cont’d)



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Silver B

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7. PROPERTY, PLANT AND EQUIPMENT

AT DEPRECIATION WRITTEN AT1.11.2007 ADDITIONS CHARGE DISPOSALS OFF 31.10.2008

THE GROUP RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

NET BOOK VALUE

Plant and machinery 159,939 22,990 (17,817) (48) (26,830) 138,234Gallery 8,664 165 (1,150) - - 7,679Motor vehicles 2,380 204 (729) (19) - 1,836Office equipment,

furniture and fittings 11,102 409 (3,576) (101) (171) 7,663

182,085 23,768 (23,272) (168) (27,001) 155,412

ACCUMULATEDACCUMULATED IMPAIRMENT NET BOOK

COST DEPRECIATION LOSS VALUEAT 31.10.2008 RM’000 RM’000 RM’000 RM’000

Plant and machinery 214,279 (64,818) (11,227) 138,234Gallery 11,649 (3,970) - 7,679Motor vehicles 4,801 (2,965) - 1,836Office equipment,

furniture and fittings 22,186 (14,523) - 7,663

252,915 (86,276) (11,227) 155,412

At 31.10.2007

Plant and machinery 231,178 (60,012) (11,227) 159,939Gallery 11,484 (2,820) - 8,664Motor vehicles 8,881 (6,501) - 2,380Office equipment,

furniture and fittings 24,397 (13,295) - 11,102

275,940 (82,628) (11,227) 182,085

The Company carried out a review of the recoverable amount of its property, plant and equipment during the financial year.As a result of the review, no impairment loss was recognised. The recoverable amount was based on the estimatedvalue-in-use of the assets based on the current and estimated future revenue and cash flows from the assets.

At the balance sheet date, the carrying amount of assets acquired under hire purchase terms is as follows:-

THE GROUP2008 2007

RM’000 RM’000

Motor vehicles 1,703 2,107

8. OTHER RECEIVABLE

This represents the security deposits placed with Amanah Raya Berhad for the payment of rental pursuant to a sale andleaseback transaction. The amount is due and receivable after twelve months from the balance sheet date.

(cont’d)



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(cont’d)

9. INTANGIBLE ASSETS

THE GROUP2008 2007

RM’000 RM’000AT COST:-Goodwill on acquisition of subsidiaries:At 1 November 2007/2006 36,730 36,210Arising during the financial year - 520

36,730 36,730

Trademark 3 5

At 31 October 36,733 36,735

Trademark, at cost 20 20

Accumulated amortisation:-At 1 November 2007/2006 (15) (13)Charge for the financial year (2) (2)

(17) (15)

At 31 October 3 5

Goodwill arises from the acquisition of SGSB by the Group in 2004, is stated at cost and reviewed for impairment annually.

Goodwill has been allocated for impairment testing to the Group’s cash-generating unit (“CGU”), the Group’s bakery productsmanufacturing division.

During the financial year, the Group assessed the recoverable amount of the goodwill, and determined that the goodwillis not impaired.

The recoverable amount of a CGU is determined based on the value-in-use calculations. These calculations use post-taxcash flow projections based on financial budgets approved by management.

The key assumptions underpinning the value-in-use calculations are as follows:

Gross margin 10%Growth rate 6%Discount rate 8%

Management determined the budgeted gross margin based on past performance and its expectations of market development.

10. LONG-TERM LOAN TO SUBSIDIARIES

Included in the long-term loan to subsidiaries is an amount of RM62,289,000 (2007 - RM62,289,000) which bore an effectiveinterest of 3.5% (2007 - 5.80%) per annum at the balance sheet date. The balance of the long-term loan is interest-free.

The long-term loan is unsecured and is not repayable within the next twelve months.

11. INVENTORIES

THE GROUP2008 2007

RM’000 RM’000

AT COST:-Raw materials 2,725 2,616Finished goods 9,309 7,982Packaging materials 1,702 2,290Telecommunication products 5,105 3,743

18,841 16,631

None of the inventories is stated at net realisable value.

12. TRADE RECEIVABLES

THE GROUP2008 2007

RM’000 RM’000

Trade receivables 47,221 46,640Less: Allowance for doubtful debts (1,395) (1,395)

45,826 45,245

Allowance for doubtful debts:-At 1 November 2007/2006 (1,395) (1,323)Addition during the financial year - (72)

At 31 October 2008/2007 (1,395) (1,395)

The Group’s normal trade credit terms range from 30 to 60 days. Other credit terms are assessed and approved on a case-by-case basis.

The foreign currency exposure profile of trade receivables of the Group at the balance sheet date is as follows:-

THE GROUP2008 2007

RM’000 RM’000

Singapore Dollar 153 4,827United States Dollar 55 -

13. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Included in the other receivables, deposits and prepayments was an amount of RM27,001,000 (2007 - RM Nil) in respect ofinsurance claim recoverable.

Insurance claim recoverable represents the carrying value of the plant and equipment destroyed in a fire at a subsidiary’sfactory premises during the financial year. Subsequent to the balance sheet date, the Group has received and accepted theoffer letter for the first settlement portion of RM12.5 million from the insurance company and the negotiation for the secondsettlement is ongoing. The Directors, having considered all the facts available at the date of this report, are confident that theinsurance claim filed will be fully settled. Accordingly, no writedown of the carrying value of the plant and equipment isnecessary as disclosed in Note 49 to the financial statements.



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(cont’d)

14. AMOUNTS OWING BY/(TO) SUBSIDIARIES

The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand.

15. SHORT-TERM DEPOSIT WITH A FINANCIAL INSTITUTION

The short-term deposit with a financial institution represents bond debt reserve account.

The weighted average effective interest rate of the short-term deposits at the balance sheet date was 3.65% (2007 - Nil) perannum. The short-term deposits have maturity periods of 6 months.

16. FIXED DEPOSITS WITH LICENSED BANKS

The fixed deposits are pledged to licensed banks for credit facilities granted to the Group.

The weighted average effective interest rate of fixed deposits at the balance sheet date was 3.25% (2007 - 3.25%)per annum. The maturity period of the fixed deposits at the balance sheet date was 3 months (2007 - 3 months).

17. SHARE CAPITAL

The movements in the ordinary shares of RM0.50 each are as follows:-

THE COMPANY2008 2007 2008 2007NUMBER OF SHARES RM’000 RM’000

AUTHORISED 1,000,000,000 1,000,000,000 500,000 500,000

ISSUED AND FULLY PAID-UPAt 1 November 2007/2006 235,538,101 210,638,765 117,769 105,319Issuance of shares

pursuant to the:- private placement - 20,000,000 - 10,000- conversion of 1% ICULS 50,527 4,899,336 25 2,450- rights issue 78,528,807 - 39,265 -

At 31 October 314,117,435 235,538,101 157,059 117,769

During the financial year, the Company increased its issued and paid-up capital by way of the following:-

(i) the conversion of RM34,358 nominal value 1% ICULS into 50,527 ordinary shares of RM0.50 each, at a conversionprice of RM0.68 per new ordinary share; and

(ii) the allotment of 78,528,807 new ordinary shares of RM0.50 each at an issue price of RM0.66 per share, through a rightsissue on the basis of 2 new ordinary shares for every 6 existing ordinary shares held for working capital purposes. Theshares were issued for cash consideration.

All the new shares issued during the financial year rank pari passu in all respects with the existing shares of the Company.



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18. SHARE PREMIUM

THE GROUP/THE COMPANY2008 2007

RM’000 RM’000

At 1 November 2007/2006 24,325 23,443Premium arising from:- conversion of 1% ICULS 9 882- rights issue 12,564 -Expenses incurred for share issuance exercises (832) -

At 31 October 2008/2007 36,066 24,325

The share premium is not distributable by way of dividends.

19. MERGER DEFICIT

The merger deficit relates to the difference between the nominal value of shares issued for the purchase of subsidiaries andthe nominal value of the shares acquired.

20. CAPITAL RESERVE

The capital reserve arose from the capitalisation of the post-acquisition profits of a subsidiary for the bonus issue of sharesin prior years. This reserve is not distributable by way of dividends.

21. 1% ICULS


RM’000 RM’000

At 1 November 2007/2006 76 3,408Converted during the financial year (34) (3,332)

At 31 October 42 76

Pursuant to a Trust Deed dated 6 February 2004, the Company had on 16 February 2004 issued RM20,500,000 nominalvalue ICULS 2004/2009 as partial payment of the purchase consideration for the acquisition of the entire equity interestof Stanson Group Sdn. Bhd.

The principal terms of the ICULS are as follows:-

(a) Interest rate The ICULS bear interest at 1% per annum payable annually in arrears.

(b) Convertibility Convertible into new ordinary shares of the Company at any time during the conversion period at the conversion price. All ICULS not converted by the holders at the expiry of the conversion period shall be mandatorily converted into ordinary shares.

(c) Conversion price The conversion price of the ICULS shall be RM0.68 per new ordinary share. Conversion shall be by way of surrendering ICULS which shall be converted into new ordinary shares of the Company at the conversion price.

(d) Conversion period The period commencing on the first anniversary of the date of listing of the ICULS and expiring on the last day of the tenure of the ICULS.

The ICULS have a tenure of 5 years from the date of issue and matured on 16 February 2009.

(cont’d)

21. 1% ICULS (CONT’D)

(e) Redeemability The ICULS will not be redeemable for cash. All outstanding ICULS shall be mandatorily converted into new ordinary shares of the Company on the date of maturity.

(f) Securities The ICULS issued are unsecured in nature.

(g) Transferability and listing Listing on Bursa Securities is subject to a minimum of one hundred ICULS holders (“Public Spread”). The legal ownership of the ICULS shall be transferable in amounts of RM0.50 each or multiples thereof.

(h) Status of new shares issued The new ordinary shares issued pursuant to the conversion of ICULS shall upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company except that the new ordinary shares issued shall not be entitled to any dividends, rights, allotments or other distributions which may be declared, made or paid, the entitlement date of which is before or on the relevant conversion date of ICULS.

22. WARRANTS RESERVE

The warrants reserve arose from the rights issue of Warrants A - 2005/2010 in prior years.

The principal terms of the Warrant A is as follows:-

(a) Tenure 5 years from the date of issuance of the Warrants.

(b) Exercise Period The Warrants may be exercised at any time within a period commencing from the date of issue of the Warrants and ending on the Expiry Date. Warrants not exercised during the exercise period shall thereafter lapse and cease to be valid.

(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of RM0.50 each (“Share”) in SBGB at the Exercise Price at any time during the Exercise Period.

(d) Exercise Price RM0.78 payable in full in respect of each Share upon exercise of the Warrant or any such price adjusted in accordance with the terms and conditions set out in the Deed Poll governing the Warrants.

(e) Expiry Date 19 September 2010, being the date of the end of the 5th anniversary from the date of issue of the Warrants and if that date does not fall on a Market Day, then it shall be the immediate preceding Market Day.

(f) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of the allotment of the new Shares in SBGB arising from the exercise of their Warrants.

(g) Ranking of the SBGB The new SBGB Shares to be issued pursuant to the exercise of the Warrants shall,new Shares upon issue and allotment rank pari passu in all respects with existing SBGB Shares,

save and except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of the allotment of new Shares arising from the exercise of Warrants.

(h) Listing Approval-in-principle has been obtained from Bursa Securities on 18 May 2007 for the admission of the Warrants to the Official List of Bursa Securities and for the listing of and quotation for the Warrants and the new SBGB Shares arising from the exercise of the Warrants on the Main Board of Bursa Securities.

(i) Adjustment to the The exercise price of the Warrants, and the number of Warrants belonging to theExercise Price and Warrant holder, may from time to time be adjusted, calculated or determined by the the number of Warrants directors in consultation with an approved merchant bank and certified by the auditor

appointed by the Company, in accordance with the terms of the Deed Poll.



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22. WARRANTS RESERVE (CONT’D)

The principal terms of the Warrant B - 2008/2013 is as follows:-

(a) Tenure 5 years from the date of issuance of the Warrants.

(b) Exercise Period The Warrants may be exercised at any time within a period commencing from the date of issue of the Warrants and ending on the Expiry Date. Warrants not exercised during the exercise period shall thereafter lapse and cease to be valid.

(c) Exercise Rights Each Warrant entitles the holder to subscribe for 1 new ordinary share of RM0.50 each (“Share”) in SBGB at the Exercise Price at any time during the Exercise Period.

(d) Exercise Price RM0.90 payable in full in respect of each Share upon exercise of the Warrant or any such price adjusted in accordance with the terms and conditions set out in the Deed Poll governing the Warrants.

(e) Expiry Date 24 February 2013, being the date of the end of the 5th anniversary from the date of issue of the Warrants and if that date does not fall on a Market Day, then it shall be the immediate preceding Market Day.

(f) Rights of Warrants The Warrant holders are not entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of the allotment of the new Shares in SBGB arising from the exercise of their Warrants.

(g) Ranking of the SBGB The new SBGB Shares to be issued pursuant to the exercise of the Warrants shall,new Shares upon issue and allotment rank pari passu in all respects with existing SBGB Shares,

save and except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of the allotment of new Shares arising from the exercise of Warrants.

(h) Listing Approval-in-principle has been obtained from Bursa Securities on 4 January 2008 for the admission of the Warrants to the Official List of Bursa Securities and for the listing of and quotation for the Warrants and the new SBGB Shares arising from the exercise of the Warrants on the Main Board of Bursa Securities.

(i) Adjustment to the Exercise The exercise price of the Warrants, and the number of Warrants belonging to the Price and the number Warrants holder, may from time to time be adjusted, calculated or determined by the of Warrant directors in consultation with an approved merchant bank and certified by the auditor

appointed by the Company, in accordance with the terms of the Deed Poll.

23. TREASURY SHARES

During the financial year, the Company purchased its own ordinary shares from the open market under the share buy-backprogramme. Details are as follows:-

TOTALPRICE PER SHARE NO OF CONSIDERATION

DATE LOWEST HIGHEST AVERAGE SHARES RM’000

Balance at 1 November 2007 827,500 323November 2007 0.900 0.900 0.900 1,000 1

828,500 324February 2008 0.970 1.000 0.985 (828,500) (889)

At 31 October 2008 - (565)

During the financial year, all treasury shares were sold at a consideration of RM889,000, resulting in a gain of RM565,000which was recognised in the statements of changes in equity.



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24. DEFERRED TAXATION

THE GROUP2008 2007

RM’000 RM’000

At 1 November 2007/2006 620 2,900Recognised in income statement (Note 37) (620) (2,280)

At 31 October 2008/2007 - 620

25. LONG-TERM BORROWINGS

THE GROUP2008 2007

RM’000 RM’000

Hire purchase payables (Note 33) 1,056 1,398

26. BONDS


RM’000 RM’000

Gross amount of bonds 30,000 50,000Discount on bonds (3,627) (4,729)

26,373 45,271

Discount on bondsAt 1 November 2007/2006 (4,729) (5,831)Amortisation during the financial year 1,102 1,102

At 31 October 2008/2007 (3,627) (4,729)

The principal terms of the bonds are as follows:-

Amount(a) Maturity Tranche Tenure (Years) (RM’ Million)

A 3 20B 4 20C 5 20D 6 5E 7 5

70

(b) Coupon rate Interest at 3.5% per annum shall be payable semi-annually commencing 6 months from date of first issue until final maturity of the respective tranches.

(c) Security Assignment over the Designated Account, comprising the Debt Service Reserve Account.

(d) Basis of Arrangement On a “bought deal” basis.

(e) Issue and Redemption The Serial Bonds shall be issued at a discount and redeemed at par on the respective maturities.

(f) Listing The Serial Bonds will not be listed on Bursa Securities or on any other stock exchange.



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27. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 90 days.

The foreign currency exposure profile of trade payables of the Group at the balance sheet date is as follows:-

THE GROUP2008 2007

RM’000 RM’000

US Dollar 213 317

28. OTHER PAYABLES AND ACCRUALS


RM’000 RM’000 RM’000 RM’000

Other payables 4,245 14,466 458 6,217Accruals 3,417 2,271 570 92

7,662 16,737 1,028 6,309

29. COMMERCIAL PAPERS (“CPs”)


RM’000 RM’000

At 1 November 2007/2006 30,000 25,000Drawdown during the financial year 90,000 55,000Repayment during the financial year (90,000) (50,000)

At 31 October 2008/2007 30,000 30,000

The CPs are subject to a weighted average effective interest of 6.41% (2007 - 6.25%) per annum.

The principal terms of the CPs are as follows:-

(a) Tenure/Maturity The CPs facility is available up to 7 years from the date of execution of the Facility Agreements with the issuance of CPs with 1 month to 12 months maturity.

(b) Security The CPs issued are unsecured in nature.

(c) Interest rate The interest on CPs are recognised based on the difference between gross and netproceeds received, and amortised to the income statement over the period of the CPs.

(d) Redemption At par on the respective maturity dates.

(e) Ranking of notes The notes to be issued under the CPs Facility shall constitute direct, unconditional and unsecured obligations of the Issuer and evidence the obligations of the Issuer to pay to the noteholders the sums represented thereby. The notes shall at all times rank pari passu and rateably, without discrimination, preference or priority amongst themselves, subject to priorities or rights preferred at law and will rank at least equally and rateably (pari passu) in point of priority and security with all other present and future unsecured and unsubordinated liabilities (both actual and contingent) of the Issuer.



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30. SHORT-TERM BORROWINGS

THE GROUP2008 2007

RM’000 RM’000

Bills payable 94,248 83,095Hire purchase payables (Note 33) 534 466

94,782 83,561

The bills payable bore a weighted average effective interest rate of 4.50% (2007 - 3.80%) per annum at the balance sheet date.

The bills payable are secured as follows:-

(i) by a deed of debenture incorporating a first fixed charge over all the property, plant and equipment of a subsidiary, andby a floating charge over all current assets, both present and future of a subsidiary;

(ii) by a lien over the fixed deposits of the Group; and

(iii) by a corporate guarantee of the Company.

31. BANK OVERDRAFTS

The bank overdrafts bore a weighted average effective interest of 7.51% (2007 - 8.00%) per annum and are secured in thesame manner as the bills payable as disclosed in Note 30 to the financial statements.

32. NET ASSETS PER SHARE

The net assets per share is calculated based on the net asset value at the balance sheet date of RM141,810,000(2007 - RM112,612,000) divided by the enlarged number of ordinary shares in issue at the balance sheet date of314,180,000 (2007 - 234,824,000), details of which are as follows:-

THE GROUP2008 2007

NUMBER OF NUMBER OFSHARES SHARES

Ordinary shares of RM0.50 each in issue at thebalance sheet date 314,117,000 235,538,000

Ordinary shares to be issued at RM0.68 per sharepursuant to the full conversion of 1% ICULS 63,000 113,000

Ordinary shares under the share buy-back programme - (827,000)

314,180,000 234,824,000



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33. HIRE PURCHASE PAYABLES

THE GROUP2008 2007

RM’000 RM’000Minimum hire purchase payments:- not later than one year 626 582- later than one year but not later than five years 1,130 1,528

1,756 2,110Less: Future finance charges (166) (246)

Present value of hire purchase payables 1,590 1,864

The net hire purchase payables are repayable as follows:-

Current:Not later than one year (Note 30) 534 466

Non-current:Later than one year but not later than five years (Note 25) 1,056 1,398

1,590 1,864

The hire purchase payables are subject to a weighted average effective interest of 7.05% per annum (2007 - 7.08%).

34. REVENUE

Revenue of the Group represents the invoiced value of goods sold and services rendered less discounts and returns,as follows: -


RM’000 RM’000 RM’000 RM’000

Bakery products 149,492 146,892 - -Telecommunication products 488,511 459,504 - -Others 560 87 - -

638,563 606,483 - -

35. OTHER OPERATING EXPENSES

Included in other operating expenses in the previous financial year was a writeback of impairment loss on property, plant andequipment of RM16,794,000.



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36. LOSS BEFORE TAXATION


RM’000 RM’000 RM’000 RM’000

Loss before taxationis arrived at after charging/ (crediting):-

Audit fee- current year 181 77 19 15- (over)/underprovision

previous financial years (2) - 4 -Allowance for doubtful debts - 72 - -Amortisation expense:- discount on bonds 1,102 1,102 1,102 1,102- intangible assets 2 2 - -Bad debts written off 94 57 - -Depreciation of property,

plant and equipment 23,272 19,031 - -Directors’ fee 246 159 246 159Directors’ non-fee emoluments 1,478 1,602 1,478 1,602Interest expense 7,601 6,468 3,872 3,439Property, plant and

equipment written off - 13 - -Rental of premises 7,146 5,570 - -Rental of truck 8,076 8,481 - -Staff costs 31,941 28,038 1,136 752(Gain)/Loss on disposal of

plant and equipment (19) 2,942 - -Interest income (1,940) (87) (1,776) (80)Interest income from subsidiaries - - (4,954) (4,608)Realised (gain)/loss on foreign exchange (1,826) 1 - -Writeback of impairment

loss on property, plant and equipment - (16,794) - -

37. INCOME TAX EXPENSE


RM’000 RM’000 RM’000 RM’000

Current taxation:-- overprovision in the previous

financial year (1,239) (40) (1,239) -

Deferred taxation (Note 24):-- for the financial year (620) (2,280) - -

(1,859) (2,320) (1,239) -



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37. INCOME TAX EXPENSE (CONT’D)

During the current financial year, the statutory tax rate was reduced from 27% to 26% as announced in the MalaysianBudget 2007.

A reconciliation of the statutory tax rate to the effective tax rate applicable to the loss before taxation of the Group and of theCompany is as follows:-


RM’000 RM’000 RM’000 RM’000

Loss before taxation (23,134) (18,397) (1,970) (3,876)

Tax at the statutory tax rateof 26% (2007 - 27%) (6,015) (4,967) (512) (1,047)

Tax effects of:-Non-deductible expenses 3,471 4,622 1,488 1,243Non-taxable gain - (4,535) - -Share of loss in a jointly controlled entity - 4,979 - -Deferred tax assets not

recognised during the financial year 4,246 - - -Utilisation of previously

unrecognised deferred tax assets (2,322) (2,379) (976) (196)Overprovision of income tax

in previous financial years (1,239) (40) (1,239) -

Tax for the financial year (1,859) (2,320) (1,239) -

38. LOSS PER SHARE

The basic loss per share is arrived at by dividing the Group’s loss attributable to shareholders of RM21,209,000(2007 - RM15,939,000) by the weighted average number of ordinary shares in issue during the financial year of approximately288,935,000 (2007 - 214,036,000).

Diluted loss per share is not presented as there were no potential dilutive ordinary shares during the financial year.

39. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

THE GROUP2008 2007

RM’000 RM’000

Cost of property, plant and equipment purchased 23,768 34,225Amount financed through hire purchase (185) -

Cash disbursed for purchase of property, plant and equipment 23,583 34,225



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40. ACQUISITION OF A SUBSIDIARY

The details of net assets acquired and cash flow arising from the acquisition of subsidiaries during the previous financial yearwere as follows:-

THE GROUP2008 2007

RM’000 RM’000

Plant and equipment - 8,531Current assets - 5,436Current liabilities - (10,447)Minority interest - (481)

Fair value of net assets acquired - 3,039Goodwill on acquisition - 520

Total purchase consideration - 3,559Cash and cash equivalents of subsidiaries - 561

Net cash outflow from acquisition - 4,120

41. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-


RM’000 RM’000 RM’000 RM’000

Short-term deposit with a financial institution 882 - - -Fixed deposits with licensed banks 227 219 - -Cash and bank balances 16,640 9,227 76 84Bank overdrafts (5,966) (485) - -

11,783 8,961 76 84

42. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments received and receivable by Directors of the Group and of the Company during thefinancial year are as follows:-


RM’000 RM’000 RM’000 RM’000

Executive directors:-- basic salaries, bonus and EPF 1,478 1,602 1,478 1,602

Non-executive directors:-- fee 246 159 246 159



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42. DIRECTORS’ REMUNERATION (CONT’D)

The details of emoluments for the directors of the Group and of the Company received/receivable for the financial year in bands of RM50,000 are as follows:-


Non- Non-Executive Executive Executive ExecutiveDirectors Directors Directors Directors

Below RM50,000 - 7 - 7RM400,001 - RM450,000 1 - - -RM500,001 - RM550,000 - - 1 -RM1,050,001 - RM1,100,000 1 - - -RM1,300,001 - RM1,350,000 - - 1 -

43. RELATED PARTY DISCLOSURES

For the purpose of these financial statements, the Group and the Company have related party relationships with its directors,key management personnel, entities of which the directors and/or key management have significant financial interests andentities within the same group of companies disclosed in Note 6 to the financial statements.

In addition to the balances detailed elsewhere in the financial statements, the Group and the Company carried out thefollowing transactions or balances with related parties during the financial year:-


RM’000 RM’000Interest income from subsidiaries:- SCSB 3,367 3,357- SMSB 1,587 1,251

Long-term loan to:-ISB (719) (719)MBSB 1,160 1,160MCSB 5,802 5,802MFSB 2,545 2,545SBI 610 (227)SBSB 6,914 (105)SCSB 110,777 92,076SDSB 113 113SFRD * *SGSB 1,400 2,100SMSB 1,465 1,720

130,067 104,465

Amounts owing by:-SBI 13 13SCSB 797 810SGSB 6 6

816 829

Amounts owing to:-MBSB 6 6SBSB 4 4SBF - 2SMSB 39 39

49 51

* - Amount equivalent to RM2



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43. RELATED PARTY DISCLOSURES (CONT’D)

Key management personnel compensation


RM’000 RM’000 RM’000 RM’000

Short-term employee benefits 2,329 2,029 2,083 2,029

The outstanding amounts of the related parties will be settled in cash. No guarantees have been given or received. Noexpenses have been recognised during the financial year as bad and doubtful debts in respect of amounts owing by therelated parties.

44. CONTINGENT LIABILITY


RM’000 RM’000

Corporate guarantees given to securebanking facilities granted to certain subsidiaries 158,129 150,715

45. COMMITMENTS

Capital commitments

Authorised capital expenditure not provided for in the financial statements:-

THE GROUP2008 2007

RM’000 RM’000

Approved capital commitment contractedbut not provided for 2,921 8,736

Operating lease commitments

The future minimum lease payments under the non-cancellable operating leases are as follows:-

THE GROUP2008 2007

RM’000 RM’000

Not later than one year 13,700 13,199Later than one year and not later than five years 41,686 46,674Later than five years 23,256 30,128

78,642 90,001



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46. FOREIGN EXCHANGE RATES

The applicable closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent)for the translation of foreign currency balances at the balance sheet date are as follows:-

2008 2007RM RM

Brunei Dollar N/A 2.28Euro N/A 4.82Singapore Dollar 2.40 2.30US Dollar 3.48 3.34

47. SEGMENTAL REPORTING

(a) By business segment:-

Manufacturing Distribution ofand distribution tele-

of consumer communicationfood products Others Group

2008 RM’000 RM’000 RM’000 RM’000

REVENUETotal sales 258,943 488,511 47 747,501Inter-segment sales (108,938) - - (108,938)

150,005 488,511 47 638,563

RESULTSegment results (19,193) 2,957 (135) (16,371)Interest income 1,940Finance costs (8,703)

Loss before taxation (23,134)Income tax expense 1,859

Loss after taxation (21,275)

OTHER INFORMATIONSegment assets # 302,940 5,105 16,755 324,800Segment liabilities * 115,585 9,759 57,332 182,676Capital expenditure 23,768 - - 23,768Depreciation 23,272 - - 23,272



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47. SEGMENTAL REPORTING (CONT’D)

(a) By business segment (Cont’d):-

Manufacturing Distribution ofand distribution tele-

of consumer communicationfood products Others Group

2007 RM’000 RM’000 RM’000 RM’000

REVENUETotal sales 221,625 459,504 87 681,216Inter-segment sales (74,733) - - (74,733)

146,892 459,504 87 606,483

RESULTSegment results 12,792 2,877 (8,141) 7,528Interest income 87Finance costs (7,569)Loss of a former jointly

controlled entity (18,443) (18,443)

Loss before taxation (18,397)

Income tax expense

- Group 2,320 2,320- Share of taxation from

a jointly controlled entity - -

2,320


OTHER INFORMATION

Segment assets #

293,612 3,743 20,219 317,574Segment liabilities * 114,395 14,625 75,269 204,289Capital expenditure 34,255 - - 34,225Depreciation 19,031 - - 19,031Writeback of

impairment of property,plant and equipment 16,794 - - 16,794

Property, plant andequipment written off 13 - - 13



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(b) By geographical market:-

Malaysia Singapore Group2008 RM’000 RM’000 RM’000

REVENUETotal sales 733,447 14,054 747,501Inter-segment sales (108,938) - (108,938)

624,509 14,054 638,563

RESULTSegment results (10,901) (5,470) (16,371)Interest income 1,940Finance costs (8,703)

Loss before taxation (23,134)Income tax expense 1,859


OTHER INFORMATIONSegment assets # 317,723 7,077 324,800Segment liabilities * 182,046 630 182,676Capital expenditure 23,727 41 23,768Depreciation 22,735 537 23,272



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(b) By geographical market (Cont’d):-

Malaysia Singapore Group2007 RM’000 RM’000 RM’000

REVENUETotal sales 662,091 19,125 681,216Inter-segment sales (74,733) - (74,733)

587,358 19,125 606,483

RESULTSegment results 28,183 (20,655) 7,528Interest income 87Finance costs (7,569)Loss of a former jointly controlled entity (18,443) (18,443)

Loss before taxation (18,397)

Income tax expenses

- Group 2,320 2,320- Share of taxation from a -

jointly controlled entity2,320


OTHER INFORMATIONSegment assets # 310,681 6,893 317,574Segment liabilities * 203,145 1,144 204,289Capital expenditure 32,466 1,759 34,225Depreciation 18,676 355 19,031Writeback of impairment of

property, plant and equipment 16,794 - 16,794Property, plant and equipment

written off 13 - 13

# - Segment assets comprise total current and non-current assets, excluding income tax assets.

* - Segment liabilities comprise total current and non-current liabilities, excluding income tax liabilities.

48. FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

(a) Long-Term Bank Loans and Bonds

The fair values of the long-term bank loans and bonds are determined by discounting the relevant cash flows usingcurrent interest rates for similar types of instruments.



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48. FAIR VALUES OF FINANCIAL INSTRUMENTS (CONT’D)

(b) Short-Term Borrowings, Other Current Liabilities and Commercial Papers

The carrying amounts approximated their fair values because of the short period to maturity of these instruments.

(c) Hire Purchase Obligations

The fair values of hire purchase payables are determined by discounting the relevant cash flows using current interestrates for similar types of instruments.

(d) Long-Term Loan to Subsidiaries

The carrying amounts approximated their fair values as these instruments bear interest at variable rates.

(e) Long-Term Other Receivable

The carrying amount approximated its fair value as this is a security deposit for a sale and leaseback transaction.

(f) Cash And Cash Equivalents And Other Short-Term Receivables/Payables

The carrying amounts approximated their fair values due to the relatively short-term maturity of these instruments.

The nominal amount and net fair value of financial instruments not recognised in the balance sheets of the Company are as follows:

THE COMPANYNominal NetAmount Fair Value

At 31 October 2008 Note RM’000 RM’000

Contingent liability 44 158,129 *

At 31 October 2007

Contingent liability 44 150,715 *

* The net fair value of the contingent liability is estimated to be minimal as the subsidiaries are expected to fulfill theirobligations to repay their borrowings.

49. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR

A portion of the plant and machinery which belonged to SBSB had been damaged as a result of a fire which occurred on2 March 2008. The fire and police departments’ investigations in this incident are still ongoing. This incident did not have anysignificant adverse effect on the results and financial position of the Group as the assets have been adequately covered bythe Group’s insurance policy.

The Group’s overall manufacturing output for bread has not been interrupted as existing capacity and other arrangementscould meet the Group’s production demand. The portions damaged are sufficiently covered by insurance to mitigate anylosses arising from the incident.

Consequently, the subsidiary has filed the insurance claim and the Group has received and accepted the offer letter for thefirst settlement of RM12.5 million subsequent to the balance sheet date.

50. SIGNIFICANT EVENT SUBSEQUENT TO THE BALANCE SHEET DATE

Subsequent to the balance sheet date, the issued and paid-up share capital was increased from RM157,058,717.50 toRM157,090,078.50 by way of the conversion of RM42,690 nominal value of 1% ICULS into 62,722 ordinary shares ofRM0.50 each, at a conversion price of RM0.68 per new ordinary share.

All the new shares issued subsequent to the balance sheet date rank pari passu in all respects with the existing shares ofthe Company.



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ANALYSIS OF ORDINARY SHAREHOLDINGS

A. Authorised Share Capital : RM500,000,000-00Issued and Fully Paid-Up : RM157,090,078-50Class of Shares : Ordinary shares of RM0-50 eachVoting Right : Every member of the Company, present in person or by proxy, shall

have on a show of hands one (1) vote or on poll, one (1) vote for each share held

B. Distribution of Shareholdings

Size of Shareholdings No. of Shareholders % No. of Shares %

Less than 100 169 12.88 9,613 0.003100 – 1,000 226 17.22 150,322 0.0481,001 – 10,000 704 53.66 2,664,674 0.84810,001 – 100,000 170 12.96 4,531,343 1.442100,001 – 15,709,007 38 2.90 92,954,869 29.58715,709,008 & above 5 0.38 213,869,336 68.072

Total 1,312 100.00 314,180,157 100.00

C. Substantial Shareholders’ Shareholdings

Substantial Shareholders Direct Shareholdings Indirect ShareholdingsNo. of Shares % No. of Shares %

Lembaga Tabung Haji 92,770,606 29.53 0 0

Dato’ Tan Han Kook 46,040,866 14.65 (1) 8,076,079 2.57

Datin Ong Hooi Siang 8,076,079 2.57 (1) 46,040,866 14.65

Berjaya Sompo Insurance Berhad 15,600,000 4.97 0 0

Rantau Embun Sdn Bhd 37,730,000 12.01 0 0

Selat Makmur Sdn Bhd 15,600,000 4.97 0 0

Inter-Pacific Capital Sdn Bhd 5,000,000 1.59 0 0

Premier Merchandise Sdn Bhd 9,282,000 2.95 0 0

Berjaya Capital Berhad 0 0 (2) 58,330,000 18.57

Bizurai Bijak (M) Sdn Bhd 0 0 (3) 58,330,000 18.57

Juara Sejati Sdn Bhd 0 0 (4) 73,930,000 23.53

Berjaya Group Berhad 0 0 (4) 73,930,000 23.53

Berjaya Corporation Berhad 0 0 (5) 73,930,000 23.53

Hotel Resort Enterprise Sdn Bhd 0 0 (6) 73,930,000 23.53

Tan Seri Dato’ Seri Vincent Tan Chee Yioun 2,670,000 0.85 (7) 83,212,000 26.49

CVC Limited 36,876,666 11.74 0 0

Vanda Russell Gould 0 0 (8) 36,876,666 11.74

Analysis Of OrdinaryShareholdings And Warrants

as at 27 February 2009

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ANALYSIS OF ORDINARY SHAREHOLDINGS (CONT’D)

C. Substantial Shareholders’ Shareholdings (Cont’d)

(1) Deemed interested by virtue of his/her spouse’s shareholding.(2) Deemed interested by virtue of interest in Berjaya Sompo Insurance Berhad and Inter-Pacific Capital Sdn Bhd, and 100% interest in Rantau

Embun Sdn Bhd.(3) Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad, Rantau Embun

Sdn Bhd and Inter-Pacific Capital Sdn Bhd.(4) Deemed interested by virtue of interest in Berjaya Capital Berhad, the holding company of Berjaya Sompo Insurance Berhad, Rantau Embun

Sdn Bhd and Inter-Pacific Capital Sdn Bhd, and Berjaya Land Berhad, the holding company of Selat Makmur Sdn Bhd.(5) Deemed interested by virtue of 100% equity interest in Berjaya Group Berhad.(6) Deemed interested by virtue of interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya Sompo Insurance Berhad,

Rantau Embun Sdn Bhd, Selat Makmur Sdn Bhd and Inter-Pacific Capital Sdn Bhd.(7) Deemed interested by virtue of interest in Berjaya Corporation Berhad, the ultimate holding company of Berjaya Sompo Insurance Berhad,

Rantau Embun Sdn Bhd, Selat Makmur Sdn Bhd and Inter-Pacific Capital Sdn Bhd and HQZ Credit Sdn Bhd, the ultimate holding companyof Premier Merchandise Sdn Bhd.

(8) Deemed interested through CVC Limited by virtue of Section 6A of the Companies Act, 1965.

D. Directors’ Shareholdings

Directors Direct Shareholdings Indirect ShareholdingsNo. of Shares % No. of Shares %

Dato’ Dr Gan Khuan Poh 0 0 0 0

Dato’ Tan Han Kook 46,040,866 14.65 (1) 8,076,079 2.57

Ching Siew Cheong 5,349,291 1.70 0 0

Lim Hock Chye 0 0 0 0

Richard George Azlan Bin Abas 133,333 0.04 0 0

Dato’ Seri Talaat Bin Husain 0 0 0 0

Adi Azuan Bin Abdul Ghani 0 0 0 0

Dato’ Lee Kok Chuan 0 0 0 0

Peter John McLoghlin 0 0 0 0

Vanda Russell Gould 0 0 (2) 36,876,666 11.74(Alternate Director to Peter John McLoghlin)

(1) Deemed interested by virtue of his spouse’s shareholding.(2) Deemed interested through CVC Limited by virtue of Section 6A of the Companies Act, 1965.

E. Thirty (30) Largest Shareholders

No. Name of Shareholders No. of Share %

1 Lembaga Tabung Haji 92,770,606 29.53

2 Amanah Raya Nominees (Asing) Sdn BhdExempt AN For Perkasa Normandy Managers Sdn Bhd 50,240,066 15.99

3 Rantau Embun Sdn Bhd 37,730,000 12.01

4 OSK Nominees (Tempatan) Sdn Bhd 17,078,664 5.44OSK Capital Sdn Bhd For Tan Han Kook

5 CIMSEC Nominees (Tempatan) Sdn Bhd 16,050,000 5.11CIMB Bank for Tan Han Kook



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ANALYSIS OF ORDINARY SHAREHOLDINGS (CONT’D)

E. Thirty (30) Largest Shareholders (Cont’d)

No. Name of Shareholders No. of Share %

6 Selat Makmur Sdn Bhd 15,600,000 4.97

7 Berjaya Sompo Insurance Berhad 12,048,267 3.83

8 Premier Merchandise Sdn Bhd 9,260,000 2.95

9 Tan Han Kook 7,500,000 2.39

10 Koperasi Permodalan Felda Berhad 5,482,333 1.74

11 RHB Capital Nominees (Tempatan) Sdn Bhd 5,307,524 1.69Pledged Securities Account For Tan Han Kook

12 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 5,000,000 1.59Inter-Pacific Capital Sdn Bhd

13 OSK Nominees (Tempatan) Sdn Berhad 4,519,800 1.44OSK Capital Sdn Bhd For Ong Hooi Siang

14 Kurnia Insurans (Malaysia) Berhad 3,782,500 1.20


16 RHB Capital Nominees (Tempatan) Sdn Bhd 3,500,000 1.11Pledged Securities Account For Ong Hooi Siang

17 TA Nominees (Tempatan) Sdn Bhd 2,911,131 0.93Pledged Securities Account For Ching Siew Cheong

18 Ching Siew Cheong 2,364,827 0.75

19 CIMB Group Nominees (Tempatan) Sdn BhdPledged Securities Account For Vincent Tan Chee Yioun 1,670,000 0.53

20 Oommen Thomas 1,590,000 0.51

21 Citigroup Nominees (Asing) Sdn Bhd 1,195,766 0.38Goldman Sachs International

22 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 1,000,000 0.32Pledged Securities Account For Arsam Bin Damis

23 OSK Nominees (Tempatan) Sdn BerhadPledged Securities Account For Vincent Tan Chee Yioun 1,000,000 0.32

24 Ong Min Hong 971,050 0.31

25 Maureen Chong Mai Lee 959,000 0.30

26 HSBC Nominees (Asing) Sdn Bhd 600,000 0.19Exempt AN for HSBC Private Bank (Suisse) S.A.

27 Public Nominees (Tempatan) Sdn Bhd 495,250 0.16Pledged Securities Account For Oo Siew Chin

28 Ng Lai Yin 400,000 0.13

29 Alliancegroup Nominees (Tempatan) Sdn Bhd 258,000 0.08Pledged Securities Account For Ho Tau Tai

30 Lee Seng Teck 216,666 0.07



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ANALYSIS OF WARRANT 2005/2010 HOLDINGS

A. No. of Warrant Issued : 109,248,423No. of Warrant Exercised : 75,000No. of Warrant Unexercised : 109,173,423Exercise Period : 20 September 2005 to 19 September 2010

Voting Right at the Meeting of Warrant Holders : Every member of the Company, present in person or by proxy, shall have on a show of hands one (1) vote or on poll, one (1) vote for each Warrant held in the meeting of Warrant holders.

B. Distribution of Warrant Holdings

Size of Warrant Holdings No. of Warrant Holders % No. of Warrant %

Less than 100 301 18.88 15,474 0.01100 – 1,000 270 16.94 123,877 0.111,001 – 10,000 500 31.37 2,071,265 1.9010,001 – 100,000 449 28.17 11,999,302 10.99100,001 – 5,458,670 68 4.26 25,141,848 23.035,458,671 and above 6 0.38 69,821,657 63.96

Total 1,594 100.00 109,173,423 100.00

C. Directors’ Warrant Holdings

Directors Direct Warrant Holdings Indirect Warrant HoldingsNo. of Warrant % No. of Warrant %


Dato’ Tan Han Kook 0 0 (1) 135,647 0.12

Ching Siew Cheong 155,617 0.14 0 0


Richard George Azlan Bin Abas 0 0 0 0





Vanda Russell Gould 0 0 0 0(Alternate Director to Peter John McLoghlin)

(1) Deemed interested by virtue of his spouse’s shareholding.



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ANALYSIS OF WARRANT 2005/2010 HOLDINGS (CONT’D)

D. Thirty (30) Largest Warrants Holders

No. Name of Warrants Holders No. of Warrant %


2 Affin Nominees (Tempatan) Sdn Bhd 15,600,095 14.29Pledged Securities Account For Tan Sew Hoey (Tan Siew Hoey)

3 Mayban Securities Nominees (Tempatan) Sdn Bhd 9,521,562 8.72Pledged Securities Account For Chai Yeng Sun



6 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 7,000,000 6.41Inter–Pacific Capital Sdn Bhd


8 HDM Nominees (Tempatan) Sdn Bhd 1,600,000 1.47Pledged Securities Account For Ong Yin Chong

9 AllianceGroup Nominees (Tempatan) Sdn Bhd 1,500,650 1.37Pledged Securities Account For Chay Wing Wai @ Cheah Wing Wai

10 Public Nominees (Tempatan) Sdn Bhd 1,136,264 1.04Pledged Securities Account For Oo Siew Chin

11 CIMSEC Nominees (Asing) Sdn Bhd 862,058 0.79ING Asia Private Bank Ltd for Regina International Limited

12 Lim Tock Ooi 800,000 0.73

13 AIBB Nominees (Tempatan) Sdn Bhd 709,308 0.65Pledged Securities Account For Batu Bara Resources Corporation Sdn Bhd

14 HSBC Nominees (Asing) Sdn Bhd 700,000 0.64Exempt AN for HSBC Private Bank (Suisse) S.A.

15 Tan Song Mo 657,458 0.60

16 RHB Capital Nominees (Tempatan) Sdn Bhd 644,050 0.59Pledged Securities Account For Robert Ong Thien Cheng

17 Ng Pee Moy 622,200 0.57

18 Tan Kok Kwan 587,400 0.54

19 Saravanan a/l Subramaniam 518,500 0.47

20 HDM Nominees (Tempatan) Sdn Bhd 500,000 0.46Pledged Securities Account For Ganesh Kumar Bangah

21 Leong Jun Kiat 454,000 0.42

22 Chin Kok Yee 435,540 0.40

23 Ong Yin Chong 403,500 0.37



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D. Thirty (30) Largest Warrants Holders (Cont’d)

No. Name of Warrants Holders No. of Warrant %

24 Woon Yee Chong 403,393 0.37

25 Tan Tiam Yee 365,140 0.33

26 Lee Mok Lean 334,900 0.31

27 CIMSEC Nominees (Tempatan) Sdn Bhd 334,432 0.31CIMB For Wong Lee Yun

28 Chen Lai Fun 334,300 0.31

29 Berjaya Sompo Insurance Berhad 323,232 0.30

30 Leong Soo Ming 311,100 0.28



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ANALYSIS OF WARRANT 2008/2013 HOLDINGS

A. No. of Warrant Issued : 29,448,302No. of Warrant Exercised : -No. of Warrant Unexercised : 29,448,302Exercise Period : 25 February 2008 to 24 February 2013

Voting Right at the Meeting of Warrant Holders : Every member of the Company, present in person or by proxy, shall have on a show of hands one (1) vote or on poll, one (1) vote for each Warrant held in the meeting of Warrant holders.

B. Distribution of Warrant Holdings

Size of Warrant Holdings No. of Warrant Holders % No. of Warrant %

Less than 100 141 14.89 6,736 0.02100 – 1,000 461 48.68 183,530 0.621,001 – 10,000 262 27.67 816,408 2.7710,001 – 100,000 63 6.65 1,797,230 6.11100,001 – 1,472,414 14 1.48 4,823,490 16.381,472,415 and above 6 0.63 21,820,908 74.10

Total 947 100.00 29,448,302 100.00

C. Directors’ Warrant Holdings

Directors Direct Warrant Holdings Indirect Warrant HoldingsNo. of Warrant % No. of Warrant %


Dato’ Tan Han Kook 3,657,330 12.42 (1) 757,425 2.57

Ching Siew Cheong 372,640 1.27 0 0


Richard George Azlan Bin Abas 12,499 0.04 0 0





Vanda Russell Gould 0 0 (2) 3,757,187 12.76(Alternate Director to Peter John McLoghlin)

(1) Deemed interested by virtue of his spouse’s shareholding.(2) Deemed interested through CVC Limited by virtue of Section 6A of the Companies Act, 1965.



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D. Thirty (30) Largest Warrants Holders

No. Name of Shareholders No. of Warrant %

1 Lembaga Tabung Haji 6,956,391 23.62

2 Amanah Raya Nominees (Asing) Sdn Bhd 3,657,187 12.76Exempt AN For Perkasa Normandy Managers Sdn Bhd

3 OSK Nominees (Tempatan) Sdn Bhd 3,657,330 12.42OSK Capital Sdn Bhd For Tan Han Kook





8 OSK Nominees (Tempatan) Sdn Berhad 757,425 2.57OSK Capital Sdn Bhd For Ong Hooi Siang

9 Ching Siew Cheong 367,641 1.25

10 Berjaya Sompo Insurance Berhad 332,974 1.13

11 Inter-Pacific Equity Nominees (Tempatan) Sdn Bhd 300,000 1.02Inter-Pacific Capital Sdn Bhd

12 HDM Nominees (Tempatan) Sdn Bhd 300,000 1.02Pledged Securities Account For Ganesh Kumar Bangah

13 Affin Nominees (Tempatan) Sdn Bhd 289,587 0.98Pledged Securities Account For Tan Sew Hoey (Tan Siew Hoey)

14 Vincent Tan Chee Yioun 250,000 0.85

15 Lim Poh Hock 237,900 0.81

16 RHB Capital Nominees (Tempatan) Sdn Bhd 226,900 0.77Pledged Securities Account For Tan Seow Than

17 Kwong Moei Jie 194,237 0.66

18 HLG Nominee (Tempatan) Sdn Bhd 174,800 0.59Hong Leong Bank Bhd For Low Kim Chai

19 Mayban Securities Nominees (Tempatan) Sdn Bhd 150,000 0.51Pledged Securities Account For Musadik Ahmad Bin Kamarudeen

20 Maureen Chong Mai Lee 125,000 0.42

21 Tay Khai Wei 100,000 0.34

22 Public Nominees (Tempatan) Sdn Bhd 91,300 0.31Pledged Securities Account For Leong Wing Goon

23 Loo Ah Kau @ Loo Yong Ling 73,900 0.25

24 Ng Yeoh Lan @ Ng Siam Keng 70,000 0.24



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D. Thirty (30) Largest Warrants Holders (Cont’d)

No. Name of Shareholders No. of Warrant %

25 Mrs Julia Chin @ Tang Yuat Kum 60,000 0.20

26 Lim Kwang Jeow 54,400 0.18

27 AmBank (M) BerhadPledged Securities Account For Hoi Hung Chor 48,000 0.16

28 Public Nominees (Tempatan) Sdn BhdPledged Securities Account For Oo Siew Chin 47,325 0.16

29 Yong Kah Chin 45,000 0.15

30 HLG Nominee (Tempatan) Sdn BhdPledged Securities Account For Wong Kang Yeow 43,800 0.15



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Notice OfAnnual General Meeting

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AGENDA

1. To receive the Audited Financial Statements for the financial year ended 31 October 2008together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who are retiring under Article 97 of the Articles of Associationof the Company:

2.1 Dato’ Dr Gan Khuan Poh2.2 Dato’ Tan Han Kook2.3 Mr Lim Hock Chye

3. To approve the sum of RM246,000.00 (2007: RM146,000.00) being the directors’ fees forthe financial year ended 31 October 2008.

4. To re-appoint Messrs Horwath as Auditors to hold office until the conclusion of the nextAnnual General Meeting and to authorise the Directors to fix their remuneration.

Special Business

To consider and if thought fit, pass the following resolutions:

5. Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and arehereby empowered to allot and issue shares in the Company, at any time, at such price, uponsuch terms and conditions, for such purpose and to such person or persons whomsoeveras the Directors may in their absolute discretion deem fit provided that the aggregate numberof shares to be issued does not exceed ten per centum (10%) of the issued share capitalof the Company at the time of issue and THAT the Directors be and are hereby alsoempowered to obtain the approval for the listing of and quotation for the additional sharesso issued on the Bursa Malaysia Securities Berhad and THAT such authority shall continueto be in force until the conclusion of the next Annual General Meeting of the Company.”

6. Proposed Renewal of Authority to Purchase the Company’s Own Shares

“THAT subject to the Companies Act, 1965 (“the Act”), rules, regulations and orders madepursuant to the Act, provisions of the Company’s Memorandum and Articles of Associationand the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any otherrelevant authority, the Directors of the Company be and are hereby authorised to makepurchases of ordinary shares of RM0.50 each in the Company’s issued and paid-up sharecapital through the Bursa Securities subject further to the following: -

(i) the maximum number of shares which may be purchased and/or held by the Companyshall be equivalent to 10% of the issued and paid-up share capital of the Company(“Shares”) at any point in time;

(ii) the maximum fund to be allocated by the Company for the purpose of purchasingthe Shares shall not exceed the aggregate of the retained profits and share premiumaccount of the Company. As at 31 October 2008, the audited accumulated loss and share premium account of the Company were RM5,034,000 and RM36,066,000respectively;

NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of SILVERBIRD GROUP BERHAD will be held at High5 Breadtown, Silver Bird Complex,Lot 72 Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor DarulEhsan on Wednesday, 29 April 2009 at 10.00 a.m. for the following purposes:

Ordinary Resolution 1Ordinary Resolution 2Ordinary Resolution 3

Ordinary Resolution 4




(iii) the authority conferred by this resolution will commence immediately upon passing of this resolution and will expireat the conclusion of the next Annual General Meeting (“AGM”) of the Company, unless earlier revoked or varied byordinary resolution of the shareholders of the Company in a general meeting or the expiration of the period within whichthe next AGM after that date is required by the law to be held, whichever occurs first, but not so as to prejudice thecompletion of purchase(s) by the Company before the aforesaid expiry date and, in any event, in accordance with theprovisions of the guidelines issued by the Bursa Securities or any other relevant authority; and

(iv) upon completion of the purchase(s) of the Shares by the Company, the Directors of the Company be and are herebyauthorised to deal with the Shares in the following manner: -(a) cancel the Shares so purchased; or(b) retain the Shares so purchased as treasury shares; or(c) retain part of the Shares so purchased as treasury shares and cancel the remainder; or (d) distribute the treasury shares as dividends to shareholders and/or resell on the Bursa Securities and/or cancel all

or part of them; or

in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and therequirements of the Bursa Securities and any other relevant authority for the time being in force.

AND THAT the Directors of the Company be and are hereby authorised to take all such steps as are necessary or expedientto implement or to effect the purchase(s) of the Shares with full power to assent to any condition, modification, variationand/or amendment as may be imposed by the relevant authorities and to take all such steps as they may deem necessaryor expedient in order to implement, finalise and give full effect in relation thereto.”

BY ORDER OF THE BOARD

TAN FONG SHIAN @ LIM FONG SHIAN (MAICSA 7023187)COMPANY SECRETARY

Shah Alam7 April 2009

Notes :

1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two (2)) to attend and votein his/her stead. If a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/herholdings to be represented by each proxy. A proxy may but need not be a member of the Company and if he is not a member, he need notbe an advocate, an approved Company auditor or a person approved by the Registrar of Companies.

2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxyshall be given under the Company’s Common Seal or under the hand of an officer or attorney duly appointed.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Silver Bird Complex, Lot 72, Persiaran JubliPerak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for the holding ofthe Fifteenth Annual General Meeting or any adjournment thereof.

Explanatory Note on the Special Business

Ordinary Resolution 6Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company, from the date of the Fifteenth AnnualGeneral Meeting, to issue and allot shares (other than bonus or rights issue) of the Company up to and not exceeding in totalten per centum (10%) of the issued share capital of the Company at the time of issue for such purpose as they considered wouldbe in the best interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the next AnnualGeneral Meeting of the Company.

Ordinary Resolution 7Proposed Renewal of Authority to Purchase the Company’s Own Shares

The proposed Ordinary Resolution 7, if passed, will empower the Company to purchase and/or hold up to 10% of the issued andpaid-up share of the Company. This authority unless revoked or varied by the Company at a General Meeting will expire at thenext Annual General Meeting of the Company.

Please refer to Share Buy Back Statement dated 7 April 2009 for further information.

Notice OfAnnual General Meeting

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1. Names of Directors who are standing for re-election at the Fifteenth AGM of the Company:

(i) Dato’ Dr Gan Khuan Poh;(ii) Dato’ Tan Han Kook; and(iii) Mr Lim Hock Chye.

2. Details of attendance of Directors at Board Meetings

The details are set out on page 18 of this Annual Report.

3. Date, Time and Venue of the Fifteenth AGM of the Company

The Fifteenth AGM of the Company will be held on Wednesday, 29 April 2009 at 10.00 a.m. at High5 Breadtown, Silver BirdComplex, Lot 72 Persiaran Jubli Perak, Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan.

4. Further details of Directors who are standing for re-election as Directors

The details of the Directors who are standing for re-election at the Fifteenth AGM are set out on page 10 to14 of this Annual Report.

No individual other than the retiring Directors is seeking election as a Director at the Fifteenth AGM of the Company.

No notice of nomination has been received todate from any member nominating any individual for election as a Directorat the Fifteenth AGM of the Company.

Statement AccompanyingNotice Of Annual General Meeting

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(Pursuant to Paragraph 8.28(2) of the Bursa Securities Listing Requirements)

This page was intentionally left blank

*I / We, ..........................................................................................................................................................................................(FULL NAME IN CAPITAL LETTERS)

NRIC No./Company No. ................................................................... (NEW) ......................................................................... (OLD)

of ..................................................................................................................................................................................................(FULL ADDRESS)

being a member of SILVER BIRD GROUP BERHAD hereby appoint ............................................................................................(FULL NAME)

NRIC No. .............................................. (NEW) .............................................. (OLD) or failing him/her.............................................

.......................................................................NRIC No. .............................................. (NEW) .............................................. (OLD)(FULL NAME)

or failing him/her, the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Fifteenth AnnualGeneral Meeting (“AGM”) of the Company to be held at High5 Breadtown, Silver Bird Complex, Lot 72 Persiaran Jubli Perak,Seksyen 21, 40300 Shah Alam, Selangor Darul Ehsan on Wednesday, 29 April 2009 at 10.00 a.m. and at any adjournmentthereof of the following resolutions referred to in the Notice of Fifteenth AGM. My/Our proxy is to vote as indicated below:

For Against








(Please indicate with an "X" in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy willvote as he/she thinks fit.)

(i) Applicable to shares held through a nominee account.

* Delete where applicable

Signed this ………….. day of ………………..…. 2009

Signature/Common Seal of Member

Notes:-1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies (but not more than two (2)) to attend and vote in his/her stead.

If a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.A proxy may but need not be a member of the Company and if he is not a member, he need not be an advocate, an approved Company auditor or a personapproved by the Registrar of Companies.

2. In the case of a corporation, the proxy appointed must be in accordance with its Articles of Association and the instrument appointing a proxy shall be given underthe Company's Common Seal or under the hand of an officer or attorney duly appointed.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at Silver Bird Complex, Lot 72 Persiaran Jubli Perak, Seksyen 21,40300 Shah Alam, Selangor Darul Ehsan not less than forty-eight (48) hours before the time appointed for the holding of the Fifteenth AGM or any adjournmentthereof.

FORM OF PROXY

For appointment of two proxies, percentage ifshareholdings to be represented by the proxies:

No. of shares Percentage

Proxy 1

Proxy 2

Total 100%

CDS Account No. (i)

No. of Shares held

The Company Secretary

SILVER BIRD GROUP BERHAD(Company No. 277977-X)

Lot 72, Persiaran Jubli PerakSeksyen 21, 40300 Shah Alam

Selangor Darul Ehsan

STAMP

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Silver Bird Annual Report 2008

Documents

Transcript of Silver Bird Annual Report 2008