Y.S.P. SOUTHEAST ASIA HOLDING BERHAD · 2007-08-04 · 02 Y.S.P. Southeast Asia Holding Berhad...
Transcript of Y.S.P. SOUTHEAST ASIA HOLDING BERHAD · 2007-08-04 · 02 Y.S.P. Southeast Asia Holding Berhad...
Y.S.P. SOUTHEAST ASIA HOLDING BERHAD552781-X
2005
annual report
Contents
A Tribute 02 Corporate Information 03 Corporate Structure 03 Chairman’s Statement 04 Group
Managing Director’s Operation Review 06 Group Financial Highlights 08 Directors’ Profile 09 Corporate
Governance Statement 12 Other Information 17 Statement of Internal Control 18 Audit Committee 19
Financial Statements 21 List of Properties 60 Shareholding Statistics 62 Notice of Annual
General Meeting 64 Statement Accompanying Notice of Annual General Meeting 66 Proxy Form
“Providing the
best quality
products and
improving human
health”
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200502
A Tribute to the Memory
of The Corporate Founder
of YSP Group
The Honourable
Dr. Lee Tien Te
A remarkable man and visionary who rose
from a humble upbringing during an era of
hardship to become a major and influential
corporate leader in the pharmaceutical
industry. His philosophy, profound thinking
and charismatic leadership had impressed
and inspired many who had the opportunity
to meet him. His passing is undoubtedly a
great loss to the YSP organizations
worldwide.
The Late Hon Dr. Lee Tien Te was the
founder of YSP Group with more than fifty
years experience in the pharmaceutical
field. He graduated from Japan Osaka
Business School in Japan as a Business
Specialist. He began his career with the
Tachia Town Administrative Council in
Tachia, Taiwan, Republic of China in health
management. In 1952, he set up Yung
Shin Pharmacy in Taiwan as a distributor of
pharmaceuticals. In 1965, he established
Yung Shin Pharma Co Ltd (YSP (TW)) to
manufacture and distribute pharmaceutical
products, first locally and later into several
overseas markets including Southeast Asia
countries, USA and China. YSP (TW) was
listed on the Main Board of the Taiwan
Stock Exchange in 1993 and Y.S.P.SAH
was listed on the Second Board of Bursa
Malaysia Securities Berhad in 2004.
His entrepreneurship, vision, foresight and
wealth of expertise in the pharmaceutical
industry had propelled YSP (TW) from
strength to strength to reach great heights
and worldwide recognition over the years.
The Late Hon. Dr Lee Tien Tee actively
supported many charitable, welfare and
benevolent causes during his lifetime.
He was also the Chairman of the Yung Shin
Social Welfare Foundation of Taiwan
R.O.C. and Yung Shin Lee Tien Te Medical
Trust Fund.
Chairman’s Statement
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 03
Corporate information
BOARD OF DIRECTORS
Datuk Dr. Anis Bin Ahmad
Chairman
Independent Non-Executive Director
Dr. Lee Fang Hsin
President/Group Managing Director
En. Adi Azuan Bin Abdul Ghani
Non-Independent Non-Executive Director
Madam Lee Ling Chin
Non-Independent Non-Executive Director
(Appointed on 16 February 2005)
Dr. Lee Fang Chuan @
Lee Fang Chen
Non-Independent Non-Executive Director
(Appointed on 27 February 2006)
Dr. Lee Fang Yu
Non-Independent Non-Executive Director
(Resigned on 6 February 2006)
Dato’ Koay Soon Eng
Independent Non-Executive Director
Mr. Tu Shu Yao
Independent Non-Executive Director
COMPANY SECRETARIES
Lim Seck Wah
(MAICSA 0799845)
M. Chandrasegaran
A/L S. Murugasu
(MAICSA 0781031)
REGISTERED OFFICE AND
PRINCIPAL PLACE OF
BUSINESS
16th Floor, Plaza IBM,
No. 1, Jalan Tun Mohd Fuad,
Taman Tun Dr. Ismail,
60000 Kuala Lumpur.
Tel : 03-7727 6390
Fax : 03-7727 6701
Email : [email protected]
Website : www.yspsah.com.my
REGISTRAR
Mega Corporate Services Sdn Bhd
(187984-H)
Level 15-2, Faber Imperial Court,
Jalan Sultan Ismail,
50250 Kuala Lumpur.
Tel : 603-2692 4271
Fax : 603-2732 5388
AUDITORS
Shamsir Jasani Grant Thornton
(AF0737)
(Member of Grant Thornton
International)
Level 11-1, Faber Imperial Court,
Jalan Sultan Ismail,
50250 Kuala Lumpur.
Tel : 603-2692 4022
Fax : 603-2691 5229
PRINCIPAL BANKERS
Malayan Banking Berhad (3813 K)
No. 2, Lorong Rahim Kajai 14,
Taman Tun Dr. Ismail,
60000 Kuala Lumpur.
Tel : 03-7729 3671
HSBC Bank Malaysia Berhad
Level 1 Annexe, Menara Milenium,
Jalan Damanlela,
Pusat Bandar Damansara,
Damansara Heights,
50490 Kuala Lumpur.
Cathay United Bank (970064C)
Licensed Offshore Bank,
Level 3(C), Main Office Tower,
Financial Park Labuan Complex.
STOCK EXCHANGE LISTING
Second Board of
Bursa Malaysia Securities Berhad
100%Y.S.P. Industries
(Malaysia) Sdn Bhd
Y.S.P. Southeast Asia Holding Berhad552781-X
Resident Representative
Office of Y.S.P. Industries
(Malaysia) Sdn Bhd
100%Kumpulan Y.S.P.
(M) Sdn Bhd
99.80%Myanmar Yung Shin
Pharma.Ltd.
100%
Y.S.P. (Cambodia)
Pte. Ltd.
100%Yung Shin Pharm.
(Singapore) Pte. Ltd.
99.99%Yung Shin Pharm.
(Philippines) Inc.
100%P.T. Yung Shin Pharmaceutical
Indonesia
Chairman’s statement
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200504
2005 was a year of performance and
challenge for the Group as a whole.
Performance was manifested in our overall
growth, and challenges in the form of
growing competition, both domestically and
regionally in the pharmaceutical industry.
However benefactors will be pleased to
know that the Group has moved in the right
direction towards establishing itself as a
serious regional player, amidst raising
expectations and confidence amongst
clients and shareholders alike. One such
development is the proposed transfer of
listing of the Group from its current second
board status to main board status. A move
when completed will better reflect the
stature of Y.S.P.SAH and its subsidiaries,
giving the Group better recognition and
acceptance amongst investors, in particular
institutional investors.
INDUSTRY, MARKET &DEVELOPMENT OVERVIEW
The Malaysian economy expanded at a
strong annual rate of 5.2% in the fourth
quarter of 2005, and this strong turnover
continued into the first quarter of 2006
with expectancies raising high for the rest
of the financial year. The pharmaceutical
industry in Malaysia has experienced an
increase of 10%-15% growth annually for
the last decade. This trend continued in
the year of 2005, and its is expected to
continue to soar barring any unforeseen
changes with a potential revenue estimated
at USD208 million in 2007. This upward
robust development is heavily influenced by
several factors, such as the Government's
pursuit in improving the overall wellness of
Malaysians and, in particular Malaysia's
acceptance as a Member of the
Pharmaceutical Inspection Co-operation
Scheme (PICS), which recognizes
Malaysian manufactured pharmaceutical
products as having global standards for
quality. These factors have encouraged the
local pharmaceutical players as they have
intensified their R&D efforts, in particular
the area of generic and herbal remedies,
whilst establishing themselves as a reputed
manufacturer and exporter with market
segments across the Asian and African
regions. Another growing trend that has
caught on in the Malaysia and the Asia
Pacific region is the demand and growth of
the “Wellness Revolution”. Under this
wave, people everywhere are living or
striving towards healthier lifestyles, this has
somewhat increased the demand for, in
particular herbal and other food supplements
that are cheaper yet of high quality.
FINANCIAL PERFORMANCE
For YSP, I am pleased to announce that the
year was characterized by good sales
growth, productivity with continued
investment in innovation. In line with
strong economic fundamentals and the
growing demand for pharmaceutical and
healthcare products, the Group recorded an
increase of 15% in sales turnover amounting
to RM86.38 million in FYE 2005 which
spells a net profit after tax of RM9.51
million in contrast of the previous turnover
of RM74.96 million and Profit After Tax
RM8.48 million.
The increase is largely attributed to the
Group's continuous efforts on our expanded
product variety and aggressive marketing
strategies to promote sales both locally and
overseas, particularly in the Southeast Asia
region whilst expanding production capacity
and warehouses to further enhance revenue
growth for the Group. While we are proud of
the 12% increase in net profit, we do not
intend to rest on our laurel as efforts to
improve turnaround time and business
efficiency, and achieving economies of
scale in all operations is constantly pursued.
Datuk Dr. Anis Bin AhmadChairman
Independent Non-Executive Director
“Once again it is with great optimism, pleasure and honour
that I present to you the Annual Reports and Financial
Highlights of the Group and its subsidiaries for the financial
year ending 31st December 2005.”
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 05
DIVIDEND
Whilst we are mindful of the increase in profits in
FYE2005, we are also aware of the needs to be
prudent and investments in the future of the
Company. The principles and strategies of the
Company demand that further commitment be put
into manufacturing, logistics and housing, coupled
with extensive R&D will secure the future of the
Group. Therefore no dividend is proposed for the
year under review.
OUTLOOK
As we step into another year, the Board is
confident of the Company's future outlook. With
the strength of our ever recovering economy, the
Group is well positioned for the opportunities that
might prove lucrative. For starters we foresee the
coming 9th Malaysian Plan (9MP) to have a
significant impact on the Malaysian healthcare
sector. The thrust of the healthcare sector in the
9MP is “Towards Achieving Greater Health
Through Consolidation Of Services” of which one
of its primary goals is the prevention and
reduction of disease burden. The Government's
announcement to allocate of about RM1.3 billion
for development expenditure to the Ministry of
Health further strengthens its commitment
towards healthcare in the nation. The healthcare
sector itself is estimated to be valued between
USD70 million - USD80 million in 2004, with the
pharmaceutical industry representing of about 1/3
of the overall volume of USD0.4 billion, and of
which only 20% - 30% being produced
domestically. These facts coupled with the impact
of the 9MP represent the huge untapped potential
in the pharmaceutical industry.
Investments in R&D is essential to our success
strategy. Our research team is constantly
developing and testing new products for further
market penetration. As a result, Y.S.P.SAH will
launch a series of new products in the year 2006
whilst aggressively stepping up A&P for its current
stable of products in particular its “SHINE” range.
Regionally our subsidiaries in South East Asia
continue to add value to our growing portfolio of
products and profits, with exceptional growth mainly
in Singapore, Vietnam and Philippines, whilst
Thailand, Cambodia, Myanmar, Sri Lanka, Indonesia
and Laos continue to show increased potential.
In conclusion, the Board believes the Group is
well positioned to anticipate the market demands
locally and regionally. Sound management
principle, facilities, excellent distribution network,
experienced management team along with an
extensive portfolio of products give the group the
edge in this ever growing competitive industry.
With the anticipated positive outcome of the 9MP,
coupled with our proposed transfer of listing to the
main board, YSP's stature will increase in folds as
investors and competitors alike take note.
ACKNOWLEDGEMENT
On behalf of the Board, I wish to extend our
condolences to the family of the late honorary
Dr. Lee Tien Te, our corporate founder. He will be
greatly missed and fondly remembered as a
mentor whose leadership, vision and wisdom has
brought the Group to a position of strength today.
We welcome Lee Fang Chuan to the Board and bid
farewell to Lee Fang Fu along with our sincere
gratitude for his dedication which has been of
great value to the Group. The Board also extends
its appreciation to the management and staff of
the Group for their dedication and commitment.
Finally, our gratitude and sincere thanks to the
various government authorities, shareholders,
partners, clients, suppliers and regulatory authorities
for their invaluable support and assistance, and
look forward to their continued support.
Datuk Dr. Anis Bin AhmadChairman
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200506
Over the last 10 years the pharmaceutical industry
across South East Asian countries have grown
steadily at an average annual rate of 10%-12%.
As the Government Authority across this region
continues to play more proactive role in their
country's healthcare sector, the demand for
cheaper generic alternatives continue to rise and
has become a major investment field. Some
countries such as Indonesia and Thailand are
imposing generic substitution as mandatory. It is
also anticipated that over 40 blockbuster drugs
will lose its patent exclusivity over the coming
years, raising expectations of a huge increase in
market share for generic manufacturers. Based on
these factors, the generic market, in particular the
Malaysian market is expected to increase by
another 30% to the tune of almost USD400
million in 2009. Hence the pharmaceutical
players in the south eastern region, in particular
generic manufacturers stand to gain a substantial
increase in demand and profits.
SALES PERFORMANCE REVIEW
In Malaysia, the sale of medicinal products to GPs
in the private sector increased by 8.68% (RM3.11
million). We have successfully registered and
launched 6 new products and 3 additional pack
sizes. Hospital sales increased by 46.36%
(RM2.87 million) in 2005, largely due to the
increased sales to government hospitals whilst
sales to private hospitals has returned to positive
results. Over The Counter (OTC) products registered
a 13.88% growth compared to the previous year.
This significant rise is largely attributed to the
Group's aggressive A&P activities towards building
the “SHINE” range, with constant advertising,
exhibitions, launch conferences and road shows
across the country. Veterinary sales declined by
0.16%, due largely to the feed miller reducing
cost in animal feed causing a decrease in expenditure
for drugs and premix. Wide spread bird flu
outbreaks has caused a major reduction in poultry
supply. The Group's counter measure strategies
include investing into pro-biotic and anti-septic
products to fulfill the gaps in this division.
As for the year 2006, Y.S.P.SAH has planned to
launch several medicinal products to general
practitioners and private hospitals alike. The
significant increase in government hospital sales has
propelled us to move in that direction with more
participation in government tenders anticipated.
The Group's “SHINE” range of products continues
to register increasing sales. Other than aggressive
A&P activities, the Group plans to increase its
range of products under the “SHINE” brand
catering to a wider section of the community.
Regionally, Y.S.P.SAH's export sales has increased
by 33.68% for the FYE2005 with Singapore,
Vietnam and the Philippines as the primary export
contributors. Our export to Thai, Cambodia,
Myanmar, Sri Lanka, Indonesia and Laos have also
made progressive strides in their respective areas.
The development of the pharmaceutical industry
in this part of the region is still in its growth
stage. As such the Group's first step was to
establish a distribution network in each corner of
the South East Asian market. Our confidence in
this region is upheld by our close relationships
with the distributors and respective authorities
which has enabled us to listen to the needs of the
people and supply good quality products according
to these needs. To date we have obtained a
substantial number of product licenses in this
region with more anticipated in the coming year.
With launches and registrations and Y.S.P.SAH's
role as license holders, we are setting up one of
the most secured foundations in this region.
CORPORATE DEVELOPMENT
The Board believes that over the years Y.S.P.SAH
has focused strongly on achieving its near and
long term goals mainly by launching of new
products, advancing pipeline of products and
viable foreign investments. The group has made
good progress towards these goals. However, the
long term success of the Group will depend mainly
on its products. Our products are vital and we
continue to ensure upkeeping of its quality and
Group Managing Director’s operations review
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 07
efficacy in the years to come, and most
importantly they play an important role in the
quality of life.
RESEARCH & DEVELOPMENT
The Group's R&D is focused mainly on generics,
lifestyle and OTC drugs. Armed with an
experienced and dedicated team of R&D
researchers, Y.S.P.SAH has been improving and
developing quality pharmaceutical products in
these division, which matches the current market
demands and constitutes a significant contribution
to the revenue of the Group.
MANUFACTURING & WAREHOUSING
Our certified GMP manufacturing plant provides
an ideal and clean production site for large scale
production of pharmaceuticals. With the support
of high-tech equipment and a dedicated team of
production staffs, Y.S.P.SAH is able to meet the
demands of an ever increasing market. The well-
planned expansion scheme for the production site
and the continuous supply of new manufacturing
equipment will ensure that Y.S.P.SAH lives up to
world's standards and manufacturing quota. To
complement our world class manufacturing plant
is our equally superb warehousing facility. With a
built up area of 5400 sq meters, our warehouse
is capable of housing all our products under one
roof. It is also equipped with Enterprise Resource
Planning (ERP) Information System and Computer
Aided Picking & Packing System (CAPS) designed
to handle 3000 orders daily.
QUALITY ASSURANCE & PROFESSIONALTEAM DEVELOPMENT
This important aspect of pharmaceutical
manufacturing requires detailed documentation
and auditing. Here at Y.S.P.SAH, every single step
of the manufacturing process, starting from the
purchasing of raw materials, is fully documented
and continuously audited. These measures assure
the high quality of our pharmaceutical products.
Pharmacists, nutritionists and veterinarians make
up the professional team of Y.S.P.SAH in order to
provide sophisticated professional service for
customers. This further strengthens our
confidence in our products and services which
stems from our strict demands on quality and the
implementation of regular inspection and audit.
MARKETING & PERSONNEL DEVELOPMENT
Y.S.P.SAH has in place an established and well-
coordinated distribution system for the servicing of
its clientele in the local and regional markets. Our
marketing teams are continuously striving by
researching market needs for the development of
new products. Our marketing teams are also
subject to constant training and seminars that
help develop their marketing skills and product
knowledge to ensure constant customer
satisfaction.
Our aim is to continue to develop new
pharmaceutical, health food and veterinary
products for fulfilling the medicinal needs of our
people and to uphold our corporate philosophy
which is "Providing the Best Quality Products and
Improving Human Health".
ACKNOWLEDGEMENT
I would like to extend my appreciation to my
fellow Board members for their advice and
guidance during the year under review, the
management and staff for their dedication and
sense of ownership of the Group. Their attitude
has been outstanding and I am confident of their
role in the Company's success in the years to
come. And finally to our shareholders, your
continuous support keeps us going as we strive
towards global recognition.
Dr. Frank S. Lee Fang Hsin
President /Group Managing Director
Group financial highlightsfor the year ended 31 December 2005
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200508
2003 2004 2005
Turnover (RM’000) 70,369 74,960 86,381
Profit before taxation (RM’000) 11,150 11,579 17,860
Profit after taxation (RM’000) 8,300 8,483 14,601
Earning per share (sen*) 16.91 14.02 24.13
Net tangible assets per share (sen) 1.38 1.44 1.45
* The earning per share for the year 2004 and 2005 has been restated to make into account the effects of
bonus shares issued.
03
TURNOVER
(RM‘000)
04 05
70
,36
9
74
,96
0
86
,38
1
03
PROFIT BEFORE TAXATION
(RM’000)
04 051
1,1
50
11
,57
9
17
,86
0
03
PROFIT AFTER TAXATION
(RM’000)
04 05
8,3
00
8,4
83
14
,60
1
03
EARNING PER SHARE
(SEN)
04 05
16
.91
14
.02
24
.13
03
NET TANGIBLE ASSETS
PER SHARE (SEN)
04 05
1.3
8
1.4
4
1.4
5
Directors’ profile
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 09
Datuk Dr. Anis Bin Ahmad Aged 60, a Malaysian,
was appointed to the Board of Directors of
Y.S.P.SAH as an Independent Non-Executive
Director on 16th September 2002 and
subsequently as the Chairman on 17th November
2003. Datuk Dr. Anis graduated with a Bachelor
of Pharmacy from the University of Singapore, a
Master of Science in Pharmaceutical Technology
from the University of London and a Ph.D. in
Pharmacology from the University of Bath, United
Kingdom In 1968.
Datuk Dr. Anis started his career as a
Pharmaceutical Officer/Pharmacist with the MOH
for 6 years. He continued his career as a Lecturer
and Head of the Department of Pharmacology in
University Kebangsaan Malaysia from 1975 to
1979. From his extensive experience in pharmacy,
he served as the Deputy Director of NPCB from
1983 to 1987, and was promoted to Director of
NPCB in 1988 and served in that capacity until
1990. He was also the Secretary of the DCA from
1985 to 1990. In 1991, he held the position of
Deputy Director of Health (Pharmacy) for the
Department of Health, Johor before he was
promoted to Director of Pharmacy of MOH in
1996 where he was attached for 5 years until
2001. Datuk Dr. Anis was awarded the Pingat
Jasa Negara that carries the title “Datuk” by Seri
Paduka Baginda Yang Dipertuan Agong in 2001.
Datuk Dr. Anis also serves on the board of New
Hoong Fatt Holding Bhd.
Datuk Dr. Anis is presently the Chairman of the
Remuneration Committee and a member of
Nomination Committee of Y.S.P.SAH.
Datuk Dr. Anis has no family relationship with
other directors or major shareholders of Y.S.P.SAH.
Datuk Dr. Anis holds 1,412,500 shares in
Y.S.P.SAH.
Dr. Lee Fang Hsin Aged 46, a Taiwanese and a
permanent resident in Malaysia, was appointed to
the Board of Directors of Y.S.P.SAH as
President/Group Managing Director on 17th
November 2003. Dr. Lee currently sits on the
boards of several private limited companies in
Malaysia including subsidiary companies of
Y.S.P.SAH in Malaysia and he also currently sits
on the board of YSP(TW). He possesses a graduate
diploma in Finance and Taxation from Tamsui
Oxford College, a Masters in Business
Administration and PhD from Pacific Western
University. USA
Dr. Lee started his career in 1985 with Yung Shin
Pharmaceutical Industries Co. Ltd. [YSP(TW)], as
a Marketing Executive. In the same year, he was
transferred to Japan to conduct marketing surveys
for YSP(TW) until 1987. In 1987, Dr. Lee was
also appointed as the Representatives in charge of
YSP(TW)'s branch in Malaysia, which eventually
resulted in the establishment in Kumpulan Y.S.P.
(Malaysia) Sdn Bhd.
Dr. Lee has been honoured with the following
titles and awards:-
- “Darjah Seri Melaka” by the Governor of
Malacca in 1998.
- The Asia-Pacific Distinguish General Manager
Award in the Second Annual Professional
Manager Award for Enterprise in Taiwan,
R.O.C. in 1998
- The Model from Overseas Chinese Young
Entrepreneur in Taiwan, R.O.C. in 1998
- The Global Overseas Professional Manager
Award in Taiwan, R.O.C. in 2000
- The Third National Award of Overseas
Taiwanese Enterprises in 2001
Dr. Lee is currently the Honorary President of
Taipei Investors' Association in Malaysia and
Honorary President of The Council of Taiwanese
Chambers of Commerce in Asia.
Dr. Lee is presently a member of Audit Committee
and Remuneration Committee of Y.S.P.SAH.
Dr. Lee is a sibling to Dr. Lee Fang Chuan @ Lee
Fang Chen and Mdm Lee Ling Chin.
Dr. Lee holds 3,121,976 shares in Y.S.P.SAH and
has an indirect interest of 25,663,330 shares in
Y.S.P.SAH by virtue of his spouse interest in
Y.S.P.SAH and his interest in Yung Shin
Pharmaceutical Industries Co. Ltd which wholly
owns YSP International Co. Ltd. in turn wholly
owns YSP Sea Investment Co. Ltd., a substantial
shareholder in Y.S.P.SAH.
Dato' Koay Soon Eng Aged 59, a Malaysian, was
appointed to the Board of Directors of Y.S.P.SAH
as an Independent Non-Executive Director and
Chairman of the Audit Committee of Y.S.P.SAH on
16th September 2002 and 17th November 2003
respectively. He holds a Bachelor of Commerce
from the University of Queensland and is an
Accountant by profession, being a Chartered
Accountant of the Malaysian Institute of
Accountants. Dato' Koay is also the Fellow of the
Institute of Chartered Accountants in Australia
and a Certified Practising Accountant of the
Society of Certified Practising Accountants,
Australia.
Being in public practice for over 30 years since
1973 as an Accountant, Auditor, Tax Agent and
Business Consultant, Dato' Koay is currently the
Executive Chairman of the Moores Rowland Group,
a Malaysian firm of an international practice of
accountants and consultants.
Dato' Koay is presently the Chairman of the Audit
Committee of Y.S.P.SAH and he has no family
relationship with other directors or major
shareholders of Y.S.P.SAH.
Tu Shu Yao Aged 56, a Taiwanese, was appointed
to the Board of Directors of Y.S.P.SAH as an
Independent Non-Executive Director and a
member of the Audit Committee of Y.S.P.SAH on
17th November 2003. Graduated with a Diploma
in Mining & Metallurgical engineering from the
University of National Taipei Technology in 1971,
he embarked on his career in the metal and gas
industry in Nigeria, Africa where he served in
various capacities. He was involved in similar
metal and gas industry in Taiwan from 1986 to
1989.
Mr. Tu is presently the Chairman and Managing
Director of Region group of companies (“RGC”) in
Malaysia, a position which he holds since 1986.
In RGC, Mr. Tu is involved in, amongst others,
overseeing the business operations, devising
strategic plans and business direction as well as
responsible for the overall performance of the
group. As the President of the Chinese Taipei
School (Kuala Lumpur) and President of the
Taipei Investors' Association in Malaysia, Mr. Tu is
also active in providing business advices and
guidance to other associations and social
organisations.
Mr. Tu is presently a member of Audit Committee,
Remuneration Committee and Nomination
Committee of Y.S.P.SAH and he has no family
relationship with other directors or major
shareholders of Y.S.P.SAH.
Mr. Tu holds 550,000 shares in Y.S.P.SAH and
has an indirect interest of 209,000 shares in
Y.S.P.SAH by virtue of his spouse interest in
Y.S.P.SAH.
Lee Ling Chin Aged 56, Taiwanese, was
appointed to the Board of Director of Y.S.P.SAH as
a Non-Independent Non-Executive Director on
16th February 2005. She is currently the Director
and a substantial shareholder of YSP(TW). She
graduated with Family Business Management from
Shih Chien University, Taiwan R.O.C in 1971.
She started her career in 1972 with Yung Shin
Pharmaceutical Industries Co. Ltd YSP(TW) as
Section Manager of Administration Section
responsible for Accounting and General Affairs
and she was also involved in setting up the
company management regulation and SOP. She
was then promoted as Manager to be responsible
for overseas business including Southeast Asia
market research and development. She was later
promoted to the position of Vice President in year
1988 to assist the President in management
operation and assist to expand the sales to general
hospital. At the same year she was elected as
Committee Member of Taiwan Pharmaceutical
Manufacturer's Association as an active
participant in public health activities. In Year
2000, she was transferred to an investment
company of YSP(TW), a company dealing with
plasma products business name “BioTrust
International Corporation”, as President. She was
involved in pushing the development of biological
industry in Taiwan R.O.C. and had succeeded in
implementing a new legistration of “Blood
Products Act” in Taiwan R.O.C. She is currently
the Vice Chairman of BioTrust International
Corporation.
Mdm Lee currently served as a member of the
board of several private limited companies in
Taiwan R.O.C. and the subsidiary companies of
Y.S.P.SAH in Malaysia.
Mdm Lee is presently a member of Nomination
Committee of Y.S.P.SAH and she is a sibling to Dr.
Lee Fang Hsin and Dr. Lee Fang Chuan @ Lee
Fang Chen.
Mdm Lee holds 345,434 shares in Y.S.P.SAH and
has an indirect interest of 25,502,730 shares in
Y.S.P.SAH by virtue of her interest in Yung Shin
Pharmaceutical Industries Co. Ltd which wholly
owns YSP International Co. Ltd. in turn wholly
owns YSP Sea Investment Co. Ltd., a substantial
shareholder in Y.S.P.SAH.
Directors’ profile
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200510
Directors’ profile
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 11
Adi Azuan Bin Abdul Ghani Aged 36, a
Malaysian, was appointed to the Board of
Directors of Y.S.P.SAH as a Non-Independent Non-
Executive Director of Y.S.P.SAH since 1st
December 2004. Graduated with UK BSc
(Honours) Accounting from Queen's University of
Belfast and ACCA from Emile Woolf College,
London, UK. He is now a Fellow Member of the
ACCA (FCCA) and also a member of Malaysian
Institute of Accountants (MIA).
He started his professional career in the auditing
and accounting fields with PricewaterhouseCoopers,
Kuala Lumpur in year 1996. He was then
promoted to the position of Manager in year 2002
and involved in the provision of audit and
accounting services mainly to banking and
financial institutions before joining Lembaga
Tabung Haji as the Divisional Head of Group
Accounts in July 2002. Presently, he is the Head
of Division in Finance & Accounts and Group
Accounts Divisions.
Encik Adi Azuan Bin Abdul Ghani does not have
any equity interest in Y.S.P.SAH or the subsidiary
companies. He also does not have any family
relationship with any directors or major
shareholders of Y.S.P. SAH. Encik Adi Azuan is a
representative of Lembaga Tabung Haji on the
Board of Y.S.P.SAH.
Dr. Lee Fang Chuan @ Lee Fang Chen Aged 49, a
Taiwanese, was appointed to the Board of
Directors of Y.S.P.SAH on 27 Feb 2006. Dr. Lee
currently holds the Chairman of the Board of
Directors and the President of Yung Shin
Pharmaceutical Ind. Co., Ltd. [YSP (TW)], one of
the major stakeholder of YSP SAH. Dr. Lee also
sits on the boards of several private limited
companies in Malaysia including subsidiary
companies of Y.S.P.SAH in Malaysia as well. Dr.
Lee possesses a BS in Pharmacy from Taipei
Medical University, a Master in Pharmaceutical
Chemistry from National Taiwan University, a MBA
from Tunghai University and a PhD in Medicinal
Chemistry from University of Minnesota, USA. Dr.
Lee is currently pursuing his degree in LLM from
the Institute of Technology Law at National
ChiaoTung University.
Dr. Lee started his career in 1983 with [YSP
(TW)] as a research associate in R&D Division. In
1989, Dr. Lee was appointed as the Director of
Medicinal Chemistry in R&D. Dr. Lee was then
gradually promoted to the Vice-president of R&D.
Dr. Lee was assigned to Yung Zip Chemical (YZC)
as the President for his connection to FDA and he
has successfully organized staff of YZC to upgrade
YZC's cGMP to FDA standard. Dr. Lee was again
assigned to China in 1996 as the President of the
start-up company, namely Yung Shin
Pharmaceutical (KunShan) and he worked
together with other expatriates to build the facility
to meet SFDA's cGMP standard in record time. 1n
2001, Dr. Lee returned to Taiwan and continued
his leaderships in YZC and was soon elected as
the Chairman of the Board. In 2004 he was
elected as Board of Director of [YSP (TW)] and
further nominated as the Chairman of the Board
on November 23, 2005.
Dr. Lee also holds certificate granted by Ministry
of Education at Taiwan as an Associate Professor.
Dr. Lee is active in many organizations at Taiwan,
such as Chinese Pharmaceutical Manufacturing
and Development Association and Chinese
Medical and Pharmaceutical Technology
Development Center where he is the elected
Chairman of the Board since April 2005.
Dr. Lee is presently a member of Nomination
Committee of Y.S.P.SAH and he is sibling to Dr.
Lee Fang Hsin and Mdm Lee Ling Chin.
Dr. Lee holds 463,146 shares in Y.S.P.SAH and
has an indirect interest of 25,502,730 shares in
Y.S.P.SAH by virtue of his interest in Yung Shin
Pharmaceutical Industries Co. Ltd which wholly
owns YSP International Co. Ltd. in turn wholly
owns YSP Sea Investment Co. Ltd., a substantial
shareholder in Y.S.P.SAH.
All the above-named Directors of Y.S.P.SAH have
not been convicted of any criminal offences (other
than ordinary traffic offences, if any) and they do
not have any conflict of interest with the Company.
The Board of Directors fully acknowledges the
importance of good corporate governance and is
taking steps to evaluate the status of the corporate
governance adopted by the Group as tabulated
below and its compliance with the code of best
practices as set out in Part 1 and 2 of the
Malaysian Code on Corporate Governance pursuant
to Paragraph 15.26 of the Listing Requirements
of Bursa Malaysia Securities Berhad (“Bursa
Securities”).
1. BOARD OF DIRECTORS
1.1 Composition of the Board of Directors
The Board presently has seven (7)
members and is headed by the
President/Group Managing Director,
Dr. Lee Fang Hsin. The profile of each
Director is presented separately in the
Annual Report.
1.2 Board Balance
The Board has seven (7) members
comprising the following:-
• One (1) Chairman (Independent Non-
Executive)
• One (1) President/Group Managing
Director
• Two (3) Non-Independent Non-
Executive Directors
• Two (2) Independent Non-Executive
Directors
The Company is in compliance with
Paragraph 15.02 of the Listing
Requirements whereby nearest one-third
of its Board members are independent
directors.
All Board members participate fully in
decisions on the key issues involving the
Group. The President/Group Managing
Director has primary responsibilities for
managing the Group's day to day
operations and together with the Non-
Executive Directors to ensure that the
strategies proposed by the management
are fully discussed and examined, and
taking into account the long term
interests of the various stakeholders
including shareholders, employees,
clients, suppliers and the various
communities in which the Group
conducts its business.
The Board is assured of a balanced and
independent view at all Board
deliberations largely due to the presence
of its Non-Executive Directors who are
independent from Management. The
Independent Directors are also free from
any business or other relationships that
could materially interfere with the
exercise of their independent judgment.
The Board is constituted of individuals
who are committed to business integrity
and professionalism in all its activities.
As part of its commitment, the Board
supports the highest standards of
corporate governance and the
development of the best practices for the
Group.
In addition to the role of guidance by the
Independent Non-Executive Directors,
each Director brings independent
judgment to bear on issues of strategy,
performance, resources and standard of
conduct.
1.3 Duties and Responsibilities
The Board retains full and effective
control of the Company and the Group.
This includes responsibility for
determining the Group's overall strategic
direction as well as development and
control of the Group.
1.4 Meetings
The Board met four (4) times during the
financial year ended 31 December 2005.
The members of the Board and their
attendance at the meetings, were as
follows:-
Corporate Governance Statement
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200512
Board of Directors No. of meetings attended
Datuk Dr. Anis Bin Ahmad 4/4
Dr. Lee Fang Hsin 4/4
Dato' Koay Soon Eng 4/4
Mr. Tu Shu Yao 4/4
En. Adi Azuan Bin Abdul Ghani 4/4
Madam Lee Ling Chin (Appointed on 16.2.2005) 3/3
Dr. Lee Fang Yu (Resigned on 6.2.2006) 3/4
Dr. Lee Fang Chuan @ Lee Fang Chen (Appointed on 27.2.2006) -
13Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X
Corporate Governance Statement
1.5 Appointments to the Board
The appointment of any additional Director
is made as and when it is deemed necessary
by the existing Board with due consideration
given to the mix of expertise and
experience required for an effective Board.
In compliance with the Listing
Requirements of Bursa Securities, the
Board's Nomination Committee comprises
exclusively Non-Executive Directors.
The Nomination Committee is empowered
by the Board and its terms of reference to
consider and evaluate the appointment of
new Directors and Directors to board
Committees of the Company. The
Nomination Committee will then
recommend the candidates to the Board
for the appointment. The Nomination
Committee also keeps under review the
Board structure, size and composition
and the mix of skills and core
competencies required for the Board to
discharge its duties effectively. In
addition, the Nomination Committee will
deliberate on Board succession plan as
and when appropriate.
The Nomination Committee will also
assess the effectiveness of the Board as a
whole, the Committees of the Board and
the contributions of each individual
Director on at least an annual basis.
The members of the Nomination
Committee are as follows:-
a) Dr. Lee Fang Chuan @
Lee Fang Chen (Chairman)
b) Datuk Dr. Anis Bin Ahmad
c) Mr. Tu Shu Yao
d) Madam Lee Ling Chin
1.6 Retirement and Re-election
Pursuant to the Company's Articles of
Association, one-third (1/3) of the
Directors, including the Managing
Director, shall retire from office, at least
once in three (3) years. Retiring Directors
can offer themselves for re-election.
Directors who are appointed by the Board
during the financial year are subject to re-
election by shareholders at the next
Annual General Meeting held following
their appointment. Directors over seventy
(70) years of age are subject for re-
appointment annually in accordance with
Section 129(6) of the Companies Act,
1965.
1.7 Supply of Information
The agenda and Board papers for each
item as well as minutes of previous
meetings are circulated prior to the Board
meetings to give Directors sufficient time
to deliberate on the issues to be raised at
the Board meetings.
Upon recommendations by the
management / committee members, the
Board will deliberate and discuss on the
matters before any decisions be made. All
proceedings of the Board Meetings are
minuted and signed by the Chairman of
the meeting in accordance with the
provision of Section 156 of the
Companies Act, 1965.
The Board is kept updated on the
Company's and Group's activities and its
operations on a regular basis. The Directors
also have access to reports on the Group's
activities, both financial and operational.
All Directors have access to the advice
and services of the Company Secretary
who is responsible for ensuring that board
procedures are followed and the Board
may also take independent advice, at the
Company's expenses, in the furtherance
of their duties if so required. The Board
also has unlimited access to all information
with regard to the activities of the
Company.
1.8 Relationship of the Board to Management
• Quality of Information
Information plays a key role in the
Board's decision-making and in
setting up the policies and strategies
of the Company. The Board has
unrestricted access to timely and
accurate information, which is not
only confined to qualitative and
quantitative information, but also to
other information deemed suitable
such as customer satisfaction,
products and services quality, market
share and market reaction and macro
economic performance.
• Access to Information
Prior to the board meetings, all
Directors receive an agenda and
Board papers containing information
relevant to the business of the
meeting including information on
major financial, operational and
corporate matters relating to the
activities and performance of the
Group. The Board papers were served
earlier to enable Directors to have
sufficient time to digest the
information and to obtain further
explanation, where necessary, in
order to be properly informed before
the meeting.
• Use of Board Committees
As appropriate, the Board has
delegated certain responsibilities to
Board Committees which operate
within clearly defined terms of
reference. The Committees are as
follows:-
a) Audit Committee
b) Remuneration Committee
c) Nomination Committee
1.9 The Relationship between the Board and
the Shareholders
The principal forum for dialogue with
shareholders is the AGM, during which
shareholders are encouraged to
participate and pose questions to the
Board regarding operational and financial
information. The AGM also allows
shareholders an opportunity to interact
directly with the Board and seek first-
hand information on the above matters.
Extraordinary General Meetings are held
as and when shareholders' approvals are
required on specific matters and
shareholders are notified of such
meetings requirements.
2.0 Directors' Training
In view of the changing laws, regulations
and business environment, the Directors
are encouraged to attend continuous
training to further their knowledge and to
equip them to effectively discharge their
duties as directors.
All members of the Board had attended
the Mandatory Accreditation Programme
(“MAP”) as prescribed by Bursa
Securities Listing Requirements.
The Directors are encouraged to and, in
accordance with their respective needs,
have attended briefings, seminars and
other continuing education programmes
to keep abreast with current
developments in the industry as well as
changes in laws and regulations.
2. DIRECTORS' REMUNERATION
2.1 The Level and Make-Up of Remuneration
(i) The aggregate remuneration of
Directors of the Group for the
financial year ended 31 December
2005 is follows:-
Salaries & Other
Emoluments
RM
Executive Directors 913,727
Non-Executive Directors 196,799
1,110,526
Corporate Governance Statement
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200514
Remuneration Band Executive Directors Non-Executive Directors
Below 50,000 - 8
RM 50,001 - RM100,000 1 -
RM150,001 - RM200,000 2 -
RM400,001 - RM450,000 1 -
2.2 Procedure
In compliance with the Listing
Requirements of Bursa Securities, the
Board has established a Remuneration
Committee consisting of two (2)
Independent Non-Executive Directors and
the Group Managing Director. The
Committee's primary responsibility is to
recommend to the Board, the
remuneration of Directors. However, the
final decision on remuneration for
Directors is a matter for the Board as a
whole and individual directors are
required to abstain from discussion of
their own remuneration.
The members of the Remuneration
Committee are as follows:-
a) Datuk Dr. Anis Bin Ahmad
(Chairman)
b) Mr. Tu Shu Yao
c) Dr. Lee Fang Hsin
3. SHAREHOLDERS
3.1 Dialogue between the Company and
Investors
The Group values dialogue with investors
as a means of effective communication
that enables the Board to convey
information about the Group's
performance, corporate strategy and other
matters affecting shareholders' interests.
The AGM is the principal forum for dialogue
with individual shareholders. It is a crucial
mechanism in shareholder communication
for the Company. At the Company's AGM,
shareholders have direct access to the
Board and are given the opportunity to ask
questions during the open questions and
answers session. The shareholders are
encouraged to ask questions on both the
resolutions being proposed or about the
Group's operations in general.
The Board is also committed to ensure
that shareholders are well informed of
major developments of the Company and
the Group and the information is also
communicated to them through the
following channels:-
a) Annual Report;
b) various disclosures and
announcements made to Bursa
Securities including the quarterly
results and annual results; and
c) the Company's website
www.yspsah.com.my through which
shareholders and the public in
general can gain access to the latest
corporate and product information of
the Group.
3.2 Annual General Meeting (“AGM”)
Notice of AGM and Annual Reports are
sent out to shareholders at least 21 days
before the date of the meeting.
At the AGM, the Board also provides
opportunities for shareholders to raise
questions pertaining to the business
activities of the Group. Directors and
senior management staff are available to
provide responses to shareholders'
questions.
For the re-election of Directors, the Board
will ensure that full information is
disclosed through the notice of meeting
regarding Directors who are retiring and
who are willing to serve if re-elected.
Each item of special business included in
the notice of meeting will be
accompanied by an explanatory statement
for the proposed resolution to facilitate
full understanding and evaluation of
issues involved.
(ii) Number of Directors of the Group whose remuneration falls in bands of RM50,000 is
tabulated below:-
Corporate Governance Statement
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 15
4. ACCOUNTABILITY AND AUDIT
4.1 Financial Reporting
The Board is aware of its responsibilities
to shareholders and the requirement to
present a balanced and comprehensive
assessment of the Group's financial
position, by means of the annual and
quarterly reports and other published
information. In this regard, the Board is
primarily responsible for the preparation
of a financial statement to present a fair
and balanced report of the financial state
of affairs of the Group.
Before releasing to Bursa Securities, the
quarterly financial results are reviewed by
the Audit Committee and approved by the
Board of Directors. The details of the
Company's and the Group's financial
positions are included in the Financial
Statements section of the Annual Report.
4.2 Internal Control
The Board acknowledges its responsibility
for maintaining a sound system of
internal control in the Company and the
Group. These controls can only provide
reasonable but not absolute assurance
against material misstatement, loss or
fraud. Information on the Group's internal
control is disclosed in the Statement of
Internal Control section in the Annual
Report.
4.3 Relationship with Auditors
The Company's external auditors, Shamsir
Jasani Grant Thornton report to members
of the Company on their findings which
are included as part of the Company's
financial reports with respects to each
year's audit on the statutory financial
statements. In doing so, the Company has
established a transparent arrangement
with the auditors to meet their
professional requirements. From time to
time, the auditors highlight to the Audit
Committee and Board of Directors on
matters that require the Board's attention.
5. DIRECTOR'S RESPONSIBILITY STATEMENT
IN RESPECT OF FINANCIAL STATEMENTS
The Board of Directors are required under
Paragraph 15.27(a) of the Bursa Securities
Listing Requirements to issue a statement
explaining their responsibilities in the
preparation of the annual financial
statements.
The Directors are required by the Companies
Act, 1965 to prepare financial statements for
each financial year which give a true and fair
view of the state of affairs of the Company
and of the Group as at the end of the
financial year and of the profit and loss of the
Company and of the Group for the financial
year.
In preparing the financial statements, the
Directors are required to:-
a) use appropriate accounting policies and
consistently apply them;
b) make judgments and estimates that are
reasonable and prudent; and
c) ensure all applicable approved accounting
standards have been followed.
The Directors are responsible for keeping
proper accounting records which disclose,
with reasonable accuracy at any time, the
financial position of the Company and of the
Group and to enable them to ensure that the
accounts comply with the Companies Act,
1965.
The Directors are satisfied that in preparing
the financial statements of the Group for the
financial year ended 31 December 2005, the
Group has used the appropriate accounting
policies and applied them consistently and
prudently. The Directors are of the opinion
that all relevant approved accounting
standards have been followed and confirm
that the financial statements have been
prepared on a going concern basis.
Corporate Governance Statement
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200516
SHARE BUYBACKS
During the financial year, there were no share
buybacks by the Company.
OPTION, WARRANTS AND CONVERTIBLE
SECURITIES
The Company has not issued any options, warrants
or convertible securities during the financial year.
American Depository Receipt (“ADR”) / Global
Depository Receipt (“GDR”)
During the financial year, the Company did not
sponsor any ADR or GDR programme.
SANCTIONS AND/OR PENALTIES
There were no sanctions and/or penalties imposed
on the Company and its subsidiaries, Directors or
management staff by the relevant regulatory
bodies during the financial year.
NON-AUDIT FEE
The Group paid RM4,000 to the external auditors
for the financial year ended 31 December 2005,
for the taxation service to the Group.
PROFIT ESTIMATE, FORECAST OR PROJECTION
The Company did not undertake any profit
estimates, forecast or projection for the financial
year. Thus, there is no variance between the
results for the financial year and unaudited results
previously released by the Company.
PROFIT GUARANTEE
There was no profit guarantee given by the
Company during the financial year.
REVALUATION OF LANDED PROPERTIES
The Group's revaluation policy on landed
properties is as set out in the financial
statements.
MATERIAL CONTRACTS
There were no material contracts entered into by
the Group, Directors and major shareholders
during the financial year.
As disclosed Utilisation Utilised
RM'000 RM'000 RM'000
Purchase of Land 4,000 4,000 -
Extension of factory and purchase of machinery 3,546 732 2,814
Repayment of hire purchase creditors 1,971 1,971 -
Working capital 781 660 121
Listing expenses 1,500 1,621 (121)
11,798 8,984 2,814
UTILIZATION OF PROCEEDS
The proceeds from public issue of RM11,798 million are utilized in the following manner:-
Other InformationRequired Pursuant to Part A of the Bursa Malaysia Securities Berhad Listing Requirements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 17
The Board recognized the importance of the
internal audit function and the independent status
required for the audit activities to be carried out
effectively. KPMG Business Advisory Sdn Bhd
(“KPMG”), an independent professional business
advisory firm was appointed during the financial
year to provide internal audit services to the Group
commencing May 2005. This provided the Board
much of the assurance regarding the effectiveness
as well as the adequacy and integrity of the
Group's system of internal control established by
the management.
During the financial year under review, there were
2 cycles of internal audits carried out by KPMG
based on an internal audit plan presented to and
approved by the Audit Committee. The key
internal controls relating to the identified key
processes and focus areas of the business
operations agreed with the management were
addressed in these two cycles.
All internal audit findings and recommendations
for improvement were presented to respective
managers and departments. The Company has set
up an Internal Control Unit to follow-up on the
respective outstanding matters to ensure the
corrective actions and preventive actions are
implemented properly and on a timely basis.
OTHER CONTROL PROCESS
In addition to the KPMG internal audit, the
Company is also subject to the system audit
conducted by the internal auditor from YSP
(Taiwan). The audit was focused in reviewing the
ERP system, authority limits, financial control and
production management.
Apart from the internal audit, the Company also
participates in the Inter-Company Quality
Assurance audit among YSP Group, namely Y.S.P.
Industries in Malaysia, YSP (Taiwan), YSP (China),
Carlsbad Technology Inc. (USA) and Yung Zip
Chemical. The manufacturing facilities and
logistic warehouse of the Company has been
audited in July 2005 to assure the conformance
with cGMP (Current Good Manufacturing Practice)
compliance. The Company has taken positive
measures in ensuring CAPA (Corrective Action and
Preventive Action) system is implemented properly
against all observation.
The management of the Company assists and
supports the Board in the discharge of internal
audits duties and responsibilities. The Audit
Committee considers reports from internal audit
and from management, before reporting and
making recommendations to the Board in
strengthening the risk management, internal
control and governance systems.
Statement of Internal Control
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200518
The primary objective of the Audit Committee is to
assist the Board in the effective discharge of its
fiduciary responsibilities for corporate governance,
financial reporting to shareholders and the public
and the internal control.
The Audit Committee will adopt practices aimed
at maintaining appropriate standards of
responsibility, integrity and accountability to all
the Company's shareholders.
MEMBERSHIP
The Audit Committee is appointed by the Board
and comprises the following members:-
1. Dato' Koay Soon Eng (Chairman)
Independent Non-Executive Director
2. Tu Shu Yao
Independent Non-Executive Director
3. Dr. Lee Fang Hsin
President/Group Managing Director
TERMS OF REFERENCE
COMPOSITION
The composition of the Audit Committee is at
least three (3) members of whom the majority,
including the Chairman, must be independent
directors.
At least one (1) member of the Committee must:-
a) be a member of Malaysian Institute of
Accountants (“MIA:); or
b) have at least 3 years' working experience and:-
i) must have passed the examinations
specified in Part I of the 1st schedule of
the Accountants Act, 1967; or
ii) must be a member of one of the
associates of accountants specified in
Part II of the 1st Schedule of the
Accountants Act, 1967.
No alternate director shall be appointed as a
member of the Committee.
In the event that the Audit Committee is reduced
to less than (3) members, the vacancy shall be
filled within 3 months.
AUTHORITY
The Audit Committee is authorized by the Board
to investigate any activity of the Company and its
subsidiaries within its terms of reference
determined by the Board of Directors and all
employees shall be directed to co-operate as and
when required by the Audit Committee.
The Audit Committee shall have direct
communication channels with the external
auditors and person(s) carrying out the internal
audit function or activity (if any).
The Audit Committee is authorized at the cost of
the Company to take such independent
professional advice as it considers necessary.
MEETINGS
The Committee shall meet a least four (4) times
as year and such additional meetings as the
Chairman shall decide in order to fulfill its duties.
In addition, the Chairman may call a meeting of
the Audit Committee if a request is made by any
committee member, any Executive Director, or the
external auditors.
In order to form a quorum, the majority of
members present must be independent directors.
The Company Secretary shall act as Secretary of
the Audit Committee or in her/his absence,
another person authorized by the Chairman of the
Audit Committee.
There were five (5) Audit Committee meetings
held during the year 2005. The details of
attendance of Committee members are as follows:-
Name of Committee Members Attendance
Dato' Koay Soon Eng ( Chairman) 5/5
Mr. Tu Shu Yao 5/5
Dr. Lee Fang Hsin 5/5
RESPONSIBILITIES AND DUTIES OF THECOMMITTEE
The duties and responsibilities of the Committee
shall include:-
1) To consider the appointment of the external
auditors, the audit fees, and any questions of
resignation and dismissal.
Audit Committee
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 19
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200520
2) To review and report the following to the
Board of Directors:-
i) The quarterly results and year end
financial statements, prior to approval by
the Board focusing particularly on:-
a) changes in or implementation of
major accounting policy;
b) significant and unusual events;
c) compliances with accounting
standards, listing and other relevant
legal and regulatory requirements.
ii) The audit report, audit plan with the
external auditors and their evaluation of
the system of internal controls;
iii) Any related party transaction and conflict
of interest situation that may arise within
the Company or Group including any
transaction, procedure or course of
conduct that raises questions of
management integrity.
3) To review the adequacy of the scope,
functions and resources on the internal audit
functions and that it has the necessary
authority to carry out its work.
4) To review the internal audit programme,
processes, the results of the internal audit
programme, processes or investigation
undertaken and whether or not appropriate
action is taken on the recommendations of
the internal audit function.
5) Other functions as may be agreed to by the
Audit Committee and the Board of Directors.
6) To verify the allocation of options to the
eligible employees pursuant to the Company's
Employee Share Option Scheme at the end of
each financial year.
SUMMARY OF ACTIVITIES OF THE AUDITCOMMITTEE
In line with the terms of reference of the Audit
Committee, the following activities were carried
out by the Audit Committee during the financial
year ended 31 December 2005 in the discharge
of its functions and duties:-
a) Reviewed the scope of work of the external
auditors and audit plans for the year.
b) Reviewed with the external auditors the
results of the audit, the audit report and the
management letter, including management's
response.
c) To consider and recommend to the Board for
approval of the audit fees payable to the
external auditors.
d) Reviewed the internal auditors' scope of work.
e) Checked with the internal auditors on any
findings which require the committee's
attention.
f) Reviewed the internal control policy and
internal control system.
g) Reviewed the quarterly unaudited financial
results announcements before recommending
them for the Board's approval.
h) Reviewed the audited Financial Statements of
the Group and the Company prior to
submission to the Board for their
consideration and approval. The review was to
ensure that the audited Financial Statements
were drawn up in accordance with the
provisions of the Companies Act, 1965 and
the applicable accounting standards approved
by the Malaysian Accounting standard Board
(“MASB”).
i) Reviewed the Company's compliance in
particular the quarterly and year end financial
statements with the Listing Requirements of
the Bursa Securities, accounting policy and
other legal and regulatory requirements.
j) Reviewed any related party transactions
entered into by the Group.
INTERNAL AUDIT FUNCTIONS
The Company has outsourced its Independent
Internal Audit Division to Messrs KPMG to ensure
the internal audit functions are carried out
effectively and professionally.
The role of the internal audit functions is to
undertake independent regular and systematic
reviews of the system of internal controls so as to
provide reasonable assurance that such systems
continue to operate satisfactorily and effectively.
The internal audits cover the review of the
adequacy of risk management, operational
controls, compliance with established procedures,
guidelines and statutory requirements.
ADDITIONAL INFORMATION
The Company did not establish any Employee
Share Option Scheme (“ESOS”) in the financial
year ended 31 December 2005.
Audit Committee
Financial Statements
Directors’ Report 22 Statement by Directors 26 Statutory Declaration 26 Report of the Auditors 27
Balance Sheets 28 Income Statements 30 Statements of Changes in Equity 31
Cash Flow Statements 33 Notes to the Financial Statements 36
The Directors have pleasure in submitting their report together with the audited financial statements of the
Group and of the Company for the financial year ended 31 December 2005.
PRINCIPAL ACTIVITIES
The principal activities of the Company consists of investment holding and provision of management
services.
The principal activities of the subsidiary companies are as disclosed in Note 12 to the Financial
Statements.
There have been no significant changes in the nature of these activities of the Company and its subsidiary
companies during the financial year.
FINANCIAL RESULTSGroup Company
RM RM
Net profit for the year 14,601,007 12,605,962
Unappropriated profit/(Accumulated loss) at beginning of year 7,353,190 (9,732)
Unappropriated profit at end of year 21,954,197 12,596,230
DIVIDENDS
There were no dividends paid or declared by the Company since the end of the previous financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year except as stated
in the financial statements and the notes thereto.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the following shares were issued:-
Date of Purpose of Class of Number of shares Term of
issue issue share at RM1.00 per share Issue
09.08.2005 Bonus issue Ordinary 5,500,000 Capitalisation from
share premium
The bonus issue was allotted and issued on the basis of one new ordinary share for every ten existing ordinary
share held on 2 August 2005.
There were no debentures issued during the financial year.
Directors’ Report
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200522
INFORMATION ON THE FINANCIAL STATEMENTS
Before the financial statements of the Group and of the Company were made out, the Directors took
reasonable steps:-
(a) to ascertain that action had been taken in relation to the writing off of bad debts and the making of
allowance for doubtful debts and satisfied themselves that all known bad debts had been written off
and that adequate allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to be realised in the ordinary course of business
including their value as shown in the accounting records of the Group and of the Company have been
written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:-
(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful
debts in the financial statements of the Group and of the Company inadequate to any substantial
extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and
of the Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of
the Group and of the Company misleading or inappropriate.
No contingent or other liability has become enforceable or is likely to become enforceable within the period
of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect
the ability of the Group and of the Company to meet its obligations as and when they fall due.
At the date of this report, there does not exist:-
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the
financial year which secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial
year.
OTHER STATUTORY INFORMATION
The Directors state that:-
At the date of this report, they are not aware of any circumstances not otherwise dealt with in this report or
the financial statements which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:-
(a) the results of the Group’s and of the Company’s operations during the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature; and
(b) there has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature likely to affect substantially the results of
the operations of the Group and of the Company for the current financial year in which this report is
made.
Directors’ report
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 23
DIRECTORS
The Directors in office since the date of the last report are:-
Datuk Dr. Anis Bin Ahmad (Chairman)
Lee Fang Hsin
Dato’ Koay Soon Eng
Tu Shu Yao
Adi Azuan Bin Abdul Ghani
Lee Ling Chin
Lee Fang Chuan@Lee Fang Chen (Appointed on 27 February 2006)
Lee Fang Yu (Resigned on 6 February 2006)
The shareholdings in the Company and its related corporations of those who were Directors at the end of the
financial year are as follows:-
At At
1.1.2005 Bought Sold 31.12.2005
Company
Ordinary shares of RM1 each
Direct shareholding
Datuk Dr. Anis Bin Ahmad 1,975,000 137,500 700,000 1,412,500
Lee Fang Hsin 2,745,160 376,816 - 3,121,976
Lee Fang Yu 526,052 52,605 - 578,657
Lee Ling Chin 314,031 31,403 - 345,434
Tu Shu Yao - 550,000 - 550,000
Ultimate holding company
- Yung Shin Pharmaceutical
Industries Co. Ltd. (Taiwan)
Ordinary shares of NTD 10 each
Direct shareholding
Lee Fang Hsin 10,213,907 510,695 - 10,724,602
Lee Fang Yu 6,342,438 273,121 - 6,615,559
Lee Ling Chin 6,795,377 339,768 - 7,135,145
Subsidiary company
- Yung Shin (Philippines) Inc
Ordinary shares of PESO 10 each
Direct shareholding
Lee Fang Hsin 1 - - 1
Lee Fang Yu 1 - - 1
By virtue of Mr. Lee Fang Hsin, Mr. Lee Fang Yu and Ms. Lee Ling Chin’s interest in shares of the ultimate
holding company, they are deemed to have interest in the Company and its related companies under Section
6A of the Companies Act, 1965 to the extent the ultimate holding company has an interest.
No other Directors in office at end of the financial year held any interest in shares of the Company and its
related corporations during the financial year.
Directors’ report
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200524
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with
the object or objects of enabling the Directors of the Company to acquire benefits by means of the acquisition
of shares in the Company or any other body corporate.
Since the end of the previous financial year, no Director has received or become entitled to receive any
benefit (except as disclosed in Notes 20 and 23 to the Financial Statements) by reason of a contract made
by the Company or a related corporation with the Director or with a firm of which the Director is a member,
or with a company in which the Director has a substantial financial interest.
ULTIMATE HOLDING COMPANY AND IMMEDIATE HOLDING COMPANY
The Directors regard Yung Shin Pharmaceutical Industries Co. Ltd., a company incorporated in Taiwan,
Republic of China as the ultimate holding company and YSP SEA Investment Co. Ltd., a company
incorporated in British Virgin Island, United Kingdom, as the immediate holding company.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
The significant events during the financial year of the Company are disclosed in Note 24 to the Financial
Statements.
AUDITORS
Messrs Shamsir Jasani Grant Thornton has expressed their willingness to continue in office.
On behalf of the Board
)
DATUK DR. ANIS BIN AHMAD )
)
)
) DIRECTORS
)
)
)
LEE FANG HSIN )
Kuala Lumpur
27 February 2006
Directors’ report
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 25
In the opinion of the Directors, the financial statements set out on pages 28 to 59 are drawn up in
accordance with the provisions of the Companies Act, 1965 and applicable approved accounting standards
in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at
31 December 2005 and of the results and cash flows of the Group and of the Company for the financial year
then ended.
On behalf of the Board
DATUK DR. ANIS BIN AHMAD LEE FANG HSIN
Kuala Lumpur
27 February 2006
I, Lee Fang Hsin, being the Director responsible for the financial management of Y.S.P. Southeast Asia
Holding Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial
statements set out on pages 28 to 59 are correct and I make this solemn declaration conscientiously
believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by )
the abovenamed at Kuala Lumpur in )
the Federal Territory this day of )
27 February 2006 )
LEE FANG HSIN
Before me:
Commissioner for Oaths
Statement by Directors
Statutory Declaration
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200526
We have audited the financial statements of the Group and of the Company set out on pages 28 to 59 of
Y.S.P Southeast Asia Holding Berhad.
These financial statements are the responsibility of the Company’s Directors.
We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. These
standards require that we plan and perform the audit to obtain all the information and explanations, which
we consider necessary to provide us with sufficient evidence to give reasonable assurance that the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence relevant
to the amounts and disclosures in the financial statements. An audit includes an assessment of the
accounting principles used and significant estimates made by the Directors as well as evaluating the overall
financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
a) the financial statements have been properly drawn up in accordance with the provisions of the
Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to give a true
and fair view of:
(i) the state of affairs of the Group and of the Company as at 31 December 2005 and of the results
and cash flows of the Group and of the Company for the financial year ended on that date; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial
statements of the Group and of the Company;
and
b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by
the Company and by the subsidiary companies of which we have acted as auditors have been properly
kept in accordance with the provisions of the said Act.
We have considered the financial statements and auditors’ reports thereon of the subsidiary companies of
which we have not acted as auditors, as indicated in Note 12 to the Financial Statements.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with
the Company’s financial statements are in form and content appropriate and proper for the purposes of the
preparation of the consolidated financial statements and we have received satisfactory information and
explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any
qualification and did not include any comment made under Subsection (3) of Section 174 of the Act.
SHAMSIR JASANI GRANT THORNTON
(NO. AF: 0737)
CHARTERED ACCOUNTANTS
DATO’ N.K. JASANI
CHARTERED ACCOUNTANT
(NO.: 708/03/06(J/PH))
PARTNER
Kuala Lumpur
27 February 2006
Report of the Auditors to the members of Y.S.P. Southeast Asia Holding Berhad and its Subsidiary Companies
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 27
Balance Sheets as at 31 December 2005
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200528
Group Company
Note 2005 2004 2005 2004
RM RM RM RM
SHARE CAPITAL 5 60,500,000 55,000,000 60,500,000 55,000,000
SHARE PREMIUM 1,983,829 7,534,681 1,983,829 7,534,681
EXCHANGE FLUCTUATION
RESERVE 6 206,051 189,945 - -
RESERVE ON CONSOLIDATION 7 3,241,737 8,934,710 - -
UNAPPROPRIATED PROFIT/
(ACCUMULATED LOSS) 21,954,197 7,353,190 12,596,230 (9,732)
Total shareholders' equity 87,885,814 79,012,526 75,080,059 62,524,949
MINORITY INTERESTS 278 298 - -
NON-CURRENT LIABILITIES
Deferred taxation 8 2,871,000 2,871,000 - -
Term loans 9 5,483,216 3,340,632 - -
Finance creditors 10 24,844 37,223 - -
96,265,152 85,261,679 75,080,059 62,524,949
Represented by:-
NON-CURRENT ASSETS
PROPERTY, PLANT
AND EQUIPMENT 11 48,878,878 44,842,298 - -
INVESTMENT IN
SUBSIDIARY COMPANIES 12 - - 66,228,818 115,653,422
AMOUNT DUE FROM
SUBSIDIARY COMPANIES 12 - - 7,720,000 4,000,000
INTANGIBLE ASSETS 2,504 1,201 - -
48,881,382 44,843,499 73,948,818 119,653,422
CURRENT ASSETS
Inventories 13 24,781,041 23,733,900 - -
Trade receivables 14 29,280,297 25,911,808 - -
Other receivables 15 3,608,092 4,034,438 2,243 249,657
Amount due from
related companies 16 67,593 30,708 - -
Amount due from
subsidiary companies 12 - - 4,117,006 6,217,345
Tax recoverable - 835,532 - -
Fixed deposits with
licensed banks 3,724,349 3,273,102 550,000 250,000
Cash and bank balances 7,442,577 6,777,383 375,006 1,257,692
Total current assets 68,903,949 64,596,871 5,044,255 7,974,694
Balance sheets
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 29
Group Company
Note 2005 2004 2005 2004
RM RM RM RM
LESS: CURRENT LIABILITIES
Trade payables 1,176,625 3,610,426 - -
Other payables 17 11,639,964 10,282,910 44,870 321,876
Amount due to ultimate
holding company 16 2,937,442 3,676,474 - -
Amount due to
subsidiary companies 12 - - 3,868,144 64,781,291
Amount due to
related companies 16 - 24,766 - -
Bank borrowings 18 3,929,711 5,221,497 - -
Term loans 9 1,210,935 1,251,988 - -
Tax payable 625,502 110,630 - -
Total current liabilities 21,520,179 24,178,691 3,913,014 65,103,167
NET CURRENT
ASSETS/(LIABILITIES) 47,383,770 40,418,180 1,131,241 (57,128,473)
96,265,152 85,261,679 75,080,059 62,524,949
The accompanying notes form an integral part of the financial statements.
Income Statements for the financial year ended 31 December 2005
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200530
Group Company
Note 2005 2004 2005 2004
RM RM RM RM
Revenue 19 86,380,714 74,960,015 360,000 3,300,000
Cost of goods sold (43,676,711) (38,021,590) - -
Gross profit 42,704,003 36,938,425 360,000 3,300,000
Other operating income 1,908,495 1,875,823 392,863 328,597
Gain on voluntary winding up
of a subsidiary company 5,091,913 - 12,538,543 -
Distribution cost (22,113,152) (18,849,350) - -
Administration expenses (7,325,872) (7,073,428) - -
Other operating expenses (1,670,772) (838,024) (433,108) (283,825)
Profit from operations 18,594,615 12,053,446 12,858,298 3,344,772
Finance cost (734,689) (474,141) - -
Profit before taxation 20 17,859,926 11,579,305 12,858,298 3,344,772
Taxation 21 (3,258,939) (3,096,482) (252,336) (44,595)
Profit after taxation 14,600,987 8,482,823 12,605,962 3,300,177
Minority interests 20 10 - -
Net profit for the year 14,601,007 8,482,833 12,605,962 3,300,177
Earnings per share
- Basic 22 24.13 sen 14.02 sen - -
The accompanying notes form an integral part of the financial statements.
Unappro
pri
ate
d
Exc
hange
pro
fit/
Share
Share
fluctu
ati
on
Rese
rve o
n(A
ccum
ula
ted
capit
al
pre
miu
mre
serv
econso
lidati
on
loss
)Tota
l
Gro
up
RM
RM
RM
RM
RM
RM
Bala
nce a
t 1
January
20
04
46
,75
0,0
00
5
,61
4,2
64
4
3,1
49
9
,92
7,4
55
2
,17
0,3
57
6
4,5
05
,22
5
Issu
e o
f sh
are
s -
exe
rcis
e o
f IP
O8
,25
0,0
00
3
,54
7,5
00
-
- -
11
,79
7,5
00
Am
ort
isati
on o
f re
serv
e o
n c
onso
lidati
on
- -
- (9
92
,74
5)
- (9
92
,74
5)
Curr
ency
transl
ati
on d
iffe
rence
- -
14
6,7
96
-
- 1
46
,79
6
Net
pro
fit
for
the y
ear
- -
- -
8,4
82
,83
3
8,4
82
,83
3
Lis
ting e
xpense
s-
(1,6
27
,08
3)
- -
- (1
,62
7,0
83
)
Fir
st a
nd f
inal
div
idend o
f 6
% p
er
share
,
tax
exe
mpte
d-
- -
- (3
,30
0,0
00
)(3
,30
0,0
00
)
Bala
nce a
t 3
1 D
ecem
ber
20
04
55
,00
0,0
00
7
,53
4,6
81
1
89
,94
5
8,9
34
,71
0
7,3
53
,19
0
79
,01
2,5
26
Issu
e o
f sh
are
s -
bonus
issu
e5
,50
0,0
00
(5
,50
0,0
00
)-
- -
-
Am
ort
isati
on o
f re
serv
e o
n c
onso
lidati
on
- -
- (6
01
,06
0)
- (6
01
,06
0)
Realisa
tion o
f re
serv
e o
n v
olu
nta
ry w
indin
g
up o
f a s
ubsi
dia
ry c
om
pany
- -
- (5
,09
1,9
13
)-
(5,0
91
,91
3)
Curr
ency
transl
ati
on d
iffe
rence
- -
16
,10
6
- -
16
,10
6
Net
pro
fit
for
the y
ear
- -
- -
14
,60
1,0
07
1
4,6
01
,00
7
Share
iss
ue e
xpense
s-
(50
,85
2)
- -
- (5
0,8
52
)
Bala
nce a
t 3
1 D
ecem
ber
20
05
60
,50
0,0
00
1
,98
3,8
29
2
06
,05
1
3,2
41
,73
7
21
,95
4,1
97
8
7,8
85
,81
4
Statements of Changes in Equityfor the financial year ended 31 December 2005
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 31
Unappro
pri
ate
d
Exc
hange
pro
fit/
Share
Share
fluctu
ati
on
Rese
rve o
n(A
ccum
ula
ted
capit
al
pre
miu
mre
serv
econso
lidati
on
loss
)Tota
l
Com
pany
RM
RM
RM
RM
RM
RM
Bala
nce a
t 1
January
20
04
46
,75
0,0
00
5
,61
4,2
64
-
- (9
,90
9)
52
,35
4,3
55
Issu
e o
f sh
are
s -
exe
rcis
e o
f IP
O8
,25
0,0
00
3
,54
7,5
00
-
- -
11
,79
7,5
00
Net
pro
fit
for
the y
ear
- -
- -
3,3
00
,17
7
3,3
00
,17
7
Lis
ting e
xpense
s-
(1,6
27
,08
3)
- -
- (1
,62
7,0
83
)
Fir
st a
nd f
inal
div
idend o
f 6
%
per
share
, ta
x exe
mpte
d-
- -
- (3
,30
0,0
00
)(3
,30
0,0
00
)
Bala
nce a
t 3
1 D
ecem
ber
20
04
55
,00
0,0
00
7
,53
4,6
81
-
- (9
,73
2)
62
,52
4,9
49
Issu
e o
f sh
are
s -
bonus
issu
e5
,50
0,0
00
(5
,50
0,0
00
)-
- -
-
Net
pro
fit
for
the y
ear
- -
- -
12
,60
5,9
62
1
2,6
05
,96
2
Share
iss
ue e
xpense
s-
(50
,85
2)
- -
- (5
0,8
52
)
Bala
nce a
t 3
1 D
ecem
ber
20
05
60
,50
0,0
00
1
,98
3,8
29
-
- 1
2,5
96
,23
0
75
,08
0,0
59
The a
ccom
panyi
ng n
ote
s fo
rm a
n i
nte
gra
l part
of
the f
inancia
l st
ate
ments
.
Statements of changes in equity
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200532
Cash Flow Statementsfor the financial year ended 31 December 2005
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 33
Group Company
Note 2005 2004 2005 2004
RM RM RM RM
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before taxation 17,859,926 11,579,305 12,858,298 3,344,772
Adjustments for:-
Allowance for doubtful debts
no longer required (873,142) (402,655) - -
Allowance for doubtful debts 682,764 422,555 - -
Amortisation of intangible assets 1,242 685 - -
Amortisation of reserve
on consolidation (601,060) (992,745) - -
Bad debts written off 669,405 373,228 - -
Damaged goods written off 374,323 273,310 - -
Depreciation 3,308,388 2,240,086 - -
Gain on disposal of property,
plant and equipment - (114,563) - -
Gain on voluntary winding up
of a subsidiary company (5,091,913) - (12,538,543) -
Interest expenses 497,936 183,559 - -
Interest income (105,378) (108,072) (392,863) (328,562)
Loss/(gain) on foreign exchange
- unrealised (19,448) 4,316 - -
Loss on revaluation of property,
plant and equipment - 102,350 - -
Property, plant and equipment
written off - 3,577 - -
Operating profit/(loss) before
working capital changes 16,703,043 13,564,936 (73,108) 3,016,210
Changes in working capital:-
Inventories (1,421,464) (3,934,344) - -
Receivables (3,441,254) (859,945) 247,414 (246,797)
Payables (837,745) 5,454,559 (277,006) 301,200
Ultimate holding company (739,032) 243,445 - -
Subsidiary companies - - (569,661) (8,596,451)
Related companies (61,651) (251,302) - -
Cash generated from/
(used in) operations 10,201,897 14,217,349 (672,361) (5,525,838)
Interest paid (497,936) (183,559) - -
Tax paid (1,908,535) (3,317,530) (252,336) (44,595)
Interest received 105,378 108,072 392,863 328,562
Net cash from/(used in)
operating activities 7,900,804 10,824,332 (531,834) (5,241,871)
Cash flow statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200534
Group Company
Note 2005 2004 2005 2004
RM RM RM RM
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisition of subsidiary
company, net of cash A - - - (379,761)
Proceeds from disposal of
property, plant and equipment - 272,000 - -
Purchase of property,
plant and equipment B (4,896,795) (17,534,909) - -
Purchase of intangible assets (2,545) (644) - -
Net cash used in
investing activities (4,899,340) (17,263,553) - (379,761)
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceed from issuance of shares - 11,797,500 - 11,797,500
Listing expenses paid - (1,627,083) - (1,627,083)
Share issue expenses paid (50,852) - (50,852) -
Repayment of finance creditors (2,681,423) (1,676,625) - -
Repayment of term loans (57,509) (3,045,472) - -
Drawdown of short term
revolving credit 2,000,000 1,000,000 - -
Drawdown of term loans 2,159,040 3,425,374 - -
Dividend paid - (3,292,014) - (3,292,014)
Net cash from/(used in)
financing activities 1,369,256 6,581,680 (50,852) 6,878,403
CASH AND CASH EQUIVALENTS
Effect on foreign exchange
rate changes 37,507 112,138 - -
Net increase/(decrease) 4,370,720 142,459 (582,686) 1,256,771
Brought forward 5,828,988 5,574,391 1,507,692 250,921
Carried forward C 10,237,215 5,828,988 925,006 1,507,692
Cash flow statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 35
NOTES TO THE CASH FLOW STATEMENTS
A. ACQUISITION OF SUBSIDIARY COMPANIES
On 30 November 2004, the Company subscribed for the newly issued and fully paid-up share capital
of PT Yung Shin Pharmaceutical Indonesia comprising 922,500,000 ordinary shares of RP1 each for
a total purchase consideration of RM379,761 satisfied by way of cash.
B. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
The Group acquired property, plant and equipment with an aggregate cost of RM7,346,285 (2004:
RM19,135,188) of which RM2,449,490 (2004: RM1,600,279) was acquired by means of hire
purchase. Cash payment of RM4,896,795 (2004: RM17,534,909) was made to purchase the
property, plant and equipment.
C. CASH AND CASH EQUIVALENTS
Group Company
2005 2004 2005 2004
RM RM RM RM
Bank overdraft (Note 18) (929,711) (4,221,497) - -
Fixed deposits with licensed banks 3,724,349 3,273,102 550,000 250,000
Cash and bank balances 7,442,577 6,777,383 375,006 1,257,692
10,237,215 5,828,988 925,006 1,507,692
The accompanying notes form an integral part of the financial statements.
1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared in accordance with the
provisions of the Companies Act, 1965 and applicable approved accounting standards in Malaysia.
2. FINANCIAL RISK MANAGEMENT POLICIES
The Group’s and the Company’s financial risk management policies seek to ensure that adequate financial
resources are available for the development of the Group’s and the Company’s business whilst managing
its risks. The Group and the Company operates within clearly defined guidelines that are approved by the
Board and the Group’s and the Company’s policies are not to engage in speculative transactions.
The main areas of the financial risks faced by the Group and the Company and the policies in respect
of the major areas of treasury activity are set out as follows:-
(a) Foreign currency risk
The Group and the Company are exposed to foreign currency risk as a result of its normal trading
or operating activities, both external and intra-Group where the currency denomination differs
from the local currency, Ringgit Malaysia(RM). The Group’s and the Company’s policy is to
minimise the exposure of overseas operating subsidiaries or activities to transaction risk by
matching local currency income against local currency costs.
(b) Interest rate risk
The Group’s and the Company’s policy is to borrow principally on the floating rate basis but to
retain a proportion of fixed rate debt. The objectives for the mix between fixed and floating rate
borrowings are set to reduce the impact of an upward change in interest rates while enabling
benefits to be enjoyed if interest rates fall.
(c) Credit risk
The credit risk is controlled by the application of credit approvals, limits and monitoring
procedures. This is done through reference to published credit ratings by prime financial
institutions. In the absence of published ratings, an internal credit review is conducted if the
credit risk is material.
(d) Market risk
For key product purchases, the Group establishes floating and fixed price levels that the Group
considers acceptable and enters into physical supply agreements, where necessary, to achieve
these levels. The Group does not face significant exposure from the risk from changes in debt and
equity prices.
(e) Liquidity and cash flow risks
The Group and the Company seeks to achieve a balance between certainty of funding even in
difficult times for the markets or the Group and the Company and a flexible, cost-effective
borrowing structure. This is to ensure that at the minimum, all projected net borrowing needs are
covered by committed facilities. Also, the objective for debt maturity is to ensure that the amount
of debt maturing in any one year is not beyond the Group’s and the Company’s means to repay
and refinance.
Notes to the Financial Statements- 31 December 2005
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200536
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Accounting convention
The financial statements of the Group and of the Company have been prepared under historical
cost convention unless otherwise indicated in the other significant accounting policies.
(b) Basis on consolidation
The consolidated financial statements incorporate the audited financial statements of the
Company and its subsidiary companies made up to 31 December 2005, except for Y.S.P.
(Cambodia) Pte. Ltd. and PT Yung Shin Pharmaceutical Indonesia which are based on unaudited
management financial statements made up to 31 December 2005. All significant inter-company
transactions are eliminated on consolidation and the consolidated financial statements reflect
external transactions only.
The results of the subsidiary companies acquired are included in the consolidated income
statement from the date of acquisition.
Any difference between the cost of investment and the net worth at the date of acquisition is
included in the consolidated balance sheet as reserve/goodwill arising on consolidation. Goodwill
arising on consolidation is retained in the consolidated balance sheet. Where an indication of
impairment exists, the carrying amount of the goodwill is assessed and written down immediately
to their recoverable amount.
Reserve arising on consolidation represents the excess of the Group’s interest in the fair value of
the identifiable assets and liabilities of a subsidiary company at the date of acquisition over the
cost of acquisition.
The amount of reserve arising on consolidation not exceeding the fair values of acquired
identifiable non-monetary assets should be recognised as income on a systematic basis over the
remaining weighted average useful life of the identifiable acquired depreciable or amortisable
assets. A period of ten (10) years is used for this purpose.
(c) Investment in subsidiary companies
A subsidiary company is a company in which the Group or the Company has a long term equity
interest of more than 50 per cent where there is management participation through Board
representation.
Investments in subsidiary companies are stated at cost. Where an indication of impairment exists,
the carrying amount of the investment in subsidiary companies are assessed and written down
immediately to their recoverable amount.
(d) Minority interests
Minority interests are measured at the minorities’ share of the post acquisition fair values of the
identifiable assets and liabilities of the acquiree as at acquisition date and the minorities’ share
of movements in the acquiree’s equity since then. Separate disclosure is made for minority
interests.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 37
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200538
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(e) Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost or valuation less accumulated depreciation and
accumulated impairment loss. Freehold land is not depreciated. Depreciation on other property, plant
and equipment is calculated to write off the cost or valuation of the property, plant and equipment on
a straight line basis over the estimated useful lives of the property, plant and equipment concerned.
The principal annual depreciation rates used are as follows:-
Freehold building 2%
Long leasehold building 2%
Furniture and fittings 10%
Office equipment 10%
Plant and machinery 10%
Motor vehicles 20%
Laboratory equipment 10%
Long leasehold land over the remaining term of lease of 83 years
The Group revalues its properties comprising land and buildings every 5 years or at shorter intervals
whenever the fair value of the revalued assets is expected to differ materially from their carrying value.
Surplus arising from revaluation are dealt with in the revaluation reserve account. Any deficit
arising is offset against the revaluation reserve to the extent of a previous increase for the same
property. In all other cases, a decrease in carrying amount will be charged to the income statement.
Restoration cost relating to an item of property, plant and equipment is capitalised only if such
expenditure is expected to increase the future benefits from the existing asset beyond its
previously assessed standard of performance.
Property, plant and equipment are written down to recoverable amount if, in the opinion of the
Directors, it is less than their carrying value. Recoverable amount is the net selling price of the
property, plant and equipment i.e. the amount obtainable from the sale of an asset at arm’s length
transaction between knowledgeable, willing parties, less the costs of disposal.
(f) Foreign currency translation
Foreign currencies translation has been translated into Malaysian Ringgit at the rates of exchange
ruling on the transaction dates. All foreign currency assets and liabilities at the balance sheet
date are translated into Malaysian Ringgit at approximate exchange rates ruling at that date. All
exchange gains and losses are dealt with in the income statements.
For the purposes of consolidation, net assets of the foreign subsidiary companies are translated
into Ringgit Malaysia at the exchange rate ruling at the balance sheet date while the income
statement is translated into Malaysian Ringgit at the average exchange rate for the financial year.
Exchange differences arising from such transaction are taken to exchange fluctuation reserve. The
Directors regard all the foreign subsidiary companies as foreign entity.
The closing rates of foreign currencies used in translation were as follows:-
2005 2004
RM RM
New Taiwan Dollar 0.1150 0.1187
Peso 0.0729 0.0677
Singapore Dollar 2.2925 2.3185
US Dollar 3.7510 3.7956
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(g) Intangible assets
Expenditure on acquired patents, trademarks and licenses is capital and amortised using the
straight line method over their useful lives or 20 years, which ever is shorter. Intangible assets
are not revalued.
(h) Inventories
Inventories are stated at lower of cost and net realisable value. Cost of finished goods and work
in progress are determined using the weighted average method. Cost of raw material and
packaging material is determined using the First-In-First-Out method. Cost includes all expenses
incurred in bringing the inventories to their present location and condition. Finished goods
include cost of raw materials, labour and an appropriate proportion of manufacturing overheads.
(i) Receivables
Receivables are carried at anticipated realisable value. Bad debts are written off in the period in
which they identified. An estimate is made for doubtful debts based on a review of all outstanding
amounts at the financial year end.
(j) Deferred tax liabilities and assets
Deferred tax liabilities and assets are provided for under the liability method at the current tax rate
in respect of all temporary differences between the carrying amount of an asset or liability in the
balance sheet and its tax base including unabsorbed tax losses and unutilised capital allowances.
Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences can be utilised. The carrying
amount of deferred tax assets is reviewed at each balance sheet date. If it is no longer probable
that sufficient taxable profit will be available to allow the benefit of part or that entire deferred
tax assets to be utilised, the carrying amount of the deferred tax assets will be reduced
accordingly. When it becomes probable that sufficient taxable profit will be available, such
reductions will be reversed to the extent of the taxable profit.
(k) Assets acquired under hire-purchase and lease agreements
The cost of property, plant and equipment acquired under hire purchase and finance lease
arrangements which transferred substantially all the risks and rewards of ownership to the Group
are capitalised. The depreciation policy on these assets is similar to that of the Group’s property,
plant and equipment depreciation policy. Outstanding obligations due under hire purchase and
finance lease arrangements after deducting finance expenses are included as liabilities in the
financial statements. Finance charges on hire purchase and finance lease arrangements are
allocated to income statements over the period of the respective agreements.
(l) Provisions
Provisions are recognised when there is a present obligation, legal or constructive, as a result of
a past event, when it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 39
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(m) Payables
Payables are stated at cost which the fair value of the consideration to be paid in the future for
goods and services received.
(n) Revenue recognition
Group
Revenues are recognised upon delivery of products to customer, net of sales tax and trade discounts.
Company
Investment income is recognised when the right to receive payment is established. Management
income is recognised upon the rendering of services.
(o) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, balance with banks, demand deposits and
highly liquid investments which are readily convertible to known amount of cash and which are
subject to an insignificant risk of changes in value.
(p) Impairment of assets
The carrying values of assets are reviewed for impairment when there is an indication that the
assets might be impaired. Impairment is measured by comparing the carrying values of the assets
with their recoverable amounts. The recoverable amount is the higher of net realisable value and
value in use, which is measured by reference to discounted future cash flows. Recoverable
amounts are estimated for individual assets, or if it is not possible, for the cash generating unit.
An impairment loss is charged to the income statements immediately, unless the asset is carried
at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease
to the extent of previously recognised revaluation surplus for the same asset.
Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous
impairment loss and is recognised to the extent of the carrying amount of the asset that would
have been determined (net of amortisation and depreciation) had no impairment loss been
recognised. The reversal is recognised in the income statements immediately, unless the asset is
carried at revalued amount. A reversal of an impairment loss on a revalued asset is credited
directly to revaluation surplus. However, to the extent that an impairment loss on the same
revalued asset was previously recognised as an expense in the income statements, a reversal of
that impairment loss is recognised as income in the income statements.
(q) Segmental results
Segment revenues and expenses are those directly attributable to the segments and include any
joint revenue and expenses where a reasonable basis of allocation exists. Segments assets include
all assets used by a segment and consist principally of cash, receivables, inventories, intangibles
and property, plant and equipment, net of provision and accumulated depreciation and
amortisation. Segments liabilities include all liabilities incurred by a segment and consist
principally of payables and borrowings. Segment assets and liabilities include items directly
attributable to the segments as well as those that can be allocated on a reasonable basis.
Unallocated items mainly comprise tax recoverable, tax payable and deferred taxation.
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200540
3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(r) Intersegment transfer
Segment revenues, expenses and results include transfers between segments. The prices charged
on intersegment transactions are the same as those charged for similar goods to parties outside of
the economic entity at an arm’s length transactions. These transfers are eliminated on consolidation.
(s) Employees benefits
(i) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in
the year in which the associated services are rendered by employees of the Group. Short
term accumulating compensated absences such as paid annual leave are recognised when
services are rendered by employees that increase their entitlement to future compensated
absences, and short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.
(ii) Defined contribution plan
The Group’s contributions to defined contribution plans are charged to the income
statement in the period to which they are related.
(t) Borrowings
Interest bearing bank loans and overdrafts are recorded at the amount of proceeds received, net
of transaction costs.
(u) Financial instruments
Financial instruments carried on the balance sheet include cash and bank balances, fixed deposits
with licensed banks, receivables, payables and borrowings. The particular recognition methods
adopted are disclosed in the individual accounting policy statement associated with each item.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument
classified as liability are reported as expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity. Financial instruments are offset when
the Group and the Company has a legally enforceable right to set off the recognised amounts and
intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.
4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION
The principal activity of the Company consists of investment holding and provision of management
services.
The principal activities of the subsidiary companies are as mentioned in Note 12 to the Financial
Statements.
There have been no significant changes in the nature of these activities of the Company and its
subsidiary companies during the financial year.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 41
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200542
4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION (CONT’D)
The Company is a public limited company, incorporated and domiciled in Malaysia. The registered
office and principal place of business is located at 16th Floor, Plaza IBM, No.1, Jalan Tun Mohd Fuad,
Taman Tun Dr. Ismail, 60000 Kuala Lumpur.
The financial statements were authorised for issue by the Board of Directors in accordance with a
resolution of the Directors passed on 27 February 2006.
5. SHARE CAPITALGroup and Company
2005 2004
RM RM
Authorised:-
Ordinary shares of RM1.00 each
At beginning and end of year 100,000,000 100,000,000
Issued and fully paid:-
Ordinary shares of RM1.00 each
At beginning of year 55,000,000 46,750,000
Issued during the year 5,500,000 8,250,000
At end of year 60,500,000 55,000,000
6. EXCHANGE FLUCTUATION RESERVEGroup
2005 2004
RM RM
At beginning of year 189,945 43,149
Translation of foreign subsidiary companies 16,106 146,796
At end of year 206,051 189,945
The above reserve is not available for distribution as dividends.
7. RESERVE ON CONSOLIDATIONGroup
2005 2004
RM RM
At beginning of year 4,052,170 9,927,455
Less: Accumulated amortisation (810,433) (992,745)
At end of year 3,241,737 8,934,710
The above reserve is not available for distribution as dividends.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 43
8. DEFERRED TAXATIONGroup
2005 2004
RM RM
At beginning of year 2,871,000 1,918,000
Transferred from income statement - 953,000
At end of year 2,871,000 2,871,000
The balance in the deferred taxation is made up of temporary differences arising from:-
Group
2005 2004
RM RM
Carrying amount of property, plant and equipment in excess of
their tax base 2,137,000 2,100,000
Revaluation on land and buildings 734,000 771,000
2,871,000 2,871,000
9. TERM LOANSGroup
2005 2004
RM RM
Secured:-
Payable within 12 months
Term loan (1) 41,265 82,318
(2) 1,169,670 1,169,670
1,210,935 1,251,988
Payable after 12 months
Term loan (1) 1,068,472 1,084,928
(2) 4,414,744 2,255,704
5,483,216 3,340,632
Total term loans 6,694,151 4,592,620
Term loan (1)
The term loan bears interest at rate of 3.00% (2004: 3.00%) per annum and is repayable by 240
monthly instalments commencing on 1 October 2003. It is secured by fresh first legal all monies
mortgage on the subsidiary company’s leasehold properties.
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200544
9. TERM LOANS (CONT’D)
Term loan (2)
The term loan of the subsidiary company is secured by:-
(i) An “all monies” First Party Sixth (6th) Legal Charge as subsidiary instrument (to be ranked after
Malayan Banking Berhad’s four existing legal charges) over land and building, with an unlimited
covenant to pay on the part of the subsidiary company to secure USD3,000,000, whereby the
Sixth (6th) Legal Charge shall rank pari-passu with the Fifth (5th) Legal Charge to be created by
the subsidiary company in favour of the HSBC Bank Malaysia Berhad for RM7,000,000;
(ii) An “all monies” First Party Second Legal Charge as subsidiary instrument over the land and
building, with an unlimited covenant to pay on the part of the subsidiary company to secure
USD3,000,000 whereby the Second Legal Charge shall rank pari-passu with the First Legal
Charge to be created by the subsidiary company in favour of HSBC Bank Malaysia Berhad for
RM7,000,000;
(iii) Corporate Guarantee from the Company; and
(iv) Letter of undertaking from the Company;
The term loan bears interest at rate of 0.75% (2004: nil) per annum above the London Interbank Offer
Rate (LIBOR) and is repayable in 10 quarterly installments commencing not later than 3 months after
the moratorium period.
10. FINANCE CREDITORSGroup
2005 2004
RM RM
Minimum lease payments
- within 1 year 1,107,020 1,334,485
- after 1 year but not later than 5 years 27,583 43,374
1,134,603 1,377,859
Less : Interest-in-suspense (17,884) (29,207)
Present value of finance creditors 1,116,719 1,348,652
Present value of finance creditors
- within 1 year 1,091,875 1,311,429
- after 1 year but not later than 5 years 24,844 37,223
1,116,719 1,348,652
The amount payable within 1 year has been included in other payables.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 45
11
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At
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At
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0,0
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Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200546
11
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,32
41
2,7
57
,04
53
3,0
98
,71
83
0,2
59
,91
0
Accum
ula
ted d
epre
cia
tion
At
begin
nin
g o
f ye
ar
--
13
1,7
98
22
2,5
30
96
9,8
91
1,3
24
,21
99
04
,01
4
Charg
e f
or
the y
ear
--
89
,63
41
44
,86
23
31
,96
05
66
,45
64
55
,38
4
Reva
luati
on
--
--
--
(36
,76
0)
Tra
nsl
ati
on d
iffe
rence
--
--
(52
5)
(52
5)
1,5
81
At
end o
f ye
ar
--
22
1,4
32
36
7,3
92
1,3
01
,32
61
,89
0,1
50
1,3
24
,21
9
Net
book v
alu
e
31
.12
.20
05
8
,64
8,9
19
1,8
70
,00
04
86
,99
88
,74
6,9
32
11
,45
5,7
19
31
,20
8,5
68
-
31
.12
.20
04
5,8
20
,47
61
,87
0,0
00
57
6,6
32
8,8
91
,79
41
1,7
76
,78
9-
28
,93
5,6
91
Repre
sente
d b
y:-
Cost
8,6
48
,91
9-
17
8,4
30
4,5
49
,32
44
,46
9,1
95
17
,84
5,8
68
15
,00
7,0
60
Valu
ati
on
-1
,87
0,0
00
53
0,0
00
4,5
65
,00
08
,28
7,8
50
15
,25
2,8
50
15
,25
2,8
50
8,6
48
,91
91
,87
0,0
00
70
8,4
30
9,1
14
,32
41
2,7
57
,04
53
3,0
98
,71
83
0,2
59
,91
0
Depre
cia
tion c
harg
e f
or
the y
ear
ended 3
1.1
2.2
00
4-
-9
5,9
58
61
,41
22
98
,01
4-
45
5,3
84
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 47
11. PROPERTY, PLANT AND EQUIPMENT (CONT’D)
Included in property, plant and equipment is net book value of assets of the subsidiary companies held
under hire purchase arrangements of RM2,053,857 (2004: RM1,637,396).
Freehold and leasehold properties of certain subsidiary companies were revalued by Directors in year
2001 and 2000 based on an independent professional valuations using the open market basis and
incorporated into financial statements in the same year.
Long leasehold land and building have been pledged to a licensed bank as collateral for credit facilities
granted to a subsidiary company.
The subsidiary company’s leasehold property was revalued by the Directors based on an independent
professional valuation on 11 June 2004 by Kelvin Ng (BSc. (Est) Mgt) from Colliers International
Consultancy and Valuation (S) Pte. Ltd.. Valuation was made on the basis of open market value on an
existing use bases. The deficit on revaluation was charged to the income statement.
Had the land and buildings been carried at historical cost less accumulated depreciation, the net book
value of the revalued assets at the end of the financial year are as follows:-
Group
2005 2004
RM RM
Freehold land and buildings 1,076,186 1,076,186
Long leasehold land 947,838 960,585
Long leasehold building 9,866,982 10,122,169
12. SUBSIDIARY COMPANIESCompany
2005 2004
RM RM
Unquoted shares, at cost
- in Malaysia 61,082,415 110,507,019
- outside Malaysia 5,146,403 5,146,403
66,228,818 115,653,422
Details of the subsidiary companies are as follows:-
Effective
Place of equity interest
Subsidiary companies incorporation 2005 2004 Principal activities
% %
Yung Shin South East Asia Malaysia - 100 Investment holding and
Sdn. Bhd. (“YSSEA”) disposed off during the current
financial year
Y.S.P. Industries (M) Sdn. Bhd. Malaysia 100 100 Importer and manufacturer of
pharmaceutical and veterinary
products, pharmaceutical fine
chemicals and provision of
management services
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200548
12. SUBSIDIARY COMPANIES (CONT’D)
Details of the subsidiary companies are as follows:- (Cont’d)
Effective
Place of equity interest
Subsidiary companies incorporation 2005 2004 Principal activities
% %
Yung Shin (Philippines), Inc. # Philippines 99.99 99.99 Manufacturing, importing,
exporting, buying and selling of
pharmaceuticals and other
related products
Myanmar Yung Shin Myanmar 99.80 99.80 Trading in pharmaceutical
Pharma Limited # products
Kumpulan Y.S.P. Malaysia 100 100 Importer, distributor of
(Malaysia) Sdn. Bhd. pharmaceutical and veterinary
products and pharmaceutical
fine chemicals
Yung Shin Pharmaceutical Singapore 100 100 Importer and exporters and
(Singapore) Pte. Ltd. # trading in all kinds of
pharmaceutical products
Y.S.P. Cambodia Pte. Ltd.# Cambodia 100 100 Trading in pharmaceutical
products
PT Yung Shin Pharmaceutical Indonesia 99.92 99.92 Trading in pharmaceutical
Indonesia # products
# Subsidiary companies not audited by Shamsir Jasani Grant Thornton
In the previous financial year, included in the amount due from subsidiary companies is
RM10,000,000 which is unsecured, bear interest at the rate of 3.50% per annum and repayable in
20 installments on a monthly basis commencing on January 2005. However, the repayment term and
condition have been revised during the financial year.
In the current financial year, included in the amount due from subsidiary companies are
RM10,000,000 and RM1,680,000 which are unsecured, bear interest at the rate of 3.50% per annum
and repayable in 40 and 24 installments on a monthly basis commencing on January 2006 and on
September 2005 respectively.
The other amounts due from/to subsidiary companies are unsecured, interest free and have no fixed
terms of repayment.
13. INVENTORIESGroup
2005 2004
RM RM
At cost:-
Raw materials 5,265,051 5,923,991
Finished goods 13,246,764 12,867,655
Work-in-progress 4,108,447 3,221,194
Packaging 2,160,779 1,721,060
24,781,041 23,733,900
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 49
14. TRADE RECEIVABLESGroup
2005 2004
RM RM
Trade receivables 29,778,399 26,600,288
Less: Allowance for doubtful debts (498,102) (688,480)
29,280,297 25,911,808
15. OTHER RECEIVABLESGroup Company
2005 2004 2005 2004
RM RM RM RM
Non-trade receivables 232,745 553,151 2,243 249,657
Deposits 216,029 236,166 - -
Down payment - plant and machinery 426,952 438,921 - -
Prepayments
- finance creditors 627,175 566,965 - -
- others 2,105,191 2,239,235 - -
3,608,092 4,034,438 2,243 249,657
16. ULTIMATE HOLDING COMPANY, IMMEDIATE HOLDING COMPANY AND RELATEDCOMPANY
The Directors regard Yung Shin Pharmaceutical Industries Co. Ltd., a company incorporated in Taiwan,
Republic of China as the ultimate holding company and YSP SEA Investment Co. Ltd., a company
incorporated in British Virgin Island, United Kingdom, as the immediate holding company.
Related companies refer to Yung Shin Pharmaceutical Industries Co. Ltd’s group of companies.
Amounts due from/to related companies and ultimate holding company are unsecured, interest free and
has no fixed term of repayment.
17. OTHER PAYABLESGroup Company
2005 2004 2005 2004
RM RM RM RM
Finance creditors 1,091,875 1,311,429 - -
Guarantee deposits payables 98,710 864 - -
Non-trade payables 4,293,370 2,681,245 - 256,800
Accrual of expenses 6,151,989 6,281,386 40,850 57,090
Dividend payable 4,020 7,986 4,020 7,986
11,639,964 10,282,910 44,870 321,876
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200550
18. BANK BORROWINGSGroup
2005 2004
RM RM
Secured:-
Bank overdraft 929,711 4,221,497
Short term revolving credit 3,000,000 1,000,000
3,929,711 5,221,497
The bank borrowings are secured by:-
(i) The existing 1st, 2nd, 3rd and 4th legal charges totaling RM13,500,000 over land and building;
(ii) An “all monies” First Party Fifth (5th) legal charge as subsidiary instrument (to be ranked after
Malayan Banking Berhad’s four existing legal charges) over land and building, whereby the Fifth
(5th) Legal Charge shall rank pari-passu with the Sixth (6th) Legal Charge to be created by the
subsidiary company in favour of The Hongkong and Shanghai Banking Corporation Ltd, Offshore
Banking Unit Labuan USD3,000,000;
(iii) An “all monies” First Party First Legal Charge as subsidiary instrument over the land and
building, with an unlimited covenant to pay on the part of the subsidiary company to secure
RM7,000,000 whereby the First Legal Charge shall rank pari-passu with the Second Legal Charge
to be created by the subsidiary company in favour of The Hongkong and Shanghai Banking
Corporation Ltd, Offshore Banking Unit Labuan for USD3,000,000;
(iv) Corporate Guarantee from the Company; and
(v) Trade Finance General Agreement and Islamic Trade Finance General Agreement;
The bank overdraft and short term revolving credit bear interest at rates ranging from 0.50% to 0.75%
(2004: 0.50% to 0.75%) above the bank’s base lending rate and cost of fund respectively.
19. REVENUE
Group
Revenue for the Group represents sales of goods outside the Group net of discounts, returns and sales tax.
Company
Revenue represents dividend income declared or received from subsidiary companies. Management
income represents the management services rendered to its subsidiary companies.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 51
20. PROFIT BEFORE TAXATION
Profit before taxation has been determined after charging/(crediting) amongst other items the
following:-
Group Company
2005 2004 2005 2004
RM RM RM RM
Auditors’ remuneration
- statutory 40,799 38,458 3,000 2,000
- others 4,000 4,000 4,000 4,000
Bad debts written off 669,405 373,228 - -
Damaged goods written off 374,323 273,310 - -
Depreciation 3,308,388 2,240,086 - -
Directors’ remuneration
- fee 229,754 197,159 212,500 180,000
- other emoluments 880,772 740,712 10,800 3,900
Allowance for doubtful debts 682,764 422,555 - -
Amortisation of intangible assets 1,242 685 - -
Interest expenses
- bankers’ acceptance 33,634 61,506 - -
- hire purchase 53,905 21,202 - -
- term loan 410,397 100,851 - -
Loss on foreign exchange
- realised - - 2,590 7,555
- unrealised - 4,316 - -
Loss on revaluation of property,
plant and equipment - 102,350 - -
Property, plant and equipment
written off - 3,577 - -
Rental of premises 793,566 985,199 - -
Allowance for doubtful debts
no longer required (873,142) (402,655) - -
Amortisation of reserve
on consolidation (601,060) (992,745) - -
Gain on foreign exchange
- realised (164,119) (123,428) - -
- unrealised (19,448) - - -
Gain on disposal of property,
plant and equipment - (114,563) - -
Gain on voluntary winding-up of
a subsidiary company (5,091,913) - (12,538,543) -
Interest income (105,378) (108,072) (392,863) (328,562)
Rental income (31,440) (64,157) - -
The estimated monetary value of benefit provided to Directors of the Group during the financial year
amounted to RM214,675 (2004: RM135,658).
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200552
21. TAXATION Group Company
2005 2004 2005 2004
RM RM RM RM
In Malaysia
Current year’s taxation 2,906,000 1,737,400 206,000 44,400
Transferred to deferred taxation - 953,000 - -
Underprovision in prior year 54,151 249,867 46,336 195
Outside Malaysia
Current taxation 309,833 143,821 - -
(Over)/Underprovision in prior year (11,045) 12,394 - -
Total 3,258,939 3,096,482 252,336 44,595
Provision for taxation is determined by applying the current Malaysian tax rate on chargeable income.
The Company has sufficient tax credit under Section 108 of the Income Tax Act,1967 to frank the
payment of dividends to the extent of approximately RM749,000 (2004 : Nil) out of its unappropriated
profit as at 31 December 2005.
A reconciliation of income tax expenses on profit before taxation with the applicable statutory income
tax rate is as follows:-
Group Company
2005 2004 2005 2004
% % % %
Tax at applicable tax rate 28.0 28.0 28.0 28.0
Income not subject to tax (8.9) (3.0) (27.3) (27.7)
Non-allowable expenses 1.9 6.5 0.9 1.0
Tax effect on the utilisation of
reinvestment allowances (2.7) (6.1) - -
Underprovision in prior year 0.3 2.3 0.4 -
Tax effect on different tax rate (0.4) (1.0) - -
Average effective tax rate 18.2 26.7 2.0 1.3
However, the above amounts are subject to approval of the Inland Revenue Board of Malaysia.
22. EARNINGS PER SHARE
Group
The earnings per share has been calculated based on Group’s profit after taxation and minority interest
of RM 14,601,007 (2004: RM8,482,833) and the weighted average number of shares issued during
the financial year of 60,500,000 (2004: Revised : 60,500,000).
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 53
23. RELATED PARTY TRANSACTIONS
Significant related party transactions during the financial year were as follows:-
Group Company
2005 2004 2005 2004
RM RM RM RM
Purchases from related companies 360,259 645,955 - -
Purchases from ultimate
holding company 7,010,838 5,621,947 - -
Purchases from companies in which
certain Directors, namely Lee Fang
Hsin and Tu Shu Yao have interest 71,100 11,904 - -
Sales to related companies 46,748 47,256 - -
Consultancy fees charged by
ultimate holding company 547,913 947,690 - -
Transactions with a company in which
certain Directors namely, Lee Fang
Hsin and Lee Fang Yu have interest
- management fee received 24,000 24,000 - -
- rental paid 90,000 90,000 - -
Interest income from
subsidiary company - - 371,986 283,402
Dividend income from
subsidiary company - - - 3,300,000
The Directors of the Group and of the Company are of the opinion that the terms of the above
transactions were entered on a negotiated basis.
24. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
The significant events during the financial year were as follows:-
a) On 11 May 2005, the Company has dissolved Yung Shin South East Asia Sdn. Bhd., a wholly
owned subsidiary company through members' voluntary winding-up.
The exercise has resulted in a gain of RM12,538,543 and RM5,091,913 at Company and Group
level respectively.
b) On 6 June 2005, K & N Kenanga Bhd on behalf of the Board of Directors of the Company
proposed bonus issue of 5,500,000 new ordinary shares of RM1.00 each through the
capitalisation of share premium to be credited as fully paid-up to the shareholders of Y.S.P.
Southeast Asia Holding Berhad on the basis of one(1) new share for every ten(10) existing shares
held (Proposed Bonus Issue).
The Proposed Bonus Issue was duly approved by the members at the Extraordinary General
Meeting held on 29 June 2005. The 5,500,000 new ordinary shares arising from the Bonus Issue
were duly issued and allotted on 9 August 2005.
25. FINANCIAL INSTRUMENTS
(a) Interest rate risk
The interest rate risk that financial instruments’ values will fluctuation as a result of changes in
market interest rates, and the effective weighted average interest rates on classes of financial
assets and financial liabilities, were as follows:-
Effective weighted
Less than 1 to 5 average interest rates
1 year years Total during the year
Group RM RM RM
2005
Financial asset
Fixed deposits with
licensed banks 3,724,349 - 3,724,349 0.70% - 3.10%
Financial liabilities
Bank overdraft 929,711 - 929,711 6.50% - 6.75%
Short term revolving credit 3,000,000 - 3,000,000 4.40%
Term loans 1,210,935 5,483,216 6,694,151 2.78% - 3.50%
Finance creditors 1,091,875 24,844 1,116,719 1.75% – 5.25%
2004
Financial asset
Fixed deposits with
licensed banks 3,273,102 - 3,273,102 0.70% - 3.00%
Financial liabilities
Bank overdraft 4,221,497 - 4,221,497 6.50% - 6.75%
Short term revolving credit 1,000,000 - 1,000,000 4.40%
Term loans 1,251,988 3,340,632 4,592,620 3.00% - 3.12%
Finance creditors 1,311,429 37,223 1,348,652 1.75% - 5.25%
Company
2005
Financial assets
Fixed deposits with
licensed banks 550,000 - 550,000 2.50%
Amount due from
subsidiary company 3,960,000 7,720,000 11,680,000 3.50%
2004
Financial assets
Fixed deposits with
licensed banks 250,000 - 250,000 2.50%
Amount due from
subsidiary company 6,000,000 4,000,000 10,000,000 3.50%
(b) Credit risk
The maximum credit risk associated with recognised financial assets is the carrying amount
shown in the balance sheet.
The Group has no significant concentration of credit risk with any single counterparty. In respect
of investment in cash, the policy is to transact with financial institutions that have at least a short
term counterparty rate.
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200554
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 55
26. EMPLOYEES INFORMATIONGroup
2005 2004
RM RM
Staff costs 19,606,801 16,663,596
The number of employees of the Group at the end of the financial year was 519 (2004: 470) persons.
The Company has not employed any staff since the date of its incorporation.
27. CAPITAL COMMITMENTS
Capital commitments expenditure in respect of the following are not provided for in the financial
statements:-
Group
2005 2004
RM RM
Authorised and contracted for:-
- Buildings in progress 392,950 1,714,509
- Buildings - 908,100
- Plant and machinery 1,037,963 655,074
1,430,913 3,277,683
28. CONTINGENT LIABILITIESCompany
2005 2004
USD USD
Corporate guarantee given to licensed bank for facilities granted
to a subsidiary company 3,000,000 3,000,000
29. SEGMENTAL REPORTING
(i) Primary segmental reporting – Business Segment
The Group is organised based on three major business segments as follows:-
Business segments Business activities
Trading Import, export and trading in various kinds of pharmaceutical products.
Manufacturing Manufacturing of various kind of pharmaceutical products.
Investment holding Investment holding
29. SEGMENTAL REPORTING (CONT’D)
(i) Primary segmental reporting – Business Segment (Cont’d)
Investment
Year ended Trading Manufacturing holding Eliminations Consolidated
31 December 2005 RM RM RM RM RM
Revenue
External 12,465,653 73,915,061 - - 86,380,714
Intersegment - 4,141,269 360,000 (4,501,269) -
Total revenue 12,465,653 78,056,330 360,000 (4,501,269) 86,380,714
Results
Segment results 1,302,231 11,338,676 12,465,435 (6,617,105) 18,489,237
Interest income 17,541 66,960 392,863 (371,986) 105,378
Profit from
operations 1,319,772 11,405,636 12,858,298 (6,989,091) 18,594,615
Finance cost (734,689)
Profit from
ordinary activities
before taxation 17,859,926
Taxation (3,258,939)
Net profit for
the year 14,600,987
Other
Information
Segment assets 11,598,126 105,259,956 927,249 - 117,785,331
Consolidated
assets 11,598,126 105,259,956 927,249 - 117,785,331
Segment liabilities 3,170,935 23,186,932 44,870 - 26,402,737
Tax payable 252,706 372,796 - - 625,502
Deferred taxation - 2,871,000 - - 2,871,000
Consolidated
liabilities 3,423,641 26,430,728 44,870 - 29,899,239
Capital expenditure
on property, plant
and equipment 42,635 7,303,650 - - 7,346,285
Depreciation 167,680 3,140,708 - - 3,308,388
Amortisation 1,242 - - - 1,242
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200556
29. SEGMENTAL REPORTING (CONT’D)
(i) Primary segmental reporting – Business Segment (Cont’d)
Investment
Year ended Trading Manufacturing holding Eliminations Consolidated
31 December 2004 RM RM RM RM RM
Revenue
External 10,650,780 64,309,235 - - 74,960,015
Intersegment - 4,105,009 3,300,000 (7,405,009) -
Total revenue 10,650,780 68,414,244 3,300,000 (7,405,009) 74,960,015
Results
Segment results 467,221 11,154,789 33,940,899 (33,633,591) 11,929,318
Interest income 29,537 21,004 356,989 (283,402) 124,128
Profit from
operations 496,758 11,175,793 34,297,888 (33,916,993) 12,053,446
Finance cost (474,141)
Profit from
ordinary activities
before taxation 11,579,305
Taxation (3,096,482)
Net profit for
the year 8,482,823
Other
Information
Segment assets 10,695,481 96,987,540 1,757,349 - 109,440,370
Consolidated
assets 10,695,481 96,987,540 1,757,349 - 109,440,370
Segment liabilities 3,316,759 23,806,081 323,076 - 27,445,916
Tax payable 110,630 - - - 110,630
Deferred taxation - 2,871,000 - - 2,871,000
Consolidated
liabilities 3,427,389 26,677,081 323,076 - 30,427,546
Capital expenditure
on property, plant
and equipment 616,220 18,518,968 - - 19,135,188
Depreciation 135,633 2,104,453 - - 2,240,086
Amortisation 685 - - - 685
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 57
29. SEGMENTAL REPORTING (CONT’D)
(ii) Secondary segmental reporting – Geographical segment
The Group’s operations are operates in the following geographical areas:-
Geographical segments Business activities
Malaysia Mainly manufacturing in various kind of pharmaceutical products
Philippines Mainly import, export and trading in various kind of pharmaceutical
products
Myanmar Mainly import, export and trading in various kind of pharmaceutical
products
Singapore Mainly import, export and trading in various kind of pharmaceutical
products
Vietnam Mainly import, export and trading in various kind of pharmaceutical
products
Cambodia Mainly import, export and trading in various kind of pharmaceutical
products
Indonesia Mainly import, export and trading in various kind of pharmaceutical
products
Year ended
31 December 2005
Revenue Total assets Capital expenditure
RM RM RM
Malaysia 68,473,014 106,187,782 7,303,652
Philippines 3,466,400 2,735,681 3,612
Myanmar - 29,039 -
Singapore 8,192,983 8,039,749 36,267
Vietnam 4,239,193 - -
Cambodia 806,270 440,922 -
Indonesia - 352,158 2,754
Others 1,202,854 - -
86,380,714 117,785,331 7,346,285
Notes to the financial statements
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200558
29. SEGMENTAL REPORTING (CONT’D)
(ii) Secondary segmental reporting – Geographical segment (Cont’d)
Year ended
31 December 2004
Revenue Total assets Capital expenditure
RM RM RM
Malaysia 60,753,283 98,748,504 18,518,968
Philippines 3,703,360 2,982,686 312,950
Myanmar - 17,604 -
Singapore 6,259,282 6,834,974 290,828
Vietnam 2,783,772 - -
Cambodia 688,138 478,482 12,442
Indonesia 378,120 - -
Others 772,180 - -
74,960,015 109,440,370 19,135,188
30. FAIR VALUES
The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance
sheet date approximated their fair values except for investment in subsidiary companies, which is
stated at cost, as it is not practical to estimate the fair value without incurring excessive costs.
Notes to the financial statements
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 59
Net Book
Value as at
Land/ Approximate 31 December
Description and Built-up Age of 2005
Location Usage Tenure Area Building (RM’000)
Lot 3, 5 & 7, Jalan P/7, Three contiguous parcels 99 years 0.4047 13 years 13,466
Section 13 of industrial lands with leasehold, hectare
Kawasan Perindustrian purpose built industrial all expiring on each,
Bandar Baru Bangi buildings for own use 29.09.2086 totalling
43000 Kajang consisting of:- 1.2141
Held under:- hectare
H.S.(M) 9635 for (i) 4-storey office /
P.T. 11466, Seksyen 13, laboratory building
H.S.(M) 9636 for (ii) 4 storey production /
P.T. 11467 Seksyen 13 laboratory / warehouse
and H.S.(M) 9637 for building
P.T. 11468 Seksyen 13, (iii) 2-storey raw materials /
all in the Mukim of packaging building
Kajang, District of (iv) 1-storey maintenance /
Hulu Langat, Tenaga Nasional Berhad
State of Selangor sub-station building
(v) 1-storey canteen
(vi) water treatment plant
(vii)guard house
No. 18, Intermediate 3-storey Freehold 163 17 years 1,170
Jalan Wan Kadir terrace shop-office square
Taman Tun Dr. Ismail for own use metres
60000 Kuala Lumpur
Held under Geran:-
23507 for Lot No. 50965
in Mukim Kuala Lumpur,
District of Wilayah
Persekutuan State of
Wilayah Persekutuan
No. 20, Jalan Wan Kadir Intermediate 3-storey Freehold 164 17 years 1,171
Taman Tun Dr. Ismail terrace shop-office square
60000 Kuala Lumpur for own use metres
Held under Geran:-
23508 for Lot No. 50966,
in Mukim Kuala Lumpur,
District of Wilayah
Persekutuan State of
Wilayah Persekutuan
Lot 266, Lot 268 4 units of double storey 99 years 143 Building 714
and Lot 299 under terrace house for leasehold square in progress
PT 55634, PT 55632, own use metres/
PT 55602 and PT 55601 unit
respectively, all in
Seksyen 9, Bandar Baru
Bangi, Mukim Kajang,
Daerah Hulu Langat,
Selangor
List of Propertiesas at 31 December 2005
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200560
Net Book
Value as at
Land/ Approximate 31 December
Description and Built-up Age of 2005
Location Usage Tenure Area Building (RM’000)
Lot 1 & 3, Jalan 9/8 Five contiguous parcels 99 years 4.03 1 year 12,386
Lot 2,4 & 6, Jalan 9/7 of industrial lands leasehold, acres/
Taman IKS, Section 9 with purpose built all expiring in 13,939
Bandar Baru Bangi industrial building for year 2103 square
43650 Kajang own use consisting of:- metres
Held under:-
H.S.(D) 87699 for (i) 2-storey
P.T. 56932 Seksyen 9, warehouse
H.S.(D) 87700 for P.T. building PKNS
56933 Seksyen 9, Industrial land
H.S.(D) 87693 for for factory build
P.T. 56926 Seksyen 9, on Lot 1 & 2
H.S.(D) 87694 for Section 9,
P.T.56927 Seksyen 9 Bandar Baru Bangi
and H.S.(D) 87695
for P.T. 56928 Seksyen 9, (ii) Lot 3, 4, & 5
all in the Mukim of Kajang, - vacant land
District of Hulu Langat,
State of Selangor
No.10, Ubi Crescent Flatted factory 60 years 2,250 3 years 766
#06-57, leasehold, square
Singapore 408564 all expiring on feet
04.07.2057
No.10, Ubi Crescent Flatted factory for 60 years 2,325 3 years 792
#06-58, own use leasehold, square
Singapore 408564 all expiring feet
on 04.07.2057
No. 8 2nd storey flatted 60 years 139.0 19 years 440
Kaki Bukit Road 2, warehouse within a leasehold, square
#02-26, 4-storey industries expiring on metres
Ruby Warehouse development. Let 06.12.2042
Complex, out
Singapore 417841
Unit 3-B LPL Plaza Condominium Unit Freehold 152.0 21 years 304
Condominium for own use square
Building metres
No.12
4 L.P Leviste
Street, Salcedo
Village, Makati City
List of Propertiesas at 31 December 2005
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 61
Authorized Capital : RM100,000,000 divided into 100,000,000 ordinary shares of RM1.00 each
Issued and Paid-Up Capital : RM60,500,000 divided into 60,500,000 ordinary shares of RM1.00 each
Class of Shares : There is only one class of shares in the Company
• Ordinary Shares of RM1.00 each fully paid
Voting Rights : One vote per ordinary share
DISTRIBUTION OF SHAREHOLDINGS AS AT 4TH MAY 2006
Size of Holdings No. of Shareholders Total Holdings %
Less than 100 shares 25 616 0.00
100 - 1,000 shares 77 42,615 0.07
1,001 - 10,000 shares 1,183 3,456,560 5.71
10,001 - 100,000 shares 274 7,248,521 11.98
100,001 - below 5% of issued shares 39 17,959,268 29.69
5% and above of issued shares 2 31,792,420 52.55
1,600 60,500,000 100.00
SUBSTANTIAL SHAREHOLDERS AS AT 4TH MAY 2006
Direct Interest Deemed Interest
No. Name Shares % Shares %
1. YSP SEA Investment Co. Ltd. 25,502,730 42.15 - -
2. Lembaga Tabung Haji 6,289,690 10.40 - -
3. Lee Tien-Te 608,361 1.01 31,214,362 (a) 51.59
4. Lee-Chang Yu-Ying 506,050 0.84 31,316,673 (a) 51.76
5. Dr. Lee Fang Hsin 3,121,976 5.16 25,663,330 (b) 42.42
6. Dr. Lee Fang-Yu 578,657 0.96 25,502,730 (c) 42.15
7. Dr. Lee Fang-Chen @ Lee Fang-Chuan 463,146 0.76 25,502,730 (c) 42.15
8. Dr. Lee Fang-Jen 443,344 0.73 25,502,730 (c) 42.15
9. Lee Ling-Chin 345,434 0.57 25,502,730 (c) 42.15
10. Lee Ling-Fen 253,025 0.42 25,502,730 (c) 42.15
11. YSP International Co. Ltd. - - 25,502,730 (d) 42.15
12. Yung Shin Pharmaceutical Industries Co. Ltd. - - 25,502,730 (e) 42.15
DIRECTORS' SHAREHOLDINGS AS AT 4TH MAY 2006
Direct Interest Deemed Interest
No. Name Shares % Shares %
1. Datuk Dr. Anis Bin Ahmad 1,412,500 2.33 - -
2. Dr. Lee Fang Hsin 3,121,976 5.16 25,663,330 (b) 42.42
4. Dr. Lee Fang Chuan @ Lee Fang Chen 463,146 0.76 25,502,730 (c) 42.15
3. Lee Ling Chin 345,434 0.57 25,502,730 (c) 42.15
5. Dato' Koay Soon Eng - - - -
6. Tu Shu Yao 550,000 0.91 209,000 (f) 0.35
7. Adi Azuan Bin Abdul Ghani - - - -
Shareholding Statisticsas at 4th May 2006
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200562
Note
(a) Deemed interested by virtue of his family members’ direct shareholding in YSPSAH and by virtue of his own togetherwith his family members’ shareholding of more than 15% in Yung Shin Pharmaceutical Industries Co. Ltd. whichwholly owns YSP International Co. Ltd. in turn wholly owns YSP SEA Investment Co. Ltd.
(b) Deemed interested by virtue of his interest in Yung Shin Pharmaceutical Industries Co. Ltd. which wholly owns YSPInternational Co. Ltd. which in turn wholly owns YSP SEA Investment Co. Ltd and his spouse’s interest in the Companypursuant to Section 6A of the Companies Act, 1965.
(c) Deemed interested by virtue of his interest in Yung Shin Pharmaceutical Industries Co. Ltd. which wholly owns YSPInternational Co. Ltd. which in turn wholly owns YSP SEA Investment Co. Ltd.
(d) Deemed interested by virtue of Section 6A of the Companies Act 1965, through its 100% interest in YSP SEAInvestment Co. Ltd.
(e) Deemed interested by virtue of Section 6A of the Act, through its 100% interest in YSP International Co. Ltd. whichin turn wholly owns YSP Sea Investment Co. Ltd.
(f) Deemed interested by virtue of his spouse shareholding in YSPSAH.
THIRTY (30) LARGEST SHAREHOLDERS AS AT 4TH MAY 2006
No. Names No. of Shares held %
1 YSP SEA INVESTMENT COMPANY LIMITED 25,502,730 42.15
2 LEMBAGA TABUNG HAJI 6,289,690 10.40
3 LEE FANG HSIN 3,121,976 5.16
4 BHLB TRUSTEE BERHAD – TA SMALL CAP FUND 2,314,300 3.83
5 ANIS BIN AHMAD 1,412,500 2.33
6 PERMODALAN NASIONAL BERHAD 1,170,840 1.94
7 THE ESTATE OF THE LATE HON. DR LEE, TIEN-TE 608,361 1.01
8 LIN, MIN-JU 581,957 0.96
9 LIN, MENG-BE 581,957 0.96
10 LEE, FANG-YU 578,657 0.96
11 TU SHU YAO 550,000 0.91
12 BHLB TRUSTEE BERHAD – TA COMET FUND 532,400 0.88
13 LEE CHANG, YU-YING 506,050 0.84
14 LEE FANG-CHUAN @ LEE FANG-CHEN 463,146 0.76
15 ABB NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN SIEW KHENG 455,620 0.75
16 LEE, FANG-JEN 443,344 0.73
17 PUBLIC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN KONG HAN 385,000 0.64
18 LEE, LING-CHIN 345,434 0.57
19 TU SHU HUA 310,800 0.51
20 LEE I-HSIUNG 277,228 0.46
21 CHIANG HUNG-WEN 277,228 0.46
22 LI, YU-LIN 277,228 0.46
23 CHU FONG HEE 271,700 0.45
24 LIN BAO-CHENG 253,025 0.42
25 LEE, LING-FEN 253,025 0.42
26 TING CHIN LIU 209,000 0.35
27 LIANG KUO TUNG 200,620 0.33
28 TANG WEI CHEN 193,614 0.32
29 LIAO MIAO JUNG 160,600 0.27
30 FONG AH CHAI 150,000 0.25
48,678,030 80.48
Shareholding Statisticsas at 4th May 2006
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 63
NOTICE IS HEREBY GIVEN that the Fifth Annual General Meeting of the Company will be held at the
Banquet Hall, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70B, Off Jalan Bukit Kiara, 60000 Kuala
Lumpur on Friday, 23rd June 2006 at 10:00 a.m. for the following purposes:-
AGENDA
AS ORDINARY BUSINESS
1. To receive the Audited Financial Statements of the Company for the financial
year ended 31st December 2005 and the Reports of the Directors and the
Auditors thereon.
2. To approve the payments of Directors' Fee for the year ended 31st December
2005.
3. To re-elect the following Directors retiring in accordance with the Company's
Articles of Association:-
i) Datuk Dr. Anis Bin Ahmad Article 85
ii) Dr. Lee Fang Hsin Article 85
ii) Dr. Lee Fang Chuan @ Lee Fang Chen Article 92
4. To re-appoint Messrs Shamsir Jasani Grant Thornton as Auditors and to
authorise the Board of Directors to fix their remuneration.
AS SPECIAL BUSINESS
To consider and, if thought fit, to pass the following Resolutions: -
5. AS ORDINARY RESOLUTION
- AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE
COMPANIES ACT, 1965
“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to
the approvals from the relevant governmental/regulatory authorities, the
Directors be and are hereby empowered to issue shares in the capital of the
Company from time to time and upon such terms and conditions and for such
purposes as the Directors may deem fit provided that the aggregate number of
shares issued pursuant to this resolution does not exceed 10% of the issued
capital of the Company for the time being excluding the number of ordinary
shares arising from the exercise of Employees Share Option Scheme (“ESOS”)
and that such authority shall continue in force until the conclusion of the next
annual general meeting of the Company.”
6. AS ORDINARY RESOLUTION
PROPOSED SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY
TRANSACTIONS OF A REVENUE OR TRADING NATURE FOR RRPT1 TO
RRPT9
PROPOSED SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY
TRANSACTIONS OF A REVENUE OR TRADING NATURE FOR RRPT10
(RESOLUTION 1)
(RESOLUTION 2)
(RESOLUTION 3)
(RESOLUTION 4)
(RESOLUTION 5)
(RESOLUTION 6)
(RESOLUTION 7)
(RESOLUTION 8)
Notice of Annual General Meeting
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200564
“THAT approval be hereby given to the Company and/or its subsidiaries (“Group”) to enter into the
recurrent related party transactions of a revenue or trading nature as set out in Section 2.3(ii) of the
Circular to Shareholders dated 1 June 2006 (“Circular”) which are necessary for the Group's day-to-day
operations provided such transactions are in the ordinary course of business and are on terms not more
favourable to the related party than those generally available to the public and not detrimental to
minority shareholders and such approval shall continue to be in force until:-
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following this AGM, at
which time it will lapse, unless by a resolution passed at such AGM, such authority is renewed;
(b) the expiration of the period within which the next AGM of the Company is required to be held
pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed
pursuant to Section 143(2) of the Act); or
(c) revoked or varied by resolution passed by the shareholders in a general meeting; whichever is earlier.
AND THAT, the Directors of the Company be and hereby authorized to complete and to do all such acts
and things (including executing all such documents as may be required) as they may consider expedient
or necessary to give effect to the Proposed Mandate.”
7. To transact any other business which may properly be transacted at an Annual General Meeting for which
due notice shall have been given.
By Order of the Board
LIM SECK WAH (MAICSA 0799845)
M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA 0781031)
Company Secretaries
Dated this 1st day of June 2006
Kuala Lumpur
Notes:
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy/proxies to attend and
vote in his/her stead. A proxy needs not be a member of the Company.
2. Where a member is an authorised nominee as defined under the Securities Industry (Central
Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it
holds with ordinary shares of the company standing to the credit of the said securities account.
3. Where a member appoints more than one (1) proxy to attend at the same meeting, the appointment shall
be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.
4. If the appointer is a corporation, this form must be executed under its Common Seal or under the hand
of its attorney duly authorized.
5. The Form of Proxy must be deposited at the Company's Share Registrar Office at Level 15-2, Faber
Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time
appointed for holding the meeting or any adjournment thereof.
6. Explanatory notes on Special Business
6.1 The proposed Resolution 6 is primarily to give flexibility to the Board of Directors to issue and allot
shares at any time in their absolute discretion and for such purposes as they consider would be in
the interest of the Company without convening a general meeting. This authority, unless revoked or
varied at a general meeting, will expire at the next annual general meeting of the Company.
6.3 The proposed Resolutions 7 & 8, if passed will mandate the Company to enter into the categories
of recurrent transactions of a revenue or trading nature and with those related parties specified in
Section 2.3 of the Circular to Shareholders dated 1 June 2006.
Notice of Annual General Meeting
Annual Report 2005 Y.S.P. Southeast Asia Holding Berhad 552781-X 65
1. DIRECTORS STANDING FOR RE-ELECTION
a) Datuk Dr. Anis Bin Ahmad - Article 85
b) Dr. Lee Fang Hsin - Article 85
c) Mr. Lee Fang Chuan @ Lee Fang Chen - Article 92
The particulars of all the above directors have been disclosed in the Directors' Profile in this Annual
Report.
2. DETAILS OF ATTENDANCE OF DIRECTORS AT BOARD MEETINGS
The Board met four (4) times during the financial year ended 31 December 2005. The members of the
Board and their attendance at the meetings, were as follows:-
Board of Directors No. of meetings attended
Datuk Dr. Anis Bin Ahmad 4/4
Dr. Lee Fang Hsin 4/4
Dato' Koay Soon Eng 4/4
Mr. Tu Shu Yao 4/4
En. Adi Azuan Bin Abdul Ghani 4/4
Madam Lee Ling Chin (Appointed on 16.02.2006) 3/3
Dr. Lee Fang Yu (Resigned on 06.02.2006) 3/4
Dr. Lee Fang Chuan @ Lee Fang Chen (Appointed on 27.02.2006) -
3. PLACE, DATE AND TIME OF THE GENERAL MEETING
The Fifth Annual General Meeting of the Company will be held as follows:-
Place : Banquet Hall, Kuala Lumpur Golf & Country Club, No. 10, Jalan 1/70B, Off Jalan Bukit Kiara,
60000 Kuala Lumpur
Date : 23 June 2006
Time : 10.00 a.m.
Statement Accompanying Noticeof Annual General Meeting
Y.S.P. Southeast Asia Holding Berhad 552781-X Annual Report 200566
Proxy Form
(Before completing this form please refer to the notes below)
I/WE NRIC No./Passport No./ Company No.
(Full name in block letters) CDS. A/C No.
of
(Full address)
being a member/members of Y.S.P. SOUTHEAST ASIA HOLDING BHD., hereby appoint the following person(s) or failing him/her, the
Chairman of the meeting as *my/our proxy/proxies to attend and vote for *me/us and on my/our behalf at the Fifth Annual General
Meeting of the Company which will be held at the Banquet Hall, Kuala Lumpur Golf & Country Club, No. 10, Jalan 11/70B, Off Jalan
Bukit Kiara, 60000 Kuala Lumpur, on Friday, 23rd June 2006 at 10:00 a.m. and at every adjournment thereof to vote as indicated below:-
Name of proxy, NRIC No. & Address No. of shares to be
represented by proxy
1.
2.
In the case of a vote taken by way of show of hands, the first-named proxy shall vote on *my/our behalf. In the event of a poll being
demanded, *my/our proxy/proxies shall vote as indicated below:-
FOR AGAINST FOR AGAINST
Ordinary Resolution 1 Ordinary Resolution 5
Ordinary Resolution 2 Ordinary Resolution 6
Ordinary Resolution 3 Ordinary Resolution 7
Ordinary Resolution 4 Ordinary Resolution 8
(Please indicate with an “x” in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will vote
or abstain from voting at his/her discretion).
In case of a vote taken by a show of hands, the First-named Proxy shall vote on *my/our behalf.
Date this day of 2006.
Signature/Common Seal
* Strike out whichever is not desired.
Notes:-
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his/her stead. A
proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1)
proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
3. Where a member appoints two (2) or more proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be
represented by each proxy.
4. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or, if the appointer
is a corporation, either under its common seal or under the hand of an officer or attorney duly authorised.
5. The instrument appointing a proxy must be deposited at the Company Secretary's office at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail,
50250 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.
Y.S.P. SOUTHEAST ASIA HOLDING BHD. (Company No. 552781 X)Incorporated in Malaysia
No. of ordinary shares held
The Company Secretary
Y.S.P. SOUTHEAST ASIA HOLDING BHD
Level 15-2, Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
STAMP