london biscuit ar 2010
TRANSCRIPT
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Contents
1
2
3 - 4
5 - 6
7 - 10
11 - 17
Corporate Social Responsibility 17
18 - 19
20 - 24
25 - 26
27 - 81
82 - 83
84 - 87
88 - 91
Appendix A
Proxy Form
1
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Corporate Information
Board of Directors
Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP Datin Sri Lim Yook Lan Non-Independent Non-Executive Chairman Non-Independent Non-Executive Director
Dato’ Sri Liew Yew Chung, SSAP, DIMP Dato’ Liew Yew Cheng, DIMP Group Managing Director / Group CEO Non-Independent Non-Executive Director
Ms Liew Yet Mei Dato’ Liew Yet Lee, DIMP Non-Independent Non-Executive Director Non-Independent Non-Executive Director
Dato’ Cheong Siew Kai, DJMK, AMS, JP Mr Huang Yan Teo, PIS, PPNIndependent Non-Executive Director Independent Non-Executive Director
Mr Leslie Looi MengIndependent Non-Executive Director
Audit Committee
Mr Huang Yan Teo, PIS, PPN (CHAIRMAN) Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JPIndependent & Non-Executive Director Non-Independent Non-Executive Chairman
Mr Leslie Looi MengIndependent & Non-Executive Director
Company Secretaries Auditors
Hoh Leong Ching (MAICSA 7006654) Wong Weng Foo & Co (AF: 0829) Chartered AccountantsHoh Chee Mun (MIA 8891)
Registered Address Share Registrars
No 1, Jalan Istimewa 2 Bina Management (M) Sdn Bhd
Taman Perindustrian Desa Cemerlang Lot 10, the Highway Centre
81800 Ulu Tiram Jalan 51/205
Johor Darul Takzim, Malaysia 46050 Petaling Jaya
Tel : 607-861 5288 Selangor Darul Ehsan, Malaysia
Fax : 607-861 5186 Tel : 603-7784 3922
Website : www.londonbiscuits.com.my Fax : 603-7784 1988
Email : [email protected]
Stock Exchange Listing Principal Bankers
Main Market, Bursa Malaysia Securities Berhad HSBC Bank Malaysia Berhad
HSBC Amanah Malaysia Berhad
OCBC Bank (Malaysia) Berhad
Date of Incorporation23 June 1981
2
Khee San Berhad Kinos Food Industries (M) Sdn. Bhd. TPC Plus Berhad
Khee San
Food
Industries
Sdn. Bhd.
Khee San
Marketing
Sdn. Bhd.
Kinos Food
Trading
Sdn. Bhd.
Kim Choaw
Sdn. Bhd.
Teck Ping Chan
Agriculture
Sdn. Bhd.
Mestika Arif
Sdn. Bhd.
Teck Ping Chan
(1976)
Sdn. Bhd.
Corporate Chart
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
32.87%
100% 33.65%
100% 100% 100% 100% 100%
100%
100%
3
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
5 years Group Financial Highlights
138,164
9,257
10,503
57,252
-
152,635
152,635
12.61
-
195.57
184,302
17,612
16,027
73,280
2,617
168,663
168,663
19.20
-
216.11
117,171
14,604
19,885
49,637
2,888
134,003
135,394
27.70
5.00
184.58
107,740
18,644
13,536
37,748
7,996
119,534
120,885
19.01
13.00
168.28
223,434
17,59
15,064
85,726
*
199,330
199,330
17.31
-
-
2010 2009 2008 2007 2006
(As Restated)
Financial Results (RM'000)
Turnover
Profit Before Income Tax (before minority interest)
Profit After Income Tax Attributable to equity holders
of the Company
Retained Profit Attributable To Members
Dividends (Net)
Financed By (RM'000)
Shareholders' Funds
Net Assets Attributable to Equity Holders of the Company
Statistics
Earnings per share (Sen) (Fully diluted)
Gross Dividend per share (Sen)
Net Asset per share (Sen)
* The Directors had on 15 October 2010 declared an interim dividend of 1.5% tax exempted for the financial
year ended 30 June 2010 amounting to RM 1,440,203 which was paid on 26 November 2010.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
10,503 16,027 19,885 13,536
2
2009
3
2008
4
2007
5
2006
1
2010
Profit After Income Tax Attributable to Equity Holders of the Company
15,064
4
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
138,164 184,302 223,434 117,171 107,740
0
50,000
100,000
150,000
200,000
2
2009
3
2008
4
2007
5
2006
1
2010
0
5
10
15
20
25
30
12.6119.2017.31 27.70 19.01
Turnover
Shareholders' Fund
Earnings Per Share (Sen) (fully diluted)
152,635 134,003 119,534
2
2009
3
2008
4
2007
5
2006
1
2010
2
2009
3
2008
4
2007
5
2006
1
2010
168,663199,330
5
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
On behalf of the Board of Directors of LONDON BISCUITS BERHAD (“LONDON”), it is my pleasure to present to you the Annual Report and Financial Statements of the Group for the financial year ended 30 June 2010.
Review of Performance
Group’s revenue for the financial year ended 30 June 2010 surged by RM39,131,998 to RM223,434,122, which represented a 21.23% increase over that achieved in the preceding year of RM184,302,124. The Group continues to achieve commendable progressive operating revenue. Internal targets set for management to go all out, not only to sustain our current achievements but to improve substantially on it.
Profit After Income Tax attributable to the Group fell slightly by 6% to RM15,064,018 as compared to RM16,027,316 achieved in the previous year. This is because the Group “suffered” a slight hiccup of having had to write off certain amount against our investment in Lay Hong Berhad in the year under review. If not for this mentioned write off, the Group would have met our internal target of approximately RM20,000,000 profit for the year under review. The Board deliberated on this write off and are of unanimous opinion to allow for this painful stand as a matter of prudence and good accounting policy. With this behind us, we now move forward exciting. Like an old Chinese saying goes, “BITTER FIRST, SWEET TASTE LATER”.
The result of LONDON on its own stands very impressively. We recovered in 2010, with a good financial showing, although the world is still in midst of global economic crisis, with ever rising cost of production and against pressure from competitors and consumers pricing. Profit After Income Tax went up by 61.6% from RM8,422,511 to RM13,610,392.
The basic net earnings per share of the Group for the financial year, 2010 fell accordingly to 17.31sen (2009 – 20.54sen), based on the weighted average number of 96,031,500 ordinary shares (2009 – 78,045,000) of RM1 each, in issue as at 30 June 2010.
As at 30 June 2010, Group’s shareholders’ equity stood at RM199,330,061 (2009 - RM168,662,503 ) whilst Group’s net tangible assets per share fell to RM1.94 in 2010 from RM2.00 per share in 2009.
Outlook and Prospects
Recovery, we believe is in sight. Although, the year ahead should remain difficult and challenging, the Board is confident that LONDON is in for another good year.
We predicted LONDON should end this financial year 2010 with a “bang” and it indeed did so. We went through a string of activities, added another public listed company to our stable and also decided to dispose one off but what we did not expect was the wide media publicity and the regulatory coverage that came along with it.
When we first bought into Lay Hong Berhad (“Lay Hong”), the principal objective was to assure ourselves of a continuous and adequate supply of quality liquid eggs at reasonable prices. Liquid eggs is one of the main raw material ingredients in the manufacturing of our range of cake products. An investment opportunity was extended to us to take up a “controlling” stake in TPC PLUS BERHAD (“TPC”) at a reasonably cheap entry cost. TPC, a company also listed in the main market of Bursa Malaysia, is principally involve in the business of producing chicken eggs for industrial, commercial and consumer use. We believe we made a good buy, so much so that we went ahead to extend a Conditional Mandatory Take-Over Offer (“MGO”) for TPC shares not already owned by LONDON. Although, the MGO was not successful, it nevertheless an indication that, with LONDON as its major shareholder, the remaining TPC shareholders have faith in the future of TPC ahead.
Arising from the acquisition of TPC were subjected to mounting claims of a situation of potential conflict of interest by virtue of our only one Board representation on the Board of Lay Hong as TPC is in similar business as Lay Hong. Your Board deliberated carefully on this matter and it was decided to sell off our interest in Lay Hong, incurring a “paper” loss, which is actually an accumulation of our share of profit after income tax and equity-accounted for on Lay Hong. Having TPC has opened the door to a core of business activities and synergies that will be developed or expanded, whether upstream or downstream on its own or with LONDON, on a win-win situation. The most important is now, we have in the Group, our very own supplier of eggs with assured quality, is cost-effective and will adequately meet our ever growing substantial requirements. This is especially so with the commissioning of our new London Roll cake production line which we believe to be the single biggest such production line in South East Asia. This line, once up and running, will more than double our existing production capacity. This decision to sell Lay Hong, is purely, a commercial and business decision. Rightly or wrongly, only time will tell.
Chairman’s Message
6
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The construction of a new warehouse with to cater for storage needs is completed in respect of expected increase in
raw materials supply due to the upcoming commissioning of the abovementioned new London Roll cake line and in
anticipation of an increase in demand for our products. Older machines and facilities in the snack manufacturing
division are being reviewed and reassessed for upgrading to custom design and built machines, which will improve
production efficiencies and reduce manpower requirements.
The huge allocation approved for an intensive and aggressive marketing and advertising campaign is maintained
with successful TV programmes in Malaysia and Singapore, supported with strong product campaigns on ground
events such as Suarasa and Karnival Jom Heboh by TV3 to create a continued awareness of our Group Brand Name,
as a mean to build and to retain customers loyalty continues to bring fruitful and meaningful results. These
campaigns also help to promote and to educate on the convenience and health benefits of our products that use
high quality ingredients. The Group is committed to maintain our current performance and to confirm our position
as one of the market leaders not only in Malaysia but also in this part of the region. We have commenced a Brand
Building campaign in Hong Kong and Vietnam and took an active part in the EKSPO BELI BARANG MALAYSIA,
organized by Pejabat Perdagangan Dalam Negeri with aim to introduce our quality Malaysian made products to
Malaysian customers. Our participation in trade missions, exhibitions and fairs held internationally and on local front
(Singapore FHA 2010, Japan Foodex 2010, Dubai Sweet Middle East 2010, Kuala Lumpur MIHAS 2010) received good
reviews from visitors, existing and potential customers.
Dividends
Difficult trading and business conditions and environment are still in year, ahead. The Board is always constantly on
the workout for a solution to conserve financial resources of the Group to meet capital, operating and investing
expenditure and at same time to reward our shareholders for their faith, support and loyalty to the Group. This is the
stance that your Board has adopted consistently over the years. We have work out a “Win-Win” formulation that
should ensure a steady cashflow for the Group’s requirements at same time, able to service our dividends to
shareholders in an orderly manner in line with an improvement in our resources. The Board has already declared an
interim dividend of 1.5 sen (tax-exempt) per share in respect of the financial year ended 30 June 2010, amounting to
RM1,440,203, which will be paid, by month end, on 26 November 2010. Although, we do not intend to propose any
final dividend for the same financial year, the Board may consider to declare an interim dividend in respect of the
financial year ending 30 June 2011 in future.
Acknowledgement and Appreciation
I, take this opportunity to express my sincere appreciation to my fellow directors, the management team and
all our employees for their hard work and dedicated services in the past year. In recognition, the Board has
proposed to terminate the existing Employees’ Share Option Scheme (“ESOS”), to be replaced with a New ESOS
to continue to reward, to motivate and to retain employees and Executive Directors, whose services are
considered vital to LONDON Group.
My heartfelt thanks are also extended to our valued customers, suppliers, bankers and to others whose
supports are invaluable to the continued success of LONDON.
DATO’ SRI LIEW KUEK HIN, SSAP, DIMP, PJK, JP Chairman of the Board
Chairman’s Message (Continued)
7
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP Malaysian, aged 71
Non-Independent Non-Executive Chairman
Dato’ Sri Liew Kuek Hin was appointed to the Board of London Biscuits Berhad on 27 December 1993 and was
subsequently on 26 October 2007, re-designated as the Non-Independent Non-Executive Chairman of the
whole Group. He is also a Member of the Audit Committee and Remuneration Committee.
He started his career by joining his family-owned businesses, which includes logging, transportation,
sawmilling, plywood manufacturing, plantations, palm oil mill and hotel operations, after his study in
Nanyang University, Singapore . His current directorships in other public listed companies include Khee
San Berhad and TPC Plus Berhad.
He is a substantial shareholder of the Company by virtue of his direct and indirect interest shareholdings held
by his immediate family and family-owned company. He is the spouse of Datin Sri Lim Yook Lan and is the
parent to Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Ms Liew Yet Mei and Dato’ Liew Yet Lee.
He has attended all the Meetings held during the financial period under review.
Datin Sri Lim Yook LanMalaysian, aged 71
Non-Independent Non-Executive Director
Datin Sri Lim Yook Lan was appointed to the Board on 27 December 1993 as the Non-Independent Non-Executive
Director.
Datin Sri Lim is a substantial shareholder of the Company by virtue of her direct and indirect interest
shareholdings held by her immediate family and family-owned company. She is the spouse of Dato’ Sri
Liew Kuek Hin, and is the parent to Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Ms Liew Yet Mei and
Dato’ Liew Yet Lee. Her current directorships in other public listed company include TPC Plus Berhad.
She has attended all the Meetings held during the financial period under review.
Dato’ Sri Liew Yew Chung, SSAP, DIMPMalaysian, aged 40
Group Managing Director/Group CEO
Dato’ Sri Liew Yew Chung was appointed to the Board on 27 December 1993. He was appointed as a General
Manager in 1994 and in 2000, he was appointed as the Managing Director and Chief Executive Officer of LBB.
He obtained his Bachelor of Science in Business Administration from the Drexel University, Philadelphia, United
States in 1991 and majoring in Economics and Finance Accounting. In 1992, he obtained his listed Masters of
Business Administration, majoring in Accounting Control. His current directorships in other public companies
include Khee San Berhad and TPC Plus Berhad.
Board of Directors
8
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Dato’ Sri Liew is a substantial shareholder of the Company by virtue of his direct and indirect interest
shareholdings held by his immediate family and family-owned company. He is the son of Dato’ Sri Liew
Kuek Hin and Datin Sri Lim Yook Lan, and is the brother of Dato’ Liew Yew Cheng, Ms Liew Yet Mei and Dato’
Liew Yet Lee.
He has attended 5 Meetings held during the financial period under review.
Dato’ Liew Yew Cheng, DIMPMalaysian, aged 37
Non-Independent Non-Executive Director
Dato’ Liew Yew Cheng was appointed as the Non-Independent Non-Executive Director of LBB on 27 December
1993. Presently, he is the Group General Manager of the Customer Services Department of LBB Group.
He obtained his Diploma in Business and Management from the Drexel University, Philadelphia, United States
in 1994. His current directorship in other public listed companies include Khee San Berhad and TPC Plus
Berhad.
Dato’ Liew is a substantial shareholder of the Company by virtue of his direct and indirect interest
shareholdings held by his immediate family and family-owned company. He is the son of Dato’ Sri Liew Kuek
Hin and Datin Sri Lim Yook Lan, and is the brother of Dato’ Sri Liew Yew Chung, Ms Liew Yet Mei and Dato’ Liew
Yet Lee.
He has attended all the Meetings held during the financial period under review.
Liew Yet MeiMalaysian, aged 43
Non-Independent Non-Executive Director
Ms Liew Yet Mei was appointed as the Non-Independent Non-Executive Director of LBB on 27 December 1993.
She is the Chairman of the Nomination Committee and a Member of the Remuneration Committee.
She obtained her Bachelor in Accounting, from Drexel University, Philadelphia, United States in 1992. She is
currently an Alternate Director of Dato‘ Liew Yet Lee in TPC Plus Berhad, a public listed company.
Ms Liew is a substantial shareholder of the Company by virtue of her direct and indirect interest shareholdings
held by her immediate family and family-owned company. She is the daughter of Dato’ Sri Liew Kuek Hin and
Datin Sri Lim Yook Lan, and is the sister to Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng and Dato’ Liew Yet
Lee.
She has attended 4 Meetings held during the financial period under review.
9
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Dato’ Liew Yet Lee, DIMPMalaysian, aged 36
Non-Independent Non-Executive Director
Dato’ Liew Yet Lee was appointed to the Board on 27 December 1993 as the Non-Independent Non-Executive
Director and the Chairman of the Remuneration Committee.
She joined LBB as an Executive Manager in 1993 and she is now the General Manager for Special Projects in
LBB. Currently, she is in-charge of the Internal Audit function for the Group.
She obtained her Bachelor of Business majoring in Hospitality Management from Edith Cowan University,
Western Australia in 1996. Her current directorship in other public listed company include TPC Plus Berhad.
Dato’ Liew is a substantial shareholder of the Company by virtue of her direct and indirect interest sharehold-
ings held by her immediate family and family-owned company. She is the daughter of Dato’ Sri Liew Kuek Hin
and Datin Sri Lim Yook Lan, and is the sister to Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng and Ms Liew Yet
Mei.
She has attended all the Meetings held during the financial period under review.
Dato’ Cheong Siew Kai, DJMK, AMS, JPMalaysian, aged 72
Independent Non-Executive Director
Dato’ Cheong Siew Kai was appointed to the Board on 20 November 2001 as an Independent Non-Executive
Director.
He obtained his Diploma in Accountancy from the Australian National Institute of Accountants in 1961. He
became a Member of the Malaysian Institute of Accountants in year 1973 and the Malaysian Institute of
Taxation in 1992. In October 1997, he obtained his fellowship of Malaysian Institute of Taxation. He is a Member
of the British Institute of Management since 1980 and became a Fellowship Member in 1995. Currently, he is
also a Member of the Malaysian Association of Company Secretaries.
Dato’ Cheong is also a specialist in income tax advisory work. Recently, he leads a group of companies which
provides corporate and consultancy services.
He does not have any family relationship with any Director and/or Major Shareholder of LBB.
He has attended 5 Meetings held during the financial period under review.
10
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Huang Yan Teo, PIS, PPNMalaysian, aged 63
Independent Non-Executive Director
Mr Huang Yan Teo was appointed to the Board as an Independent Non-Executive Director on 20 November
2001. He is a Chairman of the Audit Committee and a Member of the Nomination Committee.
He became a Member of the Association of Chartered Certified Accountants (UK) in 1975 and obtained his
Fellowship in 1980. In 1975, he also became a Member of the Malaysian Institute of Accountants and as a
Member of the Malaysian Institute of Taxation in 1992.
In 1966, Mr Huang started his career with Messrs Coopers & Lybrand and in 1974, he became the Group
Financial Controller with a commercial firm. He then started his own accounting practice, Messrs Huang Yan
Teo & Co, in 1981 and currently is the Managing Partner.
Mr Huang sit on the Board of Director of other public listed companies include Khee San Berhad,
Connectcounty Holdings Berhad, Denko Industrial Corporation Berhad and TPC Plus Berhad.
He does not have any family relationship with any Director and /or Major Shareholder of LBB.
Mr Huang has attended all the Board Meetings held in the financial year.
Leslie Looi MengMalaysian, aged 40
Independent Non-Executive Director
Mr Leslie Looi Meng on August 2005 was appointed as an Independent Non-Executive Director of LBB and as
a Member of the Audit Committee and the Nomination Committee.
He obtained his Bachelor of Arts (Law) from University of Kent, (Canterbury) in 1991 after graduated from the
University of Kent with a Bachelor of Law in 1990. On 15 July 1993, he was admitted to the Malaysia Bar.
Mr Leslie Looi currently is a partner of the legal firm, Messrs Dennis Nik & Wong and manages the Johor Bahru
Branch. He has also been called to the Singapore Bar. He has been in active practice as an Advocate & Solicitor
till to-date.
The scope of experience in his legal practice include civil and corporate litigation (i.e boardroom and
shareholders disputes, corporate liquidation/insolvency and restructuring), corporate acquisitions,
tax-restructuring schemes, cross-border joint ventures and corporate bank financing.
Mr Leslie Looi sits on the Board of Directors in other public listed companies include Khee San Berhad and TPC
Plus Berhad.
He does not have any family relationship with any Director and /or Major Shareholder of LBB.
Mr Leslie Looi has attended all the Board Meetings held in the financial year.
* None of the Directors have any conviction for any offence for the past 10 years.
11
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Board of Directors of London Biscuits Berhad recognizes the importance and commitment of upholding
the highest standards of Corporate Governance throughout the whole Group as expressed in the Principles
and Best Practices set out in Parts 1 and 2 of the Malaysian Code on Corporate Governance (“MCCG” or “the
Code”).
The Board is pleased to share the manner in which how the Principles of the Code have been applied in the
Company and the extent to which the Company has complied with the Best Practices of the Code throughout
the financial year ended 30 June 2010 which were regularly reviewed to ensure transparency and accountability.
This Statement was prepared pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad (Listing Requirements) and approved by the Board on 1 November 2010.
Board of Directors
1. Composition and Board Balance
2. Supply and Access to Information
London Biscuits Berhad is lead and managed by an effective Board of Directors. The Board has nine (9)
members which comprises of the Non-Independent Non-Executive Chairman with an Executive Director, four
(4) Non- Independent Non-Executive Directors and three (3) Independent Non-Executive Directors. The
Directors are professionals in the fields of finance, accounting, legal, administration and management. The
profile of each Director is presented on pages 7 to 10 of this Annual Report.
In line with the Code, the Chairman and Group Managing Director / Group Chief Executive Officer have
distinct roles and responsibilities to ensure that there is a clear and proper balance of power and authority.
The Chairman ensures that conduct and working of the Board is in an orderly and effective manner whilst
the Group Managing Director / Group Chief Executive Officer carries out the day-to-day operational
functions on the running of business and implementation of Board’s policies. The Group Managing Director
/ Group Chief Executive Officer is accountable for the strategic development of the Group including the profit
of the Company, and refers major issues to the Board, for final approvals.
The Board meets the requirements imposed by Bursa Malaysia Securities Berhad (“Bursa Securities”) of
having one-third (1/3) of its Board Members being Independent Non-Executive Directors. This
Board structure provides an effective balance of corporate accountability to the Group given that the
Independent Directors can contribute their independent judgement and knowledge to the management
in conducting the day-to-day duties and also safeguard the shareholders’ interests.
The Board is supplied with and assured of full and timely access to all relevant information to discharge its
duties effectively. The Agenda and Board Papers are distributed to the Board Members prior to the Board
Meetings to enable the Directors to obtain relevant information and have sufficient time to deliberate on
the issues to be raised at the Meeting so as to discharge their duties diligently. The Board Papers provide
information of the previous Meeting, quarterly financial results, supporting management reports, annual
reports, analysis of shareholders and copies of signed resolution for the months in concerned will be
distributed to the Directors.
Corporate Governance Statement
12
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Board Members have full unrestricted access to all information pertaining to the Group’s business
operations and have access to the advice and services of the Head of Internal Audit and the Company
Secretary. The Company Secretary is responsible for ensuring the Board’s procedures are adhered to and all
relevant rules and regulations are complied with, especially the Listing Requirements.
The Board may also seek outside independent professional advice as a full Board or in their own individual
capacity, whenever it is required in order to fulfill their duties and specific responsibilities at the expense of
the Company.
3. Board Meetings
The Board meets at least four (4) times a year, with additional meetings convened as and when necessary.
The Company Secretary sends out the Notice of the Board Meetings together with the Agenda at least
seven (7) days prior the date of such Meetings for the Directors to review the Agenda for the Meeting. The
Board has been practicing paperless Board Meetings for the past few years.
During the financial year under review, the Board convened a total of six (6) meetings, mainly to discuss and
review the quarterly and annual financial results, internal audit reports, dividend proposals, recurring related
party transactions and corporate strategies. All Directors have complied with the requirement in respect of
the Board Meeting attendance as provided in the Main Market Listing Requirements. The details of the atten-
dance of each member of the Board are tabulated below :-
Non-Independent
Non-Executive Chairman
Non-Independent
Non-Executive Director
Group Managing Director /
Group Chief Executive Officer
Non-Independent
Non-Executive Director
Non-Independent
Non-Executive Director
Non-Independent
Non-Executive Director
Independent
Non-Executive Director
Independent
Non-Executive Director
Independent
Non-Executive Director
6/6
6/6
5/6
6/6
4/6
6/6
5/6
6/6
6/6
Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
Datin Sri Lim Yook Lan
Dato’ Sri Liew Yew Chung, SSAP, DIMP
Dato’ Liew Yew Cheng, DIMP
Ms Liew Yet Mei
Dato’ Liew Yet Lee, DIMP
Dato’ Cheong Siew Kai, DJMK, AMS, JP
Mr Huang Yan Teo, PIS, PPN
Mr Leslie Looi Meng
Director DesignationNo. of Meetings
attended
13
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Board meets quarterly and also on other occasions, whenever required, to discuss and approve the
Quarterly Reports, the Annual Reports, the Business Plans, acquisitions or disposals of investments, corporate
proposals, announcements and to review the performance of the operating subsidiaries. The Board
Meeting’s agenda is sanctioned by the Chairman prior to its issuance. Some of the decisions were taken by
way of circular resolutions in between the Board Meetings.
4. Appointment to the Board & Re-election
5. Board Committee
The Board had delegated the responsibility to assess the suitability of proposed new appointment,
re-appointment and/or re-election of Directors prior to the approval of the Board to the Nomination
Committee. It also reviews the Board’s structure, size and composition, as well as the Boards’ succession plans.
In accordance of the Company’s Articles of Association, all the Directors of the Company shall retire from
office once at least in every three (3) years but will be eligible for re-election. Directors who are appointed
during the financial year are subject to re-appointment / re-election by the Shareholders at the next Annual
General Meeting (“AGM”) following their appointments. Directors over seventy (70) years of age are
required to submit themselves for re-appointment annually pursuant to Section 129 of the Companies Act,
1965, at the forthcoming AGM.
The Board operates through four (4) committees with delegated authorities and defined terms of reference.
The Board Committees were established to assist the Board in the execution of its duties, power and
authorities. Nevertheless, the Board as a whole retains full responsibility for the direction and control of the
Group. The Chairman of the various Committees will report to the Board on the outcome of the respective
Committee Meetings and such reports will be incorporated in the minutes of the Board Meetings. The
compositions and function of these committees are described as follows :-
Audit Committees
The composition, terms of reference and a summary of the activities of the Audit Committee are set out
separately in the Audit Committee Report as laid out on pages 20 to 24 of this Annual Report.
Nomination Committee
The Committee is responsible for making recommendations for any appointments to the Board and Board
Committees. It also assesses the effectiveness of the Board as a whole, the various Committees and each
individual Director’s contribution to the effectiveness of the decision-making process of the Board.
The Nomination Committee consists of follows :-
, PIS, PPN,
The Committee met once during the financial year ended 30 June 2010.
14
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
6. Directors’ Training
Remuneration Committee
The objectives of Remuneration Committee is to recommend to the Board, the policy and framework for
Directors’ remuneration, fees and meeting allowances of the Directors. The level of fees and allowances of
Non-Executive Directors are determined by the Board as a whole.
The Remuneration Committee consists of follows :-
DIMP (Chairperson), Non-Independent Non-Executive Director
, SSAP, DIMP, PJK, JP, Non-Independent Non-Executive Director
The Committee meets at least once a year or as and when required. During the financial year ended 30 June
2010, the Remuneration Committee had held one (1) meeting.
Employee Share Option Scheme (ESOS) Committee
on 13 January 2010 for a period of five (5) years including all necessary actions and decisions while
performing its duties. For the best interest of the Company, the Committee has ensured that the
, DIMP,
, DIMP,
During the financial year, certain Directors have attended trainings or seminars whether in-house or external
in a various areas to enhance their skills so as to contribute more effectively to the Company. Directors who
were unable to attend any formal training during the financial year, are well-informed of the latest
developments on the various relevant rules and regulations as all Directors were updated by the Company
The training programmes, seminars, workshop and briefings attended by the Directors are as follows :-
15
Executive Director
RM
Non-Executive Directors
RM
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
7. Directors’ Remuneration
The level of remuneration of the Company is structured to attract, retain and motivate the Directors
in order to run and manage the Company successfully. The Remuneration Committee to review the
policy and make recommendations to the Board on the remuneration package and benefits annually.
Directors do not participate in decisions regarding their own remuneration packages and directors’
fee must be approved by the Shareholders at the AGM.
The remuneration package for Executive Director is based on their skills, experience, performance and
responsibilities, whereas the remunerations package for Non-Executive Directors will hinge on their
contribution to the Group in terms of their knowledge and experience.
The aggregate remuneration received by the Directors of the Company from the Company and its
subsidiaries for the financial year under review, is as follows :-
Note:
1. For security and confidentially reasons, the details of Directors’ remuneration are not shown with reference to Directors
individually. The Board is of the view that the transparency and accountability aspect of the corporate governance on
Directors’ remuneration are appropriately served by the band disclosure made.
The number of Directors whose remuneration fell within the following ranges (per annum) :-
Remuneration- Salaries & Allowances
- Fees
Range of Remuneration
Below RM50,000
RM50,001 – RM100,000
RM100,001 – RM150,000
RM150,001 – RM200,000
RM200,001 – RM550,000
RM550,001 – RM600,000
RM600,001 – RM750,000
RM750,001 – RM800,000
-
-
-
-
-
1
-
-
3
2
1
1
-
-
-
1
Number of Directors
Executive Director Non-Executive Directors
566,000
16,700
582,700
1,072,700
229,250
1,301,950
16
Accountability and Audit
1. Financial Reporting
2. Internal Control
3. Relationship with Auditors
In preparing of the annual Financial Statements, Annual Report and quarterly announcements of
results to Shareholders, the Board takes steps to ensure a clear, balanced and understandable assessment of
the Group’s financial position, performance and prospects. The Board, with the assistance of the Audit
Committee, takes due care and oversee the Group’s financial reporting process to ensure an accuracy,
adequacy and quality of its financial reporting.
The Board recognises its responsibilities to maintain a sound system of internal controls to safeguard
Shareholders’ investment and Group assets.
Information on the Group’s system of internal control is presented in the Statement on Internal Control set
out on pages 25 to 26 of this Annual Report.
The Audit Committee of the Company works closely and maintains a transparent professional relationship
with the Company’s External Auditors, Messrs Wong Weng Foo & Co. to ensure the Company comply with
the applicable accounting standards in Malaysia.
The Company’s independent External Auditors fills an essential role for the Shareholders by enhancing the
reliability of the Company’s financial statements and giving assurance of that reliability to users of these
financial statements.
A summary of the activities and term of reference of the Audit Committee during the year are set out in the
Audit Committee Report on pages 20 to 24 of this Annual Report.
Shareholders
1. Financial Reporting
The Group recognises the importance of effective communications policy that enables both the Board and
the Management to communicate with Shareholders, Stakeholders and the public. The Company maintains
regular communications and makes sure the Shareholders and Stakeholders are well informed on the
activities, achievements and performance of the Group to enable them to make their own evaluation and
investment decision.
The Investors and Members of the public who wish to contact the Group on any matters, can forward their
queries to :-
The Chairman
London Biscuits Berhad
No.1, Jalan Istimewa 2
Taman Perindustrian Desa Cemerlang
81800 Ulu Tiram, Johor Darul Takzim
Tel : 607 – 861 5288
www.londonbiscuits.com.my
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
17
The Group recognizes the importance of a good Corporate Culture that emphasizes good Corporate Social
Responsibility (CSR). The Group has obligations to care, protect and contribute positively to the needs of a
range of stakeholders in the community and environment in which it operates.
The Board acknowledges that a successful CSR programme encompasses ethical and transparency by carrying
out all its business transactions and relationships with its clients, suppliers, employees, business partners, the
community at large and all Shareholders on a highly ethical and transparent manner.
By implementing of good CSR, the Group places high importance on Safety and Health and development of
employees by implementing workplace safety relating committee and internal audit in order to promote
awareness of safety workplace and ensure all the employees’ health and well-being is constantly looked
after. The Board recognizes that constant training and upgrading the knowledge and skills of the employees
enhances the capabilities of the employees in discharging their responsibilities effectively and efficiently.
The Group also ensure HALAL compliances on its products and had participated in MIHAS 2010 held at the
Matrade Exhibition Centre, a trade event exclusively for halal products. During the financial year under
review, the Group has contributed towards various projects, such as the Kiwanis Club, Johor Bahru and also
the Malaysia Pavilion during the CommunicAsia 2010, Singapore.
Corporate Social Responsibility
In accordance with paragraph 15.26 of the Listing Requirements, the Directors are required to give a
responsibility statement in respect of the preparation of the audited financial statements.
Therefore in preparing the financial statements for the year ended 30 June 2010 and to give a true and fair
view of the financial position of the Group and of the Company, the Directors have :
The Directors are responsible for ensuring that the Group and the Company maintain proper accounting
records which disclose with reasonable accuracy at any time the financial position of the Group and of the
Company and have a general responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and of the Company, and to prevent and detect fraud and other
irregularities.
This statement was made in accordance with a resolution by the Board of Directors dated 1 November 2010.
Directors’ Responsibility Statement
2. Annual General Meeting (AGM)
The AGM is the principal forum for dialogue with all the Shareholders who are encouraged to raise any
question pertaining to any key issue regarding the Group including the Group’s business and performance.
The Chairman and the Directors are available to answer any queries and discuss matters pertaining to the
business activities of the Group.
Shareholders are also informed and invited to attend and vote in any Extraordinary General Meetings
through circulars and notice of meeting, if any.
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
18
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Utilisation of Proceeds
Not applicable.
Share Buy-Back
The Company did not enter into any share buy-back transactions during the financial year under review.
Options or Convertible Securities
The Company has not granted or issued any options convertible securities during the financial year under
review.
Depository Receipt Programme
The Company did not sponsor any Depository Receipt Programme during the financial year under review.
Sanctions and/or Penalties
There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or
management by the relevant regulatory bodies during the financial year under review.
Non-Audit Fees
During the financial year, the non-audit fees paid by the Group to the External Auditors amounted to
RM 114,400.00
Variation in Results
There were no material variations between the Audited Results for the financial year ended 30 June 2010
against the announced unaudited results for the year ended 30 June 2010.
Profit Guarantee
The Company did not provide any profit guarantee during the financial year under review.
Material Contracts
There were no other material contracts entered into by the Company (not being contracts entered into in
the ordinary course of business of the Company) involving the Directors and Major Shareholders for the
financial year under review.
Revaluation Policy
The Company has adopted a policy of revaluation on its landed properties every five (5) years. During the
year ended 30 June 2010, no revaluation exercise was carried out on its landed properties.
Additional Disclosure
19
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
11. Recurrent Related Party Transactions of Revenue or Trading Nature
At the Twenty-Eighth Annual General Meeting of the Company held on 24 December 2009, the
Shareholders of the Company has given their approval for the renewal of its existing mandate for the
Group to enter into recurrent related party transactions of a revenue or trading nature (“Recurrent
Related Party Transaction”) with the related party which are necessary for the day-to-day operation and
are in the ordinary course of business of the Group.
The said mandate took effect on 24 December 2009 until the forthcoming Annual General Meeting of the
Company.
The Company intends to seek its Shareholders’ approval to renew the existing mandate for recurrent
related party transactions of a revenue or trading nature at the Twenty-Ninth Annual General Meeting of
the Company.
The details of the Shareholders’ mandate to be sought will be furnished in the Circular to Shareholders
dated 2 December 2010 accompanying this Annual Report.
20
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Audit Committee (AC) is accountable to the Board of Directors of LBB and assists the Board in its responsibilities
in ensuring an effective system of internal control and the compliance of financial reporting.
Composition and Meetings
The Board has established the Audit Committee and its current Members are :-
, PIS, PPN (Chairman)
(Independent Non-Executive Director)
Member of the Malaysian Institute of Accountants
, SSAP, DIMP, PJK, JP (Member)
(Non-Independent Non-Executive Director)
(Independent Non-Executive Director)
Terms of Reference
1. Constitution
The AC shall ensure: -
a)
b)
(i)
(ii)
c)
d)
function of being primarily responsible for the management of the financial affairs of a corporation.
Audit Committee Report
21
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
have the necessary resources required to perform its duties;
have full and unrestricted access of information on the Company and its subsidiaries;
investigate any activity or matter of the Group within its terms of reference;
promptly report to Bursa Malaysia Securities Berhad (“Bursa Securities”) matters which have not been
resolves satisfactorily thus resulting in a breach of the Bursa Securities Listing Requirements;
obtain external independent professional advice, legal or otherwise, when deemed necessary;
maintain direct communication channels with External Auditors, person(s) carrying out the internal
audit function or activity and with senior management of the Company and its subsidiaries.
The appointed Chairman of the Audit Committee shall be an Independent Director.
All the Members shall retire, at least once in every three (3) years. At the end of each financial year, one-third
(1/3) of the Committee Members shall retire from office. The Members retiring each year shall be the
Members having served the longest term of office.
The appointment of a Committee Member terminates when the Member ceases to be a Director of the
Company. Members of the AC may relinquish their Memberships, with prior written notice to the Company
Secretary of the AC and may continue to serve as Directors of the Company.
If a Member of the Committee resigns, dies or for any other reason ceases to be Member with the result that
the number of Members is reduced below three (3), the Board of Directors shall, within three (3) months of
that event, appoint such number of new Members as may be required to make up the minimum number of
required Members.
The Nomination Committee shall review the terms of office and performance of the AC Members and
thereafter to be approved by the Board.
Secretary
The Company Secretary shall be the Secretary of the Committee.
The Secretary is responsible for :-
a) sending out notices of Meetings; and
b) preparing and keeping minutes of Meetings.
Quorum
Two Members of the Committee present at the Meeting shall constitute a quorum and the majority of
Members present must be Independent Directors.
Authority
In discharging its function, the AC has also been empowered by the Board to:-
a)
b)
c)
d)
e)
f )
2.
3.
4.
22
convene Meetings with Internal and External Auditors, without the attendance of the Management
and Executive Director, whenever deemed necessary.
invite other Directors and / or Employees of the Group, at their discretion, to attend any particular AC
Meetings on specific issues.
g)
h)
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Functions
1. Duties and Responsibilities
The AC shall, amongst others, discharge their functions in the following areas :-
a) Internal Audit
b) External Audit
c) Financial Reporting
d) Recurring Related Party Transactions
To approve the appointment, replacement and / or dismissal of the Senior Staff Members of the
Internal Audit Department.
To review the adequacy of the scope of audits conducted by Internal Audit Department, functions and
resources of Internal Audit Department and that it has the necessary authority to carry out its work.
To evaluate the performance and decide on the remuneration of the Internal Auditors.
To review the External Auditors’ audit plan, scope of their audits and their audit reports.
To assess the performance of the External Auditors and make recommendations to the Board of
Directors on their appointment and / or removal.
To review the independence and objectivity of the External Auditors and their services, including
non-audit services.
To approve the provision of non-audit services by the External Auditors.
To review the quarterly and annual financial statements of LBB and its subsidiaries, for recommendation
to the Board of Directors for approval, particularly focusing on :-
- Changes in or implementation of new accounting policies and practices;
- Significant and unusual events; and
- Compliance with the applicable approved accounting standards and other legal and regulatory
requirements.
To monitor and review any recurring related party transactions that may arise within the LBB Group
and other parties.
23
Designation
Chairman
Member
Member
No. of Meetings attend
5/5
5/5
5/5
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Director
Mr Huang Yan Teo, PIS, PPN Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
Mr Leslie Looi Meng
Meeting and Reporting Procedure
a)
b)
c)
d)
e)
f )
g)
Meeting Attendance
A total of five (5) Audit Committee (“AC”) Meetings were held during the financial year ended 30 June
2010 (25 August 2009, 28 October 2009, 24 November 2009, 23 February 2010 and 26 May 2010). The
details of attendance of the Audit Committee members are as follows :-
The Committee Meetings’ minutes are to be extended to the Board of Directors of the Company for reporting
purposes.
e) Annual Report
f ) Allocation of ESOS
g) Other Matters
To report the AC’s activities for the financial year.
To review and verify that the allocation of Employee Share Options Scheme is in line with the
prescribed ESOS By-laws.
To consider such other matters as the Committee considers appropriate or as authorized by the Board
of Directors.
The Committee shall meet as the Chairman deems necessary but not less than four (4) times a year.
The External Auditors may request a Meeting if they consider that one is necessary and shall have the right
to appear and be heard at any meeting of the Committee.
The Chairman shall convene a Meeting whenever any Member of the Committee requests for a Meeting.
Members of the Committee and the External Auditor will be given notice of the Meeting together with the
agenda where applicable.
The Head of Internal Audit (where such a function exists) and a representative of the External Auditors will
be invited to attend the AC Meetings.
At least twice a year, the Committee shall meet with the External Auditors without the presence of the
Executive Director.
The Chairman shall be entitled, where deemed appropriate, to invite other Board Members, employees,
professionals and/or any person(s) with the relevant experience and expertise to attend Meetings of the
Committee.
24
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
a)
b)
c)
d)
e)
f )
g)
h)
The AC Members had meetings with the External Auditors separately on more than three occasions without
the presence of the Executive Director during the year under review to advise and clarify the financial issues.
Activities During The Year
The following activities were carried out by the AC Members during the financial year under review :-
Internal Audit
The Internal Audit Department (“IAD”) was been established to assist the AC and the Board of Directors, in
overseeing the Group’s risk management internal control and good governance.
The IAD works covered monitoring all the business operations systems, departments for the Company and
its subsidiaries / suppliers and also to resolve such issues within the Group to ensure effectiveness and
smoothness of the operations.
Quarterly reporting by the IAD to the AC during the AC Meetings were supplied with updated reports,
independent reviews and suggestions, which will be deliberated by the AC before recommending to the
Board of Directors and / or the Management for immediate action, if and when necessary.
Reviewed the quarterly unaudited financial reports before recommending them to the Board of Directors
for approval and subsequent release to Bursa Malaysia Securities Berhad;
Reviewed the audited financial statements before submitting them to the Board, ensuring that the
financial statements were prepared in accordance with the applicable approved accounting standards
and provisions of the Companies Act, 1965;
Evaluated the performance of the External Auditors and made recommendations on their re-appointment
to the Board;
Discussed and addressed the key aspects of business operations that would affect the profitability and
growth of the Company and its subsidiaries;
Reviewed the internal control systems of the Group;
Reviewed and discussed Related Party Transactions (“RPTs”) and Recurrent Related Party Transactions
(“RRPTs”) with the Group Accountant, the External Auditors and the Company Secretary, to ascertain if the
transactions were conducted at arm’s length and on normal commercial terms, and such transactions were
not detrimental to the interest of minority Shareholders; and
Reviewed and verified the allotment of shares under the ESOS.
Ensure the compliance of financial standards and disclosure including transparency throughout the
financial year.
25
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Board of Directors (“the Board”) is committed to maintain a sound system of Internal Control as
promulgated by the Malaysian Code on Corporate Governance with the objective of safeguarding its
Shareholders’ investment and the Group’s assets.
Responsibility of the Board
The Board has the overall responsibility for the Group’s system of internal control and reviews its effectiveness to
ensure the policies and procedures implemented are adequate for the identification and management of risks.
Risk Management
Risk Management is regarded by the Board to be an integral part of the business operations. The Board
preserves a lifelong responsibility to increase the Group’s control mechanism. The Boards always put Risk
Management as first mechanism to protect the Group’s asset. The Group’s key risks which involved the daily
operations, strategic and business plans were addressed at the Management’s periodic meetings. Besides that,
the Board will confront every crucial risk identified at their scheduled meetings. The risk management policy
which was set up to identify efficacious risk management framework, will be reviewed periodically.
Internal Audit Function
The In-house Internal Audit Department is responsible to assist the Audit Committee in providing
independent assessment on the adequacy, efficiency and effectiveness of internal control system and
ensuring operational compliance with Operating Manuals, Internal Control Guidance, HACCP and ISO
Standards, as set out by Llyod’s Register Quality Assurance, within the Group.
The Internal Audit Department performs regular and systematic review of the internal controls in identifying
and addressing risk. Quarterly reports are produced and presented to the Audit Committee which will assess
the issues and review remedial action implemented by the Management. The yearly Internal Audit Plan was
also tabled at the Audit Committee Meeting for approval before implementation.
Other key elements
Other key elements of internal control process that were in place in the financial year under review are
summarised below :-
Established procedures for delegating authority, which ensures decisions that were significant, either
because of the value or the impact on the other parts of the Group, were taken at appropriate level.
Monthly operational meetings were conducted among senior management to deliberate and review the
business plans, budgets, financial and operational performances of the Company. The quarterly financial
statements containing key financial results and comparisons were tabled to the Board for their review.
Review of a comprehensive and full set of system of budgetary control, including monthly performance
reviews were used.
Each of the Company Functional Departments goals set by respective Departments was aligned to the
Group’s overall strategic goals.
Appraisal and approval of capital expenditure and treasury operations were evaluated against the defined
policies and procedures set and approved according to formalize limits of authority.
Internal Control Statement
26
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Conclusion
Risk management and control is an integral part of the Board’s commitment to providing consistent and high
quality returns to the shareholders.
The Board is of the view that the Group’s Risk Management Policy has been in place for the year under review
and up to the date of Annual Report is sound and sufficient. Moreover, the identification, evaluation and mitigation
of risk is an on-going process as all the control procedures are reviewed regularly by the Board to ensure the
effectiveness and adequacy of the systems to safeguard shareholders’ investments and the Group’s assets.
This statement was made in accordance with a resolution of the Board of Directors dated 1 November 2010.
Review of Statement By External Auditors
The External Auditors have reviewed the Statement on Internal Control for the inclusion in the Annual Report
of the Group for the financial year ended 30 June 2010 and reported to the Board that nothing has come to
their attention that causes them to believe that this statement is inconsistent with understanding of the
process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.
Board representation was mandatory in companies in which material interest exists to facilitate the review
of performance of the companies.
Audit Committee held regular quarterly meetings to deliberate upon findings and recommendations for
improvement by both, the internal and external auditors, on the state of the internal control system and
these were reported to the Board.
27
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Report On The Financial Statements
We have audited the financial statements of London Biscuits Berhad, which comprise the balance sheets as at
30th June, 2010 of the Group and of the Company, and the income statements, statements of changes in equity
and cash flow statements of the Group and of the Company for the year then ended, and a summary of
significant accounting policies and other explanatory notes, as set out on pages 37 to 80.
Directors' Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation and fair presentation of these financial
statements in accordance with the provisions of the Companies Act, 1965 and Financial Reporting Standards
in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our judgment, including the assessment of risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk
assessments, we consider internal control relevant to the Company's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with the provisions of the
Companies Act, 1965 and Financial Reporting Standards in Malaysia so as to give a true and fair view of the
financial position of the Group and of the Company as of 30th June, 2010 and of their financial performance
and cash flow for the year then ended.
Report on other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.
INDEPENDENT AUDITORS’ REPORTto the members of London Biscuits Berhad
28
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
(b)
(c)
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other
person for the content of this report.
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company's
financial statements are in form and content appropriate and proper for the purposes of the preparation of
the financial statements of the Group and we have received satisfactory information and explanations
required by us for those purposes.
The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Act.
WONG WENG FOO & CO.AF: 0829
CHARTERED ACCOUNTANTS
WONG WENG FOO1218/03/12 (J/PH)
CHARTERED ACCOUNTANTKUALA LUMPUR
Dated this : 25th October, 2010
Report on other Legal and Regulatory Requirements (Continued)
29
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Directors hereby submit their report together with the audited financial statements of the Group and of
the Company for the financial year ended 30th June, 2010.
Principal Activities
The principal activities of the Company consist of manufacturing and trading of confectionery and other related
foodstuffs. The principal activities of the subsidiary companies are disclosed in Note 6 to the financial statements.
The principal activities of the Company and its subsidiary companies in the course of the financial year
remained unchanged.
Results
Dividends
Since the end of the previous financial year, a first and final dividend of 3% tax exempted for the financial year
ended 30th June, 2009 amounting to RM2,617,500 was paid on 22nd March, 2010. The directors had on 15th
October, 2010 declared an interim dividend of 1.5% tax exempted for the financial year ended 30th June, 2010
amounting to RM1,440,203 to be paid on 26th November, 2010.
The Directors do not recommend a final dividend to be paid in respect of the financial year ended 30th June, 2010.
Issue of Shares or Debentures
During the financial year, the fully and paid up share capital of the Company was increased from 78,045,000 to
96,013,500 by allotments of:-
i)
ii)
The purpose of these allotments was to allow equity participation by employees of the Company.
There were no issue of debentures during the financial year.
4,775,000 new ordinary shares of RM1.00 each for cash at par exercised on 20th July, 2009 and 670,000 new
ordinary shares of RM1.00 each for cash at par exercised on 30th July, 2009 under the Old Employees’ Share
Option Scheme; and
3,760,000 new ordinary shares of RM1.00 each for cash at RM1.04 per share exercised on 11th February, 2010,
483,500 new ordinary shares of RM1.00 each for cash at RM1.04 per share exercised on 5th March, 2010,
8,000,000 new ordinary shares of RM1.00 each for cash at RM1.01 per share exercised on 23rd March, 2010
and 280,000 new ordinary shares of RM1.00 each for cash at RM1.01 per share exercised on 20th April, 2010
under the New Employees’ Shares Option Scheme.
Directors’ Report
Profit after taxation
Retained profit brought forward
Profit available for appropriation
Minority interest
First and final dividend of 3% tax exempted,
paid on 22nd March, 2010
Retained profit carried forward
18,065,326
73,279,626
91,344,952
(3,001,308)
(2,617,500)
85,726,144
13,610,392
59,771,161
73,381,553
-
(2,617,500)
70,764,053
Group
RM
Company
RM
30
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Options Granted Over Unissued Shares
At an Extraordinary General Meeting held on 24th December, 2009, the shareholders had approved the
termination of the Old Employees’ Share Option Scheme (“ESOS I”)
At the same Extraordinary General Meeting, the shareholders had also approved the establishment of the
New Employees’ Share Option Scheme (“ESOS II”). Bursa Malaysia Securities Berhad has vide its letter
dated 26th November, 2009 approved the listing of such number of additional new ordinary shares of
RM1.00 each, representing up to fifteen percent (15%) of the issued and paid-up ordinary share capital of
the Company, to be issued pursuant to the exercise of options under ESOS II.
Other than options granted and exercised under the ESOS, there were no share options granted over
unissued shares by the Company during the financial year.
Employees’ Share Option Scheme
i) The Company’s ESOS I is governed by the by-laws approved by the shareholders at the Extraordinary
General Meeting held on 29th May, 2007, had been terminated as approved by the shareholders at an
Extraordinary General Meeting held on 24th December, 2009.
The principal features of ESOS I are as follows:
a)
b)
c)
d)
e)
Scheme shall be in force for a period of five years from 3rd July, 2007 (the date of the first offer made)
expiring on 2nd July, 2012 but subject to any extension or renewal for a further period of five years as
may be approved by the shareholders in a general meeting and any other relevant regulatory authority
whose approval is necessary.
Eligible persons are employees of the Group, who is a Malaysian citizen who has attained eighteen
(18) years of age (including full time Executive Directors) and have been confirmed and has served at
least six (6) months in the employment of the Group on the date of the offer or where the Executive
Director or employee is under an employment contract, the contract is for a duration of at least one (1)
year and has not expired within three (3) months from the date of offer. The eligibility for participation
in ESOS I shall be at the discretion of the ESOS Committee appointed by the Board of Directors.
The total number of shares to be issued under ESOS I shall not exceed 15% of the issued and paid-up
share capital of the Company being, the maximum allowable allotment of shares, at any point of time
during the duration of Scheme.
The option price for each new RM1.00 share to be offered shall be determined by the ESOS Committee
in the following manner:
i)
ii) the par value of the Company’s shares of RM1.00 each,
whichever is the higher.
No option shall be granted for less than 100 shares and shall always be in multiples of 100 shares.
a price at a discount of not more than ten percent (10%) from the five (5) days weighted average
market price of the Company’s shares as shown in the daily official list issued by Bursa Malaysia
Securities Berhad immediately preceding the Date of Offer; or
31
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
ii)
f )
g)
During the financial year, the number of options over the ordinary shares of RM1.00 each of the Company
granted under ESOS I are as follows:
The Company’s ESOS II is governed by the by-laws approved by the shareholders at the Extraordinary
General Meeting held on 24th December, 2009.
The principal features of ESOS II are as follows:
a)
An offer made by the ESOS Committee to a selected employee shall be valid for a period of forty-five
days from the date of offer and may be accepted within this prescribed period by the selected
employee to whom the offer is made by written notice to the ESOS Committee. Upon acceptance of an
offer, the Grantee may during the option period exercise his options in full or in part in such manner as
stipulated in the offer letter.
All new ordinary shares issued upon exercise of the options granted under ESOS I will rank pari-passu
in all respects with the existing ordinary shares of the Company except that the shares so issued will
not be entitled to any dividends, rights allotments and/or other distributions, the entitlement date of
which is prior to the date of allotment of the new ordinary shares.
Scheme shall be in force for a period of five years from 14th January, 2010 (the date of the first offer
made) expiring on 13th January, 2015 but subject to any extension or renewal for a further period of
five years as may be approved by the shareholders in a general meeting and any other relevant
regulatory authority whose approval is necessary.
Number of options over ordinary
shares of RM1.00 each
Option
date
12.5.2009
6.7.2009
1.00
1.00
5,325,000
-
5,325,000
-
120,000
120,000
(5,325,000)
(120,000)
(5,445,000)
-
-
-
Option
price
per share
RM
Balance
at
1.7.2009 Granted Exercised
Balance
at
30.6.2010
20.7.2009
30.7.2009
0.85
0.88
1.00
1.00
4,775,000
670,000
5,445,000
Exercise
date
Fair value of shares at
share issue date
RM/ share
Exercised price
RM/ share
Number of
shares
issued
2010
5,445,000
2010
RM
Details relating to options exercised during the financial year are as follows:
Proceeds received on exercise of the above shares options
Employees’ Share Option Scheme (Continued)
32
Number of options over ordinary
shares of RM1.00 each
Option
date
14.1.2010
4.3.2010
1.04
1.01
-
-
-
4,243,500
8,280,000
12,523,500
(4,243,500)
(8,280,000)
(12,523,500)
-
-
-
Option
price
per share
RM
Balance
at
1.7.2009 Granted Exercised
Balance
at
30.6.2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
b)
c)
d)
e)
f )
g)
During the financial year, the number of options over the ordinary shares of RM1.00 each of the Company
granted under ESOS II are as follows:
Eligible persons are employees of the Group, who is a Malaysian citizen who has attained eighteen (18)
years of age (including full time Executive Directors) and have been confirmed and has served at least
six (6) months in the employment of the Group on the date of the offer or where the Executive
Director or employee is under an employment contract, the contract is for a duration of at least one (1)
year and has not expired within three (3) months from the date of offer. The eligibility for participation
in ESOS II shall be at the discretion of the ESOS Committee appointed by the Board of Directors.
The total number of shares to be issued under ESOS II shall not exceed 15% of the issued and paid-up
share capital of the Company being, the maximum allowable allotment of shares, at any point of time
during the duration of Scheme.
The option price for each new RM1.00 share to be offered shall be determined by the ESOS Committee
in the following manner:
i)
ii)
No option shall be granted for less than 100 shares and shall always be in multiples of 100 shares.
An offer made by the ESOS Committee to a selected employee shall be valid for a period of forty-five
days from the date of offer and may be accepted within this prescribed period by the selected
employee to whom the offer is made by written notice to the ESOS Committee. Upon acceptance of an
offer, the Grantee may during the option period exercise his options in full or in part in such manner as
stipulated in the offer letter.
All new ordinary shares issued upon exercise of the options granted under ESOS II will rank pari-passu
in all respects with the existing ordinary shares of the Company except that the shares so issued will
not be entitled to any dividends, rights allotments and/or other distributions, the entitlement date of
which is prior to the date of allotment of the new ordinary shares.
a price at a discount of not more than ten percent (10%) from the five (5) days weighted average
market price of the Company’s shares as shown in the daily official list issued by Bursa Malaysia
Securities Berhad immediately preceding the Date of Offer; or
the par value of the Company’s shares of RM1.00 each,
whichever is the higher.
Employees’ Share Option Scheme (Continued)
33
11.2.2010
5.3.2010
23.3.2010
20.4.2010
1.15
1.05
1.01
1.01
1.04
1.04
1.01
1.01
3,760,000
483,500
8,000,000
280,000
12,523,500
Exercise
date
Fair value of shares at
share issue date
RM/ share
Exercised price
RM/ share
Number of
shares
issued
2010
12,776,040
2010
RM
Details relating to options exercised during the financial year are as follows:
Proceeds received on exercise of the above shares options
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Reserves and Provisions
Other than as disclosed in the financial statements, there were no material transfers to or from reserves or
provisions during the financial year.
Bad and Doubtful Debts
Before the income statements and balance sheets of the Group and of the Company were made out, the Directors
took reasonable steps 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 are satisfied that there are no known bad debts and adequate
allowance had been made for doubtful debts.
At the date of this report, the Directors are not aware of any circumstances that would require the writing off
of bad debts or render the amount of allowance made for doubtful debts inadequate to any substantial extent.
Current Assets
Before the income statements and balance sheets of the Group and of the Company were made out, the
Directors took reasonable steps to ascertain whether any current assets which were unlikely to realise in the
ordinary course of business their values as shown in the accounting records of the Group and of the Company
and to the extent so ascertained were written down to an amount that they might be expected to realise.
At the date of this report, the Directors are not aware of any circumstances that would render the values
attributed to the current assets of the Group and of the Company misleading.
Valuation Methods
At the date of this report, the Directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
Employees’ Share Option Scheme (Continued)
34
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Contingent And Other Liabilities
At the date of this report, there does not exist:-
(i)
(ii)
No contingent liability or other liability of the Group and of the Company 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 substantially affect the ability of the Group and of the Company to meet
their obligations as and when they fall due.
Change of Circumstances
At the date of this report, the Directors are not aware of any circumstances, not otherwise dealt with in
this report or in the financial statements of the Group and of the Company that would render any amount
stated in the respective financial statements misleading.
Items of an Unusual Nature
The results of the operations of the Group and of the Company for the financial year were not, in the opinion
of the Directors, substantially affected by any item, transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any
item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to
affect substantially the results of the operations of the Group and of the Company for the financial year
in which this report is made.
Directors of the Company
The Directors who served since the date of the last report are as follows:-
Dato' Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
Datin Sri Lim Yook Lan
Dato’ Sri Liew Yew Chung, SSAP, DIMP
Dato’ Liew Yew Cheng, DIMP
Liew Yet Mei
Dato’ Liew Yet Lee, DIMP
Dato' Cheong Siew Kai, DJMK, AMS, JP
Huang Yan Teo, PIS, PPN
Leslie Looi Meng
any charge on the assets of the Group and of the Company that has arisen since the end of the financial
year that secures the liabilities of any other person; or
any contingent liability in respect of the Group and of the Company that has arisen since the end of the
financial year.
35
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Directors' Interest
According to the register of directors shareholdings, the interest of directors in office at the end of the financial year
in shares of the Company and related corporations during the financial year ended 30th June, 2010 are follows:-
Number of ordinary shares of RM1 each
Dato' Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
(Chairman, Non-Executive, Non-Independent Director)
- direct
- indirect
Datin Sri Lim Yook Lan
(Non-Executive, Non-Independent Director)
- direct
- indirect
Dato’ Sri Liew Yew Chung, SSAP, DIMP
(Group Managing Director/ Group CEO)
- direct
- indirect
Dato’ Liew Yew Cheng, DIMP
(Non-Executive, Non-Independent Director)
- direct
- indirect
Liew Yet Mei
(Non-Executive, Non-Independent Director)
- direct
- indirect
Dato’ Liew Yet Lee, DIMP
(Non-Executive, Non-Independent Director)
- direct
- indirect
Dato' Cheong Siew Kai, DJMK, AMS, JP
(Independent Non-Executive Director)
- direct
- indirect
Huang Yan Teo, PIS, PPN
(Independent Non-Executive Director)
- direct
- indirect
Leslie Looi Meng
(Independent Non-Executive Director)
- direct
- indirect
1,510,250
35,892,433
224,487
37,178,196
1,631,785
35,770,898
75,231
37,327,452
39,671
37,363,012
39,671
37,363,012
-
-
-
-
-
-
250
37,871,733
224,487
37,647,496
1,631,785
36,240,198
75,231
37,796,752
39,671
37,832,312
39,671
37,832,312
-
-
-
-
-
-
-
1,979,300
-
1,979,300
-
1,979,300
-
1,979,300
-
1,979,300
-
1,979,300
-
-
-
-
-
-
1,510,000
-
-
1,510,000
-
1,510,000
-
1,510,000
-
1,510,000
-
1,510,000
-
-
-
-
-
-
Shares in the Company Balance at
1.7.2009 Bought Sold
Balance at
30.6.2010
36
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Directors' Interest (Continued)
By virtue of their substantial shareholdings in the Company, Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP, Datin Sri
Lim Yook Lan, Dato’ Sri Liew Yew Chung, SSAP, DIMP, Dato’ Liew Yew Cheng, DIMP, Messrs Liew Yet Mei and Dato’
Liew Yet Lee, DIMP are also deemed interested in shares in all the subsidiary companies to the extent the
Company has an interest.
Directors' Benefits
Since the end of the previous financial year, no Director of the Company has received or become entitled to
receive any benefit (other than as disclosed in the financial statements) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which the Director is a member, or with
a company in which a Director has a substantial financial interest.
Neither during nor at the end of the financial year, was the Company a party to any arrangement whose object
is to enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.
Auditors
The auditors, Messrs Wong Weng Foo & Co., have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors.
DATO' SRI LIEW KUEK HIN,SSAP, DIMP, PJK, JP
Director
DATO’ SRI LIEW YEW CHUNG, SSAP, DIMP
DirectorKUALA LUMPUR
25th October, 2010
37
The attached notes form an integral part of the Financial Statements
ASSETS
Non-Current Assets
Property, plant and equipment
Prepaid lease payments
Investment properties
Interest in associated companies
Investments
Intangible assets
Current Assets
Inventories
Trade receivables
Other receivables, deposits & prepayments
Deposits, cash & bank balances
Total Assets
EQUITY
Share capital
Reserves
Shareholders' equity
Share application monies
Minority interest
Total Equity
LIABILITIES
Non-Current Liabilities
Hire-purchase payables
Term loans
Deferred income tax liabilities
Current Liabilities
Trade payables
Bankers' acceptances
Revolving credits
Other payables & accruals
Hire-purchase payables
Term loans
Bank overdrafts
Current income tax liabilities
Total Liabilities
Total Equity and Liabilities
Consolidated Balance SheetAs At 30th June 2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Note
2010
RM
2009
RM
3
4
5
7
8
9
10
11
12
13
14
15
16
17
18
17
17
19
16
17
17
348 ,820,122
6,227,271
3,410,000
20,232,260
825,746
12,659,547
392,174,946
31,562,835
26,305,732
29,814,752
21,505,607
109,188,926
501,363,872
96,013,500
103,316,561
199,330,061
-
49,447,048
248,777,109
26,626,090
72,937,980
644,238
100,208,308
52,273,136
44,224,114
17,000,000
6,571,027
12,674,351
19,053,887
398,295
183,645
152,378,455
252,586,763
501,363,872
314,627,232
6,377,900
3,410,000
14,521,970
1,303,702
12,659,547
352,900,351
33,055,440
22,772,367
23,222,480
15,805,394
94,855,681
447,756,032
78,045,000
90,617,503
168,662,503
5,325,000
46,823,359
220,810,862
29,940,443
40,550,210
2,313,238
72,803,891
29,154,001
62,450,092
34,000,000
7,214,377
11,508,800
8,981,520
582,653
249,836
154,141,279
226,945,170
447,756,032
38
Consolidated Income StatementFor The Year Ended 30th June 2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Note
2010
RM
2009
RM
OPERATING REVENUE
COST OF SALES
GROSS PROFIT
SELLING & DISTRIBUTION EXPENSES
ADMINISTRATIVE EXPENSES
OTHER OPERATING INCOME
PROFIT FROM OPERATIONS
FINANCE COST
SHARE OF PROFIT IN ASSOCIATED COMPANIES
PROFIT BEFORE INCOME TAX
INCOME TAX
PROFIT AFTER INCOME TAX
Attributable to:
Equity holders of the Company
Minority interest
EARNINGS PER SHARE (sen)
- Basic
- Fully diluted
223,434,122
(169,284,276)
54,149,846
(11,241,536)
(22,185,039)
2,925,583
23,648,854
(8,192,781)
2,138,618
17,594,691
470,635
18,065,326
15,064,018
3,001,308
18,065,326
17.31
17.31
20
20
21
22
22
184,302,124
(133,770,347)
50,531,777
(11,209,626)
(17,177,799)
3,267,998
25,412,350
(10,535,259)
2,735,399
17,612,490
(490,912)
17,121,578
16,027,316
1,094,262
17,121,578
20.54
19.20
The attached notes form an integral part of the Financial Statements
39
Consolidated Statement of Changes in EquityFor The Year Ended 30th June 2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Share
capital
(Note 14)
RM
Share
application
monies
RM
Share
premium
(Note 15)
RM
Revaluation
reserve
(Note 15)
RM
Retained
profits
(Note 15)
RM
Minority
interest
RM
Total
RM
At 1st July, 2008
Minority interest
share of net assets
in subsidiary
companies
Share application
monies
Profit after income tax
At 30th June, 2009/
1st July, 2009
Minority interest
share of dividend
paid by a subsidiary
company
Employee’s shares
option scheme
First and final
dividend of 3% tax
exempted, paid on
22nd March, 2010
Profit after income tax
At 30th June, 2010
78,045,000
-
-
-
78,045,000
-
17,968,500
-
-
96,013,500
-
-
5,325,000
-
5,325,000
-
(5,325,000)
-
-
-
13,521,926
-
-
-
13,521,926
-
252,540
-
-
13,774,466
3,815,951
-
-
-
3,815,951
-
-
-
-
3,815,951
57,252,310
-
-
16,027,316
73,279,626
-
-
(2,617,500)
15,064,018
85,726,144
-
45,729,097
-
1,094,262
46,823,359
(377,619)
-
-
3,001,308
49,447,048
152,635,187
45,729,097
5,325,000
17,121,578
220,810,862
(377,619)
12,896,040
(2,617,500)
18,065,326
248,777,109
The attached notes form an integral part of the Financial Statements
40
Consolidated Cash Flow StatementFor The Year Ended 30th June 2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Cash Flow From Operating Activities
2010
RM
2009
RM
Profit before income tax
Adjustments for:-
Share of profit of associated company
Amortisation of prepaid lease payments
Gain on disposal of investments
Impairment loss on investments
Depreciation
Property, plant and equipment written off
Gain on disposal of property, plant and equipment
Loss on foreign exchange – unrealised
Allowance for doubtful debts no longer required
Allowance for doubtful debts
Dividend income
Interest expense
Interest income
Operating profit before working capital changes
Decrease/ (Increase) in inventories
(Increase)/ Decrease in receivables
Increase/ (Decrease) in payables
Cash generated from operations
Dividend received
Dividend paid
Interest received
Interest paid
Tax paid
Tax refund
Net cash provided by operating activities
Cash Flow From Investing Activities
#Net cash flow from acquisition of subsidiary companies
Investment in an associated company
Net decrease in portfolio investments in
quoted shares and in money markets
*Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Prepaid lease payments
Net cash used in investing activities
17,594,691
(2,138,618)
180,559
(46,636)
4,774,668
9,865,174
-
(876,011)
6,509
-
456,258
(900)
8,192,781
(39,454)
37,969,021
1,492,605
(9,959,864)
22,475,785
51,977,547
107,289
(2,995,119)
39,454
(8,192,781)
(1,914,822)
21,950
39,043,518
-
(8,223,412)
295,050
(47,665,804)
15,532,097
(29,930)
(40,091,999)
17,612,490
(2,735,399)
178,052
(53,394)
3,745,501
8,243,295
267,726
(1,095,667)
171,143
(13,992)
50,824
(12,925)
10,535,259
(133,410)
36,759,503
(3,643,096)
4,676,445
(895,562)
36,897,290
9,641
-
133,410
(10,535,259)
(1,605,554)
2,793,962
27,693,490
(2,789,735)
-
2,717,455
(32,395,939)
19,107,400
(182,362)
(13,543,181)
41
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Consolidated Cash Flow Statement (Continued)
For The Year Ended 30th June 2010
Cash Flow From Operating Activities
2010
RM
2009
RM
2010
RM
2009
RM
Proceeds from issue of shares
Share application monies
Net (decrease)/ increase in bankers’ acceptances
Net (decrease)/ increase in revolving credits
Proceeds from term loans
Repayment of term loans
Hire-purchase instalments paid
Net cash provided by/ (used in) financing activities
Net changes in cash & cash equivalents
Cash & cash equivalents brought forward (Note 23)
Cash & cash equivalents carried forward (Note 23)
*
#Net cash flow from acquisition of subsidiary companies
Net assets acquired
Goodwill on consolidation
Minority interest
Acquisition cost
Less: Amount previously recognised as interest in
associated company
Cash & cash equivalents acquired
Net cash flow on acquisition
68,117,426
6,854,076
(45,729,097)
29,242,405
(29,208,447)
2,755,777
2,789,735
12,896,040
-
(18,225,978)
(17,000,000)
56,000,000
(13,539,862)
(13,197,148)
6,933,052
5,884,571
15,222,741
21,107,312
-
5,325,000
19,450,092
12,498,484
4,157,924
(48,699,200)
(9,842,580)
(17,110,280)
(2,959,971)
18,182,712
15,222,741
-
-
-
-
-
-
-
The attached notes form an integral part of the Financial Statements
Property, plant and equipment at aggregate cost of RM58,714,150 (2009 – RM50,780,152) was acquired
during the financial year of which RM11,048,346 (2009 – RM18,384,213) was acquired by means of
hire-purchase.
42
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Balance SheetAs At 30th June 2010
Note
2010
RM
2009
RMASSETS
Non-Current Assets
Property, plant and equipment
Interest in subsidiary companies
Interest in associated companies
Investments
Current Assets
Inventories
Trade receivables
Other receivables, deposits & prepayments
Deposits, cash & bank balances
Total Assets
EQUITY
Share capital
Reserves
Share application monies
Total Equity
LIABILITIES
Non-Current Liabilities
Hire-purchase payables
Term loans
Deferred income tax liabilities
Current Liabilities
Trade payables
Bankers' acceptances
Revolving credits
Other payables & accruals
Hire-purchase payables
Term loans
Current income tax liabilities
Total Liabilities
Total Equity and Liabilities
224,835,707
56,286,142
20,075,172
825,745
302,022,766
12,864,729
18,444,775
24,594,239
17,018,695
72,922,438
374,945,204
96,013,500
88,354,470
184,367,970
-
184,367,970
16,457,380
72,937,980
3,200,000
92,595,360
26,198,454
29,135,114
13,000,000
2,706,383
7,714,891
19,053,887
173,145
97,981,874
190,577,234
374,945,204
3
6
7
8
10
11
12
13
14
15
16
17
18
17
17
19
16
17
202,522,764
53,158,700
12,088,798
1,055,287
268,825,549
14,402,264
19,085,216
17,888,947
12,295,411
63,671,838
332,497,387
78,045,000
77,109,038
155,154,038
5,325,000
160,479,038
19,134,046
40,550,210
2,200,000
61,884,256
9,389,915
50,458,092
30,000,000
3,504,828
7,549,902
8,981,520
249,836
110,134,093
172,018,349
332,497,387
The attached notes form an integral part of the Financial Statements
43
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Income StatementFor The Year Ended 30th June 2010
Note
2010
RM
2009
RM
OPERATING REVENUE
COST OF SALES
GROSS PROFIT
SELLING & DISTRIBUTION EXPENSES
ADMINISTRATIVE EXPENSES
OTHER OPERATING INCOME
PROFIT FROM OPERATIONS
FINANCE COST
PROFIT BEFORE INCOME TAX
INCOME TAX
PROFIT AFTER INCOME TAX
EARNINGS PER SHARE (sen)
- Basic
- Fully diluted
161,972,843
(119,451,119)
42,521,724
(9,549,785)
(12,680,890)
1,561,904
21,852,953
(6,032,744)
15,820,209
(2,209,817)
13,610,392
15.64
15.64
20
20
21
22
22
154,148,984
(114,015,278)
40,133,706
(9,727,347)
(12,205,185)
2,090,695
20,291,869
(9,408,544)
10,883,325
(2,460,814)
8,422,511
10.79
10.09
The attached notes form an integral part of the Financial Statements
44
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Statement of Changes in EquityFor The Year Ended 30th June 2010
Share
capital
(Note 14)
RM
Share
application
monies
RM
Share
premium
(Note 15)
RM
Revaluation
reserve
(Note 15)
RM
Retained
profits
(Note 15)
RM
Total
RM
At 1st July, 2008
Share application monies
Profit after income tax
At 30th June, 2009/
1st July, 2009
Employee’s shares
option scheme
First and final
dividend of 3% tax
exempted, paid on
22nd March, 2010
Profit after income tax
At 30th June, 2010
78,045,000
-
-
78,045,000
17,968,500
-
-
96,013,500
-
5,325,000
-
5,325,000
(5,325,000)
-
-
-
13,521,926
-
-
13,521,926
252,540
-
-
13,774,466
3,815,951
-
-
3,815,951
-
-
-
3,815,951
51,348,650
-
8,422,511
59,771,161
-
(2,617,500)
13,610,392
70,764,053
146,731,527
5,325,000
8,422,511
160,479,038
12,896,040
(2,617,500)
13,610,392
184,367,970
The attached notes form an integral part of the Financial Statements
45
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Cash Flow StatementFor The Year Ended 30th June 2010
2010
RM
2009
RMCash Flow From Operating Activities
Profit before income tax
Adjustments for:-
Impairment loss on investments
Gain on disposal of investments
Allowance for doubtful debts no longer required
Depreciation
Gain on disposal of property, plant and equipment
Dividend income
Interest expense
Interest income
Operating profit before working capital changes
Decrease in inventories
Increase in receivables
Increase in payables
Cash generated from operations
Dividend received
Dividend paid
Interest received
Interest paid
Tax paid
Tax refund
Net cash provided by operating activities
Cash Flow From Investing Activities
Net decrease in portfolio investments in quoted shares
and in money markets
Investment in an associated company
* Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash Flow From Financing Activities
Proceeds from issue of shares
Share application monies
Net (decrease)/ increase in bankers' acceptances
Net (decrease)/ increase in revolving credits
Proceeds from term loans
Repayment of term loans
Hire-purchase instalments paid
Net cash provided by/ (used in) financing activities
15,820,209
359,966
-
-
6,283,940
(876,010)
(247,404)
6,032,744
(19,642)
27,353,803
1,537,535
(8,780,466)
15,598,267
35,709,139
292,167
(2,617,500)
19,642
(6,032,744)
(1,224,657)
-
26,146,047
-
(8,223,412)
(37,204,604)
15,532,096
(29,895,920)
12,896,040
-
(21,322,978)
(17,000,000)
56,000,000
(13,539,863)
(8,560,042)
8,473,157
10,883,325
3,790,915
(53,394)
(13,992)
6,039,299
(1,095,667)
(675)
9,408,544
(67,449)
28,890,906
1,103,741
(2,486,609)
3,275,152
30,783,190
506
-
67,449
(9,408,544)
(849,996)
1,642,429
22,235,034
2,717,455
-
(40,453,584)
26,320,168
(11,415,961)
-
5,325,000
22,458,092
9,000,000
4,157,924
(48,699,200)
(7,173,446)
(14,931,630)
46
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Cash Flow Statement (Continued)
For The Year Ended 30th June 2010
2010
RM
2009
RM
Net changes in cash & cash equivalents
Cash & cash equivalents brought forward (Note 23)
Cash & cash equivalents carried forward (Note 23)
4,723,284
12,295,411
17,018,695
(4,112,557)
16,407,968
12,295,411
The attached notes form an integral part of the Financial Statements
* Property, plant and equipment at aggregate cost of RM43,252,969 (2009 – RM42,260,390) was acquired
during the financial year of which RM6,048,365 (2009 – RM1,806,806) was acquired by means of
hire-purchase.
47
1. General Information
1.1
1.2
1.3
1.4
2. Significant Accounting Policies
2.1 Basis of Preparation
2.2 Changes in Accounting Policies and Effects from Adoption of New and Revised FRSs
The Company is a public limited company, incorporated and domiciled in Malaysia, and listed on the
Main Market of Bursa Malaysia Securities Berhad.
The principal place of business is located at No 1, Jalan Istimewa 2, Taman Perindustrian Desa Cemer-
lang, 81800 Ulu Tiram, Johor Darul Takzim.
The principal activities of the Company consist of manufacturing and trading of confectionery and
other related foodstuffs. The principal activities of the subsidiary companies are disclosed in Note 6 to
the financial statements.
The financial statements of the Group and of the Company were authorised for issue by the Board of
Directors in accordance with a resolution dated
The financial statements of the Group and of the Company have been prepared under the historical
cost convention except as disclosed in this summary of significant accounting policies.
The preparation of financial statements, in conformity with the provisions of the Companies Act,
1965 and Financial Reporting Standards in Malaysia requires the Directors to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reported financial year
as disclosed in Note 2.4. Although these estimates are based on the Directors’ best knowledge of
current events and actions, actual results could differ from those estimates.
The directors of the Group have chosen not to early adopt the following FRS, amendments and
interpretations which were in issue but not yet effective:-
Unless otherwise stated, the following significant accounting policies have been used consistently in
dealing with items which are considered material in relation to the financial statements.
Notes to the Financial Statements30th June 2010
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Effective for
financial period
beginning on or
after
FRS 1
Amendments to FRS 1
First-time Adoption of Financial Reporting
Standards (revised)
- Limited Exemption from Comparative
FRS 7 Disclosure for First-time Adopters
- Additional Exemption for First-time Adopters
1.7.2010
1.1.2011
48
2.2 Changes in Accounting Policies and Effects from Adoption of New and Revised FRSs (Continued)
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Effective for
financial period
beginning on or
after
Amendments to FRS 2
FRS 3
FRS 4
Amendments to FRS 5
FRS 7
Amendments to FRS 7
FRS 101
Amendments to FRS 101
FRS 123
Amendments to FRS 127
Amendments to FRS 132
Amendments to FRS 138
FRS 139
Amendments to FRS 139
IC Interpretation 4
IC Interpretation 9
Amendments to
IC Interpretation 9
IC Interpretation 10
Share-based Payment
- Vesting Conditions and Cancellations
- Group Cash settled Share Based Payment
Business Combinations (revised)
Insurance Contracts
Non-current Assets Held for Sale and
Discontinued Operations
Financial Instruments: Disclosures
- Improving Disclosures about Financial Instrments
Presentation of Financial Statements (revised)
- Puttable Financial Instruments and
Obligation Arising on Liquidation
Borrowing Costs (revised)
Consolidated and Separate Financial Statements
Financial Instruments: Presentation
- Puttable Financial Instruments and
Obligation Arising on Liquidation
- Separation of Compound Instrument
- Classification of Rights Issues
Intangible Assets
Financial Instruments: Recognition and Measurement
- Reclassification of Financial Assets
- Collective Assessment of Impairment for
Banking Institutions
Determining whether on Arrangement
contain a Lease
Reassessment of Embedded Derivatives
- Reassessment of Embedded Derivatives
Interim Financial Reporting and Impairment
1.7.2010
1.1.2010
1.1.2011
1.7.2010
1.1.2010
1.7.2010
1.1.2011
1.1.2010
1.1.2010
1.1.2010
1.1.2010
1.1.2010
1.1.2010
1.3.2010
1.7.2010
1.1.2010
1.1.2010
1.1.2010
1.1.2011
1.1.2010
1.7.2010
1.1.2010
49
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.2 Changes in Accounting Policies and Effects from Adoption of New and Revised FRSs (Continued)
2.3 Summary of Significant Accounting Policies
a) Subsidiary Companies and Basis of Consolidation
Subsidiary companies are enterprises controlled by the Company. Control exists when the Company
has the power to govern the financial and operating policies of the enterprises so as to obtain
benefits from their activities.
The consolidated financial statements include the financial statements of the Company and its
subsidiary companies made up to the balance sheet date using the purchase method of accounting.
Under this method, the results of the subsidiary companies acquired are included in the consolidated
financial statements from the dates of acquisition.
Any excess of the cost of the acquisition over the Group’s interest in the net fair value of identifiable
assets, liabilities and contingent liabilities represents goodwill.
Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contin-
gent liabilities over the cost of acquisition is recognised immediately in income statement.
All inter-company balances and transactions are eliminated on consolidation and the consolidated
financial statements reflect external transactions only.
Effective for
financial period
beginning on or
after
IC Interpretation 11
IC Interpretation 12
IC Interpretation 13
IC Interpretation 14
IC Interpretation 15
IC Interpretation 16
IC Interpretation 17
IC Interpretation 18
FRS2 – Group and Treasury Share Transactions
Service Concession Arrangements
Customer Loyalty Programmes
FRS119 – The Limit on a Defined Benefit Asset,
Minimum Funding Requirements’ and Their Interaction
Agreements for the Construction of Real Estate
Hedges of a Net Investment in a Foreign Operations
Distributions of Non-cash Assets to Owners
Transfer of Assets from Customers
1.1.2010
1.7.2010
1.1.2010
1.1.2010
1.7.2012
1.7.2010
1.7.2010
1.1.2011
These new and revised FRS’S are not expected to have any significant impact on the financial statements
of the Group and of the Company.
50
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
b) Property, Plant and Equipment and Depreciation
c) Leases
i) Classification
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and
rewards incidental to ownership. Leases of land and buildings are classified as operating or finance
leases in the same way as leases of other assets and the land and buildings elements of a lease of
land and buildings are considered separately for the purposes of lease classification. All leases that
do not transfer substantially all the risks and rewards are classified as operating leases.
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised.
All other repairs and maintenance are charged to the income statement during the financial period
in which they are incurred.
Subsequent to recognition, property, plant and equipment are stated at cost as modified by the
revaluation of certain freehold land and buildings and certain plant and machinery less accumulated
depreciation and accumulated impairment loss, if any.
No depreciation is provided on freehold land, freehold land and buildings-in-progress and plant and
machinery under installation.
All other property, plant and equipment are depreciated on a straight line basis to write off the cost
of each asset to their residual value over the estimated useful lives of the assets concerned. The
principal annual rates used are as follows:-
Freehold buildings 1%
Plant & machinery 5%
Plant and machinery at group cost 6 2/3%
Motor vehicles 20%
Furniture & fittings 10%
Office & laboratory equipment 10%
Renovations & electrical fittings 10%
The Group and Company adopts a policy to revalue its freehold land and buildings every 5 years
from the date of last revaluation. Surplus arising from revaluation is credited directly to revaluation
reserve. Deficit in excess of the revaluation reserve arising from previous revaluation is taken to the
income statement.
The residual value, useful life and depreciation method are reviewed at each financial year end to
ensure that the amount, method and period of depreciation are consistent with previous estimates
and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. The difference between the net disposal
proceeds, if any and the net carrying amount is recognised in income statement.
51
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
c) Leases (Continued)
ii) Finance Leases
d) Investment Properties
iii) Operating Leases
Assets acquired by way of finance leases are stated at an amount equal to the lower of their fair
values and the present value of the minimum lease payments at the inception of the leases, less
accumulated depreciation and impairment losses. The corresponding liability is included in the
balance sheet as borrowings. In calculating the present value of the minimum lease payments, the
discount factor used is the interest rate implicit in the lease, when it is practicable to determine,
otherwise, the Group’s or Company's incremental borrowing rate is used. Any initial direct costs are
also added to the carrying amount of such assets.
Lease payments are apportioned between the finance costs and the reduction of the outstanding
liability. Finance costs, which represent the difference between the total leasing commitments and
the fair value of the assets acquired, are recognised in income statement over the term of the
relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the
obligations for each accounting period.
The depreciation policy for leased assets is in accordance with that for depreciable property, plant
and equipment as described in Note 2.3(b).
Investment properties are properties held either to earn rental income or for capital appreciation or
for both. Gain or losses arising from changes in the fair values of investment properties are included
in the income statement in the year in which they arise.
Investment properties are derecognised when they have either been disposed of or when the investment
property is permanently withdrawn from use and no future benefit is expected from its disposal. On
the derecognition of an investment property, the difference between the net disposal proceeds and
the carrying amount is charged to the income statement; any amount in the revaluation reserve
relating to the investment property is transferred to retained earnings.
e) Intangible Assets
(i) Goodwill on Consolidation
Goodwill on consolidation represents the excess of the fair value of the purchase consideration
over the Group's share of the fair values of the identifiable net assets of subsidiaries at the date of
acquisition.
Operating lease payments are recognised as an expense on a straight-line basis over the term of
the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a
reduction of rental expense over the lease term on a straight-line basis.
In the case of a lease of land and buildings, the minimum lease payments or the up-front
payments made are allocated, whenever necessary, between the land and the buildings elements
in proportion to the relative fair values for leasehold interests in the land element and buildings
element of the lease at the inception of the lease. The up-front payment represents prepaid lease
payments and are amortised on a straight-line basis over the lease terms.
52
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
e) Intangible Assets (Continued)
(i) Goodwill on Consolidation
f) Inventories
Goodwill on consolidation is retained in the consolidated balance sheet. The carrying amount of
the goodwill is reviewed annually and is written down for impairment where it is considered necessary.
The impairment value of goodwill is taken to the consolidated income statement.
If after reassessment, the Group's interest in the fair values of the identifiable net assets of the
subsidiaries exceed the cost of the business combinations, the excess is recognised immediately in
the consolidated income statement.
(ii) Other Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their fair values as at the date of acquisition. Following
initial recognition, intangible assets are carried at cost less any accumulated amortisation and any
accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite
or indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the
estimated economic useful lives and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at each balance sheet date.
Intangible assets with indefinite useful lives are not amortised but tested for impairment annually
or more frequently if the events or changes in circumstances indicate that the carrying value may
be impaired either individually or at the cash-generating unit level. The useful life of an intangible
asset with an indefinite life is also reviewed annually to determine whether the useful life assessment
continues to be supportable.
Inventories are valued at the lower of cost and net realisable value on the weighted average cost basis. Cost
of raw materials comprise the cost of purchase plus the cost of bringing the inventories to their present
location and condition. For finished goods and work-in-progress cost consist of raw materials, direct labour
and an appropriate proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business less selling expenses. In
arriving at net realisable value, due allowance is made for all obsolete and slow moving inventories.
g) Investments
Investments in subsidiaries are stated at cost less impairment losses, if any. Investments in quoted
shares, portfolio investment in quoted shares and money market and unquoted bonds held as long
term investments are stated at cost less accumulated impairment losses, if any. Marketable securities
are carried at lower of cost and market value. Market value is calculated by reference to stock
exchange quoted price at close of business on the balance sheet date.
h) Receivables
Receivables are carried at anticipated realisable values. Bad debts are written off when identified.
Allowance is made for doubtful debts based on a review of all outstanding amounts as at the balance
sheet date.
53
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
Cash and cash equivalents comprise cash in hand, bank balances and deposits with licensed banks, net of outstanding bank overdrafts which are subject to an insignificant risk of changes in value.
Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.
Provisions are recognised when there is a present obligation, legal or constructive as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Property, plant and equipment acquired under hire-purchase are capitalised and are depreciated in accordance with the policy stated in Note 2.3(b) and the corresponding obligations relating to the remaining capital payments are treated as liabilities. Finance charges are charged to the income statement over the period of the plan and accounted for on a straight line method.
Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received, net of transaction costs.
Borrowing costs directly attributable to the acquisition of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use. All other borrowing costs are charged to the income statement as an expense in the period in which they are incurred.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction from share premium, otherwise it is charged to the income statement.
Dividends to shareholders are recognised in equity in the period in which they are declared or approved by shareholders at general meeting.
Income tax on the profit for the year comprises current and deferred income tax liabilities. Current income tax liabilities is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date.
i) Cash and Cash Equivalents
j) Payables
k) Provisions
l) Hire-Purchase
m) Interest-Bearing Borrowings
n) Share Capital
o) Income Tax
54
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
Deferred income tax liabilities is provided for using the liability method, on temporary fifferences at
the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. In principle, deferred income tax liabilities are recognised for all taxable
temporary differences and deferred income tax assets are recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised.
A deferred tax asset is 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
a deferred tax asset 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 all of that deferred tax asset to be utilised,
the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable
that sufficient taxable profit will be available, such reduction will be reversed to the extent of the
taxable profit.
Foreign currency transactions are converted into Ringgit Malaysia, the Group’s functional
currency, at the rates of exchange ruling on the transaction dates. Monetary assets and liabilities
in foreign currencies at balance sheet date are translated into Ringgit Malaysia at the exchange
rates ruling at that date. All exchange gains and losses are taken up in the income statement.
The principal closing rates used in translation are as follows:-
o) Income Tax (Continued)
p) Foreign Currencies
The carrying values of assets, other than inventories, 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. An impairment loss is charged to the income
statement 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 depreciation) had no impairment loss been recognised. The reversal is
recognised in the income statement 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 statement, a reversal of that impairment loss is recognised as income in the
income statement.
q) Impairment of Assets
2010
RM
3.2
2.8
2.3
4.0
2009
RM
3.2
3.1
2.4
5.1
Foreign currency
1 US Dollar
1 Australian Dollar
1 Singapore Dollar
1 Euro
55
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
i)
ii) Fair value estimation for disclosure purposes
Operating revenue of the Group and of the Company represents invoiced value of goods sold net of
returns and discounts.
Financial instruments are recognised in the respective balance sheets when the Group have become
a party to the contractual provisions of the instruments. The particular recognition methods
adopted are disclosed in the individual accounting policy statements 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 have a legally enforceable right to set off the recognised amounts and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
(a)
(b)
(c)
i)
ii)
iii)
Short term employees benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non monetary benefits are accrued
in the period in which the associated services are rendered by the employees of the Group.
Post-employment benefits
Defined contribution plan
The Group’s contribution to the defined contribution plan (“Employees Provident Fund”) are
charged to the income statement in the period in which they relate. Once the contributions have
been paid, the Group have no further payment obligations.
Equity compensation benefits
The Employees Share Option Scheme allows the employees to acquire shares of the Company. No
compensation cost or obligation is recognised. When the options are exercised, equity is increased
by the amount of the proceeds received.
The carrying amounts of financial assets and liabilities with a maturity of less than one year
are assumed to approximate their fair values.
The fair values of publicly traded securities are estimated based on quoted market prices at
the balance sheet date.
The fair values of long term borrowings and hire-purchase creditors are estimated using
discounted cash flow analysis at current market interest rate available for similar types of
lending and borrowing arrangements.
r) Financial Instruments
s) Employees Benefits
t) Revenue
56
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
2.3 Summary of Significant Accounting Policies (Continued)
i)
ii)
iii)
iv)
The residual values for certain major plant and machinery of the Group are ascertained annually at a
percentage of cost to reflect their approximate fair value at the end of their estimated useful lives.
Property, plant and equipment are depreciated on a straight line basis over their estimated useful lives.
Management estimates the useful lives of the plant and equipment to be 5 to 20 years. Changes in the
expected level of usage and technological developments could impact the economic useful lives and
residual values of the plant and equipment. Therefore the future depreciation charges could be revised.
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require judgement and estimates. Possible changes in these estimates could result in
revisions to the valuations of inventories.
The Group makes allowances for doubtful debts based on an assessment of the recoverability of
receivables. Allowances are applied to receivables where events or changes in circumstances indicate
that the carrying amounts may not be recoverable. Management specifically analysed historical bad
debts, customer concentrations, customer credit worthiness, current ecomic trends and changes in
customer payment terms when making a judgement to evaluate the adequacy of the allowance for
doubtful debts of receivables. Where the expectation is different from the original estimate, such
difference will impact the carrying value of receivables.
Revenue from sale of goods is recognised when the risks and rewards of ownership of the goods
have been transferred to the buyers.
Other sources of income earned, including interest income and rental income are recognised on an
accrual basis.
Interest from investment in bonds is accounted for in the income statement when the right to
receive payment is established.
Dividend income from investment in quoted shares is accounted for in the income statement
when the right to receive payment is established.
t) Revenue (Continued)
Revenue Recognition
The key assumptions concerning the future and other key sources of estimation uncertainty at the
balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are as stated below:-
a) Depreciation of property, plant and equipment
b) Net realisable values of inventories
c) Recoverability of receivables
2.4 Significant Accounting Estimates and Assumptions
57
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Com
pany
No:
720
57-H
34
3.
PRO
PER
TY, P
LAN
T A
ND
EQ
UIP
MEN
T
Gro
up
At
valu
atio
n A
t gro
up
cost
A
t cos
t
Pl
ant &
2010
Fr
eeho
ld
Fr
eeho
ld
m
achi
nery
Offi
ce &
R
enov
atio
ns
la
nd &
Pl
ant &
la
nd &
Pl
ant &
un
der
Mot
or
Furn
iture
la
bora
tory
&
ele
ctric
al
C
OST
/ bu
ildin
gs
mac
hine
rybu
ildin
gsm
achi
nery
in
stal
latio
nve
hicl
es
& fi
tting
seq
uipm
ent
fittin
gs
Tota
l
VALU
ATI
ON
R
M
RM
R
M
RM
R
M
RM
R
M
RM
R
M
RM
At 1
st J
uly
50,4
75,0
00
4,43
7,00
05,
959,
892
262,
165,
617
42,5
70,8
654,
589,
196
5,11
9,07
19,
272,
373
11,3
97,6
1639
5,98
6,63
0 A
dditi
ons
- -
7,69
8,85
59,
746,
059
39,5
73,7
431,
218,
933
85,5
0411
2,40
527
8,65
158
,714
,150
R
ecla
ssifi
catio
n -
- 4,
272,
035
8,43
7,00
0(1
6,71
4,61
3)-
- -
4,00
5,57
8-
Dis
posa
ls
- -
- (1
9,50
4,29
4)-
(1,3
30,1
30)
- -
- (2
0,83
4,42
4)
At 3
0th
June
50
,475
,000
4,
437,
000
17,9
30,7
8226
0,84
4,38
265
,429
,995
4,47
7,99
95,
204,
575
9,38
4,77
815
,681
,845
433,
866,
356
A
CC
UM
ULA
TED
DEP
REC
IATI
ON
A
t 1st
Jul
y 26
7,92
4 1,
393,
548
- 62
,190
,541
- 2,
288,
538
3,24
8,38
15,
278,
913
6,69
1,55
381
,359
,398
C
harg
e fo
r the
yea
r 43
5,70
1 32
5,48
812
8,79
36,
219,
770
- 55
7,00
546
5,30
917
7,63
41,
555,
474
9,86
5,17
4 R
ecla
ssifi
catio
n -
- 70
9,83
4(7
09,8
34)
- -
- -
- -
Dis
posa
ls
- -
- (5
,313
,646
)-
(864
,692
)-
- -
(6,1
78,3
38)
At 3
0th
June
70
3,62
5 1,
719,
036
838,
627
62,3
86,8
31-
1,98
0,85
13,
713,
690
5,45
6,54
78,
247,
027
85,0
46,2
34
NET
BO
OK
VA
LUE
49,7
71,3
75
2,71
7,96
417
,092
,155
198,
457,
551
65,4
29,9
952,
497,
148
1,49
0,88
53,
928,
231
7,43
4,81
834
8,82
0,12
2
58
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Com
pany
No:
720
57-H
35
PR
OPE
RTY
, PLA
NT
AN
D E
QU
IPM
ENT
(CO
NTI
NU
ED)
A
t va
luat
ion
At g
roup
co
st
At c
ost
2009
Pl
ant &
Fr
eeho
ld
Fr
eeho
ld
m
achi
nery
O
ffice
&
Ren
ovat
ions
C
OST
/ la
nd &
Pl
ant &
la
nd &
Pl
ant &
un
der
Mot
or
Furn
iture
la
bora
tory
&
ele
ctric
al
VA
LUA
TIO
N
build
ings
m
achi
nery
build
ings
m
achi
nery
in
stal
latio
n ve
hicl
es
& fi
tting
s eq
uipm
ent
fittin
gs
Tota
l
RM
R
M
RM
R
M
RM
R
M
RM
R
M
RM
R
M
At 1
st J
uly
21,2
00,0
00
4,43
7,00
03,
292,
772
194,
163,
415
40,1
80,2
29
3,31
0,25
84,
541,
275
2,37
4,21
37,
331,
770
280,
830,
932
Add
ition
s -
- 6,
071,
453
11,9
95,5
6831
,411
,840
-
8,26
620
2,39
31,
090,
632
50,7
80,1
52
Rec
lass
ifica
tion
- -
- 29
,021
,204
(29,
021,
204)
-
- -
- -
Acq
uisi
tion
of
sub
sidi
arie
s
29,2
75,0
00
- -
59,2
10,1
76-
1,55
4,42
056
9,53
08,
504,
693
2,97
5,21
4 10
2,08
9,03
3
Dis
posa
ls
- -
(3,4
04,3
33)
(32,
224,
746)
- (2
75,4
82)
- (1
,808
,926
)-
(37,
713,
487)
A
t 30t
h Ju
ne
50,4
75,0
00
4,43
7,00
05,
959,
892
262,
165,
617
42,5
70,8
65
4,58
9,19
65,
119,
071
9,27
2,37
311
,397
,616
395,
986,
630
AC
CU
MU
LATE
D
DEP
REC
IATI
ON
At 1
st J
uly
70,6
66
1,06
8,06
0-
42,5
92,5
38-
956,
554
2,64
6,11
71,
493,
088
4,38
7,12
553
,214
,148
C
harg
e fo
r the
yea
r 33
8,36
6 32
5,48
8-
5,65
4,00
1-
436,
724
328,
001
453,
421
707,
294
8,24
3,29
5 R
ecla
ssifi
catio
n -
- -
- -
- -
- -
- A
cqui
sitio
n of
s
ubsi
diar
ies
(1
41,1
08)
- -
31,7
58,6
45-
918,
127
274,
263
4,92
8,59
01,
597,
134
39,3
35,6
51
Dis
posa
ls
- -
- (1
7,81
4,64
3)-
(22,
867)
- (1
,596
,186
)-
(19,
433,
696)
A
t 30t
h Ju
ne
267,
924
1,39
3,54
8-
62,1
90,5
41-
2,28
8,53
83,
248,
381
5,27
8,91
36,
691,
553
81,3
59,3
98
NET
BO
OK
VA
LUE
50,2
07,0
76
3,04
3,45
25,
959,
892
199,
975,
076
42,5
70,8
65
2,30
0,65
81,
870,
690
3,99
3,46
04,
706,
063
314,
627,
232
2,975,214
59
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)C
ompa
ny N
o: 7
2057
-H
36
PR
OPE
RTY
, PLA
NT
AN
D E
QU
IPM
ENT
(CO
NTI
NU
ED)
Com
pany
A
t va
luat
ion
At c
ost
Plan
t &
20
10
Free
hold
Fr
eeho
ld
m
achi
nery
Offi
ce &
R
enov
atio
ns
la
nd &
la
nd &
Pl
ant &
un
der
Mot
or
Furn
iture
lab
orat
ory
& e
lect
rical
C
OST
/ V
ALU
ATI
ON
bu
ildin
gs
build
ings
m
achi
nery
inst
alla
tion
vehi
cles
&
fitti
ngs
equi
pmen
tfit
tings
To
tal
R
M
RM
R
M
RM
R
M
RM
R
M
RM
R
M
At 1
st J
uly
21,2
00,0
00
5,95
9,89
216
2,06
2,40
337
,205
,865
3,24
6,65
84,
325,
180
2,02
5,63
98,
422,
402
244,
448,
039
Add
ition
s -
7,69
8,85
556
3,71
833
,433
,743
1,21
8,93
349
,066
112,
405
176,
249
43,2
52,9
69R
ecla
ssifi
catio
n -
4,27
2,03
53,
072,
000
(11,
349,
613)
- -
- 4,
005,
578
- D
ispo
sals
-
- (1
9,50
4,29
4)-
(1,2
81,5
10)
- -
- (2
0,78
5,80
4)A
t 30t
h Ju
ne
21,2
00,0
00
17,9
30,7
8214
6,19
3,82
759
,289
,995
3,18
4,08
14,
374,
246
2,13
8,04
412
,604
,229
266,
915,
204
AC
CU
MU
LATE
D
D
EPR
ECIA
TIO
N
A
t 1st
Jul
y 21
1,99
9 -
31,3
33,7
50-
1,36
9,44
82,
741,
263
1,26
9,43
64,
999,
379
41,9
25,2
75R
ecla
ssifi
catio
n -
709,
834
(709
,834
)-
- -
- -
- C
harg
e fo
r the
yea
r 21
2,00
1 12
8,79
33,
795,
670
- 47
2,51
538
5,66
317
7,63
41,
111,
664
6,28
3,94
0D
ispo
sals
-
- (5
,313
,646
)-
(816
,072
)-
- -
(6,1
29,7
18)
At 3
0th
June
42
4,00
0 83
8,62
729
,105
,940
- 1,
025,
891
3,12
6,92
61,
447,
070
6,11
1,04
3 42
,079
,497
NET
BO
OK
VA
LUE
20,7
76,0
00
17,0
92,1
5511
7,08
7,88
759
,289
,995
2,15
8,19
01,
247,
320
690,
974
6,49
3,18
6 22
4,83
5,70
7
60
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Com
pany
No:
720
57-H
37
PR
OPE
RTY
, PLA
NT
AN
D E
QU
IPM
ENT
(CO
NTI
NU
ED)
A
t val
uatio
n A
t cos
t
Pl
ant &
2009
Fr
eeho
ld
Free
hold
mac
hine
ry
Offi
ce &
R
enov
atio
ns
la
nd &
la
nd &
Pl
ant &
un
der
Mot
or
Furn
iture
la
bora
tory
& e
lect
rical
CO
ST/
VA
LUA
TIO
N
build
ings
bu
ildin
gs
mac
hine
ry
inst
alla
tion
vehi
cles
&
fitti
ngs
equi
pmen
tfit
tings
To
tal
R
M
RM
R
M
RM
R
M
RM
R
M
RM
R
M
A
t 1st
Jul
y 21
,200
,000
3,
292,
772
165,
742,
867
33,3
37,2
293,
251,
638
4,32
5,18
01,
878,
773
7,33
1,77
0 24
0,36
0,22
9A
dditi
ons
- 6,
071,
453
8,90
4,59
926
,046
,840
- -
146,
866
1,09
0,63
2 42
,260
,390
Rec
lass
ifica
tion
- -
16,6
16,2
55(1
6,61
6,25
5)-
- -
- -
Dis
posa
ls
- (3
,404
,333
)(2
9,20
1,31
8)(5
,561
,949
)(4
,980
) -
- -
(38,
172,
580)
At 3
0th
June
21
,200
,000
5,
959,
892
162,
062,
403
37,2
05,8
653,
246,
658
4,32
5,18
02,
025,
639
8,42
2,40
2 24
4,44
8,03
9
A
CC
UM
ULA
TED
D
EPR
ECIA
TIO
N
A
t 1st
Jul
y 70
,666
-
39,9
34,9
63-
897,
934
2,44
6,05
61,
097,
311
4,38
7,12
5 48
,834
,055
Cha
rge
for t
he y
ear
141,
333
- 4,
346,
866
- 47
1,51
4 29
5,20
717
2,12
561
2,25
4 6,
039,
299
Dis
posa
ls
- -
(12,
948,
079)
- -
- -
- (1
2,94
8,07
9)A
t 30t
h Ju
ne
211,
999
- 31
,333
,750
- 1,
369,
448
2,74
1,26
31,
269,
436
4,99
9,37
9 41
,925
,275
NET
BO
OK
VA
LUE
20,9
88,0
01
5,95
9,89
213
0,72
8,65
337
,205
,865
1,87
7,21
0 1,
583,
917
756,
203
3,42
3,02
3 20
2,52
2,76
4
61
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
a)
b)
c)
The freehold properties of the Company and a subsidiary company were last revalued in the financial
year ended 30th June, 2008 and 30th June, 2009, respectively, by a firm of professional valuers Messrs
Collier Jordan Lee & Jaafar.
Surplus arising from the valuation of certain subsidiaries properties and plant and machinery totalling
RM1,998,362 (2009 – RM1,998,362), have been incorporated in the consolidated financial statements, to
restate these assets at fair value thereof to the Group.
Had the revalued property, plant and equipment been carried at historical cost less accumulated
depreciation, the net book value of each class of property, plant and equipment as at 30th June,
2010 would be as follows:-
d) Included herein for the year ended 30th June, 2010 are the following plant and equipment at cost
acquired under hire-purchase instalment plans:-
e) Included in plant and machinery of the Group and of the Company for the year ended 30th June, 2010
was an amount of RM2,470,743 (2009 – RM1,695,577) and RM2,470,743 (2009 – RM1,545,977), respectively,
of hire-purchase, term loan and revolving credit interest capitalised during period of installation of those
plant and machinery.
At group cost:
At 1st July
Additions
Amortisation for the year
At 30th June
6,377,900
29,930
(180,559)
6,227,271
6,373,590
182,362
(178,052)
6,377,900
The leasehold properties of the subsidiaries were revalued by a firm of professional valuers Messrs Colliers
Jordan Lee & Jaafar in financial year ended 30th June, 2005.
Property, Plant And Equipment (Continued)
4. Prepaid Lease Payments
Freehold land and buildings
Plant and machinery
Group
2010
RM
2009
RM
Company
2010
RM
2009
RM
26,629,741
628,288
26,689,895
928,288
17,159,658
-
17,280,129
-
Plant and machinery
Motor vehicles
Group
2010
RM
2009
RM
Group 2010
RM
2009
RM
Company
2010
RM
2009
RM
67,863,467
3,184,081
49,274,187
3,246,657
48,625,536
3,184,081
35,951,411
3,246,657
62
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
4. Prepaid Lease Payments (Continued)
Had the leasehold land and buildings been carried at historical cost less accumulated amortisation the
carrying amount of the revalued assets as at 30th June, 2010 would be as follows :
* Wholly owned subsidiaries of Khee San Berhad
** Wholly owned subsidiaries of Kinos Food Industries (M) Sdn. Bhd.
Khee San Berhad was consolidated as a subsidiary to the Group with effect from 1st November, 2008
Group
Leasehold land and buildings
2010
RM
4,046,211
2009
RM
4,106,365
5. Investment Properties
Group
Fair value, at 30th June
2010
RM
3,410,000
2009
RM
3,410,000
6. Interest In Subsidiary Companies
Group
Unquoted shares, at cost
Quoted shares, in Malaysia at cost
Amount due from a subsidiary company
Amount due to a subsidiary company
The subsidiary companies, incorporated in Malaysia, are as follows:-
2010
RM
2009
RM
Name of Company Equity
2010
%
EffectiveInterest
2009
%
Principal Activities
31,725,687
28,584,434
60,310,121
6,052,827
(10,076,806)
56,286,142
31,725,687
28,584,434
60,310,121
3,337,212
(10,488,633)
53,158,700
Khee San Berhad
* Khee San Marketing Sdn Bhd
* Khee San Food Industries Sdn Bhd
Kinos Food Industries (M) Sdn Bhd
**Kim Choaw Sdn Bhd
**Kinos Food Trading Sdn Bhd
Investment holding
Temporary ceased operations
Manufacturing of candy
confectionery and wafer
products
Investment holding, manufacturing
and trading of confectioneries
and snack food
Letting of property and trading of
confectioneries and general
food stuffs
Temporary ceased operations
32.87
32.87
32.87
100.00
100.00
100.00
32.87
32.87
32.87
100.00
100.00
100.00
63
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
7. Interest In Associated Companies
Quoted shares in Malaysia, at cost
Distribution of dividend
Impairment of investment
Share of profit in associated
companies
Market value
The associated companies, incorporated in Malaysia, are as follows:-
2010
RM
2009
RM
20,312,210
(106,614)
(4,545,126)
4,571,790
20,232,260
15,940,982
12,088,798
-
-
2,433,172
14,521,970
7,960,540
As disclosed in Note 29(i) to the Financial Statements, the Company had as announced on Bursa Malaysia
Securities Berhad on 23rd August, 2010, the Company, had disposed of its entire equity interest in Lay Hong
Berhad, its associated company in the open market and via off market transactions on a willing buyer
willing seller basis for a total consideration of RM11,851,760, resulting in an impairment on this investment
of RM4,545,126 to the Group.
Name of Company Equity
2010
%
EffectiveInterest
2009
%
Principal Activities
Lay Hong Berhad
TPC Plus Berhad
Poultry farming and related activities and
liquid eggs processing
Poultry farming and related activities and
liquid eggs processing
24.59
33.65
24.59
-
Group
2010
RM
2009
RM
20,312,210
(106,614)
(130,424)
-
20,075,172
15,940,982
12,088,798
-
-
-
12,088,798
7,960,540
Company
8. Investments
Group
Quoted (in Malaysia)
Shares in corporations
Unquoted (in Malaysia)
Bonds
Quoted (outside Malaysia)
Shares in a corporation (At group cost)
Less: Impairment loss on investments
Cost
RM
Market
value
RM
2010 2009
Cost
RM
Market
value
RM
2,252,993
4,000,000 6,252,993
1 6,252,994
(5,427,248)825,746
825,745 2,501,407
4,000,000 6,501,407
1 6,501,408
(5,197,706)1,303,702
1,303,701
64
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
9. Intangible Assets
i) Goodwill On Consolidation
Goodwill on consolidation Less: Accumulated amortisation At 1st July Add: Arising from investment in subsidiary companies At 30th June
ii) Other Intangible Assets
Trademarks, at cost
The directors regards these trademarks to have indefinite useful lives.
2010
RM
2009
RM
10. Inventories
11,568,174(508,627)
11,059,547 -
11,059,547
1,600,000 12,659,547
4,714,098 (508,627)4,205,4716,854,076
11,059,547
1,600,00012,659,547
Raw materials
Work-in-progress
Finished goods
Factory consummables
At cost:
2010
RM
2009
RM
22,597,618
4,414,781
4,345,412
205,024
31,562,835
22,207,195
4,299,943
6,364,523
183,779
33,055,440
Group
Group
2010
RM
2009
RM
8,647,463
3,117,672
1,099,594
-
12,864,729
9,243,306
3,118,942
2,040,016
-
14,402,264
Company
11. Trade Receivables
Trade receivables
Less: Allowance for doubtful debts
2010
RM
2009
RM
27,682,040
(1,376,308)
26,305,732
23,692,417
(920,050)
22,772,367
Group
2010
RM
2009
RM
18,543,481
(98,706)
18,444,775
19,183,922
(98,706)
19,085,216
Company
8. Investments (Continued)
Company
Quoted (in Malaysia)
Shares in corporations
Unquoted (in Malaysia)
Bonds
Less: Impairment loss oninvestments
Cost
RM
Market
value
RM
2010 2009
Cost
RM
Market
value
RM
2,252,993
4,000,000 6,252,993
(5,427,248)825,745
825,745 2,252,993
4,000,000 6,252,993
(5,197,706)1,055,287
1,055,287
65
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
12. Other Receivables, Deposits And Prepayments
Other receivables
Tax recoverable
Sundry deposits
Deposits for purchase of property,
plant and equipment
Prepayments
Amount due from associated
company
2010
RM
2009
RM
3,709,895
1,497,156
642,610
13,907,021
790,612
9,267,458
29,814,752
2,526,593
806,990
990,935
17,287,682
1,610,280
-
23,222,480
Group
2010
RM
2009
RM
348,489
-
435,828
13,907,021
635,443
9,267,458
24,594,239
1,804,535
-
447,233
14,887,583
749,596
-
17,888,947
Company
13. Deposits, Cash And Bank Balances
Fixed deposits with licensed banks
Cash and bank balances
The average interest rate ranges and maturity periods of fixed deposits at the balance sheet date were
as follows:
2010
RM
2009
RM
149,452
21,356,155
21,505,607
27,065
15,778,329
15,805,394
Group
2010
RM
2009
RM
149,452
16,869,243
17,018,695
27,065
12,268,346
12,295,411
Company
Interest rate
Maturity period
2010
RM
2009
RM
2.5%
12 months
3.7%
12 months
Group
2010
RM
2009
RM
2.5%
12 months
3.7%
12 months
Company
14. Share Capital
Company
Authorised:
Issued and Fully Paid:
At 1st July
ESOS I
ESOS II
At 30th June
Number of
ordinary
shares of
RM1 each RM
2010 2009
Number of
ordinary
shares of
RM1 each RM
150,000,000
78,045,0005,445,000
12,523,50096,013,500
150,000,000
78,045,0005,445,000
12,523,50096,013,500
150,000,000
78,045,000- -
78,045,000
150,000,000
78,045,000- -
78,045,000
66
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
i) Company’s ESOS I is governed by the by-laws approved by the shareholders at the Extraordinary
General Meeting held on 29th May, 2007, had been terminated as approved by the shareholders at an
Extraordinary General Meeting held on 24th December, 2009.
The principal features of ESOS I are as follows:
a)
b)
c)
d)
e)
f)
g)
Scheme shall be in force for a period of five years from 3rd July, 2007 (the date of the first offer
made) expiring on 2nd July, 2012 but subject to any extension or renewal for a further period of five
years as may be approved by the shareholders in a general meeting and any other relevant
regulatory authority whose approval is necessary.
Eligible persons are employees of the Group, who is a Malaysian citizen who has attained
eighteen (18) years of age (including full time Executive Directors) and have been confirmed
and has served at least six (6) months in the employment of the Group on the date of the offer
or where the Executive Director or employee is under an employment contract, the contract is
for a duration of at least one (1) year and has not expired within three (3) months from the date
of offer. The eligibility for participation in ESOS I shall be at the discretion of the ESOS Committee
appointed by the Board of Directors.
The total number of shares to be issued under ESOS I shall not exceed 15% of the issued and
paid-up share capital of the Company being, the maximum allowable allotment of shares, at
any point of time during the duration of Scheme.
The option price for each new RM1.00 share to be offered shall be determined by the ESOS
Committee in the following manner:
i)
ii)
No option shall be granted for less than 100 shares and shall always be in multiples of 100 shares.
An offer made by the ESOS Committee to a selected employee shall be valid for a period of forty-
five days from the date of offer and may be accepted within this prescribed period by the selected
employee to whom the offer is made by written notice to the ESOS Committee. Upon acceptance
of an offer, the Grantee may during the option period exercise his options in full or in part in such
manner as stipulated in the offer letter.
All new ordinary shares issued upon exercise of the options granted under ESOS will rank
pari-passu in all respects with the existing ordinary shares of the Company except that the shares
so issued will not be entitled to any dividends, rights allotments and/or other distributions, the
entitlement date of which is prior to the date of allotment of the new ordinary shares.
a price at a discount of not more than ten percent (10%) from the five (5) days weighted average
market price of the Company’s shares as shown in the daily official list issued by Bursa Malaysia
Securities Berhad immediately preceding the Date of Offer; or
the par value of the Company’s shares of RM1.00 each,
whichever is the higher.
14. Share Capital (Continued)
67
During the financial year, the number of options over the ordinary shares of RM1.00 each of the
Company granted under ESOS I are as follows:
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
ii) The Company’s ESOS II is governed by the by-laws approved by the shareholders at the Extraordinary
General Meeting held on 24th December, 2009.
The principal features of ESOS II are as follows:
a)
b)
c)
Scheme shall be in force for a period of five years from 3rd July, 2007 (the date of the first offer
made) expiring on 2nd July, 2012 but subject to any extension or renewal for a further period of five
years as may be approved by the shareholders in a general meeting and any other relevant regulatory
authority whose approval is necessary.
Eligible persons are employees of the Group, who is a Malaysian citizen who has attained eighteen
(18) years of age (including full time Executive Directors) and have been confirmed and has served at
least six (6) months in the employment of the Group on the date of the offer or where the Executive
Director or employee is under an employment contract, the contract is for a duration of at least one (1)
year and has not expired within three (3) months from the date of offer. The eligibility for participation
in ESOS II shall be at the discretion of the ESOS Committee appointed by the Board of Directors.
The total number of shares to be issued under ESOS II shall not exceed 15% of the issued and paid-
up share capital of the Company being, the maximum allowable allotment of shares, at any point of
time during the duration of Scheme.
14. Share Capital (Continued)
Option date
Option
price
per share
RM
Balance
at
1.7.2009 Granted Exercised
Balance
at
30.6.2010
Number of options over ordinary
shares of RM1.00 each
12.5.2009
6.7.2009
20.7.2009
30.7.2009
0.85
0.88
1.00
1.00
4,775,000
670,000
5,445,000
1.00
1.00
5,325,000
-
5,325,000
-
120,000
120,000
(5,325,000)
(120,000)
(5,445,000)
-
-
-
Details relating to options exercised during the financial year are as follows:
Exercise
date
Fair value of shares at
share issue date
RM/ share
Exercise price
RM/ share
Number of
shares
issued
2010
5,445,000Proceeds received on exercise of the above shares options
2010
RM
68
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
d)
e)
f)
g)
The option price for each new RM1.00 share to be offered shall be determined by the ESOS Committee in the following manner:
i)
ii)
No option shall be granted for less than 100 shares and shall always be in multiples of 100 shares.
An offer made by the ESOS Committee to a selected employee shall be valid for a period of forty-five days from the date of offer and may be accepted within this prescribed period by the selected employee to whom the offer is made by written notice to the ESOS Committee. Upon acceptance of an offer, the Grantee may during the option period exercise his options in full or in part in such manner as stipulated in the offer letter.
All new ordinary shares issued upon exercise of the options granted under ESOS will rank pari-passu in all respects with the existing ordinary shares of the Company except that the shares so issued will not be entitled to any dividends, rights allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the new ordinary shares.
During the financial year, the number of options over the ordinary shares of RM1.00 each of the Company granted under ESOS II are as follows:
a price at a discount of not more than ten percent (10%) from the five (5) days weighted average market price of the Company’s shares as shown in the daily official list issued by Bursa Malaysia Securities Berhad immediately preceding the Date of Offer; or
the par value of the Company’s shares of RM1.00 each,
whichever is the higher.
14. Share Capital (Continued)
Option date
Option
price
per share
RM
Balance
at
1.7.2009 Granted Exercised
Balance
at
30.6.2010
Number of options over ordinary
shares of RM1.00 each
14.1.2010
4.3.2010
11.2.2010
5.3.2010
23.3.2010
20.4.2010
1.15
1.05
1.04
1.14
1.04
1.04
1.01
1.01
3,760,000
483,500
8,000,000
280,000
12,523,500
1.04
1.01
-
-
-
4,243,500
8,280,000
12,523,500
(4,243,500)
(8,280,000)
(12,523,500)
-
-
-
Details relating to options exercised during the financial year are as follows:
Exercise
date
Fair value of shares at
share issue date
RM/ share
Exercise price
RM/ share
Number of
shares
issued
2010
12,776,040Proceeds received on exercise of the above shares options
2010
RM
69
17. Term Loans And Other Credit Facilities
Group & Company
Unsecured
Term loan I: fixed interest at commercial banking
rate per annum, repayable by 84 monthly
instalments commencing on April, 2007
2010
RM
2009
RM
5,440,000 6,880,000
Non-distributable:-
Share premium
Revaluation reserve
Distributable:-
Retained profits
2010
RM
2009
RM
13,774,466
3,815,951
85,726,144
103,316,561
13,521,926
3,815,951
73,279,626
90,617,503
Group
2010
RM
2009
RM
13,774,466
3,815,951
70,764,053
88,354,470
13,521,926
3,815,951
59,771,161
77,109,038
Company
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
15. Reserves
Minimum payments:
- not later than 1 year
- later than 1 year and not
later than 5 years
- later than 5 years
Less: Future hire-purchase charges
Present value
Total payable
Less: Payable within 1 year
Payable after 1 year
2010
RM
2009
RM
15,528,213
29,964,430
691,776
46,184,419
(6,883,978)
39,300,441
39,300,441
(12,674,351)
26,626,090
13,468,688
35,120,439
-
48,589,127
(7,139,884)
41,449,243
41,449,243
(11,508,800)
29,940,443
Group
2010
RM
2009
RM
9,744,543
18,024,830
691,776
28,461,149
(4,288,878)
24,172,271
24,172,271
(7,714,891)
16,457,380
8,874,978
22,538,309
-
31,413,287
(4,729,339)
26,683,948
26,683,948
(7,549,902)
19,134,046
Company
16. Hire-Purchase Creditors
The term for hire-purchase is 4 to 9 (2009 – 3 to 7) years. In respect of the financial year ended 30th June,
2010, the effective borrowing rate ranges from 2.45% to 3.75% (2009 – 2.45% to 3.65%) per annum. The
interest rates are fixed at the inception of the hire purchase arrangements.
70
17. Term Loans And Other Credit Facilities (Continued)
Group & Company
Unsecured
2010
RM
2009
RM
1,144,497
3,967,529
2,577,077
10,308,006
1,625,130
11,393,417
3,599,560
18,879,982
2,806,669
30,250,000
91,991,867
1,416,628
5,378,261
4,614,661
12,680,255
1,909,018
12,476,236
4,176,671
-
-
-
49,531,730
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Term loan II: fixed interest at commercial banking rates
per annum, repayable by 84 equal monthly instalment
commencing on March, 2007
Term loan III: interest at commercial banking rates above
the bank’s base lending rate per annum, repayable by
60 monthly instalments commencing December, 2007
Term loan IV: fixed interest at commercial banking rates
per annum, repayable by 60 monthly instalment
commencing on October, 2006
Term loan V: fixed interest at commercial banking rates
per annum, repayable by 80 equal monthly instalments
commencing February, 2009
Term loan VI: interest at commercial rate per annum,
repayable by 84 monthly instalments commencing
June, 2009
Term loan VII: fixed interest at commercial rate per
annum, repayable by 120 monthly instalments
commencing July, 2009
Term loan VIII: interest at commercial banking rates
above the bank’s base lending rate per annum,
repayable by 84 monthly instalments commencing
October, 2009
Term loan IX: fixed interest at commercial banking rates
per annum, repayable by 84 monthly instalments
commencing on February 2010
Term loan X: interest at commercial banking rates above
the bank’s base lending rate per annum, repayable by
84 monthly instalments commencing January, 2010
Term loan XI: fixed interest at commercial banking rate
per annum, repayable by 60 monthly instalments
commencing on February, 2010
71
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
At 1st July
Acquisition of subsidiaries
Transferred (to)/ from income
statement (Note 21)
At 30th June
The deferred income tax liabilities
are principally due to the
following:-
Temporary differences between
tax bases of assets and carrying
amounts in financial statements
Reinvestment allowances
Unabsorbed capital allowance
Unrealised loss on foreign exchange
2010
RM
2009
RM
2,313,238
-
(1,669,000)
644,238
27,761,238
(21,289,000)
(5,828,000)
-
644,238
2,116,238
1,610,900
(1,413,900)
2,313,238
28,060,038
(22,333,000)
(3,371,000)
(42,800)
2,313,238
Group
2010
RM
2009
RM
2,200,000
-
1,000,000
3,200,000
16,300,000
(13,100,000)
-
-
3,200,000
1,600,000
-
600,000
2,200,000
19,900,000
(17,700,000)
-
-
2,200,000
Company
18. Deferred Income Tax Liabilities
Other payables
Accruals
Deposits
2010
RM
2009
RM
3,624,440
2,743,754
202,833
6,571,027
4,785,285
2,429,092
-
7,214,377
Group
2010
RM
2009
RM
1,683,009
1,023,374
-
2,706,383
2,666,025
838,803
-
3,504,828
Company
19. Other Payables And Accruals
17. Term Loans And Other Credit Facilities (Continued)
2010
RM
2009
RM
19,053,887
17,855,282
43,410,698
11,672,000
72,937,980
91,991,867
8,981,520
9,349,855
21,761,478
9,438,877
40,550,210
49,531,730
Repayments due:
Within twelve months
Between 1 and 2 years
Between 2 and 5 years
After 5 years
The bankers' acceptances and revolving credits and bank overdrafts bear interest negotiated and
agreed at commercial banking rates per annum.
72
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
a) Profit before income tax is
arrived at after charging/
(crediting):-
Auditors’ remuneration
Directors' remuneration
- Fees
- current directors
- past directors
- Salaries and allowances
- Attendance allowances
Rental of premises
Rental of motor vehicles
Rental of equipment
Staff costs
Depreciation (Note 3)
Property, plant & equipment
written off
Unrealised loss on foreign exchange
Amortisation of prepaid lease
payments (Note 4)
Impairment loss on investments
Allowance for doubtful debts
Lease rental
Workers’ quarters rental
Dividend paid
Allowance for doubtful debts
no longer required
Gain on disposal of investments
Realised gain on foreign exchange
Finance cost:
Interest paid for:-
- Bank overdrafts
- Hire-purchase
- Term loans
- Bankers' acceptances
- Revolving credit
- Others
Rental income
Gain on disposal of property,
plant and equipment
Dividend from Malaysian
quoted investments (gross)
Interest income
- Fixed and short term deposits
- Other interest
2010
RM
2009
RM
250,000
290,150
10,613
1,569,700
69,000
337,796
607,411
10,920
15,220,299
9,865,174
-
6,509
180,559
4,774,668
456,258
785,618
30,470
-
-
(46,636)
(1,263,973)
1,216,569
2,206,022
2,366,547
2,037,516
170,346
195,781
8,192,781
(232,800)
(876,011)
(247,404)
(19,642)
(19,812)
204,000
280,500
-
1,541,700
65,000
512,054
-
10,920
15,499,778
8,243,295
267,726
171,143
178,052
3,745,501
50,824
-
-
-
(13,992)
(53,394)
(1,727,569)
1,313,761
1,350,610
4,973,311
2,068,774
779,954
48,849
10,535,259
(232,546)
(1,095,667)
(12,925)
(67,449)
(65,961)
Group
2010
RM
2009
RM
150,000
118,000
-
1,569,700
69,000
223,376
284,536
-
6,761,631
6,283,940
-
-
-
359,966
-
785,618
-
2,617,500
-
-
(413,761)
841,368
1,440,580
2,366,547
1,188,468
-
195,781
6,032,744
-
(876,010)
(247,404)
(19,642)
-
120,000
108,000
1,541,700
65,000
230,404
-
-
6,012,757
6,039,299
-
-
-
3,790,915
-
-
-
-
(13,992)
(53,394)
(816,682)
1,012,820
1,069,445
4,973,311
1,714,203
589,916
48,849
9,408,544
-
(1,095,667)
(675)
(67,449)
-
Company
20. Profit Before Income Tax
73
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Group
b) Directors' remuneration
Directors' remuneration of the Company is
analysed as follows:-
Executive Directors
- salaries and allowances
- fees
- attendance allowances
Non-Executive Directors
- salaries and allowances
- fees
- attendance allowances
Directors on the board of subsidiary
companies are analysed as follows:-
Executive
- fees
Non-Executive
- fees
2010
RM
2009
RM
561,000
16,700
5,000
1,008,700
229,250
64,000
16,700
27,500
631,000
23,700
5,000
910,700
182,800
60,000
24,000
50,000
Group 2010 2009
Executive
Non-
executive
-
-
-
-
-
-
-
1
-
-
4
2
1
-
-
-
-
-
-
1
Executive
Non-
executive
-
-
-
-
-
1
-
-
-
-
3
2
1
1
-
-
-
-
-
1
20. Profit Before Income Tax (Continued)
The number of Directors of the
Company whose remuneration
fell within the following ranges
(per annum) are:-
RM1 – RM50,000
RM50,001 – RM100,000
RM100,001 – RM150,000
RM150,001 – RM200,000
RM200,001 – RM550,000
RM550,001 – RM600,000
RM600,001 – RM650,000
RM650,001 – RM700,000
RM700,001 – RM750,000
RM750,001 – RM800,000
74
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Current income tax liabilities:
Estimated for the year
(Over) / Underprovision in
prior years
Deferred income tax liabilities:
Transferred (from)/ to deferred
income tax liabilities (Note 18)
Reconciliation of effective tax rate:
Profit before income tax
Taxation using statutory tax
rate of 25%
Reduction in statutory tax rate
Non-deductible expenses
for tax purposes
Capital allowances utilised
Reinvestment allowance utilised
Increase in unused tax losses
Non taxable gain
Expenses eligible for double
deduction
Balancing charge
Other items
Transferred (from)/ to deferred
income tax liabilities
(Over)/ Under provision in
prior years
2010
RM
2009
RM
1,402,050
(203,685)
(1,669,000)
(470,635)
17,594,691
4,398,672
-
4,529,984
(6,919,504)
(2,959,190)
4,216
(11,660)
(11,873)
2,825,573
(454,168)
(1,669,000)
(266,950)
(203,685)
(470,635)
1,104,950
799,862
(1,413,900)
490,912
17,612,490
4,403,122
(415)
3,840,589
(7,236,768)
(2,121,320)
-
(270,457)
(4,279)
2,513,483
(19,005)
(1,413,900)
(308,950)
799,862
490,912
Group
2010
RM
2009
RM
1,335,000
(125,183)
1,000,000
2,209,817
15,820,209
3,955,052
-
2,359,377
(4,844,800)
(2,959,190)
-
-
(4,571)
2,825,573
3,559
1,000,000
2,335,000
(125,183)
2,209,817
1,100,000
760,814
600,000
2,460,814
10,883,325
2,720,831
-
3,718,511
(5,419,030)
(2,121,320)
-
(250,341)
(3,897)
2,474,874
(19,628)
600,000
1,700,000
760,814
2,460,814
Company
21. Income Tax
Subject to agreement by the Inland Revenue Board, the Company has tax exempt account under
Schedule 7A of the Income Tax Act 1967 and tax exempt account under Section 12 of the Income Tax
(Amendment) Act, 2001 to frank the payment of dividends out of approximately RM38,300,000 of its
retained profits as at 30th June, 2010 without incurring any additional tax liability.
The Finance Act 2007 introduced a single tier company income tax system with effect from year of
assessment 2008. As such, the Section 108 tax credit as at 31st December, 2007 will be available to the
Company until such time the credit is fully utilised or upon expiry of the six year transitional period on
31st December, 2013, whichever is earlier.
75
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Profit attributable to the equity
holders of the Company
Weighted average number of
ordinary shares in issue
Basic earnings per share (sen)
2010
RM
2009
RM
15,064,018
87,031,119
17.31
16,027,316
78,045,000
20.54
Group
2010
RM
2009
RM
13,610,392
87,031,119
15.64
8,422,511
78,045,000
10.79
Company
Profit attributable to the equity
holders of the Company
Weighted average number of
ordinary shares in issue
Adjustment for assumed
exercise of share options
Adjusted weighted average
number of ordinary shares in
issue and issueable
Diluted earnings per share (sen)
2010
RM
2009
RM
15,064,018
87,031,119
-
87,031,119
17.31
16,027,316
78,045,000
5,445,000
83,490,000
19.20
Group
2010
RM
2009
RM
13,610,392
87,031,119
-
87,031,119
15.64
8,422,511
78,045,000
5,445,000
83,490,000
10.09
Company
22. Earnings Per Share
Basic
Basic earnings per share is calculated by dividing the profit after income tax by the weighted average
number of ordinary shares in issue during the financial year.
Fully diluted
For the diluted earnings per share calculation, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential ordinary shares.
The dilutive potential ordinary shares for the year of the Group and of the Company are share options
granted to employees.
Share options are deemed to have been converted into ordinary shares at the beginning of the year or on
the date when the options were granted whichever is the later.
76
Fixed deposits with
licensed banks
Cash and bank balances
Bank overdrafts
2010
RM
2009
RM
149,452
21,356,155
(398,295)
21,107,312
27,065
15,778,329
(582,653)
15,222,741
Group
2010
RM
2009
RM
149,452
16,869,243
-
17,018,695
27,065
12,268,346
-
12,295,411
Company
23. Cash and Cash Equivalents
Cash and cash equivalents included in the respective cash flow statements comprise the following:
273,298,901
-
273,298,901
20,725,436
(8,239,375)
2,138,618
2,882,171
379,032
482,136,822
13,980,673
251,580,918
817,383
58,714,150
10,045,733
-
180,000
180,000
44,429
-
-
43,412
91,603
5,070,347
176,030
177,962
10,500
-
-
(49,864,779)
(180,000)
(50,044,779)
-
-
-
-
-
-
-
-
-
-
-
223,434,122
-
223,434,122
20,769,865
(8,239,375)
2,138,618
2,925,583
17,594,691
470,635
18,065,326
(3,001,308)
15,064,018
487,207,169
14,156,703
501,363,872
251,758,880
827,883
252,586,763
58,714,150
10,045,733
Manufacturing
And Trading
RM
# Others
RM
Eliminations
RM
Total
RM
24. Segmental Reporting
Group
2010
Revenue
External revenue
Inter-segment revenue
Results
Segment results
Finance cost
Share of profit in associated
Companies
Other operating income
Profit before income tax
Income tax
Profit after income tax
Minority interest
Profit after income tax attributable
to equity holders of the company
Other information
Segment assets
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and amortisation
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
*
^
77
226,698,343
-
226,698,343
22,203,554
(10,535,259)
2,735,399
3,241,220
(490,912)
431,391,679
13,397,177
224,261,484
2,563,074
50,780,152
8,421,347
-
350,000
350,000
(59,202)
-
-
26,778
-
2,897,816
69,360
120,612
-
-
-
(42,396,219)
(350,000)
(42,746,219)
-
-
-
-
-
-
-
-
-
-
-
184,302,124
-
184,302,124
22,144,352
(10,535,259)
2,735,399
3,267,998
17,612,490
(490,912)
17,121,578
(1,094,262)
16,027,316
434,289,495
13,466,537
477,756,032
224,382,096
2,563,074
226,945,170
50,780,152
8,421,347
Manufacturing
And Trading
RM
# Others
RM
Eliminations
RM
Total
RM
24. Segmental Reporting (Continued)
Group
2009
Revenue
External revenue
Inter-segment revenue
Results
Segment results
Finance cost
Share of profit in associated
Companies
Other operating income
Profit before income tax
Income tax
Profit after income tax
Minority interes
Profit after income tax attributable
to equity holders of the company
Other information
*Segment assets
Unallocated assets
Total assets
^Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and amortisation
# - Others represent companies in the business of investment holding and letting of properties.
* - Segment assets comprise total current and non-current assets, less tax recoverable and intangible
assets.
^ - Segment liabilities comprise total current and long-term liabilities, less current income tax liabilities
and deferred income tax liabilities.
The Group operates predominantly in Malaysia and accordingly information by geographical location of
the Group is not presented.
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
78
Within 1 year
Between 1 to 5 years
2010
RM
2009
RM
1,526,052
4,252,844
5,778,896
-
-
-
Group and Company
2010
RM
2009
RM
-
-
-
11,282,434
6,167,264
(1,647,520)
7,208,002
(2,930,241)
-
-
-
-
5,244,538
(2,424,886)
(177,346)
1,238,446
(810,068)
31,480
Group
2010
RM
2009
RM
(17,090,314)
32,774,465
-
9,296,350
7,310,812
(1,647,520)
7,208,002
(2,930,241)
-
(5,682,877)
34,089,404
(7,460,069)
4,789,594
(2,257,590)
(177,346)
1,238,446
(810,068)
5,000
Company
25. Lease Commitments
With subsidiaries
- sales to
- purchases from
- proceeds from disposal of
property, plant and
equipment
With subsidiary companies
of associated companies
- purchases from
- current account balances
as at 30th June (net)
With companies in which
certain Directors have
financial interests
- sales to
- purchases from
- current account balances
as at 30th June (net)
With a firm in which a
Director is a partner
- professional fees paid
- charged to income
statement
25. Related Parties Transactions
Group and Company
The Group and the Company have an effective annual commitment under a noncancellable operating
lease in respect of plant and equipment which expires as follows:-
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
The Directors are of the opinion that the above transactions have been entered into in the normal course
of business and have been established on terms and conditions that are not materially different from
that obtainable in transactions with unrelated parties.
79
27. Financial Instruments
Financial Risk Management Objectives and Policies
The operations of the Group are subject to a variety of financial risks, including credit risk, foreign currency
exchange risk, interest rate risk, liquidity risk and cash flow risk and market risk. The Group has formulated
guidelines and policies as well as internal controls which seek to minimise the Group’s exposure to risks
associated with the financing, investing and operating activities of the Group.
(a) Credit risk
(b) Foreign currency exchange risk
(c) Interest rate risk
(d) Liquidity risk and cash flow risk
(e) Market risk
Fair Values
In the opinion of the Directors, the carrying amounts of financial assets and liabilities of the Group at the
balance sheet date are not materially different from their fair values.
The Group has a credit policy in place to evaluate customers requiring credit over a certain amount or
period. Credit risk is further minimised and is monitored via strictly limiting the Group’s associations to
business partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via
the Group’s management reporting procedures.
The Group is exposed to currency risk as a result of the Group’s transactions with foreign vendors of
plant and equipment and foreign trade receivables and payables. The Group monitors the movements
in foreign currency exchange rates closely to ensure their exposure is minimised.
The Group’s exposure to interest rate risk arises from interest-bearing borrowings of which the Group
reviews and monitors the interest rates at regular intervals.
The Group actively manages its operating cash flows and the availability of funding so as to ensure
that all repayment and funding needs are met. As part of its overall prudent liquidity management, the
Group maintains sufficient levels of cash and cash equivalents to meet its working capital requirements
and prudently balances its portfolio of short term and long term funding requirements.
The Group is principally involved in the manufacture of extruded corn snacks, chocolates, cakes and
other snack products and is therefore subject to certain risks inherent in the food-processing industry.
These risks include, inter-alia the possible increase in the operating and capital costs due to increase in
the cost of labour and raw materials, changes in consumer demands and changes in general economic
conditions. The Group seeks to limit these risks through, inter-alia, expansion of both existing and new
markets, developing and maintaining a diversified market network and investment in automated
machinery to improve efficiency.
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
80
Company
2010
RM
2009
RM
19,487,295 11,462,237
28. Contingent Liabilities – Unsecured
Corporate guarantees given to various financial
institutions for facilities granted to subsidiary
companies
- outstanding balances as at 30th June
Company
Subsequent to balance sheet date;-
i)
ii)
iii)
All amounts are stated in Ringgit Malaysia, the presentation currency of the Group.
29. Subsequent Events
30. Currency
as announced on Bursa Malaysia Securities Berhad on 23rd August, 2010, the Company, had disposed
of its entire equity interest in Lay Hong Berhad, its associated company in the open market and via off
market transactions on a willing buyer willing seller basis for a total consideration of RM11,851,760,
resulting in an impairment on this investment of RM4,545,126.
the directors had on 15th October, 2010 declared an interim dividend of 1.5% tax exempted for the
financial year ended 30th June, 2010 amounting to RM1,440,203 to be paid on 26th November, 2010.
Effective from 1st July, 2010, the accounts of TPC Plus Berhad shall be consolidated with that of the
Group.
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
81
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
We, DATO’ SRI LIEW KUEK HIN, SSAP, DIMP, PJK, JP and DATO’ SRI LIEW YEW CHUNG, SSAP, DIMP
being two of the Directors of the Company, do hereby state that in the opinion of the Directors, the financial
statements set out on pages 37 to 80 are drawn up in accordance with Financial Reporting Standards and
the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the state of affairs
of the Group and of the Company as at 30th June, 2010 and of their results and cash flows for the year ended
on that date.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors.
I, DATO’ SRI LIEW YEW CHUNG, SSAP, DIMP being the Director responsible for the financial management
of LONDON BISCUITS BERHAD, do solemnly and sincerely declare that the financial statements set out on
pages 37 to 80 are, to the best of my knowledge and belief, correct and I make this solemn declaration
conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations
Act, 1960.
Subscribed and solemnly declared )
)
by the abovenamed at Kuala Lumpur )
)
This 25th October, 2010 )
Before me:-
ASMAH BT BUROH
Commissioner for Oaths
No. W456
Kuala Lumpur
Directors’ Statements
Statutory Declaration
DATO' SRI LIEW KUEK HIN,SSAP, DIMP, PJK, JP
Director
DATO’ SRI LIEW YEW CHUNG, SSAP, DIMP
Director
KUALA LUMPUR
25th October, 2010
82
List of Properties - 30 June 2010
Properties Held by the Group
Location
H.S.(D) No 191719
PTD No 91908 &
H.S.(D) No 191720
PTD No 91909
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S. (D) No 191403
PTD No 89457 &
H.S.(D) No 191404
PTD No 89458
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S. (D) No 136985
PTD No 111739
H.S.(D) No 136986
PTD No 111740
H.S.(D) No 136987
PTD No 111741; &
H.S.(D) No 136988
PTD No 111742
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S. (D) No 136983
PTD No 111687
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S.(D) No 136984
PTD No 111738
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S.(D) No 136874
PTD No 111687
Mukim of Plentong
District of Johor Bahru
State of Johor
Industrial land
with office and
factory building
for manufacturing
of corn extruded
products
Industrial land
with office and
factory building
for warehouse
and manufacture
of bakery products
Industrial land
with office and
factory building
for warehouse
and manufacture
of bakery products
Industrial land
with office and
factory building
for warehousing
Industrial land
with office and
factory building
for warehousing
Industrial land with
office and factory
building for
warehousing
Land Area
- 2,378.32 sq m
Land Area
- 1,401.26 sq m
Land Area
- 5,351.21 sq m
Land Area
- 1,337.80 sq m
Land Area
- 1,337.80 sq m
Land Area
- 1,213.28 sq m
15 years
15 years
11 years
11 years
11 years
10 years
3,430
1,666
6,370
1,323
1,323
1,078
2008
(1995)
(Freehold)
2008
(1995)
(Freehold)
2008
(1999)
(Freehold)
2008
(1999)
(Freehold)
2008
(1999)
(Freehold)
2008
(2000)
(Freehold)
Date of lastRevaluation(Acquisition)
(Tenure)
Description / Existing Use
Approximate Size
Approximate age of
Property
Net Book Value as at
30 June 2010RM’000
LONDON BISCUITS BERHAD
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
83
H.S.(D) No 136873
PTD No 111686
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S. (D) No 136989
PTD No 111743
Mukim of Plentong
District of Johor Bahru
State of Johor
H.S.(D) No 391663
PTD No 177199
Mukim of Plentong
District of Johor Bahru
State of Johor
Unit 12, 25th Floor
Cable TV Tower
No 9 Hoishing Road
Tsuen Wan, Hong Kong
Industrial land with
office and factory
building for
warehousing
Industrial land with
office and factory
building for
warehousing
Industrial Land
Warehouse
Land Area
- 891.80 sq m
Land Area
- 5423.03 sq m
Land Area
- 10,494.66 sq m
Land Area
- 292.46 sq m
10 years
7 years
2 years
1 year
2008
(2000)
(Freehold)
2008
(2003)
(Freehold)
-
(2009)
(Freehold)
(2009)
(Leasehold)
Location
Date of lastRevaluation(Acquisition)
(Tenure)
Description / Existing Use
Approximate Size
Approximate age of
Property
Net Book Value as at
30 June 2010RM’000
LONDON BISCUITS BERHAD (cont’d)
PN 6715
Lot No 51709
Mukim of Plentong
District of Johor Bahru
State of Johor
Industrial land
with a two storey
office with a
single storey
factory for
manufacturing of
bakery products
Land Area
- 8,093.72 sq m
25 years2005
(1985)
(Leasehold –
60 years)
H.S. (D) No 124988
PTD No 71051
Mukim of Plentong
District of Johor Bahru
State of Johor
Industrial land
with a two storey
office with a
single storey
factory for
manufacturing of
bakery product
Land Area
- 8,093.72 sq m
25 years
4,041
2,1862005
(1985)
(Leasehold –
60 years)
KINOS FOOD INDUSTRIES SDN BHD
KIM CHOAW SDN BHD
Note : The Group and Company adopts the policy to revalue its landed properties every five (5) years.
Revalued by Independent Professional Value
882
4,704
15,067
2,026
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
85
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Authorised Share Capital : RM150,000,000.00
Issued and Paid-Up Share Capital : RM96,013,500.00
Class of Shares : Ordinary Share at RM 1.00 each
Voting Rights : One (1) vote per share
List of Substantial Shareholders
Notes :
i.
ii.
iii.
iv.
v.
vi.
vii.
Analysis of Shareholders 3 November 2010
Meileelanusa Sdn Bhd
Dato’ Sri Liew Yew Chung, SSAP,DIMP
Datin Sri Lim Yook Lan
Dato’ Liew Yew Cheng, DIMP
Liew Yet Mei
Dato’ Liew Yet Lee, DIMP
Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
337,396,688
1,381,785
224,487
75,231
39,671
39,671
250
-
37,775,998
38,933,296
39,082,552
39,118,112
39,118,112
39,157,533
-
39.34
40.55
40.71
40.74
40.74
40.78
i,iv
i,iii
i,v
i,vii
i,vi
i,ii
38.95
1.44
0.23
0.08
0.04
0.04
0.00
Name No of Shares % No of Shares
Direct Indirect
%
1.
2.
3.
4.
5.
6.
7.
Directors’ Interests in the Company
Dato’ Sri Liew Kuek Hin, SSAP, DIMP, PJK, JP
Datin Sri Lim Yook Lan
Dato’ Liew Yew Chung, SSAP, DIMP
Dato’ Liew Yew Cheng, DIMP
Liew Yet Mei
Dato’ Liew Yet Lee, DIMP
Dato’ Cheong Siew Kai, DJMK, AMS, JP
Huang Yan Teo, PIS, PPN
Leslie Looi Meng
250
224,487
1,381,785
75,231
39,671
39,671
-
-
-
39,157,533 i, ii
38,933,296 i, iii
37,775,998 i, iv
39,082,552 i, v
39,118,112 i, vii
39,118,112 i, vi
-
-
-
40.78
40.55
39.34
40.71
40.74
40.74
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Name No of Shares % No of Shares
Direct Indirect
%
Rights under ESOS
Direct Indirect
1.
2.
3.
4.
5.
6.
7.
8.
9.
Deemed interested by virtue of their interest in Meileelanusa Sdn Bhd
Deemed interested by virtue of the shares held by his spouse, Datin Sri Lim Yook Lan, and his children,
Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her spouse, Dato’ Sri Liew Kuek Hin, and her children,
Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by his parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and his siblings, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by his parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and his siblings, Dato’ Liew Yew Chung, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and her siblings, Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and her siblings, Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Liew Yet Mei.
0.00
0.23
1.44
008
0.08
0.04
-
-
-
85
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
List of 30 Top Shareholders as at 3 November 2009
Notes :
i.
ii.
iii.
iv.
v.
vi.
vii.
Distribution of Shareholders
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% and above of issued shares
TOTAL
41
565
2,460
798
62
3
4,020
1,112
433,625
12,810,248
24,287,462
24,089,465
34,391,588
96,013,500
0.00
0.45
13.34
25.30
25.09
35.82
100.00
Size of Shareholdings No of Holders No of Shares
Names
1
2
3
4
5
%No of Shares
%
Deemed interested by virtue of their interest in Meileelanusa Sdn Bhd.
Deemed interested by virtue of the shares held by his spouse, Datin Sri Lim Yook Lan, and his children,
Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her spouse, Dato’ Sri Liew Kuek Hin, and her children,
Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by his parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and his siblings, Dato’ Liew Yew Cheng, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by his parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and his siblings, Dato’ Sri Liew Yew Chung, Liew Yet Mei and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan,
and her siblings, Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng and Dato’ Liew Yet Lee.
Deemed interested by virtue of the shares held by her parents, Dato’ Sri Liew Kuek Hin and Datin Sri Lim Yook Lan, and
her siblings, Dato’ Sri Liew Yew Chung, Dato’ Liew Yew Cheng and Liew Yet Mei.
Meileelanusa Sdn Bhd
CIMB Group Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Meileelanusa Sdn Bhd
EB Nominees (Tempatan) Sendirian Berhad
- Pledged Securities Account For Meileelanusa Sdn Bhd
Cartaban Nominees (Asing) Sdn Bhd
- Exempt An For Jefferies And Company Incorporated New York
Alliancegroup Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account For Meileelanusa Sdn Bhd
20,315,588
8,320,000
5,756,000
3,000,000
2,999,000
21.16
8.67
5.99
3.12
3.12
86
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Names %No of Shares
2,194,900
1,380,800
1,321,000
1,175,800
706,900
630,000
516,400
440,400
438,800
430,000
372,000
354,000
339,800
321,700
300,000
279,700
260,000
2.29
1.44
1.38
1.22
0.74
0.66
0.54
0.46
0.46
0.45
0.39
0.37
0.35
0.34
0.31
0.29
0.27
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Alliancegroup Nominees (Tempatan) Sdn Bhd
- Pheim Asset Management Sdn Bhd for Employees
Provident Fund Board
Mayban Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Dato’ Sri Liew Yew Chung
Koperasi Sri Nilam Berhad
Tan Ching Ching
Low Cheng Peng
Mayban Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Tay Ong Ngo @ Tay Boon Fang
Citigroup Nominees (Asing) Sdn Bhd
- UBS AG Singapore for Allied Asia Investments Limited
Mayban Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Lee Chong Gee
HSBC Nominees (Asing) Sdn Bhd
- Exempt an for HSBC Private Bank (Suisse) S.A. (Hong Kong AC CL)
Lim Soon Huat
Tan Kee Hock
Wong Aun Phui
Teong Peck Joo
Fu Ah Goh @ Foo Sek Cheng
Pang Seng Wee
Multi-purpose Insurans Bhd
ECML Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Leong Kam Chee
87
23
24
25
26
27
28
29
30
Amsec Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Than Ah Loh @ Thab Boon Chong
Datin Sri Lim Yook Lan
HLG Nominee (Tempatan) Sdn Bhd
- Pledged Securities Account For Seh Choi Hoo [CCTS]
Kurnia Insurans (Malaysia) Berhad
Chee Ying Lin (See Ah Tai)
Cheng Hon Sang
HLB Nominees (Tempatan) Sdn Bhd
- Pledged Securities Account for Lim Fong Yee (Jane)
RHB Capital Nominees (Tempatan) Sdn Bhd
- Wong Lok Yee
250,000
224,487
220,100
206,000
200,000
200,000
200,000
193,000
53,546,375
0.26
0.23
0.23
0.21
0.21
0.21
0.21
0.20
55.78
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Names %No of Shares
88
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
NOTICE IS HEREBY GIVEN THAT the Twenty-Ninth Annual General Meeting of the Company will be held at
The London Room, No 1, Jalan Istimewa 2, Taman Perindustrian Desa Cemerlang, 81800 Ulu Tiram, Johor Darul
Takzim, Malaysia, on Friday, 24 December 2010 at 12.00 pm for the following purposes :-
Notice of the Twenty-Ninth Annual General Meeting
Ordinary Business:
To receive and consider the Audited Financial Statements of the Company and of the Group
for the financial year ended 30 June 2010 together with the Reports of the Directors and
Auditors thereon.
To approve payment of Directors' for the financial year ended 30 June 2010.
To consider and, if thought fit, pass the following resolutions:
"THAT Dato' Sri Liew Kuek Hin, retiring pursuant to Section 129 of the Companies Act
1965, be and is hereby re-appointed as Director of the Company to hold office until the
conclusion of the next Annual General Meeting."
"THAT Datin Sri Lim Yook Lan, retiring pursuant to Section 129 of the Companies Act
1965, be and is hereby re-appointed as Director of the Company to hold office until the
conclusion of the next Annual General Meeting."
"THAT Dato' Cheong Siew Kai, retiring pursuant to Section 129 of the Companies Act
1965, be and is hereby re-appointed as Director of the Company to hold office until the
conclusion of the next Annual General Meeting."
To re-elect Dato' Liew Yew Cheng, who shall retire by rotation pursuant to Article 84
of the Company's Article of Association.
To re-elect Ms Liew Yet Mei, who shall retire by rotation pursuant to Article 84 of the
Company's Article of Association.
To re-appoint Messrs. Wong Weng Foo & Co as the Auditors for the ensuing year and to
authorize the Directors to fix their remuneration.
SPECIAL BUSINESS:
To consider and if thought fit, to pass with or without modification the following
Resolutions :-
Special Resolution - Amendments to the Articles of Association of the Company
"THAT the proposed alterations, modifications, amendments or deletions to the Articles
of Association of the Company as contained in the Appendix A enclosed in the Annual
Report, be and are hereby approved."
1.
2.
3.
4.
5.
6.
7.
Resolution 1
Resolution 2
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Resolution 9
AGENDA
89
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Ordinary Resolution I - Authority to Issue Shares
"THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals
of the relevant Governmental and/or regulatory authorities, the Directors be and are
hereby empowered to issue shares in the Company, at such time and upon such terms
and conditions and for such purposes as the Directors may, in their absolute discretion
deem fit, provided that the aggregate number of shares issued pursuant to this
resolution does not exceed ten per centum (10%) of the issued share capital of the
Company for the time being and that the Directors be and are also empowered to obtain
the approval from Bursa Malaysia Securities Berhad for the listing and quotation of the
additional shares so issued and that such authority shall continue to be in force until the
conclusion of the next Annual General Meeting of the Company."
Ordinary Resolution II - Proposed Renewal Share Buy-Back Mandate
"THAT subject to the Companies Act, 1965 (the "Act") rules, regulation and orders made
pursuant to the Act, provisions of the Company's Memorandum and Articles of Association
and the Listing Requirements ("LR") of Bursa Malaysia Securities Berhad ("BMSB") and
any other relevant authorities, the Directors of the Company, be and are hereby
authorized to make purchases of ordinary shares of RM1.00 each in Company's issued
and paid-up ordinary share capital on BMSB, subject further to the following :-
(a)
(b)
(c)
AND THAT the Directors of the Company, be and are hereby authorized to take all such
steps as are necessary or expedient to implement or to effect the purchase(s) of the Shares;
AND the Directors of the Company, be and are hereby authorized to deal with any Shares so
purchased and any existing treasury shares ("the Said Shares") in the following manners :
(i)
(ii)
(iii)
8.
9.
Resolution 10
Resolution 11
the maximum number of shares which maybe purchased and/or held by the
Company, shall be equivalent to ten per centum(10%) of the issued and paid-up
ordinary share capital of the Company ("Shares") for the time being;
the maximum fund to be allocated by the Company for the purpose of purchasing
the Shares, shall not exceed the retained profits and/or the share premium account
of the Company. As of 30 June 2010, the audited retained profits and share premium
account of the Company were RM70,764,053.00 and RM13,774,466.00
respectively; and
the authority conferred by the Resolution as set out in paragraph (a) and (b) above
will commence immediately upon passing of this Ordinary Resolution and will
expire at the conclusion of the next Annual General Meeting ("AGM") of the
Company, unless earlier revoked or varied by Ordinary Resolution of the Shareholders
of the Company in a General Meeting or the expiration of the period within which
the next AGM after that date is required by law to be held, whichever occurs first and,
in any event, in accordance with the provisions of the LR of BMSB or any other
relevant authorities;
cancel the Said Shares;
retain part of the Said Shares as treasury shares and cancel the remainder;
distribute all or part of the Said Shares as dividends to Shareholders, and/or cancel
all or part of them;
90
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
or in any other manner as may be prescribed by the Act, rules, regulations and orders
made pursuant to the Act and the LR of BMSB and any other relevant authorities for the
time being in force AND THAT the authority to deal with the Said Shares shall continue
to be valid until all the Said Shares have been dealt with by the Directors of the
Company."
Ordinary Resolution III - Proposed Renewal Shareholders' Mandate for Recurrent
Related Party Transactions of a Revenue or Trading Nature
"THAT approval be and is hereby given to the Company to enter into Recurrent Related
Party Transactions of a Revenue or Trading Nature and to give effect to the specified
Recurrent Related Party Transactions with Khee San Food Industries Sdn Bhd and Teck
Ping Chan Agriculture Sdn Bhd, as stated in Section 2.3, Part B of the Circular to
Shareholders dated 2 December 2010 which are necessary for the day-to-day operations
of the Company, provided that: -
(i)
(ii)
(a)
(b)
(c)
whichever is earlier;
AND THAT the Directors and the Secretaries of the Company be and are hereby autho-
rised to complete and do all such acts and things as they may consider expedient or
necessary to give effect to the Proposed Shareholders' Mandate."
10.
To transact any other ordinary business for which due notice shall have been given.11.
Resolution 12
the transactions are carried out in the ordinary course of business and are on normal
commercial terms which are not more favourable to the Related Parties than those
generally available to the public and not detrimental to the Minority Shareholders;
and
disclosure is made in the annual report of the aggregate value of transactions
conducted pursuant to the Shareholders' Mandate during the financial year;
AND THAT such approval shall continue to be in force until:
the conclusion of the next Annual General Meeting ("AGM") of the Company at
which time it will lapse, unless by a resolution passed at the Meeting the authority is
renewed; or
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 Malaysian Companies Act, 1965 ("the
Act") (but shall not extend to such extension as may be allowed pursuant to Section
143(2) of the Act); or
revoked or varied by resolution passed by the Shareholders in General Meeting;
By Order of the Board
HOH LEONG CHING (MAICSA 7006654)HOH CHEE MUN (MIA 8891)SecretariesJohor Bahru2 December 2010
91
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Notes :-
i)
ii)
iii)
iv)
v)
Explanatory Note On Special Business :-
i)
ii)
iii)
iv)
v)
A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote
in his stead. A proxy may but need not be a Member of the Company and the provision of Section 149(1)(b) of
the Companies Act, 1965 shall not apply to the Company.
Where a Member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the
proportion of his holdings to be represented by each proxy.
Where a Member is an authorized Nominee as defined under the Central Depositories Act, it may appoint at least
one (1) proxy, in respect of each Securities Account it holds with ordinary shares of the Company standing to the
credit of the said Securities Account.
The Proxy Form must be signed by the Appointor or his Attorney duly authorized in writing, or if the Appointor is
a corporation, either under its Common Seal or under the hand of an Officer or Attorney duly authorized.
The Proxy Form must be completed and deposited at the Registered Office located at No 1, Jalan Istimewa Dua,
Taman Perindustrian Desa Cemerlang, 81800 Ulu Tiram, Johor Darul Takzim, Malaysia, not less than forty-eight
(48) hours before the time appointed for holding the Meeting or at any adjournment thereof.
The proposed Special Resolution No.9, if passed, will ensure consistency with the provisions of the Companies
Act, 1965 and in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad and any
prevailing laws, rules, regulations, orders, guidelines or requirements of the relevant authorities thereat.
The proposed Ordinary Resolution No.10, if passed, will give the Directors, the authority to issue and allot
ordinary shares from the unissued capital of the Company, for such purposes as the Directors consider would be
in the interest of the Company and also to avoid any delay and cost involved in convening a General Meeting,
expire at the conclusion of the next Annual General Meeting or the expiration of the period within which the next
Annual General Meeting is required by law, to be held, whichever is earlier.
The general mandate sought for issue of shares up to 10% of the issued capital of the Company is a renewal to
the general mandate which was approved by shareholders at the AGM held last year.
The renewal of the general mandate is to provide flexibility to the Company for any possible fund raising
exercises including but not limited to issuance of new shares for funding investment project(s), working capital
and/or acquisitions.
The proposed Ordinary Resolution No 11, if passed, will empower the Director to purchase LBB shares of up to
ten percent (10%) of the issued and paid-up shares capital of the Company. The detailed information on the
Proposed Renewal Share Buy-Back Mandate is set out in the Circular to Shareholders dated 2 December 2010
which will be despatched together with the LBB 2010 Annual Report.
Ordinary Resolution No 12, is in relation to be approval on the Shareholders Mandate on Recurrent Related
Party Transactions and if passed, will allow its subsidiaries to enter into Recurrent Party Transactions in
accordance with Paragraph 10.09 of the Main Market Listing Requirements of the Bursa Malaysia Securities
Berhad. The explanatory notes on Resolution 12 are set out in the Circular to Shareholders dated 2 December
2010 attached to the Annual Report.
Appendix A
Article 63
(Business at
meetings)
Article 64
(Requirement
in notice
calling
meeting)
Article No Existing Provision New Provision
Subject always to the provisions of
Section 151 of the Act, no business shall
be transacted at an Extraordinary
General Meeting except business of
which notice has been given in the
notice convening the meeting and no
business shall be transacted at an
Annual General Meeting other than
business of which notice has been give
aforesaid, with the exception of
declaring a dividend, the consideration
of the accounts, balance sheets and the
report of the Directions and auditors,
the election of Directors, and the
appointment and fixing of the
remuneration of auditors.
Subject always to be provisions of
Section 151 of the Act, no business shall
be transacted at an Extraordinary
General Meeting except business of
which notice has been given in the
notice convening the meeting and no
Business shall be transacted at an
Annual General Meeting other than
business of which notice has been give
aforesaid, with the exception of
declaring a dividend, the laying of the
financial statements, income
statement, balance sheets and the
report of the Directors and auditors, the
election of Directors, and the
appointment and fixing of the
remuneration of auditors.
In every notice calling a General
Meeting there shall appear with
reasonable prominence a statement
that a Member entitled to attend and
vote is entitled to appoint one or more
proxies to attend and vote instead of
him, and that a proxy may, but need not
be a Member and that where a Member
appoints more than one (1) proxy, the
appointment shall be invalid unless he
specifies the proportion of his holdings
to be represented by each proxy. Where
a Member is an Authorised Nominee, 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.
In every notice calling a General
Meeting, there shall appear with
reasonable prominence a statement
that a Member entitled to attend and
vote is entitled to appoint not more
than two proxies to attend and vote
instead of him, and that a proxy may,
but need not be a Member and that
where a Member appoints more than
one (1) proxy, the appointment shall be
invalid unless he specifies the
proportion of his holdings to be
represented by each proxy. Where a
Member is an Authorised Nominee, 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.
92
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
Appendix A (Continued)
Article 149
(Payment by
cheque)
Article No Existing Provision New Provision
Any dividend, interest, or other money
payable in cash in respect of shares may
be paid by cheque or warrant sent
through the post directed to the
registered address of the Holder as
shown in the Register of Member or
the Record of Depositors (as the case
may be) or to such person and to such
address as the Holder may in writing
direct. Every such cheque or warrant
shall be made payable to the order of
the person to whom it is sent, and the
payment of any such cheque or warrant
shall operate as a good discharge to the
Company in respect of the dividend
represented thereby, notwithstanding
that it may subsequently appear that
the same has been stolen or that the
endorsement thereon has been forged.
Every such cheque or warrant shall be
sent at the risk of the person entitled to
the money thereby represented.
Any dividend, interest, or other money
payable in cash in respect of shares may
be paid by cheque or warrant sent
through the post directed to the
registered address of the person
whose name appear in the Record of
Depositors or to such person and to
such address as the Holder may in
writing direct or by way of telegraphic
transfer or electronic transfer or
remittance to such account as
designated by such holder or the
person entitled to such payment.
Every such cheque or warrant or
telegraphic transfer or electronic
transfer or remittance shall be made
payable to the order of the person to
whom it is sent and the payment of any
such cheque or warrant or telegraphic
transfer or electronic transfer or
remittance shall operate as a good and
full discharge to the payment
represented thereby, notwithstanding
that in the case of payment by cheque
or warrant, it may subsequently appear
that the same has been stolen or that
endorsement thereon has been forged.
Every such cheque or warrant or
telegraphic transfer or electronic
transfer or remittance shall be sent at
the risk of the person entitled to the
money represented thereby.
93
Annual Report
2 0 1 0LONDON BISCUITS BERHAD
(72057-H)
PROXY FORMI/We,_____________________________________________ NRIC No: ______________________________of ___________
____________________________________________________________________________________________________
____________________________________________________________________________________________________
being a Member / Members of LONDON BISCUITS BERHAD, hereby appoint _____________________________________
_______________________________________ NRIC No:____________________________________________________
of __________________________________________________________________________________________________
____________________________________________________________________________________________________
or failing him/her, the Chairman of the Meeting, as *my/our proxy to attend and vote for *me/us on *my/our behalf at the
Twenty-Ninth Annual General Meeting of the Company to be held at The London Room, No 1, Jalan Istimewa 2, Taman
Perindustrian Desa Cemerlang, 81800 Ulu Tiram, Johor Darul Takzim, Malaysia, on Friday, 24 December 2010, at 12.00 pm
and at any adjournment thereof *for / against the resolution(s) to be proposed thereat:-
* My/Our proxy(ies) is/are to vote as indicated below:-
RESOLUTIONS For Against
Resolution 1
Resolution 2
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Resolution 9
Resolution 10
Resolution 11
Resolution 12 (Please indicate with “X” how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion).
Dated this ______ of _____________ 2010 __________________________________________
[Signature/Common Seal of Shareholder(s)]
NOTES: -
i)
ii)
iii)
iv)
v)
Number of shares held
CDS Account No.
(FULL NAME IN BLOCK LETTERS)
(FULL ADDRESS)
(FULL NAME IN BLOCK LETTERS)
(FULL ADDRESS)
A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a Member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
Where a Member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by each proxy.
Where a Member is an authorized Nominee as defined under the Central Depositories Act, it may appoint at least one (1) proxy, in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.
The Proxy Form must be signed by the Appointor or his Attorney duly authorized in writing, or if the Appointor is a corporation, either under its Common Seal or under the hand of an Officer or Attorney duly authorized.
The Proxy Form must be completed and deposited at the Registered Office located at No 1, Jalan Istimewa Dua, Taman Perindustrian Desa Cemerlang, 81800 Ulu Tiram, Johor Darul Takzim, Malaysia, not less than forty-eight (48) hours before the time appointed for holding the Meeting or at any adjournment thereof.
LONDON BISCUITS BERHAD(Company No : 72057-H) (Registered in Malaysia)
The Company Secretaries
LONDON BISCUITS BERHAD (72057-H)
No 1, Jalan Istimewa 2,
Taman Perindustrian Desa Cemerlang,
81800 Ulu Tiram,
Johor Darul Takzim,
Malaysia.
Fold here for sealing
Fold along this line (1)
AFFIX
STAMP
Fold along this line (2)