OUR - ChartNexus - Investor Relationsir.chartnexus.com/kwantas/docs/ar2009.pdf · 2012-01-11 · Contents Notice of 14th Annual General Meeting 03 Statement Accompanying 08 Notice

At Kwantas, we enhance the lives of our employees, shareholders and community by establishing good business practices, making sound investments, and undertakingsocial responsibilities.

We will endeavour to accelerate efficiency and operate an effective management to achieve satisfactory results for our customers & investors.

OUR MISSION

inside cover:Layout 1 11/24/09 2:54 PM Page 1

Contents

Notice of 14th Annual General Meeting 03

Statement Accompanying 08Notice of 14th Annual General Meeting

5-Year Group Financial Highlights 10

Share Performance 11

5-Year Group Statistics and Performances 12

Corporate Information 14

Corporate Structure 16

Directors’ Profile 18

Chairman’s Statement 21

Operations Review 23

Recognition Received 2002-2008 25

Corporate Governance 26

Statement on Internal Control 29

Statement of Directors’ Responsibilities 30in Audited Financial Statements

Compliance Statements and Additional 31Compliance Information

Audit Committee 32

Financial Statements 35

Properties of the Group 90

Shareholdings Statistics 95

Proxy Form

Kwantas FA (1-24):layout 11/25/09 6:18 PM Page 1

WE HAVE AMBITIOUSGOALS

Our leadership is rooted in agricultural-based resources that are clean,renewable, readily available, and in growing demand.


3Kwantas Corporation Berhad 356602-W

Notice Of 14th Annual General Meeting

NOTICE IS HEREBY GIVEN that the fourteenth annual general meeting of the members of the Company will be held at K-63-3rd Floor, SignatureOffice, KK Times Square, Off Coastal Highway, 88100 Kota Kinabalu, Sabahon Wednesday, 30 December 2009 at 10.00 a.m. for the following purposes:

AGENDA

1. To receive and adopt the audited financial statements for the year ended 30 June 2009 together with the Directors’ andAuditors’ Reports thereon.

2. To approve a first and final single tier dividend of 2 sen per ordinary share of RM0.50 each pursuant to Paragraph 12Bof Schedule 6 of the Income Tax Act 1967 for the year ended 30 June 2009.

3. To approve the payment of Directors’ fees for the year ended 30 June 2009.

4. To re-elect the following Directors, who retire by rotation pursuant to Article 73 of the Company’s Articles of Associationas Directors of the Company:

(a) Dato’ Mohd Sarit Bin Haji Yusoh(b) Ooi Jit Huat(c) Kwan Jin Nget

5. To re-appoint Messrs Ernst & Young as Auditors of the Company and authorise the Directors to fix their remuneration.

6. To transact any other ordinary business of the Company for which due notice shall have been given.

7. As SPECIAL BUSINESS to consider and, if thought fit, pass the following resolutions:

ORDINARY RESOLUTION NO. 1AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965.

That pursuant to Section 132D of the Companies Act, 1965 and subject always to the approval of the relevantauthorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to timeupon such terms and conditions and for such purposes as the Directors may in their discretion deem fit provided thatthe aggregate number of shares issued pursuant to this resolution does not exceed ten percent (10%) of the issuedshare capital of the Company for the time being and that the Directors be and are also empowered to obtain theapproval for listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and thatsuch authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 7

Resolution 5

Resolution 6

Resolution 8


4Annual Report 2009

Notice Of 14th Annual General Meeting continued

ORDINARY RESOLUTION NO. 2PROPOSED RENEWAL OF THE EXISTING SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTYTRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING SECTIONS 2.2 AND 2.3

That subject always to the compliance with the Companies Act, 1965, the Memorandum and Articles of Association of theCompany, the Listing Requirements of Bursa Malaysia Securities Berhad and all other applicable laws, regulation andguidelines, approval be and is hereby given to the Company and its subsidiaries to enter into recurrent related partytransactions of a revenue and trading nature which are necessary for the day-to-day operations of the Company and itssubsidiaries from time to time, the nature and the contracting parties of which referred to under Sections 2.2 and 2.3 of theCircular to Shareholders dated 03 December 2009 provided that

(i) the transactions are in the ordinary course of business on an arm’s length basis, on normal commercial terms and onterms not more favourable to the related parties than those generally available to the public and are not detrimentalto the minority shareholders of the Company; and

(ii) disclosure is made in the annual report of the breakdown of the aggregate value of the transactions conducted pursuantto this shareholders’ mandate during the financial year of the Company based on the following information:

(a) the types of the recurrent transaction made; and

(b) the names of the related parties involved in each type of the recurrent transactions made and their relationshipwith the Company.

And That such authority shall commence upon the passing of this resolution and shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting of the Company following the general meeting at which suchmandate was passed, at which time it will lapse, unless by a resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next Annual General Meeting after the date it is required to be heldpursuant to Section 143(1) of the Companies Act, 1965 but shall not extend to such extension as may be allowedpursuant to Section 143(2) of the Companies Act, 1965; or

(c) revoked or varied by resolution passed by the shareholders in general meeting

whichever is earlier.

And Further That authority be and is hereby given to the Directors of the Company to complete and do all such acts andthings (including executing such documents as may be required) to give effect to the transactions contemplated and/orauthorised by this Ordinary Resolution.

Resolution 9




ORDINARY RESOLUTION NO. 3PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE UP TO TEN PERCENT (10%) OF THEISSUED AND PAID-UP SHARE CAPITAL OF THE COMPANY

That subject always to the Companies Act, 1965 (“Act”), provisions of the Company’s Memorandum and Articles ofAssociation and the requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authorities,and other relevant approvals, the Directors of the Company be and are hereby authorized to renew the authority to purchasethe Company’s ordinary shares of RM0.50 each (“Shares”) through Bursa Securities, subject to the following:-

(a) the maximum number of Shares that may be purchased by the Company shall not exceed ten percent (10%) of theissued and paid-up share capital of the Company at any point of time;

(b) the maximum fund to be allocated by the Company for purpose of purchasing its Shares shall not exceed the aggregateof the retained profits and/or share premium of the Company;

(c) the Shares purchased are to be treated in either of the following manner:-

(i) cancel the Shares so purchased; or

(ii) retain the Shares so purchased as treasury shares; or

(iii) retain part of the Shares purchased as treasury shares and cancel the remainder

The treasury shares may be distributed as dividends to the shareholders and/or resold through Bursa Securities and/orsubsequently cancelled.

And That the authority conferred by this resolution shall commence upon the passing of this resolution until:-

(i) the conclusion of the next Annual General Meeting, at which time it will lapse, unless the authority is renewed by a resolution passed at the meeting, either unconditionally or subject to conditions; or

(ii) the expiration of the period within which the next Annual General Meeting of the Company after that date is requiredto be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuantto Section 143(2) of the Act); or

(iii) revoked or varied by ordinary resolution of the shareholders of the Company in a general meeting of the Company

whichever occurs first.

And That the Directors of the Company be and are hereby authorized to take such steps to give full effect to the aforesaidpurchase with full power to assent to any conditions, modifications, variations and/or amendments as may be imposed by therelevant authorities and/or to do all acts and things as the Directors may deem fit and expedient in the best interest of theCompany.

Resolution 10


By order of the Board

KWAN CHIEW GIOK (LS 007125)CHONG KAN HIUNG (MIA 8401)SecretariesLahad Datu

03 December 2009

Notes:

A) NOTES ON APPOINTMENT OF PROXY

A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him.A proxy may but need not be a member of the Company. The instrument appointing a proxy must be deposited at theRegistered Office of the Company at 1st Floor, Fordeco Building, Jalan Singamata, 91100 Lahad Datu, Sabah, not lessthan 48 hours before the time appointed for holding the meeting. Where the Proxy Form is executed by a corporation,it must be either under seal or under the hand of any officer or attorney duly authorized.

B) NOTES ON SPECIAL BUSINESS

(i) Resolution 8

The proposed resolution is in relation to the authority to allot shares pursuant to Section 132D of the Companies Act,1965 and if passed, will give the Directors of the Company, from the date of the above general meeting, authority toissue and allot shares from the unissued capital of the Company for such purpose as the Directors may deem fit and inthe interest of the Company. This authority, unless revoked or varied by the Company in general meeting, will expire atthe conclusion of the next Annual General Meeting of the Company.

(ii) Resolution 9

The proposed resolution is in relation to the renewal of the existing shareholders’ mandate for recurrent related partytransactions of a revenue or trading nature with related parties in the ordinary course of business which are necessaryfor the Company’s day-to-day operations.

(iii) Resolution 10

The proposed resolution is in relation to the renewal of authority for the Company to purchase up to ten percent (10%)of the issued and paid-up share capital of the Company.

6Annual Report 2009



WE HAVEGROWTHSTRATEGY


8Annual Report 2009

Statement Accompanying Notice Of 14th Annual General Meeting

Palm Oil

PARTICULARS OF DIRECTORS STANDING FOR RE-ELECTION AT THE FOURTEENTH ANNUAL GENERAL MEETING

1. Directors standing for re-election at the Fourteenth Annual General Meeting of the Company:

(i) Dato’ Mohd Sarit Bin Haji Yusoh(ii) Ooi Jit Huat(iii) Kwan Jin Nget

The above Directors are retiring by rotation pursuant to Article 73 of the Articles of Association of the Company.

2. Attendance of Directors at Board Meetings.

Details of attendance at Board Meetings held in financial year ended 30 June 2009 (total of 4 meetings held):

Name of Directors Attendance

(i) Dato’ Mohd Sarit Bin Haji Yusoh 4

(ii) Kwan Ngen Chung 4

(iii) Kwan Ngen Wah 4

(iv) Kwan Jin Nget 4

(v) Kwan Min Nyet 4

(vi) Chong Kan Hiung 4

(vii) Datuk Tyan Von Choon 4

(viii) Ooi Jit Huat 4



Statement Accompanying Notice Of 14th Annual General Meeting continued

3. Place, date and hour of Board of Directors’ Meetings held.

The Board of Directors’ Meetings during the year were held at the following date, time and venue:

Date Time Venue

(i) 26 August 2008 11.30 a.m. Suite 1-6-W9, 6th Floor, CPS Tower, Centre Point Sabah,88000 Kota Kinabalu, Sabah, Malaysia

(ii) 27 November 2008 11.30 a.m. K-63-3rd Floor, Signature Office, KK Times Square, Off Coastal Highway 88100 Kota Kinabalu, Sabah, Malaysia

(iii) 27 February 2009 11.30 a.m. K-63-3rd Floor, Signature Office, KK Times Square, Off Coastal Highway 88100 Kota Kinabalu, Sabah, Malaysia

(iv) 29 May 2009 11.30 a.m. K-63-3rd Floor, Signature Office, KK Times Square, Off Coastal Highway 88100 Kota Kinabalu, Sabah, Malaysia

4. Further details of Directors who are standing for re-election.

Details of Directors who are standing for re-election are set out in the Directors’ Profile appearing on pages 18 to 20 ofthe Annual Report.

A typically well-maintainedmature oil plam estate


Revenue RM Million

05

06

07

08

09

0 500 1,000 1,500 2,000 2,500 3,000 3,500

Total Assets RM Million

05

06

07

08

09

0 500 1,000 1,500 2,000

Basic Earnings/ (Loss) Per Share Sen

05

06

07

08

09

05

06

07

08

09

Profit/ (Loss) Before Taxation RM Million

05

06

07

08

09

Shareholders' Fund RM Million

05

06

07

08

09

0 3 6 9 12 15

Dividend Sen

0 200 400 600 800 100010

5

15

5

2

435

459

653

794

910

1,207

1,122

1,950

3,452

1,569

960

1,093

1,473

1,899

1,838

-100 -50 0 50 100 150 200 -30 -20 -10 0 10 20 30 40 50

(95)

49

16

105

213

(22.70)

11.80

5.66

23.20

48.48

10Annual Report 2009

5-Year Group Financial Highlights


0

5,000

10,000

15,000

20,000

Share Volume Traded ForKwantas Corporation Berhad

July '08~June '09

18,657

8,767

12,138

13,558

3,7403,121

2,0331,565 1,886

9,803

14,703

3,468

JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

Volume

Share Price Traded ForKwantas Corporation Berhad

July '08~June '09

highest price traded RM3.60

lowest price traded RM1.62

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.53.29

2.902.74

2.17

1.881.71

1.81 1.81 1.751.85

2.11 2.12

AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUNJUL

Price


Share Performance


Unit 2009 2008 2007 2006 2005

PLANTATIONS

Oil Palm AreaMature (16-25 Years) hectare 3,106 2,154 2,016 2,016 761Mature - Prime (8-15 Years) hectare 8,943 9,435 9,000 8,319 8,540Mature - Young (4-7 Years) hectare 2,108 1,889 1,353 1,805 2,503Immature (1-3 years) hectare 1,216 2,294 2,309 2,432 2,288

Total Planted Area hectare 15,373 15,771 14,678 14,572 14,092Total Unplanted andReserves, Infrastructure Areas hectare 22,202 21,690 22,299 2,973 3,453

Total Area hectare 37,575 37,460 36,977 17,545 17,545

FFBProduction tonne 347,906 347,524 323,467 308,304 310,528Yield Per Mature Hectare tonne 24.6 25.8 26.2 25.4 26.3Average Selling Price Per Tonne RM 315 469 309 260 277

MILLS

FFB ProcessedOwn tonne 321,692 329,912 309,844 295,768 305,272Outside tonne 194,232 303,367 302,882 355,378 371,368

Total 515,924 633,279 612,726 651,146 676,640

ProductionCrude Palm Oil tonne 104,910 132,324 130,423 136,361 143,583Palm Kernel tonne 23,975 30,107 29,895 31,107 32,482

Extration RatesCrude Palm Oil % 20.3% 20.9% 21.3% 20.9% 21.2%Palm Kernel % 4.6% 4.8% 4.9% 4.8% 4.8%

Average Selling Price (Per Tonne)Crude Palm Oil RM 1,887 2,833 1,737 1,356 1,402Palm Kernel RM 1,141 1,709 955 898 1,003

DOWNSTREAM MANUFACTURING

Production(Malaysia)Crude Palm Kernel Oil tonne 30,837 42,180 44,354 55,174 80,248Palm Kernel Expeller tonne 35,012 52,009 55,139 64,364 93,137Refined Bleached Deodorised Palm Oil tonne 239,549 354,679 464,186 555,435 580,546Palm Fatty Acid Distillate tonne 14,897 18,935 22,697 27,280 27,882Refined Bleached Deodorised Stearin tonne 35,681 65,924 92,978 91,870 88,904Refined Bleached Deodorised Olein tonne 132,756 254,986 348,798 337,243 342,429

(China)Shortening & Margarine tonne 12,135 20,230 19,128 18,386 4,727Refined Bleached Deodorised

Soya Bean Oil tonne 1,932 68,463 58,753 20,982 9,829Refined Bleached Deodorised Stearin tonne 12,304 20,478 24,027 20,302 7,028Refined Bleached Deodorised Olein tonne 5,223 6,515 1,217 11,200 3,148


5-Year Group Statistics and Performances


Unit 2009 2008 2007 2006 2005

DOWNSTREAM MANUFACTURING continued

Extration Rates(Malaysia)Crude Palm Kernel Oil % 44.9% 43.0% 42.7% 44.4% 44.6%Palm Kernel Expeller % 51.0% 53.0% 53.1% 51.8% 51.8%Refined Bleached Deodorised Palm Oil % 93.4% 94.6% 95.2% 94.8% 95.2%Palm Fatty Acid Distillate % 5.8% 5.1% 4.7% 4.7% 4.6%Refined Bleached Deodorised Stearin % 21.1% 20.5% 21.1% 21.4% 20.6%Refined Bleached Deodorised Olein % 78.4% 79.5% 79.0% 78.6% 79.4%

(China)Refined Bleached Deodorised Soya Bean Oil % 96.8% 96.7% 96.6% 97.3% 97.8%Refined Bleached Deodorised Stearin % 98.5% 99.0% 96.1% 98.7% 98.2%Refined Bleached Deodorised Olein % 99.2% 98.7% 99.5% 98.9% 99.7%

Average Selling Price (Per Tonne)(Malaysia)Crude Palm Kernel Oil RM 2,963 3,335 1,982 2,035 2,242Palm Kernel Expeller RM 247 461 235 183 179 Refined Bleached Deodorised Palm Oil RM 2,538 3,184 1,522 1,439 1,498Palm Fatty Acid Distillate RM 1,508 2,182 1,318 1,176 1,173Refined Bleached Deodorised Stearin RM 2,060 2,799 1,792 1,351 1,388Refined Bleached Deodorised Olein RM 2,369 3,315 1,864 1,483 1,554

(China)Shortening & Margarine RMB 5,170 7,278 4,709 3,585 3,806Refined Bleached Deodorised Soya Bean Oil RMB 7,617 9,640 6,081 4,684 5,937Refined Bleached Deodorised Olein RMB 5,308 7,062 5,220 3,813 4,207

FINANCIAL PERFORMANCE

Revenue RM ’000 1,568,532 3,452,163 1,949,988 1,122,204 1,206,549(Loss)/ Profit from Operation RM ’000 (65,200) 243,884 138,020 34,724 62,680Finance Cost RM ’000 (30,123) (30,584) (32,913) (18,534) (16,773)(Loss)/ Profit Before Tax RM ’000 (95,323) 213,300 105,107 16,190 48,962Taxation RM ’000 7,880 (22,151) (16,742) (788) (17,808)Minority Interests RM ’000 16,693 (40,310) (16,279) 2,130 2,307Net (Loss)/ Profit RM ’000 (70,750) 150,839 72,086 17,532 33,461

Shareholders’ Fund RM ’000 910,175 794,189 652,572 459,234 434,687Total Assets RM ’000 1,837,520 1,899,410 1,473,419 1,092,559 959,542

(Loss)/ Earnings Per Share - Basic sen (22.70)+ 48.48+ 46.40+ 11.32 23.59 (Loss)/ Earnings Per Share - Diluted sen (22.24)+ 47.27+ 45.39+ 11.07 22.89 Gross Dividend Per Share sen 2.00 + 5.00+ 15.00+ 5.00 10.00Net Tangible Assets Per Share RM 2.92 + 2.55+ 4.20+ 2.96 2.81

Share PriceHigh RM 3.60 + 5.30+ 5.10+ 4.08 5.15 Low RM 1.62 + 2.49+ 3.48+ 3.60 3.68 Closing RM 2.01 + 3.70+ 4.96+ 3.76 3.78 Others Net debt/Equity number 0.71 + 0.68 0.60 0.81 0.57

of times

~ Net debt represents total bank borrowings less short term funds, deposits with financial institutions and cash and bank balances+ Share split - Sub-division of Share from par value of RM1.00 each to par value of RM0.50 each


5-Year Group Statistics and Performances continued



Corporate Information

Board Of Directors

Dato’ Mohd Sarit Bin Haji Yusoh Chairman

Independent Non-Executive Director

Kwan Ngen ChungManaging Director

Non-Independent Executive Director

Kwan Ngen WahNon-Independent Executive Director

Kwan Jin NgetNon-Independent Executive Director

Kwan Min NyetNon-Independent Executive Director

Chong Kan HiungNon-Independent Executive Director

Datuk Tyan Von ChoonIndependent Non-Executive Director

Ooi Jit HuatIndependent Non-Executive Director

Secretaries

Chong Kan Hiung (MIA 8401) Kwan Chiew Giok (LS 007125)

Registered Office

1st Floor, Fordeco Building Jalan Singamata 91100 Lahad Datu, Sabah, MalaysiaT 089-881188F 089-883333

Solicitors

Cheu, Adnan & Razi Chin, Mirdin & CoYap & ChinLind, Willie, Wong & ChinWong & ShimGuangdong Justice Law FirmGuangdong Huafa Law FirmYadong Law Firm

Auditors

Ernst & Young

Audit Committee

Datuk Tyan Von Choon (Chairman)Dato’ Mohd Sarit

Bin Haji Yusoh (Member)Ooi Jit Huat (Member)

Registrars

Symphony Share Registrars Sdn BhdLevel 26, Menara Multi-PurposeCapital SquareNo. 8, Jalan Munshi Abdullah50100 Kuala LumpurT 03-27212222F 03-27212530/1

Bankers

Malayan Banking BerhadHSBC Bank Malaysia BerhadStandard Chartered Bank Malaysia BerhadUnited Overseas Bank (M) BerhadBank Pembangunan Malaysia BerhadCIMB Bank Berhad OCBC Bank Malaysia BerhadAmBank (M) BerhadChina Construction BankThe Hongkong and Shanghai Banking

Corporation LtdAgricultural Bank of ChinaShenzhen Development Bank Co LtdMaybank International (L) LtdDeutsche Bank Malaysia BerhadCitibank BerhadAffin Bank BerhadIndustrial & Commercial Bank of China

Stock Exchange Listing

Main Market of Bursa Malaysia Securities Berhad


WE BUILD A BRIGHTERFUTURE


Maximlink Enterprise Sdn Bhd (MESB) 179828-V

Incorporated: 17 Mar 1989Principal Activity:• Rental of leasehold land

KWANTAS CORPORATION BERHAD (KCB) 356602-WIncorporated: 23 Aug 1995

Principal Activities: • Investment Holding Company and Provision of Management Services to the Subsidiaries

Kwantas Oil Sdn Bhd (KOSB) 57450-XIncorporated: 21 Apr 1980Principal Activities:• Operation of palm oil mills, kernel crushing plant & palm oil refinery• Wholesaling & supply of diesel and lubricants• Trading of refined soya bean oil

Kwantas Land DevelopmentSdn Bhd (KLDSB) 206035-XIncorporated: 11 Oct 1990Principal Activity:• Operation of oil palm plantations

Kwantas Oleo Sdn Bhd (KOLEO) 143459-DIncorporated: 12 Aug 1985Principal Activity:• Operation of oil palm plantations

Haranky Sdn Bhd (HSB) 28971-KIncorporated: 18 Aug 1976Principal Activity:• Operation of oil palm plantations

Palm Energy Sdn Bhd (PESB) 539089-XIncorporated: 13 Feb 2001Principal Activity:• Operation of a biomass power plant

Kwantas Plantations Sdn Bhd (KPSB) 85636-XIncorporated: 1 Jun 1982Principal Activities:• Operation of oil palm plantations• Stone and gravel quarry

Kwantas SPV Sdn Bhd (SPV) 722690-KIncorporated: 3 Feb 2006Principal Activity:• Undertaking of Islamic Securities Transactions

Kwantas Edible Oil (Bintulu) Sdn Bhd (KEOBSB) 57449-KIncorporated: 21 Apr 1980Principal Activity:• Dormant

Miracle Harvest Sdn Bhd (MHSB) 700310-AIncorporated: 15 Jul 2005Principal Activity:• Operation of oil palm plantations

Green Ace Resources Sdn Bhd (GARSB) 684478-A

Incorporated: 15 Mar 2005Principal Activity:• Operation of oil palm plantations

Pristine Prestige Sdn Bhd (PPSB) 758973-TIncorporated: 11 Jan 2007Principal Activity:• Dormant

Green Green Grass Sdn Bhd (GGGSB) 769163-HIncorporated: 11 Apr 2007Principal Activity:• Waste Incineration

Aman Bersatu Sdn Bhd (ABSB) 145295-MIncorporated: 25 Sept 1985Principal Activity:• Operation of oil palm plantations

Benar Bersatu Sdn Bhd (BBSB) 143185-DIncorporated: 5 Aug 1985Principal Activity:• Operation of oil palm plantations

Kwantas Pelita Plantation (Balingian) Sdn Bhd (KPPBSB) 682158-UIncorporated: 23 Feb 2005Principal Activity:• Operation of oil palm plantations

Malaysia Companies

Foreign Companies

Subsidiary

Dongma (Guangzhou Free Trade Zone) Oleochemicals Co Ltd (DMO)Principal Activities:• Operation of soap noodle, oleochemicals and glycerine plants

100%

Dongma Oils & Fats (Guangzhou Free Trade Zone) Co Ltd (DMGZFTZ)Principal Activities:• Operation of a bulking installation, palm and soya bean oil refinery and shortening plants • Trading of palm and soya bean oils and fats products

51%

PT Kinabalu Invesdag Indonesia (PT KINABALU)

Principal Activity:Incorporated:

• Investment Holding Company

95%

PT Kalsum Pratama Perkasa (PT KALSUM)Principal Activity:•

Operation of oil palm plantations

95%

PT Gerbang MerantiAgrobisnis (PT GERBANG)Principal Activity:•

Operation of oil palm plantations

95%

Kwantas International Inc (KII) LL02811Incorporated: 19 Apr 2001Principal Activity:• International trading

100%

Dongma Oils & Fats (Zhangjiagang Free Trade Zone) Co Ltd (DMZJGFTZ)Principal Activities:• Operation of a bulking installation • Trading of palm oils and fats products

100%

100% Dongma Palm Industries (Zhangjiagang) Co Ltd (DMPI) Principal Activities:• Operation of soap noodle, oleochemicals and glycerine plants

100%

100%

100%

100%

100%

100%

100%

100%

Kwantas Commodity Trading Sdn Bhd (KCTSB) 873024-T

Incorporated: 23 Sept 2009Principal Activity:• Trading of palm oil products

100%

60%

100%

100%

100%

70%

70%

70%

100%


Corporate Structure


Behind our achievements lie a clear vision and an enduringambition to be the best

WE HAVE STRONGAMBITION



Directors’ Profile

Dato’ Mohd Sarit Bin Haji Yusoh Chairman / Independent Non-Executive Director

Dato’ Mohd Sarit Bin Haji Yusoh, D.S.A.P., D.I.M.P., A.M.P.,a Malaysian, aged 58, is the Chairman of the Company. Hewas appointed to the Board on 23 August 1996. Hegraduated with a Bachelor of Arts (Economics) (Hon) Degreefrom University of Malaya in 1975 and Master of Arts(Economics) Degree from University of Philippines in 1977.

Dato’ Sarit is a Director of several public listed companies,private companies and voluntary organizations. He has hada distinguished career with the government sector primarilyin the fields of finance and education. He had served as anOfficer to the Ministry of Finance in 1975 before joiningPETRONAS as Marketing Executive from 1977 to 1981. He was the General Manager of PERNAS from 1981 to1984. He served as Political Secretary to the EducationMinister, Ministry of Education from 1986 to 1990. He wasthe Executive Chairman of KFC Holdings (M) Berhad from1993 to 1999, Ayamas Food Corporation Berhad from 1993 to 1999, Khee San Berhad from 1996 to 2007 andGoh Ban Huat Berhad from 1994 to 2009. Currently, he isthe Chairman of Kurnia Setia Berhad.

Dato’ was the Pahang State Assemblyman for the SemantanConstituency from 1990 to 1999 and a member ofParliament for Temerloh, Pahang Darul Makmur from 1999to 2008.

Dato’ holds nil shares in Kwantas Corporation Berhad anddoes not have any family relationship with any otherDirectors and/or other major shareholders of the Companyand has no conflict of interest with the Company. Dato’ hasnot been convicted for any offences within the past 10 yearsother than traffic offences.

Dato’ is the Chairman of Nomination Committee and themember of Audit Committee of the Company.

Dato’ attended 4 out of the 4 Board Meetings of theCompany held during the financial year ended 30 June2009.

Kwan Ngen ChungManaging Director / Non-Independent Executive Director

Kwan Ngen Chung, a Malaysian, aged 49, is one of the co-founder Directors of the Company and is currently theCompany’s Managing Director cum Chief Executive Officer.He holds a degree of Master of Business Administrationfrom Wisconsin International University, USA. Prior to thefounding of the Company, Kwan Ngen Chung has beenprincipally involved in the oil palm industry. He also hassubstantial experience in stone quarry operation, roadconstruction and property development. Using his vastknowledge and experience obtained in the past 20 years, heand his brother, Kwan Ngen Wah established KwantasCorporation Berhad in 1996.

Kwan Ngen Chung holds 94,188,632 shares in KwantasCorporation Berhad. He is the brother of Kwan Ngen Wah,Kwan Jin Nget and Kwan Min Nyet. Except for certainrecurrent related party transactions of revenue andexpenditure nature which are necessary for day-to-dayoperations of the Company and its subsidiaries and forwhich he is deemed to be interested as disclosed on pages80 to 81 of the Annual Report, there are no other businessarrangements with the Company in which he has personalinterests. He has not been convicted for any offences withinthe past 10 years other than traffic offences.

Kwan Ngen Chung is the member of RemunerationCommittee of the Company.

Kwan Ngen Chung attended 4 out of the 4 Board Meetingsof the Company held during the financial year ended 30 June 2009.



Directors’ Profile continued

Kwan Jin NgetNon-Independent Executive Director

Kwan Jin Nget, a Malaysian, aged 42, graduated with aBachelor Degree of Business Administration from University ofIowa, USA in 1989. She has been a Director since the Companywas incorporated.

Kwan Jin Nget is currently the Director of Administration/Plantation of the Company. Her responsibilities include thecoordination for the efficient operations of the Company andoverseeing human resources management, generaladministration and oil palm plantations.

Kwan Jin Nget holds 760,000 shares in Kwantas CorporationBerhad. She is the sister of Kwan Ngen Wah, Kwan NgenChung and Kwan Min Nyet. Except for certain recurrent relatedparty transactions of revenue and expenditure natures which arenecessary for day-to-day operations of the Company and itssubsidiaries and for which she is deemed to be interested asdisclosed on pages 80 to 81 of the Annual Report, there are noother business arrangements with the Company in which shehas personal interests. She has not been convicted for anyoffences within the past 10 years other than traffic offences.

Kwan Jin Nget attended 4 out of the 4 Board Meetings of theCompany held during the financial year ended 30 June 2009.

Kwan Ngen WahNon-Independent Executive Director

Kwan Ngen Wah, a Malaysian, aged 51, is one of the co-founder Directors of the Company and is currently an ExecutiveDirector. He received his tertiary education in the UK.

Kwan Ngen Wah has been actively involved in the oil palmindustry, stone quarry operation, road construction andproperty development projects for the past 20 years and gainedsubstantial knowledge and experience in these industries. Theaccumulated experience coupled with the close relationshipwith customers and suppliers provide adequate impetus forhim to efficiently steer the Company to greater success.

Kwan Ngen Wah holds 93,188,632 shares in KwantasCorporation Berhad. He is the elder brother of Kwan NgenChung, Kwan Jin Nget and Kwan Min Nyet. Except for certainrecurrent related party transactions of revenue and expenditure

natures which are necessary for day-to-day operations of theCompany and its subsidiaries and for which he is deemed to beinterested as disclosed on pages 80 to 81 of the Annual Report,there are no other business arrangements with the Company inwhich he has personal interests. He has not been convicted forany offences within the past 10 years other than traffic offences.

Kwan Ngen Wah attended 4 out of the 4 Board Meetings of theCompany held during the financial year ended 30 June 2009.

Kwan Min NyetNon-Independent Executive Director

Kwan Min Nyet, a Malaysian, aged 40, graduated with aBachelor Degree of Business Administration from University ofIowa, USA in 1989. She has been a Director since the Companywas incorporated.

Kwan Min Nyet is responsible for the finance and the marketingfunctions of the Company’s oil mill operations.

Kwan Min Nyet holds 238,000 shares in Kwantas CorporationBerhad. She is the sister of Kwan Ngen Wah, Kwan NgenChung and Kwan Jin Nget. Except for certain recurrent relatedparty transactions of revenue and expenditure natures which arenecessary for day-to-day operations of the Company and itssubsidiaries and for which she is deemed to be interested asdisclosed on pages 80 to 81 of the Annual Report, there are noother business arrangements with the Company in which shehas personal interests. She has not been convicted for anyoffences within the past 10 years other than traffic offences.

Kwan Min Nyet attended 4 out of the 4 Board Meetings of theCompany held during the financial year ended 30 June 2009.



Directors’ Profile continued

CHONG KAN HIUNGNon-Independent Executive Director

Chong Kan Hiung, a Malaysian, aged 45, is a CharteredAccountant of the Malaysian Institute of Accountants and afellow of the Chartered Association of Certified Accountantin the UK and also a member of the Malaysian Institute ofTaxation. He was appointed as a Non-IndependentExecutive Director on 12 November 2001.

Chong Kan Hiung is responsible for the financial functionsof the Group. He has been with the Group for the past 10 years and is also the joint Company Secretary for theCompany.

Prior to joining the Kwantas Group in 1996, he wasattached to an international Public Accountant firm for 10years. He has considerable experience in corporate financeand general management. Chong Kan Hiung is also acertified member of the Financial Planning Association ofMalaysia.

Chong Kan Hiung holds 2,600,000 shares in KwantasCorporation Berhad. He does not have any familyrelationship with any other Directors and/or other majorshareholders of the Company and has no conflict of interestwith the Company. He has not been convicted for anyoffences within the past 10 years other than traffic offences.

Chong Kan Hiung attended 4 out of the 4 Board Meetingsof the Company held during the financial year ended 30 June 2009.

OOI JIT HUATIndependent Non-Executive Director

Ooi Jit Huat, a Malaysian, aged 58, is a CharteredAccountant of Malaysian Institute of Accountants and themanaging partner of public accounting firm, Russ Ooi &Associates since 1985. He is also a member of the MalaysianInstitute of Taxation. He was appointed as an IndependentNon-Executive Director on 9 March 2000.

He has over 25 years of experience in the financial industryhaving carved areas of expertise in corporate consultancy,financial management, management information systemsand auditing and investigations. His professional assignmentscovered floatation exercises, investigations and due diligencereporting and the reverse take-over of several companies onthe Bursa Malaysia Securities Berhad. He sits on the Boardof Priceworth Wood Products Berhad.

Ooi Jit Huat holds nil shares in Kwantas Corporation Berhad.He does not have any family relationship with any otherDirectors and/or other major shareholders of the Companyand has no conflict of interest with the Company. He hasnot been convicted for any offences within the past 10 yearsother than traffic offences.

Ooi Jit Huat is a member of Audit, Nomination andRemuneration Committee of the Company.

Ooi Jit Huat attended 4 out of the 4 Board Meetings of the Company held during the financial year ended 30 June 2009.

DATUK TYAN VON CHOONIndependent Non-Executive Director

Datuk Tyan Von Choon, a Malaysian, aged 63, is a Barrister-At-Law and was called to the English Bar Lincoln’sInn. He was appointed as an Independent Non-ExecutiveDirector on 8 March 2007.

Datuk had served in the Royal Malaysia Police for 32 yearsand retired as the Deputy Commissions of Police, Sabah inyear 2001.

Datuk holds 2,000 shares in Kwantas Corporation Berhadand does not have any family relationship with any otherDirectors and/or other major shareholders of the Companyand has no conflict of interest with the Company. He hasnot been convicted for any offences within the past 10 yearsother than traffic offences.

Datuk Tyan Von Choon is the Chairman of Audit andRemuneration Committee and a member of NominationCommittee of the Company.

Datuk Tyan Von Choon attended 4 out of the 4 BoardMeetings of the Company held during the financial yearended 30 June 2009.


TO OUR VALUEDSHAREHOLDERS,On behalf of the Board of Directors of Kwantas Corporation Berhad (Kwantas), it gives me great pleasure to present to youthe Annual Report and Audited FinancialStatements of the Group and the Companyfor the financial year ended 30 June 2009.

Chairman’s Statement



Chairman’s Statement continued

FINANCIAL RESULTS

The last financial year has been an interesting andchallenging one for the Group. With the continuing effectsof the global financial crisis of 2007/08 still affecting manyindustries, coupled with the volatility of the US Dollar andthe fluctuation of the price of crude palm oil (“CPO”), theGroup recorded operating loss of RM65.2 million (2008:Profit RM243.9 million).

It has been a tough year, yet it is one from which Kwantasemerges with considerable credit, a testament to theresilience of the Group. Being alert to the impact that theeconomic environment had on the business, theManagement was able to take the necessary steps neededto address any and all challenges, quickly and promptly.

DIVIDEND

The Board of Directors proposed a single tier dividend of 2 sen per ordinary share of RM0.50 each pursuant toParagraph 12B of Schedule 6 of the Income Tax Act 1967for the year ended 30 June 2009, subject to approval of the shareholders at the forthcoming Annual GeneralMeeting. Once approved, the dividend will be paid to theshareholders in the next financial year.

OUTLOOK AND PROSPECTS

The Board and Management recognise that the globalbusiness landscape has changed as a result of the economiccrisis. Therefore the Management has made the necessarychanges to the business footprint as required and willcontinue to build its relationship of mutual trust withstakeholders as well as seek new business opportunities forthe Group.

The demand for palm oil products continues to growannually and therefore the Management is confident thatthe Group is in a strong position to meet this growingdemand.

ACKNOWLEDGEMENTS

The commitment and hard work of everyone involved withKwantas is evident in the continuing growth andperformance of the Group. On behalf of the Board, I wouldlike to take this opportunity to extend my heartfelt thanksand appreciation to my fellow Directors, our Managementteam, staff, shareholders, business partners, suppliers,banks and authorities for their continued support.



Operations Review

OPERATIONS REVIEW 2009Financial Overview

In the financial year ended 30 June 2009, the Grouprecorded turnover of RM1.57 billion (2008: RM3.45 billion)and loss after tax of RM87.44 million (2008: ProfitRM191.15 million).

Average CPO price for the financial year was RM1,887 perMT compared with RM2,833 in the previous financial year.In spite of the uncertainty in the pricing for CPO, Kwantasremains focused on building a solid foundation for a strongand sustainable business which is characterised bycommitted and effective leadership in the organisation, atall levels.

During the financial year, Kwantas acquired 95% equityinterests in PT Kinabalu Invesdag Indonesia (“PT Kinabalu”)for RM8,348,125. The acquisition of PT Kinabalu hasresulted in the acquisition of 90.25% equity interests eachin PT Kalsum Pratama Perkasa (with land area of 9,335hectares) and PT Gerbang Meranti Agrobisnis (with landarea of 18,950 hectares). This acquisition adds 28,285hectares of oil palm plantation land to Kwantas’ landbank.

China

Kwantas, through its subsidiaries in Zhangjiagang andGuangzhou, has operations in the People’s Republic of Chinawhich are principally involved in bulking installations,manufacturing and sales of palm and soya bean oils and fatsproducts and oleochemical products. The China operationsgenerated turnover of RM165.6 million (2008: RM851.7million).

Human Resources

The Management of Kwantas strongly believes in providingthe staff with a safe working environment and also offeringthem the opportunity to improve their skills throughappropriate training programmes. In the past year, staffwere sent on various training programmes including :-

• NIOSH’S Safety Awareness Workshop for estate millpersonnel

• Public Safety and Prevention Knowledge

• Kepentingan Keselamatan & Kesihatan Pekerja ditempat kerja

• Year 2009 Budget Proposal and Recent Tax Development

• Continuous Emission Monitoring Systems (CEMS)

• Default in Palm Oil Trade

• Palm Oil & Lauric Price Outlook

• 1st Borneo Occupational Safety & Health Convention &Exhibition (BOSH)

• Help! The Analysts Rate Us A Sell

• Ultimate Share Performance

• HSBC Economic Outlook, Foreign Exchange Strategiesand Structured Product Seminar

• Development of Islamic Banking in Malaysia


CORPORATE SOCIAL RESPONSIBILITY (CSR)In good economic times, it is important to help those who areless fortunate and in need. In difficult times, it is even moreimportant to do so, to extend a helping hand and show themyou still care. Kwantas continues playing its role as aresponsible corporate citizen, treating others with compassionand respect, doing the right thing for business as well as for the community. The Management of Kwantasrecognises the importance of giving back to the communityand encourages the staff to support the various CorporateSocial Responsibility initiatives of the Group.

In the year, Kwantas invited the Optimax Eye Specialist Centreto conduct Eye Care Seminars for the staff. The Group alsocontinued with its blood donation campaign, encouragingstaff to help others by giving blood. Kwantas organisesregular activities for the families of the estate workers to promote bonding and camaraderie within the large

community. Indoor and outdoor activities are organized inorder to build teamwork, develop creativity and to foster acontinuous culture of learning and personal developmentamong all staff.

As part of the on-going programme to support local schoolsfunding, Kwantas has continually looking ways to assist notonly the local Government schools but also some localChinese independent schools where school funding is a difficult burden for the school’s education. During the year,Kwantas has made a contribution of approximatelyRM632,000 to schools and societies within the State ofSabah.


Operations Review continued



Year Publication Recognition Received 2002-2008 Ranking

2008 The Edge Top 100 Shareholder Value Awards 86

2007 The Edge Top 100 Companies that gave the best returns (10 years) 35Companies that gave the best returns by sector (5 years) 9

2006 The Edge Top 100 Companies that gave the best returns (3 years) 68Companies that gave the best returns by sector (5 years) 7

2005 The Edge Companies that gave the best returns (5 years)• Top 100 companies - Kwantas Corporation Berhad 9• Plantation Sector - Kwantas Corporation Berhad 2

2004 The Edge Companies that gave the best returns (5 years)• Top 100 companies - Kwantas Corporation Berhad 86• Plantation Sector - Kwantas Corporation Berhad 3

2004 The Edge Top 100 Companies that gave the best returns (3 years)• Kwantas Corporation Berhad 54

2003 Malaysian Malaysia’s Top CompaniesBusiness Ranking of Top 100 Companies

• Kwantas Corporation Berhad 70Ranked by Highest Increase in Turnover• Kwantas Corporation Berhad 9Ranked by Biggest Change in Profit • Kwantas Corporation Berhad 4Ranked by Highest Return on Assets• Kwantas Corporation Berhad 38

2002 Smart Investor Malaysia’s Top 100 ROE Companies (Return on Equity)Ranking of Top 100 ROE Companies• Kwantas Corporation Berhad 35Ranked by Sales• Kwantas Corporation Berhad 39Ranked by Growth Net Profit• Kwantas Corporation Berhad 90

2002 Malaysia 1000 Top 1000 CompaniesRanked by Turnover / Sales• Kwantas Corporation Berhad 197• Kwantas Oil Sdn Bhd 198

2002 Malaysia 1000 Top 500 CompaniesRanked by Profit Before Taxation• Kwantas Corporation Berhad 386• Kwantas Oil Sdn Bhd 437Ranked by Total Tangible Assets• Kwantas Corporation Berhad 375• Kwantas Oil Sdn Bhd 405Ranked by Shareholders’ Funds• Kwantas Corporation Berhad 335• Kwantas Oil Sdn Bhd 392Ranked by Capital Employed• Kwantas Corporation Berhad 500

2002 Malaysia 1000 Top 300 most Improved CompaniesRanked by Absolute Increase in Turnover• Kwantas Corporation Berhad 251• Kwantas Oil Sdn Bhd 230

Recognition Received 2002-2008



Corporate Governance

The Board of Directors (“the Board”) of Kwantas Corporation Berhad (“KCB” or “the Company”) is committed to direct andmanage the Company in ensuring that the Company practices good Corporate Governance.

A. DIRECTORS

Composition and Responsibilities

The Board of Directors currently consists of eight (8) members, of whom three (3) are Independent Non-ExecutiveDirectors. The profile of each Director is presented in this Annual Report on pages 18 to 20. The Board brings a widerange of business, industrial and financial experience to lead the Company.

There is a clear division of responsibility between the Chairman and the Managing Director to ensure there is balanceof power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the ManagingDirector has overall responsibility for the Group’s overall operating units, organisational effectiveness andimplementation of Board decisions. There is also balance in the Board because of the presence of Independent Non-Executive Directors of the calibre necessary to carry sufficient weight in Board decisions. The role of Independent Non-Executive Directors is not only deliberating on the Groups’ financial results but is also particularly important in ensuringthat the strategies proposed by the Non-Independent Executive Directors are fully discussed and examined. The Board isof the view that the interests of shareholders of the Company are fairly represented through the current composition.

The Company has corporate objectives and position descriptions including the limits to management’s responsibilities,which the Non-Independent Executive Directors are aware and are responsible for meeting, even though these are notdocumented. The Board will look into the process of formalising the documentation. The Board will also formalise theschedule of matters which specifically reverts to it for decision.

The Board has delegated its Remuneration Committee and Nomination Committee with specific powers andresponsibilities which operate under approved terms of reference in cognisance to the recommendation of the Code.

Board Meetings

The Board met four (4) times during the financial year ended 30 June 2009. The attendance record of each Directoris as follows:

Directors Number of Board Meeting Attended

1. Dato’ Mohd Sarit Bin Haji Yusoh 4/42. Kwan Ngen Chung 4/43. Kwan Ngen Wah 4/44. Kwan Jin Nget 4/45. Kwan Min Nyet 4/46. Chong Kan Hiung 4/47. Ooi Jit Huat 4/48. Datuk Tyan Von Choon 4/4

Re-election of Directors

In accordance with the provisions of the Company’s amended Articles of Association, all the Directors including theManaging Director shall retire and be eligible for re-election by rotation at each Annual General Meeting at least oncein three (3) years. In addition, one third (1/3) of the Board shall retire by rotation ad shall be eligible for re-election ateach Annual General Meeting.

Appointments to the Board

The Nomination Committee was established on 15 November 2001 and currently comprised of the followingIndependent Non-Executive Directors:

1. Dato’ Mohd Sarit Bin Haji Yusoh Chairman2. Datuk Tyan Von Choon Member3. Ooi Jit Huat Member



A. DIRECTORS continued

Appointments to the Board continued

The Nomination Committee is responsible for making recommendations for any appointments to the Board. TheCommittee empowered to assess the required mix of skills, competency and experience which the Directors should bringto the Board. Any new nomination is then put to the full Board for assessment and endorsement.

Directors’ Training

The Directors have continued to attend various training programmes during the financial year to further enhance theirskills and knowledge and to keep abreast with new regulatory and corporate governance developments.

During the year, the Directors attended the following training/courses:

1. Seminar on Year 2010 Budget Proposals and Recent Tax Development.2. Annual Palm and Lauric Oils Conference and Exhibition - Price Outlook 2009.3. National Tax Conference 2009.4. Investor Relations Talk.5. The National Accountants Conference 2009.6. Corporate Governance and Directors’ Duties.

B. DIRECTORS’ REMUNERATION

Remuneration Committee

The Remuneration Committee was established on 15 November 2001 and currently comprised of the followingDirectors:

1. Datuk Tyan Von Choon Chairman2. Kwan Ngen Chung Member3. Ooi Jit Huat Member

Procedure

The objective of the Committee is to recommend to the Board the remuneration of all Directors. The Committee shallensure that the Company attracts and retains the Directors needed to run the Group successfully. The Committee will examine the existing remuneration scheme with the performance, experience and scope of responsibility of theDirectors. Presently the remuneration of Directors, including Independent Non-Executive Directors, is endorsed by theBoard for approval by the shareholders of the Company at the Annual General Meeting.

Disclosure

The details of the remunerations for the Directors of the Company during the year are as follows:

1. Aggregated remuneration of the Directors categorised by components

Non-Independent IndependentDirectors’ Remuneration Executive Directors Non-Executive Directors

RM RM

Fees - 82,000Salaries and other emoluments 2,284,942 -Bonuses - -Total 2,284,942 82,000

Corporate Governance continued


B. DIRECTORS’ REMUNERATION continued

2. The number of Directors with total remuneration analysed by bands

Non-Independent IndependentDirectors’ Remuneration Executive Directors Non-Executive DirectorsRM’000 Number of Directors Number of Directors

Below 50 - 350 to 100 - -100 to 150 - -150 to 200 - -200 to 250 - -250 to 300 3 -300 to 350 - -350 to 400 1 -400 to 450 - -450 to 500 - -500 to 550 - -550 to 600 - -600 to 650 1 -700 to 750 - -850 to 900 - -

C. RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The Board believes in clear and regular communication with its shareholders and institutional investors. Besides thevarious announcements made during the financial year, the Annual Report and release of financial results on a quarterlybasis provide shareholders with an overview of the Group’s performance and its business activities. All enquiries madeare normally dealt with as promptly as practicable. In addition, the Board plans to conduct regular dialogues withinstitutional investors, fund managers and analysts with the aim of fostering mutual understanding of the Group’sobjectives.

The Company has over the years used the Annual General Meeting as a forum of communication with its shareholders.The Board encourages participation from shareholders by having a question and answer session during the AnnualGeneral Meeting whereby the Directors are available to discuss aspects of the Group’s performance and its businessactivities.

Each item of special business included in the notice of the meeting will be accompanied by a full explanation of theeffects of a proposed resolution. Separate resolutions are proposed for substantially separate issues at the meeting andthe Chairman declares the number of proxy votes received both for and against each separate resolution whenappropriate. For re-election of Directors, the Board ensures that full information is disclosed through the notice ofmeetings regarding Directors who are retiring and who are willing to serve if re-elected.

D. ACCOUNTABILITY AND AUDIT

Financial Reporting

In preparing the annual financial statements and quarterly announcements to shareholders, the Directors aim to presenta balanced and understandable assessment of the Group’s position and prospects.

The Audit Committee assists the Board in ensuring accuracy and adequacy of information by reviewing andrecommending for adoption information for disclosure.

Internal Control

The Board maintains a system of internal controls to safeguard shareholders’ investments and the Group’s assets.

The Statement on Internal Control furnished on page 29 to 30 of the Annual Report provides an overview of the stateof internal controls within the Group.


Corporate Governance continued



INTRODUCTION

This statement is in line with the Paragraph 15.27(b) of the Listing Requirements of Bursa Malaysia Securities Berhad (“BursaSecurities”) requires the Board of Directors of public listed companies to include a statement in the Annual Report on the stateof internal controls in the Company as a Group. The Board is pleased to present the following Statement On Internal Controlof the Group for the financial year under review prepared in accordance with the “Statement on Internal Control - Guidancefor Directors of Public Listed Companies” issued by the Institute of Internal Auditors Malaysia and adopted by Bursa Securities.

RESPONSIBILITY OF THE BOARD

The Board recognizes that it is responsible for the Group’s system of internal controls and for reviewing its adequacy andintegrity. The system of internal controls involves each key business unit in the Group and its management, including the Boardand is designed to meet the Group’s particular needs and to manage the risks to which it is exposed in pursuit of its businessobjectives. As with any internal control system, the system can only provide reasonable but not absolute assurance againstmaterial misstatement or loss, as controls are designed to manage rather than eliminate the risk of failure to achieve businessobjectives.

RISK MANAGEMENT

The Board and Management are mindful of measures required to identify risks residing in any major proposed transactions,changes in nature of activities and/or operating environment, or venturing into new operating environment.

The Board confirms that there is a process for identifying, evaluating, monitoring and managing the significant risks affectingthe achievement of the Group’s business objectives. The process is being reviewed by the Board as and when material riskareas are identified for discussion. In view of the changing business environment, the management continues to improve themeasures which are deployed on appropriate risk response strategies and controls. This is to ensure risk is properly monitoredand managed to an acceptable level.

The independent Internal Auditors assist the management in evaluating and reporting on the Group’s business risks, byrecommending certain risk management mechanisms to enhance the existing risk management practices of the Group.

THE SYSTEM OF INTERNAL CONTROL

The Group maintains a system of internal control that serves to safeguard its assets, identify and manage risk, ensurecompliance with statutory and regulatory requirements, and to ensure operational results are closely monitored andsubstantial variances are promptly explained.

The key features of the Group’s system of internal control are as follows:-

• an organisational structure with clearly defined lines of responsibility and delegation of authorities has been set up forthe Group;

• policies and procedures which sets out the compliance standards for daily operations for the respective business units ofthe Group;

• the Board evaluates risks involved and seeks appropriate experts’ advice in considering business proposals andoperational issues so as to make an effective decision in the best interest of the Group;

• the Group’s management sets clearly defined authorisation procedures which are clearly documented and implementedso as to exercise strict control on compliance therewith by all levels of employees;

• the Group’s management meetings are held monthly and attended by the Non-Independent Executive Directors and thedepartment heads to review the operational and financial performance of the businesses in the Group and itssubsidiaries, and to discuss key business, operational and management issues;

Statement on Internal Control



THE SYSTEM OF INTERNAL CONTROL continued

• the Board receives and reviews quarterly performance reports on the Group and its subsidiaries from the management,and discuss on significant business and risk issues;

• the Group’s management and internal auditors have conducted reviews on the system of internal control to ensurecompliance with the established policies and procedures of the Group. Weaknesses are properly communicated tomanagement and prompt corrective actions have been taken;

• the Board reviewed and approved the Group’s annual budget. The budgeting process incorporates the internal andexternal risk factors of each division of the Group. All key operating subsidiary companies of the Group are required toprepare budgets and business plans for the coming year; and

• established system of performance appraisal to monitor and maintain good performance standards from employees.Training and development are provided for employees to further enhance their competency.

BOARD’S CONCLUSION

The Board is pleased to report that there were no significant material internal control weaknesses noted during the year underreview and to the date of approval of the Annual Report and financial statements. The system of internal control that hadbeen implemented within the Group is generally adequate and effective. The internal control procedures will be reviewedcontinuously in order to improve and strengthen the system to ensure ongoing adequacy, integrity and effectiveness so as tosafeguard the Group’s assets and shareholders’ investments.

Pursuant to Section 169(15) of the Companies Act, 1965 that Directors are required to prepare financial statements whichgive a true and fair view of the financial position of the Group and of the Company for each financial year, as set out on page40 of this Annual Report.

In addition, pursuant to Paragraph 15.27(a) of The Listing Requirements of Bursa Malaysia Securities Berhad, when preparingthose financial statements, the Board of Directors has:

• adopted appropriate accounting policies and applied them consistently;

• ensured that applicable approved accounting standards had been followed;

• made judgements and estimates that are prudent and reasonable; and

• disclosed and explained when necessary in the financial statements.

The Directors have a general responsibility for taking such reasonable steps:

i) to safeguard the assets of the Group and the Company; andii) to prevent and detect fraud and other irregularities.

Statement on Internal Control continued

Statement of Directors’ Responsibilities in Audited Financial Statements(Pursuant to Paragraph 15.27(a) of The Listing Requirements of Bursa Malaysia Securities Berhad)



As at the financial year ended of 30 June 2009, the Group has complied with all of the Best Practises in CorporateGovernance as set out in part 2 of the Malaysia Code on Corporate Governance.

ADDITIONAL COMPLIANCE INFORMATION

1. Share Buyback

During the financial year, there was no share buyback by the Company.

2. Options, Warrants or Convertible Securities

During the financial year, there were no options, warrants or convertible securities issued.

3. American Deposit Receipt (ADR) or Global Deposit Receipt (GDR) Programme

The Company has not sponsored any ADR or GDR programme in the financial year.

4. Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management bythe relevant authorities.

5. Non-audit Fees

The amount of non-audit fees paid to external auditors of the Group for the financial year for taxation, consultancy andother fees was approximately RM33,500.00.

6. Profit Estimate, Forecast or Projection

The Company did not release any profit estimate, forecast or projection for the financial year. No significant variancearose between the results for the financial year and the unaudited results previously announced.

7. Profit Guarantee

No profit guarantee was given by the Company in respect of the financial year.

8. Material Contracts

The Company and its subsidiaries do not have any material contracts involving the interests of its Directors and/or majorshareholders.

9. Recurrent Related Party Transactions

The details of related party transactions are set out in Note 31 to the financial statements. An Annual General Meetingwill be held on 30 December 2009 to pass ordinary resolution to seek shareholders’ mandate for the renewal of recurrentrelated party transactions of revenue or trading nature.

10. Revaluation of Landed Properties

Certain buildings and plantation infrastructure, prepaid land lease payments and biological assets owned by certainsubsidiaries have been revalued as at 30 June 2009.

11. Utilisation of Proceeds

This is not applicable during the financial year.

12. Analysis of Shareholdings

The analysis of shareholdings can be found on pages 95 to 96.

13. List of Properties

The list of properties for the Group can be found on pages 90 to 94.

Compliance Statements andAdditional Compliance Information


MEMBERS

The members of the Audit Committee are as follows:

Chairman Datuk Tyan Von Choon (Independent Non-Executive Director)Committee Members Ooi Jit Huat (Independent Non-Executive Director)

Dato’ Mohd Sarit Bin Haji Yusoh (Independent Non-Executive Director)

TERMS OF REFERENCE

The Audit Committee (“AC”) shall be governed by the following terms of reference.

CONSTITUTION

A Committee of the Board known as the AC is established in accordance with the Listing Requirements of Bursa MalaysiaSecurities Berhad.

MEMBERSHIP

The Committee shall be appointed by the Board from among its members and shall consist of not less than three (3) members.All members of the Committee must be Independent Non-Executive Directors of the Company and at least one (1) of whomshall be a member of the Malaysian Institute of Accountants or shall fulfill such other requirements as prescribed in Chapter15.10 of the Listing Requirements of Bursa Malaysia Securities Berhad.

The Committee shall elect a chairperson from among the members of Independent Non-Executive Directors.

In the event that a member of the Committee resigns, dies or for any other reason ceases to be a member with the resultthat 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 three (3) members.

TERM OF MEMBERSHIP

Members of Committee shall be appointed for an initial term of three (3) years after which they will be eligible forre-appointment.

MEETINGS

The Committee shall meet at least four (4) times a year.

In addition, the chairperson shall convene a meeting of the Committee if requested to do so by any member, the managementor internal or external auditors to consider any matter within the scope and responsibilities of the Committee.


Audit Committee



ATTENDANCE AT MEETINGS

The Independent Non-Executive Directors, the Group Financial Controller, the head of internal audit, and representative of theexternal auditors shall normally attend meetings. However, the Committee may invite any person to be in attendance to assistin its deliberations. The Company Secretary shall be the Secretary of the Committee.

QUORUM

The presence of two (2) committee members shall be a quorum.

AUTHORITY

The Committee is authorised by the Board to investigate any activity within its terms of reference. It has free access to allinformation and documents it requires for the purpose of discharging its functions and responsibilities.

The AC is also authorised to obtain outside legal or other independent professional advice as it considers necessary.

FUNCTIONS

The functions of the Committee shall be:

• to review the Group’s and the Company’s quarterly and annual financial statements before submission to the Board forits approval;

• to review with the external auditors their audit plan, scope and nature of audit for the Group and the Company;

• to assess the adequacy and effectiveness of the system of internal control and accounting control procedures of theGroup and the Company by reviewing the external auditors’ management’s response;

• to discuss with the external auditors on problems and reservations arising from their interim and final audits;

• to review any related party transactions that may arise within the Group or the Company;

• to consider the appointment of the external auditors, the terms of reference of their appointment, and any question ofresignation or dismissal;

• to undertake such responsibilities as may be agreed to by the Committee and the Board; and

• to report to the Board its activities, significant results and findings.

REPORTING PROCEDURES

The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board.

ACTIVITIES

The summary of the activities of the AC in the discharge of its duties and responsibilities for the financial year includes thefollowing:

(i) review of the external auditors’ scope of work and their audit plan;

(ii) reviewing with the external auditors on the results of their audit, the audit report and internal control recommendationsin respect of control weaknesses noted in the course of their audit;

(iii) reviewing the audited financial statements before recommending for the Board of Directors’ approval;

(iv) reviewing the Company’s compliance with the Revamped Listing Requirements of the Bursa Malaysia Securities Berhadand the applicable Financial Reporting Standards in Malaysia;

(v) review of the quarterly unaudited financial results announcements and recommending for the Board of Directors’approval;

Audit Committee continued


ACTIVITIES continued

(vi) review of the Internal Audit Department’s staffing needs, programmes and plans for the financial year under review andannual assessment of the Internal Audit Department’s performance; and

(vii) review of the audit reports presented by Internal Audit Department on findings and recommendations with regards tosystem and controls weaknesses noted in the course of their audit and management’s responses thereto and ensuringmaterial findings are adequately addressed by management.

NUMBER OF MEETINGS & DETAILS OF ATTENDANCE

Five (5) AC meetings were held during the financial year ended 30 June 2009. The attendance record of each member is asfollows:

AC members Total number of meetings Number of meetings attended

Datuk Tyan Von Choon 5 5Ooi Jit Huat 5 5Dato’ Mohd Sarit Bin Haji Yusoh 5 5

INTERNAL AUDIT FUNCTION

The Group’s internal audit function is carried out by in-house Internal Audit Department that reports directly to the AC. TheCommittee acknowledges the need and importance for a systematic and effective internal control system covering all aspectsof activities of the Group. The annual Internal Audit Plan is approved by the Committee at the beginning of each FinancialYear. The Internal Audit Department performs routine and on-going audit work to evaluate and review the operations withinthe Group, with emphasis to highlight principal risk areas to the Committee and to ensure that a sound internal control system is in place. Audit reports were generated and tabled to the Committee and the Board incorporating findings andrecommendations to improve the weaknesses noted during the course of audits and management comments on the findings.Significant issues and matters unsatisfactorily resolved would be highlighted to the Committee quarterly.


Audit Committee continued


Financial Statements

Directors’ Report 36 - 39

Statement by Directors 40

Statutory Declaration 40

Independent Auditors’ Report 41 - 42

Income Statements 43

Balance Sheets 44

Consolidated Statement of Changes in Equity 45

Company Statement of Changes in Equity 46

Cash Flow Statements 47 - 48

Notes to The Financial Statements 49 - 89

kwantas acc-blue:Layout 1 24/11/2009 5:57 PM Page 35

The directors hereby present their report together with the audited financial statements of the Group and of the Company for thefinancial year ended 30 June 2009.

Principal activities

The principal activities of the Company are investment holding and provision of management services to the subsidiaries. Theprincipal activities of the subsidiaries are the operation of oil palm plantations, palm oil mills, kernel crushing plant, palm and soyabean oil refinery plant, shortening plants, oleochemical plants, biomass power plant, bulking installation and trading of palm andsoya bean oils and fats products. Other activities include the wholesaling and supply of diesel and lubricants.

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

Results

Group Company

RM’000 RM’000

Attributable to:

Equity holders of the Company (70,750) 23,403

Minority interests (16,693) -

(Loss)/profit for the year (87,443) 23,403

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financialstatements.

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were notsubstantially affected by any item, transaction or event of a material and unusual nature.

Dividends

The amount of dividends paid by the Company since 30 June 2008 was as follows:

In respect of the financial year ended 30 June 2008 as reported in the directors’ report of that year:

RM’000

First and final single tier dividend of 5 sen, on 311,677,264 ordinary shares,

declared on 30 December 2008 and paid on 27 March 2009 15,584

Directors’ Report



Directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Mohd Sarit Bin Hj YusohKwan Ngen Chung Kwan Ngen WahOoi Jit Huat Kwan Jin Nget Kwan Min Nyet Chong Kan HiungDatuk Tyan Von Choon

Directors’ Benefits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Companywas a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Companyor any other body corporate, other than those arising from the share options granted under the Employee Share Options Scheme.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefitsincluded in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-timeemployee of the Company as shown in Note 9 to the financial statements) by reason of a contract made by the Company or arelated corporation with any director or with a firm of which the director is a member, or with a company in which the director hasa substantial financial interest, except as disclosed in Note 31 to the financial statements.

Directors’ Interests

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares andoptions over shares in the Company during the financial year were as follows:

Number of ordinary shares of RM0.50 each1.7.2008 Acquired Sold 30.6.2009

The Company

Direct interest:Kwan Ngen Chung 94,188,632 - - 94,188,632Kwan Ngen Wah 93,188,632 - - 93,188,632Kwan Jin Nget 760,000 - - 760,000Kwan Min Nyet 238,000 - - 238,000Chong Kan Hiung 2,600,000 - - 2,600,000

Number of options over ordinary shares of RM0.50 each1.7.2008 Granted Exercised 30.6.2009

The Company

Kwan Ngen Chung 1,000,000 - - 1,000,000Kwan Ngen Wah 2,000,000 - - 2,000,000Kwan Jin Nget 1,000,000 - - 1,000,000Kwan Min Nyet 1,658,000 - - 1,658,000

Kwan Ngen Chung and Kwan Ngen Wah by virtue of their interests in shares in the Company are also deemed interested in sharesof all the Company’s subsidiaries to the extent the Company has an interest.

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

Directors’ Report continued



Employee Share Options Scheme

The Kwantas Corporation Berhad Employee Share Options Scheme (“ESOS”) is governed by the Bye-Laws approved by theshareholders at an Extraordinary General Meeting held on 18 December 2000. Certain amendments were subsequently made tothe Bye-Laws of the ESOS and approved by the shareholders at an Extraordinary General Meeting held on 28 May 2002. The ESOSwas implemented on 10 April 2001 and is to be in force for a period of 5 years from the date of implementation. The extension ofthe ESOS for another 5 years was approved by the shareholders at an Extraordinary General Meeting held on 31 March 2006.

The revised salient features and other terms of the ESOS are disclosed in Note 8(b) to the financial statements.

Details of options granted to directors are disclosed in the section on directors’ interests in this report.

Other statutory information

(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors tookreasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision fordoubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had beenmade for doubtful debts; and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in theordinary course of business had been written down to an amount which they might be expected so to realise.

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

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

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

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherenceto the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

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

(e) As at the date of this report, there does not exist:

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

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




Other statutory information continued

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelvemonths after the end of the financial year which will or may affect the ability of the Group or of the Company to meettheir obligations when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financialyear and the date of this report which is likely to affect substantially the results of the operations of the Group or of theCompany for the financial year in which this report is made.

Significant event

Details of the significant event are disclosed in Note 34 to the financial statements.

Subsequent event

Details of the subsequent event are disclosed in Note 35 to the financial statements.

Auditors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors.

Kwan Ngen Chung Chong Kan Hiung

26 October 2009



ned on behalf


We, Kwan Ngen Chung and Chong Kan Hiung, being two of the directors of Kwantas Corporation Berhad, do hereby state that,in the opinion of the directors, the accompanying financial statements set out on pages 43 to 89 are drawn up in accordance withFinancial Reporting Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positionof the Group and of the Company as at 30 June 2009 and of their financial performance and cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors.

Kwan Ngen Chung Chong Kan Hiung

26 October 2009

Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965

Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965


I, Chong Kan Hiung, being the director primarily responsible for the financial management of Kwantas Corporation Berhad, dosolemnly and sincerely declare that the accompanying financial statements set out on pages 43 to 89 are in my opinion correct,and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

Subscribed and solemnly

declared by the abovenamed

Chong Kan Hiung at Kota

Kinabalu in the State of Sabah

on 26 October 2009 Chong Kan Hiung

Before me,


Report on the financial statements

We have audited the financial statements of Kwantas Corporation Berhad, which comprise the balance sheets as at 30 June 2009of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of theGroup 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 43 to 89.

Directors’ responsibility for the financial statements

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

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordancewith approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan andperform 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 financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’spreparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An auditalso includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates madeby the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and theCompanies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company asat 30 June 2009 and of their financial performance and cash flows 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 itssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted asauditors, which are indicated in Note 17 to the financial statements.

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

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not includeany comment required to be made under Section 174(3) of the Act.

Independent Auditors’ Report to the members of Kwantas Corporation Berhad (Incorporated in Malaysia)



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, 1965in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Pang Pak Lok

AF: 0039 1228/03/11(J)

Chartered Accountants Chartered Accountant

Tawau, Malaysia

26 October 2009

Independent Auditors’ Report to the members of Kwantas Corporation Berhad(Incorporated in Malaysia) continued


EErrnnsstt && YYooYYoYY uunngg


Group CompanyNote 2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Revenue 3 1,568,532 3,452,163 36,324 60,189Cost of sales 4 (1,499,627) (3,062,241) - -

Gross profit 68,905 389,922 36,324 60,189

Other income 5 17,645 17,899 5,862 -Selling expenses (60,568) (127,111) - -Administrative expenses (39,988) (36,794) (4,304) (5,883)Other expenses (51,194) (32) (12) (5,012)

Operating (loss)/profit (65,200) 243,884 37,870 49,294

Finance costs 6 (30,123) (30,584) (14,930) (15,507)

(Loss)/profit before tax 7 (95,323) 213,300 22,940 33,787

Income tax expense 10 7,880 (22,151) 463 (461)

(Loss)/profit for the year (87,443) 191,149 23,403 33,326

Attributable to:Equity holders of the Company (70,750) 150,839 23,403 33,326Minority interests (16,693) 40,310 - -

(87,443) 191,149 23,403 33,326

(Loss)/earnings per share attributable to equity holders of the Company (sen):

Basic 11(a) (22.70) 48.48Diluted 11(b) (22.24) 47.27

Income StatementsFor the year ended 30 June 2009


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



RM’000 RM’000 RM’000 RM’000

AssetsNon-current assetsProperty, plant and equipment 13 577,703 546,580 - -Biological assets 14 426,490 246,523 - -Investment properties 15 9,701 9,691 - -Prepaid land lease payments 16 313,914 315,041 - -Investments in subsidiaries 17 - - 502,587 481,107Other receivables 19 18,701 2,337 - -Deferred tax assets 26 7,667 2,616 - -

1,354,176 1,122,788 502,587 481,107

Current assetsInventories 18 105,672 307,815 - -Trade and other receivables 19 318,663 322,467 70,945 60,293Tax recoverable 8,984 1,996 7,591 7,962Cash and bank balances 20 50,025 144,344 314 391

483,344 776,622 78,850 68,646

Total assets 1,837,520 1,899,410 581,437 549,753

Equity and liabilitiesEquity attributable to equityholders of the CompanyShare capital 21 155,839 155,839 155,839 155,839Share premium 53,727 53,727 53,727 53,727Other reserves 22 408,644 211,746 - -Retained earnings 23 291,965 372,877 78,399 70,580

910,175 794,189 287,965 280,146Minority interests 47,344 79,597 - -

Total equity 957,519 873,786 287,965 280,146

Non-current liabilitiesBorrowings 24 88,448 143,623 - -Deferred tax liabilities 26 68,900 76,522 - -

157,348 220,145 - -

Current liabilitiesBorrowings 24 611,964 540,245 - -Trade and other payables 27 110,689 265,234 293,472 269,607

722,653 805,479 293,472 269,607

Total liabilities 880,001 1,025,624 293,472 269,607

Total equity and liabilities 1,837,520 1,899,410 581,437 549,753

Balance Sheetsas at 30 June 2009




|------- Attributable to equity holders of the Company ------| Minority Total

|--- Non-distributable ---| Distributable interests equity

Share Share Other Retained

Note capital premium reserves earnings Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 July 2007 155,339 53,372 200,473 243,388 652,572 49,138 701,710

Disposal of subsidiary - - - - - (5,723) (5,723)

Issue of shares pursuant to ESOS 500 355 - - 855 - 855

Changes in tax rates on deferred tax 22 - - 2,490 - 2,490 - 2,490

Foreign exchange differencesarising during the year 22 - - 8,783 - 8,783 - 8,783

Profit for the year - - - 150,839 150,839 40,310 191,149

Dividend paid 12 - - - (21,350) (21,350) - (21,350)

Dividend paid to minority interests - - - - - (4,128) (4,128)

At 30 June 2008 155,839 53,727 211,746 372,877 794,189 79,597 873,786

At 1 July 2008 155,839 53,727 211,746 372,877 794,189 79,597 873,786

Acquisition of subsidiaries - - - - - 1,084 1,084

Revaluation surplus of plantationinfra-structure, buildings andbiological assets 22 - - 183,952 - 183,952 - 183,952

Revaluation reserve realised 22 - - (5,422) 5,422 - - -

Foreign exchange differencesarising during the year 22 - - 18,368 - 18,368 - 18,368

Loss for the year - - - (70,750) (70,750) (16,693) (87,443)

Dividend paid 12 - - - (15,584) (15,584) - (15,584)

Dividend paid to minority interests - - - - - (16,644) (16,644)

At 30 June 2009 155,839 53,727 408,644 291,965 910,175 47,344 957,519

Consolidated Statement of Changes in EquityFor the year ended 30 June 2009




Non-distributable Distributable

Share Share RetainedNote capital premium earnings Total

RM’000 RM’000 RM’000 RM’000

At 1 July 2007 155,339 53,372 58,604 267,315

Issue of ordinary sharespursuant to ESOS 500 355 - 855

Profit for the year - - 33,326 33,326

Dividend paid 12 - - (21,350) (21,350)

At 30 June 2008 155,839 53,727 70,580 280,146

At 1 July 2008 155,839 53,727 70,580 280,146

Profit for the year - - 23,403 23,403

Dividend paid 12 - - (15,584) (15,584)

At 30 June 2009 155,839 53,727 78,399 287,965

Company Statement of Changes in EquityFor the year ended 30 June 2009





RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

(Loss)/profit before tax (95,323) 213,300 22,940 33,787

Adjustments for:Amortisation of prepaid land lease payments 7 3,613 3,589 - -Bad debts written off 7 - 32 - -Allowance for doubtful debts 7 800 - - -Bad debts recovered 5 (6) - - -Depreciation of property, plant and equipment 7 29,559 25,362 - -Amortisation on discount of Sukuk Ijarah 7 500 500 - -Dividend income 3 - - (30,324) (54,189)Gain on disposal of property, plant and equipment 5 (192) (286) - -Gain on disposal of subsidiary 5 - (2,451) - -Property, plant and equipment scrapped 7 40 - - -Unrealised foreign exchange gain 5 (797) (3,980) (5,862) -Unrealised foreign exchange loss 7 - - 13 3,118Interest expense 6 29,623 30,084 14,930 15,507Interest income 5 (3,108) (5,248) - -

Operating (loss)/profit before working capital changes (35,291) 260,902 1,697 (1,777)Decrease/(increase) in inventories 202,142 (201,851) - -Increase in trade and other receivables (27,858) (123,398) (4,803) (1,853)(Decrease)/increase in trade and other payables (154,545) 77,220 23,865 (10,284)

Cash (used in)/generated from operations (15,552) 12,873 20,759 (13,914)Interest paid (29,763) (30,375) (14,930) (15,507)Taxes paid (18,658) (23,883) - -Income tax refunded 4,710 59 4,084 -

Net cash (used in)/generated fromoperating activities (59,263) (41,326) 9,913 (29,421)

Cash flows from investing activities

Additional investments in subsidiaries - - (13,132) (100)Acquisition of subsidiaries (8,318) 2 (8,348) -Disposal of subsidiary - 8,105 - -Purchase of property, plant and equipment 13(b) (24,934) (96,047) - -Plantation development expenditure 14 (2,502) (2,985) - -Purchase of investment properties 15 (10) (11) - -Prepayment of land lease 16 (1,098) (7,672) - -Proceeds from disposal of property, plant and equipment 2,453 819 - -Interest received 3,108 5,248 - -Net dividends received - - 27,074 49,639

Net cash (used in)/generated from investing activities (31,301) (92,541) 5,594 49,539

Cash Flow Statements For the year ended 30 June 2009




RM’000 RM’000 RM’000 RM’000

Cash flows from financing activities

Proceeds from issuance of ordinary shares - 855 - 855Drawdown of short term revolving credits 196,771 91,000 - -Repayment of short term revolving credits (166,370) (94,557) - -Proceeds from issuance of Islamic Securities 210,000 120,000 - -Redemption of Islamic Securities (210,000) (110,000) - -Drawdown of term loans - 12,163 - -Repayment of term loans (25,542) (39,416) - -Repayments of hire purchase financing (296) (610) - -Drawdown of bankers’ acceptances 2,320,733 2,140,752 - -Repayment of bankers’ acceptances (2,311,771) (1,930,172) - -Dividend paid 12 (15,584) (21,350) (15,584) (21,350)

Net (used in)/cash generated from financing activities (2,059) 168,665 (15,584) (20,495)

Net (decrease)/increase in cash and cash equivalents (92,623) 34,798 (77) (377)

Cash and cash equivalents at beginning of year 144,344 107,442 391 768

Effect of exchange rate differences (1,696) 2,104 - -

Cash and cash equivalents at end of year 20 50,025 144,344 314 391

Cash Flow Statements continuedFor the year ended 30 June 2009




1. Corporate information

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market ofthe Bursa Malaysia Securities Berhad. The registered office of the Company is located at 1st Floor, Fordeco Building, Jalan SingaMata, 91100 Lahad Datu, Sabah.

The principal activities of the Company are investment holding and provision of management services to the subsidiaries. Theprincipal activities of the subsidiaries are disclosed in Note 17 to the financial statements. There have been no significant changesin the nature of these activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on26 October 2009.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements comply with Financial Reporting Standards and the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have also been prepared on a historical basis, unless otherwisedisclosed in the other significant accounting policies, modified to include the revaluation of buildings and plantationinfrastructure included within property, plant and equipment, biological assets and investment properties.

The financial statements are presented in Ringgit Malaysia (RM) and all values are rounded to the nearest thousand (RM’000)except when otherwise indicated.

2.2 Summary of significant accounting policies

(a) Subsidiaries and basis of consolidation

(i) Subsidiaries

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

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

(ii) Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company.

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

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Notes to The Financial Statements30 June 2009



2. Significant accounting policies continued

2.2 Summary of significant accounting policies continued

(a) Subsidiaries and basis of consolidation continued

(ii) Basis of consolidation continued

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the 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 contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. Itis measured at the minorities’ share of the fair value of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.

(b) Property, plant and equipment, and depreciation

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 except for buildings and plantation infrastructure are stated at cost less accumulated depreciation and any accumulated impairment losses.

Buildings and plantation infrastructure are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

Construction-in-progress is not depreciated until it is completed and ready for use. Plantation infrastructure is depreciated over the period of the respective leases which range from 57 years to 99 years. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost or valuation of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings - 5% to 10%Plant, machinery and equipment - 5% to 20%Tractors and vehicles - 20%Furniture, fixtures and fittings - 10% to 20%Effluent ponds - 10%

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with 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 profit or loss and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

Notes to The Financial Statements continued30 June 2009





(c) Biological assets

All expenses incurred in land preparation, planting and development of crops up to maturity are capitalised as biological assets; all expenses subsequent to maturity are written off in the income statement.

Biological assets are stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment losses. Fair value is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings.

(d) Investment properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is performed by registered independent valuers having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued.

Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise.

A property interest under an operating lease is classified and accounted for as an investment property on a property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest under an operating lease classified as an investment property is carried at fair value.

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

(e) Impairment of non-financial assets

The carrying amounts of assets, other than investment properties and inventories, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated to determine the amount of impairment loss.

For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.






(e) Impairment of non-financial assets continued

An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset.

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

(f) Inventories

(i) Palm and soya bean oil products

These are stated at the lower of cost (determined using the first-in, first-out basis) and net realisable value. The cost of raw materials comprises cost of purchase. The costs of finished goods and work-in-progress comprise costs of raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity.

(ii) Oil palm seedlings

Oil palm seedlings, which represent the cost of seedlings remaining in nurseries for eventual field planting, are valued at cost.

(iii) Stores and supplies

Stores and supplies held for the Group's own use which are stated at the lower of cost and net realisable value, are valued at the average cost of acquisition less provision for obsolescence and deterioration.

Net realisable value is the estimated selling in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

(g) Financial instruments

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

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

(i) Cash and cash equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank, deposit at call and short term highly liquid investments which have an insignificant risk of changes in value, net of outstanding bank overdrafts, if any.

(ii) Trade receivables

Trade receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date.




2. Significant accouznting policies continued


(g) Financial instruments continued

(iii) Trade payables

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

(iv) Interest bearing loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

(v) Equity instruments

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

(vi) Derivative financial instruments

The Group uses derivative financial instruments such as forward foreign exchange contracts and commodity futures contracts to hedge the Group’s exposure to foreign currency, interest rate and commodity price fluctuations.

Such derivative financial instruments are not recognised in the financial statements on inception.

(h) 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, with the following exceptions:

- Property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and, if classified as investment property, is accounted for as if held under a finance lease (Note 2.2(d)); and

- Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease.

(ii) Finance leases – the Group as lessee

Assets acquired by way of hire purchase or 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 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 the profit or loss 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 2.2(b).






(h) Leases continued

(iii) Operating leases – the Group as lessee

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 term.

(i) Borrowing costs

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

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(j) Income tax

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

Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the income statement for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

(k) Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.






(l) Employee benefits

(i) Short term benefits

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

(ii) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.

(iii) Share-based compensation

The Kwantas Corporation Berhad Employee Share Options Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the Group’s employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the options will vest.

The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.

At each balance sheet date, the Group revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in the profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium, or until the option expires, upon which it will be transferred directly to retained earnings.

The proceeds received net of any directly attributable transaction costs are credited to equity when the options are exercised.

(m) Foreign currencies

(i) Functional and presentation currency

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






(m) Foreign currencies continued

(ii) Foreign currency transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation. These are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in the income statement. Exchange differences arising on monetary items that form part of the Company’s net investment in foreign operation are recognised in the income statement in the Company’s separate financial statements or the individual financial statements of the foreign operation, as appropriate.

Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(iii) Foreign operations

The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows:

- Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date;

- Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and

- All resulting exchange differences are taken to the foreign currency translation reserve within equity.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the balance sheet date.

(n) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of goods

Revenue is recognised net of sales taxes and upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Revenue from services

Revenue from services rendered is recognised net of service taxes and discounts as and when the services are performed.






(n) Revenue recognition continued

(iii) Rental income

Rental income is recognised on a time proportion and accrual basis.

(iv) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(v) Dividend income

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

2.3 Standards and Interpretations issued but not yet effective

At the date of authorisation of these financial statements, the following new FRS, amendments to FRS and Interpretations were issued but not yet effective and have not been applied by the Group and the Company:

Effective for financial periodsFRS, amendments to FRS and Interpretations beginning on or after

(i) FRS 4: Insurance Contracts 1 January 2010(ii) FRS 7: Financial Instruments: Disclosures 1 January 2010(iii) FRS 8: Operating Segments 1 July 2009(iv) FRS 139: Financial Instruments: Recognition 1 January 2010

and Measurement(v) FRS 123: Borrowings 1 January 2010(vi) FRS 101: Presentation of Financial Statements 1 January 2010

(revised 2009)(vii) IC Interpretation 9: Reassessment of Embedded 1 January 2010

Derivatives(viii) IC Interpretation 10: Interim Financial Reporting 1 January 2010

and Impairment(ix) IC Interpretation 11: FRS 2 - Group and Treasury 1 January 2010

Share Transactions(x) IC Interpretation 13: Customer Loyalty Programmes 1 January 2010(xi) IC Interpretation 14: FRS 119 - The Limit on a Defined 1 January 2010

Benefits Assets, Minimum Funding Requirementsand their Interaction

(xii) Amendments to FRS 1: First-time Adoption of Financial 1 January 2010Reporting Standards

(xiii) Amendments to FRS 2: Share-based Payment – Vesting 1 January 2010Conditions and Cancellations

(xiv) Amendments to FRS 7: Financial Instruments: Disclosures 1 January 2010(xv) Amendments to FRS 127: Consolidated and Separate 1 January 2010

Financial Statements: Cost of investment in aSubsidiary, Jointly Controlled Entity or Associate

(xvi) Amendments to FRS 132: Financial Instruments: 1 January 2010Presentation

(xvii) Amendments to FRS 139: Financial Instruments: 1 January 2010Recognition and Measurement

(xviii) Amendments to IC Interpretation 9: Reassessment of 1 January 2010Embedded Derivatives

(xix) Amendments to FRSs contained in the document entitled 1 January 2010“Improvements to FRSs (2009)”





2.3 Standards and Interpretations issued but not yet effective continued

The new FRS, amendments to FRS and Interpretations above are expected to have no significant impact on the financial statements of the Group and the Company upon their initial application except for the changes in disclosures arising from the adoption of FRS 7 and FRS 8.

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

2.4 Significant accounting estimates and judgements

Key sources of estimation uncertainty

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 discussed below.

(i) Depreciation of plant and equipment

The cost of plant and machinery is depreciated on a straight-line basis over the assets’ remaining useful lives. Management estimates the useful lives of these assets to be between 5 to 14 years. These are common life expectancies applied in the palm oil and woods industries. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(ii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses, unutilised reinvestment allowances and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses, reinvestment allowances and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of recognised tax losses, reinvestment allowances and capital allowances of the Group was RM83,572,252 (2008: RM30,590,752).

(iii) Allowance for doubtful debts

The Group recognises an allowance for doubtful debts when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables.

Significant judgement is required in the assessment of the recoverability of receivables, which have a financial impact on the amount of allowance for doubtful debts recognised.

3. Revenue

Group Company

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Gross dividends from subsidiaries - - 30,324 54,189Management fees from subsidiaries - - 6,000 6,000Rental income 4,598 13,151 - -Sales of diesel and lubricants 247 222 - -Sales of palm oil products 1,515,942 3,107,095 - -Sales of oleochemical products 15,735 2,752 - -Sales of soft oil products 20,189 322,815 - -Sales of oil palm FFB 11,583 6,056 - -Supply of electricity 238 72 - -

1,568,532 3,452,163 36,324 60,189




4. Cost of sales

Group Company

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Cost of goods sold 1,499,627 3,062,241 - -

5. Other income

Interest income from:Interest rate swap - 149 - -Negotiable certificate of deposits 994 1,959 - -Overdue accounts 2,114 3,140 - -

3,108 5,248 - -Bad debts recovered 6 - - -Gain on disposal of property, plant and equipment 192 286 - -Gain on disposal of subsidiary - 2,451 - -Forfeiture of deposit received 6,046 2,991 - -Income from hire of equipment 1,078 497 - -Income from rental of jetty 139 204 - -Income from rental of oil tanks 948 1,035 - -Income from rental of vehicles 24 24 - -Miscellaneous 2,787 843 - -Realised foreign exchange gain 2,474 293 - -Road toll charges 46 47 - -Unrealised foreign exchange gain 797 3,980 5,862 -

17,645 17,899 5,862 -

6. Finance costs

Interest expense on:Amortisation on discount of Sukuk Ijarah 500 500 - -Bank overdrafts 63 75 - -Bankers’ acceptances 15,097 13,816 - -Commercial papers/medium term notes 1,867 957 - -Hire purchase 12 66 - -Islamic Securities – Sukuk Ijarah 8,122 9,050 - -Overdue accounts 173 35 14,930 15,507Short term revolving credits 1,366 1,253 - -Term loans 2,923 4,832 - -

30,123 30,584 14,930 15,507




7. (Loss)/profit before tax

The following amounts have been included in arriving at (loss)/profit before tax:

Group Company

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Employee benefits expense (Note 8(a)) 31,101 30,733 3,739 4,975Non-executive directors’ remuneration (Note 9) 82 81 66 65Allowance for doubtful debts 800 - - -Amortisation of prepaid land lease Payments (Note 16) 3,613 3,589 - -Amortisation on discount of Sukuk Ijarah 500 500 - -Auditors’ remuneration:- Statutory audits:- Current year 204 165 35 20- Under/(over)provision in prior years 17 (2) 15 -

- Other services 22 37 3 3Bad debts written off - 32 - -Depreciation of property, plant and equipment (Note 13) 29,559 25,362 - -Formation expenses - 3 - -Hire of equipment 23 27 - -Hire of oil tankers 260 240 - -Property, plant and equipment scrapped 40 - - -Realised foreign exchange loss - - 12 183Realised loss on commodity futures contracts 50,394 - - -Rental of premises 258 330 64 138Unrealised foreign exchange loss - - - 3,118

8. Employee benefits

(a) Employee benefits expense

Salaries and wages 29,979 29,596 3,354 4,618Employees Provident Fund contributions 885 927 372 345Social security costs 237 210 13 12

31,101 30,733 3,739 4,975

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting toRM2,284,942 (2008: RM3,581,155) and RM1,760,782 (2008: RM2,787,075) respectively as further disclosed in Note 9.

(b) Employee Share Options Scheme (“ESOS”)

The Kwantas Corporation Berhad Employee Share Options Scheme (“ESOS”) is governed by the Bye-Laws approved by the shareholders at an Extraordinary General Meeting held on 18 December 2000. Certain amendments were subsequentlymade to the Bye-Laws of the ESOS and approved by the shareholders at an Extraordinary General Meeting held on 28 May 2002. The ESOS was implemented on 10 April 2001 and is to be in force for a period of 5 years from the date of implementation. The extension of the ESOS for another 5 years was approved by the shareholders at an Extraordinary General Meeting held on 31 March 2006.

The revised salient features of the ESOS are as follows:

(i) The Options Committee appointed by the Board of Directors to administer the ESOS, may from time to time grant options to eligible employees of the Group to subscribe for new ordinary shares of RM0.50 each in the Company.

(ii) Subject to the discretion of the Options Committee, any employee whose employment has been confirmed and any executive director holding office in a full-time executive capacity of the Group, shall be eligible to participate in the ESOS.




8. Employee benefits continued

(b) Employee Share Options Scheme (“ESOS”) continued

(iii) The total number of shares to be issued under the ESOS shall not exceed in aggregate 10% of the issued share capital of the Company at any point of time during the tenure of the ESOS and out of which not more than 50% of the shares shall be allocated, in aggregate, to directors and senior management. In addition, not more than 10% of the shares available under the ESOS shall be allocated to any individual director or employee who, either singly or collectively through his/her associates, holds 20% or more of the issued and paid-up capital of the Company.

(iv) The option price for each share shall be the weighted average of the market price as quoted in the Daily Official Listissued by Bursa Malaysia Securities Berhad for the 5 market days immediately preceding the date on which the option is granted less, if the Options Committee shall so determine at their discretion from time to time, a discount of not more than 10% or the par value of the shares of the Company of RM0.50.

(v) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company commencing from the date of the offer but before the expiry of five years from the date of the receipt of the last of the requisite approvals.

(vi) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company other than as may be specified in a resolution approving the distribution of dividends prior to their exercise dates.

(vii) The persons to whom the options have been granted have no right to participate by virtue of the options, in any share issue of any other company.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, shareoptions during the year:

|---------------------------------------------- Number of Share Options ----------------------------------------------|Outstanding |-------------- Movement during the year -------------| Outstanding Exercisable

at 1 Share at 30 at 30July split Granted Exercised Expired June June’000 ’000 ’000 ’000 ’000 ’000 ’000

20092001 Options 3,258 - - - - 3,258 3,2582003 Options 6,000 - - - - 6,000 6,000

9,258 - - - - 9,258 9,258

WAEP 0.74 - - - - 0.74 0.74

20082001 Options 1,629* 1,629+ - - - 3,258 3,2582003 Options 3,500* 3,500+ - (1,000) - 6,000 6,000

5,129 5,129 - (1,000) - 9,258 9,258

WAEP 1.49 - - 0.86 - 0.74 0.74




8. Employee benefits continued

(b) Employee Share Options Scheme (“ESOS”) continued

(i) Details of share options outstanding at the end of the year:

ExercisePrice Grant Date Expiry DateRM

20092001 Options 0.52 10.04.2001 09.04.20112003 Options 0.86 12.10.2002 09.04.2011

20082001 Options 0.52 10.04.2001 09.04.20112003 Options 0.86 12.10.2002 09.04.2011

(ii) Share options exercised during the year

There were no options exercised during the financial year.

+ Sub-division of share options over ordinary shares of par value of RM1.00 each to par value of RM0.50 each.* Share options over ordinary shares at par value of RM1.00 each.

9. Directors’ remuneration

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Executive directors’ remuneration (Note 8(a)):Salaries and other emoluments 2,285 3,581 1,761 2,787

Non-executive directors’ remuneration (Note 7): Fees 82 81 66 65

Total directors’ remuneration 2,367 3,662 1,827 2,852

The details of remuneration receivable by directors of the Company during the year are as follows:

Company2009 2008

RM’000 RM’000

Executive:Salaries and other emoluments 1,574 1,445Bonus - 1,054Defined contribution plan 187 288

1,761 2,787

Non-Executive:Fees 66 65

1,827 2,852




9. Directors’ remuneration continued

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Number of directors2009 2008

Executive directors:RM250,001 – RM300,000 3 -RM300,001 – RM350,000 - 1RM350,001 – RM400,000 1 1RM400,001 – RM450,000 - 1RM600,001 – RM650,000 1 -RM700,001 – RM750,000 - 1RM850,001 – RM900,000 - 1

Non-Executive directors:RM1 – RM50,000 3 3

10. Income tax expense

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Current income tax:Malaysian income tax 7,723 24,523 - 672Foreign tax - 20 - -

Overprovided in prior years:Malaysian income tax (763) (820) (463) (211)

6,960 23,723 (463) 461

Deferred tax (Note 26):Relating to origination and reversalof temporary differences (14,768) (103) - -Relating to changes in tax rates 8 (1,146) - -Overprovided in prior years (80) (323) - -

(14,840) (1,572) - -

Total income tax (7,880) 22,151 (463) 461

Domestic current income tax is calculated at the Malaysian statutory tax rate of 25% (2008: 26%) of the estimated assessable (loss)/profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.




10. Income tax expense continued

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

2009 2008RM’000 RM’000

Group

(Loss)/profit before tax (95,323) 213,300

Taxation at Malaysian statutory tax rate of 25% (2008: 26%) (23,831) 55,458

Effect of income subject to tax rate of 20% - (122)

Effect of income not subject to tax (1,489) -

Effect of different tax rates in other countries - (31,805)

Effect of deferred tax recognised at different tax rates 9 (1,146)

Effect of expenses not deductible for tax purposes 884 2,598

Effect of expenses eligible for double tax deductions (943) (1,637)

Effect of deferred tax not recognised on current year’s

tax losses incurred on other countries 18,333 -

Effect of utilisation of current year’s reinvestment allowances - (52)

Overprovision of deferred tax in prior years (80) (323)

Overprovision of tax expense in prior years . (763) (820)

Income tax expense for the year (7,880) 22,151

Company

Profit before tax 22,940 33,787

Taxation at Malaysian statutory tax rate of 25% (2008: 26%) 5,735 8,785Effect of income not subject to tax (5,796) (9,539)Effect of expenses not deductible for tax purposes 61 1,426Overprovision of tax expense in prior years (463) (211)

Income tax expense for the year (463) 461

Tax savings during the financial year arising from:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Utilisation of current year’s tax losses 2,122 - - -Utilisation of current year’s reinvestment allowances - 52 - -




11. (Loss)/earnings per share

(a) Basic

Basic (loss)/earnings per share amounts are calculated by dividing (loss)/profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year.

2009 2008

(Loss)/profit for the year (RM’000) (70,750) 150,839Weighted average number of ordinary shares in issue (‘000) 311,677 311,120

Basic (loss)/earnings per share (sen) (22.70) 48.48

(b) Diluted

For the purpose of calculating diluted (loss)/earnings per share, the weighted average number of ordinary shares in issue during the financial year has been adjusted for the dilutive effects of all potential ordinary shares, i.e. share options granted to employees.

2009 2008

(Loss)/profit for the year (RM’000) (70,750) 150,839

Weighted average number of ordinary shares in issue (’000) 311,677 311,120

Effect of dilution : Share options (’000) 6,458 7,977

Adjusted weighted average number of ordinary shares inissue and issuable (’000) 318,135 319,097

Diluted (loss)/earnings per share (sen) (22.24) 47.27

12. Dividend

Dividend Dividendin respect of year recognised in year2008 2007 2009 2008

RM’000 RM’000 RM’000 RM’000

Recognised during the year:Final tax exempt dividend of 5 sen,on 311,677,264 ordinary shares - 15,584 - 15,584

Final dividend of 2.5 sen less26% taxation, on 311,677,264ordinary shares (1.85 sen perordinary shares) - 5,766 - 5,766

First and final single tier dividend of5 sen, on 311,677,264 ordinaryshares 15,584 - 15,584 -

15,584 21,350 15,584 21,350




13. Property, plant and equipment

Plant, Furniture,Plantation machinery Tractors fixtures Construc-

infra- and and and Effluent tion-inBuildings structure equipment vehicles fittings ponds progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

At 30 June 2009

Cost or valuation

At 1 July 2008 123,863 43,937 268,082 27,190 3,811 626 245,193 712,702Additions 2,451 942 3,414 1,520 520 - 16,349 25,196Disposals (8) - (43) (195) (4) - (2,215) (2,465)Write-offs (12) - - (34) - - (1) (47)Reclassifications 42,094 390 132,385 (389) 3,619 - (178,055) 44Revaluation surplus 1,005 3,887 - - - - - 4,892Exchange reserve 3,682 - 9,291 148 71 - 17,726 30,918

At 30 June 2009 173,075 49,156 413,129 28,240 8,017 626 98,997 771,240

Representing:At cost 156,477 816 413,129 28,240 8,017 626 98,997 706,302At valuation 16,598 48,340 - - - - - 64,938

At 30 June 2009 173,075 49,156 413,129 28,240 8,017 626 98,997 771,240

Accumulated depreciation

At 1 July 2008 25,110 490 117,088 20,892 2,181 361 - 166,122Depreciation charge for the year 6,641 486 19,110 2,675 592 55 - 29,559Disposals - - (43) (159) (2) - - (204)Write-offs - - - (7) - - - (7)Reclassifications (4) (12) 395 (376) (3) - - -Revaluation surplus (2,798) (964) - - - - - (3,762)Exchange reserve 450 - 1,280 56 43 - - 1,829

At 30 June 2009 29,399 - 137,830 23,081 2,811 416 - 193,537

Net carrying amount

At cost 127,078 816 275,299 5,159 5,206 210 98,997 512,765At valuation 16,598 48,340 - - - - - 64,938

At 30 June 2009 143,676 49,156 275,299 5,159 5,206 210 98,997 577,703




13. Property, plant and equipment continued

Plant, Furniture,Plantation machinery Tractors fixtures Construc-

infra- and and and Effluent tion-inBuildings structure equipment vehicles fittings ponds progress TotalRM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group continued

At 30 June 2008

Cost or valuation

At 1 July 2007 102,496 42,780 195,458 24,630 3,213 525 233,052 602,154Additions 8,796 1,157 5,861 2,898 508 101 76,845 96,166Disposals - - (533) (264) - - (135) (932)Write-offs - - - (278) - - - (278)Reclassifications 10,978 - 63,423 141 39 - (72,682) 1,899Acquisition of subsidiary - - 7 - - - - 7Disposal of subsidiary - - (136) - - - - (136)Exchange reserve 1,593 - 4,002 63 51 - 8,113 13,822

At 30 June 2008 123,863 43,937 268,082 27,190 3,811 626 245,193 712,702

Representing:At cost 110,717 1,157 268,082 27,190 3,811 626 245,193 656,776At valuation 13,146 42,780 - - - - - 55,926

At 30 June 2008 123,863 43,937 268,082 27,190 3,811 626 245,193 712,702

Accumulated depreciation

At 1 July 2007 19,781 - 100,284 18,611 1,771 315 - 140,762Depreciation charge for the year 5,267 490 16,378 2,793 388 46 - 25,362Disposals - - (140) (259) - - - (399)Write-off - - - (278) - - - (278)Reclassifications (139) - - - 2 - - (137)Acquisition of subsidiary - - 1 - - - - 1Disposal of subsidiary - - (25) - - - - (25)Exchange reserve 201 - 590 25 20 - - 836

At 30 June 2008 25,110 490 117,088 20,892 2,181 361 - 166,122

Net carrying amount

At cost 86,868 1,150 150,994 6,298 1,630 265 245,193 492,398At valuation 11,885 42,297 - - - - - 54,182

At 30 June 2008 98,753 43,447 150,994 6,298 1,630 265 245,193 546,580




13. Property, plant and equipment continued

(a) Certain plantation infrastructure and buildings owned by certain subsidiaries were revalued on 30 June 2009 by C. H. Williams Talhar & Wong (Sabah) Sdn. Bhd., an independent professional valuer. Fair value is determined by reference to open market values on an existing use basis.

Had the revalued property, plant and equipment been carried under the cost model, the carrying amounts of each class of property plant and equipment that would have been included in the financial statements of the Group as at 30 June 2009 would be as follows:

Group2009 2008

RM’000 RM’000

Plantations infrastructure 32,351 32,507Buildings 3,805 4,292

36,156 36,799

(b) During the financial year, the Group acquired property, plant and equipment at aggregate costs of RM25,195,741 (2008: RM96,166,159) of which RM262,000 (2008: RM118,400) was acquired by means of hire purchase arrangements. Included in plant and equipment of the Group are motor vehicles with net carrying amount of RM772,773 (2008: RM1,194,091) held under hire purchase arrangements.

(c) Plantation infrastructure with an aggregate carrying value of RM21,880,000 (2008: RM17,962,529) are pledged as securities for borrowings (Note 24).

14. Biological assets

Group2009 2008

RM’000 RM’000

At beginning of year 246,523 243,538Additions during the year 2,502 2,985Revaluation surplus 177,465 -

At end of year 426,490 246,523

Representing:At cost - 2,985At valuation 426,490 243,538

426,490 246,523

(a) The biological assets were revalued on 30 June 2009 by C.H. Williams Talhar & Wong (Sabah) Sdn. Bhd., an independent professional valuer. Fair value is determined by reference to open market values on an existing use basis.

At 30 June 2009, had the revalued biological assets of the Group been carried under the cost model, the carrying amount would have been RM67,971,930 (2008: RM67,971,930).

(b) Biological assets with an aggregate carrying value of RM195,549,000 (2008: RM103,807,527) are pledged as securities for borrowings (Note 24).




15. Investment properties

Group2009 2008

RM’000 RM’000

Leasehold lands:

At beginning of year 9,691 9,623Addition during the year 10 11Reclassification - 57

At end of year 9,701 9,691

All the investment properties are held under lease terms.

16. Prepaid land lease payments

Group2009 2008

RM’000 RM’000

Long term leasehold land:

At beginning of year 315,041 320,200Addition during the year 1,098 7,672Amortisation for the year (Note 7) (3,613) (3,589)Disposal of subsidiary - (7,842)Reclassifications (44) (2,094)Exchange reserve 1,432 694

At end of year 313,914 315,041

Certain leasehold lands were revalued on 30 June 2007 by C.H. Williams Talhar & Wong (Sabah) Sdn. Bhd., an independent professional valuer. Fair value is determined by reference to open market values on an existing use basis

Leasehold land with an aggregate carrying value of RM105,230,577 (2008: RM106,302,289) are pledged as securities for borrowings (Note 24).

17. Investments in subsidiaries

Company2009 2008

RM’000 RM’000

Unquoted shares, at cost 502,587 481,107




17. Investments in subsidiaries continued

Details of the subsidiaries are as follows:

Country of Equity interest Name of subsidiaries incorporation held (%) Principal activities

2009 2008

Held by the Company

Kwantas Oil Sdn. Bhd. Malaysia 100 100 Operation of palm oilmills, kernel crushing plant,palm oil refinery plant, the wholesaling and supply of diesel and lubricants, and trading of refined soya beanoil

Kwantas Plantations Malaysia 100 100 Operation of oil palmSdn. Bhd. plantations

Haranky Sdn. Bhd. Malaysia 100 100 Operation of an oil palmplantation

Palm Energy Sdn. Bhd. Malaysia 100 100 Operation of a biomasspower plant

Kwantas International Inc. Malaysia 100 100 International trading

Kwantas Oleo Sdn. Bhd. Malaysia 100 100 Operation of an oil palmplantation

Dongma Oils & Fats People’s 51 51 Operation of a bulking(Guangzhou Free Trade Republic installation, palm and soyaZone) Co. Ltd. + of China bean oil refinery and

shortening plants, andtrading of palm and soyabean oils and fats products

Dongma Oils & Fats People’s 100 100 Operation of a bulking(Zhangjiagang Free Trade Republic installation and trading ofZone) Co. Ltd. + of China palm oils and fats products

Dongma Palm Industires People’s 100 100 Operation of soap noodle,(Zhangjiagang) Co. Ltd. + Republic oleochemicals and

of China glycerine plants

Dongma (Guangzhou People’s 51 51 Operation of soap noodleFree Trade Zone) Republic oleochemicals andOleochemicals Co. Ltd. + of China glycerine plants

Kwantas Land Malaysia 100 100 Operation of oil palmDevelopment Sdn. Bhd. plantations

Kwantas SPV Sdn. Bhd. Malaysia 100 100 Undertaking of IslamicSecurities transactions

Miracle Harvest Sdn. Bhd. + Malaysia 70 70 Operation of an oil palmplantation

Green Ace Resources Sdn. Bhd. + Malaysia 70 70 Operation of an oil palmplantation




17. Investments in subsidiaries continued

Country of Equity interest Name of subsidiaries incorporation held (%) Principal activities

2009 2008

Held by the Company continued

Kwantas Edible Oil Malaysia 100 100 Dormant(Bintulu) Sdn. Bhd.

Pristine Prestige Sdn. Bhd. + Malaysia 70 70 Dormant

Green Green Grass Malaysia 100 100 Operation of waste Sdn. Bhd. incineration

PT Kinabalu Invesdag Indonesia 95 - Investment holdingIndonesia +

Held through Kwantas Oil Sdn. Bhd.

Maximlink Enterprise Malaysia 100 100 Rental of leasehold landSdn. Bhd.

Held through Kwantas Plantations Sdn. Bhd.

Aman Bersatu Sdn. Bhd. Malaysia 100 100 Operation of an oil palmplantation

Benar Bersatu Sdn. Bhd. Malaysia 100 100 Operation of an oil palmplantation

Kwantas Pelita Plantation Malaysia 60 60 Operation of an oil palm(Balingian) Sdn. Bhd. plantation

Held through PT Kinabalu Invesdag Indonesia

PT Kalsum Pratama Indonesia 95 - Operation of an oil palmPerkasa + plantation

PT Gerbang Meranti Indonesia 95 - Operation of an oil palmAgrobisnis + plantation

+ Audited by firms of auditors other than Ernst & Young




18. Inventories

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cost

Raw materials 22,999 44,459 - -Stores and supplies 11,665 22,852 - -

34,664 67,311 - -

Net realisable value

Finished goods ` 71,008 240,504 - -

105,672 307,815 - -

19. Trade and other receivables

Current

Trade receivables

Third parties 217,025 209,123 - -Less: Allowance for doubtful debts (841) (41) - -

Trade receivables, net 216,184 209,082 - -

Other receivables

Amounts due from subsidiaries - - 70,944 58,564Advances 5,965 19,411 - -Deposits 1,265 1,333 - -Prepayments 6,929 2,546 - -Sundry receivables 88,325 90,106 1 1,729

102,484 113,396 70,945 60,293

Less: Allowance for doubtful debts (5) (11) - -

Other receivables, net 102,479 113,385 70,945 60,293

318,663 322,467 70,945 60,293

Non-current

Other receivables

Deposits for acquisition of machinery 1,690 1,690 - -Deposits for acquisition of land 13,567 647 - -Deposits for acquisition of shares 3,444 - - -

18,701 2,337 - -

337,364 324,804 70,945 60,293




19. Trade and other receivables continued

(a) Amounts due from subsidiariesThe amounts due from subsidiaries are non-interest bearing and are repayable on demand. These amounts are unsecured and are to be settled in cash.

(b) Credit riskThe Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms with its customers are mainly on credit, except for new customers, where payment in advance is normally required. The credit period is generally for a period of 14 days, extending up to three months for major customers. Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. Trade receivables are non-interest bearing.

20. Cash and cash equivalents

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Cash on hand and at banks 33,904 143,344 314 391Deposits with licensed banks 16,121 1,000 - -

Cash and bank balances 50,025 144,344 314 391

Cash deposited in the Designated Sukuk Reserve Account amounting to RM77,083 (2008: RM76,762) are not available for use by the Group as this amount is reserved for the Return Payment of Sukuk Ijarah as stated in Note 24.

Other information on financial risks of cash and cash equivalents are disclosed in Note 32.

21. Share capital

Number of ordinaryshares of RM0.50 each Amount2009 2008 2009 2008’000 ’000 RM’000 RM’000

Authorised

At beginning of year 1,000,000 500,000* 500,000 500,000Sub-division of shares - 500,000 - -

At end of year 1,000,000 1,000,000 500,000 500,000

Issued and fully paid

At beginning of year 311,678 155,339* 155,839 155,339Issued during the year:Sub-division of shares - 155,339 - -Pursuant to ESOS - 1,000 - 500

At end of year 311,678 311,678 155,839 155,839




21. Share capital continued

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote pershare at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.

* This indicates the number of ordinary shares at RM1.00 each prior to subdivision of shares to RM0.50 each.

22. Other reserves (non-distributable)

Group2009 2008

RM’000 RM’000

Asset revaluation reserve

At beginning of year 202,712 200,222Revaluation surplus, net of deferred tax 183,952 -Changes in tax rates on deferred tax - 2,490Revaluation reserve realised upon depreciation charged (5,422) -

At end of year 381,242 202,712

Foreign exchange reserve

At beginning of year 9,034 251Arising in the year 18,368 8,783


408,644 211,746

The nature and purpose of each category of reserve are as follows:

(a) Asset revaluation reserveThis reserve includes the cumulative net change, net of deferred tax effects, arising from the revaluation of plantation infrastructure, buildings, biological assets and leasehold lands.

(b) Foreign exchange reserveThe foreign exchange reserve represents foreign exchange differences arising from the translation of the financial statements of foreign subsidiaries.

23. Retained earnings

Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act, 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders ("single tier system"). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance with Section 39 of the Finance Act, 2007.

The Company has elected for the irrevocable option to disregard the 108 balance as at 30 June 2009 and 2008. Hence, the Company will be able distribute dividends out of its entire retained earnings under the single tier system.




24. Borrowings

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Short term borrowings

Secured:Bankers’ acceptances 455,091 446,129 - -Short term revolving credits 53,671 23,270 - -Commercial papers 45,000 25,000 - -Term loans 22,686 25,062 - -Sukuk Ijarah 35,381 20,567 - -Hire purchase payables (Note 25) 135 217 - -

611,964 540,245 - -

Long term borrowings

Secured:Term loans 10,442 31,211 - -Sukuk Ijarah 77,922 112,376 - -Hire purchase payables (Note 25) 84 36 - -

88,448 143,623 - -

Total borrowings

Bankers’ acceptances 455,091 446,129 - -Short term revolving credits 53,671 23,270 - -Commercial papers 45,000 25,000 - -Term loans 33,128 56,273 - -Sukuk Ijarah 113,303 132,943 - -Hire purchase payables (Note 25) 219 253 - -

700,412 683,868 - -

(a) The secured borrowings of the Group are as follows:

(i) The bankers’ acceptances for a subsidiary company of the Group are secured by corporate guarantees from the Company; a letter of negative pledge from the Company; a letter of undertaking from the Company; and a joint and several guarantee from certain directors of the Company.

(ii) The short term revolving credits for certain subsidiary companies of the Group are secured by negative pledge on properties of two of the subsidiary companies; and third party legal charge over landed properties of a subsidiary company.

(iii) The bank loans for certain subsidiary companies of the Group amounting to RM33,128,296 (2008: RM56,273,872) are secured by corporate guarantees issued by the Company; a debenture giving a first fixed charge on machinery and equipment and a fixed and floating charge on all present and future assets of a subsidiary company; negative pledge over properties of a subsidiary company; and third party legal charge over landed properties of certain subsidiaries.

(b) Murabahah Commercial Papers/Medium Term Notes Programme (“CP/MTN”)

The CP/MTN will expire seven years from the date of first issue. The profit rate for CP is zero as it will be issued at a discount while the profit rate for MTN shall be determined at the point of issuance.




24. Borrowings continued

(b) Murabahah Commercial Papers/Medium Term Notes Programme (“CP/MTN”) continued

The CP/MTN are secured inter-alia by the following:

(i) Second legal charges over the leasehold lands and buildings of certain subsidiaries;

(ii) An assignment of and charge on Kwantas SPV Sdn. Bhd.’s rights to Murabahah Designated Account and monies standing in the accounts and Permitted Investments; and

(iii) A corporate guarantee issued by the Company.

(c) Sukuk Ijarah

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Nominal value of Sukuk Ijarah 115,000 135,000 - -Less: Unamortised discount (2,500) (3,000) - -

112,500 132,000 - -Accrued interest 803 943 - -

113,303 132,943 - -

The Sukuk Ijarah comprise tranches as follows:

Couponrates Tenure RM’000

Tranche 1 6.12% Year 1 5,000Tranche 2 6.12% Year 2 15,000Tranche 3 6.12% Year 3 20,000Tranche 4 6.12% Year 4 20,000Tranche 5 6.12% Year 4 15,000Tranche 6 6.12% Year 5 20,000Tranche 7 6.12% Year 6 20,000Tranche 8 6.12% Year 7 20,000Tranche 9 6.12% Year 8 20,000

155,000

The Sukuk is secured by first legal charges over the leasehold lands and biological assets of certain subsidiaries.

Other information on financial risks of borrowings are disclosed in Note 32.




25. Hire purchase payables

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Minimum lease payments:

Not later than 1 year 137 217 - -Later than 1 year and not later than 2 years 85 36 - -Later than 2 years and not later than 5 years 7 - - -

229 253 - -Less: Future finance charges (10) ** - -

Present value of finance lease liabilities 219 253 - -

Present value of finance lease liabilities:

Not later than 1 year 135 217 - -Later than 1 year and not later than 2 years 78 36 - -Later than 2 years and not later than 5 years 6 - - -

219 253 - -Less: Amount due within 12 months (Note 24) 135 217 - -

Amount due after 12 months (Note 24) 84 36 - -

The Group has hire purchase contracts for various items of property, plant and equipment (see Note 13(b)). These contracts have terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that holds the lease. There are no restrictions placed upon the Group by entering into these contracts and no arrangements have been entered into for contingent rental payments.

Other information on financial risks of hire purchase payables are disclosed in Note 32.

** = RM222

26. Deferred tax

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

At beginning of year 73,906 77,968 - -Recognised in the income statement (Note 10) (14,840) (1,572) - -Recognised in equity 2,167 (2,490) - -

At end of year 61,233 73,906 - -

Presented after appropriate offsetting as follows:

Deferred tax assets (7,667) (2,616) - -Deferred tax liabilities 68,900 76,522 - -

61,233 73,906 - -




26. Deferred tax continued

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

Deferred tax liabilities of the Group:

Property, Prepaidplant and Biological land leaseequipment assets payments TotalRM’000 RM’000 RM’000 RM’000

At 1 July 2008 10,422 18,522 52,609 81,553Recognised in income statement (1,976) 1,072 (691) (1,595)Recognised in equity 2,167 - - 2,167

At 30 June 2009 10,613 19,594 51,918 82,125

At 1 July 2007 12,490 18,270 55,627 86,387Recognised in income statement (2,714) 166 204 (2,344)Recognised in equity 646 86 (3,222) (2,490)

At 30 June 2008 10,422 18,522 52,609 81,553

Deferred tax assets of the Group:

Unusedtax losses

andunabsorbed

capital Reinvestmentallowances allowances Others TotalRM’000 RM’000 RM’000 RM’000

At 1 July 2008 (869) (6,778) - (7,647)Recognised in income statement (13,245) - - (13,245)

At 30 June 2009 (14,114) (6,778) - (20,892)

At 1 July 2007 (1,367) (7,049) (3) (8,419)Recognised in income statement 498 271 3 772

At 30 June 2008 (869) (6,778) - (7,647)




27. Trade and other payables

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Trade payablesThird parties 50,508 188,291 - -

Other payablesAmounts due to subsidiaries - - 293,230 269,189Amounts due to directors - 4,098 - -Accruals 6,000 9,020 47 19Advanced payment received 1,482 7,422 - -Amounts due to contractors and suppliers 6,740 12,330 - -Deposits received 1,939 269 - -Retention sum 206 49 - -Sundry payables 43,814 43,755 195 399

60,181 76,943 293,472 269,607

110,689 265,234 293,472 269,607

(a) Trade payablesTrade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 days to 90 days.

(b) Amounts due to subsidiaries and directorsExcept for certain amounts due to subsidiaries with an amount of RM241,610,070 (2008: RM269,528,270), which bear interest ranging from 5% to 6.55% (2008: 6.30%) per annum, the amounts due to subsidiaries and directors are non-interest bearing and are repayable on demand. These amounts are unsecured and are to be settled in cash.

(c) Advanced payments receivedThis represents trade deposits received in respect of sales transactions.

28. Operating lease arrangements

The Group as lessee

The Group has entered into non-cancellable operating lease agreements for the use of land, buildings and certain plant and machineries. These leases have an average life of between 2 and 3 years with no renewal or purchase option included in the contracts. There are no restrictions placed upon the Group by entering into these leases.

The Group also leases various tractors and vehicles under cancellable operating lease agreements. The Group is required to give a six-month notice for the termination of those agreements.

29. Commitments

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Capital expenditure:

Approved and contracted for 20,390 17,624 - -




30. Contingent liabilities

Unsecured

The Company has provided corporate guarantees to secure banking facilities granted to subsidiary companies. The amount utilised and outstanding as at 30 June 2009 amounted to approximately RM359 million (2008: RM343 million).

31. Related party disclosures

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

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Purchase of oil palm FFB from Dataran Indah Jaya Sdn. Bhd., a company inwhich certain directors of the Company,have interest: 10,097 18,100 - -

Purchase of tyres, batteries and lubricantsfrom Lahad Datu Tyres Sdn. Bhd., acompany in which a brother and a sisterof certain directors of the Company,have interest: 1,450 2,708 - -

Freight charges paid to Universal ShippingGroup Inc., a company in which certaindirectors of the Company, have interest: 7,621 10,678 - -

Freight charges paid to Teltro Maritime Inc.,a company in which certain directors ofthe Company, have interest: 2,479 5,216 - -

Freight charges paid to Wiseberg HoldingsLimited, a company in which certain directors of the Company, have interest: 3,765 11,098 - -

Freight charges paid to Grace Star HoldingsLimited, a company in which certaindirectors of the Company, have interest: 5,296 - - -

The directors consider that the purchase of raw material, stores and supplies and rendering of services form related parties were made according to the published prices and conditions similar to those offered to the major customers of the suppliers, except that interest was not charged on overdue balances.

(b) Compensation of key management personnel

The remuneration of directors who are also the members of key management during the year was as follows:

Group Company2009 2008 2009 2008

RM’000 RM’000 RM’000 RM’000

Short-term employee benefits 2,042 3,211 1,574 2,499Post-employment benefits:Defined contribution plan 243 370 187 288

2,285 3,581 1,761 2,787




31. Related party disclosures continued

(b) Compensation of key management personnel continued

Executive directors of the Company have been granted the following number of options under the Employee Share Options Scheme:

Group and Company2009 2008000 000

At beginning of year 5,658 3,329Share split - 3,329Exercised - (1,000)


The share options were granted on the same terms and conditions as those offered to other employees of the Group as disclosed in Note 8(b).

32. Financial instruments

(a) Financial risk management objectives and policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its commodity price risk, liquidity risk, interest rate risks (both fair value and cash flow), foreign currency risk, and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the Group’s policy that no trading in derivative financial instruments shall be undertaken.

(b) Commodity price risk

The Group’s earnings are affected by changes in the prices of its raw materials and its manufactured products.

(c) Liquidity risk

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

(d) Interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group’s income and operating cash flows are substantially independent of changes in market interest rates. The Group’s interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits.

The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.




32. Financial instruments continued

(d) Interest rate risk continued

The following tables set out the carrying amounts, the weighted average effective interest rates (WAEIR) as at the balance sheet date and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

MoreWithin 1 – 2 2 – 3 3 – 4 4 – 5 Than 5

Note WAEIR 1 Year Years Years Years Years Years Total% RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 30 June 2009

Group

Fixed rate

Deposits with licensed banks 20 3.00 16,121 - - - - - 16,121Term loans 24 6.00 (2,688) - - - - - (2,688)Commercial papers 24 6.88 (45,000) - - - - - (45,000)Sukuk Ijarah 24 6.88 (35,381) (19,772) (19,663) (19,562) (18,925) - (113,303)Hire purchase liabilities 25 3.57 (135) (78) (6) - - - (219)

Floating rate

Bankers’ acceptances 24 2.40 (455,091) - - - - - (455,091)Short term revolving credits 24 3.32 (53,671) - - - - - (53,671)Term loan 24 4.45 (19,998) (6,226) (356) (377) (400) (3,083) (30,440)

At 30 June 2008

Fixed rate

Deposits with licensed banks 20 3.38 1,000 - - - - - 1,000Term loans 24 6.00 (2,764) (2,688) - - - - (5,452)Commercial papers 24 4.09 (25,000) - - - - - (25,000)Sukuk Ijarah 24 6.88 (20,567) (34,600) (19,663) (19,562) (19,468) (19,083) (132,943)Hire purchase liabilities 25 3.60 (217) (36) - - - - (253)

Floating rate

Bankers’ acceptances 24 3.74 (446,129) - - - - - (446,129)Short term revolving credits 24 5.21 (23,270) - - - - - (23,270)Term loan 24 5.35 (22,298) (18,480) (5,700) (252) (270) (3,821) (50,821)

Interest on financial instruments subject to floating interest rates is contractually repriced at intervals of less than 6 months except for term loans and floating rate loans which are repriced annually. Interest on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.

(e) Foreign currency risk

The Group is exposed to transactional currency risk primarily through sales and purchases that are denominated in a currency other than the functional currency of the operations to which they relate. The currencies giving rise to this risk are primarily United States Dollars (USD) and Renminbi (RMB). Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level. Material foreign currency transaction exposures are hedged, mainly with derivative financial instruments such as forward foreign exchange contracts.





(e) Foreign currency risk continued

The Group maintains a natural hedge, whenever possible, by borrowing in the currency of the country in which the property or investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional currencies are as follows:

Net financial assets/(liabilities)held in non-functional currency

UnitedFunctional currency of StatesGroup companies Dollars Total

RM’000 RM’000

At 30 June 2009Ringgit Malaysia 277,287 277,287Renminbi (27,410) (27,410)Rupiah 65 65

249,942 249,942

At 30 June 2008Ringgit Malaysia 267,208 267,208Renminbi (31,888) (31,888)

235,320 235,320

As at balance sheet date, the Group had entered into forward foreign exchange contracts with the following notional amounts and maturities:

TotalWithin Notional

Currency 1 year AmountRM’000 RM’000

At 30 June 2009Forwards used to hedge anticipated sales United States Dollars 108,311 108,311

At 30 June 2008Forwards used to hedge anticipated sales United States Dollars 1,076,393 1,076,393

(f) Credit risk

The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is not significant. For transactions that are not denominated in the functional currency of the relevant operating unit, the Group does not offer credit terms without the specific approval of the Head of Credit Control. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.





(f) Credit risk continued

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

(g) Fair values

Derivative financial instruments

As at balance sheet date, the Group had entered into commodity futures contracts with the following net notional amounts and maturities:

Maturitywithin

one yearRM’000

At 30 June 2009Sales contracts 123,430Purchase contracts (6,178)

At 30 June 2008Sales contracts -Purchase contracts (376,785)

The carrying amounts of financial assets and liabilities of the Group and of the Company at the balance sheet date approximated their fair values except for the followings:

Group CompanyCarrying Fair Carrying Fair

Note amount value amount valueRM’000 RM’000 RM’000 RM’000

At 30 June 2009Fixed rate term loans 24 2,688 2,595 - -Hire purchase payables 25 219 208 - -Forward foreign exchange contracts 32(e) - (11,169) - -Commodity futures contracts - (16,799) - -

At 30 June 2008Fixed rate term loans 24 5,452 5,258 - -Hire purchase payables 25 253 242 - -Forward foreign exchange contracts 32(e) - (21,267) - -Commodity futures contracts - 16,477 - -

The methods and assumptions used by management to determine fair values of financial instruments other than those whose carrying amounts reasonably approximate their fair values are as follows:

(i) BorrowingsFair value has been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of lending, borrowing and leasing arrangements.

(ii) Foreign exchange forward contractsThe fair value of a foreign exchange forward contract is the amount that would be payable or receivable on termination of the outstanding position arising and is determined by reference to the difference between the contracted rate and forward exchange rate as at the balance sheet date applied to a contract of similar quantum and maturity profile.





(g) Fair values continued

(iii) Commodity futures contractsThe fair value of the commodity futures contracts is the amount that would be receivable or payable on termination of the outstanding position, and is determined by reference to the difference between the contracted rate and the forward rate as at the balance sheet date.

33. Segment information

(a) Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

(b) Business segments

The Group comprises the following main business segments:

(i) Biomass energy – generating and supply of electricity and steam.(ii) Oil palm plantations, and palm and soya bean products processing – management and operation of plantations and

manufacturing and sale of palm and soya bean oils and fats products, and operation of bulking installations.(iii) Trading of industrial products – purchase and sale of diesel.(iv) Oleochemical products processing – manufacturing and sale of soap noodle, glycerine and oleochemical products.

Other operations of the Group mainly comprise letting of commercial properties and a stone and gravel quarry, neither of which constitutes a separately reportable segment.

(c) Geographical segments

The Group’s geographical segments are based on the location of the Group’s assets. Sales to external customers disclosed in geographical segments are based on the geographical location of its customers. The Group’s four business segments operate in two main geographical areas:

(i) Malaysia – the operations in this area are principally manufacturing and sale of palm products, management and operation of oil palm plantations and a biomass energy plant and trading of industrial products.

(ii) People’s Republic of China - the operations in this area are principally bulking installations, manufacturing and sales of palm and soya bean oils and fats products and oleochemical products.

(d) Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, liabilities and expenses.

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.




33. Segment information continued

Business segments

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by business segment:

Oil palmplantations,palm and Tradingsoya bean of Oleo-

Biomass products industrial chemicalenergy processing products products Elimination ConsolidatedRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

30 June 2009

Revenue

External sales 238 1,552,312 247 15,735 - 1,568,532Inter-segment sales 12,875 - 8,977 - (21,852) -

Total revenue 13,113 1,552,312 9,224 15,735 (21,852) 1,568,532

Result

Segment results 1,653 (49,838) 77 (17,092) - (65,200)Finance costs (30,123)

Loss before tax (95,323)Income tax expense 7,880

Loss for the year (87,443)

Assets

Segment assets 36,919 2,866,092 8,536 362,155 (1,436,182) 1,837,520

Liabilities

Segment liabilities 7,429 1,548,587 594 221,766 (898,375) 880,001

Other Information

Capital expenditure 1,667 19,871 - 7,268 - 28,806Depreciation 1,845 22,367 - 5,347 - 29,559Amortisation 33 3,316 - 264 - 3,613





Business segments continued

Oil palmplantations,palm and Tradingsoya bean of Oleo-

Biomass products industrial chemicalenergy processing products products Elimination ConsolidatedRM’000 RM’000 RM’000 RM’000 RM’000 RM’000

30 June 2008

Revenue

External sales 72 3,448,531 222 3,338 - 3,452,163Inter-segment sales 11,014 - 11,631 - (22,645) -

Total revenue 11,086 3,448,531 11,853 3,338 (22,645) 3,452,163

Result

Segment results 3,307 242,190 128 (1,741) - 243,884Finance costs (30,584)

Profit before tax 213,300Income tax expense (22,151)

Profit for the year 191,149

Assets

Segment assets 37,322 2,878,059 8,609 333,816 (1,358,396) 1,899,410

Liabilities

Segment liabilities 8,523 1,669,161 754 201,413 (854,227) 1,025,624

Other Information

Capital expenditure 2,814 53,282 - 50,738 - 106,834Depreciation 1,840 21,985 - 1,537 - 25,362Amortisation 32 3,322 - 235 - 3,589





Geographical segments

The following table provides an analysis of the Group’s revenue by geographical segment:

Revenue bygeographical segments

2009 2008RM’000 RM’000

Eastern Asia 583,049 2,621,801Southern Asia 201,194 299,942Southeast Asia 552,249 418,532Europe 222,453 98,162Middle East - 3,041North America 9,587 10,685

1,568,532 3,452,163

The following is an analysis of the carrying amount of segment assets and capital expenditure, analysed by geographical segments:

Segment Capitalassets expenditure

2009 2008 2009 2008RM’000 RM’000 RM’000 RM’000

Malaysia 1,286,987 1,319,914 20,921 54,756The People’s Republic of China 550,533 579,496 7,885 52,078

1,837,520 1,899,410 28,806 106,834

34. Significant event

On 28 May 2009, the Company subscribed for 2,375,000 ordinary shares of USD1.00 each, representing 95% equity interestin PT Kinabalu Invesdag Indonesia, a company incorporated in Indonesia, for a total cash consideration of USD2,375,000(RM8,348,125).

35. Subsequent event

On 23 October 2009, the Company acquired the remaining 49% equity interest in Dongma (Guangzhou Free Trade Zone)Oleochemical Co. Ltd. (“DMOleo”) for a total cash consideration of USD10.838 million (approximately RM36.80 million).Subsequent to the acquisition, DMOleo became wholly-owned subsidiary of the Company.

36. Material litigation

(i) The Group is disputing a claim amounting to approximately RM5 million from a commercial bank on foreign currency forward contract alleged to have been entered into by a subsidiary company. Legal proceedings are in progress and the outcome is yet to be determined. The Company’s lawyers are of the opinion that the Group has a good prospect of succeeding in defending the claim.




36. Material litigation continued

(ii) In response to a claim by Palm Energy Sdn. Bhd. (“PESB”), a wholly owned subsidiary, for liquidated damages, loss of revenue and refurbishment costs totalling approximately RM8 million, the contractor counter claimed the balance of the original contract sum amounting to approximately RM1 million and variation order works totalling approximately RM1 million. The arbitration commenced on 10 October 2007 and completed in November 2008.

The Arbitrator delivered his award on 15 July 2009 and in his final award he found both parties were guilty of breaches of contract, the consequences of which both must accordingly bear according to its relative seriousness. The contractor has been awarded a counter claim of RM420,087.25 whereby PESB is entitled to forfeit the remainder of the contract sum of RM950,000. PESB has decided to file a motion to the high court to set aside certain award given to the contractor pursuant to Section 24(2) of the Arbitration Act, 1952 (“the Act”) or alternatively certain paragraph of the award be remitted for the reconsideration of the Learned Arbitrator pursuant to Section 23(1) of the Act.

(iii) A subsidiary of the Company, Dongma Oils & Fats (Guangzhou Free Trade Zone) Co. Ltd. (“DMGZ”), a bulking tank operator in China, is disputing the claim for delivery of 2,500 metric tonne of refined palm oil products with current market value of approximately RM8 million (RMB15.5 million) from a customer, as DMGZ contending that the customer has no legal rights to claim as the relevant sales contracts have been cancelled. On 29 June 2009, judgement was given to the Plaintiff and DMGZ is in the process of filing its appeal.

(iv) On 19 August 2008, an import/export agent filed a claim of approximately RM30 million (RMB64.2 million) against DMGZ, alleging that the DMGZ had released goods without their consent, DMGZ on the other hand contending that they have received the appropriate authorisation for the release of goods. The hearing date of this case has yet to be fixed.

(v) A buyer filed a claim against DMGZ, for a sum of RMB3,189,000. DMGZ has deemed the buyer have defaulted the contracts earlier and hence forfeited these deposits, the buyer on the other hand claimed that the contracts are cancelled and demanded DMGZ to pay back the said deposit. On 11 May 2009, the court has awarded the case to the Plaintiff and DMGZ is in the process of filing its appeal.

(vi) DMGZ is defending a claim of 500 metric tonne of palm oil products (current market value about RM1 million) from a third party who is claiming ownership of the cargo from a DMGZ’s buyer. DMGZ contending that the cargo in question is no longer available as it has already been released earlier to the buyer.

(vii) An import/export agent filed a claim on 26 May 2009 against DMGZ, for releasing 4,500 metric tonne of refined palm oil products without their consent. However, DMGZ contended that proper authorisation has been received for the release of goods. Legal proceeding is now in progress.



Notes to the financial statements continued30 June 2009


TITLE REGISTERED LAND TENURE AGE EXISTING NET DATE OF(Location) OWNER AREA OF USAGE BOOK ACQUISITION OR (Built-Up) BUILDING VALUE REVALUATION RM’000

CL 095317196, KPSB 5,260 ha Leasehold - Oil Palm 239,650 30 June 2009Lamag, District of expiring PlantationKinabatangan, Sabah 31/12/2077

PL 096290069, Koyah HSB 1,122.9 ha Leasehold - Oil Palm 49,100 30 June 2009Locality, Off KM 39, expiring PlantationJln Lahad Datu-Sandakan, 31/12/2077District of Kinabatangan,Sabah

CL 095318504 KPSB 1,768.7 ha Leasehold - Oil Palm 76,920 30 June 2009CL 095318513 expiring PlantationCL 095318522 31/12/2087CL 095318531 exceptCL 095318540 CL 095318559CL 095318559 expiringSg Pin Locality, KM 50, 31/12/2086Jln Lahad Datu-Sandakan,District of Kinabatangan,Sabah.

CL 075376117, District KPSB 2.434 ha Leasehold - Vacant Land 36 30 June 2009 of Sandakan, Sabah expiring 31/12/2062

Unit No. 5/R7/4, KOSB 1490 sq. ft Pending 10 yrs Apartment for 93 30 June 2009Api-Api Centre, strata title used byKota Kinabalu, Sabah Management

CL 115379336 MESB 14.15 ha Leasehold 9 yrs Palm Oil 31,124 30 June 2003Jalan Kuching, Off expiring ProductJalan Dermaga, District 31/12/2088 Processingof Lahad Datu, Sabah Complex (Refinery & Kernal Crushing)

CL 095319065 ABSB 282.6 ha Leasehold - Oil Palm 13,190 30 June 2009Kinabatangan, District expiring Plantationof Kinabatangan, Sabah 31/12/2087

CL 095317007 BBSB 202.7 ha Leasehold - Oil Palm 9,590 30 June 2009Latangan, District of expiring PlantationKinabatangan, Sabah 31/12/2086

CL 095316395 KPSB 1,534 ha Leasehold - Oil Palm 69,040 30 June 2009Sungai Kinabatangan, expiring PlantationDistrict of KinabatanganSabah 31/12/2887

TL 117509832 KOSB 5 ha Leasehold - Jetty 90 30 June 2009New Wharf Road, expiringDistrict of Lahad Datu, 31/12/2094Sabah

Properties of The Group




Lot 49, Export KOSB 2.19 acres Pending - Vacant 862 30 June 2009Oriented Industrial submission ofZone, Kota Kinabalu master title

CL 015493697 KOSB 0.453 ha Leasehold - Bulking 942 30 June 2009Kuala Mengatal, expiring InstallationSepangar Bay, 31/12/2081Kota Kinabalu

CL 075339954 KOSB 3.84 acres Leasehold - Vacant 1,246 30 June 20098 Mile, Jln Labuk, expiringSandakan 09/07/2887

CL 095332184 KPSB 9.42 ha Leasehold - Oil Palm 117 30 June 2009Sungai Latangan, expiring PlantationKinabatangan 31/12/2098

CL 095330662 KPSB 10.01 ha Leasehold - Oil Palm 73 30 June 2009Sungai Lokan, expiring PlantationKinabatangan 31/12/2096

Title: (2002) No.1 DMGZFTZ 9,990 m2 Leasehold - Bulking 1,362 31 January 2002No.15, Jinqiao Road, expiring Installation,Guangzhou Free 30/01/2052 Edible OilTrade Zone ComplexGuangzhou, China and Office Building

Title (2004) No. 660022 DMGZFTZ 11,610 m2 Leasehold - Bulking 1,639 06 April 2004Guangzhou Free expiring Installation andTrade Zone 26/03/2054 Edible OilGuangzhou, China Complex

Title: (2003) No.BSQ-F2 DMGZFTZ 3,840 m2 Leasehold - Bulking 409 20 August 2003Guangzhou Free expiring Installation andTrade Zone 21/08/2053 Edible OilGuangzhou, China Complex

Title: (2002) No.23 DMZJGFTZ 20,006 m2 Leasehold - Bulking 1,639 21 June 2002Zhangjiagang Free expiring Installation andTrade Zone 13/08/2052 Edible OilZhangjiagang, China Complex

CL 095332451 KPSB 12.12 ha Leasehold - Oil Palm 41 30 June 2009Kg. Kinabatangan, expiring PlantationDistrict of Kinabatangan, 31/12/2098Sabah

CL 115415631 KPSB 30.08 ha Leasehold - Vacant 239 30 June 2009CL 115415640 expiringCL 115415659 31/12/2098CL 115415668CL 115415677Ulu Segama, District of Lahad Datu, Sabah

Properties of The Group continued




CL 115311138 PESB 6.94 acres Leasehold - Power Plant 1,855 31 July 2004Mile 2 1/2, expiringJln Kastam Baru, 31/12/2058District of Lahad Datu,Sabah

CL 015331932 KOSB 0.59 acres Leasehold - Vacant 788 30 June 2009Luyang, expiringDistrict of Kota Kinabalu 31/12/2912

Lot 767, Block 20 KOSB 16.194 ha Leasehold - Vacant 5,639 30 June 2009Kemena Land District expiringBintulu Port 17/06/2062

Title: (2006) No.380054 DMPI 134,040m2 Leasehold - Bulking 7,249 18 March 2005Zhangjiagang Free Trade Zone, expiring Installation andJiangsu, China 30/10/2056 Oleochemical Plant

Ladang Pintasan 4 KLDSB 1,597.57 ha Leasehold - Oil Palm 64,900 30 June 2009(318 titles) expiring from Plantation 31/12/2093 - 31/12/2095


Ladang Pintasan 6 KLDSB 878.93 ha Leasehold - Oil Palm 23,960 30 June 2009(172 titles) expiring from Plantation 24/06/2034 - 19/09/2099


Ladang Sg Koyah KLDSB 83.42 ha Leasehold - Oil Palm 850 30 June 2009(5 titles) expiring from Plantation 31/12/2083 - 31/12/2096

Ladang Haranky 2 KLDSB 205.01 ha Leasehold - Oil Palm 8,630 30 June 2009(29 titles) expiring Plantation 31/12/2091

KM28 & 30 of KLDSB 7.93 ha Leasehold - Oil Palm 590 30 June 2009Jalan Lahad Datu expiring Plantation(2 titles) N/A





Ladang Pintasan 9 KLDSB 1,005.37 ha Leasehold - Oil Palm 23,470 30 June 2009(144 titles) expiring Plantation 31/12/2096

Koyah Lands KLDSB 114.55 ha Leasehold - Vacant 570 30 June 2009(19 titles) expiring 19/09/2099

CL 115414161 KLDSB 171.50 ha Leasehold - Vacant 2,750 30 June 2009KM 14.5 of expiringJalan Lahad Datu 31/12/2098

CL 095330000 KOLEO 202.30 ha Leasehold - Oil Palm 10,780 30 June 2009Ladang Bikasjaya expiring Plantation 31/12/2097

CL 095332442 KPSB 12.18 ha Leasehold - Oil Palm 58 30 June 2009Kg. Kinabatangan expiring PlantationDistrict of Kinabatangan 31/12/2098

CL 095331696 KPSB 16.17 ha Leasehold - Oil Palm 126 30 June 2009CL 095331703 expiring PlantationSg. Latangan 31/12/2098District of Kinabatangan

Title: (2005) No.BSQ-K21 DMO 35,001 m2 Leasehold - Oleochemical 4,986 30 June 2005Guangzhou Free Trade Zone expiring Plant andGuangzhou, China 09/03/2055 Office Building

CL 095334142 KPSB 8.07 ha Leasehold - Vacant 32 30 June 2009Sg. Latangan expiringDistrict of Kinabatangan 31/12/2100

CL 095331374 KPSB 14.73 ha Leasehold - Oil Palm 83 30 June 2009Sg. Latangan expiring PlantationDistrict of Kinabatangan 31/12/2096

CL 095332719 KPSB 11.86 ha Leasehold - Oil Palm 64 30 June 2009Sg. Lamag expiring PlantationDistrict of Kinabatangan 31/12/2099

Lot 1, Block 194 GARSB 7,000 ha Leasehold - Oil Palm 6,187 31 March 2006Oya-Dalat, Mukah expiring PlantationSarawak 30/03/2066 (under development stage)

Lot 3, Block 2 MHSB 5,096 ha Leasehold - Oil Palm 4,419 27 April 2006Baoh Land, Mukah expiring PlantationSarawak 26/04/2066 (under development stage)

Lot 14-19 MHSB 4,795 ha Leasehold - Oil Palm 4,469 14 August 2006Buloh Land expiring PlantationUlu Balingian 13/08/2066 Sarawak





Lot 26-28 MHSB 2,541 ha Leasehold - Oil Palm 2,461 14 August 2006Buloh Land expiring PlantationUlu Balingian 13/08/2066 Sarawak

PI/K/63 and PI/K/64 KOSB 21,640 Pending for 2 Office 5,711 8 April 2008KK Times Square sq.ft strata Premises title

CL 095337572 KPSB 70.03 ha Leasehold - Oil Palm 553 30 June 2009Sg Tabalin expiring PlantationDistrict of Kinabatangan 31/12/2014




The Company has 2,073 shareholders as at 11 November 2009. There is only one (1) class of share, namely, ordinary share of RM0.50each.

ANALYSIS OF SHAREHOLDINGS

Size of holdings Number of holders % Number of shares %

1-999 246 11.87 46,022 0.011,000-10,000 1,536 74.10 5,437,678 1.7410,001-100,000 234 11.29 6,577,300 2.11100,001-15,583,862 (*) 51 2.46 104,957,644 33.6815,583,863 and above (**) 6 0.28 194,658,620 62.46

Total 2,073 100.00 311,677,264 100.00

Remark: * Less than 5% of issued holdings ** 5% and above of issued holdings

SUBSTANTIAL SHAREHOLDERS (5% and above)

No Name Numbers of shares held %

1. Kwan Ngen Chung 94,188,632 30.222. Kwan Ngen Wah 93,188,632 29.903. DB (Malaysia) Nominee (Asing) Sdn Bhd 24,500,000 7.864. Employees Provident Fund Board 17,875,200 5.74

DIRECTORS’ SHAREHOLDINGS

Number of shares heldNo Name Direct % Indirect %

1. Kwan Ngen Chung 94,188,632 30.22 - -2. Kwan Ngen Wah 93,188,632 29.90 - -3. Chong Kan Hiung 2,600,000 0.83 - -4. Kwan Jin Nget 760,000 0.24 - -5. Kwan Min Nyet 238,000 0.08 - -6. Datuk Tyan Von Choon 2,000 0.00 - -

LIST OF TOP 30 SHAREHOLDERS AS AT 11 NOVEMBER 2009

No. Name Shareholdings %

1. HSBC Nominees (Tempatan) Sdn Bhd 53,200,000 17.07Pledged Securities Account for Kwan Ngen Chung

2. Kwan Ngen Wah 52,641,710 16.89

3. HSBC Nominees (Tempatan) Sdn Bhd 36,000,000 11.55Pledged Securities Account for Kwan Ngen Wah

4. Kwan Ngen Chung 20,441,710 6.56

5. Employees Provident Fund Board 16,375,200 5.25

Shareholdings Statisticsas at 11 November 2009



LIST OF TOP 30 SHAREHOLDERS AS AT 11 NOVEMBER 2009 continued

No. Name Shareholdings %

6. Mayban Nominees (Tempatan) Sdn Bhd 16,000,000 5.13Maybank International (L) Ltd for Kwan Ngen Chung

7. Semangat Fajar Sdn Bhd 15,422,800 4.95

8. Bock Wan Chek 10,726,000 3.44

9. Semangat Beringin Sdn Bhd 9,441,200 3.03

10. DB (Malaysia) Nominee (Asing) Sdn Bhd 9,000,000 2.89BNP Paribas Nominees Singapore Pte Ltd for Great Time Ltd

11. DB (Malaysia) Nominee (Asing) Sdn Bhd 8,000,000 2.57BNP Paribas Nominees Singapore Pte Ltd for Joy Fountain Ltd

12. DB (Malaysia) Nominee (Asing) Sdn Bhd 7,500,000 2.41BNP Paribas Nominees Singapore Pte Ltd for Central Glory Ltd

13. Winawarisan Sdn Bhd 6,950,600 2.23

14. Englobal (M) Sdn Bhd 4,690,400 1.50

15. Joy Fountain Limited 4,500,000 1.44

16. ABB Nominee (Tempatan) Sdn Bhd 4,250,000 1.36Pledged Securities Account for Kwan Ngen Wah

17. ABB Nominee (Tempatan) Sdn Bhd 4,250,000 1.36Pledged Securities Account for Kwan Ngen Chung

18. Chong Kan Hiung 2,600,000 0.83

19. Pioneer Mark Sdn Bhd 2,564,500 0.82

20. HLG Nominee (Tempatan) Sdn Bhd 2,278,000 0.73Pledged Securities Account for Ngui Kon Nyuk

21. OSK Nominees (Tempatan) Sdn Bhd 2,054,800 0.66Pledged Securities Account for Ho Sui Khyun

22. Kumpulan Wang Simpanan Pekerja 1,500,000 0.48

23. HDM Nominees (Tempatan) Sdn Bhd 1,199,700 0.38Pledged Securities Account for Ang Theng Hian

24. Lim Hua Kuang 854,000 0.27

25. Kwan Jin Nget 760,000 0.24

26. Kwan Chiew Giok 499,600 0.16

27. Mayban Nominees (Tempatan) Sdn Bhd 397,700 0.13Pledged Securities Account for Yong Meu Fah

28. Citigroup Nominees (Asing) Sdn Bhd 343,600 0.11CBNY for DFA Emerging Markets Small Cap Series

29. CIMSEC Nominees (Tempatan) Sdn Bhd 328,000 0.11CIMB Bank for Yong Foo Fah

30. Chow Pei Lim 310,000 0.10

Shareholdings Statistic continuedas at 11 November 2009



Proxy Form

I/We,(Full Name In Block Letters)

of(Address)

being a member/members of Kwantas Corporation Berhad, hereby appoint (Full Name In Block Letters)

of(Address)

or failing whom(Full Name In Block Letters)

of(Address)

as my/our own proxy, to vote for me/us on my/our behalf at the Fourteenth Annual General Meeting of the Company to beheld at K-63-3rd Floor, Signature Office, KK Times Square, Off Coastal Highway, 88100 Kota Kinabalu, Sabah on Wednesday,30 December 2009 at 10.00 a.m. or at any adjournment thereof.

NO.RESOLUTIONS FOR AGAINST

1. To receive and adopt the audited financial statements for the year ended 30June 2009 together with the Directors’ and Auditors Report thereon.

2. To approve a first and final single tier dividend of 2 sen per ordinary share ofRM0.50 each pursuant to Paragraph 12B of Schedule 6 of the Income Tax Act1967 for the year ended 30 June 2009.

3. To approve the payment of Directors’ fees for the year ended 30 June 2009.

4. To re-elect the following Directors, who retire by rotation pursuant to Article 73of the Company’s Articles of Association as Directors of the Company:

(a) Dato’ Mohd Sarit Bin Haji Yusoh

(b) Ooi Jit Huat

(c) Kwan Jin Nget

5. To re-appoint Messrs Ernst & Young as Auditors of the Company and authorisethe Directors to fix their remuneration.

6. As Special Business, to consider and, if thought fit, pass the followingresolutions:

(i) Authority to allot and issue shares pursuant to Section 132D of theCompanies Act, 1965

(ii) To propose renewal of the existing shareholders’ mandate for recurrentrelated party transactions of a revenue or trading nature.

(iii) To propose renewal of authority for the Company to purchase up to tenpercent (10%) of the issued and paid-up share capital of the Company.

(Please indicate with ‘X’ how you wish your vote to be cast. If no specific direction as to voting is given, the proxy willvote or abstain at his discretion.)

Sign this day of 2009.

Signature of Shareholder(s)

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

Resolution 10

No. of Ordinary Shares Held

Kwantas Corporation Berhad(Company No: 356602-W)


The Secretary

Kwantas Corporation Berhad(Company No : 356602-W)

1st Floor, Fordeco BuildingJalan Singamata

91100 Lahad Datu, Sabah

Stamp/Setem

please fold here

please fold here

Notes:

A) NOTES ON APPOINTMENT OF PROXY

A member entitled to attend and vote at the meeting is entitled to appoint aproxy to attend and vote instead of him. A proxy may but need not be amember of the Company. The instrument appointing a proxy must bedeposited at the Registered Office of the Company at 1st Floor, FordecoBuilding, Jalan Singamata, 91100 Lahad Datu, Sabah, not less than 48 hoursbefore the time appointed for holding the meeting. Where the Proxy Form isexecuted by a corporation, it must be either under seal or under the hand ofany officer or attorney duly authorized.

B) NOTES ON SPECIAL BUSINES

(i) Resolution 8

The proposed resolution is in relation to the authority to allot shares pursuantto Section 132D of the Companies Act, 1965 and if passed, will give theDirectors of the Company, from the date of the above general meeting,authority to issue and allot shares from the unissued capital of the Companyfor such purpose as the Directors may deem fit and in the interest of theCompany. This authority, unless revoked or varied by the Company in generalmeeting, will expire at the conclusion of the next Annual General Meeting ofthe Company.

(ii) Resolution 9

The proposed resolution is in relation to the renewal of the existingshareholders’ mandate for recurrent related party transactions of a revenueor trading nature with related parties in the ordinary course of business whichare necessary for the Company’s day-to-day operations.

(iii) Resolution 10

The proposed resolution is in relation to the renewal authority for the Companyto purchase up to ten percent (10%) of the issued and paid-up share capital ofthe Company.


OUR - ChartNexus - Investor Relationsir.chartnexus.com/kwantas/docs/ar2009.pdf · 2012-01-11 · Contents Notice of 14th Annual General Meeting 03 Statement Accompanying 08 Notice

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