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Corporate Information

Group Corporate Structure

Chairman & Managing Director’s Statement

Directors’ Profiles

Corporate Governance Statement

Audit Committee Report

Internal Control Statement

Responsibility Statement by the Board of Directors

Financial Statements

List of Properties

Statistics of Shareholdings

Notice of Eleventh Annual General Meeting

Form of Proxy

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ADVENTA BERHAD 618533-M2

BOARD OF DIRECTORS

EDMOND CHEAH SWEE LENGChairman/Senior Independent Non-Executive Director

LOW CHIN GUANManaging Director

KWEK SIEW LENGExecutive Director

TOH SENG THONGIndependent Non-Executive Director

DATO’ DR. NORRAESAH BINTI HAJI MOHAMADIndependent Non-Executive Director

AUDIT COMMITTEE

ChairmanToh Seng Thong

MembersEdmond Cheah Swee LengDato’ Dr. Norraesah Binti Haji Mohamad

NOMINATION COMMITTEE

ChairmanEdmond Cheah Swee Leng

MemberToh Seng Thong

REMUNERATION COMMITTEE


MembersLow Chin GuanToh Seng Thong

COMPANY SECRETARY

Chua Siew Chuan (MAICSA 0777689)Pan Seng Wee (MAICSA 7034299)

REGISTERED OFFICE

1, Jalan 8, Pengkalan Chepa 2 Industrial Zone16100 Kota Bharu, KelantanTel : 09-774 4332Fax : 09-771 3072

REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara Milenium, Jalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

PRINCIPAL BANKERS

OCBC Bank (Malaysia) BerhadStandard Chartered Saadiq Berhad

EXTERNAL AUDITORS

Ernst & YoungLevel 16-1, Jaya 99, Tower B,99 Jalan Tun Sri Lanang,75100 Melaka

INTERNAL AUDITORS

PKF Advisory Sdn BhdLevel 33, Menara 1MK,Kompleks 1 Mont Kiara,No. 1, Jalan Kiara, Mont Kiara50480 Kuala Lumpur

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

BERHAD (Co. No.:618533-M)

Sun Healthcare (M) Sdn. Bhd.Distribution of medical and healthcare equipment and appliances

100%

Electron Beam Sdn. Bhd.Industrial and commercial sterilization, warehousing & handling services

100%

Lucenxia (M) Sdn. Bhd.Home dialysis treatment

100%

PTM Progress Trading & Marketing Sdn. Bhd.Investment property holding

100%

Corporate Information

annual report 2013 3

BOARD OF DIRECTORS

EDMOND CHEAH SWEE LENGChairman/Senior Independent Non-Executive Director

LOW CHIN GUANManaging Director

KWEK SIEW LENGExecutive Director

TOH SENG THONGIndependent Non-Executive Director

DATO’ DR. NORRAESAH BINTI HAJI MOHAMADIndependent Non-Executive Director

AUDIT COMMITTEE

ChairmanToh Seng Thong

MembersEdmond Cheah Swee LengDato’ Dr. Norraesah Binti Haji Mohamad

NOMINATION COMMITTEE


MemberToh Seng Thong

REMUNERATION COMMITTEE


MembersLow Chin GuanToh Seng Thong

COMPANY SECRETARY

Chua Siew Chuan (MAICSA 0777689)Pan Seng Wee (MAICSA 7034299)

REGISTERED OFFICE

1, Jalan 8, Pengkalan Chepa 2 Industrial Zone16100 Kota Bharu, KelantanTel : 09-774 4332Fax : 09-771 3072

REGISTRAR

Securities Services (Holdings) Sdn. Bhd.Level 7, Menara Milenium, Jalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala LumpurTel : 03-2084 9000Fax : 03-2094 9940

PRINCIPAL BANKERS

OCBC Bank (Malaysia) BerhadStandard Chartered Saadiq Berhad

EXTERNAL AUDITORS

Ernst & YoungLevel 16-1, Jaya 99, Tower B,99 Jalan Tun Sri Lanang,75100 Melaka

INTERNAL AUDITORS

PKF Advisory Sdn BhdLevel 33, Menara 1MK,Kompleks 1 Mont Kiara,No. 1, Jalan Kiara, Mont Kiara50480 Kuala Lumpur

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad


Sun Healthcare (M) Sdn. Bhd.Distribution of medical and healthcare equipment and appliances

100%

Electron Beam Sdn. Bhd.Industrial and commercial sterilization, warehousing & handling services

100%

Lucenxia (M) Sdn. Bhd.Home dialysis treatment

100%

PTM Progress Trading & Marketing Sdn. Bhd.Investment property holding

100%

Group Corporate Structure


Chairman & Managing Director’s Statement




Chairman & Managing Director’s Statementcont’d

Dear Shareholders,

We are pleased to inform you that the Company has progressed well and above our expectations during the year, coming from a massive divestment of all its manufacturing businesses to focus on medical services and related businesses.

To drive these businesses strongly in the near future, the Company has recruited several key marketing, distribution and logistics personnel that have vast experience in their respective fields. The addition of experienced and highly professional personnel will be the drivers in our fierce pursuit of expansion and growth, both organically and via acquisitions.

Looking AheAd

The growth of healthcare in Asia will be unprecedented, surpassing historical numbers. The growing wealth of the countries plus better access to knowledge and information demands improvement in healthcare quality and its delivery to the people. In response to this, governments are grappling to meet these expectations, balancing tight budgets and providing better care and access. The Company and the Group are well positioned to be stakeholders in this pursuit of better yet affordable healthcare.

AppreciAtion

On behalf of the Board, we would like to express our gratitude and appreciation to all our stakeholders such as our customers, suppliers, business partners and shareholders for their continuing support and confidence in the Group. We would also like to thank our management teams and employees for their hard work and commitment to the Group.

edMond cheAh SWee LengChairman

LoW chin gUAnManaging Director

FinAnciAL perForMAnce

The Group’s revenue from continuing operations grew more than 92% from RM14.19 million in the previous financial year to RM27.38 million this financial year. Net profit after tax jumped from RM1.35 million in the previous financial year to RM6.06 million this financial year, a more than four-fold increase. These results show that the decision to shift business focus towards the sustainable growth sector of medical services is starting to bear fruit.

As a part of this change, several important milestones were achieved, particularly in the hospital supplies and distribution segment. Distributorships and new accounts increased as a result of intensified efforts to gain scale in the business. The financial year saw a jump of 30% in revenue from this segment compared to the previous financial year, indicating continued growth and strength in several key product sectors.

At the same time, the Company’s sterilization business under Electron Beam Sdn Bhd has gained sufficient customer base to be sustainable in its income. Further improvements in sterilization capacity utilization by capturing additional strategic medical industry customers will contribute to improving income through better utilization of assets.

Lucenxia (M) Sdn Bhd (“Lucenxia”), the Company’s subsidiary which will be launching a pioneering home dialysis treatment programme, has the potential to supply full service home dialysis treatment anywhere in the country, rural or urban, making it a natural partner to the Government’s objective and drive to provide all patients with quality care outside of dialysis centers. Lucenxia solves the questions of access and quality care at an affordable cost and as such, a “PD first” program is being implemented. Commercial revenue is expected from this sector from Q4 of 2014 onwards.


1

standing from left to right:Dato’ Dr. Norraesah Binti Haji Mohamad

Toh Seng ThongKwek Siew Leng

sitting from left to right:Edmond Cheah Swee Leng

Low Chin Guan

Directors’ Profiles


edMond cheAh SWee LengChairman, Senior Independent Non-Executive Director

Mr. Edmond Cheah Swee Leng, aged 59, a Malaysian, was appointed to the Board of Adventa Berhad on 9 August 2004 and is presently the Chairman of the Company. His last re-election as a director was on 28 April 2011. He is a member of the Audit Committee and Chairman of the Remuneration Committee and Nomination Committee.

He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants and Association of Chartered Accountants, England and Wales. He is also a certified financial planner. His professional experience has been in the fields of audit, merchant banking, corporate & financial advising, portfolio & investment management, unit trust management and financial planning.

His career started with a professional accounting firm in London where he was an Audit Manager. He was the manager in charge of Portfolio Investment in a merchant bank in Malaysia and subsequently in charge of the corporate and planning division in a public listed company. Mr. Cheah was the Chief Executive Officer/Executive Director and a member of the Investment Committee of Public Mutual Fund Berhad, the largest private unit trust management company in Malaysia.

He was also a council member and Chairman of the Secretariat of the Federation of Investment Managers Malaysia (FIMM), and is a former Task Force Member on Islamic Finance for Labuan International Offshore Financial Centre (LOFSA), and a former member on the Securities Market Consultation Panel in Bursa Malaysia Securities Berhad.

He attended all four (4) Board Meetings held during the financial year ended 31 October 2013.

Mr. Cheah sits on the Board of Nylex Malaysia Berhad, Ancom Berhad and Ancom Logictics Berhad, all of which are listed on Bursa Malaysia Securities Berhad. He is also an Investment Committee Member and Director of MAAKL Mutual Berhad.

He does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company.

He has no convictions for any offence within the past ten (10) years.

LoW chin gUAnManaging Director

Mr. Low Chin Guan, aged 54, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004 and is presently the Managing Director of the Company. His last re-election as a director was on 29 April 2013. He is also a member of the Remuneration Committee.

He graduated as a Civil Engineer from the University of Manchester Institute of Science and Technology (UMIST), United Kingdom.

Mr. Low founded the initial subsidiary of the Group in 1988. He has years of experience in project management, operations of manufacturing and assembly plants, financial control, strategic planning and marketing. In 2004, he formed Adventa Berhad to hold various companies and manufacturing facilities under a single group management.

He now leads the Group in the areas of strategic planning, business development, investments, acquisitions and key personnel recruitment. He is also actively involved in product development, particularly in technological directions.

He attended all four (4) Board Meetings held during the financial year ended 31 October 2013.

Mr. Low does not hold directorships in any other public listed company. He is the son of Madam Wong Koon Mei @ Wong Kwan Mooi and the brother of Ms. Low Lea Kwan, who are substantial shareholders of the Company. He does not have any family relationship with any other director nor any conflict of interest in any business arrangement involving the Company, except as disclosed in the Financial Statements.


kWek SieW LengExecutive Director

Ms. Kwek Siew Leng, aged 48, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004 and is presently an Executive Director of the Company. Her last re-election as a director was on 29 April 2013.

She is an Associate Member of the Chartered Institute of Management Accountants (CIMA) and a Chartered Accountant with the Malaysian Institute of Accountants (MIA). She has senior operations experience in audit and accounting prior to joining the Adventa Bhd group. Her prior employment in public practice includes stints in statutory and regulatory reporting, financial planning, budgeting and forecasting, taxation, management and system development in various fields.

Directors’ Profilescont’d

She joined one of the Company’s subsidiaries as Finance Manager in 2002 and assumed the position of Group Finance Manager of Adventa Berhad in 2003. She was subsequently promoted to Finance Director in 2004. She is now responsible for the overall management and operations of the accounts and finance departments.

She attended all four (4) Board Meetings held during the financial year ended 31 October 2013.

She does not hold directorships in any other public listed company. She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company.

She has no convictions for any offence within the past ten (10) years.

toh Seng thongIndependent Non-Executive Director

Mr. Toh Seng Thong, aged 55, a Malaysian, was appointed to the Board of Adventa Berhad on 10 May 2004. His last re-election as a director was on 26 March 2012. He is the Chairman of the Audit Committee and a member of the Remuneration Committee and Nomination Committee. He graduated with a Bachelor of Commerce (Accounting) degree from the University of Canterbury, New Zealand in 1981. He is a Chartered Accountant by profession and a member of the Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants, New Zealand Institute of Chartered Accountants, a Fellow member of the Malaysian Institute of Taxation and an Associate member of the Harvard Business School Alumni Club of Malaysia. Mr Toh has over 25 years experience in auditing, taxation and corporate advisory and financial advisory as a practicing Chartered Accountant of Malaysia. He started his own practice under Messrs S T Toh & Co in 1997. He attended all four (4) Board Meetings held during the financial year ended 31 October 2013.

He sits on the Board of Latitude Tree Holdings Berhad and Malaysian Genomics Resource Centre Berhad, companies listed on Bursa Malaysia Securities Berhad. Mr. Toh does not have any family relationship with any other director and/or substantial shareholder of the Company nor any conflict of interest in any business arrangement involving the Company.


dAto’ dr. norrAeSAh Binti hAJi MohAMAdIndependent Non-Executive Director

Dato’ Dr. Norraesah Binti Haji Mohamad, aged 66, a Malaysian, was appointed to the Board of Adventa Berhad on 8 November 2005 as an Independent Non-Executive Director of the Company. Her last re-election as a director was on 26 March 2012. She is also a member of the Audit Committee.

Dato’ Dr. Norraesah holds a Doctorate Degree in Economics Science (International Economics and Finance) and a Masters in International Economics and Financial Relations from the University of Paris Pantheon-Sorbonne, France.

She has more than 42 years of working experience in banking, consultancy and international trade and commerce. From 1972 to 1985, she worked with the International Trade Division of the Ministry of Trade and Industry and the Ministry of Finance before joining the corporate sector.

From 1988 to 1990, Dato’ Dr. Norraesah was the Communications Manager of ESSO Production Malaysia Inc. and subsequently assumed the position of Managing Director with a consultant firm providing financial advisory services. She was also appointed as Chief Representative of Credit Lyonnais Bank in Malaysia and was the Chairman of Bank Rakyat from 2000 to 2003.

She attended two (2) out of four (4) Board Meetings held during the financial year ended 31 October 2013.

Dato’ Dr. Norraesah currently also sits on the board of My E.G. Services Berhad, Malaysian Genomics Resource Centre Berhad and Utusan Melayu (Malaysia) Berhad, all listed on Bursa Malaysia Securities Berhad.

She does not have any family relationship with any other director and/or substantial shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company.

She has no convictions for any offence within the past ten (10) years.

Directors’ Profilescont’d


Corporate Governance Statement

The Board of Directors (“the Board”) is committed to its policy of managing the affairs of the Group with transparency, integrity and accountability by ensuring that a sound framework of best corporate practices is in place at all levels of the Group’s business and thus discharging its principal responsibility towards protecting and enhancing long-term shareholders’ value and investors’ interest.

The Board is pleased to report to the Shareholders that the best practices of good corporate governance having regard to the Recommendations stated under each Principle in the Malaysian Code on Corporate Governance 2012 (“the Code”) have generally been practiced within the Group throughout the financial year ended 31 October 2013.

1.0 the BoArd oF directorS

1.1. the Board of directors

The Board has overall responsibility for corporate governance, strategic direction, formulation of policies and overseeing the investment and business of the Company.

During the financial year ended 31 October 2013, there were four (4) Board meetings held. Details of the attendance of the Directors at the Board meetings are as follows:-

name of directors no. of meetings attended/held %

Mr. Edmond Cheah Swee Leng 4/4 100

Mr. Low Chin Guan 4/4 100

Ms. Kwek Siew Leng 4/4 100

Mr. Toh Seng Thong 4/4 100

Dato’ Dr. Norraesah Binti Haji Mohamad 2/4 50

1.2. Board Balance

The Board has five (5) members comprising:-

Two (2) Executive Directors including one (1) Managing Director and three (3) Non-Executive Directors, including one (1) Senior Independent Non-Executive Chairman.

The Board composition is in compliance with Paragraph 15.02(1) of the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and Recommendation 3.4 of the Code, wherein it states that the positions of Chairman and Chief Executive Officer (in this case, the Managing Director) should be held by different individuals, and the Chairman must be a non-executive member of the Board.

1.3 Board charter

The Board has adopted a Board Charter which sets out its primary responsibilities as follows:-

• reviewingandadoptingthebusinessplanandoverallstrategicdirectionsfortheCompanyincludingestablishing company goals and ensuring that the strategies are in place to achieve them;

• establishingpolicies forstrengtheningtheperformanceof theCompany includingensuringthat theManagement is proactively seeking to build the business through innovation, initiative, technology, new products and the development of its business capital;

• overseeing the conduct of the Company’s business to evaluate whether the business is beingproperly managed;

• identifyingprincipal risksandensuringthe implementationofappropriatesystemstomanagetheserisks;

• succession planning, including appointing, training, fixing the remuneration of and whereappropriate, replacing senior management members of the Group;



Corporate Governance Statementcont’d

1.0 the BoArd oF directorS cont’d

1.3 Board charter cont’d

• developing and implementing an investor relations programme or shareholders’ communicationspolicy for the Company;

• reviewing the adequacy and integrity of the Company’s internal control systems and managementinformation systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;

• decidingonnecessary steps toprotect theCompany’s financialpositionand theability tomeet itsdebts and other obligations when they fall due, and ensuring that such steps are taken;

• ensuring that the Company’s financial statements are true and fair and conform to any applicablelaws and/or regulations; and

• ensuring that the Company has appropriate corporate governance structures in place, includingstandards of ethical behaviour, and promoting a culture of corporate responsibility.

The Board will review this Board Charter from time to time to ensure that it remains consistent with the Board’s objectives and responsibilities and any new regulations that may have an impact on the discharge of the Board’s responsibilities. The Board Charter will be uploaded to the Company’s website in due course.

There is a clear division of responsibility between the Chairman and the Managing Director to ensure that there is a balance of power and authority. The roles of the Chairman and the Managing Director are separated and clearly defined. The Chairman is responsible for ensuring Board effectiveness and conduct whilst the Managing Director has overall responsibilities over the Group’s operating units, organisational effectiveness and implementation of Board policies and decisions.

The Board is of the view that the current composition of the Board facilitates effective decision making and independent judgment where no individual shall dominate the Board’s decision making.

The Board members have a wide range of business, financial and technical experience. The mixed skills and experiences are vital for the successful direction of the Group. A brief profile of each Director is presented on pages 6 to 8 of this Annual Report.

The Board also recognises the pivotal role of the independent directors in corporate accountability as they provide unbiased and independent views, advice and judgment. Mr. Edmond Cheah Swee Leng has been identified as the Senior Independent Non-Executive Director of the Board to whom concerns may be conveyed.

1.4 code of conduct

The Board has adopted a Code of Conduct for the Directors of the Company, which covers a wide range of business practices and procedures. The Code of Conduct describes the standards of business conduct and ethical behaviour for Directors in the performance and exercise of their responsibilities as Directors of the Company or when representing the Company.

1.5 Sustainability and corporate Social responsibility (“cSr”)

The Company seeks to be a good corporate citizen in everything that it does. In promoting the Company’s sustainability and CSR which form part of the Company’s strategies, the Company aims to:-

(a) conduct every aspect of our business with honesty, integrity and openness, respecting human rights and the interests of our employees, customers and third parties;

(b) respect the legitimate interests of third parties with whom we have dealings in the course of our business; and

(c) maintain the highest standards of integrity.



1.0 the BoArd oF directorS cont’d

1.5 Sustainability and corporate Social responsibility (“cSr”)

The Company engages with the local community at a range of levels and its relationships with the various members of the local community are very important to the Company and are an essential part in the growth of the Company’s business. In line with the Company’s core values, the Company seeks to play a part in promoting CSR. Our community approach incorporates the following elements:

• engagementwiththe localcommunities inwhichweoperateonthequalityofourservicesandanychanges to those services;

• workingwithlocalauthorities,businessesandotherinterestedpartiestoimprovequalityoflife; • offering employment opportunities to all sectors of the community through non-discriminatory

policies and promoting opportunities for disadvantaged and vulnerable groups; • promotingengagementbetweenourstaffandthecommunity;and • supporting local community groups and charities such as the Malaysian Society of Nephrology and

the Kuala Lumpur Soup Kitchen, in both cash and kind.

As the Company strives to achieve continual improvement in environmental performance, the Company is committed to:-

• reducingpollutionandtheoverallimpactofouroperationsontheenvironment; • complying with, and where possible, exceeding applicable legal requirements relating to the

environment; • activelypromotingimprovedenergyefficiencywithinourbusinessinordertoreduceclimatechange.

2.0 SUppLY oF inForMAtion

The Board has full and timely access to information concerning the Company and the Group. The Board is provided with the relevant agenda and board papers in sufficient time prior to the meetings to enable them to obtain further explanation and clarification to facilitate informed decision-making. The Board papers include reports on the Group’s financial, operational and corporate development.

The Board has unrestricted access to all information within the Company, whether as a full board or in their individual capacity, which is necessary for discharge of its responsibilities and may obtain independent professional advice at the Company’s expense in furtherance of their duties.

The Board is supported by a suitably qualified and competent Company Secretary and has access to the advice and services of the Company Secretary, who is responsible to ensure that the Board meeting procedures are followed and the applicable statutory and regulatory requirements are complied with.

3.0 BoArd coMMitteeS

The Board of Directors delegates specific responsibilities to the respective Committees of the Board namely the Audit Committee, Nomination Committee, Remuneration Committee and Risk Management Committee in order to enhance business and corporate efficiency and effectiveness. The Chairman of the respective Committees will brief the Board on the matters discussed at the Committee meetings and minutes of these meetings are circulated to the full Board.

3.1 Audit committee

The Audit Committee’s composition, duties and responsibilities, terms of reference and activities are set out on pages 18 to 23 of this Annual Report.



3.0 BoArd coMMitteeS cont’d

3.2 nomination committee

The Board has established a Nomination Committee, consisting of two (2) Directors who are Independent Non-Executive Directors of the Company. This Committee is responsible for making recommendations to the Board on the optimum size of the Board and proposing new nominees to the Board. The Committee shall also assess the performance of the Directors of the Company by annually reviewing the profile of the required skills and attributes to ensure that the Board has an appropriate balance of expertise and ability. In addition, the Board will assess its own effectiveness as a whole and the contribution of each Director on an annual basis.

The members of the Nomination Committee during the financial year are as follows:-

chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Member : Mr. Toh Seng Thong Independent Non-Executive Director

The Nomination Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended 31 October 2013, the Committee had one (1) meeting and reviewed the following matters:-

• theeffectivenessof theboardasawholeandof thecommitteesof theBoardandthecontributionand performance of each individual Director;

• theindependenceoftheindependentDirectors;and • theDirectorswhoaresubjecttoretirementbyrotationat theforthcomingAnnualGeneralMeeting

(“AGM”), and are eligible for re-election.

The Board opts to deviate from Recommendation 3.2 of the Code which states that the tenure of an independent Director should not exceed a cumulative term of nine (9) years and upon completion of the nine (9) years, an independent Director may continue to serve in the Board subject to the Director’s re-designation as a non-independent Director. The Board is of the view that even though the tenures of Mr. Edmond Cheah Swee Leng and Mr. Toh Seng Thong have exceeded nine (9) years, they are able to exercise their independent judgment in facilitating decision processes of the Company, and so they can continue to be designated as independent Directors.

Any Director appointed during the year is required under the Company’s Articles of Association to retire and seek re-election by the shareholders at the following AGM immediately after their appointment. The Articles also require that one-third of the Directors including the Managing Director retire by rotation and seek re-election at each AGM and that each Director shall submit himself/herself for re-election at least once in every three (3) years. The Directors to retire from office at the forthcoming AGM are Mr. Toh Seng Thong and Mr. Edmond Cheah Swee Leng.

While the Nomination Committee and the Board have not established a policy formalizing their approach to boardroom diversity or set any target on gender diversity, the current composition of the Board with two (2) female directors, i.e. Dato’ Dr. Norraesah Binti Haji Mohamad and Ms. Kwek Siew Leng, serves well to Recommendation 2.2 of the Code.

time commitment and protocol for accepting new directorships

The appointment of a new Director or Managing Director is a matter for consideration and decision by the full Board upon an appropriate recommendation from the Nomination Committee.

On the appointment of a new Director, the new Director is required to commit sufficient time to attend to the Company’s matters before accepting his appointment to the Board.

Directors are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment. Any Board member shall not hold more than five (5) directorships in listed companies at any one time.



3.0 BoArd coMMitteeS cont’d

3.2 nomination committee cont’d

directors’ training

All the Board members have attended the Mandatory Accreditation Programme as required by the MMLR.

In addition, during the financial year under review, all Directors were also advised of developments or changes to relevant laws and regulatory requirements and suitable training and education programmes were identified for their participation from time to time. Management briefings during Board and Audit Committee meetings on various operational, technical and corporate matters were also aimed at ensuring that Directors are well versed with the knowledge of the Group’s business and affairs in enabling them to make meaningful decisions. The Directors of the Company have also attended various courses and seminars on various subject matters such as financial reporting, taxation, capital markets and investments and other business related programmes to further enhance their business acumen and knowledge in executing their duties as Directors.

The Board is also encouraged to attend various training programmes necessary to ensure that they are kept abreast on various issues facing the changing business environment within which the Group operates.

3.3 remuneration committee

In compliance with the Code, the Remuneration Committee was set up with clearly defined terms of reference comprising two (2) Independent Non-Executive Directors and one (1) Managing Director, as follows:-

chairman : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Members : Mr. Toh Seng Thong Independent Non-Executive Director Mr. Low Chin Guan Managing Director The primary function of the Remuneration Committee is to recommend to the Board on the remuneration

packages and other terms of employment of the Executive Directors. The determination of the remuneration for the Non-Executive Directors will be a matter of the Board as a whole with the Director concerned abstaining from deliberation and voting decision in respect of his individual remuneration package.

The Remuneration Committee may meet at least once a year or more frequently as deemed necessary. During the financial year ended 31 October 2013, the Committee had two (2) meetings.

details of the directors’ remuneration

The aggregate Directors’ remuneration paid or payable or otherwise made to all Directors of the Company who served during the financial year are shown as follows:-

Fees Salariesother

emoluments total

category (rM) (rM) (rM) (rM)

Executive Directors 51,840 270,000 706,420 1,028,260

Non-Executive Directors 174,960 - - 174,960

The number of Directors whose total remuneration falls within the following bands is as follows:-

range of remuneration executive directors non-executive directors

RM50,001 – RM100,000 - 3

RM300,001 – RM350,000 1 -

RM700,001 – RM750,000 1 -



4.0 internAL controL And riSk MAnAgeMent

During the year, the Company established a Risk Management Committee (“rMc”) to oversee the risk management function, determine the risk areas and develop a risk register for the Group. With the assistance of the outsourced Internal Auditors, PKF Advisory Sdn. Bhd. (“PKF”), the Company developed its Risk Management Policy and Procedure Document with an embedded Enterprise Risk Management (“erM”) framework.

The ERM framework is designed to:-

• establishthecontextforanembeddedERMframeworkwithintheGroup; • formalizetheERMfunctionsacrosstheGroup; • sensitize staff more strongly to risk identification, measurement, control, ongoing monitoring,

responsibilities and accountabilities; • coordinateandstandardizetheunderstandingandapplicationofERMwithintheGroup;and • provecompliancebytheBoardoftheCompanywithitsorganizationalobligationsanddutiesofcareand

diligence in accordance with the Code via a structured documentation system.

The RMC comprises the following members:-

chairperson : Ms. Kwek Siew Leng

Members : Mr. Daniel Peh : Mr. Choy Wah Wei : Mr. Robert Hill : Ms. Sharon Chia

The Board acknowledges that it is responsible for maintaining a sound system of internal controls which provides reasonable assessment of effective and efficient operations, internal financial controls and compliance with laws and regulations as well as with internal procedures and guidelines. The Internal Control Statement is set out on pages 24 to 25 of this Annual Report.

5.0 reLAtionShip With ShArehoLderS And inVeStorS

The Company recognises the importance of keeping shareholders and investors informed of the Group’s business and corporate developments. Such information is disseminated via the Company’s annual reports, circulars to shareholders, quarterly financial results, press releases and various announcements made from time to time. The Policy on Corporate Communications and Disclosure adopted by the Company is to ensure that the Company has in place efficient procedures for the management of information which at the same time, will promote accountability in relation to the disclosure of material information as well as to build good investor relations with the investing public that inspires trust and confidence.

During the year, the Managing Director and Executive Director have briefed institutional investors, fund managers and analysts to keep them updated on the Group’s performance, business expansion plans and other matters related to shareholders’ interest.

The Group maintains a website at www.adventa.com.my where shareholders as well as members of the public are invited to access the latest information on the Group. Alternatively, they may obtain the Group’s latest Annual Report and announcements via the Bursa Securities website at www.bursamalaysia.com.my. The Company will upload the internal corporate policies in the Corporate Governance section of the Company’s website in due course.

The AGM and Extraordinary General Meeting remains the principal forum for dialogue with shareholders where they may seek clarifications on the Group’s businesses. Shareholders are encouraged to meet and communicate with the Board at the AGM and to vote on all resolutions. The Board will respond to any questions raised during the meeting to their best ability and knowledge to do so.



5.0 reLAtionShip With ShArehoLderS And inVeStorS cont’d

The Board supports the use of poll votes to ensure a fair voting process. At the Tenth AGM held last year, the Chairman reminded the attending shareholders of their right to demand for poll voting. Nonetheless, no request for poll voting was received during the AGM. The Board would consider employing electronic means for poll votes for substantive resolutions in future general meetings.

6.0 AccoUntABiLitY And AUdit

Financial reporting

In presenting the annual audited financial statements and quarterly announcement of results to shareholders, the Directors aim to present a balanced and understandable assessment of the Group’s position and prospects.

The Audit Committee assists the Board by reviewing the information to be disclosed in the financial statements, to ensure completeness, accuracy, adequacy and compliance with applicable financial reporting standards. The composition, summary of activities and terms of reference of the Audit Committee can be found in the Audit Committee Report on pages 18 to 23 of this Annual Report.

The Audit Committee has obtained confirmation from the External Auditors that they are independent in accordance with the By-laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants, however no specific policies and procedures have been formulated to assess the suitability and independence of the External Auditors.

The Statement of Directors’ Responsibility in respect of the Audited Financial Statements pursuant to paragraph 15.26(a) of the MMLR and pursuant to the Statement of Directors’ Responsibility of the Companies Act 1965 is set out on page 26 of this Annual Report.

relationship with the Auditors

Through the Audit Committee, the Company has established a transparent and appropriate relationship with the Group’s External Auditors. From time to time, the Auditors highlighted to the Audit Committee and the Board on matters that require the Board’s attention. The functions of the Audit Committee and its relations with the Auditors are set out on pages 18 to 23 of this Annual Report.



other inForMAtion pUrSUAnt to the MAin MArket LiSting reQUireMentS oF BUrSA MALAYSiA SecUritieS BerhAd

1. Utilisation of proceeds

The total gross proceeds of RM61.11 million from the disposal of the Company’s manufacturing business after the related distribution (as set out in Note 32(a) on page 97 of this Annual Report) have been utilised in the following manner:

purpose

estimated time frame for utilisation from completion of

the disposal Amount

Amount utilised as at

31.10.2013

Balance not utilised as at

31.10.2013

rM’000 rM’000 rM’000

Payment for the purchase consideration of acquisition of Electron Beam Sdn. Bhd. Within 1 month 9,000 9,000 -

Working capital for Sun Healthcare (M) Sdn. Bhd. Within 12 months 12,000 12,000 -

Working capital for Electron Beam Sdn. Bhd. Within 12 months 5,000 5,000 -

Working capital for Lucenxia (M) Sdn. Bhd. Within 24 months 20,000 11,222 8,778

Future business expansion opportunities Within 24 months 12,614 - 12,614

Estimated expenses in relation to the Proposals Within 1 month 2,500 2,500 -

61,114 39,722 21,392

2. recurrent related party transactions of revenue nature

At the Annual General Meeting held on 29 April 2013, the Company obtained a Shareholders’ Mandate to allow the Group to enter into recurrent related party transactions of a revenue or trading nature.

In accordance with Section 3.1.5 of Practice Note 12 of the Bursa Securities Berhad Listing Requirements, the details of recurrent related party transactions conducted pursuant to the Shareholders’ Mandate are disclosed as follows:

related party

interest director/interested Major Shareholder nature of transaction

Value of transactions from

5th April 2013 up to 28th February 2014

(rM’000)

Aspion Group Mr Low Chin Guan (a) Purchases of gloves from the Aspion Group

2,915

(b) Provision of sterilisation and warehouse and handling services to the Aspion Group

5,640

(c) Sales of non-glove products to the Aspion Group

325



3. Share Buy-Back

The Company did not purchase any of its own shares during the financial year under review.

4. depository receipt programme

The Company did not sponsor any depository receipt programme during the financial year under review.

5. imposition of Sanctions/penalties

There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year under review.

6. non-Audit Fees

During the financial year under review, the Group’s non-audit fees paid or payable to the External Auditors amounted to RM39,069.

7. Variation in results

There was no material variance between the results of the financial year and the unaudited results previously announced. The Company did not make any release on any profit estimate, forecast or projections for the financial year.

8. profit guarantees

There were no profit guarantees given by the Company during the financial year under review.

9. Material contracts involving directors and Major Shareholders

There were no material contracts involving the Company and its subsidiaries with directors and/or major shareholders of the Company either still subsisting at the end of the financial year ended 31 October 2013 or entered into since the end of the previous financial year.

10. contracts relating to Loans

There were no material contracts relating to loans entered into by the Company involving Directors and/or substantial shareholders.

11. options, Warrants or covertible Securities

The Company did not issue any options, warrants or convertible securities during the year under review.


Audit Committee Report

introdUction

The Board of Directors of the Company (the “Board”) is pleased to present the report of the Audit Committee for the financial year ended 31 October 2013.

A. MeMBerShip

chairman : Mr. Toh Seng Thong Independent Non-Executive Director Members : Mr. Edmond Cheah Swee Leng Senior Independent Non-Executive Director Dato’ Dr. Norraesah Binti Haji Mohamad Independent Non-Executive Director

B. terMS oF reFerence

1. composition of Members

The Board shall appoint the Audit Committee members from amongst themselves, comprising no fewer than three (3) non-executive directors. The majority of the Audit Committee members shall be independent directors.

In this respect, the Board adopts the definition of “independent director” as defined under Bursa Malaysia Securities Berhad Main Market Listing Requirements (“MMLR”).

All members of the Audit Committee shall be financially literate and at least one (1) member of the Audit Committee must:-

(a) be a member of the Malaysian Institute of Accountants (“MIA”); or

(b) if he is not a member of the MIA, he must have at least three (3) years of working experience and:

i. he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act 1967; or

ii. he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act 1967; or

(c) fulfill such other requirements as prescribed or approved by Bursa Securities.

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

The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

retirement and resignation

If a member of the Audit Committee resigns, dies, or for any reason ceases to be a member resulting in non-compliance with the composition criteria as stated in paragraph 1 above, the Board shall within three (3) months of the event appoint such number of the new members as may be required to fill the vacancy.

2. chairman

The members of the Audit Committee shall elect a Chairman from amongst their number who shall be an independent director.

In the absence of the Chairman of the Audit Committee, the other members of the Audit Committee shall amongst themselves elect a Chairman who must be an independent director to chair the meeting.


Audit Committee Reportcont’d

B. terMS oF reFerence cont’d

3. Secretary

The Company Secretary shall be the Secretary of the Audit Committee and as a reporting procedure the minutes shall be circulated to all members of the Board.

4. Meetings

The Audit Committee shall meet regularly, with due notice of issues to be discussed, and shall record its conclusions in discharging its duties and responsibilities. In addition, the Chairman may call for additional meetings at anytime at the Chairman’s discretion.

Upon the request of the External Auditors or the Internal Auditors (if any), the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter the auditors believe should be brought to the attention of the directors or shareholders.

Notice of the Audit Committee meetings shall be given to all the Audit Committee members unless the Audit Committee waives such requirement.

The Chairman of the Audit Committee shall engage on a continuous basis with senior management, such as the Chairman, the Chief Executive Officer, the Finance Director, the head of internal audit and the External Auditors in order to be kept informed of matters affecting the Company.

The Finance Director, the head of internal audit and a representative of the External Auditors should normally attend meetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee. The Audit Committee shall be able to convene meetings with the External Auditors, the Internal Auditors, or both, without executive Board members or employees present whenever deemed necessary and at least twice a year with the External Auditors.

Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting vote.

5. Minutes

Minutes of each meeting shall be kept at the registered office and distributed to each member of the Audit Committee and also to the other members of the Board. The Audit Committee shall report on each meeting to the Board.

The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

6. Quorum

The quorum for the Audit Committee meeting shall be the majority of members present whom must be independent directors.




7. objectives

The principal objectives of the Audit Committee are to assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries. In addition, the Audit Committee shall:

(a) evaluate the quality of the audits performed by the Internal and External Auditors;

(b) provide assurance that the financial information presented by management is relevant, reliable and timely;

(c) oversee compliance with laws and regulations and observance of proper codes of conduct; and

(d) determine the quality, adequacy and effectiveness of the Group’s control environment.

8. Authority

The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the expense of the Company,

(a) have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full access to information. All employees shall be directed to co-operate as requested by members of the Audit Committee;

(b) Have full and unlimited/unrestricted access to all information and documents/resources which are required to perform its duties as well as to the Internal and External Auditors and senior management of the Company and Group;

(c) obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary;

(d) have direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity (if any); and

(e) where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the MMLR, the Audit Committee shall promptly report such matter to Bursa Securities.

9. duties and responsibilities

The duties and responsibilities of the Audit Committee are as follows:-

(a) To consider the appointment of the External Auditors, the audit fee and any question of resignation or dismissal, any letter of resignation from the External Auditors and whether there is reason (supported by grounds) to believe that the External Auditors are not suitable for re-appointment before making recommendations to the Board of Directors and recommend the nomination of a person or persons as External Auditors;

(b) To discuss with the External Auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;

(c) To review with the External Auditors his evaluation of the system of internal controls and his audit report;




9. duties and responsibilities cont’d

The duties and responsibilities of the Audit Committee are as follows:- cont’d

(d) To review the quarterly and year-end financial statements of the Board, focusing particularly on:

• anychangeinaccountingpoliciesandpractices; • significantadjustmentsarisingfromtheaudit; • thegoingconcernassumption;and • compliancewithaccountingstandardsandotherlegalrequirements.

(e) To discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management, where necessary);

(f) To review the External Auditors’ management letter and management’s response;

(g) To review the adequacy and effectiveness of risk management, internal control and governance systems relating to the accounting and reporting practices of the Company;

(h) To do the following, in relation to the internal audit function:

• ensurethattheinternalauditfunctionisindependentoftheactivitiesitauditsandtheInternalAuditors shall report directly to the Audit Committee. The head of internal audit shall be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company;

• review the adequacy of the scope, functions and competency and resources of the internalaudit function, and that it has the necessary authority to carry out its work;

• review the internal audit programme and results of the internal audit process and, wherenecessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

• review any appraisal or assessment of the performance of members of the internal auditfunction;

• approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;and • takecognizanceofresignationsof internalauditstaffmembersandprovidetheresigningstaff

member an opportunity to submit his/her reasons for resigning.

(i) To consider any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(j) To report its findings on the financial and management performance and other material matters to the Board;

(k) To consider the major findings of internal investigations and management’s response;

(l) To verify the allocation of employees’ share option scheme (“ESOS”) in compliance with the criteria as stipulated in the by-laws of ESOS of the Company, if any;

(m) To determine the remit of the internal audit function;

(n) To establish policies governing the circumstances under which contracts for the provision of non-audit services can be entered into and procedures that must be followed by the External Auditors;

(o) To consider other topics as defined by the Board; and

(p) To consider and examine such other matters as the Audit Committee considers appropriate.



c. MeetingS oF the AUdit coMMittee

The Audit Committee met four (4) times during the financial year under review and details of attendance of each member are as follows:

name no. of meetings attended/held

Toh Seng Thong – Chairman 4/4

Edmond Cheah Swee Leng 4/4

Dato’ Dr. Norraesah Binti Haji Mohamad 2/4

Representatives of management, the Internal Auditors and the External Auditors also attended the meetings at the invitation of the Committee.

d. SUMMArY oF ActiVitieS

The Audit Committee met at scheduled times, with due notices of meetings issued, and with agendas planned so that issues raised in respect of financial statements were deliberated and discussed in a focused and detailed manner.

In line with the Terms of Reference of the Committee, the following activities were carried out during the financial year under review:

• Reviewedthequarterly results,financial statementsandcorrespondingannouncements tobe releasedtoBursa Securities to ensure compliance with the relevant MMLR, the provisions of the Companies Act 1965 and applicable accounting standards in Malaysia, prior to submission to the Board for consideration and approval;

• Deliberated on the Group’s financial performance, business development, management and corporateissues and recommended to the Board for approvals any key business strategies and actions that may affect the Group;

• ReviewedandassessedtheinternalauditplanandclassificationofriskparametersoftheGroup. • Reviewedtheinternalcontrol issues identifiedbytheInternalAuditorsaswellasmanagement’sresponse

to recommendations and the implementation of agreed action plans. • ReviewedandevaluatedtheExternalAuditors’scopeofwork,proposedaudit feeandauditplanfor the

financial year prior to the commencement of the audit; • Reviewed the financial statements, the audit report and issues arising from the audits with the External

Auditors; • MetwiththeExternalandInternalAuditorstwicewithoutthepresenceofExecutiveBoardmembersand

management; and • Notedemergingfinancial reporting issuespursuant to the introductionofnewaccounting standardsand

additional statutory and regulatory disclosure requirements; and • ReviewedtheEnterpriseRiskManagement(“ERM”)FrameworktogetherwiththeRiskManagementPolicy

and Procedure Document and Risk Register.


e. internAL AUdit

The Group has in place an internal audit function whose principal responsibility is to undertake regular and systematic reviews of the internal control system so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively in the Group and the Company. The internal audit function reports directly to the Audit Committee to ensure its independent status within the Group.

The Audit Committee is assisted in discharging its duties and responsibilities with respect to the adequacy and integrity of the system of internal controls within the Group by an independent consulting firm, PKF Advisory Sdn. Bhd., to whom the internal audit function has been outsourced. The internal audits were performed using a risk based approach and focused on:

• reviewingidentifiedhighriskareasforcompliancewithestablishedpolicies,procedures,rules,guidelines,laws and regulations;

• evaluatingtheadequacyofcontrolsforsafeguardingassets;and • identifyingbusinessriskswhichhavenotbeenappropriatelyaddressed.

The internal audit carries out audit assignments based on an audit plan that is reviewed and approved by the Audit Committee. The reports of the audits undertaken were forwarded to the management for attention and necessary action and then presented to the Audit Committee for deliberation and approval.

During the financial year under review, the internal audit function undertook the following activities:

• CarriedouttheinternalauditoftheGroup’soperatingunitsincludingitssubsidiariesbyreviewingbusinessactivities and processes to ensure compliance with internal control procedures, highlighting control weaknesses and making appropriate recommendations for improvements; and

• Attended and reported to the Audit Committee its internal audit findings and the response andrectification undertaken by the management to improve the Group’s system of internal controls and procedures; and

• AssistedtheCompanyindraftingtheERMframework.

The cost incurred for the internal audit function in respect of the financial year ended 31 October 2013 amounted to approximately RM16,340.



Internal Control Statement

introdUction

Pursuant to Paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”) and the Principles and Best Practices provisions relating to internal control provided in the Malaysian Code on Corporate Governance 2012 (“the Code”), the Board of Directors (“the Board”) of listed issuers are required to include in their Annual Report a “Statement on the state of its Risk Management and Internal Control”. The following Internal Control Statement has also been prepared in accordance with the “Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers”.

BoArd reSponSiBiLitieS

The Board affirms its overall responsibility for the Group’s system of internal control which includes the establishment of an appropriate control environment and risk management framework as well as reviewing its adequacy and integrity. Due to the limitations that are inherent in any internal control system, the Group’s system of internal control can only manage rather than eliminate the risk of failure to achieve business objectives and therefore can only provide reasonable and not absolute assurance against material misstatement, loss or fraud. Notwithstanding this, the Board requires that the procedures and controls in place are subject to regular review as part of an ongoing process for identifying, evaluating and managing the significant risks faced by the Group.

The Board has extended the responsibilities of the Audit Committee to include the role of reviewing and monitoring the effectiveness of the Group’s internal control system. The Audit Committee receives assurance reports from the Internal Auditors on findings from audits carried out at operating units, and the External Auditors on areas for improvement identified during the course of statutory audit. The Reports of the Audit Committee is set out on pages 18 to 23 of the Annual Report.

riSk MAnAgeMent FrAMeWork

During the year, the Group monitored significant risks and risk mitigation strategies on an ongoing basis through its management at the Risk Management Committee (“RMC”) meetings and Board meetings. Under the purview of the RMC, the respective heads of each operating subsidiary and department of the Group are empowered with the responsibility of managing their respective operations.

In view of a constantly changing environment and competitive landscape, the Board is committed in maintaining a system of internal control that comprises the following environment, key processes and monitoring systems:

• The Audit Committee, through the RMC, reviews the adequacy and effectiveness of the Group’s riskmanagement and internal control procedures as well as any internal control issues identified by the Internal and External Auditors;

• An annual risk assessment analysis that assists the management to continuously identify significant risksassociated with key processes within a changing business and operating environment;

• An annual budgeting process that establishes monthly budgets for each business unit against whichperformance is monitored on an ongoing basis;

• Monthlybusiness reportsandmanagementaccountsaresubmittedby the respectivebusinessunits for reviewby senior management;

• Disaster recovery plans including fire prevention monitoring process, adequate insurance coverage andcomputer IT monitoring process to help ensure the risk of system failure and outages is minimised; and

• Segregationofdutiesandlimitsofauthorityarepractisedtoensureaccountabilityandresponsibility.


Internal Control Statementcont’d

internAL AUdit

The internal audit function prepares its audit strategies and plans based on the risk profiles of the major business units of the Group.

The internal audit team from PKF Advisory Sdn. Bhd. (“PKF”), the independent consulting firm to which the internal audit function has been outsourced, assesses the adequacy and integrity of the internal control system based on the scope of work approved by the Audit Committee and reports to the Audit Committee on its findings and recommendations for improvement. The Internal Auditor also reviews the extent to which its recommendations have been accepted and implemented by the Management. The Audit Committee reviews internal audit reports and management responses thereto and ensures significant findings especially control deficiencies are adequately addressed and rectified by the Management of the operating units concern. The Audit Committee reviews internal control matters and update the Board on significant issues for the Board’s attention and action.

The Internal Auditors, which report directly to the Audit Committee, conducts reviews on the adequacy and effectiveness of the Group’s system of internal controls that the management has put in place. These audits review the internal controls in the key activities of the Group’s business based on a 3-year detailed internal audit plan approved by the Audit Committee. Based on these audits, the Internal Auditors provide the Committee with annual reports highlighting observations, recommendations and management action plans to improve the system of internal control.

During the financial year ended 31 October 2013, PKF has executed internal audit reviews in accordance to the strategic internal audit plan on the following processes:-

• SalesandAccountsReceivablefunction• ProcurementandAccountsPayablefunction

other keY eLeMentS oF internAL controL

Apart from risk management and internal audit, the Group’s system of internal controls comprises the following key elements:-

• awelldefinedorganisationalstructurewithclearreportinglinesandaccountabilities;• clearlydefinedinternalpoliciesandproceduresforkeyprocessestoensurefullcompliancebyalloperatingunits

and to minimise operating risks;• aclosemonthlymonitoringandreviewoffinancialresultsandforecastsforalloperatingunitsbytheManaging

Director; and • clearreportingstructurestoensurepropermonitoringoftheGroup’soperationstogetherwithregularquarterly

reports which monitor the Group’s performance.

concLUSion

For the financial year under review and up to the date of approval of this Statement, the Board is of the view that the Group’s system of internal control and risk management is sound and adequate enough to safeguard the shareholders’ investments and the Group’s assets.

The Board has received assurance from the Managing Director and the management team of the Group that the Group’s risk management and internal control systems have been operating adequately and effectively, in all material aspects, during the financial year under review and up to the date of approval of this Statement.

There was no material internal control failure which resulted in material losses or contingencies during the financial period under review. The Board and management will, when necessary, put in place appropriate actions to further enhance the Group’s system of internal control.

This statement was made in accordance with a resolution of the Board dated 18 March 2014 and has been duly reviewed by the External Auditors, pursuant to paragraph 15.23 of the Listing Requirements.


Responsibility Statementby the Board of Directors

In preparing the annual financial statements of the Group and of the Company, the Directors are collectively responsible to ensure that these financial statements have been prepared to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and the results and cash flows of the Group and the Company in accordance with applicable approved accounting standards in Malaysia, the provisions of the Companies Act 1965 and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

In preparing the financial statements for the financial year ended 31 October 2013 set out on pages 35 to 109 of this Annual Report, the Directors have applied appropriate accounting policies on a consistent basis and made judgments and estimates that are reasonable and prudent.

The Directors have responsibility for ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act 1965.

The Directors have overall responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution of the Board of Directors dated 18 March 2014.

28

32

32

33

35

37

41

44

46

109

Directors’ Report

Statement by Directors

Statutory Declaration

Independent Auditors’ Report

Statements of Comprehensive Income

Statements of Financial Position

Statements of Changes in Equity

Statements of Cash Flows

Notes to the Financial Statements

Supplementary Information

fina

ncia

lst

ate

me

nts


The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 October 2013.

PrinciPal activities The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 16 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.

results

Group company

rM rM

Profit from continuing operations, net of tax 81,795,804 205,355,871

Profit/(loss) from discontinued operations, net of tax 583,290 (720,619)

Profit net of tax 82,379,094 204,635,252

Profit attributable to:

Owners of the parent 82,383,935 204,635,252

Non-controlling interest (4,841) -

82,379,094 204,635,252 There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statements of changes in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.

DiviDenDs

The amount of dividends paid by the Company since 31 October 2012 was as follows:

rM

In respect of the financial year ended 31 October 2013

Interim single-tier tax exempt dividend of RM1.30 per share on 152,785,770 ordinary shares of RM0.35 each, declared on 30 November 2012 and paid on 21 January 2013 198,621,501

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: Low Chin Guan Kwek Siew Leng Toh Seng Thong Edmond Cheah Swee Leng Dato’ Dr. Norraesah Binti Haji Mohamad 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 Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Notes 10 to the financial statements) by reason of a contract made by the Company or a related corporation with a director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 30 to the financial statements.

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

number of ordinary shares of rM0.35 each

1.11.2012 acquired sold 31.10.2013

Direct interest

Low Chin Guan 58,446,552 - - 58,446,552

Kwek Siew Leng 928,200 71,800 - 1,000,000

Toh Seng Thong 140,000 - - 140,000

Edmond Cheah Swee Leng 140,000 - - 140,000

Dato’ Dr. Norraesah Binti Haji Mohamad 140,000 - - 140,000

indirect interest

Low Chin Guan # 7,960,960 - - 7,960,960 # By virtue of shareholdings by his family members

Directors’ Reportcont’d


Directors’ interest cont’d Low Chin Guan by virtue of his interest in shares of the Company is also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.

share caPital reDuction During the financial year, the Company reduced its share capital from RM76,392,885 comprising 152,785,770 ordinary shares of RM0.50 each to RM53,475,020 comprising 152,785,770 ordinary shares of RM0.35 each by way of cancellation of RM0.15 of the par value of the existing ordinary shares in the Company, and the reduction of the share premium account of RM38,196,443. The capital reduction was done via a High Court Order dated 18 December 2012. other statutory inforMation (a) Before the statements of comprehensive income and statements of financial position of the Group and of the

Company were made out, the directors took reasonable steps:

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

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

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

(i) it necessary to write off any bad debts or to make any provision for doubtful debts in respect of the financial statements of the Group and the Company; 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 adherence to the existing methods 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 financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

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

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

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



other statutory inforMation cont’d

(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 twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their 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 financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.

siGnificant anD subsequent events Details of significant and subsequent events are disclosed in Note 32 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 dated 26 February 2014.

low chin Guan KweK siew lenG



We, Low Chin Guan and Kwek Siew Leng, being two of the directors of Adventa Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 35 to 108 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 October 2013 and of their financial performance and cash flows for the year then ended. The information set out in Note 38 to the financial statements have been prepared in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 26 February 2014.

low chin Guan KweK siew lenG

I, Kwek Siew Leng, being the director primarily responsible for the financial management of Adventa Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 35 to 109 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared bythe abovenamed Kwek Siew Leng atKota Bahru in the state of Kelantanon 26 February 2014 KweK siew lenG

Before me,

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

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


rePort on the financial stateMents We have audited the financial statements of Adventa Berhad, which comprise the statements of financial position as at 31 October 2013, statements of comprehensive income, statements of changes in equity and statements of cash flows for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 35 to 108. Directors’ responsibility for the financial statements The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. auditors’ responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and the Company as at 31 October 2013 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

rePort on other leGal anD reGulatory requireMents In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the

Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.

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

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

Independent Auditors’ Reportto the members of Adventa Berhad

(Incorporated in Malaysia)


other rePortinG resPonsibilities The supplementary information set out in Note 38 on page 109 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

other Matters 1. As stated in Note 2 to the financial statements, the Group and the Company adopted Malaysian Financial

Reporting Standards on 1 November 2012 with a transition date of 1 November 2011. These standards were applied retrospectively by directors to the comparative information in these financial statements, including the statements of financial position as at 31 October 2012 and 1 November 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended 31 October 2012 and related disclosures. We were not engaged to report on the comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended 31 October 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as at 1 November 2012 do not contain misstatements that materially affect the financial position as of 31 October 2013 and financial performance and cash flows for the year then ended.

2. This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

ernst & younG lee ah too AF: 0039 2187/09/15(J) Chartered Accountants Chartered Accountant

Melaka, Malaysia Date: 26 February 2014

Independent Auditors’ Reportto the members of Adventa Berhad(Incorporated in Malaysia)cont’d


Group company

note 2013 2012 2013 2012

rM rM rM rM

continuing operations

Revenue 4 27,376,071 14,193,405 726,000 -

Cost of sales 5 (16,084,919) (8,578,939) - -

Gross profit 11,291,152 5,614,466 726,000 -

Other income 6 77,382,045 17,660 205,457,369 -

other items of expense

Administrative expenses (3,031,403) (1,428,300) (792,336) -

Selling and marketing expenses (486,909) (408,072) - -

Other operating expenses (1,531,225) (1,165,450) (175,016) -

Interest expense 7 (627,477) (450,228) (20) -

Profit before tax from continuing operations 8 82,996,183 2,180,076 205,215,997 -

Income tax expense 11 (1,200,379) (831,365) 139,874 -

Profit from continuing operations, net of tax 81,795,804 1,348,711 205,355,871 -

Discontinued operations

Profit/(loss) from discontinued operations, net of tax 12 583,290 24,147,461 (720,619) 496,364

Profit net of tax 82,379,094 25,496,172 204,635,252 496,364

other comprehensive income:

Foreign currency translation representing other comprehensive loss for the year - (2,687,747) - -

total comprehensive income for the year 82,379,094 22,808,425 204,635,252 496,364

Profit attributable to:

Owners of the parent 82,383,935 25,541,881 204,635,252 496,364

Non-controlling interest (4,841) (45,709) - -

82,379,094 25,496,172 204,635,252 496,364

Statements of Comprehensive Incomefor the financial year ended 31 October 2013


Group company

note 2013 2012 2013 2012

rM rM rM rM

total comprehensive income attributable to:

Owners of the parent 82,379,094 22,854,134 204,635,252 496,364

Non-controlling interest - (45,709) - -

82,379,094 22,808,425 204,635,252 496,364

earnings per share attributable to owners of the parent (sen per share)

Basic (continuing operations) 13 53.54 0.89

Basic (discontinued operations) 13 0.38 15.83

Basic, for profit for the year 13 53.92 16.72

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

Statements of Comprehensive Incomefor the financial year ended 31 October 2013cont’d


Group

note 2013 2012

as at 1 november

2011

rM rM rM

assets

non-current assets

Property, plant and equipment 14 35,898,516 35,001,950 250,332,515

Investment property 15 7,500,000 - -

Intangible assets 17 11,717,434 7,027,953 3,304,887

Long term bank deposits - - 2,400,000

Deferred tax assets 18 5,086,838 6,110,846 6,689,676

60,202,788 48,140,749 262,727,078

current assets

Inventories 19 8,716,184 7,640,684 87,780,680

Trade and other receivables 20 4,585,777 3,566,972 85,809,751

Other current assets 21 1,179,216 1,187,173 2,697,461

Tax recoverable 167,421 - -

Cash and bank balances 22 23,513,086 1,580,952 13,386,109

38,161,684 13,975,781 189,674,001

Assets of disposal group classified as held for sale 12 - 468,002,380 -

38,161,684 481,978,161 189,674,001

total assets 98,364,472 530,118,910 452,401,079

equity and liabilities

current liabilities

Trade and other payables 23 13,993,887 24,027,093 44,858,930

Derivatives 24 34,379 16,876 1,118,944

Income tax payables 172,725 2,540 166,207

Loans and borrowings 25 5,429,152 9,720,087 93,401,346

19,630,143 33,766,596 139,545,427

Liabilities directly associated with disposal group classified as held for sale 12 - 250,838,242 -

19,630,143 284,604,838 139,545,427

Statements of Financial Positionas at 31 October 2013


Group

note 2013 2012

as at 1 november

2011

rM rM rM

non-current liabilities

Loans and borrowings 25 5,865,579 6,466,667 96,616,672

total liabilities 25,495,722 291,071,505 236,162,099

net assets 72,868,750 239,047,405 216,238,980

equity attributable to owners of the parent

Share capital 26 53,475,020 76,392,885 76,392,885

Share premium 26 4,829,789 43,026,232 43,026,232

Foreign currency translation reserve 27 - - (9,170,801)

Reserve of disposal group classified as held for sale 12 - (11,858,548) -

Retained earnings 28 14,563,941 130,801,507 105,259,626

72,868,750 238,362,076 215,507,942

Non-controlling interest - 685,329 731,038

total equity 72,868,750 239,047,405 216,238,980

total equity and liabilities 98,364,472 530,118,910 452,401,079

Statements of Financial Positionas at 31 October 2013cont’d


company

note 2013 2012

as at 1 november

2011

rM rM rM

assets

non-current assets

Property, plant and equipment 14 1,889 - 693,808

Investment in subsidiaries 16 12,056,726 10,000,000 46,597,320

Long term bank deposits - 2,400,000

Deferred tax assets 18 312,599 - 122,176

12,371,214 10,000,000 49,813,304

current assets

Trade and other receivables 20 35,002,122 - 166,817,618

Other current assets 21 2,120 - 30,326

Tax recoverable - - 289,646

Cash and bank balances 22 21,392,856 - 2,926,294

56,397,098 - 170,063,884

Assets of disposal group classified as held for sale 12 - 231,012,508 -

56,397,098 231,012,508 170,063,884

total assets 68,768,312 241,012,508 219,877,188

equity and liabilities

current liabilities

Trade and other payables 23 109,879 9,000,000 419,743

Income tax payables 172,725 - -

Loans and borrowings - - 17,231,801

282,604 9,000,000 17,651,544

Liabilities directly associated with disposal group classified as held for sale 12 - 108,426,243 -

282,604 117,426,243 17,651,544

non-current liabilities

Loans and borrowings - - 79,135,743

total liabilities 282,604 117,426,243 96,787,287

net assets 68,485,708 123,586,265 123,089,901

Statements of Financial Positionas at 31 October 2013

cont’d


company

note 2013 2012

as at 1 november

2011

rM rM rM

equity attributable to owners of the parent

Share capital 26 53,475,020 76,392,885 76,392,885

Share premium 26 4,829,789 43,026,232 43,026,232

Retained earnings 28 10,180,899 4,167,148 3,670,784

total equity 68,485,708 123,586,265 123,089,901

total equity and liabilities 68,768,312 241,012,508 219,877,188


Statements of Financial Positionas at 31 October 2013cont’d


attributable to owners of the parent

non-distributable Distributable non-distributable

equity, total

equity attributable

to owners of the parent,

total share

capital share

premium retained earnings

reserve of disposal

group classified as

held for sale

foreign currency

translation reserves

equity attributable

to non- controlling

interest

rM rM rM rM rM rM rM rM

Group

opening balance at 1 november 2012 239,047,405 238,362,076 76,392,885 43,026,232 130,801,507 (11,858,548) - 685,329

total comprehensive income 93,557,154 94,242,483 - - 82,383,935 11,858,548 - (685,329)

transactions with owners

Capital reduction (61,114,308) (61,114,308) (22,917,865) (38,196,443) - - - -

Dividends (Note 29)

(198,621,501)

(198,621,501) - - (198,621,501) - - -

(259,735,809) (259,735,809) (22,917,865) (38,196,443) (198,621,501) - - -

closing balance at 31 october 2013 72,868,750 72,868,750 53,475,020 4,829,789 14,563,941 - - -

Statements of Changes in Equityfor the financial year ended 31 October 2013


attributable to owners of the parent

non-distributable Distributable non-distributable

equity, total

equity attributable

to owners of the parent,

total share

capital share

premium retained earnings

reserve of disposal

group classified as

held for sale

foreign currency

translation reserves

equity attributable

to non- controlling

interest


opening balance at 1 november 2011 216,238,980 215,507,942 76,392,885 43,026,232 105,259,626 - (9,170,801) 731,038

total comprehensive income 22,808,425 22,854,134 - - 25,541,881 - (2,687,747) (45,709)


Reserve attributable to disposal group classified as held for sale - - - - - (11,858,548) 11,858,548 -

closing balance at 31 october 2012 239,047,405 238,362,076 76,392,885 43,026,232 130,801,507 (11,858,548) - 685,329

Statements of Changes in Equityfor the financial year ended 31 October 2013cont’d


non-distributable Distributable

equity, total

share capital

share premium

retained earnings

rM rM rM rM

company

2013

opening balance at 1 november 2012 123,586,265 76,392,885 43,026,232 4,167,148

total comprehensive income 204,635,252 - - 204,635,252


Capital reduction (61,114,308) (22,917,865) (38,196,443) -

Dividends on ordinary shares (Note 29) (198,621,501) - - (198,621,501)

(259,735,809) (22,917,865) (38,196,443) (198,621,501)

closing balance at 31 october 2013 68,485,708 53,475,020 4,829,789 10,180,899

2012

closing balance at 1 november 2011 123,089,901 76,392,885 43,026,232 3,670,784

total comprehensive income 496,364 - - 496,364

closing balance at 31 october 2012 123,586,265 76,392,885 43,026,232 4,167,148


Statements of Changes in Equityfor the financial year ended 31 October 2013

cont’d


Group company

2013 2012 2013 2012

rM rM rM rM

operating activities

Profit before tax from continuing operations 82,996,183 2,180,076 205,215,997 -

Profit/(loss) before tax from discontinued operations 583,290 20,129,924 (720,619) 335,870

Profit before tax 83,579,473 22,310,000 204,495,378 335,870

Adjustments for:

Depreciation of property, plant and equipment 2,826,466 19,912,187 376 154,444

Dividend income - - - (4,500,000)

Interest expense 1,488,243 8,964,469 20 5,177,790

Loss/(gain) on disposal of property, plant and equipment - 49,771 - (440)

Fair value loss/(gain) on derivatives 30,930 (1,132,371) - -

Gain on disposal of investment in subsidiaries (75,740,183) - (203,872,245) -

Interest income (1,613,017) (997,781) (1,601,677) (4,918,618)

Net unrealised foreign exchange losses/(gains) 345,515 (782,411) - -

Property, plant and equipment written off - 8,740 - 289

Total adjustments (72,662,046) 26,022,604 (205,473,526) (4,086,535)

Operating cash flows before changes in working capital 10,917,427 48,332,604 (978,148) (3,750,665)

Changes in working capital

Increase in inventories (2,110,579) (10,511,058) - -

(Increase)/decrease in trade and other receivables (374,469,649) 8,588,861 (34,517,013) (7,064,922)

Decrease in other current assets 2,960,074 - 26,593 -

Increase/(decrease) in trade and other payables 342,144,031 (3,521,607) (3,737,338) 10,136,211

Total changes in working capital (31,476,123) (5,443,804) (38,227,758) 3,071,289

Cash flow from operations (20,558,696) 42,888,800 (39,205,906) (679,376)

Interest paid - (2,431,766) - -

Taxes (paid)/refunded (175,739) (557,219) - 243,109

net cash flows (used in)/from operating activities (20,734,435) 39,899,815 (39,205,906) (436,267)

Statements of Cash Flowsfor the financial year ended 31 October 2013


Group company

2013 2012 2013 2012

rM rM rM rM

investing activities

Net cash outflow on acquisition of subsidiaries (7,500,000) (8,448,992) (2,056,726) (9,000,000)

Dividends received - - - 4,500,000

Interest received 1,613,017 997,781 1,601,677 4,918,618

Payment for deferred development costs (4,689,481) (252,239) - -

Proceeds from disposal of property, plant and equipment - 105,699 541,506 2,199

Cash inflow arising on disposal of investment in subsidiaries 306,835,810 - 318,916,811 -

Capital reduction (61,114,308) - (61,114,308) -

Purchase of property, plant and equipment (3,788,622) (40,148,265) (2,265) (4,190)

net cash flows from/(used in) investing activities 231,356,416 (47,746,016) 257,886,695 416,627

financing activities

Dividends paid (198,621,501) - (198,621,501) -

Drawdown of other short term

borrowings 532,563 205,748,053 - -

Drawdown of term loans 5,000,000 30,000,000 - 30,000,000

Interest paid (1,488,243) (6,515,827) (20) (5,177,790)

Repayment of obligations under finance lease (16,810) (589,224) - (529,947)

Repayment of other short term borrowings (4,151,808) (197,567,197) (6,898,020) (9,166,960)

Repayment of term loans (9,097,645) (18,668,172) - (9,800,349)

net cash flows (used in)/from financing activities (207,843,444) 12,407,633 (205,519,541) 5,324,954

net increase in cash and cash equivalents 2,778,537 4,561,432 13,161,248 5,305,314

effects of foreign exchange rate changes - 2,787,008 - -

cash and cash equivalents at 1 november 20,734,549 13,386,109 8,231,608 2,926,294

cash and cash equivalents at 31 october (note 22) 23,513,086 20,734,549 21,392,856 8,231,608


Statements of Cash Flowsfor the financial year ended 31 October 2013

cont’d


Notes to the Financial Statements31 October 2013

1. corPorate inforMation

Adventa Berhad (”the Company”) is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Bursa Malaysia Securities Berhad. The registered office of the Company is located at No. 1, Jalan 8, Pengkalan Chepa 2 Industrial Zone, 16100 Kota Bharu, Kelantan Darul Naim.

The principal activities of the Company are investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries are described in Note 16. There have been no significant changes in the nature of the principal activities during the financial year.

2. suMMary of siGnificant accountinG Policies

2.1 basis of preparation

These financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”), International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and the requirements of the Companies Act, 1965 in Malaysia. Refer to the Note 2.2 for detailed information on how the Group and the Company adopted MFRS.

The financial statements have been prepared on the historical cost basis, except as disclosed in the accounting policies below.

The financial statements are presented in Ringgit Malaysia (“RM”).

2.2 first-time adoption of Mfrs

For periods up to and including the year ended 31 October 2012, the Group and the Company had previously prepared financial statements in accordance with Financial Reporting Standards (“FRS”).

These financial statements are the first the Group and the Company have prepared in accordance with MFRS. Accordingly, the Group and the Company have prepared financial statements which comply with MFRS together with the comparative period data as at, and for the year ended, 31 October 2012, as described in the accounting policies. In preparing these financial statements, the Group’s and Company’s opening statements of financial position was prepared as at 1 November 2011, being the date of transition to MFRS. No adjustments were required to be made to the FRS statements of financial position as at 1 November 2011 and its previously published FRS financial statements as at, and for the year ended, 31 October 2012. Hence, the following are not presented:

(a) Reconciliation of equity reported under FRS to equity reported under MFRS as at 1 November 2011 and 31 October 2012; and

(b) Reconciliations of profit or loss reported under FRS for the financial year ended 31 October 2012 to profit or loss reported under MFRS for the same period.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d

2.2 first-time adoption of Mfrs cont’d MFRS 1 First-Time Adoption of Malaysian Financial Reporting Standards allows first-time adopters certain

exemptions from the retrospective application of certain MFRS and the Group and the Company have applied the following exemptions:

(a) Business Combinations

MFRS 1 provides the option to apply MFRS 3 Business Combinations prospectively from the date of transition or from a specific date prior to the date of transition. This provides relief from full retrospective application of MFRS 3 which would require restatement of all business combinations prior to the date of transition. The Group has elected to apply MFRS 3 prospectively from the date of transition. In respect of acquisitions prior to the date of transition:

(i) The classification of former business combinations under FRS is maintained;

(ii) There is no re-measurement of original fair values determined at the time of business combination (date of acquisition); and

(iii) The carrying amount of goodwill recognised under FRS is not adjusted.

(b) Property, plant and equipment

Property, plant and equipment were carried in the statements of financial position prepared in accordance with FRS on the cost basis. The Group and the Company continue to regard those values as cost at the date of the transition to MFRS.

(c) Estimates

The estimates at 1 November 2011 and at 31 October 2012 were consistent with those made for the same dates in accordance with FRS and the estimates used by the Group and the Company to present these amounts in accordance with MFRS reflect conditions at 1 November 2011, the date of transition to MFRS and as of 31 October 2012.


Notes to the Financial Statements31 October 2013cont’d



2.3 standards, amendments and interpretations issued but not yet effective

Standards, amendments and interpretations issued but not yet effective up to the date of issuance of the Group’s and the Company’s financial statements are listed below. The Group and the Company intend to adopt, where applicable, these standards, amendments and interpretations as and when they become effective:

(a) Effective for annual periods beginning on or after 1 January 2013

MFRS 1 Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (Government Loans)

MFRS 1 Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2009 - 2011 Cycle)

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

MFRS 7 Amendments to MFRS 7 Financial Instruments: Disclosures (Offsetting Financial Assets and Financial Liabilities)

MFRS 10 Consolidated Financial Statements

MFRS 11 Joint Arrangements

MFRS 11 Amendments to MFRS 11 Joint Arrangements (Transition Guidance)

MFRS 12 Disclosure of Interests in Other Entities

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

MFRS 13 Fair Value Measurement

MFRS 101 Amendments to MFRS 101 Presentation of Financial Statements (Annual Improvements 2009 - 2011 Cycle)

MFRS 116 Amendments to MFRS 116 Property, Plant and Equipment (Annual Improvements 2009 - 2011 Cycle)

MFRS 119 Employee Benefits

MFRS 127 Consolidated and Separate Financial Statements (Annual Improvements 2009 - 2011 Cycle)

MFRS 127 Separate Financial Statements

MFRS 128 Investments in Associates and Joint Ventures

MFRS 132 Amendments to MFRS 132 Financial Instruments: Presentation (Annual Improvements 2009 - 2011 Cycle)

MFRS 134 Amendments to MFRS 134 Interim Financial Reporting (Annual Improvements 2009 - 2011 Cycle)

IC Int. 2 Amendments to IC Int. 2 Members’ Shares in Co-operative Entities and Similar Instruments (Annual Improvements 2009 - 2011 Cycle)

IC Int. 20 Stripping Costs in the Production Phase of a Surface Mine



cont’d


2.3 standards, amendments and interpretations issued but not yet effective cont’d

(b) Effective for annual periods beginning on or after 1 January 2014

MFRS 10 Amendments to MFRS 10 Consolidated Financial Statements (Investment Entities)

MFRS 12 Amendments to MFRS 12 Disclosure of Interests in Other Entities (Investment Entities)

MFRS 127 Amendments to MFRS 127 Consolidated and Separate Financial Statements (Investment Entities)

MFRS 132 Amendments to MFRS 132 Financial Instruments: Presentation (Offsetting Financial Assets and Financial Liabilities)

(c) Effective for annual periods beginning on or after 1 January 2015

MFRS 9 Financial Instruments

The directors expect that the adoption of the above standards and interpretations will have no material impact on the financial statements in the period of initial application, except as discussed below:

(a) MFRS 3 Business Combinations (IFRS 3 Business Combinations issued by IASB in March 2004) and MFRS 127 Consolidated and Separate Financial Statements (IAS 27 as revised by IASB in December 2003)

An entity shall apply these earlier versions of MFRS 3 and MFRS 127 only if the entity has elected to do so as allowed in MFRS 10 Consolidated Financial Statements. The adoptions of these standards are not expected to have any significant impact to the Group and to the Company.

(b) MFRS 9 Financial Instruments

MFRS 9 reflects the first phase of the work on the replacement of MFRS 139 Financial Instruments: Recognition and Measurement and applies to classification and measurement of financial assets and financial liabilities as defined in MFRS 139 Financial Instruments: Recognition and Measurement. The adoption of the first phase of MFRS 9 will have an effect on the classification and measurement of the Group’s and the Company’s financial assets. The Group and the Company will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

(c) MFRS 10 Consolidated Financial Statements

MFRS 10 replaces part of MFRS 127 Consolidated and Separate Financial Statements that deals with consolidated financial statements and IC Interpretation 112 Consolidation – Special Purpose Entities.

Under MFRS 10, an investor controls an investee when:

(i) the investor has power over an investee,

(ii) the investor has exposure, or rights, to variable returns from its involvement with the investee, and

(iii) the investor has ability to use its power over the investee to affect the amount of the investor’s returns.




2.3 standards, amendments and interpretations issued but not yet effective cont’d

(c) Effective for annual periods beginning on or after 1 January 2015 cont’d

(c) MFRS 10 Consolidated Financial Statements cont’d

Under MFRS 127 Consolidated and Separate Financial Statements, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

MFRS 10 includes detailed guidance to explain when an investor has control over the investee. MFRS 10 requires the investor to take into account all relevant facts and circumstances.

(d) MFRS 13 Fair Value Measurement

MFRS 13 establishes a single source of guidance under MFRS for all fair value measurements. MFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under MFRS when fair value is required or permitted.

(e) Amendments to MFRS 101 Presentation of Financial Statements (Annual Improvements 2009 - 2011 Cycle)

The amendments to MFRS 101 change the grouping of items presented in other comprehensive income. Items that could be reclassified (or recycled) to profit or loss at a future point in time (for example, exchange differences on translation of foreign operations and net loss or gain on available-for-sale financial assets) would be presented separately from items which will never be reclassified (for example, actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affects presentation only and has no impact on the Group’s and Company’s financial position and performance.

(f) MFRS 127 Separate Financial Statements

As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, jointly controlled entities and associates in separate financial statements.

2.4 basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and of its subsidiaries as at the reporting date. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

- Derecognises the assets (including goodwill) and liabilities of the subsidiary - Derecognises the carrying amount of any non-controlling interest - Derecognises the cumulative translation differences, recorded in equity - Recognises the fair value of the consideration received - Recognises the fair value of any investment retained - Recognises any surplus or deficit in profit or loss - Reclassifies the parent’s share of components previously recognised in other comprehensive income

to profit or loss or retained earnings, as appropriate



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.5 business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is

measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed and included in administrative expenses.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resultant gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be re-measured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

2.6 transactions with non-controlling interest

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.




2.7 foreign currency translation

(a) Functional and presentation currency

The Group’s and the Company’s financial statements are presented in Ringgit Malaysian which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(b) Transactions and balances

Transactions in foreign currencies are initially recorded by the Group entities at the functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. All differences are taken to the profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference (translation differences on items whose gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss respectively).

(c) Group companies

The assets and liabilities of foreign operations are translated into Ringgit Malaysia at the exchange rate prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in the profit or loss.

Any goodwill arising on the acquisition of a foreign operation subsequent to 1 November 2011 and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the closing rate.

Prior to 1 November 2011, the date of transition to MFRS, the Group treated goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition as assets and liabilities of the parent. Therefore, those assets and liabilities are non-monetary items already expressed in the functional currency of the parent and no further translation differences occur.

2.8 revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of ownership to the customer. 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.



cont’d


2.8 revenue recognition cont’d

(b) Dividend income

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

(c) Management fees

Management fees are recognised when services are rendered.

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

(e) Rental income

Rental income is recognised on an accrual basis.

2.9 employee benefits

(a) 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.

(b) Defined contribution plans

The Group makes contributions to the Employee Provident Fund (“EPF”) in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

2.10 borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

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




2.11 taxes

(a) Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

(i) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

(ii) in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

(i) where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

(ii) in respect of deductible temporary differences associated with investments in subsidiaries, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets to be recovered.

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



cont’d


2.11 taxes cont’d

(b) Deferred tax cont’d

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.

2.12 Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. Such cost includes the cost of replacing component parts of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.

When significant parts of property, plant and equipment are required to be replaced at intervals, the Group and the Company derecognise the replaced part, and recognise the new part with its own associated useful life and depreciation. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the profit or loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Long term leasehold land is depreciated over the period of the respective leases that range from 60 to 89 years. Depreciation of other property, plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets, at the following annual rates:

- Buildings: 43 - 50 years - Plant and equipment: 5 to 30 years - Motor vehicles: 10 years - Office equipment, renovation, furniture and fittings: 5 to 10 years

The carrying values or property, plant and equipment are reviewed for impairment when event or changes in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each financial year end and adjusted prospectively if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.



2. suMMary of siGnificant accountinG Policies cont’d 2.13 investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses. The depreciation policy for investment properties are in accordance with that for property, plant and equipment as described in Note 2.12.

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

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.12 up to the date of change in use.

2.14 leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

(a) Group as lessee

Finance leases which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an operating expense in the profit or loss on a straight-line basis over the lease term.

(b) Group as lessor

Leases in which the Group do not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rents are recognised as revenue in the period in which they are earned.



cont’d


2.15 intangible assets

Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible assets are measured at cost less any accumulated amortisation and accumulated impairment losses.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.

Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

Research and development costs

Research costs are expensed as incurred. Deferred development costs arising from development expenditures on an individual project are recognised when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete and the ability to measure reliably the expenditures during development. Deferred development costs have a finite useful life and are amortised over the period of expected sales from the related project on a straight line basis.

2.16 investment in subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investment in subsidiaries is accounted for at cost less impairment losses.

2.17 inventories

Inventories are stated at lower of cost and net realisable value.

Costs incurred in bringing inventories to their present location and condition are accounted for as purchase costs on a weighted average basis.

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




2.18 impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the profit or loss.

Goodwill is tested for impairment annually (as at 31 October) and when circumstances indicate that the carrying value may be impaired.

Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash generating unit is less than their carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.



cont’d


2.19 financial instruments

(a) Financial assets

(i) Initial recognition and measurement

Financial assets within the scope of MFRS 139 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial assets at initial recognition.

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

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset.

The Group’s financial assets include cash, bank balances, trade and other receivables.

(ii) Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss includes financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by MFRS 139. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income or finance costs in the profit or loss.

The Group evaluates its financial assets held for trading, other than derivatives, to determine whether the intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management’s intention to sell them in the foreseeable future significantly changes, the Group may elect to reclassify these financial assets in rare circumstances. The reclassification to loans and receivables, available-for-sale or held to maturity depends on the nature of the asset. This evaluation does not affect any financial assets designated at fair value through profit or loss using the fair value option at designation.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

The Group did not have any financial assets at fair value through profit or loss during the years ended 31 October 2013 and 2012.




2.19 financial instruments cont’d

(a) Financial assets cont’d

(ii) Subsequent measurement cont’d

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (“EIR”), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss in finance costs.

Loans and receivables of the Group comprise of trade and other receivables (other than prepaid operating expenses), due from related company and cash and bank balances.

Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold them to maturity. After initial measurement, held-to maturity investments are measured at amortised cost using the effective interest method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss in finance costs.

The Group did not have any held-to-maturity investments during the years ended 31 October 2013 and 2012.

Available-for-sale financial investments

Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is reclassified to the profit or loss in finance costs and removed from the available-for-sale reserve. Interest income on available-for-sale debt securities is calculated using the effective interest method and is recognised in profit or loss.

The Group evaluates its available-for-sale financial assets to determine whether the ability and intention to sell them in the near term is still appropriate. When the Group is unable to trade these financial assets due to inactive markets and management’s intention to do so significantly changes in the foreseeable future, the Group may elect to reclassify these financial assets in rare circumstances. Reclassification to loans and receivables is permitted when the financial assets meet the definition of loans and receivables and the Group has the intent and ability to hold these assets for the foreseeable future or until maturity. Reclassification to the held-to-maturity category is permitted only when the entity has the ability and intention to hold the financial asset accordingly.



cont’d



(a) Financial assets cont’d


Available-for-sale financial investments cont’d

For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the EIR. Any difference between the new amortised cost and the expected cash flows is also amortised over the remaining life of the asset using the EIR. If the asset is subsequently determined to be impaired, then the amount recorded in equity is reclassified to the profit or loss.

The Group did not have any available-for-sale financial assets during the year ended 31 October 2013 and 2012.

(iii) Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a company of similar financial assets) is derecognised when:

- The rights to receive cash flows from the asset have expired;

- The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group have transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of it, the asset is recognised to the extent of the Group’s continuing involvement in it.

In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

(b) Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a company of financial assets is impaired. A financial asset or a company of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the company of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.




2.19 financial instruments cont’d (b) Impairment of financial assets cont’d

Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the profit or loss.

Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the profit or loss.

Available-for-sale investments

For available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a company of investments is impaired.

In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. ‘Significant’ is evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss - is removed from other comprehensive income and recognised in the profit or loss. Impairment losses on equity investments are not reversed through the profit or loss; increases in their fair value after impairments are recognised directly in other comprehensive income.

Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the profit or loss, the impairment loss is reversed through the profit or loss.



cont’d



(c) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities within the scope of MFRS 139 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, carried at amortised cost. This includes directly attributable transaction costs.

The Group’s financial liabilities include trade and other payables, loans and borrowings and derivative liabilities.

(ii) Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

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

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by MFRS 139. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

The Group has designated derivative that do not qualify for hedge accounting as at fair value through profit or loss.

Other financial liabilities

The Group’s other financial liabilities include trade payables, other payables and loans and borrowings.

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

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the profit or loss when the liabilities are derecognised as well as through the effective interest rate method (“EIR”) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the profit or loss.





(c) Financial liabilities cont’d


Financial guarantee contracts

Financial guarantee contracts issued by the Group are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.

(iii) Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.

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

(d) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

(e) Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in Note 33.

2.20 cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand, demand deposits, and short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to a insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s and of the Company’s cash management.



cont’d

2. suMMary of siGnificant accountinG Policies cont’d 2.21 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the profit or loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.22 share capital and share issuance expenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.23 Dividend distributions

The Group recognises a liability to make cash or non-cash distributions to owners of equity when the distribution is authorised and is no longer at the discretion of the Group. A corresponding amount is recognised directly in equity. Non-cash distributions are measured at the fair value of the assets to be distributed. Upon settlement of the distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in income as a separate line in statement of comprehensive income.

2.24 segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 36, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.25 Discontinued operation

A component of the Group is classified as a “discontinued operation” when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated major line of business or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be recovered principally through a sale transaction rather than through continuing use.

Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.



3. siGnificant accountinG juDGMents anD estiMates

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 judgments made in applying accounting policies

In the process of applying the Group’s accounting policies, management has not made any critical judgments, apart from those involving estimations, which could have a significant effect on the amounts recognised in the financial statements.

3.2 estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting 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 described below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

(a) Useful lives of plant and machinery

The cost of plant and machinery for the sterilisation services is depreciated on a straight-line basis over the assets’ estimated economic useful lives. Management estimates the useful lives of these plant and machinery to be 30 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Impairment of Goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units (“CGU”) to which goodwill are allocated. Estimating a value in use amount requires management to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of goodwill as at 31 October 2013 was RM5,017,193 (2012: RM8,267,210).

(c) Impairment of research and development costs

The Group determines whether research and development costs are impaired at least on an annual basis. This require an estimation of the value-in-use of the cash-generating units (“CGU”) to which research and development costs are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

The carrying amount of research and development costs was RM6,700,241 (2012: RM2,010,760) for the Group as at 31 October 2013.

The research and development costs are related to development of dialysis machines. The Group is confident there is no impairment to its carrying amount.



cont’d

4. revenue

Group company

2013 2012 2013 2012

rM rM rM rM

Sale of goods, net of discounts 27,310,071 14,193,405 - -

Management fee - 726,000 -

Rental income 66,000 - - -

27,376,071 14,193,405 726,000 -

5. cost of sales

Cost of sales represents cost of inventories sold.

6. other incoMe

Group company

2013 2012 2013 2012

rM rM rM rM

Gain on disposal of subsidiaries 75,740,183 - 203,872,245 -

Interest income 1,599,709 10,158 1,585,124 -

Realised gain on foreign exchange 913 - - -

Sundry income 23,412 7,502 - -

Unrealised gain on foreign exchange 17,828 - - -

77,382,045 17,660 205,457,369 -

7. finance costs

Group company

2013 2012 2013 2012

rM rM rM rM

Interest expense on:

- Bank overdraft 20 - 20 -

- Bank loans 624,161 450,228 - -

- Obligations under finance leases 3,296 - - -

627,477 450,228 20 -



8. Profit before tax froM continuinG oPerations

The following amounts have been included in arriving at profit before tax:

Group company

2013 2012 2013 2012

rM rM rM rM

Auditors’ remuneration

- Statutory audit 71,000 17,000 45,000 -

- Over provision in prior year (2,458) - - -

Depreciation of property, plant and equipment 1,209,730 430,566 376 -

Employee benefits expense (Note 9)

- Continuing 3,043,330 1,475,437 630,968 -

- Discontinued 4,363,242 45,213,682 692,642 3,364,678

Hire of machinery and vehicle - 1,250 - -

Loss/(gain) on foreign exchange

- Realised 101,096 230,776 - -

- Unrealised (12,630) 19,535 - -

Non-executive directors’ remuneration excluding benefits-in-kind (Note 10)

- Continuing 174,960 174,960 174,960 174,960

- Discontinued 8,000 - - -

Rental expenses 346,500 355,600 - -

Net loss on fair value change of derivatives 17,503 - - -

Loss/(gain) on disposal of property, plant and equipment - 49,771 - (440)

9. eMPloyee benefits exPenses

Group company

2013 2012 2013 2012

rM rM rM rM

Salaries and wages 6,617,643 41,347,958 1,157,111 2,324,512

Contributions to defined contribution plan 559,358 2,399,811 163,823 416,577

Social security contributions 82,418 767,785 2,676 17,444

Other benefits 147,153 2,173,565 - 606,145

7,406,572 46,689,119 1,323,610 3,364,678

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM1,050,024 (2012: RM1,898,160) and RM935,440 (2012: RM1,425,968) respectively as further disclosed in Note 10.



cont’d

10. Directors’ reMuneration

Group company

2013 2012 2013 2012

rM rM rM rM

Executive directors’ remuneration (Note 9):Fees 51,840 51,840 51,840 51,840

Other emoluments 998,184 1,846,320 883,600 1,374,128

1,050,024 1,898,160 935,440 1,425,968

Non-executive directors’ remuneration (Note 8):

Fees 182,960 174,960 174,960 174,960

Total directors’ remuneration 1,232,984 2,073,120 1,110,400 1,600,928

Estimated money value of benefit-in-kind - 17,325 - 13,325

Total directors’ remuneration including benefit-in-kind 1,232,984 2,090,445 1,110,400 1,614,253

The details of remuneration of directors of the Company are analysed as follows:

Group company

2013 2012 2013 2012

rM rM rM rM

Executive:Salaries and other emoluments 871,840 1,603,040 793,840 1,206,240 Contributions to defined contribution plan 155,800 294,500 140,980 219,108 Social security contributions 620 620 620 620 Estimated money value of benefit-in-kind - 17,325 - 13,325

1,028,260 1,915,485 935,440 1,439,293 Non-executive:Fees 174,960 174,960 174,960 174,960

Total 1,203,220 2,090,445 1,110,400 1,614,253

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

number of directors

2013 2012

executive directors:RM300,001 - RM350,000 1 - RM500,001 - RM550,000 - 1 RM700,001 - RM750,000 1 -RM1,350,001 - RM1,400,000 - 1

non-executive directors:RM50,001 - RM100,000 3 3



11. incoMe tax exPense

Group company

2013 2012 2013 2012

rM rM rM rM

statement of comprehensive income:

Current year tax

- continuing operations 176,371 2,541 172,725 -

Deferred income tax (note 18):

Deferred tax-continuing operations:

Relating to origination and reversal of temporary differences 1,008,633 729,412 (312,599) -

Under provision in prior years 15,375 99,412 - -

1,024,008 828,824 (312,599) -

Income tax expense recognised in profit or loss 1,200,379 831,365 (139,874) -

Income tax attributable to continuing operations 1,200,379 831,365 (139,874) -

Income tax attributable to discontinued operations (Note 12) - (4,017,537) - (160,494)

Income tax expense recognised in profit or loss 1,200,379 (3,186,172) (139,874) (160,494)



cont’d

11. incoMe tax exPense cont’d

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 October 2013 and 2012 are as follows:

2013 2012

rM rM

Group

Profit before tax from continuing operations 82,996,183 2,180,076

Profit before tax from discontinued operations (Note 12) 583,290 20,129,924

Accounting profit before tax 83,579,473 22,310,000

Income tax at Malaysian statutory tax rate of 25% (2012: 25%) 20,894,868 5,577,500

Effect of different tax rates in other countries - (30,365)

Effect of income not subject to tax (19,342,181) (750)

Effect of income exempted under pioneer status - (1,540,893)

Effect of income exempted under IPC status - (1,145,461)

Effect of expenses not deductible for tax purposes 273,344 1,933,282

Deferred tax assets recognised on reinvestment allowances, unabsorbed capital allowances, unused tax losses and investment tax allowance (641,027) (3,407,144)

Deferred tax assets not recognised in respect of current year’s tax losses - 23,603

Under/(over) provision of deferred tax in prior years 15,375 (1,539,645)

Over provision of income tax in prior years - (3,056,299)

Income tax expense recognised in profit or loss 1,200,379 (3,186,172)



11. incoMe tax exPense cont’d

Reconciliation between tax expense and accounting profit cont’d

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 October 2013 and 2012 are as follows: cont’d

2013 2012

rM rM

company

Profit before tax from continuing operations 205,215,997 -

Profit before tax from discontinued operations (720,619) 335,870

Accounting profit before tax 204,495,378 335,870

Income tax at Malaysian statutory tax rate of 25% (2012: 25%) 51,123,845 83,968

Effect of income not subject to tax (50,968,061) (1,191,795)

Effect of expenses not deductible for tax purposes 90,379 1,022,735

Deferred tax assets recognised on unabsorbed capital allowances and unused tax losses (386,037) (93,425)

Under provision of deferred tax in prior years - 111,288

Over provision of income tax in prior years - (93,265)

Income tax expense recognised in profit or loss (139,874) (160,494) Domestic current income tax is calculated at the statutory tax rate of 25% (2012: 25%) of the estimated assessable profit for the financial year.

The effective tax rate for the Group is lower than the statutory income tax rate due to availability of profit exempted under investment tax allowance by the Malaysian Industrial Development Authority (“MIDA”) granted to a subsidiary, subject to all the criterias set being met.

12. DiscontinueD oPerations anD DisPosal GrouP classifieD as helD for sale

The Company disposed off all of the businesses and undertakings of the Group (“Specified Business”) other

than the Excluded Business to Aspion Sdn. Bhd. (“Aspion”). The Excluded Business refers to all the shares in the capital of Sun Healthcare (M) Sdn. Bhd. and Electron Beam Sdn. Bhd. for an equivalent of RM320,850,117. The disposals were completed on 30 November 2012. The assets and liabilities of Specified Business have been de-consolidated and the results from these subsidiaries are presented separately on the statements of comprehensive income as discontinued operations.



cont’d

12. DiscontinueD oPerations anD DisPosal GrouP classifieD as helD for sale cont’d

Statements of financial position disclosures

The major classes of assets and liabilities of the Specified Business classified as held for sale as at 31 October 2013 and 2012 are as follows:

Group company

2013 2012 2013 2012

rM rM rM rM

assets:

Property, plant and equipment - 268,810,230 - 541,506

Intangible assets - 3,250,017 - -

Investment in subsidiaries - - - 45,597,320

Deferred tax assets - 7,749,556 - 189,404

Inventories - 90,691,302 - -

Trade and other receivables - 72,874,739 - 176,284,155

Prepaid operating expenses - 2,952,117 - 28,713

Tax recoverable - 2,507,395 - 139,802

Derivative financial assets - 13,427 - -

Cash and bank balances - 19,153,597 - 8,231,608

Assets of disposal group classified as held for sale - 468,002,380 - 231,012,508

liabilities:

Trade and other payables - (44,950,185) - (1,555,954)

Loans and borrowings - (205,888,057) - (106,870,289)

Liabilities directly associated with disposal group classified as held for sale - (250,838,242) - (108,426,243)

Net assets directly associated with disposal group classified as held for sale - 217,164,138 - 122,586,265

reserve:

Foreign currency translation reserves - (11,858,548) - -




Statements of comprehensive income disclosures

The results of the Specified Business for the years ended 31 October are as follows:

Group

2013 2012

rM rM

Revenue 64,049,881 424,344,553

Cost of sales (58,668,470) (355,821,462)

Other income 31,576 3,805,514

Expenses (3,968,931) (43,701,316)

Profit from operations 1,444,056 28,627,289

Interest expense (860,766) (8,497,365)

Profit before tax from discontinued operations 583,290 20,129,924

Income tax benefit - 4,017,537

Profit from discontinued operations, net of tax 583,290 24,147,461

company

2013 2012

rM rM

Revenue - 6,480,000

Other income 16,553 4,952,824

Expenses (737,172) (5,919,164)

Profit from operations (720,619) 5,513,660

Interest expense - (5,177,790)

Profit before tax from discontinued operations (720,619) 335,870

Income tax benefit - 160,494

Profit from discontinued operations, net of tax (720,619) 496,364



cont’d


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

Group company

2013 2012 2013 2012

rM rM rM rM

Auditors’ remuneration 883 154,239 - 33,000

Depreciation of property, plant and machinery 1,616,736 19,481,621 - 154,444

Fair value loss/(gain) 13,427 (1,132,371) - -

Hire of machinery and vehicle - 10,660 - -

Impairment loss on trade receivables - 33,044 - -

Interest expense 860,766 8,497,365 - 5,177,790

Loss/(gain) on foreign exchange :

- Realised 2,068,086 1,507,803 - (33,766)

- Unrealised (2,057,147) (801,946) - -

Rental expenses 58,370 1,427,533 - -

Property, plant and equipment written off - 8,740 - 289

Interest income (13,308) (987,623) (16,553) (4,918,618)

Insurance compensation received - (194,897) - - Statements of cash flows disclosures

The cash flows attributable to the Specified Business are as follows:

Group company

2013 2012 2013 2012

rM rM rM rM

Operating 112,194,463 40,238,855 41,659 (9,436,267)

Investing (1,755,126) (38,983,570) 558,059 9,416,627

Financing (117,511,933) 10,649,141 (6,898,020) 5,324,954

Net cash (outflows)/inflows (7,072,596) 11,904,426 (6,298,302) 5,305,314




Effects of disposal on financial position

The disposal had the following effects on the financial position of the Group and the Company as at the end of the year:

Group company

2013 2013

rM rM

assets/(liabilities)

Property, plant and equipment 268,948,620 -

Investment in subsidiaries - 45,597,320

Intangible assets 3,250,017 -

Deferred tax assets 11,884,631 189,404

Inventories 91,726,381 -

Trade and other receivables 448,395,360 175,799,046

Tax recoverable 3,164,436 139,802

Cash and bank balances 14,014,307 1,933,306

Trade and other payables (392,239,649) (1,820,964)

Tax payable (654,909) -

Loans and borrowings (203,119,180) (99,972,269)

Deferred tax liabilities (4,092,503) -

Net assets disposed 241,277,511 121,865,645

Transfer from foreign exchange reserve 9,437,264 -

Transfer to non-controlling interest (717,068) -

249,997,707 121,865,645

Total disposal proceeds (325,737,890) (325,737,890)

Gain on disposal (75,740,183) (203,872,245)

Disposal proceeds settled by:

Cash 320,850,117 320,850,117

Waiver of debts from Aspion 4,887,773 4,887,773

325,737,890 325,737,890

cash inflow arising from disposal:

Cash consideration 320,850,117 320,850,117

Cash and cash equivalents of subsidiaries disposed (14,014,307) (1,933,306)

Net cash inflow on disposal 306,835,810 318,916,811



cont’d

13. earninGs Per share

(a) basic

Basic earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The following tables reflect the profit and share data used in the computation of basic earnings per share for the years ended 31 October:

Group

2013 2012

rM rM

Profit net of tax attributable to owners of the parent 82,383,935 25,541,881

Less: Profit from discontinued operations, net of tax, attributable to owners of the parent (588,131) (24,193,170)

Profit net of tax from continuing operations attributable to owner of the parent used in the computation of basic earnings per share 81,795,804 1,348,711

number of shares

number of shares

Weighted average number of ordinary shares for basic earnings per share computation 152,785,770 152,785,770

Basic earnings per share (sen):

Profit from continuing operations 53.54 0.89

Profit from discontinued operations 0.38 15.83

Profit for the year 53.92 16.72

(i) Continuing operations

Basic earnings per share amounts are calculated by dividing profit for the year from continuing operations, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

(ii) Discontinued operations

The basic earnings per share from discontinued operations are calculated by dividing the profit from discontinued operations, net of tax, attributable to owners of the parent by the weighted average number of ordinary shares for basic earnings per share computation.

(b) Diluted

There is no diluted earnings per share as the Company does not have any dilutive potential ordinary shares. Accordingly, the diluted earnings per share for the current year is presented as equal to basic earnings per share.



14. ProPerty, Plant anD equiPMent

freehold land

long term leasehold

land buildings Plant and

equipment other

assets*

capital work-in- progress total

rM rM rM rM rM rM rM

Group

cost

at 1 november 2011

1,142,721 13,050,027 66,037,952 190,222,540 7,098,615 32,993,479 310,545,334

Additions 205,601 - 1,628,396 13,582,340 1,248,216 23,483,712 40,148,265

Acquisition of subsidiary - 3,496,760 16,381,827 18,571,548 229,460 - 38,679,595

Reclassification - - 10,984,408 27,331,348 776,887 (39,092,643) -

Disposals (493,616) - (164,283) - (155,199) - (813,098)

Write off - - - (120,982) (129,418) - (250,400)

Exchange differences (13,042) - (374,745) (1,647,050) (33,065) - (2,067,902)

Attributable to discontinued operations (841,664)

(13,050,027)

(78,111,728) (229,350,805) (8,304,729) (17,384,548) (347,043,501)

at 31 october 2012 and

1 november 2012 - 3,496,760 16,381,827 18,588,939 730,767 - 39,198,293

Additions - - - 1,699,934 406,362 - 2,106,296

at 31 october 2013 - 3,496,760 16,381,827 20,288,873 1,137,129 - 41,304,589



cont’d

14. ProPerty, Plant anD equiPMent cont’d

freehold land

long term leasehold

land buildings Plant and

equipment other

assets*

capital work-in- progress total

rM rM rM rM rM rM rM

Group

accumulated depreciation

at 1 november 2011 - 1,634,048 7,007,693 49,251,796 2,319,282 - 60,212,819

Charge for the year - 259,701 1,665,368 17,000,630 986,488 - 19,912,187

Acquisition of subsidiary - 145,292 1,201,337 2,278,948 51,346 - 3,676,923

Reclassification - - - (661,287) 661,287 - -

Disposals - - (18,072) - (153,440) - (171,512)

Write off - - - (115,390) (126,270) - (241,660)

Exchange differences - - (34,856) (907,084) (17,203) - (959,143)

Attributable to discontinued operations - (1,880,036) (8,510,921)

(64,353,872) (3,488,442) -

(78,233,271)

at 31 october 2012 and 1 november 2012 - 159,005 1,310,549 2,493,741 233,048 - 4,196,343

Charge for the year (Note 8) - 41,256 327,636 666,607 174,231 - 1,209,730

at 31 october 2013 - 200,261 1,638,185 3,160,348 407,279 - 5,406,073

net carrying amount

At 31 October 2012 - 3,337,755 15,071,278 16,095,198 497,719 - 35,001,950

At 31 October 2013 - 3,296,499 14,743,642 17,128,525 729,850 - 35,898,516

* Other assets comprise of motor vehicles, office equipment, furniture, fittings and renovation.




office equipment,

furniture and fittings

Motor vehicles total

rM rM rM

company

cost

at 1 november 2011 720,388 645,946 1,366,334

Additions 4,190 - 4,190

Disposals (2,199) - (2,199)

Write off (31,646) - (31,646)

Attributable to discontinued operations (690,733) (645,946) (1,336,679)

at 31 october 2012 and 1 november 2012 - - -

Additions 2,265 - 2,265

at 31 october 2013 2,265 - 2,265

accumulated depreciation

at 1 november 2011 364,291 308,235 672,526

Depreciation charge for the year (Note 8) 73,262 81,182 154,444

Disposals (440) - (440)

Write off (31,357) - (31,357)

Attributable to discontinued operations (405,756) (389,417) (795,173)

at 31 october 2012 and 1 november 2012 - - -

Depreciation charge for the year (Note 8) 376 - 376

at 31 october 2013 376 - 376

net carrying amount

At 31 October 2012 - - -

At 31 October 2013 1,889 - 1,889



cont’d


(a) During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of RM2,106,296 (2012: RM40,148,265) and RM2,265 (2012: RM4,190) respectively of which RM72,800 (2012: RM Nil) and RM Nil (2012: RM Nil) respectively were acquired by means of hire purchase arrangements. The carrying amounts of property, plant and equipment held under hire purchase arrangements are as follows:

Group

2013 2012

rM rM

Motor vehicles 71,249 -

(b) The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 25) are as follows:

Group

2013 2012

rM rM

Long term leasehold land 3,296,499 3,337,755

Buildings 14,743,642 15,071,278

Plant and equipment 16,920,187 15,884,628

34,960,328 34,293,661

15. investMent ProPerty

2013 2012

rM rM

At 1 November - -

Acquisition of a subsidiary 7,500,000 -

At 31 October 7,500,000 -

The investment property was valued based on valuations by an independent valuer who holds a recognised qualification and has relevant experience by reference to market evidence of transaction prices of similar properties or comparable available market data. The fair value of the investment property as at 31 October 2013 is approximately RM7,500,000.

The investment property is pledged to a financial institution for bank borrowings as referred to in Note 25.



16. investMent in subsiDiaries

company

2013 2012

rM rM

Unquoted shares, at cost 12,056,726 10,000,000 Details of subsidiaries

names of subsidiariescountry of

incorporation Principal activitiesProportion of

ownership interest

2013 2012

Sun Healthcare (M) Sdn. Bhd. Malaysia Distribution in medical and healthcare equipment and appliances

100% 100%

Electron Beam Sdn. Bhd. Malaysia Providing industrial and commercial sterilisation, warehousing and handling services

100% 100%

Luxencia Sdn. Bhd. Malaysia Provision of home dialysis treatment (Dormant)

100% 0%

PTM Progress Trading & Marketing Sdn. Bhd.

Malaysia Provision of rental 100% 0%

Terang Nusa Sdn. Bhd. (iv) Malaysia Manufacturing of medical examination and sterile surgical gloves

0% 100%

Terang Nusa (Malaysia) Sdn. Bhd. (iv)

Malaysia Manufacturing and distribution of medical examination and sterile surgical gloves

0% 100%

Nusaco Sdn. Bhd. (iv) Malaysia Dormant 0% 100%

Profit Point Manufacturing Sdn. Bhd. (i) (iv)

Malaysia Manufacturing and distribution of medical examination gloves

0% 100%

Ulma International GmbH (i) (iv) Germany Distribution of medical gloves and other hospital related products

0% 100%

Purnabina Sdn. Bhd.(i) (iv) Malaysia Manufacturing and distribution of medical gloves

0% 97.2%

Adventa Health Sdn. Bhd. (iv) Malaysia Distribution of medical gloves and other hospital related products

0% 100%

Cozena Limited (i) (iv) Hong Kong Investment holding 0% 100%

Kevenoll S.A. (i) (ii) (iv) Uruguay Manufacturing and distribution of medical gloves

0% 100%

Utama Associates Sdn. Bhd. (iv) Malaysia Trading in medical and healthcare equipment and appliances

0% 100%

Cytotec (M) Sdn. Bhd. (iv) Malaysia Generation and supply of energy and electricity using biomass technology

0% 100%

Sentienx Sdn. Bhd. (formerly known as Adventa Health Marketing Sdn. Bhd.) (iv)

Malaysia Distribution of medical gloves and other hospital related products

0% 100%

Beijing Adventa Health Supplies Co. Ltd. (i) (iii) (iv)

China Distribution of medical products and medical devices (Dormant)

0% 100%



cont’d

16. investMent in subsiDiaries cont’d

Details of subsidiaries cont’d

names of subsidiariescountry of

incorporation Principal activitiesProportion of

ownership interest

2013 2012

Held through Electron Beam Sdn. Bhd.

Luxencia Sdn. Bhd. Malaysia Provision of home dialysis treatment (Dormant)

0% 100%

(i) Audited by firms other than Ernst & Young (ii) Subsidiary of Cozena Limited (iii) Subsidiary of Adventa Health Sdn. Bhd. (iv) Classified as discontinued operations and disposal group classified as held for sale (Note 12) (a) Acquisition of a subsidiary

On 31 December 2012, the Company had entered into an agreement to acquire 500,000 ordinary shares

of RM1.00 each in PTM Progress Trading & Marketing Sdn. Bhd. (“PTM”), representing 100% of the equity interest in PTM for a total cash consideration of RM7,500,000, less the existing bank loan and other liabilities. The acquisition was completed on 31 March 2013. Upon the completion date, PTM became a wholly-owned subsidiary of the Company.

The fair values of the identifiable assets and liabilities of PTM as at the date of acquisition were:

fair value

carrying amount

rM rM

Acquisition effect on the Group’s financial results

Investment property 7,500,000 7,500,000

(b) Disposal of subsidiaries

Information relating to the disposed subsidiaries during the financial year are set out in Note 12.



17. intanGible assets

Group

Goodwill

Deferred development

costs total

rM rM rM

cost/net carrying amount

at 1 november 2011 3,304,887 - 3,304,887

Acquisition of a subsidiary 4,962,323 1,227,374 6,189,697

Addition in internal development - 783,386 783,386

Attributable to discontinued operations (3,250,017) - (3,250,017)

at 31 october 2012 and 1 november 2012 5,017,193 2,010,760 7,027,953

Addition in internal development - 4,689,481 4,689,481

at 31 october 2013 5,017,193 6,700,241 11,717,434

Deferred development costs

Deferred development costs relate to development of dialysis machines. The amortisation will begin when the Group launches the product commercially.

Impairment testing of goodwill

Goodwill arising from business combinations has been allocated to two individual cash-generating units (“CGU”) for impairment testing as follows:

- Healthcare products - Sterilisation provider

The carrying amounts of goodwill allocated to each cash-generating unit (“CGU”) are as follows:

2013 2012

rM rM

Healthcare products 54,870 54,870

Sterilisation provider 4,962,323 4,962,323

5,017,193 5,017,193

The recoverable amounts of the CGUs have been determined based on value in use calculations using cash flow projections from financial budgets approved by management covering a five-year period. The pre-tax discount rates (per annum) applied to the cash flow projections:

Pre-tax discount rates

2013 2012

Healthcare products 6.60% 7.70%

Sterilisation provider 6.60% 7.70%



cont’d

17. intanGible assets cont’d

The calculations of value in use for the CGUs are most sensitive to the following assumptions:

Pre-tax discount rates - Discount rates reflect the current market assessment of the risks specific to each CGU. This is the benchmark used by management to assess operating performance and to evaluate future investment proposals.

18. DeferreD tax

Group company

2013 2012 2013 2012

rM rM rM rM

At beginning of year (6,110,846) (6,689,676) - (122,176)

Recognised in profit or loss (Note 11) 1,024,008 (837,274) (312,599) (67,228)

Acquisition of subsidiary - (6,452,394) -

Exchange differences - 118,942 - -

Attributable to discontinued operations - 7,749,556 - 189,404

At end of year (5,086,838) (6,110,846) (312,599) -

Presented after appropriate offsetting as follows:

Deferred tax assets (9,319,513) (9,665,951) (313,071) -

Deferred tax liabilities 4,232,675 3,555,105 472 -

(5,086,838) (6,110,846) (312,599) -

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, plant and

equipment

rM

At 1 November 2011 22,813,719

Recognised in profit or loss 4,335,703

Acquisition of subsidiary 2,891,220

Exchange differences 5,727

Attributable to discontinued operations (26,491,264)

At 31 October 2012 3,555,105

Recognised in profit or loss 677,570

At 31 October 2013 4,232,675



18. DeferreD tax cont’d

Deferred tax assets of the Group:

unutilised reinvestment

allowances

unutilised tax

losses and unabsorbed

capital allowances others total

rM rM rM rM

At 1 November 2011 (15,284,992) (14,008,902) (209,501) (29,503,395)

Recognised in profit or loss (4,750,638) (636,562) 159,270 (5,227,930)

Acquisition of subsidiary (5,211,728) (4,131,886) - (9,343,614)

Exchange differences - 168,166 - 168,166

Attributable to discontinued operations 20,035,630 14,162,193 42,999 34,240,822

At 31 October 2012 (5,211,728) (4,446,991) (7,232) (9,665,951)

Recognised in profit or loss (254,990) 590,968 10,460 346,438

At 31 October 2013 (5,466,718) (3,856,023) 3,228 (9,319,513)

Deferred tax liabilities/(assets) of the company:

Property, plant and

equipment

unutilised tax

losses and unabsorbed

capital allowances others total

rM rM rM rM

At 1 November 2011 99,083 (210,370) (10,889) (122,176)

Recognised in income statement (9,155) (62,508) 4,435 (67,228)

Attributable to discontinued operations (89,928) 272,878 6,454 189,404

At 31 October 2012 - - - -

Recognised in profit or loss 472 (313,071) - (312,599)

At 31 October 2013 472 (313,071) - (312,599)

19. inventories

Group

2013 2012

rM rM

cost

Trading goods 7,658,930 6,641,531

Spare parts 1,057,254 999,153

8,716,184 7,640,684



cont’d

20. traDe anD other receivables

Group company

2013 2012 2013 2012

rM rM rM rM

current

trade receivables

Third parties 3,523,418 2,903,395 - -

Due from companies in which certain directors have interest 274,937 - - -

Trade receivables, net 3,798,355 2,903,395 - -

other receivables

Due from subsidiaries - - 35,001,822 -

Due from companies in which certain directors have interest 300 - 300 -

Other receivables 609,529 390,865 - -

Deposits 177,593 272,712 - -

787,422 663,577 35,002,122 -

4,585,777 3,566,972 35,002,122 -

Total trade and other receivables 4,585,777 3,566,972 35,002,122 -

Add: Cash and bank balances (Note 22) 23,513,086 1,580,952 21,392,856 -

Total loans and receivables 28,098,863 5,147,924 56,394,978 -

(a) trade receivables

The Group’s normal trade credit term ranges from 30 to 120 days. Other credit terms are assessed and approved on a case-by-case basis. They are recognised at their original invoice amounts which represent their fair values on initial recognition.



20. traDe anD other receivables cont’d

(a) trade receivables cont’d

Ageing analysis of trade receivables

Group

2013 2012

rM rM

Neither past due nor impaired 1,564,835 2,110,965

1 to 30 days past due not impaired 455,540 88,856



More than 91 days past due not impaired 623,103 74,999

2,233,520 792,430

3,798,355 2,903,395

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

The Group has trade receivables amounting to RM2,233,520 (2012: RM792,430) that are past due at the reporting date but not impaired. These receivables are unsecured in nature.

Based on past experience and no adverse information to date, the directors of the Group are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the balances are still considered fully recoverable.

Receivables that are impaired

Movement in allowance accounts:

Group

2013 2012

rM rM

At 1 November - 122,850

Charge for the year - 33,044

Exchange differences - (27,840)

Attributable to discontinued operations - (128,054)

At 31 October - -

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.



cont’d

20. traDe anD other receivables cont’d

(b) related party balances

Amounts due from subsidiaries and companies in which certain directors have interest are unsecured, non-interest bearing and are repayable upon demand.

21. other current assets

Group company

2013 2012 2013 2012

rM rM rM rM

Prepaid operating expenses 325,039 1,187,173 2,120 -

Advances to suppliers of trading inventories 854,177 - - -

1,179,216 1,187,173 2,120 -

22. cash anD cash equivalents

Group company

2013 2012 2013 2012

rM rM rM rM

Cash in hand and at banks 23,513,086 830,952 21,392,856 -

Deposits with licensed banks - 750,000 - -

Cash and bank balances 23,513,086 1,580,952 21,392,856 - Deposits with licensed banks of the Group amounting to RM Nil (2012: RM750,000) are pledged as securities for borrowings (Note 25).

The weighted average effective interest rates of deposits at reporting date was 2.55% per annum.

For the purpose of the consolidated statement of cash flow, cash and cash equivalents comprise the following at the reporting date:

Group company

2013 2012 2013 2012

rM rM rM rM

Cash and short term deposits

- Continuing operations 23,513,086 1,580,952 21,392,856 -

- Discontinued operations - 19,153,597 - 8,231,608

Cash and cash equivalents 23,513,086 20,734,549 21,392,856 8,231,608



23. traDe anD other Payables

Group company

2013 2012 2013 2012

rM rM rM rM

trade payables

Third parties 768,286 11,260,001 - -

Due to companies in which certain directors have interest 2,089,523 - - -

2,857,809 11,260,001 - -

other payables

Other payables 1,069,616 12,229,877 3,484 9,000,000

Due to companies in which certain directors have interest 9,533,729 - - -

Accruals and deposits 532,733 537,215 106,395 -

11,136,078 12,767,092 109,879 9,000,000

13,993,887 24,027,093 109,879 9,000,000

Total trade and other payables 13,993,887 24,027,093 109,879 9,000,000

Add: Loans and borrowings (Note 25) 11,294,731 16,186,754 - -

Total financial liabilities carried at amortised cost 25,288,618 40,213,847 109,879 9,000,000

(a) trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 120 days.

(b) other payables

Other payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 120 days.

(c) related party balances

Amounts due to subsidiaries and companies in which certain directors have interest are non-interest bearing and are repayable on demand. The amounts are unsecured and to be settled in cash.



cont’d

24. Derivatives

Group

2013 2012

contract/ notional amount liabilities

contract/ notional amount liabilities

rM rM rM rM

non-hedging derivatives:

current

Forward currency contracts 457,392 34,379 532,671 16,876 The Group uses forward currency contracts to manage sales and purchases transactions exposure. These contracts are not designated as cash flow or value hedges and are entered into for periods consistent with currency transaction exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting.

Forward currency contracts are used to hedge the Group’s sales and purchases denominated in United States Dollars (‘USD”) and Japanese Yen (“JPY”), extending to November 2013 (2012: December 2012).

During the financial year, the Group recognised a loss of RM17,503 (2012: RM16,876) from continuing operations and a loss of RM13,427 (2012: RM1,132,311) from discontinued operations arising from fair value changes of derivative liabilities. The fair value changes are attributable to changes in foreign exchange spot and forward rates. The method and assumptions applied in determining the fair values of derivatives are disclosed in Note 33.



25. loans anD borrowinGs

Group

2013 2012

Maturity rM rM

current

Secured:

Obligations under finance leases (Note 31(b)) 2014 23,855 -

Bank loans:

- Revolving credit 2013 - 2,700,000

- Trade loan financing 2013 - 2,020,087

- RM loan at BFR -1.5% per annum 2014 405,297 -

- RM loan at KLIBOR + 2% per annum 2014 5,000,000 5,000,000

5,429,152 9,720,087

non-current

Secured:

Obligations under finance leases (Note 31(b)) 2014 - 2015 32,135 -

Bank loans:

- RM loan at BFR -1.5% per annum 2014 - 2023 4,366,777 -

- RM loan at KLIBOR + 2% per annum 2014 - 2015 1,466,667 6,466,667

5,865,579 6,466,667

total borrowings

Obligations under finance leases (Note 31(b)) 55,990 -

Bank loans:

- Revolving credit - 2,700,000

- RM loan at BFR -1.5% per annum 4,772,074 -

- RM loan at KLIBOR + 2% per annum 6,466,667 11,466,667

- Trade loan financing - 2,020,087

11,294,731 16,186,754

The remaining maturities of the loans and borrowings are as follows:

Group

2013 2012

rM rM

On demand or not later than 1 year 5,429,203 9,720,087

Later than 1 year and not later than 2 years 2,374,092 5,000,000

Later than 2 years and not later than 5 years 1,491,876 1,466,667

Later than 5 years 1,999,560 -

11,294,731 16,186,754



cont’d

25. loans anD borrowinGs cont’d

The interest rates (per annum) at the reporting date for borrowings, excluding obligations under finance lease, were as follows:

Group

2013 2012

% %

RM loan at BFR -1.5% per annum 5.10 -

RM loan at KLIBOR + 2% per annum 4.17 - 4.62 4.17 - 4.62

Other trade facilities - 3.84 - 4.78

* KLIBOR: The Kuala Lumpur Inter-Bank Offered Rates * BFR: Based Financing Rates

The banking facilities and term loans are secured by the following:

(a) legal charge over certain assets of the Group as disclosed in Note 14; and

(b) corporate guarantees by the Company.

26. share caPital anD share PreMiuM

number ofordinary

shares ofrM0.35 each

(2012: rM0.50) amount

share capital

(issued and fully paid)

share capital

(issued and fully paid)

share premium total

rM rM rM

At beginning of year 152,785,770 76,392,885 43,026,232 119,419,117

Capital reduction - (22,917,865) (38,196,443) (61,114,308)

At end of year 152,785,770 53,475,020 4,829,789 58,304,809

number of ordinary shares ofrM0.35 each (2012: rM0.50) amount

2013 2012 2013 2012

rM rM

authorised share capital

At 1 November 200,000,000 200,000,000 100,000,000 100,000,000

Capital reduction - - (30,000,000) -

At 31 October 200,000,000 200,000,000 70,000,000 100,000,000

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction and rank equally with regard to the Company residual assets.



26. share caPital anD share PreMiuM cont’d

During the financial year, the Company:

(a) decreased its issued and paid-up ordinary share capital from 76,392,885 to 53,475,020 by way of cancellation of 22,917,865 ordinary share in the Company.

(b) reduced its share capital from RM0.50 each to RM0.35 each by way of cancellation of RM0.15 of the par value of the existing ordinary shares in the Company and the reduction of the share premium account of RM38,196,443. The capital reduction was done via a High Court Order dated 18 December 2012.

27. foreiGn currency translation reserve

Group

rM

at 1 november 2011 (9,170,801)

Foreign currency translation (2,687,747)

Attributable to discontinued operations 11,858,548

at 31 october 2012 and 31 october 2013 - The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

28. retaineD earninGs

Prior to the year 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.

As at 31 October 2013, the Company has tax exempt profits available for distribution of approximately RM10,750,000 (2012: RM9,450,000), subject to the agreement of the Inland Revenue Board.



cont’d

29. DiviDenDs

Group and company

2013 2012

rM rM

recognised during the year:

Special dividend for 31 October 2013:

Interim single-tier tax exempt dividends on 152,785,770 ordinary shares of RM0.35 each (RM1.30 per ordinary share) 198,621,501 -

30. relateD Party transactions

(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:

2013 2012

rM rM

Group

Related parties:*

Disposal of subsidiaries 325,737,890 -

company

Gross dividends from subsidiaries - 4,500,000

Interest charges to subsidiaries - 4,192,356

Management fees from subsidiaries 726,000 1,980,000

Disposal of subsidiaries 325,737,890 -

* Related parties are companies in which certain directors have interests.

The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties.

(b) Compensation of key management personnel

The remuneration of directors and other members of key management during the year was as follow:

Group company

2013 2012 2013 2012

rM rM rM rM

Short-term employee benefits 1,144,932 2,447,455 794,460 1,611,585

Defined contribution plan 183,136 340,148 140,980 246,648

1,328,068 2,787,603 935,440 1,858,233



30. relateD Party transactions cont’d

(b) Compensation of key management personnel cont’d

Included in the total remuneration of key management personnel are:

Group company

2013 2012 2013 2012

rM rM rM rM

Directors’ remuneration (Note 10) 1,232,984 2,073,120 1,110,400 1,600,928

31. coMMitMents

(a) capital commitments

Group

2013 2012

rM rM

capital expenditure

Approved and contracted for:

Property, plant and equipment 262,500 6,414,910

(b) finance lease commitments

Group

2013 2012

rM rM

Minimum lease payments:

Not later than 1 year 26,808 -

Later than 1 year and not later than 2 years 26,808 -

Later than 2 years and not later than 5 years 6,700 -

Total minimum future payments 60,316 -

Future finance charges (4,326) -

55,990 -

Present value of payments:

Not later than 1 year 23,855 -

Later than 1 year and not later than 2 years 25,503 -

Later than 2 years and not later than 5 years 6,632 -

55,990 -

analysed as:

Due within 12 months (Note 25) 23,855 -

Due after 12 months (Note 25) 32,135 -

55,990 -

The hire purchase and finance lease liabilities bore interest at the reporting date at rate of 3.49% per annum.



cont’d

32. siGnificant anD subsequent events

(a) On 25 July 2012, the Company accepted the offer letter from Aspion Sdn. Bhd. (“Aspion”) to dispose of all of the businesses and undertakings, including the liabilities and assets of Adventa Berhad (“Adventa”) other than the Excluded Business at the consideration of RM320,850,117 or RM2.10 per ordinary share of RM0.50 each in Adventa. The Excluded Business means all the shares in the capital of Sun Healthcare (M) Sdn. Bhd. and Electron Beam Sdn. Bhd.. The disposal was approved by the shareholders on 1 November 2012 and was completed on 30 November 2012.

The proceeds arising from the disposal were distributed to all entitled shareholders of Adventa of RM1.70 per share by way of a Special Dividend of RM1.30 per share and Capital Reduction and Repayment. It was completed on 21 January 2013.

The Capital Reduction and Repayment exercise were:

(i) the reduction of issued and paid-up ordinary share capital from RM0.50 each to RM0.35 each by way of cancellation of RM0.15 of the par value of the existing ordinary share in the Company.

(ii) the cancellation of part of the share premium account as at 31 October 2011 amounting to RM38,196,443 for payment of cash.

With the completion of the disposal of Adventa’s major business to Aspion Sdn. Bhd. on 30 November 2012, the Company has triggered with paragraph 8.04 and Paragraph 2.1(g) of Practice Note 17 (“PN17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which states that the Company has ceased its major business due to the disposal of its major business and therefore the Company was classified as a PN17 company on 7 January 2013.

On 20 February 2014, the Board announced that the Company was uplifted from being classified as a PN17 company with effective from 21 February 2014.

(b) On 31 December 2012, the Company had entered into an agreement to acquire 500,000 ordinary shares of RM1.00 each in PTM Progress Trading & Marketing Sdn. Bhd. (“PTM”), representing 100% of the equity interest in PTM for a total cash consideration of RM7,500,000, less the existing bank loan and other liabilities. The acquisition was completed on 31 March 2013. Upon the completion date, PTM became a wholly-owned subsidiary of the Company.

(c) On 31 March 2013, the Company acquired two ordinary shares of RM1.00 each representing 100% equity interest in Luxencia (M) Sdn. Bhd. (“Luxencia”), for a total consideration of RM2.00 from Electron Beam Sdn. Bhd., a wholly-owned subsidiary of the Company, resulting in Lucenxia to become a wholly-owned subsidiary of the Company.

33. fair value of financial instruMents

Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation

of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:

note

Trade and other receivables (current) 20

Trade and other payables (current) 23

Loans and borrowings (current) 25

Loans and borrowings (non-current) 25



33. fair value of financial instruMents cont’d

Determination of fair value cont’d

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value cont’d

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of loans and borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Derivatives

Forward currency contracts are valued using a valuation technique with market observable inputs. The most frequently applied valuation techniques include forward pricing, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates.

fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices included in Level 1, that are observable for asset or liability, either directly or indirectly; and

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

level 2

rM

Group

as at 31 october 2013

liabilities measured at fair value

Derivative liabilities 34,379

as at 31 october 2012

liabilities measured at fair value

Derivative liabilities 16,876



cont’d

34. financial risK ManaGeMent objectives anD Policies

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

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

(a) credit risk

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

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. 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 with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The carrying amount of each class of financial assets recognised in the statements of financial position.

- A nominal amount of RM11,239,000 (2012: RM16,187,000) relating to a bank guarantee provided by the Company to financial institutions for credit facilities granted to subsidiaries.

Credit risk concentration profile

At the reporting date, the Group has significant concentration of credit risk that may arise from exposures to 6 (2012: 5) trade receivables which accounted for 58% (2012: 63%) of total trade receivables. The directors believe that this will not create significant problems for the Company in view of the length of relationship and the Company works closely with its customers to provide customer satisfaction through timely delivery and the provision of high quality services at competitive cost.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 20.



34. financial risK ManaGeMent objectives anD Policies cont’d (b) liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial

obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

The Group and the Company manage 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 and the Company maintain sufficient levels of cash to meet its working capital requirements. In addition, the Group and the Company strive to maintain available banking facilities at a reasonable level to its overall debt position.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on contractual undiscounted repayment obligations.

2013

on demand or within one year

one to five years

over five years total

rM rM rM rM

Group

financial liabilities:

Loans and borrowings, representing total undiscounted financial liabilities 5,432,105 3,867,341 1,999,560 11,299,006

2012

on demand or within one year

one to five years

over five years total

rM rM rM rM

Group

financial liabilities:

Loans and borrowings, representing total undiscounted financial liabilities 10,124,000 6,678,389 - 16,802,389

(c) 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 Company has no significant interest-bearing financial assets, the Group’s and the Company’s income and operating cash flows are substantially independent of changes in market interest rates.



cont’d

34. financial risK ManaGeMent objectives anD Policies cont’d (d) foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate

because of charges in foreign exchange rates.

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 Euro (“EUR”), Japanese Yen (“JPY”) and United States Dollars (“USD”). Such transactions are kept to an acceptable level. Material foreign currency transaction exposures are hedged, mainly with derivative financial instruments such as forward foreign exchange contracts.

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

net financial assets/(liabilities) held in non-functional currencies

functional currency of Group companies euro japanese

yen

united states

Dollars total

rM rM rM rM

at 31 october 2013

Ringgit Malaysia - (9,863) (129,198) (139,061)

at 31 october 2012

Ringgit Malaysia 2,795,443 20,773 48,339,883 51,156,099

Euro - - 299,977 299,977

Uruguayan Peso - - (1,430,712) (1,430,712)

2,795,443 20,773 47,209,148 50,025,364

As at reporting date, the Group had entered into forward foreign exchange contracts with maturity within one year at the following notional amounts:

currency

total notional amount

rM

at 31 october 2013

Forwards used to hedge trade receivables USD 457,392

Forwards used to hedge trade receivables EUR -

Forwards used to hedge trade payables USD -

Forwards used to hedge trade payables JPY -

457,392



34. financial risK ManaGeMent objectives anD Policies cont’d (d) foreign currency risk cont’d

As at reporting date, the Group had entered into forward foreign exchange contracts with maturity within one year at the following notional amounts: cont’d

currency

total notional amount

rM

at 31 october 2012

Forwards used to hedge trade receivables USD 26,016,308

Forwards used to hedge trade receivables EUR 13,782,698

Forwards used to hedge trade payables USD (37,334,521)

Forwards used to hedge trade payables JPY (532,671)

1,931,814

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the Euro, JPY and USD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Group

2013 2012

rM rM

Profit net of tax

EURO/RM

- strengthened 5% - 828,907

- weakened 5% - (828,907)

JPY/RM

- strengthened 5% 493 (25,595)

- weakened 5% (493) 25,595

USD/RM

- strengthened 5% 14,514 1,851,084

- weakened 5% (14,514) (1,851,084)



cont’d

35. caPital ManaGeMent

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 October 2013 and 31 October 2012.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Capital represents equity attributable to the owners of the parent.

The Group is required by the Bursa Malaysia to maintain a consolidated shareholders’ equity equal to or not less than 25% of the issued and paid-up share capital and such shareholders’ equity is not less than RM40 million.

Group company

2013 2012 2013 2012

note rM rM rM rM

Trade and other payables 23 13,993,887 24,027,093 109,879 9,000,000

Loans and borrowings 25 11,294,731 16,186,754 - -

Less: Cash and bank balances (23,513,086) (1,580,952) (21,392,856) -

Net debt 1,775,532 38,632,895 (21,282,977) 9,000,000

Equity attributable to the owners of the parent, representing total capital 72,868,750 238,362,076 68,485,708 123,586,265

capital and net debt 74,644,282 276,994,971 47,202,731 132,586,265

Gearing ratio 2% 14% - 7%



36. seGMent inforMation

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

I. The healthcare products segment is a manufacturer, distributor and trader of healthcare products. Certain products within this segment has been classified as a discontinued operations during the financial year (Note 12).

II. The sterilisation provider is provision of industrial and commercial sterilisation services, warehousing and handling services.

III. The corporate segment is involved in Group-level corporate services, treasury functions and provision of management services to subsidiaries. As all subsidiaries, except for Sun Healthcare (M) Sdn. Bhd. and Electron Beam Sdn. Bhd. Group, ceased to be subsidiary of the Company, all related revenue and results have been classified as discontinued operations during the financial year (Note 12).

IV. The energy provider segment generate and supply energy and electricity using biomass technology. This segment has been classified as a discontinued operation during the financial year (Note 12).

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.



cont’d

36.

seG

Me

nt

info

rM

ati

on

co

nt’d

hea

lthca

re

pro

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ts

st

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isco

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ued

o

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atio

ns

ad

just

men

ts a

nd

e

limin

atio

ns

Per

con

solid

ated

fi

nanc

ial s

tate

men

ts

2013

20

12

2013

20

12

2013

20

12

2013

20

12

2013

20

12

2013

20

12

rM

r

M

rM

r

M

rM

r

M

rM

r

M

rM

r

M

not

e r

M

rM

rev

enue

:

Ext

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mer

s17

,390

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12,

617,

599

9,98

6,00

3 1,

575,

806

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- 6

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9,88

1 42

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A, B

-

-

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l rev

enue

17,3

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2,91

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2 72

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0 -

64,

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14

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1 13

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(1

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4 28

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5



36. seGMent inforMation cont’d

Discontinued operations

healthcare products

energy provider corporate

total Discontinued

2013 2012 2013 2012 2013 2012 2013 2012


revenue:

External customers 62,465,506 424,344,553 1,584,375 - - - 64,049,881 424,344,553

Inter-segment - 352,448,740 - 19,786,875 - 1,980,000 - 374,215,615

Total revenue 62,465,506 776,793,293 1,584,375 19,786,875 - 1,980,000 64,049,881 798,560,168

results:

Interest income 13,308 261,361 - - 16,553 4,918,618 29,861 5,179,979

Dividend income - - - - - 4,500,000 - 4,500,000

Fair value (loss)/gain (13,427) 1,132,371 - - - (13,427) 1,132,371

Depreciation 1,514,082 18,117,558 102,654 1,209,620 - 154,444 1,616,736 19,481,622

Other non-cash expenses - 41,495 - - - 289 - 41,784

Segment profit 1,151,256 24,090,881 152,653 7,621,597 (720,619) 5,438,608 583,290 37,151,086

assets:

Additions to non-current assets 1,748,737 38,209,873 6,389 1,868,306 - 4,190 1,755,126 40,082,369

segment assets - 542,627,146 - 30,629,029 - 276,366,986 - 849,623,161

segment liabilities - 293,198,811 - 10,792,514 - 61,122,694 - 365,114,019

A The amounts relating to the certain products within healthcare products, energy provider and corporate segment have been excluded to arrive at amounts shown in the consolidated statement of comprehensive income as they are presented separately in the statement of comprehensive income within one line item, “profit from discontinued operations, net of tax”.

B Inter-segment revenues are eliminated on consolidation.



cont’d


C The following items are added to/(deducted from) segment profit to arrive at “Profit before tax from continuing operations” presented in the consolidated statement of comprehensive income:

2013 2012

rM rM

Segment results of discontinued operations (127,971,321) (37,151,086)

Finance costs - (467,104)

(127,971,321) (37,618,190)

D The following items are added to/(deducted from) segment assets to arrive at total assets reported in the consolidated statement of financial position:

2013 2012

rM rM

Deferred tax assets - 17,952,905

Tax recoverable - 2,504,855

Inter-segment assets (42,042,604) (408,484,918)

(42,042,604) (388,027,158)

E The following items are added to/(deducted from) segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2013 2012

rM rM

Deferred tax liabilities - 4,092,503

Loans and borrowings - 222,074,811

Inter-segment liabilities (35,003,071) (347,081,633)

(35,003,071) (120,914,319)




Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

revenue non-current assets

2013 2012 2013 2012

rM rM rM rM

Malaysia 27,376,071 14,193,405 60,202,788 48,140,749

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position:

2013 2012

rM rM

Property, plant and equipment 35,898,516 35,001,950

Intangible assets 11,717,434 7,027,953

Investment property 7,500,000 -

Deferred tax assets 5,086,838 6,110,846

60,202,788 48,140,749

37. authorisation of financial stateMents for issue

The financial statements for the year ended 31 October 2013 were authorised for issue in accordance with a resolution of the directors on 26 February 2014.



cont’d

38. suPPleMentary inforMation - breaKDown of retaineD Profits into realiseD anD unrealiseD

The breakdown of the retained profits of the Group and of the Company as at 31 October 2013 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Group company

2013 2012 2013 2012

rM rM rM rM

Total retained earnings of Adventa Berhad and its subsidiaries

- Realised 161,500,803 140,534,106 9,868,300 3,977,744

- Unrealised 5,099,468 13,318,982 312,599 189,404

166,600,271 153,853,088 10,180,899 4,167,148

Less: Consolidation adjustments (152,036,330) (23,051,581) - -

Retained earnings as per financial statements 14,563,941 130,801,507 10,180,899 4,167,148


List of Propertiesfor year ended 31 October 2013

address/location Description/use

land area (square metres) tenure

age of building no. of years

net book value as at 31.10.2013

rM’000

Date of revaluation

or acquisition

electon beam sdn. bhd.

Lot PT 121634HSD 119754Mukim of KlangDistrict of KlangSelangor

Sterilisation plant, warehouse and office

17,098 99 yearsleasehold

expiring on24.02.2097

5 18,040 23 July, 2012

PtM Progress trading & Marketing sdn. bhd.

Lot PT17HSM 9655Mukim of Sungai BuluhDistrict of PetalingSelangor

Warehouse 8,090 60 yearsleasehold

expiring on29.12.2055

4 7,500 22 April, 2013


Statistics of Shareholdingsas at 6 March 2014

Authorised Share Capital : RM70,000,000/-Issued and Paid-Up Capital : RM53,475,020 - comprising 152,785,770 Ordinary Shares of RM0.35 eachClass of Shares : Ordinary Shares of RM0.35 eachOn show of hands : One vote per shareholder/proxy presentOn a poll : One vote per Ordinary Share held

analysis of shareholDinGs

a. Distribution of shareholDinGs

range of shareholdingsnumber of

shareholders %number of

shares %

1- 99 137 4.92 6,150 0.00

100 - 1,000 533 19.14 442,571 0.29

1,001 - 10,000 1,601 57.51 7,042,784 4.61

10,001 - 100,000 439 15.77 13,643,149 8.93

100,001 to less than 5% of issued shares 71 2.55 44,014,464 28.81

5% and above of issued shares 3 0.11 87,636,652 57.36

total 2,784 100.00 152,785,770 100.00

b. substantial shareholDers (as shown in the Register of Substantial Shareholders)

Direct indirect

no. nameno. of shares %

no. of shares %

1. Low Chin Guan 58,446,552 38.25 7,960,960 (1) 5.21

2. Wong Koon Mei @ Wong Kwan Mooi 3,460,000 2.26 62,947,512 (2) 41.20

3. Low Lea Kwan 4,500,960 2.95 61,906,552 (3) 40.52

4. Lembaga Tabung Haji 14,323,900 9.38 - -

(1) Deemed interested by virtue of the family relationship between Mr. Low Chin Guan and Madam Wong Koon Mei @ Wong Kwan Mooi, who is his mother and Ms. Low Lea Kwan, who is his sister.

(2) Deemed interested by virtue of the family relationship between Madam Wong Koon Mei @ Wong Kwan Mooi and Mr. Low Chin Guan, who is her son and Ms. Low Lea Kwan, who is her daughter.

(3) Deemed interested by virtue of the family relationship between Ms. Low Lea Kwan and Mr. Low Chin Guan, who is her brother and Madam Wong Koon Mei @ Wong Kwan Mooi, who is her mother.


Statistics of Shareholdingsas at 6 March 2014cont’d

c. Directors’ shareholDinGs (as shown in the Register of Directors’ Shareholdings)

Direct indirect

no. nameno. of shares %

no. of shares %

1. Low Chin Guan 58,446,552 38.25 7,960,960 (1) 5.21

2. Kwek Siew Leng 1,000,000 0.65 - -

3. Toh Seng Thong 140,000 0.09 - -

4. Edmond Cheah Swee Leng 140,000 0.09 - -

5. Dato’ Dr. Norraesah binti Haji Mohamad 140,000 0.09 - -

(1) Deemed interested by virtue of the family relationship between Mr. Low Chin Guan and Madam Wong Koon Mei @ Wong Kwan Mooi, who is his mother and Ms. Low Lea Kwan, who is his sister.

Mr. Low Chin Guan, by virtue of his total direct and indirect interests of 66,407,512 shares in the Company, and pursuant to Section 6A(4)(c) of the Companies Act, 1965, is deemed interested in the shares in all of the Company’s subsidiary companies to the extent that the Company has interests.

D. thirty (30) larGest securities account holDers

no. shareholdersnumber of

shares %

1. Low Chin Guan 58,446,552 38.25

2. HSBC Nominees (Asing) Sdn. Bhd.Exempt AN for Clearstream Banking S.A.

14,866,200 9.73

3. Lembaga Tabung Haji 14,323,900 9.38

4. Aphesus Limited 6,555,300 4.29

5. Low Lea Kwan 4,296,000 2.81

6. Wong Koon Mei @ Wong Kwan Mooi 3,460,000 2.26

7. Sin Tong Meng 3,174,900 2.08

8. Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Wong Yoke Fong @ Wong Nyok Fing (JRC)

1,888,000 1.24

9. CIMSEC Nominees (Tempatan) Sdn. Bhd.CIMB Bank for Lai Kim Fook (MY0637)

1,517,328 0.99

10. Wee Ye Yee 1,226,000 0.80

11. Emerson & CO.S.R.L. 1,176,400 0.77

12. Wong Yoke Fong @ Wong Nyok Fing 1,175,500 0.77

13. Kenanga Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Mak Tian Meng

1,163,000 0.76

14. CIMSEC Nominees (Tempatan) Sdn. Bhd.CIMB Bank for Mak Tian Meng (MY0343)

1,134,000 0.74

15. Lau Kooi See 1,090,000 0.71

16. HSBC Nominees (Tempatan) Sdn. Bhd.HSBC (Malaysia) Trustee Berhad for Amanah Saham Sarawak

1,000,000 0.65

17. Kwek Siew Leng 1,000,000 0.65


Statistics of Shareholdingsas at 6 March 2014

cont’d

D. thirty (30) larGest securities account holDers cont’d

no. shareholdersnumber of

shares %

18. Lam Sheau Chin 710,000 0.46

19. TASEC Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Sin Tong Meng

685,000 0.45

20. Theang Koh Keng 590,000 0.39

21. Liew Chuan Hau 569,264 0.37

22. Chin Swee Ming 491,000 0.32

23. Lee Siew Chow 490,300 0.32

24. Wee Ye Yee 438,000 0.29

25. Wong Yoke Fong @ Wong Nyok Fing 410,000 0.27

26. Foo Chooh Leong 400,000 0.26

27. Leang Saw Ying @ Leong Moh Yin 395,000 0.26

28. Loo Chee Lain 383,500 0.25

29. CIMSEC Nominees (Tempatan) Sdn. Bhd.CIMB Bank for Tan Hock Seng (MP0060)

358,500 0.23

30. Maybank Nominees (Tempatan) Sdn. Bhd.M.Baaden bin Asasmulia

350,000 0.23

123,763,644 81.00


Notice of Eleventh Annual General Meeting

notice is hereby Given that the Eleventh Annual General Meeting of the Company will be held at 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan on Thursday, 24 April 2014 at 10:30 a.m. for the following purposes:-

aGenDa

1. To receive the Audited Financial Statements for the financial year ended 31 October 2013 together with the Reports of the Directors and the Auditors thereon.

2. To approve the payment of Directors’ fees for the financial year ended 31 October 2013.

3. To re-elect the following Directors who retire pursuant to Article 114 of the Company’s Articles of Association and being eligible, have offered themselves for re-election: -

(a) Mr. Toh Seng Thong; and (b) Mr. Edmond Cheah Swee Leng

4. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

5. as special business

To consider and, if thought fit, to pass the following Ordinary and Special Resolutions:- orDinary resolution 1

- authority to issue shares Pursuant to section 132D of the coMPanies act, 1965

“that subject to Section 132D of the Companies Act, 1965 and approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; anD that such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

orDinary resolution 2 - ProPoseD renewal of shareholDers’ ManDate for recurrent

relateD Party transactions of a revenue or traDinG nature

“that approval be and is hereby given to Adventa Berhad Group (“the Group”) to enter into and to give effect to specified recurrent related party transactions of a revenue or trading nature with the Related Parties as stated in Part A Section 1.5 of the Circular to Shareholders dated 2 April 2014, which are necessary for its day-to-day operations, to be entered into by the Group on the basis that this transaction is entered into on terms which are not more favorable to the Related Party involved than generally available to the public and are not detrimental to the minority shareholders of the Company (hereinafter referred to as the “Proposed renewal of shareholders’ Mandate”);

[Please refer to Explanatory Note (i)]

(Resolution 1)

(Resolution 2)(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)


that the Proposed Renewal of Shareholders’ Mandate is subject to annual renewal. In this respect, any authority conferred by the Proposed Renewal of Shareholders’ Mandate, shall only continue to be in force until:-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general meeting at which the Proposed Renewal of Shareholders’ Mandate was passed, at which time it will lapse, unless by resolution passed at the general meeting, the authority is renewed; or

(b) the expiration of the period within which the AGM after that date is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965; or

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

whichever is the earlier;

anD that the Directors and/or any of them be and are hereby authorised to complete and do all such acts and things (including executing such documents as may be required) to give effect to the Proposed Renewal of Shareholders’ Mandate.”

orDinary resolution 3 - ProPoseD renewal of share buy-bacK authority of uP to 10% of

the issueD anD PaiD-uP share caPital of aDventa berhaD (“ProPoseD renewal of authority for share buy-bacK”)

“that, subject to the compliance with Section 67A of the Companies Act, 1965 and all other applicable laws, rules and regulations, approval be and is hereby given to the Company, to purchase such amount of ordinary shares of RM0.35 each in the Company (“shares”) as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad (“bursa securities”) as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of Shares to be purchased and held pursuant to this resolution does not exceed 10% of the existing issued and paid-up share capital of the Company including the Shares previously purchased and retained as treasury shares (if any), upon such terms and conditions as set out in Part B of the Circular to the Shareholders dated 2 April 2014.

anD that such authority shall commence immediately upon the passing of this ordinary resolution and until the conclusion of the next Annual General Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be held unless revoked or varied by ordinary resolution in the general meeting of the Company but so as not to prejudice the completion of a purchase made before such expiry date, in any event in accordance with the provisions of the Main Market Listing Requirements of Bursa Securities and any other relevant authorities.

anD that the maximum amount of funds to be utilised for the purpose of the Proposed Renewal of Authority for Share Buy-Back shall not exceed the Company’s aggregate of the share premium and/or retained profits.

anD that authority be and is hereby given to the Directors of the Company to decide in their absolute discretion to retain the Shares in the Company so purchased by the Company as treasury shares and/or to cancel them and/or to resell them and/or to distribute them as share dividends in such manner as may be permitted and prescribed by the provisions of the Main Market Listing Requirements of Bursa Securities and any other relevant authorities.

Notice of Eleventh Annual General Meetingcont’d

(Resolution 7)


anD that authority be and is hereby given to the Directors of the Company to take all such steps as are necessary to enter into any agreements, arrangements and guarantees with any party or parties to implement, finalise and give full effect to the aforesaid with full powers to assent to any conditions, modifications, variations and/or amendments (if any) as may be imposed by the relevant authorities and to do all such acts and things as the Directors may deem fit and expedient in the interests of the Company.”

sPecial resolution - ProPoseD aMenDMents to the articles of association

“that the proposed amendments to the Company’s Articles of Association as set out in Part C of the Circular to Shareholders dated 2 April 2014 (“Proposed amendments”), be and are hereby approved anD that the Board of Directors of the Company be and is hereby authorised to do all such acts, deeds and things as are necessary and/or expedient in order to give full effect to the Proposed Amendments with full powers to assent to any conditions, modifications and/or amendments as may be required by any relevant authorities.”

6. To transact any other ordinary business of which due notice has been given.

By Order of the Board

chua siew chuan (MAICSA 0777689)Pan senG wee (MAICSA 7034299)Company Secretaries

Kuala LumpurDated: 2 April 2014

Notes:

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 18 April 2014 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where two (2) proxies are appointed, a member shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid provided that where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. If a member appoints two (2) proxies, he must specify which proxy is entitled to vote on a show of hands, only one (1) of those proxies is entitled to vote on a show of hands.

3. A proxy may but does not need to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 need not be complied with. Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly appointed under a power of attorney or if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a Power of Attorney.

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

6. The instrument appointing a proxy must be deposited at Securities Services (Holdings) Sdn. Bhd., Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

(Resolution 8)




Explanatory Notes to Ordinary and Special Business:

i) Item 1 of the Agenda

This Agenda item is meant for discussion only, as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda item is not put forward for voting.

ii) Ordinary Resolution 1 - Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Company wishes to renew the mandate on the authority to issue shares pursuant to Section 132D of the Companies Act, 1965 at the Eleventh Annual General Meeting of the Company (hereinafter referred to as the “General Mandate”).

The Company had been granted a general mandate by its shareholders at the Tenth Annual General Meeting of the Company held on 29 April 2013 (“the Previous Mandate”).

As at the date of this notice, the Previous Mandate granted by the shareholders had not been utilised and hence no proceeds were raised therefrom.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisition(s).

iii) Ordinary Resolution 2 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

The proposed adoption of the Ordinary Resolution in respect of the Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature is intended to facilitate transactions in the normal course of business of the Group which are transacted from time to time with the specified classes of related parties, provided that they are carried out on an arm’s length basis and on the Group’s normal commercial terms and are not prejudicial to the shareholders on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders.

iv) Ordinary Resolution 3 - Proposed Renewal of Authority for Share Buy-Back

The proposed adoption of the Ordinary Resolution in respect of the Proposed Renewal of Authority for Share Buy-Back is to renew the authority granted by the shareholders of the Company at the Tenth Annual General Meeting held on 29 April 2013. The proposed renewal will allow your Directors to exercise the power of the Company to purchase not more than 10% of the issued and paid-up share capital of the Company any time within the time period stipulated in Bursa Malaysia Securities Berhad Main Market Listing Requirements.

v) Special Resolution - Proposed Amendments to the Articles of Association

The proposed amendments to the Articles of Association are to streamline the Company’s Articles of Association to be aligned with the amendments to the Bursa Malaysia Securities Berhad Main Market Listing Requirements.


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Form of Proxy

(Incorporated in Malaysia)

number of shares heldcDs account no.

*I/We (Full Name In Capital Letters)

of (Full Address)

being a Member of ADVENTA BERHAD, do hereby appoint (Full Name In Capital Letters)

of (Full Address)

or failing him/her (Full Name In Capital Letters)

of (Full Address)

or failing him/her, the CHAIRMAN OF THE MEETING, as *my/our proxy to attend and vote for *me/us and on *my/our behalf at the Eleventh Annual General Meeting of the Company to be held at 21, Jalan Tandang 51/205A, Seksyen 51, 46050 Petaling Jaya, Selangor Darul Ehsan on Thursday, 24 April 2014 at 10:30 a.m. and at any adjournment thereof.

Please indicate with an “X” in the space provided below how you wish your votes to be casted. If no specific direction as to voting is given, the Proxy will vote or abstain from voting at his discretion.

item agenda1. To receive the Audited Financial Statements for the financial year ended 31 October

2013 together with the Reports of the Directors and the Auditors thereon.resolution for against

2. To approve the payment of Directors’ fees for the financial year ended 31 October 2013.

1

3. To re-elect the Director, Mr. Toh Seng Thong who retires pursuant to Article 114 of the Company’s Articles of Association.

2

4. To re-elect the Director, Mr. Edmond Cheah Swee Leng who retires pursuant to Article 114 of the Company’s Articles of Association.

3

5. To re-appoint Messrs. Ernst & Young as Auditors of the Company until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.

4

6. special businessOrdinary Resolution 1- Authority to issue shares pursuant to Section 132D of the Companies Act, 1965. 5

7. Ordinary Resolution 2- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party

Transactions of a Revenue or Trading Nature.6

8. Ordinary Resolution 3- Proposed Renewal of Authority for Share Buy-Back. 7

9. Special Resolution- Proposed Amendments to the Articles of Association. 8

* Strike out whichever not applicable.

As witness my/our hand this day of 2014

Signature of Member/Common Seal Notes:

1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 18 April 2014 (“General Meeting Record of Depositors”) shall be eligible to attend the Meeting.

2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting and where two (2) proxies are appointed, a member shall specify the proportion of his holdings to be represented by each proxy, failing which the appointment shall be invalid provided that where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. If a member appoints two (2) proxies, he must specify which proxy is entitled to vote on a show of hands, only one (1) of those proxies is entitled to vote on a show of hands.

3. A proxy may but does not need to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 need not be complied with. Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

4. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly appointed under a power of attorney or if such appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a Power of Attorney.

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

6. The instrument appointing a proxy must be deposited at Securities Services (Holdings) Sdn. Bhd., Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time for holding the Meeting or at any adjournment thereof.

AFFIXSTAMP

1st Fold Here

Fold This Flap For Sealing

Then Fold Here

The SecretaryaDventa berhaD (618533-M)

c/o Securities Services (Holdings) Sdn. Bhd.Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur

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