TWM_AR 2010

Corporate ValuesDeeply rooted in honesty, accountability and innovation

Key StrategiesClear and bold with in-built dynamism

guiding philosophyupon which we hold, to achieve

Our values are our

our objectives

scenario planning agile and robustaction plans to provide us with

Formulated based on an extensive process of

Performance MeasurementWell defined yardstick that focuses equally on non-monetary output

PartnershipTrencsending boundaries even further

genuine corporate responsibilityexercises for our employees, environment, community and stakeholders

We achieve results through

entrepreneurship & professionalism

We create avenues for effective and beneficial global partnerships through our

002

Annual Report 2010

Financial CalendarAnnouncements of Financial ResultsQuarter 1st quarter 2nd quarter 3rd quarter 4th quarter 31 May 2010 25 August 2010 30 November 2010 24 February 2011 Date of Announcement

37

th

Annual General MeetingVenue : Mahkota Ballroom 2 Ballroom Level Hotel Istana Kuala Lumpur 73 Jalan Raja Chulan 50200 Kuala Lumpur Date : Tuesday, 28 June 2011 Time : 10.30 a.m.

Dividends for the Financial Year Ended 31 December 2010 First Interim 20 sen per share less 25% Income Tax Announced Entitlement Date Paid 14 January 2011 7 February 2011 28 February 2011

Final Subject to the approval by 20 sen per share less shareholders at the 37th Annual 25% Income Tax General Meeting General Meetings 36th Annual General Meeting 37th Annual General Meeting 22 June 2010 28 June 2011

p p

36

30

Chairmans Statement

Review of Operations by the Group Managing Director

003

Tradewinds (M) Berhad

We are proud to conclude that the year 2010 is our best ever performance of the GroupDato Wira Syed Abdul Jabbar bin Syed Hassan Chairman

Financial Calendar 004 005 006 010 011 014 019 020 026 Corporate Vision & Mission Corporate Information Corporate Structure Group Half-Yearly Results Group Financial Highlights Notice of Annual General Meeting Statement Accompanying Notice of Annual General Meeting Profile of Directors Group Management Chairmans Statement Review of Operations by the Group Managing Director Corporate Responsibility Statement on Corporate Governance Statement on Directors Responsibility Additional Compliance Information Statement on Internal Control Report of the Audit Committee Financial StatementS Properties of the Group Shareholding Statistics Additional Information on Shareholders Top Thirty Shareholders Directory of Groups Operations Notice of Nomination of Auditors FORM OF PROXY

Contents

030 036 046 054 060 061 063 065 068 199 205 206 207 209 218

p

40

p

38

004

Annual Report 2010

Corporate Vision

To be the preferred globally competitive integrated agribusiness organisation that delivers outstanding value for all.

Corporate MissionWe, as a team, are committed to achieve our vision by: providing premium products and services to our customers optimising shareholder value improving the quality of life of our employees fostering a sustainable environment

005


Board of Directorschairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Independent Non-Executive Director Group managing Director Bakry bin Hamzah Non-Independent Executive Director Directors Syed Azmin bin Syed Nor Non-Independent Non-Executive Director Chuah Seong Tat Non-Independent Non-Executive Director Ooi Teik Huat Independent Non-Executive Director Khalid bin Sufat Independent Non-Executive Director Datuk Hj. Ismail bin Hj. Hashim Non-Independent Non-Executive Director (Appointed w.e.f. 11 March 2010) Datuk R Sharifuddin Hizan bin R Zainal Abidin Non-Independent Non-Executive Director (Appointed w.e.f. 22 February 2010) (Resigned w.e.f. 12 April 2011)

Corporate Informationaudit committee Chairman Ooi Teik Huat Syed Azmin bin Syed Nor Khalid bin Sufat nomination and Remuneration committee Chairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Ooi Teik Huat Khalid bin Sufat executive committee Chairman Dato Wira Syed Abdul Jabbar bin Syed Hassan Bakry bin Hamzah Chuah Seong Tat Registered Office Level 12, Menara HLA No. 3, Jalan Kia Peng 50450 Kuala Lumpur t : 603 2179 7777 F : 603 2161 1632 W : www.twinds.com.my e : [email protected] company Secretary Zainal Rashid bin Ab Rahman (LS007008) (Appointed w.e.f. 11 January 2011) Mohamad Affendi bin Yusoff (LS007158) (Resigned w.e.f. 6 February 2011) auditors Messrs Anuarul Azizan Chew & Co. No. 18, Jalan 1/64 Off Jalan Kolam Air, Jalan Ipoh 51200 Kuala Lumpur t : 603 4041 7233 F : 603 4041 0395 Share Registrar Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Selangor Darul Ehsan t : 603 7841 8000 F : 603 7841 8008 Solicitors Messrs Lee Hishammudin Allen & Gledhill Messrs Martin Cheah & Associates Messrs Pakharuddin & Partners Messrs Azmi & Associates Bankers Malayan Banking Berhad CIMB Bank Berhad RHB Bank Berhad Bangkok Bank Berhad AmBank (M) Berhad Form of legal entity Incorporated on 19 June 1974 as a private company limited by shares under the Companies Act, 1965 as Tradewinds (M) Sdn Bhd and was converted into a public company on 28 September 1987 and since then known as Tradewinds (M) Berhad Place of incorporation and Domicile Malaysia Stock exchange listing Main Market of Bursa Malaysia Securities Berhad Stock name TWS Stock code 4421 iSin MYL 442100003

006

Annual Report 2010

Corporate Structure

Central Sugars Refinery Sdn Bhd (100%)

Tradewinds Plantation Berhad *(69.76%)

Sovereign Place Sdn Bhd (100%)

Delta Delights Sdn Bhd (100%)

> > > >

Delta Delights (Cambodia) Co Ltd Tradewinds Cambodia Co Ltd Tradewinds Realty Co Ltd Croesus Limited

100% 100% 100% 100%

> > > > > > >> Investment holding > Manufacturing and trading > Cultivation of oil palm and production of crude palm oil > Cultivation of oil palm > Plantation management and advisory services > Sole and specific purpose of undertaking Islamic Securities Transaction > Cultivation of oil palm and rubber trees > Property development and oil palm plantation > Rice > Property > Ceased operations

Tradewinds Plantation Management Sdn Bhd Tradewinds Agro Services Sdn Bhd Tradewinds Plantech Sdn Bhd Tradewinds Plantation Services Sdn Bhd Tradewinds Plantation Capital Sdn Bhd Tradewinds Corridor Sdn Bhd Quek Shin & Sons Pte Ltd Teon Choon Realty Company Sdn Berhad Ladang Chendana Sdn Bhd Ibok Plantation Sdn Bhd Binu Plantations Sdn Bhd Ladang Permai Sdn Bhd Ladang Serasa Sdn Berhad Ladang Mawar Sdn Bhd Syarikat Ladang Sawit Cherul Sdn Bhd Prisma Spektra Sdn Bhd Kumpulan Kris Jati Sdn Bhd Bahtera Bahagia Sdn Bhd Barisan Tekad Sdn Bhd Northern Intergrated Agriculture Sdn Bhd > NIA Development Sdn Bhd > NIA Infrastructure Sdn Bhd

100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 70% 70% 70% 70% 100% 100%

> >

Pride Palm Oil Mill Sdn Bhd > Solar Green Sdn Bhd Johore Tenggara Oil Palm Berhad > Ladang Petri Tenggara Sdn Bhd > Pertanian Johor Tenggara Sdn Bhd > Agromaju Sendirian Berhad > Permodalan Pelangi Sdn Bhd > Tanah Semai Sdn Bhd > Semai Segar Sdn Bhd > Uni-Agro Plantations (Trengganu) Sdn Bhd > M.P Plantation Sdn Bhd > Ladang Sungai Relai Sdn Bhd > Agromaju Landscape Sdn Bhd > Hak JTOP Sdn Bhd > Barisan Perangsang Sdn Bhd Amalan Penaga (M) Sdn Bhd > Trans Kenyalang Sdn Bhd > Senandung Masyhur Sdn Bhd > Tradewinds Tanjung Alan Plantation Sdn Bhd > Arah Bersama Sdn Bhd > Usaha Wawasan Sdn Bhd > Melur Gemilang Sdn Bhd > Amalan Pelita Pasai Sdn Bhd

50% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 70% 100% 100% 51% 100% 85% 85% 70% 70% 70% 70% 60%

> > > > > > > > > > > > >

>

> Dormant* Public Listed


Padiberas Nasional Berhad *(72.57%)

Gula Padang Terap Sdn Bhd (100%)

Retus Plantation Sdn Bhd (60%)

>

Masretus Oil Palm Plantation Sdn Bhd

100%

>

Beras Corporation Sdn Bhd > Liansin Trading Sdn Bhd > Liangtye Trading Sdn Bhd > Tong Seng Huat Rice Trading Sdn Bhd > Sabarice Sdn Bhd > Sazarice Sdn Bhd > Dayabest Sdn Bhd > Haskarice Food Sdn Bhd > Ban Say Tong Sdn Bhd > Hock Chiong Foodstuff Sdn Bhd Bernas Dominals Sdn Bhd > Bernas Feedstuff Sdn Bhd Edaran Bernas Nasional Sdn Bhd Bernas Seed Pro Sdn Bhd

100% 60% 100% 51% 100% 95% 100% 51% 51% 51% 100% 49% 80% 100%

>

> > >

Jasmine Food Corporation Sdn Bhd > Jasmine Food (Ipoh) Sdn Bhd > Jasmine Food (Alor Setar) Sdn Bhd > Jasmine Khidmat & Harta Sdn Bhd > Jasmine Food (Johor Bahru) Sdn Bhd > Jasmine Food (Seremban) Sdn Bhd > Jasmine Food (Prai) Sdn Bhd > Jasmine Food (Kuantan) Sdn Bhd > Jasmine Rice Mill (Tunjang) Sdn Bhd > Jasmine Rice Products Sdn Bhd > JS Jasmine Sdn Bhd Syarikat Faiza Sdn Bhd Era Bayam Kota Sdn Bhd Bernas Project & Development Sdn Bhd Bernas Logistics Sdn Bhd Bernas Overseas (L) Limited > Irfan Noman Bernas (Pvt) Limited Bernas Agrotech Sdn Bhd Bernas Production Sdn Bhd

61% 100% 100% 100% 100% 100% 100% 100%

>

YHL Holding Sdn Bhd > YHL Trading (Kedah) Sdn Bhd > YHL Trading (KL) Sdn Bhd > YHL Trading (Melaka) Sdn Bhd > YHL Trading (Segamat) Sdn Bhd > YHL Trading (Johor) Sdn Bhd > YHL Trading (Terengganu) Sdn Bhd Gardenia Bakeries (KL) Sdn Bhd OEL Realty Holdings Sdn Bhd United Malayan Flour (1996) Sdn Bhd Ban Heng Bee Holdings Sdn Bhd Serba Wangi Sdn Bhd

51% 100% 100% 100% 100% 100% 100% 30% 30% 45% 20% 40%

> >

100% 100% 51% 51% 60% 100% 100% 100% 20% 100% 100%

> > >

> > > > >

> >

TOTAL GROuP ReVenue billion for 2010

RM5.6

RM806.6million for 2010

Group profit before tax

Performance

growth

010

Annual Report 2010

Group Half-Yearly Results6 months ended 30 June 2010 RM000 Revenue Profit from operation Profit before tax Taxation Profit for the financial year Minority interest Profit attributable to Owners of the Parent Earnings per share (sen) Dividend per share - gross (sen) 2,585,246 326,940 292,190 (76,777) 215,413 (50,659) 164,754 56.28 % 47 37 36 43 34 35 34 34 6 months ended 31 December 2010 RM000 2,966,133 554,146 514,405 (103,004) 411,401 (95,016) 316,385 108.73 20.0* % 53 63 64 57 66 65 66 66 100 12 months ended 31 December 2010 RM000 5,551,379 881,086 806,595 (179,781) 626,814 (145,675) 481,139 165.01 20.0* % 100 100 100 100 100 100 100 100 100

* 2010 gross dividend excludes the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.

011


Group Financial Highlights2006 RM000 Revenue Profit before tax Profit for the financial year Profit attributable to Owners of the Parent Equity attributable to Owners of the Parent Total assets Total borrowings Issue and paid-up capital Dividends paid (net of tax) GROWTH RATES Revenue Profit before tax Profit attributable to Owners of the Parent Equity attributable to Owners of the Parent Total assets Total borrowings RATIO Return on equity (%) Return on total assets (%) Return on revenue (%) Gross dividend per share (sen) Earnings per share - basic (sen) Net assets per share (RM) Gearing (times) 1,151,154 65,238 49,610 46,641 1,158,750 3,065,702 1,169,768 296,471 38,423 2006 18.7% 22.2% 41.3% 12.5% 41.1% 52.4% 2006 4.0 1.5 4.1 20.0 15.7 3.91 1.01 2007 RM000 1,690,837 253,616 204,669 147,649 1,263,920 2,982,060 1,018,106 296,471 47,613 2007 46.9% 288.9% 216.6% 9.1% -2.7% -13.0% 2007 11.7 5.0 8.7 23.0 51.4 4.26 0.81 2008 RM000 1,767,566 298,808 222,242 160,735 1,373,524 3,449,642 1,235,364 296,471 50,459 2008 4.5% 17.8% 8.9% 8.7% 15.7% 21.3% 2008 11.7 4.7 9.1 20.0 56.1 4.63 0.90 2009 RM000 2 ,069,398 349,225 275,094 240,973 1 ,576,218 6 ,323,872 2 ,662,009 296,471 22,235 2009 17.1% 16.9% 49.9% 14.8% 83.3% 115.5% 2009 15.3 3.8 11.6 15.0 81.8 5.32 1.69 2010 Rm000 5,551,379 806,595 626,814 481,139 2,019,005 6,765,477 2,878,258 296,471 33,353 2010 168.3% 131.0% 99.7% 28.1% 7.0% 8.1% 2010 23.8 7.1 8.7 20.0* 165.0 6.81 1.43

* 2010 gross dividend excludes the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.

012

Annual Report 2010

Group Financial HighlightsRevenue (RM million) Profit before Taxation (RM million)1,0005,551

4,0001,691 1,768

800 600254

1,151

2,000 1,000 0

400 200 065

06

07

08

09

10

06

07

299

08

09

349

3,000

2,069

10

Profit attributable to Owners of the Parent (RM million)481

Equity attributable to Owners of the Parent (RM million)2,019

Total Assets (RM million)

500 400241

2,500 2,0001,264 1,374 1,576

7,500 6,0002,982

300 200 100 0 06 07 0847 148 161

1,500 1,000 500 0

1,159

4,500 3,000 1,500 0

09

10

06

07

08

09

10

06

3,066

07

3,450

08

09

6,324

10

6,765

807

5,000

013


Return on Equity (%)

Gross Dividend (sen)

Earnings Per Share - Basic (sen)20.0 *

23.0

20.0

15.3

15.0

2011.7 11.7

20 15 10

20.0

25

23.8

25

175 140 10551.4 81.8

15 10 5 0 064.0

7015.7

5 0 07 08 09 10 06 07 08 09 10

35 0

06

07

56.1

08

09

10

* Excluding the 20 sen final dividend which is subject to shareholders approval at the 37th Annual General Meeting.

Net Asset Per Share (RM)

7.54.63

6.0 4.5 3.0 1.5 0 06 073.91 4.26

08

09

5.32

10

6.81

165.0

014

Annual Report 2010

notice of Annual General Meetingnotice is hereby given that the Thirty-Seventh Annual General Meeting (AGM) of Tradewinds (M) Berhad (TWM or the Company) will be held at Mahkota Ballroom 2, Ballroom Level, Hotel Istana Kuala Lumpur, 73, Jalan Raja Chulan, 50200 Kuala Lumpur on Tuesday, 28 June 2011 at 10.30 a.m. for the following purposes:-

as Ordinary Business, to consider and if thought fit, to pass the following resolutions:Ordinary Resolutions 1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2010 together with the Reports of the Directors and Auditors thereon; To declare a Final Dividend of 20 sen per share less 25% income tax for the financial year ended 31 December 2010; To approve the payment of Directors fees for the financial year ended 31 December 2010; To re-elect the following Directors who are required to retire by rotation from office pursuant to Articles 105 and 106 of the Companys Articles of Association:i) Syed Azmin bin Syed Nor; and ii) Bakry bin Hamzah To reappoint Dato Wira Syed Abdul Jabbar bin Syed Hassan whose office shall become vacant at the conclusion of this AGM pursuant to Section 129(2) of the Companies Act, 1965 (Act) to hold office until the conclusion of the next AGM; To appoint Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Notice of Nomination pursuant to Section 172(11) of the Act, a copy of which is included in the Annual Report 2010 has been received by the Company for the nomination of Messrs Ernst & Young, who have given their consent to act, for appointment as Auditors and of the intention to propose the following ordinary resolution:That Messrs Ernst & Young be and are hereby appointed Auditors of the Company in place of retiring Auditors, Messrs Anuarul Azizan Chew & Co., to hold office until the conclusion of the next AGM at a remuneration to be determined by the Board of Directors. Resolution 1

2.

Resolution 2

3. 4.

Resolution 3

Resolution 4 Resolution 5 Resolution 6

5.

6.

Resolution 7

015


as Special Business, to consider and if thought fit, to pass the following resolutions:Ordinary Resolutions 7. Proposed Shareholders Mandates for the Company and its Subsidiary Companies (collectively, Group Companies) to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature specified in the Circular to Shareholders dated 3 June 2011 (Circular):i) Proposed Category A Mandate:THAT approval be and is hereby given for the Group Companies to enter into the recurrent related party transactions of a revenue or trading nature specified and set out in Section 3.2 of the Circular (Category A Mandate) provided that such transactions are (i) in the ordinary course of business and necessary for day-to-day operations of the Group Companies and (ii) on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of TWM AND THAT unless revoked or varied by the resolutions of the shareholders of the Company in general meeting, Category A Mandate shall continue to be in force until the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the said Act) whichever is earlier. AND FURTHER THAT the Group Companies be and are hereby authorised to enter into and execute all such agreements, instruments, documents and deeds and to do all acts, deeds and things necessary, expedient or advisable for and in respect of the Category A Mandate and the transactions contemplated and/or authorised by Category A Mandate. ii) Proposed Category B Mandate:THAT approval be and is hereby given for the Group Companies to enter into the recurrent related party transactions of a revenue or trading nature specified and set out in Section 4.2 of the Circular (Category B Mandate) provided that such transactions are (i) in the ordinary course of business and necessary for day-to-day operations of the Group Companies and (ii) on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders of TWM AND THAT unless revoked or varied by the resolutions of the shareholders of the Company in general meeting, Category B Mandate shall continue to be in force until the conclusion of the next AGM of the Company or the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the said Act) whichever is earlier. AND FURTHER THAT the Group Companies be and are hereby authorised to enter into and execute all such agreements, instruments, documents and deeds and to do all acts, deeds and things necessary, expedient or advisable for and in respect of Category B Mandate and the transactions contemplated and/or authorised by the Category B Mandate. Resolution 9 Resolution 8

016

Annual Report 2010

Special Resolution 8. Proposed Amendments of the Articles of Association of the Company (Proposed Amendments of Articles):THAT the existing Article 139 and Article 141 be and are hereby deleted in their entirety and be replaced with the following new Article 139 and Article 141, respectively:(i) existing article 139 Payment by cheque or warrant Any dividend, instalment of dividend, bonus or interest in respect of any shares may be paid by cheque or warrant payable to the order of the member in the register and/or the Records of Depositors. Resolution 10

Proposed new article 139 Mode of payment of dividend Any dividend, instalment of dividend, or other money payable in cash in respect of shares may be paid by the Company to the member or the person entitled thereto by way of direct bank transfer or such other form of electronic fund transfer to the bank account notified and provided by that member or that person to the Depository under and in accordance with the Listing Requirements and the Rules of the Depository, or by way of cheque or warrant made payable to the order of the member or the person entitled thereto in the event that details of that member or that payees bank account has not been provided to the Depository, or by such other manner as may be prescribed or permitted by the Exchange and/or the Depository or as the Directors may determine.

(ii) existing article 141 Payment by post and discharge Every such cheque or warrant shall be sent by post to the last registered address of member or person entitled appearing on the register and/or the Record of Depositors and the receipt of such a member shall be a good discharge to the company of all dividends, bonuses or other payments made in respect of such share. Every such cheque or warrant shall be sent at risk of the person entitled to the money represented thereby.

Proposed new article 141 Payment of dividend and discharge The payment of dividend, instalment of dividend, or other money payable in respect of any shares by direct bank transfer or any other form of electronic fund transfer to the bank account notified and provided by the member or person entitled thereto to the Depository shall operate as a good discharge of the Companys obligation in respect of the payment of the dividend represented thereby, notwithstanding that it may subsequently appear that the instruction for payment by such direct transfer or electronic means and/or the details of the bank account provided had been forged.

017


Proposed new article 141 (contd) Payment of dividend and discharge The payment of dividend, instalment of dividend, or other money in respect of any shares by cheque or warrant shall be made payable to the order of the member or the person entitled thereto and sent by post to the last registered or last known address of the member or of the person entitled thereto, and the payment of every such cheque or warrant by the Company as aforesaid shall operate as a good discharge of the Companys obligation in respect of the payment of the dividend represented thereby, notwithstanding that it may subsequently appear that the cheque or warrant has been stolen or any endorsement thereon has been forged or that any discrepancy in the details of the bank account(s) given by the member. Every such cheque or warrant shall be sent by post at the risk of the member or the person entitled to the dividend represented thereby.

AND THAT the Board be and is hereby authorised to sign, execute and deliver on behalf of the Company all necessary documents, and also all such acts and things as may be required or relevant for and in connection with and to give effect to and implement the Proposed Amendment with full power to assert any conditions, modifications, variations and/or amendments in any manner as may be imposed or permitted by the relevant authorities. 9. To transact any other ordinary business for which due notice shall have been given. nOtice OF DiViDenD entitlement anD PaYment Notice is hereby given that a Final Dividend of 20 sen per share less 25% income tax in respect of the financial year ended 31 December 2010, if approved by shareholders at the forthcoming AGM, will be paid on 29 July 2011 to shareholders whose names appear on the Companys Register of Depositors on 14 July 2011. A Depositor shall qualify for entitlement to the dividend only in respect of:a) Shares deposited into the Depositors Securities Account before 12.30 p.m. on 12 July 2011 in respect of shares which are exempted from mandatory deposit; b) Shares transferred into the Depositors Securities Account before 4.00 p.m. on 14 July 2011 in respect of ordinary transfer; and c) Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD Zainal RaSHiD Bin aB RaHman (lS 007008) Company Secretary Kuala Lumpur 3 June 2011

018

Annual Report 2010

notes: Proxy 1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint any one person to be his/her proxy without limitation to attend and vote in his/her stead and the provisions of Section 149 (1)(a) and (b) of the Act shall not apply to the Company. A proxy may but need not be a member of the Company; 2. Where a member of the Company is an authorised nominee as defined under the Central Depositories Act, it may appoint 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; 3. This Form of Proxy to be valid, must be deposited at the Share Registrars office, Symphony Share Registrars Sdn Bhd at Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor on or before Sunday, 26 June 2011 at 10.30 a.m. being not less than forty-eight hours before the time fixed for holding the meeting or at any adjournment thereof; 4. In the case of a corporate member, the proxy appointed must be in accordance with the Memorandum and Articles of Association and the Form of Proxy should be given under its common seal or under the hand of its attorney; and 5. Statement Accompanying the Notice of Annual General Meeting on Profiles of Directors standing for re-election and reappointment as Directors of the Company for Resolutions 4 to 6 are shown on pages 21 to 23 of this Annual Report. eXPlanatORY nOteS On ReSOlutiOnS:1. Ordinary Resolution 7 appointment of auditors Notice of Nomination has been received pursuant to Section 172(11) of the Act, a copy of which is included in this Annual Report 2010 for the appointment of Messrs Ernst & Young as Auditors of the Company in place of the retiring Auditors, Messrs Anuarul Azizan Chew & Co., to hold office until the conclusion of the next AGM at a remuneration to be determined by the Directors. 2. Ordinary Resolutions 8 and 9 Recurrent Related Party transactions For further information on Ordinary Resolutions 8 and 9, please refer to the Circular to Shareholders dated 3 June 2011 accompanying this Annual Report. 3. Special Resolution 10 Proposed adoption of new articles of association The proposed Special Resolution, if passed, will align Article 139 and Article 141 of the Articles of Association of the Company with the requirement of Bursa Malaysia Securities Berhad that cash dividends shall be paid to shareholders by directly crediting the same into their bank accounts as notified and provided by the shareholders to Bursa Malaysia Depository Sdn Bhd.

019


Statement Accompanying notice of Annual General Meetingmade pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

1.

Directors who are standing for re-election and reappointment by rotation at the Annual General Meeting of the Company (AGM) pursuant to Articles 105 and 106 of the Articles of Association of the Company are as follows:i. Syed Azmin bin Syed Nor; and ii. Bakry bin Hamzah.

2.

Dato Wira Syed Abdul Jabbar bin Syed Hassan who is over 70 years of age, is standing for reappointment at the AGM in accordance with Section 129(6) of the Companies Act, 1965. Six Board Meetings were held during the financial year ended 31 December 2010. Details of attendance of Directors at the said Board Meetings are contained in their respective profile on pages 21 to 25 of this Annual Report. The AGM of Tradewinds (M) Berhad will be held as follows:Venue : Mahkota Ballroom 2, Ballroom Level Hotel Istana Kuala Lumpur 73, Jalan Raja Chulan 50200 Kuala Lumpur : 28 June 2011 : 10.30 a.m.

3.

4.

Date Time 5.

Further details of Directors who are standing for re-election and reappointment are shown on pages 21 and 23 of this Annual Report.

020

Annual Report 2010

Dato Wira Syed Abdul Jabbar bin Syed Hassan

Bakry bin Hamzah

021


Profile of DirectorsDatO WiRa SYeD aBDul JaBBaR Bin SYeD HaSSan Chairman / Independent Non-Executive Director YBhg. Dato Wira Syed Abdul Jabbar bin Syed Hassan, a Malaysian aged 71, was appointed as Chairman of Tradewinds (M) Berhad on 29 October 2008. He also sits as Chairman of the Executive Committee as well as Nomination and Remuneration Committee of the Company. He holds a Bachelor of Economics degree from University of Western Australia and a Masters of Science degree in Marketing from University of Newcastle-Upon-Tyne, United Kingdom. YBhg. Dato Wira Syed Abdul Jabbar was previously the Chief Executive Officer of the Kuala Lumpur Commodity Exchange, Executive Chairman of Malaysia Monetary Exchange and Executive Chairman of the Commodity and Monetary Exchange. YBhg. Dato Wira Syed Abdul Jabbar is currently the Chairman of MMC Corporation Berhad, MARDEC Berhad, Padiberas Nasional Berhad, Tradewinds Plantation Berhad and Aliran Ihsan Resources Berhad. He is also a board member of Star Publications (M) Berhad and KAF Investment Bank (M) Berhad. He has attended all six Board Meetings held during the financial year under review. YBhg. Dato Wira Syed Abdul Jabbar no longer holds any shares in the Company. Details of his share movement are as disclosed on page 71 of this Annual Report. He has no family relationships with any director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any. BaKRY Bin HamZaH Group Managing Director / Non-Independent Executive Director

Encik Bakry bin Hamzah, a Malaysian aged 53, was redesignated as Non-Independent Executive Director and Group Managing Director of Tradewinds (M) Berhad on 3 February 2010. Previously, he was appointed as Non-Independent Non-Executive Director on 9 April 2007. He also sits as a member of the Executive Committee of the Company. He had previously served as a director of the Company from 22 August 2002 to 24 March 2003 before being appointed the Chief Operating Officer on 1 April 2003. He later became the Chief Executive Officer of the Company effective 1 December 2005 until 8 April 2007. Encik Bakry holds a Bachelor of Arts degree from University Malaya and began his career as Assistant Director of Marketing in Lembaga Padi dan Beras Negara. Subsequently, he became the Operations Manager of Bukhary Holdings Sdn Bhd before joining Juara Niaga Sdn Bhd as General Manager, prior to being the Head of Business Development of Aero Mutiara Sdn Bhd in 1995. He was also the Executive Director of Latitude Tree Holding Berhad and a Director of Oriental Food Industries Berhad and MARDEC Berhad. He is currently a director of Tradewinds Plantation Berhad and Managing Director of Padiberas Nasional Berhad. Encik Bakry has attended all the six Board Meetings held during the financial year under review.

He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

022

Annual Report 2010

Syed Azmin bin Syed Nor

Ooi Teik Huat

Chuah Seong Tat

023


SYeD aZmin Bin SYeD nOR Non-Independent Non-Executive Director Tuan Syed Azmin bin Syed Nor, a Malaysian aged 47, was appointed to the Board of Directors of Tradewinds (M) Berhad on 28 September 2005. He also sits as a member of the Audit Committee of the Company. He holds a Bachelor of Science degree, majoring in Business Management from University of Berkeley, USA. Upon his return in 1984 until 1993, he was involved in several private business ventures including trading in commodities, housing development, manufacturing, stock broking and international trading. In 1997, he was appointed as Executive Director of CN Asia Corporation Berhad until 2001. He was also involved in the incorporation of Commerce Dot Com Sdn Bhd which undertook one of the Governments electronic commerce projects, e-Perolehan. He currently sits on the boards of Amtek Holdings Berhad, Engtex Group Berhad, Tradewinds Corporation Berhad, United Malayan Land Berhad and several private limited companies. Tuan Syed Azmin has attended all six Board Meetings held during the financial year under review. Tuan Syed Azmin is the brother of YBhg. Tan Sri Dato Seri Syed Mokhtar Shah bin Syed Nor, who holds indirect major shareholding in the Company. His interest in the securities of the Company or its subsidiaries is as disclosed on page 71 of this Annual Report. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

cHuaH SeOnG tat Non-Independent Non-Executive Director Mr. Chuah Seong Tat, a Malaysian aged 60, was appointed to the Board of Directors of Tradewinds (M) Berhad on 23 June 2006. He also sits as a member of the Executive Committee of the Company. He obtained his Bachelor of Applied Science (Hons) degree from Universiti Sains Malaysia and a Masters of Business Administration from the Australian Graduate School of Management, University of New South Wales. Currently, he is also a Director of Tradewinds Plantation Berhad and Padiberas Nasional Berhad. He had also held prominent positions in various companies such as Director in Bukhary Sdn Bhd and KHSB Marketing Sdn Bhd, an Executive Director in Botly Securities Sdn Bhd, Chief Dealer in UMBS Securities Sdn Bhd, Senior General Manager in Alor Setar Securities Sdn Bhd, Corporate Finance Officer in Asian International Merchant Bankers Berhad and as an engineer in Intel Technology Sdn Bhd and NS Electronics Malacca Sdn Bhd. Mr. Chuah has attended all six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

OOi teiK Huat Independent Non-Executive Director

Mr. Ooi Teik Huat, a Malaysian aged 51, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. He is the Chairman of the Audit Committee and is also a member of the Nomination and Remuneration Committee. Mr. Ooi Teik Huat is a member of Malaysian Institute of Accountants and CPA Australia and holds a Bachelor of Economics degree from Monash University, Australia. He started his career with Messrs Hew & Co (now known as Messrs Mazars), Chartered Accountants before joining Malaysian International Merchant Bankers Berhad (now known as MIMB Investment Bank Berhad). He subsequently joined Pengkalen Securities Sdn Bhd (now known as PM Securities Sdn Bhd) as Head of Corporate Finance, before leaving to set up Meridian Solutions Sdn Bhd where he is presently a director. Mr. Ooi Teik Huat is also a director of Tradewinds Plantation Berhad, MMC Corporation Berhad, DRB-Hicom Berhad and Zelan Berhad. Mr. Ooi Teik Huat has attended all six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

024

Annual Report 2010

Khalid bin Sufat

Datuk Hj. Ismail bin Hj. Hashim

025


KHaliD Bin SuFat Independent Non-Executive Director

DatuK HJ. iSmail Bin HJ. HaSHim Non-Independent Non-Executive Director YBhg. Datuk Hj. Ismail bin Hj. Hashim, a Malaysian aged 66, was appointed to the Board of Directors of Tradewinds (M) Berhad on 11 March 2010. He holds a Diploma in Accountancy from RIDA College, Petaling Jaya (now known as Universiti Teknologi MARA). YBhg. Datuk Hj. Ismail is also a Fellow of the Chartered Institute of Management Accountants, United Kingdom. He had also attended the Management Development Program at Harvard Business School, Boston, USA. YBhg. Datuk Hj. Ismail began his career at Shell Marketing Malaysia as a Management Trainee and subsequently joined ICI Group of Companies in Malaysia, Singapore, Indonesia, United Kingdom and Canada in 1966 as an Accountant and Project Investment Analyst. In 1973, he then joined Tower Group of Companies for South East Asia Timber Industry as Director of Finance for South East Asia. YBhg. Datuk Hj. Ismail joined PETRONAS Group of Companies as Financial Controller in 1974 and was later appointed to the Main Board of PETRONAS as Executive Director, Finance from 1975 to 1986; as Vice President, Finance, Planning and Information Services until 1990 and as Senior Vice President, Downstream until 1994. He served as Non-Executive Director, ANCOM Berhad from 1995 to 1997 and became the Chief Executive Officer of ANCOM Energy & Services Sdn Bhd until his retirement in 2004. YBhg. Datuk Hj. Ismail is currently an independent board member of Felda Holdings Bhd and Sarawak Economic Development Corporation. YBhg. Datuk Hj. Ismail has attended all four Board Meetings held since his appointment and for the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/ or substantial shareholders of Tradewinds (M) Berhad. He has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

Encik Khalid bin Sufat, a Malaysian aged 55, was appointed to the Board of Directors of Tradewinds (M) Berhad on 1 April 2009. He also sits as a member of the Audit Committee of the Company. An accountant by profession, Encik Khalid is a Fellow of Association of Chartered Certified Accountants, United Kingdom, a member of the Malaysian Institute of Accountants and the Malaysian Institute of Certified Public Accountants. He has vast experience in the banking industry and has held several senior portfolios including Managing Director of Bank Kerjasama Rakyat Malaysia Berhad, General Manager, Consumer Banking of Malayan Banking Berhad and Executive Director of United Merchant Finance Berhad. He had previously managed Tronoh Mines Malaysia Berhad, Furqan Business Organisation Berhad and Seacera Tiles Berhad as Executive Director, Deputy Executive Chairman and Group Managing Director, respectively. Currently, he is a board member of Bina Puri Holdings Berhad, Malaysia Building Society Berhad, UMW Holdings Berhad and Chemical Company of Malaysia Berhad. Encik Khalid has attended five out of six Board Meetings held during the financial year under review. He does not hold any interest in the securities of the Company or its subsidiaries. He has no family relationships with any Director and/or substantial shareholders of Tradewinds (M) Berhad. He also has no conflict of interest in any business arrangement with the Company and has no conviction for any offence within the past ten years other than traffic offences, if any.

026

Annual Report 2010

A

Bakry bin Hamzah Group Managing Director / Managing Director Rice Division chan Seng Fatt Chief Executive Officer Plantation Division tuan ngah bin tuan Baru Chief Executive Officer Sugar Division

B

mohd nazri bin Shariff Group Chief Financial Officer mohd azanuddin bin Salleh Senior General Manager Finance Zainudin bin Hashim Senior General Manager Corporate Planning

A

from left to right: Bakry bin Hamzah (seated), Tuan Ngah bin Tuan Baru and Chan Seng Fatt

B

Group Management

from left to right: Zainudin bin Hashim, Mohd Nazri bin Shariff and Mohd Azanuddin bin Salleh

027


C from left to right: Zurkarnain bin Mohd Yusoff, Sabrina binti Yon, Ibrahim bin Husian and Lim Yin Meng

C

Zurkarnain bin mohd Yusoff Senior General Manager Commodity & Derivatives Management Sabrina binti Yon General Manager Corporate Communication ibrahim bin Husian General Manager Project / Operations lim Yin meng General Manager Group Internal Audit

from left to right: Azmin bin Abidin, Zainal Rashid bin Ab Rahman, Ismail bin Mohamed Yusoff and Ainul Arfah binti Baharim D

D

ismail bin mohamed Yusoff Senior General Manager Group Managing Directors Office / Investor Relations azmin bin abidin General Manager Human Resources & Administration ainul arfah binti Baharim Assistant General Manager Risk Management Zainal Rashid bin ab Rahman Company Secretary

THe GROuP WILL Be DeVeLOPInG

24,491hectares of its plantable reserves over the next 4 years

The Group aims to increase local paddy purchase domination to

within the next 3 to 5 years

50%

Key Strategies

market leadership

030

Annual Report 2010

Chairmans Statement

031


Our Dearest Shareholders,From a total global population of 3 billion in the 1960s, the world has grown to accommodate almost 7 billion people now. Projections recently issued by the United Nations suggest that world population by 2050 could reach 10 billion. As the worlds population keeps on increasing rapidly, the food and commodity businesses are becoming increasingly strategic to nations worldwide. With ever-changing global environment, matching the demand for food with supply has always had its sets of challenges. To add to these challenges, the impact of higher commodity prices is threatening the wellbeing of the less developed economies that spend more than 50% of their household income on basic necessities. Despite the turbulence in the international food and commodity prices, the impact to the livelihood of Malaysians so far is mild by comparison. This is attributable to the relentless efforts by our Government to ensure ample food at affordable prices for our growing nation. Tradewinds (M) Berhad (TWM) Group is working diligently to support our Governments efforts. Today, we manage more than 60% of Malaysias rice supply and almost 50% of its sugar supply. Hence, we would always do our best to keep supplies, as well as prices, stable. As we continue our journey in the food and commodity business to deliver outstanding value to all our stakeholders, we are proud to conclude the year 2010 with the bestever performance of the Group. On this note, on behalf of the Board of Directors (the Board) of TWM, it is my pleasure to present to you the Annual Report and Audited Financial Statements of your Group and Company for the financial year ended 31 December 2010. OuR Financial PeRFORmance TWM Group recorded its highest-ever profit before tax (PBT) of RM806.6 million for the financial year ended 31 December 2010, compared to RM349.2 million recorded in 2009. The Groups revenue also reached a record level of RM5.6 billion for the financial year ended 31 December 2010 compared to RM2.1 billion in 2009. This significant increase was mainly due to the maiden inclusion of Padiberas Nasional Berhads (BERNAS) full years results. On a backdrop of stable cost of international rice and increased volume of sales compared to the year before, BERNAS recorded a PBT of RM245.8 million which is its highest-ever PBT recorded. For the Plantation Division, the operating environment was generally favourable in 2010 though we were not spared the adverse effects of the El Nino and La Nina phenomena that had affected our fresh fruit

The Group recorded its highest-ever PBT of

RM806.6 millionfor the FYe 2010

032

Annual Report 2010

bunches (FFB) production nationwide. Despite all these, I am pleased to report that the Plantation Division recorded a 34.2% increase in revenue to RM1.025 billion whilst its PBT grew to RM335 million from RM92.9 million in the previous year. This represents the highest PBT ever recorded by the Plantation Division since it came into existence in 2006. Sugar has been one of the most volatile commodities in recent years. In 2010 itself, we witnessed the price of raw sugar fluctuating from a low of US14.5 cents per lb to an all-time-high of US34.8 cents per lb towards the end of 2010. However, despite this volatility, the Sugar Division recorded a 38% increase in revenue to RM1.35 billion and a 97% increase in PBT to RM266.5 million. This is the best performance of the Sugar Division in its 45 years of operations. DiViDenD Based on the record-breaking performance in 2010, we declared and paid an interim dividend of 20 sen per share less 25% income tax in February this year, while another 20 sen per share less 25% income tax will be recommended to you for your approval at this forthcoming 37th Annual General Meeting, thus giving a total dividend per share of 40 sen. This is more than double the 15 sen per share declared for 2009.

cORPORate DeVelOPmentS On 20 January 2010, our Company completed the acquisition of an additional 22.24% equity in BERNAS following the successful completion of the Mandatory General Offer in December 2009, taking the Companys interest in BERNAS to 72.57%. The TWM Group is now one of the largest food and commodity groups listed on the Main Market of Bursa Malaysia Securities Berhad. As I mentioned in my letter in the last years annual report, the acquisition of BERNAS was expected to generate synergies amongst the divisions of the Group. I am pleased to report that plans have been implemented to achieve such synergies. In May 2010, we relocated the corporate office, together with our Plantation, Sugar and Rice divisions under one roof in Kuala Lumpur. We have also restructured the corporate service at the holding company level to centralise the services for better coordination and harmonisation of plans and operations. Efforts to further streamline the operations and realise the synergies within the enlarged Group are still ongoing.

Tradewinds Groups RevenueRM billion

5.6

5 4 3 2.1 2 1 0 2009 2010

RM5.6billion

033


On 25 April 2011, BERNAS announced that the Government has agreed to extend the BERNAS Agreement for a period of 10 years commencing from 11 January 2011 to 10 January 2021. This extension is a reflection of the Governments confidence in BERNAS for its role in ensuring food security and price stability in the country. The effectiveness of BERNAS role is most evident in 2007/2008 when the international rice prices increased by more than double during the period. In Malaysia however, the increase in rice price was only between 30% to 50% and the regulated Super Tempatan 15%s price remained unchanged. There was never a shortage of rice in the country at that time. The stability in prices and supply was due to BERNAS effective management in procurement and distribution with the support from the Government to increase the national rice stockpile. BERNAS, as the leader in the domestic rice industry was also invited to participate in the Economic Transformation Programme (ETP) which was launched in September 2010. The ETP is part of the Governments initiatives to transform Malaysia into a high income economy by 2020. One of the initiatives is the Entry Point Project 10 (EPP10) aimed to scale up and strengthen the productivity of paddy farming in the Muda area, Kedah. Following this, BERNAS signed an MOU with Muda Agricultural Development Authority (MADA) in March 2011 to undertake commercial activities in relation to the EPP10.

As reported last year on 30 September 2009, Prisma Spektra Sdn Bhd, a wholly-owned subsidiary of Tradewinds Plantation Berhad entered into a conditional share sale agreement with Semi Bayu Sdn Bhd to purchase the entire issued and paidup ordinary share capital of MARDEC Berhad (Mardec), an investment holding company involved in the processing and trading of natural rubber as well as the manufacturing of value-added rubber products. The proposed acquisition of Mardec is conditional upon the fulfilment of various conditions that are still pending. However, we are confident that this acquisition will be completed within this year. At the shareholding level, FELDA emerged as a new substantial shareholder when its whollyowned subsidiary, Felda Global Ventures Holdings Sdn Bhd acquired a 20% equity in TWM from Grenfell Sdn Bhd in January 2010. We believe that with FELDAs vast business ventures in agro-based industries, there could be opportunities for both parties to explore for mutual benefits. OutlOOK FOR 2011 The prospects for our business in 2011 are encouraging. Malaysias economy is forecasted to grow by 5% to 6% this year after recording a growth of 7.2% in 2010. This growth will provide an impetus for our businesses to grow and continue to perform well in 2011. In addition, local

034

Annual Report 2010

paddy and international rice prices have stabilised in the past few months and we expect this stability to sustain for the rest of the year. With regards to sugar, our fixed-price long term contract will continue until the end of the year allowing us to significantly protect our sales margin amidst a very volatile international sugar market. Crude palm oil (CPO) prices are also at a level which is favourable to our Plantation Division. For the first quarter of 2011, CPO prices have been higher than the average recorded in 2010. If this continues, our Plantation Division is likely to record another excellent year. However, we will continue to focus on improvements in efficiency and productivity through various initiatives and programmes planned for this year. Plans are already in the pipeline to construct three additional palm oil mills, with the first set to take off in 2011 at Kuala Suai, in Miri, Sarawak. We are also looking at upgrading selected rice mills nationwide as well as our sugar storage capacity. With improvements in production and storage capacity, we are looking at expanding our market share both locally and abroad. At present, only 30% of our sugar production is exported and

opportunities are there for the Group to develop its export business and raise total contribution from overseas sales. We will also continue our efforts to increase local rice market share via Program Rakan Ladang (PRL) which has contributed positively in 2010. Through PRL, we managed to improve our local paddy market share from 30.8% in 2009 to 32.2% in 2010. The emphasis for 2011 will also be on yield improvements. The graded rice recovery (GRR) at our mills improved by 1% in 2010 compared to the year before, even with generally lower quality paddy received caused by floods and diseases. With further capital investments to modernise our mills and through strategic collaborations, we are confident that the GRR will improve further. Similarly, our Plantation Division is showing an uptrend in crop yield and oil extraction rate. Overall, 2011 is expected to be another good year for our business. However, we are very much aware of the challenges ahead and hence, have prepared ourselves for any eventualities. We believe our strengths in areas of procurement, production and market development will enable us to expand our business and continue to create value for you.

035


The TWM Group is now one of the largest food and commodity groups listed on the Main Board of Bursa Malaysia Securities Berhad.aPPReciatiOn & RecOGnitiOn On behalf of the Board, I would like to extend our appreciation to the Government for their confidence in the Group in the management of the essential commodities in the country. We would also like to thank all the relevant agencies for their guidance and support in all areas of our business operations. Our appreciation also goes to our business associates, financiers and partners for working steadfastly with us to take the Group to greater heights. Our success would not have been possible without the resolve and dedication of our management and employees thank you for your sacrifices and contributions. My utmost gratitude goes to you, our shareholders for your continued support and faith in the Board. Last but not least, I wish to thank my esteemed colleagues on the Board for their wisdom and counsel. Our sincere appreciation also goes to YBhg Datuk R Sharifuddin Hizan bin R Zainal Abidin for his invaluable contributions during his tenure as a member of the Board. We look forward to continuing support from all our stakeholders as we move along the journey to nurture the growth of the Group.

DatO WiRa SYeD aBDul JaBBaR Bin SYeD HaSSan Chairman

036

Annual Report 2010

Review of Operations by the Group Managing Director

037


I am pleased to present the review of operations for Tradewinds (M) Berhad (TWM) for the financial year 2010. It has been a remarkable year for Tradewinds Group (Group) and it is our sincere hope that we have done our stakeholders proud.For the financial year 2010, the Group recorded profit before tax (PBT) of RM806.6 million. It is the highest PBT ever recorded by the Group and excellent performance is recorded across all divisions.

Rice

Plantation

Sugar

038

Annual Report 2010

Rice DivisionThe year 2010 marks the first full years inclusion of Padiberas Nasional Berhad (BERNAS) into the Group and it has truly been a promising start. BERNAS benefited greatly from a relatively conducive business environment in 2010 compared to those of 2008 and 2009. Globally, the year 2010 saw a firmer supply of rice which had caused a drop in the international price of rice in contrast to the significant increase in other major food grains such as maize and wheat. The benchmark Thai White Rice 100% B was trading at approximately USD600 per tonne at the beginning of 2010 but dropped to USD460 per tonne in June. However, strong demand combined with supply concerns arising from the massive floods hitting Thailand and other producing nations caused the price to gradually increase before closing at approximately USD560 per tonne in December 2010. Volume of rice sold by BERNAS grew marginally by 1.6% to 1.33 million tonnes in 2010 compared to 1.31 million tonnes in 2009. However, revenue dropped to RM3.2 billion in 2010 compared to RM3.25 billion recorded in the previous year. By managing demand and supply well, BERNAS was able to improve its operating margins. For the financial year 2010, BERNAS PBT grew by 3% to RM245.8 million from RM238.3 million posted in 2009. During the year under review, BERNAS share of local paddy purchase increased to 32.2% compared to 30.8% in 2009 despite the 7% drop in the overall national paddy production volume caused by floods and diseases. This increase was mainly due to the successful implementation of Program Rakan Ladang (PRL) with the farmers and our strategic partnership programme of Skim Upah Mengering dan Kisar (SUMK) with Bumiputera millers.

039


Reaching out In reaching out to the community, we have donated staples like rice, sugar, bread and other provisions to ease the financial burden borne by orphanages and needy families throughout the country.

040

Annual Report 2010

Plantation DivisionThe year 2010 was a spectacular year for the Plantation Division. The Divisions revenue grew by 34.2% to RM1.025 billion in 2010 compared to RM758.9 million registered previously. The increase in revenue was mainly due to higher average crude palm oil (CPO) price in 2010 at RM2,701 per tonne against RM2,236 per tonne recorded in 2009. The adverse weather conditions and flood have affected the national average fresh fruit bunches (FFB) yield and oil extraction rate (OER). Peninsular Malaysia was severely affected with average FFB yield declining by 7.5% followed by Sabah and Sarawak at 4.7% and 2.6%, respectively. The Divisions production of FFB in 2010 however was almost unchanged at approximately 1.36 million tonnes. In addition, we also achieved a higher yield of 17.07 tonnes per hectare in 2010 compared to 16.95 tonnes per hectare recorded in the previous year. On the milling activities, CPO production volume increased to 293,717 tonnes from 288,400 tonnes previously recorded in 2009. Driven mainly by the increase in CPO price, the Plantation Divisions PBT increased significantly to RM335.0 million in 2010 compared to RM92.9 million recorded in the previous year. The Division has a landbank of 151,901 hectares nationwide of which 87,560 or 57.6% are located in Sarawak, 11,302 hectares or 7.4% in Sabah and the remaining 53,039 hectares or 34.9% in Peninsular Malaysia. About 104,837 hectares or 69% has been planted with oil palms and rubber trees leaving another 12,235 hectares or 8.1% still under development. As at the year-end 2010, the Divisions total remaining reserves stood at 24,491 hectares which will be developed over the next four years.

041


RSPO certification During the year, the Group moved a step closer towards RSPO certification.

042

Annual Report 2010

Sugar DivisionDuring the year 2010, the domestic selling price of sugar was adjusted from RM1,540 per tonne in January to RM1,940 per tonne in December. Such a move was seen as necessary in view of the extreme volatility in the price of raw sugar which saw the price began at US29.0 cents per lb in January 2010 before bottoming at US14.5 cents per lb in May, only to surge erratically thereafter, building up to peak at US34.8 cents per lb in December 2010. With the Sugar Divisions revenue surpassing the RM1.0 billion mark, 2010 was truly a remarkable year. Volume of sales in 2010 was 731,882 tonnes which generated revenue of RM1.35 billion for the Division compared to lower volume of sugar sold in 2009 at 666,984 tonnes, at a value of RM977.2 million. The increase in volume was recorded for both the domestic and export market sales which grew by 5% and 25%, respectively. We can definitely attribute the good sales performance to the ability of the Division to adapt to the growing needs of the market. As a result, PBT almost doubled to RM266.3 million from RM135.0 million recorded in 2009.

043


Our raw sugar melting capacity at CSR is now at 2000 tonnes per day compared to 150 tonnes in 1965.

044

Annual Report 2010

Facilities & infrastructure and Quality management The volatile nature of commodity prices is undoubtedly the main challenge of a commoditybased Group like ours - more so in recent years when we have seen the international prices of all three of our products fluctuating significantly. However, this will not distract us from focussing on improvements to our mills, refineries and warehouses to increase efficiency and reduce operational unit costs. On the Rice Division, we have initiated a few improvement programmes in 2010 specific on increasing milling capacity and more efficient operating systems. These include the construction of gantry crossing railway track for paddy pneumatic transport system and other infrastructure works at our rice mill in Arau, Perlis. In addition, we have also undertaken the upgrading of incoming electricity supply and control room for the 20 tonne-per-hour central packaging plant in Bukit Raya, Kedah. Moving on to our Plantation Division, we have implemented many quality initiatives and programmes spearheaded by our Mill Engineering Unit and Total Quality Environmental Management Strategic Business Unit (TQEM-SBU) together with the respective Joint Consultative Committees (JCC). As a result, the OER for CPO improved from

21.21% in 2009 to 21.47% in 2010. This compares favourably with the national OER of 20.45%. The extraction rate for palm kernel has also improved to 5.32% from 5.25% over the same period. With respect to quality management, we are proud to announce that our Sg. Kachur Palm Oil Mill and Ulu Sebol Palm Oil Mill earned their certifications for ISO 9001:2008 on 16 July and 6 September 2010, respectively. For our Sugar Division, we have completed the additional melting facility at one of our sugar refineries, Central Sugars Refinery Sdn Bhd (CSR), in September 2010. With this additional facility, raw sugar melting capacity at CSR is now 2,000 tonnes per day. This is far cry from the 150 tonnes per day capacity when CSR began operations way back in 1965. All these improvements signify our commitment for market growth amidst the challenging market conditions in which we operate. Our successes thus far are attributable to our firm focus on product quality, timely delivery and consistent cooperation with our major customers with a sole view to improve the value of our services. Research & Development (R&D) We firmly believe that R&D is a major source of long term productivity growth and will provide the Group with a sustainable competitive advantage in

045


the future. In the Rice Division, the Universiti Putra Malaysia-BERNAS laboratory has been undergoing the process to obtain ISO 170025 accreditation in 2010. Once accredited, the laboratory which is recognised as one of its kind in the country will be able to conduct rice analysis for BERNAS own purpose or other commercial entities including contract research services. Indeed, R&D has played a major role in positioning Malaysia as a leader in the global palm oil industry. For our Plantation Division, specific R&D projects have been conducted in collaboration with the Malaysian Palm Oil Board (MPOB) as well as Universiti Putra Malaysia (UPM) which include improvements on agronomic management and the determination of suitable protocols for the establishment of leguminous cover crops in peat soils. Another interesting joint-research project with UPM involves research into phosphate requirements for peat planting. Human capital Development We have embarked on a continuous training programme both in-house and external to equip our employees with the relevant skills to complement the expectations of the Group. To enhance our human capital development more effectively, we have revamped our training needs and programmes, reviewed the training hours allocated to employees and enhance our job rotation programme and succession planning. We

have also adopted the job analysis improvement initiatives that identify the fit between the individual employees and job requirements. closing Remarks Although we are pleased with our performance to date, we cannot rest on our laurels. TWM will remain committed to its corporate and social mandates. We will continue to seek improvements in all facets of our operations while remain committed to our sustainability agenda. We have had a fantastic 2010 and I am appreciative of all the efforts, commitments and show of unity and strength demonstrated by our workforce out in the fields and in the office who have kept the positive energy permeating throughout the Group. The bountiful harvest reaped in 2010 has put us in a good financial standing to invest further in expanding and strengthening our market share. The remarkable achievements and the challenges we successfully overcame have also given us newfound confidence to take the Group to the next level. I believe that we are now consolidated in our shared mission. As a team, we now look forward to another successful year in 2011.

BaKRY Bin HamZaH Group Managing Director

046

Annual Report 2010

Corporate ResponsibilityAs an agribusiness organisation, Tradewinds (M) Berhad (TWM) recognises that its business conducts can and will have a profound impact on the environment, its workforce, society and the local communities. Tradewinds Group (Group) therefore takes its corporate social responsibility seriously and is committed to the continuous improvements of our policies, action plans and work systems across the Group to ensure that all aspects of our social responsibilities are considered and addressed. Although TWM adheres to the principles of creating and sustaining long term value for the shareholders, our Board of Directors do place significant emphasis on corporate social responsibility and it is well reflected in the development and implementations of appropriate policies. Our corporate social responsibility stresses on the importance of employee development, health and safety, community involvement, good ethical behaviour and care for the environment. emPlOYee DeVelOPment These days, it is common for organisations to claim that people are their core assets. However, at TWM, people have been the centre of our policies and strategies long before the phrase entered the lexicon of corporate language. We have always envisaged that as our Group progresses, we will be able to disseminate and experience the benefits of our corporate social responsibility programmes throughout the Group. Over the years, we have invested in providing our workers with housing, water and electricity,

047


schools, mini parks, shops and other infrastructure developments aimed at enhancing the quality of life in their communities. HOuSinG & cOmmunitY inFRaStRuctuRe The Group has worked closely with all its subsidiaries in the design and construction of houses and quarters for the sugar refinery workers at both of our Central Sugars Refinery Sdn Bhd (CSR) and Gula Padang Terap Sdn Bhd (GPT) refineries. At Tradewinds Plantation Berhad (TPB), our community infrastructure development programme goes a step further into the design and building of complete mini township consisting of mosques, community halls and sundry shops. Furthermore, we provide electricity to all the homes in our plantations and we have taken great care to ensure 24-hours of uninterrupted electricity to enable operations to continue without disruptions. Equally, we want to ensure that our workers are comfortable and productive not only at work but also at home with their families. We consider this vital to enable the development of healthy and thriving communities in our plantations. A good example of these would be the Kuala Suai Estate in Miri, the Gemilang and Melur Estates in Gedong and the Jaya Estate in Kota Tinggi.

FeStiVitieS tO FOSteR tieS The Group has great pleasure in providing the venues, platforms, time and space for our workforce to celebrate their cultural and religious festivities. We believe in hard and smart work but we also enjoy giving rewards and recognitions when due while at same time being able to provide our people with the opportunity to enjoy celebrating their festivities. These gatherings also provide a great opportunity for us to foster good relationships and understanding between the different cultures and religions in our communities, in line with the spirit of 1Malaysia. It has been very rewarding when we consider the depth of appreciation we have created between the cultures and festivals of East and West Malaysia. It has made us appreciate the rich diversities we have in our country alone. Events such as Annual Sports Meet, Workers Day, Family Day, Hari Raya Puasa celebrations, birthdays and Annual Dinners are much awaited calendar events for our staff. They represent the opportunity for everyone to meet and enjoy each others company as contemporaries and members of the same community. Our Sports Meets are becoming good arenas for comradeship and healthy competition to evolve and we have diehard competitive employees always waiting for the next meet. We believe in providing and participating in these activities as we are aware that the multiplier effects of goodwill, comradeship and team spirit will translate into success and returns for the Group.

048

Annual Report 2010

OuR cOmmitment tO OccuPatiOnal SaFetY anD HealtH Occupational Safety and Health (OSH) is becoming top priority in the Group. It stems from the conviction that all accidents and injuries are preventable through the establishment and compliance of health and safety policies. It is a guiding principle embraced by all staff of TWM to work as a team to inculcate a work safe culture within the Group. To this end, and as an initiative towards the RSPO requirement for OSH, we recently initiated the OHSAS 18001:2007 in our Melur Gemilang Palm Oil Mill. We have great hopes for the success of this initiative. We want to inculcate proactive involvement and compliance and create OSH awareness amongst our estate managers and employees. We will do this through a few training sessions by introducing the necessary documentations, familiarisation and compliance with audits, reviews, processes and records needed to substantiate the award of the certification. Therefore, with all that needs to be achieved, choosing Melur Gemilang Palm Oil Mill was a practical one. This is our first initiative with OSH certification and to facilitate a smoother and faster transference and evolution of Occupational Safety and Health awareness, we decided to start with a mill that is nearest to an OSH Monitoring Unit. To date, this has proven to be the right decision as we are still on track to complete the process within the stipulated 12 to 15 month period. The success of this project and all other health and safety initiatives are closely monitored by our inhouse OSH Department, headed by a dedicated OSH officer who is registered with the Department of Occupational Safety and Health (Ministry of Human Resource). OuR DeDicatiOn FOR Human caPital DeVelOPment The Group aims to attract, keep and engage the highest caliber of employees and once in, to continue to encourage their development. Thus, an environment that fosters learning, innovation and collaboration is critical to the Groups success. TWM encourages and provides educational and training programmes throughout its different subsidiaries. To enable this to happen, a significant proportion of our subsidiaries annual operating budgets are allocated to human capital development. Furthermore, as an ongoing initiative, the Tradewinds Plantation Academy provides various programmes to TPBs workforce to update and equip them with the necessary new skills and knowledge to add value to their handson experience. The Group will endeavour to continue creating value through people development to meet not just the current requirements but also future business expectations. Programmes covering a broad range of subjects such as corporate governance, compliance, finance, management, leadership, quality and productivity improvements, risk management, information technology and communication skills were conducted successfully during the year under review. Subsequent results from those who participated have been positive and encouraging.

049


The Group will aim to do the right things to ensure sustainability of our business for all our stakeholders.cOmmunitY DeVelOPment education Education has long been the core of the Groups community relations activities. The Group has been actively involved with certain public and private educational organisations to facilitate young and bright students who do not have the financial means to further their studies. In 2010, the Group has contributed RM15 million to Albukhary International University, a non-profit institution for higher learning catering for the poor and less privileged to pursue higher education. The newly-completed campus in Alor Setar has opened its doors for students from Malaysia and overseas based on family income and academic excellence. Our subsidiary BERNAS has been working closely with the daily newspaper, Berita Harian, to perpetuate the Program Skor A aimed at the children and orphans of BERNAS and the Albukhary Foundation. We are proud to announce that we now have 543 students, out of which 516

students are from the paddy farming community and another 27 consisting of young orphans from the Albukhary Foundation. This programme not only provides the young students with the financial assistance but equally important, it gives them access and opportunity to appreciate and learn examination techniques critical to achieving good results in examinations. In addition to the above, all our subsidiaries now provide placements for students to undergo internship programmes. These internship programmes are necessary as they provide these inexperienced young potential professionals with the solid foundation needed to build their capabilities and strength. It also allows them the opportunity to experience a working environment and to accumulate work experience. community assistance As part of our community service, we are proud that one of the subsidiaries of TPB, Binu Plantation Sdn Bhd worked hand in hand with the Ministry of Rural and Regional Development to provide electricity to three long houses within the vicinity of our Binu Estate in Sarawak. This has created plenty of goodwill and community spirit between our neighbours and us. The goodwill and good publicity have subsequently attracted local labour force potential.

050

Annual Report 2010

We are honoured that we had the opportunity to lend a helping hand to some of the 30,000 farmers in Kedah and Perlis who were traumatised economically and personally by the devastating floods that took the two states by surprise last November. We promptly sent a team of volunteers to the affected area to provide relief assistance including donations in the form of rice and other necessities. Programmes for the Farmers TWM is equally concerned for those who supply us with agricultural produce. BERNAS has specially developed the Program Rakan Ladang or better known as the PRL programme in December 2007 to facilitate the welfare of the paddy farmers who sell their paddy directly and entirely to BERNAS.

BERNAS has made all this possible by the methodology and technical training, financial and farm schemes that they have introduced to the paddy farmers. We have encouraged the farmers to work on other paddy fields apart from their own so that productivity and efficiencies are shared throughout the local farming community. enViROnment Roundtable of Sustainable Palm Oil (RSPO)

The Group will continue to foster a sustainable environment for its estates. Our RSPO programmes are progressing well and we are on track to attain the certifications for all our estates. The initiative is laudable and the requirements are tough. However, we are well aware that once we get it, it will represent an affirmation to our customers The purpose of this programme was to help improve and clients that TWM practices environmental and the quality of the grains and the quantity of the social consciousness in our agricultural practices harvest so that these farmers may see the monetary and business activities. Nevertheless, regardless results from their efforts. Indirectly, by helping the of our efforts to obtain the RSPO certifications, paddy farmers, BERNAS, in collaboration with the we want our stakeholders to be assured that we Government will also be able to guarantee the have always been a responsible business entity. We continuous cultivation of our top quality, local rice have been practicing, perfecting and promoting responsible and green work ethics progressively species. long before the RSPO initiatives.

051


OuR cOmmitment tO PReSeRVinG tHe enViROnment At our Plantation Division, as part of our RSPO programmes, we have embarked on a series of Palm Oil Mill Effluent (POME) treatment projects. POME consists of the water-soluble components of palm fruit as well as a variety of suspended materials. It is acidic, has a high Biological Oxygen Demand (BOD) and has to be treated before it can be discharged. Our Retus Estate Complex in Sibu has benefitted from both our recent efforts and we are proud to say that we now have clean water flowing out of the estates. The level of the mills final discharge now meets the standards set by the Department of Environment in Sarawak. A similar project is being implemented at the Trusan Palm Oil Mill and should be completed by the end of 2011. Regardless, be rest assured that we make it a point to monitor the quality and quantity of the water supplies in all our plantations and refineries.

a clOSinG nOte OF aSSuRance Finally, we would like to say that today our subsidiaries are all learning and working with each other towards cost and quality improvements without jeopardising our business or neglecting our environment. Our combined aim is to provide our customers with products that are grown and manufactured ethically, are of the highest quality, at the best price and personifies the values important to TWM Group.

Partnership

global ventures

054

Annual Report 2010

Statement on Corporate GovernanceThe Board of Directors of Tradewinds (M) Berhad (TWM) (Board) is committed in ensuring the highest standard of corporate governance is applied throughout TWM Group (Group). The Board strives to ensure that the principles of Corporate Governance (Principles) as laid down in the Malaysian Code of Corporate Governance (Code) are adhered to by the Group in all aspects of its business dealings displaying integrity and transparency with the objective to safeguard the investments of shareholders and ultimately enhancing shareholder value.

The Board is pleased to disclose the Groups application of the Principles as set out in Part 1 of the Code and pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (MMLR) during the financial year ended 31 December 2010 up to the date of this Statement. DiRectORS the Board The Board is responsible for the overall performance of the Group by maintaining full and effective control over strategic, financial, operational, compliance and governance issues. The Board comprised of members drawn from various professional backgrounds, bringing depth and diversity in experience, expertise and perspectives to the Groups operations. The Group recognises the vital role played by the Board in the stewardship of its directions and operations, and ultimately the enhancement of long-term shareholder value. The Board reserves material matters to itself for decision which include the overall Group strategies and directions, acquisition and divestment policies, approval of major capital expenditure projects, plans and budgets and significant financial matters as well as human capital policies including succession planning for top management. Profile of directors which are presented from pages 20 to 25 of this Annual Report demonstrate their range of experiences and expertise. Board Balance The Board has a balanced composition of executive and non-executive directors. Currently, the Board is made up of an independent nonexecutive chairman, three non-independent non-executive directors, two independent non-executive directors and one non-independent executive director. One non-independent non-executive director has resigned from the Board effective 12 April 2011.

More than one-third of the Board consist of independent directors, which is in compliance with the MMLR. No individual or small group of individuals dominates the decision-making of the Board and the number of directors fairly reflects the best interests of shareholders investment. Collectively, the directors bring a wide spectrum of business acumen, skills and perspectives necessary for the decision-making process. The diversity and depth of knowledge offered by the directors reflect the commitment of the Company to ensure effective leadership and control of the Group. The non-executive directors provide considerable depth of knowledge collectively gained from experiences in a variety of public and private companies. They have the necessary caliber and credibility as well as necessary skills and experiences bringing their judgement on the issues of strategy, performance and resource, including key appointments and standard of conduct. The independent non-executive directors provide unbiased and independent views in ensuring that the strategies proposed by the management are fully deliberated and examined, not only in the interests of the Group but also of other stakeholders. There is a clear division of responsibilities between the roles of the Chairman and the Group Managing Director (GMD) to ensure a balance of power and authority and no individual has unfettered powers of decision. The Chairman is primarily responsible for the orderly conduct and working of the Board whilst the GMD is responsible for the overall operations of the business, organisational effectiveness and the implementation of the Board policies and strategies. The GMD is assisted by the management team in managing the business of the Group on a day-to-day basis. Supply of information Board meetings are scheduled in advance of the new financial year to enable directors to plan ahead and fit the years meetings into their schedules. The Board meets at least six times yearly. Additional meetings are held as and when required. During the financial year under review, six Board meetings were held. Details of attendance are as follows:-

055


Board of Directors Dato Wira Syed Abdul Jabbar bin Syed Hassan Bakry bin Hamzah Syed Azmin bin Syed Nor Chuah Seong Tat Khalid bin Sufat Ooi Teik Huat Datuk Hj Ismail bin Hj Hashim (appointed w.e.f. 11 March 2010) Datuk R Sharifuddin Hizan bin R Zainal Abidin (appointed w.e.f. 22 February 2010) (Resigned w.e.f. 12 April 2011)

number of meetings attended 6 out of 6 6 out of 6 6 out of 6 6 out of 6 6 out of 6 6 out of 6 5 out of 5 5 out of 5

The agenda and full set of Board papers for consideration and information are distributed prior to the Board meetings to ensure that directors have sufficient time to read and be properly prepared for discussion at the meetings. Proposals comprising comprehensive and balanced financial and non-financial information are encapsulated in the papers covering amongst others, strategic, operational, regulatory, marketing and human resource issues to enable the Board to examine both the quantitative and qualitative aspects of the business. Minutes of meetings which include a record of decisions and resolutions of the board meetings are duly recorded and thereafter confirmed by the Chairman of the meetings. All directors have the right to make further enquiries where deemed necessary. The three independent directors are independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgement. They have the caliber to ensure that the strategies proposed by the management are fully deliberated and examined in the long-term interest of the Group as well as the shareholders, employees and customers. Directors have full and unhindered access to the advice and services of the company secretary who is responsible for ensuring that Board meeting procedures are adhered to and that applicable rules and regulations are complied with. The directors may, whether as a full Board or in their individual capacities, obtain independent professional advice, where necessary and appropriate, in furtherance of their duties at the Companys expense.

appointments to the Board The Company has in place a formal and transparent procedure for the appointment of new directors to the Board. All nominees are initially considered by the Nomination and Remuneration Committee (NRC) taking into account the required mix of skills, experiences and other qualities prior to putting forward a recommendation to the Board for its aproval. Re-election In accordance with the provisions of the Companys Articles of Association, all directors who are newly appointed by the Board are subject to re-election by the shareholders at the first Annual General Meeting (AGM) following their appointments. Additionally, at least one-third of the Board shall retire from office at least once in three years but shall be eligible for re-election at every AGM. This provides shareholders the opportunity to evaluate the performances of their directors and also promotes an effective Board. Pursuant to Section 129 of the Companies Act, 1965 (Act), directors over the age of 70 are also required to retire but shall be eligible for reappointment. DiRectORS RemuneRatiOn the level and make up of Remuneration Directors are remunerated at levels which allow the Company to attract and retain directors with the relevant experience and expertise to manage the Group successfully. The remunerations reflect the level of experience and expertise they bring with them and the amount of responsibility undertaken by them.

056

Annual Report 2010

All Non-Executive Directors are paid directors fees which are subsequently approved by the shareholders at the AGM. Procedure The Board, through its NRC, annually reviews the performance of the Executive Director as a prelude to determining his annual remuneration, bonus and other benefits. In discharging this duty, the NRC evaluates the Executive Directors performance against the objectives set by the Board, thereby linking his remuneration to performance. The remuneration of Non-Executive Directors is reviewed by the Board as a whole to ensure that it is aligned to the market and to their duties and responsibilities. Disclosure A summary of remuneration of the Directors (including from companies within the Group) during the financial year under review is as follows:Fees (Rm) Non-Executive Directors Executive Director tOtal 670,823 89,000 759,823 emoluments (Rm) 1,058,814 971,614 2,030,428 Benefits-in-Kind (Rm) 48,950 12,500 61,450 total (Rm) 1,778,587 1,073,114 2,851,701

Note: Inclusive of fees and emoluments received from subsidiaries.

The number of Directors whose total remuneration falls within the following bands is as follows:Range of Remuneration per annum RM1 to RM50,000 RM50,001 to RM100,000 RM100,001 to RM150,000 RM150,001 to RM200,000 RM200,001 to RM250,000 RM250,001 and above number of Directors executive 1 non-executive 2 2 2 3

Notes: 1. The total remuneration includes salaries, bonuses, fees and meeting allowances received from subsidiaries. 2. Tan Gee Sooi and Boo Yew Leng resigned w.e.f. 6 January 2010.

057


SHaReHOlDeRS Dialogue between companies and investors The Board recognises the importance of transparency and accountability to its shareholders and maintains an effective communication policy that enables both the Board and the management to communicate effectively with its shareholders and the public. An important aspect of an active and constructive communication policy is the timeliness in disseminating information to shareholders and investors. In addition to the various announcements made during the financial year under review in respect of corporate developments of the Group, the timely release of financial results on a quarterly basis provides shareholders with an overview of the performance and operations of the Group. Copies of full announcement are supplied to the shareholders and members of the public upon request. The full financial results and announcements made by the Company can also be obtained from Bursa Malaysia Securities Berhad (Bursa Malaysia)s website at www.bursamalaysia.com as well as the Companys website at www.twinds.com.my. The website of the Company also provides convenient access to the latest corporate information of the Group. the aGm The AGM, usually held in June each year, is the principal forum for dialogue with shareholders. Shareholders who are unable to attend are allowed to appoint proxies to attend and vote on their behalf. Members of the Board, senior management of the Group, as well as the Companys auditors are present to answer questions raised during the meeting. Additionally, a press conference is held immediately after the AGM whereby the Chairman briefs the media on the resolutions passed and answers questions concerning the Group. accOuntaBilitY anD auDit Financial Reporting The Board aims to present a balanced and meaningful assessment of the Groups financial performance, position and prospe

Documents

TWM_AR 2010