NOTES TO THE FINANCIAL STATEMENTS

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4 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The operations of the Group is subject to a variety of financial risks, including foreign currency exchange risk, interest rate risk, cash flow risk, market risk, credit risk and liquidity risk. The Group has formulated risk management framework whose principal objective is to minimise the Group's exposure to risk and/or costs associated with financing, investing and operating activities of the Group. Various risk management policies are made and approved by the Board for observation in the day-to-day operations for the controlling and management of the risks associated with financial instruments. The Group's activities expose it to a variety of financial risks, including:

•	foreign currency exchange risk - risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates;
•	interest rate risk - risk that the value of a financial instrument will fluctuate due to changes in market interest rates;
•	cash flow risk - risk that future cash flows associated with a financial instrument will fluctuate.
•	market risk - risk that the value of a financial instrument will fluctuate as a result of changes in market prices.
•	credit risk - risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss; and
•	liquidity risk (funding risk) - risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments.

Market risk

The Group has in place policies to manage the Group's exposure to fluctuation in the prices of the key raw materials and commodities used in the operations. The Group enters into fixed price contracts to establish determinable prices for raw materials and commodities used.

Credit risk

The Group has no major concentration of credit risk and manage these risks by monitoring credit ratings and limiting the aggregate financial exposure to any individual counterparty. The Group extends credit to its customers based upon careful evaluation of the customer's financial condition and credit history.

Liquidity risk

The Group practices prudent liquidity risk management to minise the mismatch of financial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirements of its working capital.

Cashflow risk

The Group is exposed to minimal cashflow risk in view of the healthy cash position.

Foreign currency risk

The Group has a natural hedge to the extent that payments for foreign currency payables is matched against receivables, or whenever possible, by intercompany arrangements and settlements.

5 SEGMENTAL REPORTING

(a)	Primary segment - Business segments
	The Group is principally involved in one business segment which is the production, marketing and distribution of beverage and food products. As such, no information on the Group's operations by business segments is provided.
(b)	Secondary segment - Geographical
	The Group operates in the following geographical areas:

Revenue

Total assets

Capital expenditure

	2004 RM'000	2003 RM'000	2004 RM'000	2003 RM'000	2004 RM'000	2003 RM'000
Malaysia	305,390	316,843	368,210	384,578	6,538	8,033
Singapore	54,411	62,567	18,127	19,657	-	-
Others	13,443	29,219	-	-	-	-
	____________	____________	____________	____________	____________	____________
Malaysia	373,244	408,629	386,337	404,235	6,538	8,033
	==========	==========	==========	==========	==========	==========

In determining the geographical segments of the Group, sales are based on the region in which the customer is located. Total assets and capital expenditure are determined based on where the assets are located.

6 REVENUE

Revenue comprises the invoiced value for the sale of goods, net of sales taxes, rebates and discounts, and after eliminating sales within the Group.

7 DIRECTORS' REMUNERATION

Group

Company

	2004 RM'000	2003 RM'000	2004 RM'000	2003 RM'000
Executive directors:
Salaries and other allowances	491	806	491	806
	____________	____________	____________	____________
Non-executive directors:
Fees	44	54	44	54
Other emoluments	267	130	267	130
	____________	____________	____________	____________
	802	990	802	990
	==========	==========	==========	==========

The estimated monetary value of benefits provided to executive director during the financial year amounted to approximately RM21,000 (2003: RM19,000).

The Directors of the Company in office during the financial year were as follows:

Philip Ng Chee Tat
Tjong Yik Min
Brigadier General (R) Dato' Yahya bin Yusof
Dato' Mohamed Nizam bin Abdul Razak
Tham Chong Kong	(Appointed on 8.06.2004, resigned on 13.08.2004)
Dato' N. Sadasivan A/L N.N. Pillay	(Appointed on 13.08.2004)
Winston Mah Yat Kong	(Resigned on 31.12.2004)
Chan Wai Ming	(Retired on 22.04.2004)
Raja Dato' Hj. Redzwa bin Raja Tun Uda	(Demised on 28.01.2004)

The number of Directors of the Company whose total remuneration during the financial year fall within the following bands are as follows:

Number of Directors

	2004	2003
Executive directors:
RM450,000 - RM500,000	1	-
RM800,000 - RM850,000	-	1
	____________	____________
Non-executive directors:
RM0	3	4
RM5,001 - RM50,000	2	-
RM50,001 - RM100,000	2	3
RM100,001 - RM150,000	1	-
	____________	____________

8 PROFIT FROM OPERATIONS

The following amounts have been charged/(credited) in arriving at profit from operations:

Group

Company

	2004 RM'000	2003 RM'000	2004 RM'000	2003 RM'000
Audit fee:

	Auditors of the Company	202	202	92	90
	Other auditors
	- Current year	18	11	-	-
	- Over provision in prior year	-	(7)	-	-
	Property, plant and equipment written off	1,633	140	376	-
	(Gain)/Loss on disposal of property, plant
	and equipment	(911)	(446)	(428)	372
	Inventories written off	3,573	7,256	645	2,198
	Net allowance/(writeback) for inventories
	obsolescence	4,190	230	1,632	(117)
	Allowance for doubtful receivables:
	- Trade	45	2,063	37	-
	- Others	1,386	953	1,386	498
	- Associated companies	12	638	12	638
	Writeback of allowance for doubtful receivables:
	- Trade	(1,137)	-	-	-
	- Others	(467)	-	(12)
	Bad receivables:
	- Written off	605	36	-	36
	- Recovered	-	(3)	-	(1)
	Royalty, technical and management fees payable
	to ultimate holding company (Note 26)	5,532	4,289	5,532	4,289
	Rental of machinery, equipment and
	motor vehicles payable to:
	- Third party	2,997	2,516	1,559	1,941
	- Subsidiary	-	-	2,733	2,646
	Rental income of machinery and
	equipment receivable from:
	- Immediate holding company (Note 26)	(643)	(622)	-	-
	- Third party	-	(27)	-	-
	Rental of premises payable	381	465	321	398
	Rental income of premises receivable	(483)	(496)	(792)	(876)
	Provision for retirement benefits (Note 23)	647	-	341	-
	Provision for retirement benefit
	no longer required (Note 23)	-	(2,308)	-	(1,754)
	Contributions to Employees' Provident Fund	3,967	4,112	1,771	1,902
	Foreign exchange gain:
	- Realised	(966)	(596)	(950)	(485)
	- Unrealised	(516)	(259)	(481)	(244)
		____________	____________	____________	____________

Staff costs include salaries, bonuses, contributions to Employees' Provident Fund, retirement benefit, executive directors salary and bonus, and all other payroll costs.

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