ACOSTEC-AnnualReport2010 (1.4MB)

Annual Report as at 31 December 2010
Contents
04 07 08 09 10 12 14 17
Notice of Annual General Meeting Statement Accompanying Notice of Annual General Meeting Financial Highlights Group Structure Corporate Information Chairmans Statement Profile of Directors Corporate Social Responsibility
20 23 28 29 31 115 117
Audit Committee Report Corporate Governance Statement Other Information Statement of Internal Control Financial Statements Analysis of Shareholdings List of Properties
Proxy Form
Our Excellence Ensures Ultimate Convenience
4 | Acoustech Berhad (496665-W)
Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twelfth Annual General Meeting of the Company will be held at Crystal Room, Level 1, Crystal Crown Hotel Harbour View, 217 Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan on Thursday, 16 June 2011 at 11.30 a.m. for the following purposes:
1. To receive the Audited Financial Statements for the financial period ended 31 December 2010 and the Reports of the Directors and the Auditors thereon. (Please refer to Note No. 2) To approve the payment of Directors Fees in respect of the financial period ended 31 December 2010. Ordinary Resolution 1 To re-elect the following Directors retiring in accordance with Article 103 of the Articles of Association of the Company: (a) Mr Soon Kwai Choy (b) Mr Chen Po Hsiung (c) Mr Su Cheng Tao 4. Ordinary Resolution 2 Ordinary Resolution 3 Ordinary Resolution 4
2.
3.
To re-appoint Messrs BDO as the Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Ordinary Resolution 5 As Special Business To consider and if thought fit, to pass the following resolutions:
5.
Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965 THAT pursuant to Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia for the listing of and quotation for the additional shares so issued and other relevant authorities, where approval is necessary, authority be and is hereby given to the Directors to allot and issue shares in the Company at any time upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit provided always that the aggregate number of shares to be issued shall not exceed 10% of the issued share capital of the Company at any point of time AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company. Ordinary Resolution 6
Acoustech Berhad (496665-W) | 5

(Contd)
6. Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature THAT approval be and is hereby given for the renewal of the Shareholders Mandate for the Acoustech Berhad Group of Companies to enter into any category of recurrent transactions of a revenue or trading nature falling within the types of transactions as set out in Section 3.3 in the Circular to Shareholders dated 24 May 2011 with the related parties falling within the classes of persons set out in Section 3.2 in the Circular which are necessary for day-to-day operations and are carried out in the ordinary course of business on terms which are not more favorable to the related parties than those generally available to the public and are not to the detriment of minority shareholders; AND THAT the authority conferred by such mandate shall commence upon the passing of this resolution and continue to be in force until;(a) the conclusion of the next Annual General Meeting (AGM) of the Company at which time the mandate will lapse, unless by a resolution passed at the next AGM, the mandate is renewed; or (b) the expiration of the period within which the next AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but must not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or (c) revoked or varied by resolution passed by the shareholders in general meeting. whichever is earlier; AND THAT the Directors be and are hereby authorised to complete and do all such acts and things including executing such documents as may be required to give effect to the transactions contemplated and/or authorised by this mandate. Ordinary Resolution 7 7. Proposed Renewal of the Authority for Share Buy-Back THAT, subject to the Companies Act, 1965 (Act), the Listing Requirements of Bursa Malaysia Securities Berhad and the approval of all relevant governmental and/or regulatory authorities, the Company be and is authorized to purchase such number of ordinary shares of RM0.50 each in the Company (Proposed Share Buy Backs) as may be determined by the Board from time to time on Bursa Malaysia Securities Berhad upon such terms and conditions as the Board may deem fit and expedient in the interest of the Company provided that the aggregate number of shares purchased pursuant to this resolution does not exceed ten percent (10%) of the issued and paid-up share capital of the Company and an amount not exceeding the total retained earnings of RM22,340,071 and share premium account of RM7,342,201 based on the latest audited accounts of the Company as at 31 December 2010, be allocated by the Company for the Proposed Share Buy-Backs.

(Contd)
THAT such authority shall commence upon the passing of this resolution and shall remain in force until the conclusion of the next Annual General Meeting (AGM) of the Company unless earlier revoked or varied by ordinary resolution of the shareholders of the Company in general meeting. THAT authority be and is hereby given to the Directors of the Company to decide in their discretion to retain the ordinary shares in the Company so purchased by the Company as treasury shares and/or cancel them and/or resell the treasury shares or distribute them as share dividend and/or subsequently cancel them. AND THAT authority be and is hereby given to the Directors of the Company to take all such steps as are necessary (including executing all such documents as may be required) and to enter into any agreements and arrangements with any party or parties to implement, finalise and give full effect to the aforesaid with full powers to assent to any conditions, modifications, variations and/or amendments (if any) as may be imposed by the relevant authorities and to do all such acts and things as the Directors may deem fit and expedient in the interest of the Company. Ordinary Resolution 8 8. To transact any other business of the Company of which due notice shall have been given.
By Order of the Board
LIM HOOI MOOI (MAICSA 0799764) TAN ENK PURN (MAICSA 7045521) Joint Company Secretaries Kuala Lumpur 24 May 2011 NOTES 1. Appointment of Proxy A Member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him. A member of the Company who is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. A proxy need not be a member of the Company. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorised in writing, or if the appointer is a corporation, either under its common seal or in some other manner approved by its Directors. The instrument of proxy must be deposited at the Companys Registered Office at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty-eight hours before the time appointed for holding the meeting.

(Contd)
2. Agenda No. 1 This item of the Agenda is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 require that the audited financial statements and the Reports of the Directors and Auditors thereon be laid before the Company at its Annual General Meeting. As such this Agenda item is not a business which requires a resolution to be put to vote by shareholders. 3. Explanatory Notes on Special Businesses Ordinary Resolution No. 6 The proposed Ordinary Resolution No. 6, seeking a renewal of the general mandate is to provide flexibility to the Company to issue new securities without the need to convene separate general meeting to obtain its shareholders approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of bank borrowings, if any, acquisitions and/or for issuance of shares as settlement of purchase consideration. Should the mandate be exercised, the Directors will utilize the proceeds raised for working capital or such other applications they may in their absolute discretion deem fit. Ordinary Resolution No. 7 For further information, please refer to the Circular to Shareholders dated 24 May 2011 accompanying the Companys Annual Report for the financial period ended 31 December 2010. Ordinary Resolution No. 8 The proposed Ordinary Resolution No. 8, if passed will empower the Directors of the Company to purchase up to 10% of the issued and paid-up share capital of the Company (Proposed Share Buy-Backs) by utilizing the funds allocated which shall not exceed the retained profits and share premium account of the Company. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the next Annual General Meeting of the Company.
Statement Accompanying Notice of Annual General Meeting

There is no person seeking election as Director of the Company at this Annual General Meeting.
Financial Highlights
RM million
30
29.7 28.2 25.8
RM million
40
30.7 37.4
30 20
19.6 16.9 17.8 17.0 14.4 13.0 9.3 20.0
28.9
27.6
20 10 0
19.6 16.9
17.8 14.5 9.7
14.4
9.3
10
9.7
0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10 (9-months)
-10 31-3-06 31-3-07 31-3-08 31-3-09
(3.5)
31-3-10 31-12-10 (9-months)
Profit from operations
EBITDA*
Cash from operations
Profit from operation
Sen
12
10.5 10.1 11.0 9.8 8.6 6.1
RM million
150
139.3 11.9 147.8 145.6 142.7 141.5
Percentage
145.8
15 12
9
8.3
120
11.4 10.4 7.3
9 6
4.8
6
4.9 4.5
5.5 4.1 3.5
90
6.0
60
3 0
31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10 (9-months)
0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10 (9-months)
30
Net dividend per share
Net earnings per share
Shareholders fund
Net return on shareholders fund %
* EBITDA : Earnings before interest expense, tax expense, depreciation and amortisation charges.
Group Structure
100%
Formosa Prosonic Technics Sdn Bhd
100%
Formosa Prosonic Chemicals Sdn Bhd
75%
Formosa Prosonic Equipment Sdn Bhd
58.19%
Aerotronic Sdn Bhd
50%
Elkay Pacific Rim (Malaysia) Sdn Bhd
Corporate Information
AUDIT COMMITTEE 1) Soon Kwai Choy (Chairman, Independent Non-Executive Director) Dato Nik Abdul Aziz Bin Mohamed Kamil (Independent Non-Executive Director) Leong Ngai Seng (Independent Non-Executive Director)
2) BOARD OF DIRECTORS Chang Song Hai Chairman, Non-Independent Non-Executive Director Su Cheng Tao Managing Director Dato Nik Abdul Aziz Bin Mohamed Kamil Independent Non-Executive Director Chen Po Hsiung Executive Director Huang Huai Son Executive Director Leong Ngai Seng Independent Non-Executive Director Shih Chao Yuan Non-Independent Non-Executive Director Soon Kwai Choy Independent Non-Executive Director 2) 1) 3)
OPTION COMMITTEE Su Cheng Tao (Managing Director) Chen Po Hsiung (Executive Director)
2)
NOMINATION COMMITTEE 1) Chang Song Hai (Chairman, Non-Independent Non-Executive Director) Leong Ngai Seng (Independent Non-Executive Director) Soon Kwai Choy (Independent Non-Executive Director)
3)
Corporate Information
(Contd)
REMUNERATION COMMITTEE 1) Chang Song Hai (Chairman, Non-Independent Non-Executive Director) Leong Ngai Seng (Independent Non-Executive Director) Dato Nik Abdul Aziz Bin Mohamed Kamil (Independent Non-Executive Director)
REGISTERED OFFICE Level 18, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 03-2264 8888 Fax: 03-2282 2733 SHARE REGISTRAR Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 03-2264 3883 Fax: 03-2282 1886 PRINCIPAL PLACE OF BUSINESS No. 2, Jalan 1 Bandar Sultan Suleiman Taiwanese Industrial Park 42000 Port Klang Selangor Darul Ehsan Tel : 03-3176 1145 Fax: 03-3176 2003
PRINCIPAL BANKERS RHB Bank Berhad Malayan Banking Berhad CIMB Bank Berhad Citibank Berhad STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad WEBSITE www.acoustech.com.my
2)
3)
COMPANY SECRETARIES 1) Lim Hooi Mooi (MAICSA 0799764) Tan Enk Purn (MAICSA 7045521)
2)
AUDITORS BDO (AF : 0206) Chartered Accountants 12th Floor, Menara Uni.Asia 1008 Jalan Sultan Ismail 50250 Kuala Lumpur
Chairmans Statement
Dear shareholders, On behalf of the Board of Directors of Acoustech Berhad, I am pleased to present you the Annual Report and Audited Financial Statements of the Group and the Company for the financial period ended 31 December 2010.
Operationally, 2010 was a slow year as the Group was feeling the effects from the downturn in the chemical paints and electrical equipment divisions which faced relatively soft end market demand in certain economies. As a result of the slow order intake in 2010, these divisions recorded drop in sales and profit. Despite the year-on-year increase in the sales of audio division, its profitability was impacted by rising material and operating costs. During the financial period under review, there were indeed some challenging situations such as the fluctuating and surging commodity prices which fanned inflation concerns and the strengthening of the Japanese Yen against the US Dollar.
During the financial period, the Group changed its financial year end from 31 March to 31 December which resulted in a 9-month financial period ended 31 December 2010. The sales and operating profit contributions by division are as follow: 9-month ended 31.12.2010 RM mil % Sales: Audio Electrical equipment Chemical paints 12-month ended 31.3.2010 RM mil %
165.8 24.4 17.0 207.2
80.0 11.8 8.2 100.0
156.7 47.2 28.5 232.4
67.4 20.3 12.3 100.0
Operating profit: Audio Electrical equipment Chemical paints Unallocated expenses
6.7 (0.1) 3.2 (0.5) 9.3
72.0 (1.0) 34.4 (5.4) 100.0
7.6 3.9 3.6 (0.6) 14.5
52.4 26.9 24.8 (4.1) 100.0
Chairmans Statement
(Contd)
Financial review Total sales dropped 11% to RM207.2 million for the 9-month period ended 31 December 2010 from RM232.4 million for the previous full financial year. Gross profit declined to RM21.4 million from RM29.6 million, or a decline of 28% mainly due to increases in material costs which had been aggravated by lower economies of scale. As a result, profit attributable to shareholders dropped to RM7.5 million for the 9-month period from RM11.6 million for the previous full financial year. This translated to lower earnings per share of 4.1 sen as compared to 6.0 sen for the previous financial year. Nevertheless the Group ended the financial period with a healthy balance sheet. The Group is debt free and has cash and cash equivalents (inclusive of short term funds) of RM56.1 million. Turnover for trade receivables and inventories stood at 70 days and 41 days respectively, compared to 60 days and 49 days at the end of the last financial year. Outlook As economies undergo a gradual but uneven recovery going into 2011, we
believe that the outlook is overall positive. Barring unforeseen circumstances, we expect our Group to remain profitable in the financial year ending 2011. Dividends The Directors had paid an interim single tier tax exempt dividend of 3.5 sen per ordinary share or RM6.0 million in respect of the current financial period on 7 April 2011. Appreciation On behalf of the Board, I would like to thank our shareholders, business partners and associates, management and staff for their staunch support and invaluable contribution over the years. I would also like to extend my gratitude to the Board of Directors for their guidance and inputs, which have contributed towards the Groups performance.
Chang Song Hai Chairman 24 May 2011 Kuala Lumpur, Malaysia
Profile of Directors
CHANG SONG HAI Taiwanese, aged 65, Non-Executive Chairman, was appointed to the Board of Acoustech on 22 September 2001. Mr Chang had been involved in the plastic moulding industry for more than 42 years. Since 1968, he has been the Executive Chairman of Song Hai Plastic Industrial Co. Ltd., Taiwan, a company involved in the plastic moulding business. Mr Chang is the Chairman of both the Nomination and Remuneration Committee of the Company. Mr Chang holds directly 400,000 ordinary shares or 0.23% interest in the Company. Mr Chang is a Non-Independent Director as he is a major shareholder of Formosa Prosonic Industries Berhad (FPIB), whose wholly owned subsidiary Formosa Prosonic Manufacturing Sdn Bhd holds 46,442,474 ordinary shares or 27.09% interest in the Company.
SU CHENG TAO Taiwanese, aged 65, Managing Director, was appointed to the Board of Acoustech on 18 September 2001. Mr Su holds a Diploma in Mechanical Engineering and he has more than 36 years of experience in the manufacturing industry. He started his career with Capetronics Group in Taiwan where he served for more than 10 years, gaining experience and expertise in manufacturing plastic components. Mr Su joined Formosa Prosonic Industries Berhad Group in 1988 where he served, as a General Manager in Formosa Prosonic Manufacturing Sdn Bhd until he left 2001 to join Acoustech. Mr Su holds directly 1,505,956 ordinary shares or 0.88% interest in the Company.
DATO NIK ABDUL AZIZ BIN MOHAMED KAMIL Malaysian, aged 68, Independent Non- Executive Director, was appointed to the Board of Acoustech on 3 September 2001. Dato Nik graduated from Universiti Malaya with a Bachelor of Arts Degree, Middlesex University, London with a Postgraduate Diploma in Personnel Management and Asian Institute of Management, Philippines with a Master in Management. He also attended the Senior Executive Program at the London Business School. Dato Nik has over 39 years of working experience in the human resource management/industry with attachments ranging from Petroliam Nasional Berhad (PETRONAS), Malaysian LNG Sdn Bhd, Bank Bumiputra Malaysia Berhad, Rothmants of Pall Mall (Malaysia) Sdn Bhd and the National Electricity Board. In 1997 he set up his own business, NA & Associates Sdn Bhd, a company involved in human resource training and skills management. Dato Nik is a Member of both the Audit and Remuneration Committee of the Company. Dato Nik does not hold any shares in the Company or its subsidiary companies.
(Contd)
CHEN PO HSIUNG Taiwanese, aged 67, Executive Director, was appointed to the Board of Acoustech on 3 September 2001. He obtained a Diploma in Mechanical Engineering from Air Asia Jet Engine Training Center, Taiwan in 1971. Upon his graduation in 1971, Mr Chen joined Air Asia (Aircraft Co.) as a Technician. In 1980, he joined Great Century Paints Co. Ltd as a General Manager until his resignation in 1991. He was appointed as the General Manager of Formosa Prosonic Chemicals Sdn Bhd (FPC) in 1991 where his experience in the aircraft industry as well as in the chemical industry has contributed to the success story of FPC. Mr Chen manages the daily operations of FPC. Mr Chen holds directly 7,209,876 ordinary shares or 4.21% interest in the Company and is deemed interested in 265,846 ordinary shares held by his spouse.
HUANG HUAI SON Taiwanese, aged 63, Executive Director, was appointed to the Board of Acoustech on 22 May 2002, Mr Huang holds a Diploma in Business Management and has accumulated 38 years of experience in the manufacturing industry. Mr Huang was involved with Foster Electric Co.Ltd, Taiwan, a manufacture of speaker units, for over 15 years until his resignation as its Vice President in 1987. Mr Huang is presently the advisor of New Advance Electronic Co. Ltd, Taiwan, a company specializing in the business of home theatre and multimedia speaker systems. Mr Huang holds directly 10,552,732 ordinary shares or 6.16% interest in the Company.
LEONG NGAI SENG Malaysian, aged 39, Independent Non- Executive Director, was appointed to the Board of Acoustech on 25 February 2002. He obtained his Law Degree and Commerce Degree LLB (Hons) B. Comm. from University of Melbourne and became a member of the Malaysian Bar in 1997. He was formerly an Assistant Vice- President in the Corporate Finance Department of a leading merchant bank in Malaysia. Mr Leong is currently a partner in his own law firm. Mr Leong is a Member of the Audit Committee, Nomination and Remuneration Committee of the Company. Mr Leong holds directly 300,000 ordinary shares or 0.17% interest in the Company.
(Contd)
SHIH CHAO YUAN Taiwanese, aged 55, Non-Independent Non-Executive Director, was appointed to the Board of Acoustech on 25 February 2003. He holds a Master Degree in Management Science from Taiwan National Chiao Tung University. Prior to coming to Malaysia he was the assistant to the President of Friendship Corporation in Taiwan and was actively involved in the management and affairs of Friendship Corporation gaining experience and in-depth knowledge of speaker systems operations. In 1986 Mr Shih came to Malaysia to set up Formosa Prosonic Industries Sdn Bhd which has since listed on the Bursa Malaysia Securities Berhad. Mr Shih is currently the Group Managing Director of the Formosa Prosonic Industries Berhad (FPIB) Group of Companies. Mr Shih holds directly 1,854,290 ordinary shares or 1.08% interest in the Company and is deemed interested in 1,440,000 ordinary shares held by his spouse. As a representative of FPIB, Mr Shih is deemed to have an interest in 46,442,474 ordinary shares or 27.09% stake in the Company to the extent the Formosa Prosonic Industries Berhad Group has an interest in Acoustech.
SOON KWAI CHOY Malaysian, aged 60, Independent Non- Executive Director was appointed to the Board of Acoustech on 3 September 2001. He has held several senior positions in various major Malaysian corporations and was admitted as a member of the Association of Chartered Certified Accountants (ACCA) (UK) in 1979 and a member of the Malaysian Institute of Accountants (MIA) since 1980. He was the Past President of the Confederation of Asian and Pacific Accountants and former Vice-President of MIA. He sat in the International Council of the ACCA headquarters in London, United Kingdom from 1996-2008. He was awarded an honorary CPA by the Chinese Government in 1996. Mr Soon is the Chairman of the Audit Committee of the Company and a member of the Nomination Committee. Mr Soon holds directly 400,000 ordinary shares or 0.23% interest in the Company and is deemed interested in 610,000 ordinary shares held by his spouse.
Family Relationship None of Directors have any family relationship with any other director and/or major shareholder of the Company. Conflict of Interest The Company and/or its subsidiaries have entered into recurrent related party transactions of a revenue or trading nature with the Formosa Industries Berhad Group of Companies (FPIB Group) in which the Directors of the Company, namely Mr Shih Chao Yuan and Mr Chang Song Hai have interests. By virtue of their interest, they are deemed to be interested in the recurrent related party transactions entered with the FPIB Group. Save for the above, none of the Directors have any conflict of interest with the Company. Conviction For Offences None of the Directors has been convicted for any offences within the past ten (10) years.
Corporate Social Responsibility

Acoustech Group views responsibility as a key issue in its management system. The Group strives for stable and responsible operations in term of smooth-running processes, high standard of occupational safety and minimising environmental impact. Financial responsibility A profitable business is essential for financially responsible operations. A financially responsible company benefits a companys shareholders, its employees and partners, and society as a whole. The Group offers a solid source of business to numerous suppliers and sub-contractors. The Group purchased RM162 million worth of materials (before consolidation adjustment) during the 9-month ended 31 December 2010 for use in production. Employee benefits which comprised salaries and wages, contribution to retirement fund and other remuneration amounted to RM28 million during the same period.
MATERIALS CONSUMED RM million 300
200
100
0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10
EMPLOYEE BENEFITS RM million 40 30 20 10 0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10

(Contd)
Shareholders benefit from their holdings through dividends and possible capital gain with rise in share price. During the financial period ended 31 December 2010, the Company paid tax-exempt dividend of 3 sen per share equivalent to RM5.1 million.
DIVIDEND PAID RM million 20 15 10 5 0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10
As the below graph depicts, the financial position of the Group remains strong and sound.
CAPITAL STRUCTURE RM million 150
100
50
0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10
shareholders equity cash & cash equivlents (inclusive of short term funds) interest-bearing debts

(Contd)
Environmental responsibility As a manufacturer of audio, chemical paints and electrical products to consumers worldwide, the Group is fully committed to implementing environmental management system based on ISO14001 Standard and aims to conserve global environment and to create a sustainable society. This underpins our approach to environmental responsibility. To achieve our goal, we strive to make continuous improvement in our efforts to comply with all applicable legal environmental legislations and regulations and other requirements to which the Group subscribes. Environmental impacts are minimised and reduced by: Proper control of the usage of chemicals; Eliminating the use of ozone-depleting substances; Reduction in the generation of solid and schedule waste through recycling and reuse of materials; Engineering control on noise and air pollution; Proper control of discharging of sewage and industrial effluents; Non-use of environmental hazardous substances as prohibited by customers; and Proper control and management of energy consumption.
We set and review targets and objectives in order to improve our environmental performance. We create and promote environmental awareness to all suppliers and employees through meeting, training and education. We make available relevant environmental information to all interested parties upon written request. Our approaches fully complement and support environmental conservation programmes undertaken by our major customers. We have been a green partner to Sony Green Partner Environment Quality Approval Programmes and in compliance with Green Procurement Standards by Panasonic. Safety and health responsibility The Group would continuously work at enhancing safety and health management systems. The Group is committed to zero accidents. Poor safety and health performance impacts financial performance, either in the form of additional expenses or lost revenue, while good safety performance contributes to better employee well-being and competitiveness. Our Safety Committee meets regularly to review safety issues. In-house risk assessment exercises are carried out prior to the commencement of any production activity to ensure that our workers will not be at risk. To enhance work safety and competency in equipment handling, our employees are given training on safety protocols. We are also mindful of the health of our employees and have put in place a set of precautionary measures in the event of pandemic: We take and record the temperature and travel history of all visitors before entry into our premises. For those who show symptoms of being unwell, quarantine procedures are undertaken to protect both themselves and others around them. Employees who return from affected countries are quarantined at home, if necessary, to ascertain their physical condition before returning to work.
Audit Committee Report

THE BOARD OF DIRECTORS (the board) of Acoustech Berhad (the Company) is pleased to present the report of the Audit Committee for the financial period ended 31 December 2010. Chairman Soon Kwai Choy Independent Non-Executive Director Members Dato Nik Abdul Aziz Bin Mohamed Kamil Independent Non-Executive Director Leong Ngai Seng Independent Non-Executive Director
TERMS OF REFERENCE Constitution The Audit Committee was constituted per resolution of the Board on 4 September 2001 and its terms of reference are consistent with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (the Exchange). Authority The Audit Committee is authorised by the Board to investigate any activity within its terms of reference. It has unlimited access to all information relevant to its activities. It is authorised by the Board to obtain legal or other professional advice if it deems necessary.
COMPOSITION The Audit Committee shall comprise at least 3 directors all of which must be non-executive directors with a majority of them being independent directors; Alternate director shall not be appointed as members of the Audit Committee; At least one member of the Audit committee shall be a member of the Malaysian Institute of Accountants or a person who fulfills the specific requirements as prescribed or approved by the Exchange. In the event of any vacancy in the Audit Committee resulting in the non-compliance of the Exchanges Listing Requirements, the vacancy shall be filled within 3 months. The members of the Audit Committee shall elect a chairman from among their number who shall be an independent director. Members of the Committee shall serve for a period of two years and then retire from office but shall be eligible for re-appointment.

(Contd)
FUNCTIONS The Audit Committee shall, amongst others, discharge the following functions: Review the following and report the same to the Board of Directors; with the external auditors, the audit plan; with the external auditors, his evaluation of the system of internal controls; the assistance given by employees to the external auditors; the adequacy of the scope, functions, competency and resources of the internal audit functions and the necessary authority of the internal auditor has to carry out the work; the internal audit program, processes, the results of the internal audit program, processes or investigations undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function; the quarterly results and year-end financial statements, prior to the approval by the Board focusing particularly on;(i) (ii) (iii) (iv) changes in or implementation of major accounting policy changes; significant and unusual events; the going-concern assumptions; and compliance with accounting standards and other legal requirements;
any related party transactions and the conflict of interest situation including any transaction, procedure or course of conduct that raises questions of management integrity; any letter of resignation from the external auditors; and whether there is any reason and supported by grounds, to believe that the external auditors is not suitable for re-appointment;
Recommend the nomination of a person or persons as external auditors; Report promptly to the Exchange on any matter the Audit Committee had reported to the Board of Directors, which was not satisfactorily resolved and/or resulted in a breach of the Exchanges Listing Requirements; Consider and report on matter requested by the Board of Directors; and To verify the basis of allocation of the options under the Employees Share Option Scheme (ESOS) in accordance with the By-Laws of ESOS.

(Contd)
ACTIVITIES The Committee met four (4) times for the period ended 31 December 2010 under review and carried out the following activities: Reviewed the unaudited quarterly financial statements before submission to the Board for approval; Reviewed the internal audit programs, reports and remedial action taken; Assessed the Groups overall system of internal control; and Reviewed the Related Party Transactions, the conflict of interest declarations and the Circular to Shareholder in relation to Recurrent Related Party Transactions.
MEETINGS The Audit Committee met four (4) times during the financial period ended 31 December 2010. Details of attendance are as follows: Name of Director Soon Kwai Choy Dato Nik Abdul Aziz Bin Mohamed Kamil Leong Ngai Seng Attendance 4/4 2/4 4/4
INTERNAL AUDIT FUNCTION An Internal Audit Function was set up to undertake continuous systematic reviews of the Groups internal control systems so as to provide the Board with reasonable assurance that such systems continue to operate satisfactorily and effectively. The Group has adopted a risk-based approach to the implementation and monitoring of controls and had carried out an exercise to identify and evaluate the risks associated with the Group.
Corporate Governance Statement

The Board of the Company is committed to ensure the fulfillment of the highest standards of Corporate Governance as set out in the Malaysian Code on Corporate Governance, which highlights the principles and best practices on structures and processes that the Company may use in their operations towards achieving the optimal governance framework.
1.
THE BOARD OF DIRECTORS 1.1 Board Responsibilities The Board retains effective control of the Company and the Group and is responsible for the overall corporate affairs, strategic direction, formulation of policies and the overall performance of the Company and the Group. The Executive Directors take on primary responsibility for managing the Groups business and resources. 1.2 Board Balance The Company is led by an experienced Board comprising eight (8) members of whom three (3) are Independent Non-Executive Directors, two (2) are Non-Independent Non-Executive Directors and three (3) are Executive Directors. No individual or group of individuals dominates the Boards decision making. Independent Directors constitute more than onethird of the Board and the interest of the significant shareholder is fairly represented on the Board. The present Directors bring a wide range of experience and skills relevant to the business of the Group. Brief descriptions on the background of each Director are set out on pages 14 to 16. There is clear division of responsibility between the Chairman and Managing Director to ensure the balance of power and authority. The Managing Director is under the control of the Board. The Independent Non-Executive Directors provide independent judgement and check and balance on the Board. 1.3 Board Meeting The Board meets at least four (4) times a year and has a formal schedule of matters reserved for it. Additional meetings are held as and when necessary. During the financial period ended 31 December 2010, three meetings were held in which the Board deliberated upon and considered various issues including the Groups financial results, annual budgets, performance of the Groups business, major investment, business plan and policies and strategic issues affecting the Groups business. Details of attendance of the Directors at Board meetings held during the financial period are as follows:Total Number Meetings Chang Song Hai Su Cheng Tao Dato Nik Abdul Aziz Bin Mohamed Kamil Chen Po Hsiung Huang Huai Son Leong Ngai Seng Shih Chao Yuan Soon Kwai Choy 3 3 3 3 3 3 3 3 Number of Meetings Attended 3 3 2 3 3 3 3 3

(Contd)
1.4 Supply of Information The Board has unrestricted access to timely and accurate information necessary in the furtherance of their duties. At each Board meeting, the Managing Director briefs the Board on the Groups activities and operations. Directors have access to the advice and services of the Company Secretary and where necessary, obtain independent professional advise at the Groups expense. 1.5 Board Committees The Board of Directors delegates certain responsibilities to Board Committees namely the Audit Committee, Remuneration Committee and Nomination Committee in order to enhance business and operational efficiency and effectiveness. 1.6 Appointments to the Board The duties and functions of the Nomination Committee encompass the following:Recommend to the Board, candidates nominated by shareholders or the Board for directorships to be filled; Recommend to the Board, directors to fill seats on board committees; Review annually the required skills and experience and other qualities and core competencies non-executive directors should bring to the Board; and Assess annually the effectiveness of the Board as a whole and the contribution of each individual director.
The decision on new appointment of directors rests with the Board after considering the recommendation of the Nomination Committee. The members of the Nomination Committee are as follows:Chang Song Hai - Chairman Non-Independent Non-Executive Director Leong Ngai Seng - Independent Non-Executive Director Soon Kwai Choy - Independent Non-Executive Director During the financial year under review, the Committee met once to conduct the annual review on the Directors core competencies, contribution and effectiveness. 1.7 Re-election of Directors In accordance with the Companys Articles of Association, one-third of the Directors are required to submit themselves for re-election by rotation at least once every three years at each Annual General Meeting (AGM). Retiring Directors can offer themselves for re-election. Directors who are appointed during the financial year are, in accordance with the Companys Articles of Association, required to retire at the AGM following their appointment but are eligible for re-election by the shareholders.

(Contd)
1.8 Directors Training All Directors of the Company have attended Bursa Malaysias Mandatory Accreditation Programme (MAP). The Directors will also attend relevant training programmes from time to time. All members of the Board also attended a briefing on Goods and Services Tax done by Messrs BDO on 19 May 2010. During the period, the following Director attended external training as listed below:Name of Director Soon Kwai Choy Title World Congress of Accountants 2010 by MIA on 8-11 November 2010
2.
DIRECTORS REMUNERATION The Board has set up the Remuneration Committee whose primary responsibility include reviewing and making recommendations on remuneration packages and policies applicable to the Chairman, Managing Director, Senior Executives and Directors themselves. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages. Individual Directors are required to abstain from discussion on their own remuneration. The determination of the remuneration of Non-Executive Directors is a matter for the Board as a whole. The members of the Remuneration Committee are as follows:Chang Song Hai Chairman, Non-Independent Non-Executive Director Dato Nik Abdul Aziz Bin Mohamed Kamil Independent Non-Executive Director Leong Ngai Seng Independent Non-Executive Director During the financial period under review, the Committee met once to review the principles and guidelines on directors remuneration adopted by the Board and the levels of remuneration applied.

(Contd)
For the financial period ended 31 December 2010, the remuneration of the Directors are as follows:Total Remuneration RM 908,277 247,050 1,155,327
Fees RM Executive Directors Non-Executive Directors Total 90,000 165,000 255,000
Emoluments Benefits-in-kind RM RM 784,080 82,050 866,130 34,197 34,197
The number of Directors whose total remuneration falls within the following bands is as follows:Executive Directors Below RM50,000 RM50,001 RM100,000 RM100,001 RM250,000 RM250,001 RM300,000 RM300,001 RM350,000 RM350,001 RM400,000 RM400,001 RM450,000 RM450,001 RM500,000 RM500,001 RM550,000 RM550,001 RM600,000 1 1 1 Non-Executive Directors 2 3 -
3.
SHAREHOLDERS The Board of Directors recognizes the importance of communication and timely dissemination of information to shareholders. Information is communicated through announcements to the Bursa Malaysia and the distribution of annual reports to shareholders. General Meetings serve as the principal forum for communicating with the shareholders of the Company. The Board encourages participation of shareholders at the General Meeting to ensure a high level of accountability and identification with the Groups strategy and goals. The Company follows a continuous disclosure policy, making announcements to the Bursa Malaysia when it becomes aware of information which might materially affect the price of its shares.

(Contd)
4. ACCOUNTABILITY AND AUDIT 4.1 Financial Reporting The Board aims to provide and present a balanced and clear assessment of the Groups financial performance and prospect primarily through the annual financial statements and quarterly report as well as announcements to the Bursa Malaysia. The Audit Committee assists the Board in scrutinizing information for disclosure to ensure compliance with accounting standard, accuracy, adequacy and completeness. 4.2 Statement of Directors Responsibility in respect of audit financial statements The Board is responsible for ensuring that the financial statements of the Group gives a true and fair view of the state of affairs of the Group and of the Company as at the end of the accounting period and of their income statements and cashflows for the period. These involve Directors selecting suitable accounting policies and then applying them consistently and make judgements and estimates that are reasonable and prudent. The Directors have the responsibility of ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Group and of the Company and which ensures that the financial statements comply with the Companies Act, 1965. 4.3 Internal Control The Board of Directors is ultimately responsible for the overall system of internal control which includes not only financial controls but also controls relating to operations, compliance and risk management. The internal control system was designed to manage rather than eliminate risks of failure in achieving the Groups business objectives; and as such could only provide reasonable but not absolute assurance against material misstatement or loss. The Statement on Internal Control as set out on pages 29 to 30 in this Annual Report provides an overview of the state of internal controls with the Group. 4.4 Statement of Internal Audit Function Internal Audit activities are conducted in-house. During the financial period, the Internal Audit Unit (IAU) conducted various internal audit engagements in accordance with the risk-based audit plans which are consistent with the organisations goals. The internal audit function is carried out impartially, proficiently and with due professional care. The IAU reports to the Audit Committee on regular audits and appraisals of key operations of the Group. Its activities for the year under review include: Procedural checks in relation to the acquisition and/or disposal of investments and changes to the Groups structure; Reviewing of approval and payments processes, receipts for deposit and miscellaneous payment; Observing the stock take to ensure that the stock take was conducted in a proper and orderly manner; Identifying the Related Party Transactions and Recurrent Related Party Transactions to ensure that the transactions were conducted at arms length; and Conducting reviews requested by the Audit Committee
4.5 Relationship with the Auditors The external auditors, Messrs BDO have continued to report to members of the Company on their findings which are included as part of the Companys financial reports with respect to each years audit on the statutory financial statements. In doing so the Company has established a transparent arrangement with the auditors to meet their professional requirements. The auditors have, from time to time, highlighted to the Audit Committee and the Board matters requiring the Boards attention.
Other Information
Conflict of Interests None of the Directors has any family relationships with other Directors or major shareholders of the Company. Convictions for Offences None of the Directors has been convicted for offences within the past ten years other than traffic offences, if any. Utilisation of Proceeds There were no issuance of new shares, rights issue or issuance of bonds during the financial period. Imposition of Sanctions and/or Penalties There were no sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or Management by relevant regulatory bodies during the financial period. Share Buybacks During the financial period the company bought back 10,000 of its shares. Option, Warrants or Convertible Securities There was no exercise of option, warrant or convertible securities during the financial period. American Depository Receipts (ADR) and Global Depository Receipts (GDR) The Company has not sponsored any ADR or GDR programme for the financial period. Non-Audit Fees There were RM33,558 non-audit fees paid to the external auditors for the financial period. Profit Estimate, Forecast or Projection The Company did not make any release on profit estimates, forecast or projections during the financial period. Profit Guarantee There was no profit guarantee given by the Company during the financial period. Material Contracts There were no material contracts entered into by the Company and/or its subsidiary companies which involved Directors and major shareholders interests either still subsisting at the end of the financial period ended 31 December 2010 or entered into since the end of the previous financial year. Recurrent Related Party Transactions of a Revenue or Trading Nature Details of transactions with related parties undertaken by the Group during the financial year under review are disclosed in note 29 to the financial statements. Contracts Relating to Loans There was no contract relating to loans by the Company. Revaluation of Landed Properties The Company and the Group have not adopted a policy for regular revaluation of its landed properties.
Statement of Internal Control

Introduction Pursuant to paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors is pleased to provide the following statement on the state of internal controls of the Group. Board Responsibility The Board of Directors acknowledges its responsibility for the Groups system of internal control that is designed to manage rather than eliminate the risks of failure to achieve business objectives; and as such could only provide reasonable, but not absolute assurance against material misstatement or loss. The Board confirms that there is an ongoing process which is in place for the financial period under review for identifying, evaluating and managing significant risks that may affect the achievement of our business objectives. Our system of internal controls cover financial, organizational, operational, and administrative and compliance controls. The Board regularly reviews the control processes with the assistance of the Audit Committee. Key Processes Salient features of the key processes of the system of internal control of the Group are as follows:1. 2. The management structure is well defined, with clear lines of authority and responsibility. The Board continually assesses business performance and evaluates operation controls at all levels, and where necessary takes appropriate remedial action. The Managing Director regularly updates the Board on industry trend, key customers and performance of various units within the Group, and the Board endorses responses taken. Financial results are reviewed quarterly by the Audit Committee and the Board and compared to budgets and forecasts. Executive Directors and Heads of Departments meet regularly to discuss operational, management issues, financial performance and indicators focusing on the evaluation of applicable risks. Operations ISO Standards 9001:2000 and 14001 and Accounting procedures are communicated to staff at all levels. The Groups Internal Audit Unit (IAU) which reports to the Audit Committee performs regular reviews to assess the effectiveness of internal controls and to identify significant risks. The internal audit control assessment excludes the joint venture company. The Audit Committee reviews actions taken on internal control issues raised by the IAU and external auditors. Formal recruitment, training and development, and performance appraisals are in place to ensure and maintain the professionalism and competency of staff.
3.
4. 5.
6. 7.
8. 9.
10. The Audit Committee reviews the Recurrent Related Party Transactions undertaken by the Group twice a year. 11. The Group had established a set of corporate values, ethical behaviour, and guidance for quality products and services and these are set out in the Groups Employee Handbook and Safety Handbook.
Statement of Internal Control

(Contd)
Conclusion The Board is satisfied with the ongoing process for identifying, evaluating, managing and monitoring significant risks, and is of the opinion that the Groups internal control systems are adequate. The Board also confirmed that they have reviewed the integrity and the effectiveness of the system of internal control through the monitoring process set out above and are not aware of any significant weakness or deficiency in the Groups system of internal control for the financial period under review and to the date of approval of this annual report and financial statements.
Financial Statements
32 37 37 38 40 42 43 46 49
Directors Report Statement by Directors Statutory Declaration Independent Auditors Report Statements of Financial Positions Statements of Comprehensive Income Statements of Changes in Equity Statements of Cash Flows Notes to The Financial Statements
Directors Report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial period from 1 April 2010 to 31 December 2010.
PRINCIPAL ACTIVITIES The Company is an investment holding company. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial period.
CHANGE OF FINANCIAL YEAR END During the financial period, the Company changed its financial year end from 31 March to 31 December.
RESULTS Group RM Profit for the financial period 7,500,559 Company RM 5,595,824
Attributable to: Owners of the parent Minority interests 7,023,420 477,139 7,500,559 5,595,824 5,595,824
DIVIDENDS Dividends paid and declared since the end of the previous financial year were as follows:
Company RM In respect of financial year ended 31 March 2010: Second interim single tier tax exempt dividend of 3.0 sen per ordinary share, paid on 22 July 2010 5,143,353
The Directors declared a first interim single tier tax exempt dividend of 3.5 sen per ordinary share, amounting to RM6,000,579 in respect of the financial period ended 31 December 2010 and paid to the shareholders on 7 April 2011, whose names appeared on the Record of Depositors of the Company at the close of business on 24 March 2011. The Directors do not recommend the payment of any final dividend in respect of the current financial period.
Directors Report
(Contd)
RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial period other than those disclosed in the financial statements.
ISSUE OF SHARES AND DEBENTURES The Company has not issued any new shares or debentures during the financial period.
TREASURY SHARES During the financial period, the Company repurchased 10,000 ordinary shares of RM0.50 each from the open market at an average price of RM0.78 per ordinary share. The total consideration paid for the shares repurchased including transaction costs was RM7,857. The shares repurchased were financed by internally generated funds and are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965 in Malaysia. As at 31 December 2010, the Company had 6,376,300 treasury shares. Such treasury shares are being held at carrying amounts of RM5,528,318. Further details are disclosed in Note 18 to the financial statements.
OPTIONS GRANTED OVER UNISSUED SHARES No options were granted to any person to take up unissued ordinary shares of the Company during the financial period.
DIRECTORS The Directors who have held for office since the date of the last report are: Chang Song Hai Su Cheng Tao Dato Nik Abdul Aziz Bin Mohamed Kamil Chen Po Hsiung Huang Huai Son Leong Ngai Seng Shih Chao Yuan Soon Kwai Choy
Directors Report
(Contd)
DIRECTORS INTERESTS The Directors holding office at the end of the financial period and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial period ended 31 December 2010 as recorded in the Register of Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965 were as follows: ---Number of ordinary shares of RM0.50 each--Balance Balance as at as at 1.4.2010 Bought Sold 31.12.2010 Shares in the Company Direct interests Chang Song Hai Su Cheng Tao Chen Po Hsiung Huang Huai Son Leong Ngai Seng Shih Chao Yuan Soon Kwai Choy Indirect interests Chen Po Hsiung * Shih Chao Yuan # Soon Kwai Choy * 95,723 44,135,914 610,000 170,123 3,746,560 265,846 47,882,474 610,000 400,000 1,505,956 7,209,876 10,552,732 300,000 1,854,290 400,000 400,000 1,505,956 7,209,876 10,552,732 300,000 1,854,290 400,000
* Deemed interests held through spouse. # Deemed interests pursuant to Section 6A of the Companies Act, 1965 in Malaysia and held through spouse. By virtue of their interests in the ordinary shares of the Company and pursuant to Section 6A to the Companies Act, 1965 in Malaysia, Su Cheng Tao, Chen Po Hsiung, Huang Huai Son and Shih Chao Yuan are deemed to be interested in the ordinary shares of all the subsidiaries to the extent that the Company has an interest. The other Director holding office at the end of the financial period did not have any interest in the ordinary shares of the Company or ordinary shares, options over ordinary shares and debentures of its related corporations during the financial period.
DIRECTORS BENEFITS Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than the transactions entered into in the ordinary course of business with companies in which the Directors of the Company have substantial financial interests as disclosed in Note 29 to the financial statements. There were no arrangements during and at the end of the financial period, to which the Company is a party, which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
Directors Report
(Contd)
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (I) AS AT THE END OF THE FINANCIAL PERIOD (a) Before the statements of comprehensive income and statements of financial positions of the Group and of the Company were made out, the Directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there are no known bad debts and that provision need not be made for doubtful debts; and to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.
(ii)
(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial period have not been substantially affected by any item, transaction or event of a material and unusual nature. (II) FROM THE END OF THE FINANCIAL PERIOD TO THE DATE OF THIS REPORT (c) The Directors are not aware of any circumstances: (i) which would necessitate the writing off of bad debts or the provision for doubtful debts in the financial statements of the Group and of the Company; or which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and
(ii)
(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. (d) In the opinion of the Directors: (i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial period in which this report is made; and no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial period which will or may affect the abilities of the Group and of the Company to meet their obligations as and when they fall due.
(ii)
Directors Report
(Contd)
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued) (III) AS AT THE DATE OF THIS REPORT (e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial period to secure the liabilities of any other person. (f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial period.
(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.
AUDITORS The auditors, BDO, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors.
Su Cheng Tao Director Port Klang 27 April 2011
Chen Po Hsiung Director
Statement by Directors
In the opinion of the Directors, the financial statements set out on pages 40 to 114 have been drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as at 31 December 2010 and of their financial performance and cash flows of the Group and of the Company for the financial period from 1 April 2010 to 31 December 2010.
On behalf of the Board,
Su Cheng Tao Director Port Klang 27 April 2011
Chen Po Hsiung Director
Statutory Declaration
I, Gan Ah Chu, being the officer primarily responsible for the financial management of Acoustech Berhad, do solemnly and sincerely declare that the financial statements set out on pages 40 to 114 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed at Kuala Lumpur this 27 April 2011 ) ) )
GAN AH CHU
Before me: S.Ideraju No. W451 Pesuruhjaya Sumpah Malaysia Tingkat 18, Wisma Sime Darby Jalan Raja Laut 50350 Kuala Lumpur
Independent Auditors Report

To the Members of Acoustech Berhad
Report on the Financial Statements We have audited the financial statements of Acoustech Berhad, which comprise the statements of financial positions as at 31 December 2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial period from 1 April 2010 to 31 December 2010, and a summary of significant accounting policies and other explanatory information, as set out on pages 40 to 114.
Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and of the Company as of 31 December 2010 and of their financial performance and cash flows for the financial period from 1 April 2010 to 31 December 2010.
Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: (a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act. (b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. (c) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.
Independent Auditors Report

To the Members of Acoustech Berhad (Contd)
Other Reporting Responsibilities The supplementary information set out in Note 19(c) to the financial statements is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
BDO AF : 0206 Chartered Accountants Kuala Lumpur 27 April 2011
Tang Seng Choon 2011/12/11 (J) Chartered Accountant
Statements of Financial Position

As at 31 December 2010
Group Company 31.12.2010 31.3.2010 31.12.2010 31.3.2010 (Restated) (Restated) RM RM RM RM
Note ASSETS Non-current assets Property, plant and equipment Investments in subsidiaries Investment in a jointly controlled entity Other investments 8 9 10 11
50,240,661 2,242,427 6,160,000 58,643,088
49,134,834 2,281,229 3,755,630 55,171,693 22,057,393 39,117,812 3,657,443 70,433,521
74,893,666 74,893,666 27,961,411 328,134 6,495,772 6,191,252 40,976,569
74,893,666 74,893,666 37,518,952 309,542 242,715 38,071,209
Current assets Inventories Derivative assets Trade and other receivables Current tax assets Short term funds Cash and cash equivalents 12 13 14 15 16 22,435,420 198,968 54,266,504 3,839,230 13,088,636 43,055,287
136,884,045 135,266,169 TOTAL ASSETS
195,527,133 190,437,862 115,870,235 112,964,875
The accompanying notes form an integral part of the financial statements.
Statements of Financial Position

As at 31 December 2010 (Contd)
Group Company 31.12.2010 31.3.2010 31.12.2010 31.3.2010 (Restated) (Restated) RM RM RM RM
Note EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital Treasury shares Reserves 17 18 19
88,910,700 88,910,700 (5,528,318) (5,520,461) 62,403,411 58,087,317
88,910,700 88,910,700 (5,528,318) (5,520,461) 29,682,272 29,229,801
145,785,793 141,477,556 113,064,654 112,620,040 Minority interests TOTAL EQUITY 7,512,740 7,025,048 -
153,298,533 148,502,604 113,064,654 112,620,040
LIABILITIES Non-current liabilities Deferred tax liabilities Current liabilities Trade and other payables Current tax liabilities 21 38,586,496 938,089 39,524,585 TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES 42,228,600 38,046,192 1,057,726 39,103,918 41,935,258 2,805,581 2,805,581 2,805,581 344,835 344,835 344,835 20 2,704,015 2,831,340 -
195,527,133 190,437,862 115,870,235 112,964,875
Statements of Comprehensive Income

For the Financial Period From 1 April 2010 to 31 December 2010
Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 (Restated) RM RM 207,184,530 (185,783,547) 21,400,983 3,537,889 (6,493,091) (5,246,592) (3,832,165) (67,128) 281,198 24 25 9,581,094 (2,080,535) 7,500,559 232,376,892 (202,734,824) 29,642,068 2,416,628 (6,689,116) (5,924,609) (4,928,443) (91,814) 173,235 368,225 14,966,174 (3,321,146) 11,645,028 Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 (Restated) RM RM 8,000,000 8,000,000 96,673 (526,616) (100,955) 7,469,102 (1,873,278) 5,595,824 21,678,000 21,678,000 (412,383) (139,435) 21,126,182 (5,307,289) 15,818,893
Note Revenue Cost of sales Gross profit Other income Selling and distribution costs Administrative expenses Other expenses Finance costs Share of profits of an associate Share of profits of a jointly controlled entity Profit before tax Tax expense Profit for the financial period/year Other comprehensive loss: Fair value adjustment on available-for-sale financial asset Total comprehensive income Profit attributable to: Owners of the parent Minority interests 23
(1,260,000) 6,240,559
11,645,028
5,595,824
15,818,893
7,023,420 477,139 7,500,559
10,357,559 1,287,469 11,645,028
5,595,824 5,595,824
15,818,893 15,818,893
Total comprehensive income attributable to: Owners of the parent Minority interests
5,763,420 477,139 6,240,559
10,357,559 1,287,469 11,645,028
5,595,824 5,595,824
15,818,893 15,818,893
Single tier tax exempt dividend per ordinary share (sen) - First interim dividend - Second interim dividend Earnings per ordinary share attributable to owners of the parent - Basic
26 3.50 2.50 3.00 3.50 2.50 3.00
27
4.10
6.05
Statements of Changes in Equity

Total attributable Treasury to owners of shares the parent RM RM
Group Balance as at 1 April 2009 Total comprehensive income Transactions with owners Dividends paid Dividends paid to minority interests of subsidiaries Ordinary shares issued pursuant to ESOS Total transactions with owners Balance as at 31 March 2010
Note
Share capital RM
Share premium RM
Retained earnings RM
Minority interests RM
Total equity RM
88,592,100 -
7,266,493 -
52,366,815 10,357,559
(5,520,461) 142,704,947 10,357,559
6,157,079 148,862,026 1,287,469 11,645,028
26
(11,979,258)
(11,979,258)
(11,979,258)
(419,500)
(419,500)
17
318,600
75,708
394,308
394,308
318,600
75,708
(11,979,258)
(11,584,950)
(419,500) (12,004,450)
88,910,700
7,342,201
50,745,116
(5,520,461) 141,477,556
7,025,048 148,502,604

For the Financial Period From 1 April 2010 to 31 December 2010 (Contd)
Available -for-sale reserve RM Total attributable to owners of the parent RM
Group Balance as at 31 March 2010 Effects of the adoption of FRS 139 Restated balance as at 1 April 2010 Total comprehensive income Transactions with owners Dividends paid Repurchase of shares Total transactions with owners Balance as at 31 December 2010
Note
Share capital RM
Share premium RM
Retained earnings RM
Treasury shares RM
Minority interests RM
Total equity RM
88,910,700 34 -
7,342,201 -
3,664,370
50,745,116 31,657
(5,520,461) -
141,477,556 3,696,027
7,025,048 10,553
148,502,604 3,706,580
88,910,700 -
7,342,201 -
3,664,370 (1,260,000)
50,776,773 7,023,420
(5,520,461) -
145,173,583 5,763,420
7,035,601 477,139
152,209,184 6,240,559
26 18
(5,143,353) -
(7,857)
(5,143,353) (7,857)
(5,143,353) (7,857)
(5,143,353)
(7,857)
(5,151,210)
(5,151,210)
88,910,700
7,342,201
2,404,370
52,656,840
(5,528,318)
145,785,793
7,512,740
153,298,533

Share capital RM 88,592,100 Share premium RM 7,266,493 Retained earnings RM 18,047,965 15,818,893 Treasury shares RM Total RM
Company Balance as at 1 April 2009 Total comprehensive income Transactions with owners Dividends paid Ordinary shares issued pursuant to ESOS Total transactions with owners Balance as at 31 March 2010 Total comprehensive income Transaction with owners Dividends paid Repurchase of shares Total transactions with owners Balance as at 31 December 2010
Note
(5,520,461) 108,386,097 - 15,818,893
26 17
318,600 318,600 88,910,700 -
75,708 75,708 7,342,201 -
(11,979,258) (11,979,258) 21,887,600 5,595,824
(11,979,258) 394,308 (11,584,950)
(5,520,461) 112,620,040 5,595,824
26 18
88,910,700
7,342,201
(5,143,353) (5,143,353) 22,340,071
(7,857) (7,857)
(5,143,353) (7,857) (5,151,210)
(5,528,318) 113,064,654
Statements of Cash Flows

Group Company 1.4.2010 to 1.4.2009 to 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 31.12.2010 31.3.2010 (Restated) (Restated) RM RM RM RM
Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Bad debt written off Depreciation of property, plant and equipment Dividend income Fair value adjustments on - derivative assets - short term funds Loss/(Gain) on disposal of property, plant and equipment Loss on disposal of an associate Impairment loss on trade receivables Interest expenses Income distribution from short term funds Interest income Inventories written off Inventories written down Net unrealised loss on foreign exchange Property, plant and equipment written off Reversal of inventories previously written down Share of profits of a jointly controlled entity Share of profits of an associate Operating profit before working capital changes Changes in working capital: Inventories Trade and other receivables Trade and other payables Cash (used in)/generated from operations Interest paid Tax paid, net of refund Net cash (used in)/from operating activities
9,581,094
14,966,174
7,469,102
21,126,182
3,436,996 (490,000) (142,688) (58,523) 2,275 31,562 (143,150) (428,812) 99,797 1,860 213,663 1,294 (45,970) (281,198) 11,778,200
40,415 4,864,420 (595,000) (14,212) 112,428 29,728 51,580 (486,931) 248,402 47,063 447,607 28,089 (368,225) (173,235) 19,198,303
(31,741) (64,031) (901) 7,372,429
21,126,182
(a) 14(f)
12 12 8 12 (a)
(433,714) (15,996,478) 1,190,872
1,531,826 2,562,955 14,062,190
16,480 7,388,909 (1,891,870) 5,497,039
(45,093) 21,081,089 (5,419,499) 15,661,590
(3,461,120) 37,355,274 (31,562) (2,523,354) (51,580) (3,501,078)
(6,016,036) 33,802,616

Group Company 1.4.2010 to 1.4.2009 to 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 31.12.2010 31.3.2010 (Restated) (Restated) RM RM RM RM
Note CASH FLOWS FROM INVESTING ACTIVITIES Dividend received from quoted investments Dividend received from a jointly controlled entity Income distribution received from short term funds Interest received (Advances to)/Repayments by a jointly controlled entity Repayments by/(Advances to) subsidiaries Purchase of property, plant and equipment Placements of short term funds Proceeds from disposal of property, plant and equipment Proceeds from disposal of an associate Net cash (used in)/from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of ordinary shares Purchase of treasury shares Dividends paid Dividends paid to minority interests of subsidiaries Net cash used in financing activities Net (decrease)/increase in cash and cash equivalents Effects of exchange rate fluctuations on cash and cash equivalents Cash and cash equivalents at beginning of financial period/year Cash and cash equivalents at end of financial period/year 16
490,000 320,000 143,150 428,812 (10,631) 8 (4,547,712) (13,030,113) 1,320 (a) (16,205,174)
595,000 360,000 486,931 10,308 (7,054,952) 42,388 5,700,000 139,675
64,031 901 12,001,807 (6,464,031) 5,602,708
(4,066,620) (4,066,620)
18 26
394,308 (7,857) (5,143,353) (11,979,258) (419,500) (5,151,210) (12,004,450) (27,372,420) 21,937,841 (5,814) 70,433,521 43,055,287 (669,562) 49,165,242 70,433,521
394,308 (7,857) (5,143,353) (11,979,258) (5,151,210) (11,584,950) 5,948,537 242,715 6,191,252 10,020 232,695 242,715

Note to the statements of cash flows Investment in an associate (a) In previous financial year, Formosa Prosonic Chemicals Sdn. Bhd., a wholly-owned subsidiary of the Company disposed off the entire equity interest of 30% in Musashi Paint Corporation Sdn. Bhd. (MPC). The results of MPC in previous financial year had been accounted for based on the unaudited management accounts up to the date of disposal. The summarised financial information of the associate was as follows: 1.4.2009 to 19.5.2009 RM
Results
Revenue Profit for the financial period/year
1,470,511 577,451
The loss on disposal of the associate in previous financial year was as follows: 31.3.2010 RM Group Cost of investment less shares of post acquisition results Net proceeds from disposal Loss on disposal 5,812,428 5,700,000 112,428
Notes to the Financial Statements

31 December 2010
1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. The principal place of business of the Company is located at No. 2, Jalan 1, Bandar Sultan Suleiman, Taiwanese Industrial Park, 42000 Port Klang, Selangor Darul Ehsan. The financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 27 April 2011.
2.
PRINCIPAL ACTIVITIES The Company is an investment holding company. The principal activities of the subsidiaries are set out in Note 9 to the financial statements. There have been no significant changes in the nature of these activities during the financial period.
3.
CHANGE OF FINANCIAL YEAR END During the financial period, the Group and the Company changed its financial year end from 31 March to 31 December.
4.
BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (FRSs) and the provisions of the Companies Act, 1965 in Malaysia. However, Note 19(c) to the financial statements has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad.
5.
SIGNIFICANT ACCOUNTING POLICIES 5.1 Basis of accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements. The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 7 to the financial statements. Although these estimates and assumptions are based on the Directors best knowledge of events and actions, actual results could differ from those estimates.

31 December 2010 (Contd)
5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.2 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries made up to the end of the financial period using the purchase method of accounting. Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination. At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill. If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will: (a) reassess the identification and measurement of the acquirees identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the business combination; and recognise immediately in profit or loss any excess remaining after that reassessment.
(b)
When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiarys identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation. Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently convertible or exercisable are taken into consideration. Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. If a subsidiary uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements. The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds and the Groups share of its net assets as of the date of disposal including the carrying amount of goodwill and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the consolidated statement of comprehensive income. Minority interests is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the minoritys share of the fair value of the subsidiaries identifiable assets and liabilities at the acquisition date and the minoritys share of changes in the subsidiaries equity since that date. Where losses applicable to the minority in a subsidiary exceed the minoritys interest in the equity of that subsidiary, the excess and any further losses applicable to the minority are allocated against the Groups interest except to the extent that the minority has a binding obligation and is able to make additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the Groups interest until the minoritys share of losses previously absorbed by the Group has been recovered.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.2 Basis of consolidation (continued) Minority interest is presented in the consolidated statement of financial position within equity and is presented in the consolidated statement of changes in equity separately from equity attributable to owners of the Company. Minority interest in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the total profit or loss for the financial period between minority interest and owners of the Company. Changes in the Companys ownership in a subsidiary that do not result in a loss of control are accounted for as equity transactions. If the Company loses control of a subsidiary, the assets and liabilities of the subsidiary are derecognised at their carrying amounts at the date when control is lost and any resulting difference with the fair value of the consideration received will be recognised in profit or loss. 5.3 Property, plant and equipment and depreciation All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has different useful life, is depreciated separately. After initial recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated to write off the costs of the assets to their residual values on a straight line basis over their estimated useful lives. The principal depreciation periods are as follows: Factory buildings Leasehold land Plant, machinery and equipment Office equipment Furniture and fittings Motor vehicles Renovations and installations Canteen equipment 50 years 60 - 99 years 1 - 10 years 1 - 10 years 1 - 10 years 5 years 1 - 10 years 1 - 10 years
At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 5.6 to the financial statements on impairment of non-financial assets).

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.3 Property, plant and equipment and depreciation (continued) The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit or loss. 5.4 Leases (a) Finance leases Assets acquired under finance leases which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Groups incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets. The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are recognised in profit or loss over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease liabilities. (b) Operating leases A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term. (c) Leases of land and buildings For leases of land and building, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets. The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and building are allocated between the land and the building elements of the lease in proportion to the relative fair values for leasehold interest in the land element and the building element of the lease at the inception of the lease. Following the adoption of Amendment to FRS 117 Leases contained in the Improvements to FRSs (2009), the Group reassessed the classification of land elements of unexpired leases on the basis of information existing at the inception of those leases. Consequently, the Group retrospectively reclassified all its prepaid lease payments for land as property, plant and equipment as disclosed in Notes 8 and 33 to the financial statements.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.5 Investments (a) Subsidiaries A subsidiary is an entity in which the Group and the Company have power to control the financial and operating policies so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. An investment in subsidiary, which is eliminated on consolidation, is stated in the Companys separate financial statements at cost less impairment losses, if any. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss. (b) Associate An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. In the entitys separate financial statements, an investment in associate is stated at cost less impairment losses, if any. An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment in associate in the consolidated statement of financial position is initially recognised at cost and adjusted thereafter for the post acquisition change in the Groups share of net assets of the investment. The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long term interest that, in substance, form part of the Groups net interest in the associate. The Groups share of the profit or loss of the associate during the financial period is recognised in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. Distributions received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the Groups proportionate interest in the associate arising from changes in the associates equity that have not been recognised in the associates profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Groups share of those changes is recognised directly in equity of the Group. Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Groups interest in the associate. When the Groups share of losses in the associate equals or exceeds its interest in the associate, the carrying amount of that interest is reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on its behalf. The most recent available financial statements of the associate are used by the Group in applying the equity method. When the end of the reporting periods of the financial statements are not coterminous, the share of results is arrived at using the latest audited financial statements for which the difference in end of the reporting periods is no more than three (3) months. Adjustments are made for the effects of any significant transactions or events that occur between the intervening period. Upon disposal of an investment in associate, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.5 Investments (continued) (c) Jointly controlled entity A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entities over which there is contractually agreed sharing of joint control over the economic activity of the entity. Joint control exists when strategic financial and operational decisions relating to the activity require the unanimous consent of all the parties sharing control. In the entitys separate financial statements, an investment in jointly controlled entity is stated at cost less impairment losses, if any. The investment in jointly controlled entity is accounted for in the consolidated financial statements using the equity method of accounting. The Groups share of the profit or loss of the jointly controlled entity during the financial period is included in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that joint control commences until the date that joint control ceases. The Group recognises the portion of gains and losses on the sale of assets by the Group to the joint venture that is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint venture until it results from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, a loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment loss. When necessary, in applying the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with those of the Group. Unrealised gains on transactions between the Group and its jointly controlled entity are eliminated to the extent of the Groups interest in the jointly controlled entity; unrealised losses are also eliminated unless the transaction provides evidence on impairment of the asset transferred. Where necessary, in applying the equity method, adjustments are made to the financial statements of the jointly controlled entity to ensure consistency of accounting policies with those of the Group. Adjustments to the carrying amount may also be necessary for changes in the Groups proportionate interest in the jointly controlled entity arising from changes in the jointly controlled entitys equity that have not been recognised in the jointly controlled entitys profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Groups share of those changes is recognised directly in equity of the Group. Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss. 5.6 Impairment of non-financial assets The carrying amount of assets, except for financial assets (excluding investments in subsidiaries and a jointly controlled entity), inventories and deferred tax assets, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated. The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (CGU) to which the asset belongs. The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.6 Impairment of non-financial assets (continued) In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated to the assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is recognised in profit or loss immediately. An impairment loss for assets is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income immediately in profit or loss. 5.7 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out formula. The cost of raw materials comprises all cost of purchase plus the cost of bringing the inventories to their present location and condition. The cost of work-in-progress and finished goods includes the cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the production facilities. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. 5.8 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group. Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.8 Financial instruments (continued) An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss. (a) Financial assets A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent measurement: (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this classification upon initial recognition. Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses. However, derivatives that is linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price in an active market are recognised at cost. (ii) Held-to-maturity investments Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process. (iii) Loans and receivables Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the effective interest method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when the financial assets are derecognised or impaired, and through the amortisation process. (iv) Available-for-sale financial assets Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.8 Financial instruments (continued) (a) Financial assets (continued) (iv) Available-for-sale financial assets (continued) Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the Groups right to receive payment is established. Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid investments with original maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes in value. A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive income shall be recognised in profit or loss. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or marketplace convention. A regular way purchase or sale of financial assets shall be recognised and derecognised, as applicable, using trade date accounting. (b) Financial liabilities Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into the following two categories after initial recognition for the purpose of subsequent measurement: (i) Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition. Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses. (ii) Other financial liabilities Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as at fair value through profit or loss.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.8 Financial instruments (continued) (b) Financial liabilities (continued) (ii) Other financial liabilities (continued) Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the amortisation process. A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. (c) Equity An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments. Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss. Dividends to shareholders are recognised in equity in the period in which they are declared. If the Company reacquires its own equity instruments, the consideration paid, including any attributable transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Companys own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity. Following the adoption of FRS 139 during the financial period, the Group reassessed the classification and measurement of financial assets and financial liabilities as at 1 April 2010. Consequently, the Group reclassified and remeasured financial assets and financial liabilities as disclosed in Note 34 to the financial statements.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.9 Impairment of financial assets The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period. (a) Loans and receivables The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable, and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables. If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial assets carrying amount and the present value of estimated future cash flows discounted at the financial assets original effective interest rate. The impairment loss is recognised in profit or loss. The carrying amount of loans and receivables is reduced through the use of an allowance account. If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of impairment reversed is recognised in profit or loss. (b) Available-for-sale financial assets The Group collectively considers factors such as significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market as objective evidence that available-for-sale financial assets are impaired. If any such objective evidence exists, an amount comprising the difference between the financial assets cost (net of any principal payment and amortisation) and current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss. Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Instead, any increase in the fair value subsequent to the impairment loss is recognised in other comprehensive income. 5.10 Borrowing costs All borrowing costs are recognised in the profit or loss account in the period in which they are incurred. 5.11 Income taxes Income taxes include all domestic taxes on taxable profit. Taxes in the statement of comprehensive income comprise current tax and deferred tax.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.11 Income taxes (continued) (a) Current tax Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period. Current tax for the current and prior periods is measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the end of the reporting period. (b) Deferred tax Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the statement of financial position and its tax base. Deferred tax is recognised for all temporary differences, unless the deferred tax arises from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit. A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profits. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority on either: (i) (ii) the same taxable entity; or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Deferred tax will be recognised as income or expense and included in the profit or loss for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting period. 5.12 Provisions Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.12 Provisions (continued) Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed. Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. 5.13 Contingent liabilities and contingent assets A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but disclose its existence where inflows of economic benefits are probable, but not virtually certain. In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest. 5.14 Employee benefits (a) Short term employee benefits Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the financial period when employees have rendered their services to the Group. Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term nonaccumulating compensated absences such as sick leave are recognised when the absences occur. Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation. (b) Defined contribution plan The Company and its subsidiaries make contributions to a statutory provident fund. The contributions are recognised as a liability after deducting any contribution already paid and as an expense in the period in which the employees render their services. (c) Share-based payments The Group operated an equity-settled share-based compensation plan, allowing the employees of the Group to acquire ordinary shares of the Company at predetermined prices. The total fair value of share options granted to employees was recognised as an expense with a corresponding increase in the share options reserve within equity over the vesting period and taking into account the probability that the options would vest.

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.14 Employee benefits (continued) (c) Share-based payments (continued) The fair value of share options was measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions were included in assumptions about the number of options that were expected to become exercisable on the vesting date. At the end of each reporting period, the Group revised its estimates of the number of options that are expected to become exercisable on vesting date. It recognised the impact of the revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount was recognised in the share options reserve until the options were exercised, upon which it would be transferred to share premium, or until the options expires, upon which it would be transferred directly to retained earnings. The proceeds received net of any directly attributable transaction costs were credited to equity when the options are exercised. The Group had adopted the transitional provision of FRS 2 in respect of equity instruments granted after 31 December 2004 and not vested on 1 January 2006. 5.15 Foreign currencies (a) Functional and presentation currency Items included in the financial statements of each of the Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Ringgit Malaysia, which is also the Companys functional and presentation currency. (b) Foreign currency translations and balances Transactions in foreign currencies are converted into Ringgit Malaysia of the respective operating entities at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting period are translated into Ringgit Malaysia of the respective operating entities at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts are used. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Nonmonetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes. 5.16 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the Groups activities as follows:

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.16 Revenue recognition (continued) (a) Sale of goods Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with the delivery of goods and services and acceptance by customers. (b) Services Revenue in respect of the rendering of services is recognised when the stage of completion at the end of the reporting period and the cost incurred can be reliably measured. The stage of completion is determined by the services performed to date as a percentage of total services to be performed. (c) Dividend income Dividend income is recognised when the right to receive payment is established. (d) Interest and rental income Interest and rental income are recognised on accrual basis. 5.17 Research and development costs Expenditure on development activities of internally developed products is recognised as an intangible asset when it relates to the production of new or substantively improved products and processes and when the Group can demonstrate that it is technically feasible to develop the product or processes, adequate resources are available to complete the development and that there is an intention to complete and sell the product or processes to generate future economic benefits. Development expenditure not satisfying the criteria mentioned and expenditure arising from research or from the research phase of internal projects are recognised in profit or loss as incurred. Research expenditure shall be recognised as an expense in the period in which they are incurred. 5.18 Operating segments During the previous financial year, segment reporting was presented based on business segments and geographical segments of the Group. Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those components operating in other economic environments. Following the adoption of FRS 8 Operating Segments during the current financial period, operating segments are defined as components of the Group that: (a) engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group); whose operating results are regularly reviewed by the Groups chief operating decision maker (i.e. the Groups Chief Executive Officer) in making decisions about resources to be allocated to the segment and assessing its performance; and for which discrete financial information is available.
(b)
(c)

5. SIGNIFICANT ACCOUNTING POLICIES (continued) 5.18 Operating segments (continued) An operating segment may engage in business activities for which it has yet to earn revenues. The Group reports separately information about each operating segment that meets any of the following quantitative thresholds: (a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the combined revenue, internal and external, of all operating segments. The absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of: (i) (ii) (c) the combined reported profit of all operating segments that did not report a loss; and the combined reported loss of all operating segments that reported a loss.
(b)
Its assets are ten (10) per cent or more of the combined assets of all operating segments.
Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management believes that information about the segment would be useful to users of the financial statements. Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Groups revenue. Operating segments identified as reportable segments in the current financial period in accordance with the quantitative thresholds would result in a restatement of prior period segment data for comparative purposes.
6.
ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs 6.1 New FRS adopted during the current financial period (a) FRS 8 and the consequential amendments resulting from FRS 8 are mandatory for annual financial periods beginning on or after 1 July 2009. FRS 8 sets out the requirements for the disclosure of information on the Groups operating segments, products and services, the geographical areas in which it operates and its customers. The requirements of this Standard are based on the information about the components of the Group that management uses to make decisions about operating matters. This Standard requires the identification of operating segments on the basis of internal reports that are regularly reviewed by the Groups chief operating decision maker in order to allocate resources to the segment and assess its performance, as elaborated in Note 5.18 to the financial statements. In accordance with the transitional provisions of FRS 8, segment information for prior years that is reported as comparative information for the initial year of application has been restated to conform to requirements of FRS 8, as disclosed in Note 30 to the financial statements.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (b) FRS 4 Insurance Contracts and the consequential amendments resulting from FRS 4 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 4 replaces the existing FRS 2022004 General Insurance Business and FRS 2032004 Life Insurance Business. This Standard applies to all insurance contracts, including reinsurance contracts that an entity issues and to reinsurance contracts that it holds. This Standard prohibits provisions for potential claims under contracts that are not in existence at the end of the reporting period, and requires a test for the adequacy of recognised insurance liabilities and an impairment test for reinsurance assets. This Standard also requires an insurer to keep insurance liabilities in its statement of financial position until they are discharged or cancelled, or expire, and to present insurance liabilities without offsetting them against related reinsurance assets. There is no impact upon adoption of this Standard during the financial period. (c) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation. This Standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial instruments for the Groups financial position and performance. (d) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are mandatory for annual periods beginning on or after 1 January 2010. This Standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale. There is no impact upon adoption of this Standard during the financial period. (e) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual financial periods beginning on or after 1 January 2010. This Standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. The impact upon adoption of this Standard is disclosed in Note 34 to the financial statements. (f) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning on or after 1 January 2010. These amendments clarify that vesting conditions comprise service conditions and performance conditions only. Cancellations by parties other than the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment that are non-vesting conditions are included in the grant date fair value of the share-based payment. There is no impact upon adoption of these amendments during the financial period.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (g) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate are mandatory for annual periods beginning on or after 1 January 2010. These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The cost method of accounting for an investment has also been removed pursuant to these amendments. There is no impact upon adoption of these amendments during the financial period. (h) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010. This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host contract that significantly modifies the cash flows that would otherwise be required by the host contract. There is no impact upon adoption of this Interpretation during the financial period. (i) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January 2010. This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost. There is no impact upon adoption of this Interpretation during the financial period. (j) IC Interpretation 11 FRS 2 Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010. This Interpretation requires share-based payment transactions in which the Company receives services from employees as consideration for its own equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees. If the Company grants rights to its equity instruments to the employees of its subsidiaries, this Interpretation requires the Company to recognise the equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the remuneration expense for the services received from employees. If the subsidiaries grant rights to equity instruments of the Company to its employees, this Interpretation requires the Company to account for the transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations. There is no impact upon adoption of this Interpretation during the financial period. The Group would like to draw attention to the withdrawal of this Interpretation for annual periods beginning on or after 1 January 2011 as disclosed in Note 6.2(k) to the financial statements.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (k) IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on or after 1 January 2010. This Interpretation requires the separation of award credits as a separately identifiable component of sales transactions involving the award of free or discounted goods or services in the future. The fair value of the consideration received or receivable from the initial sale shall be allocated between the award credits and the other components of the sale. If the Group supplies the awards itself, the consideration allocated to the award credits shall only be recognised as revenue when the award credits are redeemed. If a third party supplies the awards, the Group shall assess whether it is acting as a principal or agent in the transaction. If the Group is acting as the principal in the transaction, it shall measure its revenue as the gross consideration allocated to the award credits. If the Group is acting as an agent, it shall measure its revenue as the net amount retained on its own account, and recognise the net amount as revenue when the third party becomes obliged to supply the awards and entitled to receive the consideration for doing so. There is no impact upon adoption of this Interpretation during the financial period. (l) IC Interpretation 14 FRS 119 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods beginning on or after 1 January 2010. This Interpretation applies to all post-employment defined benefits and other long-term employee defined benefits. This Interpretation clarifies that an economic benefit is available if the Company can realise it at some point during the life of the plan or when the plan liabilities are settled, and that it does not depend on how the Company intends to use the surplus. A right to refund is available to the Group in stipulated circumstances and the economic benefit available shall be measured as the amount of the surplus at the end of the reporting period less any associated costs. If there are no minimum funding requirements, the economic benefit available shall be determined as a reduction in future contributions as the lower of the surplus in the plan and the present value of the future service cost to the Group. If there is a minimum funding requirement for contributions relating to the future accrual of benefits, the economic benefit available shall be determined as a reduction in future contributions at the present value of the estimated future service cost less the estimated minimum funding required in each financial period. There is no impact upon adoption of this Interpretation during the financial period. (m) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010. FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. This Standard introduces the titles statement of financial position and statement of cash flows to replace the current titles balance sheet and cash flow statement respectively. A new statement known as the statement of comprehensive income is also introduced in this Standard whereby all non-owner changes in equity are required to be presented in either one statement of comprehensive income or in two statements (i.e. a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (m) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010 (continued). This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative period if there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the financial statements. Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other comprehensive income, and the presentation of dividends recognised as distributions to owners together with the related amounts per share in the statement of changes in equity or in the notes to the financial statements. This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based on information provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable financial instruments classified as equity instruments. Following the adoption of this Standard, the Group has reflected the new format of presentation and additional disclosures warranted in the primary financial statements and relevant notes to the financial statements. (n) Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual periods beginning on or after 1 January 2010. These amendments permit reclassifications of non-derivative financial assets (other than those designated at fair value through profit or loss upon initial recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the available-for-sale category to the loans and receivables category are also permitted provided there is intention and ability to hold that financial asset for the foreseeable future. All of these reclassifications shall be subjected to subsequent reassessments of embedded derivatives. These amendments also clarify the designation of one-sided risk in eligible hedged items and streamline the terms used throughout the Standards in accordance with the changes resulting from FRS 101. There is no impact upon adoption of these amendments during the financial period. (o) Amendments to FRS 132 Financial Instruments: Presentation are mandatory for annual periods beginning on or after 1 January 2010. These amendments require certain puttable financial instruments, and financial instruments that impose an obligation to deliver to counterparties a pro rata share of the net assets of the entity only on liquidation to be classified as equity. Puttable financial instruments are defined as financial instruments that give the holder the right to put the instrument back to the issuer for cash, or another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death or retirement of the instrument holder. There is no impact upon adoption of these amendments during the financial period.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (p) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010. Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that the disclosure requirements of this Standard specifically apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 8 clarifies the consistency of disclosure requirement for information about profit or loss, assets and liabilities. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing activities. Cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash receipts, shall be classified as cash flows from operating activities. Expenditures that result in a recognised asset in the statement of financial position are eligible for classification as cash flows from investing activities. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 108 clarifies that only Implementation Guidance issued by the MASB that are integral parts of FRSs is mandatory. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising dividends declared after the reporting period but before the financial statements are authorised for issue. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the applicability of this Standard to property that is being constructed or developed for future use as investment property but do not yet satisfy the definition of investment property in FRS 140 Investment Property. This amendment also replaces the term net selling price with fair value less costs to sell, and clarifies that proceeds arising from routine sale of items of property, plant and equipment shall be recognised as revenue in accordance with FRS 118 Revenue rather than FRS 5. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of classification based on the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made retrospectively in accordance with FRS 108. At the end of reporting period, the Group has carrying amount of prepaid lease payments for land of RM8,822,060 that has been reclassified as land held in accordance with FRS 116 upon adoption of this amendment. Amendment to FRS 118 clarifies reference made on the term transaction costs to the definition in FRS 139. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 119 Employee Benefits clarifies the definitions in this Standard by consistently applying settlement dates within twelve (12) months in the distinction between short-term employee benefits and other long-term employee benefits. This amendment also provides additional explanations on negative past service cost and curtailments. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. There is no impact upon adoption of this amendment during the financial period.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (p) Improvements to FRSs (2009) are mandatory for annual periods beginning on or after 1 January 2010 (continued). Amendment to FRS 123 clarifies that interest expense calculated using the effective interest rate method described in FRS 139 qualifies for recognition as borrowing costs. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments measured at cost shall be accounted for in accordance with FRS 5 when they are held for sale in accordance with FRS 5. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 128 Investments in Associates clarifies that investments in associates held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies that impairment loss recognised in accordance with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill, that forms the carrying amount of the investment. Accordingly, any reversal of that impairment loss shall be recognised in accordance with FRS 136. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the requirement to apply historical cost basis of accounting. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 131 Interests in Joint Ventures clarifies that venturers interests in jointly controlled entities held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment also clarifies that a listing and description of interests in significant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 136 clarifies the determination of allocation of goodwill to each cash-generating unit whereby each unit shall not be larger than an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is determined using discounted cash flow projections. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 138 Intangible Assets clarifies the examples provided in this Standard in measuring the fair value of an intangible asset acquired in a business combination. This amendment also removes the statement on the rarity of situations whereby the application of the amortisation method for intangible assets results in a lower amount of accumulated amortisation than under the straight line method. There is no impact upon adoption of this amendment during the financial period. Amendment to FRS 140 clarifies that properties that are being constructed or developed for future use as investment property are within the definition of investment property. This amendment further clarifies that if the fair value of such properties cannot be reliably determinable but it is expected that the fair value would be readily determinable when construction is complete, the properties shall be measured at cost until either its fair value becomes reliably determinable or construction is completed, whichever is earlier. There is no impact upon adoption of this amendment during the financial period.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.1 New FRS adopted during the current financial period (continued) (q) Amendments to FRS 132 are mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the transitional provisions in accounting for compound financial instruments and classification of right issues respectively. These amendments remove the transitional provisions in respect of accounting for compound financial instruments issued before 1 January 2003 pursuant to FRS 1322004 Financial Instruments: Disclosure and Presentation. Such compound financial instruments shall be classified into its liability and equity components when FRS 139 first applies. The amendments also clarify that rights, options or warrants to acquire a fixed number of the Companys own equity instruments for a fixed amount of any currency shall be classified as equity instruments rather than financial liabilities if the Company offers the rights, options or warrants pro rata to all of its own existing owners of the same class of its own non-derivative equity instruments. There is no impact upon adoption of these amendments during the financial period. (r) Amendments to FRS 139 are mandatory for annual periods beginning on or after 1 January 2010. These amendments remove the scope exemption on contracts for contingent consideration in a business combination. Accordingly, such contracts shall be recognised and measured in accordance with the requirements of FRS 139. There is no impact upon adoption of these amendments during the financial period. 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (a) FRS 1 First-time Adoption of Financial Reporting Standards is mandatory for annual periods beginning on or after 1 July 2010. This Standard supersedes the existing FRS 1 and shall be applied when the Group adopts FRSs for the first time via the explicit and unreserved statement of compliance with FRSs. An opening FRS statement of financial position shall be prepared and presented at the date of transition to FRS, whereby: (i) (ii) (iii) (iv) All assets and liabilities shall be recognised in accordance with FRSs; Items of assets and liabilities shall not be recognised if FRSs do not permit such recognition; Items recognised in accordance with previous GAAP shall be reclassified in accordance with FRSs; and All recognised assets and liabilities shall be measured in accordance with FRSs.
All resulting adjustments shall therefore be recognised directly in retained earnings at the date of transition to FRSs. The Group does not expect any impact on the financial statements arising from the adoption of this Standard. (b) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010. This Standard supersedes the existing FRS 3 and now includes business combinations involving mutual entities and those achieved by way of contract alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interests proportionate share of the acquirees net identifiable assets.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (b) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010 (continued). The time limit on the adjustment to goodwill due to the arrival of new information on the crystallisation of deferred tax benefits shall be restricted to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present obligations shall be recognised, regardless of the probability of outflow of economic resources. Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received. Consideration transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value at acquisition date. In business combinations achieved in stages, the acquirer shall remeasure its previously held equity interest at its acquisition date fair value and recognise the resulting gain or loss in profit or loss. The Group does not expect any impact on the financial statements arising from the adoption of this Standard. (c) FRS 127 Consolidated and Separate Financial Statements is mandatory for annual periods beginning on or after 1 July 2010. This Standard supersedes the existing FRS 127 and replaces the current term minority interest with a new term non-controlling interest which is defined as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. Changes in the Companys ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. If the Group loses control of a subsidiary, any gains or losses are recognised in profit or loss and any investment retained in the former subsidiary shall be measured at its fair value at the date when control is lost. As at the end of the reporting period, the Group reports minority interests of RM7,512,740. The Group expects to reclassify this as non-controlling interests and remeasure the non-controlling interests prospectively in accordance with the transitional provisions of FRS 127. (d) Amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010. Amendments to FRS 2 Share-based Payments clarify that transactions in which the Group acquired goods as part of the net assets acquired in a business combination or contribution of a business on the formation of a joint venture are excluded from the scope of this Standard. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 5 clarify that non-current asset classified as held for distribution to owners acting in their capacity as owners are within the scope of this Standard. The amendment also clarifies that in determining whether a sale is highly probable, the probability of shareholders approval, if required in the jurisdiction, shall be considered. In a sale plan involving loss of control of a subsidiary, all assets and liabilities of that subsidiary shall be classified as held for sale, regardless of whether the Group retains a non-controlling interest in its former subsidiary after the sale. Discontinued operations information shall also be presented. Non-current asset classified as held for distribution to owners shall be measured at the lower of its carrying amount and fair value less costs to distribute. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (d) Amendments to FRSs are mandatory for annual periods beginning on or after 1 July 2010 (continued). Amendments to FRS 138 clarify that the intention of separating an intangible asset is irrelevant in determining the identifiability of the intangible asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group reflects the expectations of the Group of an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow. Accordingly, the probability criterion is always considered to be satisfied for separately acquired intangible assets. The useful life of a reacquired right recognised as an intangible asset in a business combination shall be the remaining contractual period of the contract in which the right was granted, and do not include renewal periods. In the case of a reacquired right in a business combination, if the right is subsequently reissued to a third party, the related carrying amount shall be used in determining the gain or loss on reissue. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to IC Interpretation 9 clarify that embedded derivatives in contracts acquired in a business combination, combination of entities or business under common controls, or the formation of a joint venture are excluded from this Interpretation. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. (e) IC Interpretation 12 Service Concession Arrangements is mandatory for annual periods beginning on or after 1 July 2010. This Interpretation applies to operators for public-to-private service concession arrangements, whereby infrastructure within the scope of this Interpretation shall not be recognised as property, plant and equipment of the operator. The operator shall recognise and measure revenue in accordance with FRS 111 Construction Contracts and FRS 118 for the services performed. The operator shall also account for revenue and costs relating to construction or upgrade services in accordance with FRS 111. Consideration received or receivable by the operator for the provision of construction or upgrade services shall be recognised at its fair value. If the consideration consists of an unconditional contractual right to receive cash or another financial asset from the grantor, it shall be classified as a financial asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be classified as an intangible asset. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. (f) IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation is mandatory for annual periods beginning on or after 1 July 2010. This Interpretation applies to hedges undertaken on foreign currency risk arising from net investments in foreign operations and the Group wishes to qualify for hedge accounting in accordance with FRS 139. Hedge accounting is applicable only to the foreign exchange differences arising between the functional currency of the foreign operation and the functional currency of any parent (immediate, intermediate or ultimate parent) of that foreign operation. An exposure to foreign currency risk arising from a net investment in a foreign operation may qualify for hedge accounting only once in the financial statements. Hedging instruments designated in the hedge of a net investment in a foreign operation may be held by any companies within the Group, as long as the designation, documentation and effectiveness requirements of FRS 139 are met. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (g) IC Interpretation 17 Distributions of Non-cash Assets to Owners is mandatory for annual periods beginning on or after 1 July 2010. This Interpretation applies to non-reciprocal distributions of non-cash assets by the Company to its owners in their capacity as owners, as well as distributions that give owners a choice of receiving either non-cash assets or a cash alternative. This Interpretation also applies to distributions in which all owners of the same class of equity instruments are treated equally. The liability to pay a dividend shall be recognised when the dividend is appropriately authorised and is no longer at the discretion of the Company. The liability shall be measured at the fair value of the assets to be distributed. If the Company gives its owners a choice of receiving either a non-cash asset or a cash alternative, the dividend payable shall be estimated by considering the fair value of both alternatives and the associated probability of the owners selection. At the end of each reporting period, the carrying amount of the dividend payable shall be remeasured and any changes shall be recognised in equity. At the settlement date, any difference between the carrying amounts of the assets distributed and the carrying amount of the dividend payable shall be recognised in profit or loss. The Company does not expect any impact on the financial statements arising from the adoption of this Interpretation. (h) Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters is mandatory for annual periods beginning on or after 1 January 2011. This amendment permits a first-time adopter of FRSs to apply the exemption of not restating comparatives for the disclosures required in Amendments to FRS 7. The Group does not expect any impact on the financial statements arising from the adoption of this amendment. (i) Amendments to FRS 1 Additional Exemptions for First-time Adopters are mandatory for annual periods beginning on or after 1 January 2011. These amendments permits a first-time adopter of FRSs to apply the exemption of not restating the carrying amounts of oil and gas assets determined under previous GAAP. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. (j) Amendments to FRS 7 Improving Disclosures about Financial Instruments are mandatory for annual periods beginning on or after 1 January 2011. These amendments require enhanced disclosures of fair value of financial instruments based on the fair value hierarchy, including the disclosure of significant transfers between Level 1 and Level 2 of the fair value hierarchy as well as reconciliations for fair value measurements in Level 3 of the fair value hierarchy. By virtue of the exemption provided under paragraph 44G of FRS 7, the impact of applying these amendments on the financial statements upon first adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (k) Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions are mandatory for annual periods beginning on or after 1 January 2011. These amendments clarify the scope and the accounting for group cash-settled share-based payment transactions in the separate financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction. Consequently, IC Interpretation 8 Scope of FRS 2 and IC Interpretation 11 have been superseded and withdrawn. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. The effects of adopting IC Interpretation 11 have been disclosed in Note 6.1(j) to the financial statements. (l) IC Interpretation 4 Determining whether an Arrangement contains a Lease is mandatory for annual periods beginning on or after 1 January 2011. This Interpretation requires the determination of whether an arrangement is, or contains, a lease based on an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and whether the arrangement conveys a right to use the asset. This assessment shall be made at the inception of the arrangement and subsequently reassessed if certain condition(s) in the Interpretation is met. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no arrangements dependent on the use of specific assets in the Group. (m) IC Interpretation 18 Transfers of Assets from Customers is mandatory for annual periods beginning on or after 1 January 2011. This Interpretation applies to agreements in which an entity receives from a customer an item of property, plant and equipment that must be used to either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services. The entity receiving the transferred item is required to assess whether the transferred item meets the definition of an asset set out in the Framework. The credit entry would be accounted for as revenue in accordance with FRS 118. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. (n) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012. This Interpretation applies to the accounting for revenue and associated expenses by entities undertaking construction or real estate directly or via subcontractors. Within a single agreement, the Company may contract to deliver goods or services in addition to the construction of real estate. Such an agreement shall therefore, be split into separately identifiable components. An agreement for the construction of real estate shall be accounted for in accordance with FRS 111 if the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress. Accordingly, revenue shall be recognised by reference to the stage of completion of the contract.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (n) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012 (continued). An agreement for the construction of real estate in which buyers only have limited ability to influence the design of the real estate or to specify only minor variations to the basic designs is an agreement for the sale of goods in accordance with FRS 118. Accordingly, revenue shall be recognised by reference to the criteria in paragraph 14 of FRS 118 (e.g. transfer of significant risks and rewards, no continuing managerial involvement nor effective control, reliable measurement, etc.). The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. (o) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011. Amendments to FRS 1 clarify that FRS 108 does not apply to changes in accounting policies made upon adoption of FRSs until after the first FRS financial statements have been presented. If changes in accounting policies or exemptions in this FRS are used, an explanation of such changes together with updated reconciliations shall be made in each interim financial report. Entities whose operations are subject to rate regulation are permitted the use of previously revalued amounts as deemed cost. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 3 clarify that for each business combination, the acquirer shall measure at the acquisition date non-controlling interests that consists of the present ownership interests and entitle holders to a proportionate share of the entitys net assets in the event of liquidation. Un-replaced and voluntarily replaced share-based payment transactions shall be measured using the market-based measurement method in accordance with FRS 2 at the acquisition date. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 7 clarify that quantitative disclosures of risk concentrations are required if the disclosures made in other parts of the financial statements are not readily apparent. The disclosure on maximum exposure to credit risk is not required for financial instruments whose carrying amount best represents the maximum exposure to credit risk. The Group expects to improve the disclosures on maximum exposure to credit risk upon adoption of these amendments. Amendments to FRS 101 clarify that a statement of changes in equity shall be presented as part of a complete set of financial statements. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates clarify that the accounting treatment for cumulative foreign exchange differences in other comprehensive income for the disposal or partial disposal of a foreign operation shall be applied prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 128 clarify that the accounting treatment for the cessation of significant influence over an associate shall be applied prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 131 clarify that the accounting treatment for the cessation of joint control over an entity shall be applied prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

6. ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (continued) 6.2 New FRSs that have been issued, but not yet effective and not yet adopted (continued) (o) Improvements to FRSs (2010) are mandatory for annual periods beginning on or after 1 January 2011 (continued). Amendments to FRS 132 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to FRS 134 clarify that updated information on significant events and transactions since the end of the last annual reporting period shall be included in the Groups interim financial report. Although the Group does not expect any impact on the financial statements rising from the adoption of these amendments, it is expected that additional disclosures would be made in the quarterly interim financial statements of the Group. Amendments to FRS 139 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. Amendments to IC Interpretation 13 clarify that the fair value of award credits takes into account, amongst others, the amount of the discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. (p) Amendments to IC Interpretation 14 FRS 119 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction are mandatory for annual periods beginning on or after 1 July 2011. These amendments clarify that if there is a minimum funding requirement for contributions relating to future service, the economic benefit available as a reduction in future contributions shall include any amount that reduces future minimum funding requirement contributions for future service because of the prepayment made. The Group does not expect any impact on the financial statements arising from the adoption of these amendments. (q) IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments is mandatory for annual periods beginning on or after 1 July 2011. This Interpretation applies to situations when equity instruments are issued to a creditor to extinguish all or part of a recognised financial liability. Such equity instruments shall be measured at fair value, and the difference between the carrying amount of the financial liability extinguished and the consideration paid shall be recognised in profit or loss. The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation. (r) FRS 124 Related Party Disclosures and the consequential amendments to FRS 124 are mandatory for annual periods beginning on or after 1 January 2012. This revised Standard simplifies the definition of a related party and eliminates certain inconsistencies within the superseded version. In addition to this, transactions and balances with government-related entities are broadly exempted from the disclosure requirements of the Standard. The Group expects to reduce related party disclosures in respect of transactions and balances with governmentrelated entities upon adoption of this Standard.

7. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS 7.1 Changes in estimates Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Directors are of the opinion that there are no changes in estimates at the end of the reporting period. 7.2 Critical judgement made in applying accounting policies In the process of applying the Groups accounting policies, the Directors are of the opinion that there are no critical judgements involved that have a significant effect on the amounts recognised in the financial statements. 7.3 Key sources of estimation uncertainty The following are key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. (a) Depreciation of property, plant and equipment The cost of property, plant and equipment is depreciated on a straight line basis over the assets useful lives. Management estimates the useful lives of these property, plant and equipment in accordance with accounting policy stated in Note 5.3 on property, plant and equipment and depreciation. These are common life expectancies applied in this industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, and therefore future depreciation charges could be revised. (b) Impairment of receivables The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations differ from the original estimates, the differences will impact the carrying value of receivables. (c) Write down for obsolete or slow moving inventories The Group writes down its obsolete or slow moving inventories based on assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses sales trend and current economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories. (d) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profits will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

8. PROPERTY, PLANT AND EQUIPMENT Balance as at 1.4.2010, as restated RM Depreciation charges for the financial period RM
Group 31.12.2010
Additions RM
Disposals RM
Written off RM
Balance as at 31.12.2010 RM
Carrying amount Factory buildings Leasehold land Plant, machinery and equipment Office equipment Furniture and fittings Motor vehicles Renovations and installations Canteen equipment 22,281,911 8,925,202 13,520,283 416,121 84,883 169,030 3,559,140 178,264 49,134,834 74,550 2,006,646 148,175 2,800 2,284,542 30,999 4,547,712 (1,275) (2,320) (3,595) (89) (1,205) (1,294) (408,963) 21,947,498 (103,142) 8,822,060 (2,161,005) 13,364,560 (75,558) 487,533 (12,326) 75,357 (93,348) 75,682 (559,632) 5,284,050 (23,022) 183,921 (3,436,996) 50,240,661
[--------------- At 31.12.2010 -------------] Accumulated Carrying Cost depreciation amount RM RM RM Factory buildings Leasehold land Plant, machinery and equipment Office equipment Furniture and fittings Motor vehicles Renovations and installations Canteen equipment 27,330,351 9,062,725 43,101,429 1,609,290 463,994 1,724,784 11,071,530 341,751 94,705,854 (5,382,853) 21,947,498 (240,665) 8,822,060 (29,736,869) 13,364,560 (1,121,757) 487,533 (388,637) 75,357 (1,649,102) 75,682 (5,787,480) 5,284,050 (157,830) 183,921 (44,465,193) 50,240,661

8. PROPERTY, PLANT AND EQUIPMENT (continued) Balance as at 1.4.2009, as restated RM Depreciation Balance charges for as at the financial 31.3.2010, year as restated RM RM
Group 31.3.2010
Additions RM
Disposals RM
Written off RM
Carrying amount Factory buildings Leasehold land Plant, machinery and equipment Office equipment Furniture and fittings Motor vehicles Renovations and installations Canteen equipment 19,936,579 9,062,725 13,503,011 460,705 55,276 348,973 3,547,789 85,509 47,000,567 2,857,116 3,178,660 69,865 50,371 774,626 124,314 7,054,952 (27,940) (236) (28,176) (2,371) (5,585) (578) (12,791) (6,764) (28,089) (511,784) (137,523) (3,131,077) (108,864) (20,186) (179,943) (750,484) (24,559) (4,864,420) 22,281,911 8,925,202 13,520,283 416,121 84,883 169,030 3,559,140 178,264 49,134,834
[--------------- At 31.3.2010 -------------] Accumulated Carrying Cost depreciation amount RM RM RM Factory buildings Leasehold land Plant, machinery and equipment Office equipment Furniture and fittings Motor vehicles Renovations and installations Canteen equipment 27,255,801 9,062,725 41,134,428 1,479,124 461,194 1,724,784 8,786,988 338,591 90,243,635 (4,973,890) (137,523) (27,614,145) (1,063,003) (376,311) (1,555,754) (5,227,848) (160,327) (41,108,801) 22,281,911 8,925,202 13,520,283 416,121 84,883 169,030 3,559,140 178,264 49,134,834
(a)
The carrying amounts of leasehold lands are analysed as follows: Group 31.12.2010 31.3.2010 RM RM Long term leasehold land Short term leasehold land 6,296,790 2,525,270 8,822,060 6,353,414 2,571,788 8,925,202

8. PROPERTY, PLANT AND EQUIPMENT (continued) (b) Securities The factory buildings of the Group with carrying amounts of RM3,476,339 (31.3.2010: RM18,255,648) have been charged to a bank for credit facilities granted to the subsidiaries. The leasehold land with carrying amounts of RM2,143,620 (31.3.2010: RM8,262,654) have been charged to a bank for credit facilities granted to the Group. The above credit facilities have not been utilised by the Group as at the end of the financial period. (c) At the end of reporting period, the title deed for a piece of leasehold land of a subsidiary with a carrying amount of RM2,143,620 (31.3.2010: RM2,161,935) is in the process of being transferred and registered in the subsidiarys name. At the end of reporting period, the title deed for a piece of leasehold land of a subsidiary with a carrying amount of RM2,525,270 (31.3.2010: RM2,571,788) is registered under the name of a statutory body of the State Government of Kedah, over which a subsidiary has a right for the remaining lease period expiring on 31 May 2050. During the financial period, the Group reassessed its leases of land in accordance with the Amendment to FRS 117 to be finance leases, where applicable. The classification of prepaid lease payments for land as property, plant and equipment has been accounted for retrospectively. The effects of the reclassifications are shown in Note 33(a) to the financial statements.
(d)
(e)
9.
INVESTMENTS IN SUBSIDIARIES Company 31.12.2010 31.3.2010 RM RM Unquoted shares, at cost 74,893,666 74,893,666
The details of the subsidiaries, which are all incorporated in Malaysia are as follows: Interest in equity held by: Company Subsidiary 31.12.2010 31.3.2010 31.12.2010 31.3.2010 % % % % 100 100 -
Name of company
Principal activities
Formosa Prosonic Technics Sdn. Bhd. (FPT)*
Manufacturing and assembly of speaker units, multi-media speaker systems and moulded plastic parts Manufacturing of chemical paints Manufacturing equipment of specialised
Formosa Prosonic Chemicals Sdn. Bhd.* Formosa Prosonic Equipment Sdn. Bhd.* * Audited by BDO.
100
100
75
75
electrical

9. INVESTMENTS IN SUBSIDIARIES (continued) The details of the subsidiaries, which are all incorporated in Malaysia are as follows (continued): Interest in equity held by: Company Subsidiary 31.12.2010 31.3.2010 31.12.2010 31.3.2010
Name of company Subsidiary of FPT Aerotronic Sdn. Bhd.*
58.19
58.19
Manufacturing of voice coils and related products for use in speaker units and multimedia speaker systems
* Audited by BDO.
10.
INVESTMENT IN A JOINTLY CONTROLLED ENTITY Group 31.12.2010 31.3.2010 RM RM Unquoted shares, at cost Share of post acquisition reserves, net of dividends received 1,816,048 426,379 2,242,427 1,816,048 465,181 2,281,229
The details of the jointly controlled entity, which is incorporated in Malaysia are as follows: Interest in equity held by a subsidiary 31.12.2010 31.3.2010 % % 50 50
Name of company
Elkay Pacific Rim (Malaysia) Sdn. Bhd. (EPR)
Sale of water coolers and related spare parts
The result of EPR has been accounted for based on the unaudited management accounts for the financial period from 1 April 2010 to 31 December 2010. In the previous financial year, the results of EPR had been accounted for based on the audited financial statements for the financial year ended 31 December 2009 and unaudited management accounts for the financial period from 1 January 2010 to 31 March 2010.

10. INVESTMENT IN A JOINTLY CONTROLLED ENTITY (continued) The Groups aggregate share of the assets, liabilities and income and expenses of the jointly controlled entity are as follows: 31.12.2010 RM Assets and liabilities Current assets Non-current assets Total assets 2,989,762 42,815 3,032,577 2,973,508 51,750 3,025,258 31.3.2010 RM
Current liabilities Non-current liabilities Total liabilities
789,374 777 790,150
738,884 5,145 744,029
Results Revenue Expenses, including finance costs and tax expense 3,704,892 3,423,694 5,213,766 4,845,541
11.
OTHER INVESTMENTS Group 31.12.2010 31.3.2010 RM RM Available-for-sale financial assets - Quoted shares in Malaysia
6,160,000
Other investments - at cost - Quoted shares in Malaysia
3,755,630
Market value of quoted shares
6,160,000
7,420,000
(a) (b)
Other investments have been classified into available-for-sale financial assets upon adoption of FRS 139 on 1 April 2010. The comparative figures have not been presented based on the new categorisation of financial assets resulting from the adoption of FRS 139 by virtue of the exemption given in FRS 7.44AA. Information on the fair value hierarchy is disclosed in Note 31 to the financial statements.
(c)

12. INVENTORIES Group 31.12.2010 31.3.2010 RM RM At cost Raw materials Work-in-progress Finished goods 14,293,487 2,347,953 5,572,314 22,213,754 At net realisable value Finished goods 221,666 22,435,420 376,152 22,057,393 13,772,888 2,873,616 5,034,737 21,681,241
(a)
During the financial period, inventories of the Group recognised as cost of goods sold amounted to RM149,373,210 (31.3.2010: RM163,230,768). In addition, the amounts recognised in the cost of goods sold include the following: Group 31.12.2010 31.3.2010 RM RM Inventories written down Reversal of inventories previously written down Inventories written off 1,860 (45,970) 99,797 55,687 47,063 248,402 295,465
(b)
The Group reversed RM45,970 in respect of inventories previously written down as the Group was able to sell these inventories above their carrying amounts.
13.
DERIVATIVE ASSETS Contracts/ Notional amounts RM Group 31.12.2010 Forward currency contracts 5,326,350 198,968 Assets RM

13. DERIVATIVE ASSETS (continued) (a) Forward currency contracts Forward currency contracts have been entered into to operationally hedge forecast sales denominated in foreign currencies that are expected to occur at various dates within eleven (11) months from the end of the reporting period. The forward currency contracts have maturity dates that coincide with the expected occurrence of these transactions. The fair values of these components have been determined based on the differences between the quarterly future rates and the strike rates discounted at the convenience yield of the instruments involved. (b) During the financial period, the Group recognised total gains of RM142,688 (31.3.2010: Nil) arising from fair value changes of derivative assets. The fair value changes are attributable to changes in foreign exchange spot and forward foreign exchange and interest rates. The methods and assumptions applied in determining the fair values of derivatives are disclosed in Note 31.
14.
TRADE AND OTHER RECEIVABLES Group 31.12.2010 31.3.2010 RM RM Trade receivables Third parties Jointly controlled entity 51,646,771 1,440,302 53,087,073 53,087,073 Other receivables, deposits and prepayments Subsidiaries Jointly controlled entity Other receivables Deposits Prepayments 30,836 50,900 86,245 1,011,450 1,179,431 54,266,504 20,205 381,981 67,916 357,774 827,876 39,117,812 27,934,411 26,000 1,000 27,961,411 27,961,411 37,491,952 26,000 1,000 37,518,952 37,518,952 37,261,797 1,057,867 38,319,664 (29,728) 38,289,936 Company 31.12.2010 31.3.2010 RM RM
Less: Impairment loss
(a)
Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group range from 30 to 90 days (31.3.2010: 30 to 90 days) from the date of invoice. They are recognised at their original invoice amounts, which represent their fair values on initial recognition. Included in trade receivables from third parties of the Group are amounts owing by related parties of RM26,729,717 (31.3.2010: RM13,669,934).
(b)

14. TRADE AND OTHER RECEIVABLES (continued) (c) Amount owing by a jointly controlled entity represents trade transactions with trade credit term of 60 days (31.3.2010: 60 days) from the date of invoice except for an amount of RM30,836 (31.3.2010: RM20,205) representing advances and payments on behalf, which are unsecured, interest-free and payable upon demand in cash and cash equivalents. Non-trade balances owing by subsidiaries represent advances and payments made on behalf, which are unsecured, interest-free and payable upon demand in cash and cash equivalents. The currency exposure profile of receivables are as follows: Group 31.12.2010 31.3.2010 RM RM Ringgit Malaysia US Dollar Japanese Yen 41,038,980 13,136,839 90,685 54,266,504 29,901,174 9,216,638 39,117,812 Company 31.12.2010 31.3.2010 RM RM 27,961,411 27,961,411 37,518,952 37,518,952
(d)
(e)
(f)
The ageing analysis of trade receivables of the Group are as follows: Group 31.12.2010 31.3.2010 RM RM Neither past due nor impaired Past due, not impaired 1 to 30 days 31 to 60 days 61 to 90 days More than 90 days Past due and impaired 5,516,559 1,669,327 215,711 762,996 53,087,073 4,386,143 1,150,671 1,130,666 654,982 29,728 38,319,664 44,922,480 30,967,474
Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated during the financial period.

14. TRADE AND OTHER RECEIVABLES (continued) (f) The ageing analysis of trade receivables of the Group are as follows (continued): Receivables that are past due but not impaired Trade receivables that are past due but not impaired mainly arose from active corporate clients with healthy business relationship, in which the management is of the view that the amounts are recoverable based on past payments history. The trade receivables of the Group that are past due but not impaired are unsecured in nature. Receivables that are past due and impaired Trade receivables of the Group that are past due and impaired at the end of the reporting period are as follows: Individually impaired 31.12.2010 31.3.2010 RM RM 29,728 (29,728) -
Group Trade receivables, gross Less: Impairment loss
The reconciliation of movements in the impairment loss are as follows: Group 31.12.2010 31.3.2010 RM RM At 1 April Charge for the financial year (Note 24) Written off At 31 December/31 March 29,728 (29,728) 29,728 29,728
Trade receivables that are individually determined to be impaired at the end of the previous reporting period relate to those debtors that exhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

15. SHORT TERM FUNDS Group 31.12.2010 31.3.2010 RM RM Financial assets at fair value through profit or loss Fixed income trust funds in Malaysia 13,088,636 13,088,636 6,495,772 6,495,772 Company 31.12.2010 31.3.2010 RM RM
(a)
Short term funds are mainly designated to manage free cash flows and optimise working capital so as to provide a steady stream of income returns. It is an integral part of the overall cash management. Information on financial risks of short term funds are disclosed in Note 32 to the financial statements. Short term funds are denominated in Ringgit Malaysia (RM).
(b) (c)
16.
CASH AND CASH EQUIVALENTS Group 31.12.2010 31.3.2010 RM RM Cash and bank balances Deposits with licensed banks 13,283,695 29,771,592 43,055,287 25,914,229 44,519,292 70,433,521 Company 31.12.2010 31.3.2010 RM RM 191,252 6,000,000 6,191,252 242,715 242,715
(a) (b)
Information on financial risks of cash and cash equivalents are disclosed in Note 32 to the financial statements. The currency exposure profile of cash and cash equivalents are as follows: Group 31.12.2010 31.3.2010 RM RM Ringgit Malaysia US Dollar Japanese Yen 36,644,305 3,591,859 2,819,123 43,055,287 52,926,799 13,853,113 3,653,609 70,433,521 Company 31.12.2010 31.3.2010 RM RM 6,191,252 6,191,252 242,715 242,715

17. SHARE CAPITAL Group and Company 31.12.2010 31.3.2010 Number Number of shares RM of shares Ordinary shares of RM0.50 each: Authorised 400,000,000 200,000,000 400,000,000 200,000,000
RM
Issued and fully paid: Balance as at 1 April Issued for cash pursuant to: - Employees Share Options Scheme Balance as at 31 December/31 March 177,821,400 88,910,700 177,184,200 88,592,100
177,821,400
637,200
318,600 88,910,700
88,910,700 177,821,400
(a)
The owners of the parent are entitled to receive dividends as and when declared by the Company and are entitled to one vote per ordinary share at meetings of the Company. All ordinary shares rank pari passu with regard to the Companys residual assets. In the previous financial year, the issued and paid-up ordinary share capital of the Company was increased from RM88,592,100 to RM88,910,700 by way of issuance of 637,200 new ordinary shares of RM0.50 each for cash pursuant to the exercise of the Companys Employees Share Option Scheme (ESOS) at the following option prices: Number of ordinary shares issued 303,200 334,000 Option price per share RM0.612 RM0.625
(b)
The abovementioned new shares issued ranked pari passu in all respects with the then existing shares of the Company. The Companys ESOS came into effect on 29 October 2004 and expired on 28 October 2009 with all unexercised options as of that date were lapsed.
18.
TREASURY SHARES The shareholders of the Company, by a resolution passed in the Annual General Meeting held on 25 August 2010 renewed the authority given to the Directors to repurchase up to 10% of the issued and paid-up ordinary share capital of the Company (Share Buy-Back). The Directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the purchase plan can be applied in the best interests of the Company and its shareholders. During the financial period, the Company repurchased 10,000 ordinary shares of RM0.50 each from the open market at an average price of RM0.78 per ordinary share. The total consideration paid for the shares repurchased including transaction costs was RM7,857. The shares repurchased were financed by internally generated funds and are held as treasury shares in accordance with the requirement of Section 67A of the Companies Act, 1965 in Malaysia.

18. TREASURY SHARES (continued) As at 31 December 2010, the Company had 6,376,300 (31.3.2010: 6,366,300) treasury shares. There were no disposals of treasury shares during the financial period. Details of the treasury shares are as follows: Number of ordinary shares At 1 April 2010 Purchases during the financial period: May 2010 At 31 December 2010 10,000 6,376,300 7,857 5,528,318 0.78 0.78 0.77 0.77 0.78 0.87 6,366,300 Purchase Price Per Ordinary Highest Lowest Average RM RM RM 0.95 0.66 0.87
Cost RM 5,520,461
19.
RESERVES Group 31.12.2010 31.3.2010 RM RM Non-distributable: Share premium Available-for-sale reserve Distributable: Retained earnings 52,656,840 62,403,411 50,745,116 58,087,317 22,340,071 29,682,272 21,887,600 29,229,801 7,342,201 2,404,370 7,342,201 7,342,201 7,342,201 Company 31.12.2010 31.3.2010 RM RM
(a)
Available-for-sale reserve Available-for-sale reserve is in respect of gains or losses arising from financial assets classified as available-for-sale.
(b)
Retained earnings Effective from 1 January 2008, the Company is given the option to make an irrecoverable election to move to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act, 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest, by 31 December 2013. The Company has made this election and as a result, there are no longer any restrictions on the Company to frank the payment of dividends out of its entire retained earnings as at the end of the reporting period.

19. RESERVES (continued) (c) Supplementary information on realised and unrealised profits or losses The retained earnings as at the end of the reporting period may be analysed as follows: 31.12.2010 Group Company RM RM Total retained profits of Acoustech Berhad and its subsidiaries: - Realised - Unrealised 83,698,860 (2,660,188) 81,038,672 Total share of retained profits from a jointly controlled entity: - Realised - Unrealised 465,490 (39,111) 22,371,812 (31,741) 22,340,071 -
Less: Consolidation adjustments Total Group/Company retained profits as per consolidated accounts
81,465,051 22,340,071 (28,808,211) 52,656,840 22,340,071
20.
DEFERRED TAX LIABILITIES (a) The deferred tax liabilities are made up of the following: Group 31.12.2010 31.3.2010 RM RM Balance as at 31 March Tax effect on adoption of FRS 139 Restated balance as at 1 April Recognised in profit or loss (Note 25) Balance as at 31 December/ 31 March 2,831,340 14,070 2,845,410 (141,395) 2,704,015 3,411,300 3,411,300 (579,960) 2,831,340
Presented after appropriate offsetting: Deferred tax assets, net Deferred tax liabilities, net (142,760) 2,846,775 2,704,015 (224,830) 3,056,170 2,831,340

20. DEFERRED TAX LIABILITIES (continued) (b) The components and movements of deferred tax assets and liabilities during the financial period prior to offsetting are as follows: Deferred tax assets of the Group Other temporary differences RM At 1 April 2010 Recognised in profit or loss At 31 December 2010 224,830 (82,070) 142,760
Total RM 224,830 (82,070) 142,760
At 1 April 2009 Recognised in profit or loss At 31 March 2010
23,000 201,830 224,830
23,000 201,830 224,830
Deferred tax liabilities of the Group Property, Other plant and temporary equipment differences RM RM At 1 April 2010 Recognised in profit or loss At 31 December 2010 2,994,170 (287,395) 2,706,775 76,070 63,930 140,000
Total RM 3,070,240 (223,465) 2,846,775
At 1 April 2009 Recognised in profit or loss At 31 March 2010 Tax effect on adoption of FRS 139 Restated balance as at 1 April 2010
3,184,000 (189,830) 2,994,170 2,994,170
250,300 (188,300) 62,000 14,070 76,070
3,434,300 (378,130) 3,056,170 14,070 3,070,240

21. TRADE AND OTHER PAYABLES Group 31.12.2010 31.3.2010 RM RM Trade payables Third parties Other payables Subsidiary Other payables Accruals 4,809,557 3,927,489 8,737,046 38,586,496 3,440,708 2,646,408 6,087,116 38,046,192 2,444,266 132 361,183 2,805,581 2,805,581 135 344,700 344,835 344,835 29,849,450 31,959,076 Company 31.12.2010 31.3.2010 RM RM
(a)
Trade payables are non-interest bearing and the normal trade credit terms granted ranging from 30 to 90 days (31.3.2010: 30 to 90 days) from the date of invoice. Included in trade payables to third parties of the Group and other payables of the Group are amounts owing to related parties of RM2,180,834 (31.3.2010: RM1,911,919) and RM451,453 (31.3.2010: RM619,158) respectively. Non trade balances owing to related parties represent advances and payments made on behalf, which are unsecured, interest-free and payable upon demand in cash and cash equivalents.
(b)
(c)
Non trade balance owing to a subsidiary represents advances and payments made on behalf, which are unsecured, interestfree and payable upon demand in cash and cash equivalents. Information on financial risks of trade and other payables are disclosed in Note 32 to the financial statements. The currency exposure profile of payables are as follows: Group 31.12.2010 31.3.2010 RM RM Ringgit Malaysia US Dollar Japanese Yen Renminbi New Taiwan Dollar Singapore Dollar 27,503,495 10,045,913 964,827 11,344 60,917 38,586,496 25,061,880 11,785,920 1,019,997 19,688 128,394 30,313 38,046,192 Company 31.12.2010 31.3.2010 RM RM 2,805,581 2,805,581 344,835 344,835
(d) (e)

22. CAPITAL COMMITMENTS Group 31.12.2010 31.3.2010 RM RM Authorised capital expenditure not provided for in the financial statements Contracted - Purchase of property, plant and equipment Approved but not contracted for - Purchase of property, plant and equipment
1,028,788
1,641,233
1,028,788
178,290 1,819,523
23.
REVENUE Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Sale of goods Services rendered Dividend income from subsidiaries 206,946,869 232,166,917 237,661 209,975 207,184,530 232,376,892 Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM 8,000,000 8,000,000 21,678,000 21,678,000
24.
PROFIT BEFORE TAX Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM
Note Profit before tax is arrived at after charging: Auditors remuneration: - current period/year (statutory) - under provision in prior years Bad debts written off Depreciation of property, plant and equipment Directors remuneration: - Company: - fees - emoluments other than fees - under provision in prior years
109,800 6,000 3,436,996
103,800 2,000 40,415 4,864,420
24,000 1,000 -
23,000 2,000 -
255,000 866,130 122,000
255,000 1,134,099 10,000
255,000 82,050 122,000
255,000 66,700 10,000

24. PROFIT BEFORE TAX (continued) Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM
Note Profit before tax is arrived at after charging (continued): Directors remuneration (continued): - Subsidiaries: - emoluments other than fees Impairment loss on trade receivables Interest expenses on: - letter of credit - overdraft - others Inventories written down Inventories written off Loss on disposal of an associate Loss on disposal of property, plant and equipment Property, plant and equipment written off Realised loss on foreign exchange Rental of premises Research and development costs Unrealised loss on foreign exchange
14(f)
510,790 8,316 11 23,235 1,860 99,797 2,275 1,294 483,402 67,481 358,934 934,179
624,220 29,728 748 50,832 47,063 248,402 112,428 28,089 732,854 91,846 240,075 1,379,315
12 12
And after crediting: Dividend income from: - subsidiaries - quoted investments Gain on disposal of property, plant and equipment Fair value adjustments on: - derivative assets - short term funds Interest income Income distribution from short term funds Reversal of inventories previously written down Realised gain on foreign exchange Rental income Unrealised gain on foreign exchange 490,000 142,688 58,523 428,812 143,150 45,970 953,047 259,425 720,516 595,000 14,212 486,931 124,020 235,900 931,708 8,000,000 31,741 901 64,031 21,678,000 -
12
The estimated monetary value of benefits-in-kind other than in cash received or receivable by the Directors from the Company and the Group amounted to RM34,197 (31.3.2010: RM38,620) and RM58,570 (31.3.2010: RM55,734) respectively.

25. TAX EXPENSE Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Current tax expense - Based on profit for the financial period/year - (Over)/Under provision in prior years Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM
2,383,733 (161,803) 2,221,930
3,878,160 22,946 3,901,106
1,871,200 2,078 1,873,278
5,317,914 (10,625) 5,307,289
Deferred tax (Note 20) - Relating to origination and reversal of temporary differences - Under/(Over) provision in prior years
(220,705) 79,310 (141,395)
(516,860) (63,100) (579,960) 3,321,146
1,873,278
5,307,289
Total tax expense
2,080,535
The Malaysian income tax is calculated at the statutory tax rate of 25% (31.3.2010: 25%) of the estimated taxable profits for the fiscal period. The reconciliation between the average effective tax rate and the applicable tax rate of the Group and of the Company are as follows: Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 % % Applicable tax rate Tax effect in respect of: Non-allowable expenses Tax exempt dividend income Non taxable income Tax incentives and allowances Tax effect on share of results in: - an associate - a jointly controlled entity 1.9 (1.3) (0.5) (1.8) (0.7) 22.6 Under/(Over) provision in prior years - tax expense - deferred tax Average effective tax rate (1.7) 0.8 21.7 2.4 (1.0) (3.0) (0.3) (0.6) 22.5 0.1 (0.4) 22.2 0.4 (0.3) 25.1 25.1 0.2 25.2 (0.1) 25.1 25.0 25.0 Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 % % 25.0 25.0

26. DIVIDENDS Group and Company 31.12.2010 31.3.2010 Gross Gross dividend dividend per ordinary Amount per ordinary Amount share of dividend share of dividend sen RM sen RM First and final interim single tier tax exempt in respect of financial year ended 31 March 2009 First interim single tier tax exempt dividend in respect of financial year ended 31 March 2010 Second interim single tier tax exempt dividend in respect of financial year ended 31 March 2010
4.50
7,692,881
2.50
4,286,377
3.00 3.00
5,143,353 5,143,353
7.00
11,979,258
The Directors declared a first interim single tier tax exempt dividend of 3.5 sen per ordinary share, amounting to RM6,000,579 in respect of the financial period ended 31 December 2010 and paid to the shareholders on 7 April 2011, whose name appeared on the Record of Depositors of the Company at the close of business on 24 March 2011. The financial statements for the current financial period do not reflect this dividend as it was declared after the end of the reporting period. This dividend will be accounted for as an appropriation of retained earnings in the financial year ending 31 December 2011.
27.
EARNINGS PER ORDINARY SHARE (a) Basic earnings per ordinary share Basic earnings per ordinary share for the financial period is calculated by dividing the profit for the financial period/year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding (adjusted for treasury shares) during the financial period. Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 Profit attributable to equity holders of the parent (RM) 7,023,420 10,357,559
Weighted average number of ordinary shares outstanding (adjusted for treasury shares)
171,447,318 171,179,063
Basic earnings per ordinary share (sen)
4.10
6.05

27. EARNINGS PER ORDINARY SHARE (continued) (b) Diluted earnings per ordinary share The diluted earnings per ordinary share for the financial period/year was not shown as there were no dilutive potential ordinary shares as at 31 December 2010 and 31 March 2010.
28.
EMPLOYEE BENEFITS Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Salaries, wages and bonuses Defined contribution plan Other employee benefits 24,237,516 1,469,966 2,129,985 27,837,467 24,975,520 1,877,121 1,965,625 28,818,266 Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM 204,050 204,050 76,700 76,700
Included in the employee benefits of the Group and of the Company are Directors remuneration amounting RM1,498,920 (31.3.2010: RM1,768,319) and RM204,050 (31.3.2010: RM76,700) respectively.
29.
RELATED PARTY DISCLOSURES (a) Identities of related parties Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other parties. The Company has controlling related party relationships with its direct and indirect subsidiaries. The Group also has related party relationships with the following parties: Identities of related parties Formosa Prosonic Holdings Sdn. Bhd. (FPH) Formosa Prosonic Industries Berhad (FPI) Relationship A corporate shareholder A company with significant influence over the Company through its wholly-owned subsidiary, FPM (as defined below) A corporate shareholder, which is wholly-owned by FPI, with significant influence over the Company A subsidiary of FPI A subsidiary of FPI
Formosa Prosonic Manufacturing Sdn. Bhd. (FPM) Energistic Sdn. Bhd. (Energistic) Asia Pacific Card & System Sdn. Bhd. (APCS)

29. RELATED PARTY DISCLOSURES (continued) (a) Identities of related parties (continued) The Group also has related party relationships with the following parties (continued): Identities of related parties FP Group Limited (FPG) Acoustic Energy Limited (AE) Elkay Pacific Rim (Malaysia) Sdn. Bhd. (EPR) Musashi Paint Corporation Sdn. Bhd. (MPC) (b) Relationship A subsidiary of FPI A subsidiary of FPI A jointly controlled entity A company which has common director with the Company
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with the related parties during the financial period: Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM Related parties: Commission payable Purchases of products Rental income received Sales of products Sub-contract income received Jointly controlled entity: Dividend received Sales of products Subsidiaries: Gross dividends received Company 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 RM RM
1,155,758 10,630,497 259,425 79,012,147 154,451
2,043,352 14,789,250 235,900 81,383,003 -
320,000 5,919,347
360,000 8,580,192
8,000,000
21,678,000
(i) (ii)
The related party transactions described above were carried out on negotiated terms. Balances of the above related parties are disclosed in Notes 14 and 21 to the financial statements.

29. RELATED PARTY DISCLOSURES (continued) (c) Compensation of key management personnel Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly, including any director (whether executive or otherwise) of the Group. The remuneration of Directors and other key management personnel during the financial period was as follows: Group 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 Short term employee benefits Contribution to defined contribution plan 1,619,660 143,352 1,763,012 1,852,999 207,736 2,060,735
30.
OPERATING SEGMENTS Acoustech Berhad and its subsidiaries are principally engaged in manufacturing and trading of speaker units, multimedia speakers systems, specialised chemical paints and electrical equipment. Acoustech Berhad has arrived at three (3) reportable segments that are organised and managed separately according to the business segments, which requires different business and marketing strategies. The reportable segments are summarised as follows: (i) Audio division Manufacturing, assembly and sales of speaker units and multimedia speaker systems, including component parts. (ii) Chemical division Manufacturing and sales of specialised chemical paints. (iii) Electrical equipment division Manufacturing and distribution of electrical equipment. Other operating segment that does not constitute reportable segment comprises operation related to investment holding. The accounting policies of operating segments are the same as those described in the summary of significant accounting policies. Segment performance is evaluated based on operating profit, excluding non-recurring losses, and in certain respect as explained in the table below, it is measured differently from operating profit in consolidated financial statements.

30. OPERATING SEGMENTS (continued) Inter-segment revenue is carried out on negotiated terms and conditions. Segment assets exclude tax assets, investments and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities. Electrical equipment division RM Other operating segment RM
31.12.2010 Revenue Total revenue Inter-segment revenue Revenue from external customers
Audio division RM
Chemicals division RM
Total RM
176,321,628 (10,499,271) 165,822,357
17,510,985 (491,349) 17,019,636
24,344,909 (2,372) 24,342,537
8,000,000 226,177,522 (8,000,000) (18,992,992) - 207,184,530
Interest income Finance costs Net interest income
138,153 (35,410) 102,743
257,247 (4,906) 252,341
32,511 (26,812) 5,699
901 901
428,812 (67,128) 361,684
Segment profit/(loss) before income tax Share of profit of a jointly controlled entity Income tax (expense)/income Other material non-cash item: - Depreciation Investment in a jointly controlled entity Available-for-sale financial assets Capital expenditure Segment assets Segment liabilities
6,726,243 (1,515,155)
3,227,489 (714,292)
(122,938) 281,198 22,190
(530,898) 126,722
9,299,896 281,198 (2,080,535)
2,302,453 3,633,690 105,317,628 30,896,446
431,417 6,160,000 51,248 36,571,472 2,562,354
703,126 2,242,427 862,774 28,682,352 4,766,381
3,436,996 2,242,427 6,160,000 4,547,712
12,714,024 183,285,476 361,315 38,586,496

30. OPERATING SEGMENTS (continued) Electrical equipment division RM Other operating segment RM
31.3.2010 Revenue Total revenue Inter-segment revenue Revenue from external customers
Audio division RM
Chemicals division RM
Total RM
168,406,490 (11,714,652) 156,691,838
29,007,486 (542,435) 28,465,051
47,221,105 21,768,000 266,403,081 (1,102) (21,768,000) (34,026,189) 47,220,003 - 232,376,892
Interest income Finance costs Net interest income
196,226 (35,119) 161,107
252,397 (6,116) 246,281
38,308 (50,579) (12,271)
486,931 (91,814) 486,931
Segment profit/(loss) before income tax Share of profit of an associate Share of profit of a jointly controlled entity Income tax (expense)/income Other material non-cash item: - Depreciation Investment in a jointly controlled entity Other investments Capital expenditure Segment assets Segment liabilities
7,519,488 (1,613,847)
3,569,537 173,235 (906,501)
3,887,507 368,225 (913,009)
(551,818) 112,211
14,424,714 173,235 368,225 (3,321,146)
3,111,570 6,133,530 107,531,438 31,141,647
120,672 3,755,630 752,099 40,673,279 1,944,386
583,351 2,281,229 169,323 32,269,128 4,615,324
1,048,827 -
4,864,420 2,281,229 3,755,630 7,054,952
269,715 180,743,560 344,835 38,046,192

30. OPERATING SEGMENTS (continued) Reconciliations of reportable profit or loss, assets and liabilities to the Groups corresponding amounts are as follows: 1.4.2010 to 31.12.2010 RM Profit for the financial period/year Total profit for reportable segments Share of profits of an associate Share of profit of a jointly controlled entity Profit before tax Income tax expense Profit after tax Minority interests Profit for the financial period/year 1.3.2009 to 31.3.2010 RM
9,299,896 281,198
14,424,714 173,235 368,225
9,581,094 14,966,174 (2,080,535) (3,321,146) 7,500,559 11,645,028 (477,139) (1,287,469) 7,023,420 10,357,559
Assets Total assets for reportable segments Other investments Investment in a jointly controlled entity Current tax assets Groups assets
183,285,476 180,743,560 6,160,000 3,755,630 2,242,427 2,281,229 3,839,230 3,657,443 195,527,133 190,437,862
Liabilities Total liabilities for reportable segments Deferred tax liabilities Current tax liabilities Groups liabilities
38,586,496 2,704,015 938,089 42,228,600
38,046,192 2,831,340 1,057,726 41,935,258

30. OPERATING SEGMENTS (continued) Geographical information The Group operates wholly in Malaysia. The revenue disclosed in geographical segments is based on the geographical location of its customers. The composition of each geographical segment is as follows: (i) Malaysia Manufacturing, assembly and sales of speaker units and multimedia speaker systems, including component parts, manufacturing and sales of specialised chemical paints, manufacturing and distribution of electrical equipment and investment holding. (ii) Asia Sales of speaker units and multimedia speaker systems, including component parts and sales of specialised chemical paints. (iii) North America and Europe Sales of speaker units and multimedia speaker systems, including component parts and distribution of electrical equipment. The following table provides an analysis of the Groups revenue by geographical segments: Group 1.4.2010 to 1.3.2009 to 31.12.2010 31.3.2010 RM RM 175,427,195 168,002,285 7,237,470 14,884,046 24,519,865 49,490,561 207,184,530 232,376,892
Revenue Malaysia Asia North America and Europe
All the assets and capital expenditure of the Group are located within Malaysia. Major Customers The following are major customers with revenue equal to or more than 10 percent of the revenue of the Group:
Revenue 1.4.2010 to 1.4.2009 to 31.12.2010 31.3.2010 % % - Customer A - Customer B - Customer C 28.6 36.3 8.8 73.7 15.4 20.2 16.6 52.2
Segment
Audio division Audio division Electrical equipment division

31. FINANCIAL INSTRUMENTS (a) Capital management The objective of the Groups capital management is to ensure that it maintains healthy ratios in order to support its business operations and to provide fair returns for shareholders and benefits for other stakeholders. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may, from time to time, adjust the dividend payout to shareholders or issue new share, where necessary. No changes were made in the objectives, policies or processes during the financial period ended 31 December 2010 and financial year ended 31 March 2010. The Group is not subject to any externally imposed capital requirements. The Group monitors capital by reference to its indebtedness position, which is derived from the total financial debts divided by the total equity plus total financial debts. The Groups strategy is to maintain the balance between debt and equity and to ensure sufficient operating cash flows to repay its liabilities as and when they fall due. (b) Financial instruments Certain comparative figures have not been presented for 31 March 2010 by virtue of the exemption given in paragraph 44AA of FRS 7. Categories of financial instruments Fair value through profit or loss RM
Group 31.12.2010 Financial assets Other investments Trade and other receivables Derivative assets Short term funds* Cash and cash equivalents
Loans and receivables RM
Availablefor-sale RM
Held to maturity RM
Total RM
54,266,504 43,055,287 97,321,791
198,968 13,088,636 13,287,604
6,160,000 6,160,000
6,160,000 54,266,504 198,968 13,088,636 43,055,287
- 116,769,395
*Represent fixed income trust funds in Malaysia. Fair value through profit or loss RM
Other financial liabilities RM Financial liabilities Trade and other payables
Total RM
38,586,496 38,586,496
38,586,496 38,586,496

31. FINANCIAL INSTRUMENTS (continued) (b) Financial instruments (continued) Categories of financial instruments (continued) Fair value through profit or loss RM
Company 31.12.2010 Financial assets Trade and other receivables Short term funds* Cash and cash equivalents
Loans and receivables RM
Availablefor-sale RM
Held to maturity RM
Total RM
27,961,411 6,191,252 34,152,663
6,495,772 6,495,772
27,961,411 6,495,772 6,191,252 40,648,435
*Represent fixed income trust funds in Malaysia. Fair value through profit or loss RM
Other financial liabilities RM Financial liabilities Other payables
Total RM
2,805,581 2,805,581
2,805,581 2,805,581
(c)
Determination of fair values Methods and assumptions used to estimate fair values The fair values of financial assets and financial liabilities are determined as follows: (i) Financial instruments that are not carried at fair values and whose carrying amounts are a reasonable approximation of fair values The carrying amounts of financial assets and financial liabilities, such as trade and other receivables and trade and other payables, are reasonable approximation of fair values due to their short-term nature. (ii) Quoted shares and short term funds The fair values of quoted investments and short term funds in Malaysia are determined by reference to the exchange quoted market bid prices at the close of the business on the end of the reporting period.

31. FINANCIAL INSTRUMENTS (continued) (c) Determination of fair values (continued) Methods and assumptions used to estimate fair values (continued) The fair values of financial assets and financial liabilities are determined as follows (continued): (iii) Derivatives The fair value of a forward foreign exchange contract is the amount that would be payable or receivable upon termination of the outstanding position arising and is determined by reference to the difference between the contracted rate and the forward exchange rate as at the end of the reporting period applied to a contract of similar amount and maturity profile. (d) Fair value hierarchy The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on observable market data (unobservable inputs). As at 31 December 2010, the Group and the Company held the following financial instruments carried at fair values on the statements of financial positions: Assets measured at fair values 31.12.2010 RM Level 1 RM Level 2 RM Level 3 RM
Group Financial assets at fair value through profit or loss - Forward currency contracts - Short term funds Available-for-sale financial assets - Quoted shares
198,968 13,088,836
13,088,836
198,968 -
6,160,000
6,160,000
Company Financial assets at fair value through profit or loss - Short term funds
31.12.2010 RM
Level 1 RM
Level 2 RM
Level 3 RM
6,495,772
6,495,772
During the financial period, there were no transfers between Level 1 and Level 2 fair value measurements.

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Exposure to credit risk, liquidity and cash flow risk, interest rate risk, foreign currency risk and market price risk, arises in the normal course of the Groups businesses. The Groups overall financial risk management objective is to minimise potential adverse effects on the financial performance of the Group. The Groups overall business strategies, its tolerance of risk and its general risk management philosophy are determined by the management in accordance with prevailing economic and operating conditions. Financial risk management is carried out through risk review, internal control systems and adherence to the Groups financial risk management policies. The Group does not have financial instruments for trading purposes. The Groups management policies for managing each of the financial risk are summarised below: (i) Credit risk Cash deposits and trade receivables may give rise to credit risk, which requires the loss to be recognised if a counter party fails to perform as contracted. Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Groups exposure and the creditworthiness of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by the counterparty limits that are reviewed and approved by management annually. The Groups primary exposure to credit risk arises through its trade receivables. The carrying amount of financial assets as recorded in the financial statements, grossed up for any allowances for impairment losses, represents the Groups maximum exposure to credit risk without taking account of the value of any collateral obtained. Credit risk concentration profile At the end of the reporting period, approximately: 30.8% (31.3.2010: 28.8%) of the Groups trade receivables were owing by 2 major customers located in Malaysia. 52.3% (31.3.2010: 42.3%) of the Groups trade and other receivables were due from related parties while 99.9% (31.3.2010: 99.9%) of the Companys trade and other receivables were balances with related parties.
Financial assets that are neither past due nor impaired Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 14 to the financial statements. Deposits with banks and other financial institutions, investment securities and derivatives that are neither past due nor impaired are placed with or entered into with financial institutions with good standing. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 14 to the financial statements. (ii) Liquidity and cash flow risk Liquidity risk is the risk that the Group is unable to service its cash obligations in future. To mitigate this risk, the management monitors and maintains a level of cash and cash equivalents deemed adequate to finance the Groups operations and development activities.

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) (ii) Liquidity and cash flow risk (continued) Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Groups and the Companys liabilities at the end of the reporting period based on contractual undiscounted repayment obligations. 31.12.2010 On demand or within one year RM Group Financial liabilities: Trade and other payables Total undiscounted financial liabilities Company Financial liabilities: Other payables Total undiscounted financial liabilities (iii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial instruments will fluctuate because of changes in market interest rates. The Groups exposure to market risk for changes in interest rates relates primarily to the interest-earning fixed deposits placed with licensed banks. The Group does not use derivative financial instruments to hedge its risk. The following tables set out the carrying amounts, the average effective interest rates as at the end of the reporting period and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk: Average effective interest rate % 2,805,581 2,805,581 2,805,581 2,805,581 38,586,496 38,586,496 38,586,496 38,586,496 One to five years RM Over five years RM
Total RM
Group At 31 December 2010 Fixed rate Deposits with licensed banks At 31 March 2010 Fixed rate Deposits with licensed banks
Note
Within 1 year RM
16
2.36
29,771,592
16
1.67
44,519,292

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) (iii) Interest rate risk (continued) The following tables set out the carrying amounts, the average effective interest rates as at the end of the reporting period and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk (continued): Average effective interest rate %
Company At 31 December 2010 Fixed rate Deposits with licensed banks
Note
Within 1 year RM
16
2.55
6,000,000
Sensitivity analysis for interest rate risk At the end of reporting period, if interest rate had been 50 basis points higher or lower, with all the variables held constant, the Groups and the Companys profit after tax for the financial period would have been approximately RM139,295 and RM11,250 higher or lower respectively. The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment. (iv) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group is subject to foreign exchange fluctuations through the import of raw materials and export of finished goods. The Group periodically uses foreign currency forward contracts to protect against the volatility associated with foreign currency transactions for receivables denominated in currencies other than the functional currency of the operating entities within the Group. During the financial period, the Group entered into foreign currency forward contracts to manage exposures to currency risk for receivables, which are denominated in a currency other than the functional currencies of the Group. The notional amount and maturity date of the forward foreign exchange contracts outstanding are as follows: Contract amounts RM equivalent
Contract At 31 December 2010 Sales contracts used to hedge trade receivables
Maturities
Less than one (1) year
USD 1,650,000
5,326,350
At 31 March 2010 Sales contracts used to hedge trade receivables Less than one (1) year USD 350,000 1,195,325

32. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) (iv) Foreign currency risk (continued) The unrecognised gain as at 31 March 2010 on the open contracts that hedged anticipated future foreign currency sales amounting to RM56,280 were deferred and recognised during the current financial period upon adoption of FRS 139 as disclosed in Notes 34 to the financial statements. Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Groups profit after tax to a 3% change in the United States Dollar (USD) and Japanese Yen (YEN) exchange rates against the Ringgit Malaysia (RM) respectively, with all other variables held constant. 3% is the sensitivity rate used when reporting foreign currency risk exposures internally to key management personnel and represents managements assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only significant outstanding balances denominated in foreign currencies. If the relevant foreign currency strengthens by 3% against the functional currency of the Group as at the end of the reporting period, profit for the financial period would increase by the following amounts, mainly due to period end exposure on monetary balances denominated in the respective foreign currencies. Group 31.12.2010 RM Profit after tax USD/RM YEN/RM 151,773 43,850
If the relevant foreign currency weakens by 3% against the functional currencies as mentioned, impact on the profit for the financial period would be vice versa. (v) Market price risk Market price risk is the risk that the fair value of future cash flows of the Groups financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates). The Group and the Company are exposed to equity price risks arising from quoted investments and short term funds held by the Group and the Company. Short term funds are listed by the reputable financial institutions and quoted equity instruments in Malaysia are listed on the Bursa Malaysia. These instruments are classified as financial assets designated at fair value through profit or loss and available-for-sale financial assets. Sensitivity analysis for equity price risk At the end of the reporting period, if the market prices of the quoted investments had been 10% higher or lower, with all other variables held constant, the Groups available-for-sale reserve would have been approximately RM616,000 higher or lower, arising as a result of an increase and decrease in the fair values of equity instruments. Short term funds of the Group and of the Company are exposed to changes in market quoted prices. However, the volatility of these funds prices is considered low, and hence, sensitivity analysis for equity price risk is not presented.

33. COMPARATIVES (a) Certain figures as at 1 April 2009 have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously reported, to property, plant and equipment - leasehold land. Effects on As adoption of previously Amendment reported to FRS 117 RM RM
Group As at 1 April 2009 Statement of Financial Position Property, plant and equipment - leasehold land Prepaid lease payments for land
As restated RM
9,062,725
9,062,725 (9,062,725)
9,062,725 -
For the financial year ended 31 March 2010 Statement of Comprehensive Income Depreciation of property, plant and equipment - leasehold land Amortisation of prepaid lease payments for land 137,523 137,523 (137,523) 137,523 -
Statement of Financial Position Property, plant and equipment - leasehold land Prepaid lease payments for land
8,925,202
8,925,202 (8,925,202)
8,925,202 -
(b)
The following comparative figures in the financial statements have been reclassified in order to conform to the current financial periods presentation: As previously reported RM
Group Statement of Comprehensive Income Other income Other expenses
Reclassifications RM
As restated RM
4,838,549 7,350,364
(2,421,921) (2,421,921)
2,416,628 4,928,443

34. OPENING STATEMENT OF FINANCIAL POSITION The opening statement of financial position as at 1 April 2010, primary reflect the effects arising from the adoption of FRS 139 as follows: As Effects on previously adoption of reported FRS 139 RM RM
Group Statement of Financial Position Assets Non-current assets Property, plant and equipment Investment in a jointly controlled entity Other investments
As restated RM
49,134,834 2,281,229 3,755,630 55,171,693
3,664,370 3,664,370
49,134,834 2,281,229 7,420,000 58,836,063
Non-current assets Inventories Derivative assets Trade and other receivables Current tax assets Cash and cash equivalents
22,057,393 39,117,812 3,657,443 70,433,521 135,266,169
56,280 -
22,057,393 56,280 39,117,812 3,657,443 70,433,521
56,280 135,322,449 3,720,650 194,158,512
Total assets
190,437,862

34. OPENING STATEMENT OF FINANCIAL POSITION (continued) The opening statement of financial position as at 1 April 2010, primary reflect the effects arising from the adoption of FRS 139 as follows (continued): As Effects on previously adoption of reported FRS 139 RM RM
Equity and liabilities Equity attributable to owners of the parent Share capital Treasury shares Reserves
As restated RM
88,910,700 (5,520,461) 58,087,317 141,477,556 7,025,048 148,502,604
3,696,027
88,910,700 (5,520,461) 61,783,344
Minority interests Total equity
3,696,027 145,173,583 10,553 7,035,601 3,706,580 152,209,184
Liabilities Non-current liabilities Deferred tax liabilities Current liabilities Trade and other payables Current tax liabilities Total liabilities 2,831,340 14,070 2,845,410
38,046,192 1,057,726 41,935,258
14,070
38,046,192 1,057,726 41,949,328
Total equity and liabilities
190,437,862
3,720,650 194,158,512
Analysis of Shareholdings
As at 22 April 2011
SHARE CAPITAL Authorised Issued & Fully Paid-Up Class of Shares Voting Rights Size of Shareholding 1 - 99 shares 100 - 1,000 shares 1,001 - 10,000 shares 10,001 - 100,000 shares 100,001 to less than 5% of issued shares* 5% and above of issued shares TOTAL : RM200,000,000 : RM88,910,700 : Ordinary shares of RM0.50 each : One vote per ordinary share No. of Shareholders 46 349 2,917 964 126 2 4,404 % of Shareholders 1.04 7.92 66.24 21.89 2.86 0.05 100.00 No. of Shares 2,417 311,747 14,295,106 29,301,402 70,539,222 56,995,206 171,445,100 % of Shareholdings 0.00 0.18 8.34 17.10 41.14 33.24 100.00
* Excluding a total of 6,376,300 treasury shares bought back SUBSTANTIAL SHAREHOLDERS Direct No. of Shares 46,442,474 10,552,732 56,995,206 Indirect No. of Shares -
Name 1) Formosa Prosonic Manufacturing Sdn Bhd 2) Huang Huai Son TOTAL
Percentage 27.09 6.16 33.25
Percentage -
DIRECTORS' INTEREST Direct No. of Shares 10,552,732 7,209,876 1,854,290 1,505,956 400,000 400,000 300,000 22,222,854 Indirect No. of Shares 265,846 47,882,474 610,000 48,758,320
Name 1) 2) 4) 3) 5) 6) 7) 8) Huang Huai Son Chen Po Hsiung Shih Chao Yuan Su Cheng Tao Chang Song Hai Soon Kwai Choy Dato' Nik Abdul Aziz Bin Mohamed Kamil Leong Ngai Seng
Percentage^ 6.16 4.21 1.08 0.88 0.23 0.23 0.17 12.96
Percentage^ 0.16 27.93 0.36 28.45
TOTAL
^ Excluding a total of 6,376,300 treasury shares bought back
Analysis of Shareholdings
As at 22 April 2011 (Contd)
LIST OF TOP 30 SHAREHOLDERS No. of Shares Held 46,442,474 10,552,732 7,929,880 7,209,876 6,700,000 4,133,400 3,781,000 2,088,000 1,854,290 1,541,974 1,505,956 1,478,000 1,440,000 1,400,000 1,163,812 1,157,882 1,105,100 1,000,000 941,900 820,160 715,000 635,000 614,600 610,000 589,726 507,000 487,442 441,200 419,600 400,000 109,666,004
Name 1) 2) 3) 4) 5) 6) 7) 8) 9) FORMOSA PROSONIC MANUFACTURING SDN BHD HUANG HUAI SON CHEN SHAN CHING CHEN PO HSIUNG YEOH KEAN HUA FEDERLITE HOLDINGS SDN BHD WANG CHUN CHENG MUSASHI PAINT CORPORATION SDN BHD SHIH CHAO YUAN
Percentage 27.09 6.16 4.63 4.21 3.91 2.41 2.21 1.22 1.08 0.90 0.88 0.86 0.84 0.82 0.68 0.68 0.64 0.58 0.55 0.48 0.42 0.37 0.36 0.36 0.34 0.30 0.28 0.26 0.24 0.23 63.99
10) WU SWEE NGOR 11) SU CHENG TAO 12) C.L.P. INDUSTRIES SDN BHD 13) SHIH HUANG HSIU FANG 14) JOHAN ENTERPRISE SDN BHD 15) LAM CHOI WAN 16) WANG WEI NAN 17) LEONG KOK TAI 18) CHANG KEI POI 19) SU MEI YING 20) LIAO CHANG PI HUA 21) TANG CHUN YONG 22) NG INN JWEE 23) TAY KAK CHOK 24) TEOH BEE YONG 25) CHANG WEN LUNG 26) KAM CHOOI SUAN 27) PENG LIU MEI 28) SOH CHAK BOO 29) LIM CHING SENG (Shares held under HDM Nominees (Asing) Sdn Bhd 30) CHAN KAM TONG TOTAL
Location
Description
Tenure
Valuation/ Acquisition/ Completion Date 15/6/2001 27/4/2000 19 For Factory 15 188,217 106,064 10,655,425 For Office
Approximate Age of Building (Years)
Approximate Site Area (Sq.Ft.)
Built-up/ Lettable Area (Sq.Ft.)
Carrying Amount RM
Existing Use
Four Storey Office Block
No. 2 Lebuh 1 Bandar Sultan Suleiman Taiwanese Industrial Park 42000 Port Klang Selangor Darul Ehsan 27/4/2000 15 For Factory
Single Storey Factory (Old)
Leasehold (99 years Expiring 30/12/2093)
Single Storey Factory (New) 15/6/2001 17
As at 31 December 2010
Single Storey Sports Hall
For Recreation For Meal and Drinks For Storage of Containers For Security For Electricity Supply 55,684 19,144 1,824,295 For Office Cum Factory
List of Properties
Single Storey Canteen
15/6/2001
17
Container Yard
15/6/2001
17
Single Storey Guardhouse And TNB Station 15/6/2001 17
15/6/2001
17
No. 2 Jalan 1 Bandar Sultan Suleiman Taiwanese Industrial Park 42000 Port Klang Selangor Darul Ehsan Leasehold (60 years Expiring 30/12/2050) June 2000 11
Double Storey Office Block Location At the Front Portion And A Connecting Single Storey Factory
Leasehold (99 years Expiring 30/12/2093)
27/4/2000
21
Plot 236,238 & 240 Kawasan Perusahaan LPK Taman Ria Jaya 08000 Sungai Petani Kedah Darul Aman Warehouse Facility Leasehold (95 years Expiring 30/6/2091) 30/11/2009 July 1996
Double Storey Office Block Location At the Front Portion And A Connecting Single Storey Office
423,797
121,008
9,879,430
For Office Cum Factory
2 16
129,976 130,634
68,136 55,170
2,790,451 5,619,959
For Storage For Office Cum Factory
No. 11, Jalan Sultan Mohamed 5 Bandar Sultan Suleiman Taiwanese Industrial Park 42000 Port Klang Selangor Darul Ehsan
Double Storey Office Block Location At the Front Portion And A Connecting Single Storey Factory
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Proxy Form
I/We __________________________________________________________I.C./Passport/Company No._____________________________ of _________________________________________________________________________________________________________________ being a member/members of ACOUSTECH BERHAD, do hereby appoint __________________________________________________ _____________________________________________________________________I.C./Passport No._______________________________ of _________________________________________________________________________________________________________________ or failing *him/her the Chairman of the Meeting as *my/our proxy to vote for *me/us on my/our behalf at the Twelfth Annual General Meeting of the Company to be held at Crystal Room, Level 1, Crystal Crown Hotel Harbour View, 217 Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan on Thursday, 16 June 2011 at 11.30 a.m. and at any adjournment thereof. My/Our proxy is to vote as indicated below: RESOLUTIONS Ordinary Resolution 1 Ordinary Resolution 2 Ordinary Resolution 3 Ordinary Resolution 4 Ordinary Resolution 5 Ordinary Resolution 6 Ordinary Resolution 7 Ordinary Resolution 8 Please indicate with an X in the spaces provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific directions, your proxy will vote or abstain as *he/she thinks fit. FOR AGAINST
Signed this ___________ day of _________________________ No, of shares held CDS Account No.
Notes: 1. A member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend and vote instead of him. A member of the Company who is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991 may appoint one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. A proxy need not be a member of the Company. The instrument appointing a proxy shall be in writing under the hands of the appointer or of his attorney duly authorised in writing, or if the appointer is a corporation, either under its common seal or in some other manner approved by its Directors. The instrument of proxy must be deposited at the registered office of the Company situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not later than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
Signature/Common Seal of Member(s)
2. 3. 4.
please fold along this line (1)
STAMP
The Company Secretary ACOUSTECH BERHAD

(Company No. 496665-W)
Level 18, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur
please fold along this line (2)

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Annual Report as at 31 December 2010

Our Excellence Ensures Ultimate Convenience

4 | Acoustech Berhad (496665-W)

Notice of Annual General Meeting

Acoustech Berhad (496665-W) | 5

Notice of Annual General Meeting

6 | Acoustech Berhad (496665-W)

Notice of Annual General Meeting

By Order of the Board

Acoustech Berhad (496665-W) | 7

Notice of Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

8 | Acoustech Berhad (496665-W)

17.8 14.5 9.7

0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10 (9-months)

-10 31-3-06 31-3-07 31-3-08 31-3-09

31-3-10 31-12-10 (9-months)

Profit from operations

Cash from operations

Profit from operation

11.4 10.4 7.3

5.5 4.1 3.5

0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10 (9-months)

Net dividend per share

Net earnings per share

Net return on shareholders fund %

Acoustech Berhad (496665-W) | 9

10 | Acoustech Berhad (496665-W)

Acoustech Berhad (496665-W) | 11

12 | Acoustech Berhad (496665-W)

165.8 24.4 17.0 207.2

80.0 11.8 8.2 100.0

156.7 47.2 28.5 232.4

67.4 20.3 12.3 100.0

Operating profit: Audio Electrical equipment Chemical paints Unallocated expenses

6.7 (0.1) 3.2 (0.5) 9.3

72.0 (1.0) 34.4 (5.4) 100.0

7.6 3.9 3.6 (0.6) 14.5

52.4 26.9 24.8 (4.1) 100.0

Acoustech Berhad (496665-W) | 13

Chang Song Hai Chairman 24 May 2011 Kuala Lumpur, Malaysia

14 | Acoustech Berhad (496665-W)

Acoustech Berhad (496665-W) | 15

16 | Acoustech Berhad (496665-W)

Acoustech Berhad (496665-W) | 17

Corporate Social Responsibility

MATERIALS CONSUMED RM million 300

0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10

EMPLOYEE BENEFITS RM million 40 30 20 10 0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10

18 | Acoustech Berhad (496665-W)

Corporate Social Responsibility

DIVIDEND PAID RM million 20 15 10 5 0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10

CAPITAL STRUCTURE RM million 150

0 31-3-06 31-3-07 31-3-08 31-3-09 31-3-10 31-12-10

Acoustech Berhad (496665-W) | 19

Corporate Social Responsibility

20 | Acoustech Berhad (496665-W)

Audit Committee Report

Acoustech Berhad (496665-W) | 21

Audit Committee Report

22 | Acoustech Berhad (496665-W)

Audit Committee Report

Acoustech Berhad (496665-W) | 23