Our Vision

To be the market leader in the various industries

and segments where our products are deployed
and used.

To Achieve Our Vision

We are responsible, team oriented, creative
and passionate about what we do.
 Headquarters

Industronics Berhad
No.9, Jalan Taming 3, Taman Tanming Jaya,
43300 Seri Kembangan,
Selangor Darul Ehsan, Malaysia
Tel: 603-8961 3024
Fax: 603-8961 6409
E-mail: [email protected]
Website: www.industronics.com.my

Division
Industronics AV/ITS/
Communications Division
No. 16, Jalan 3/146, Bandar Tasik Selatan,
Sungai Besi, 57000 Kuala Lumpur, Malaysia.
Tel: 603-9059 2411
Fax: 603-9058 2411
E-mail: [email protected]
Website: www.industronics.com.my

Subsidiaries

Industronics Automation Sdn. Bhd. Industronics Corporation Limited Industronics Manufacturing Sdn. Bhd.
Vietnam
No. 39, Jalan Sungai Besi Indah 1/21 No.9, Jalan Taming 3, Taman Tanming Jaya,
Taman Sungai Besi Indah Off Jalan Balakong,
H2/72B, Thong Phong Alley,
43300 Seri Kembangan 43300 Seri Kembangan,
Ton Duc Thang Street,
Selangor Darul Ehsan, Malaysia. Selangor Darul Ehsan, Malaysia
Quoc Tu Giam Ward, Dong Da District,
Tel: 603-8948 3953 Tel: 603-8961 3024
Hanoi, Vietnam.
Fax: 603-8948 1895 Fax: 603-8961 6409
Tel: +844-732 5423
E-mail: [email protected] E-mail: [email protected]
Fax: +844-732 5424
E-mail: [email protected] Website: www.industronics.com.my
E-mail: [email protected]
Website: www.indusaut.com

Asian Advertising (M) Sdn. Bhd. TTE Electronics Sdn. Bhd. Ademco (M) Sdn. Bhd.
No. 41B, Jalan Sungai Besi Indah 1/21, No. 6, Jalan Perusahaan Utama, No. 60 Jalan Manis Tiga,
Taman Sungai Besi Indah, Tmn. Industri Selesa Jaya, Taman Segar, Cheras,
43300 Seri Kembangan, 43300 Balakong, 56100 Kuala Lumpur, Malaysia.
Selangor Darul Ehsan, Malaysia. Selangor Darul Ehsan, Malaysia. Tel: 603-9133 1313
Tel: 603-8942 1493 Tel: 603-8962 2032 Fax: 603-9131 7909
Fax: 603-8942 6317 Fax: 603-8962 2039 E-mail: [email protected]
E-mail: [email protected] E-mail: [email protected]

member of the INDUSTRONICS Group of C

ompanies

Industrial Electronics (S) Pte. Ltd. Primeworth (M) Sdn. Bhd. Sukitronics Group
No. 627A, Aljunied Road, No. 8, 10 & 12, Tmn Industri Selesa Jaya 22 Jln Pendidik U1/31, Section U1,
#05-12 Biztech Centre Balakong, 43300 Seri Kembangan Hicom-Glenmarie Industrial Park,
Singapore 389842 Selangor Darul Ehsan, Malaysia. 40150 Shah Alam,
Tel: +65-6744 6873 Tel: 603-8961 5207 Selangor Darul Ehsan, Malaysia.
Fax: +65-6744 5971 Fax: 603-8961 6146 Tel: 603-5569 7028
E-mail: [email protected] E-mail: [email protected] Fax: 603-5569 9008
Website: www.ie-pl.com Website: www.primeworth.com Email: [email protected]
Website: www.sukitronics.com
 Our products and systems are installed in
stadiums, transportation hubs,
universities, highways, power plants,
private homes and urban townships.

CONTENTS
 Financial Highlights 6
Corporate Information 8
Corporate Structure 10
Chairman’s Statement 12
Operation Highlights 19
Statement On Corporate Governance 28
Audit Committee Report 32
Statement On Internal Control 34
Directors’ Profile 36
Financial Statements 40
Additional Compliance Information 119
List Of Properties 120
Analysis Of Shareholdings 122
Notice Of Annual General Meeting 125
Statement Accompanying The Notice Of 127
Annual General Meeting
Proxy Form
FINANCIAL HIGHLIGHTS
 Financial Highlights
7
annual report 2009

RM Million 2005 2006 2007 2008 2009

Revenue 112.9 80.4 94.6 66.1 56.1
Pre-tax Profit/(Loss) 4.6 2.5 (0.4) (6.3) 0.6
Profit/(Loss) Attributable to Shareholders 3.0 1.9 (2.5) (6.1) 0.1
Net Assets 60.4 60.0 56.1 51.5 51.5
SEN
Earnings Per Share 3.3 2.1 (2.8) (6.5) 0.1
Net Assets Per Share 66.8 58.0 62.1 54.8 54.8
Gross Dividend Per Share 3.0 3.0 - - -

Revenue (RM million) Net Assets (RM million)

112.9

94.6
80.4 60.4 60.0 56.1
66.1 51.5 51.5
56.1

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

Pre-tax Profit / ( Loss ) (RM million) Earnings Per Share (Sen)

4.6

3.3
2.5
2.1

0.6 0.1
(0.4) (6.3) (2.8) (6.5)

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
CORPORATE INFORMATION
 Corporate Information
9
annual report 2009

BOARD OF DIRECTORS AUDITORS

Dato’ Haji Wan Abdullah B.W. Salleh Ernst & Young (AF 0039)
(Independent Non-Executive Chairman) Chartered Accountants
Dr. Lim Jit Chow Level 23A, Menara Milenium
(Non-Executive Director) Jalan Damanlela, Pusat Bandar Damansara
50490 Kuala Lumpur
Dr. Junid bin Abu Saham
(Independent Non-Executive Director)
Ooi Soon Kiam REGISTERED OFFICE
(Independent Non-Executive Director)
No. 9 Jalan Taming 3
Gan Boon Chuan Taman Tanming Jaya
(Executive Director) 43300 Seri Kembangan Selangor D.E.
Deepak Kumar Ruia Tel : (603) 8961 3024
(Executive Director) Fax : (603) 8961 6409
Lim Jit Fu Homepage: www.industronics.com.my
(alternate to Dr. Lim Jit Chow)
Raj Kishor Khandelwal
(alternate to Deepak Kumar Ruia)
SHARE REGISTRAR
Symphony Share Registrars Sdn. Bhd.
Level 6, Symphony House,
CHIEF EXECUTIVE OFFICER (ACTING) Pusat Dagangan Dana 1,
Jalan PJU 1A/46,
Lim Jit Fu
47301 Petaling Jaya, Selangor Darul Ehsan.
Tel : (603) 7841 8000
AUDIT COMMITTEE Fax : (603) 7841 8008
Ooi Soon Kiam (Chairman)
Dato’ Haji Wan Abdullah B.W. Salleh (Member)
PRINCIPAL BANKERS
Dr. Junid Bin Abu Saham (Member)
Malayan Banking Berhad
HSBC Bank Malaysia Berhad
NOMINATION COMMITTEE RHB Bank Berhad
Dato’ Haji Wan Abdullah B.W. Salleh Alliance Bank (M) Berhad
Ooi Soon Kiam Public Bank Berhad
Dr. Junid bin Abu Saham AmBank Berhad
EON Bank Berhad

REMUNERATION COMMITTEE
Dato’ Haji Wan Abdullah B.W. Salleh SOLICITORS
Dr. Junid bin Abu Saham Harjit & Co.
Ooi Soon Kiam Suraj Singh & Co.

COMPANY SECRETARIES STOCK EXCHANGE LISTING

Ng Pek Wan (BC No. N867) Main Market of Bursa Malaysia Securities Berhad
Lee Lai Huat (BC No. L787)

INVESTORS SERVICE
Shareholders, investors and members of public are invited to access the Company’s website at www.industronics.com.my for information on the
Group’s operations and latest developments. For further details, please contact : -

Dr. Junid bin Abu Saham Melissa Liew

Lead Independent Director Investor Relations
Industronics Berhad Industronics Berhad
Tel : (603) 8961 3024 Tel : (603) 8961 3024
Fax : (603) 8961 6409 Fax : (603) 8961 6409
email : [email protected] email : [email protected]
CORPORATE STRUCTURE
Corporate Structure
11
annual report 2009

100% Industronics Automation Sdn Bhd

100% Industronics Corporation Ltd.

100% Industronics Manufacturing Sdn Bhd

100% Olympex Sdn Bhd

100% ScreeRental Sdn Bhd

100% TTE Electronics Sdn Bhd

95% Ademco (Malaysia) Sdn Bhd

70% Industrial Electronics (S) Pte. Ltd.

69.2% Primeworth (M)Sdn Bhd

100% PW Precision Sdn Bhd

55% Asian Advertising (M) Sdn Bhd

55% Dasar Spektrum (M) Sdn Bhd

51% Sukitronics Sdn Bhd

100% Sukitronics Innova Sdn Bhd

100% Sukitronics PMC Sdn Bhd

100% Sukitronics Corporation Ltd

40% Accumax Technology Sdn Bhd

40% Floramerge Sdn Bhd

24% PDX.Com Sdn Bhd

CHAIRMAN’S STATEMENT
 Chairman’s Statement
13
annual report 2009

e c t o r s of
d o f D ir e
h e B o a r o r “ t h
a l f o f t
d u s t r o n i c s”
On be s Berhad (“In nt the Annual
h
ic e
Industron , I hereby pres atements of the
o m p a n y ” ) a n c i a l S t l y e a r
C t h e F i n e f i n a n c i a
a n d t h
Report the Company for Y 2009”).
r o u p a n d 2 0 0 9 ( “ F
G e c e m b er
D
ended 31

The General Economy

The global economy experienced the sharpest contraction since the post-war period in the first half of 2009 before entering into a gradual but
uneven recovery in the second half of the year. The fragility of the recovery was evident as the growth experienced by most countries in the second
half of 2009 continued to rely heavily on the fiscal support.

Despite a sharp contraction in the first quarter, the Malaysian economy contracted moderately by 1.7% in 2009 as recovery strengthened in the
second half year due to accelerated implementation of fiscal stimulus measures, the aggressive easing monetary policy and the comprehensive
measures introduced to ensure continued access of financing contributed in the domestic economy in the second half year of 2009.

(Source: Bank Negara Report 2009)

 Chairman’s Statement
15
annual report 2009
(cont’d)

Financial Review
In the face of a challenging operating environment, Industronics Group took concerted efforts to improve operating efficiencies and implement cost
saving measures during the FY 2009. All these efforts had contributed to the overall Group’s profitability. The Group turned in a Profit Before Tax (“PBT”)
of RM0.58 million in FY 2009 from a loss of RM 6.3 million in FY 2008 despite a 15% decline in revenue to RM 56.05 million from RM 66.1 million in
FY 2008.

At the Company level, PBT recorded in FY 2009 was RM 2.1 million as compared to a loss of RM 8.1 million in FY 2008 despite lower contribution
from lower sales revenue.

The balance sheet of the Group continues to remain healthy. As at 31 December 2009, the shareholders’ equity has increased slightly to RM 51.54
million while the cash and cash equivalents stood at RM 21.3 million.

Earnings per share for the financial year improved to 0.11 sen as compared to a loss per share of 6.48 sen in FY 2008.

Prospect
It is generally believed that the worst is over, and it is hopeful that the slow but steady recovery recorded in the second half of 2009 could gain some
momentum in 2010. Nevertheless, the Group will continue to be prudent and shall remain focused on improving operational efficiencies and cost
control measures whilst opening up new markets to meeting customer needs.

Board Changes
Encik Mazlan bin Duaji, a non-executive director, retired on 24 June 2009 following his decision not to seek re-election at the last Annual General
Meeting in 2009. On the same day at the last Annual General Meeting in 2009, we also saw the retirement of another two non-executive directors,
namely, Mr. Pawan Kumar Ruia and Mr. Raj Kishor Khandelwal from the Board of Directors. We thank the outgoing Directors for their efforts and
contributions to the advancement of the Company.

Dividend
The Board of Directors does not recommend any payment of dividend for the financial year ended 31 December 2009.
Industronics Berhad
Industronics AV/ITS/Communications Division
 Chairman’s Statement
17
annual report 2009
(cont’d)

Corporate Social Responsibility (CSR)

While there is no formal policy on Corporate Social Responsibility, we discharge our responsibilities to stakeholders and community in which we
operate. At Industronics, our commitment to CSR has become an integral part of our business.

Respect for employees

Recognising that employees are important assets, the Group continued to improve the welfare of all employees with safe and quality workplace and
continuous learning and development of skills and competencies to meet changing challenges.

We also recognise and appreciate the services of its dedicated long service employees by rewarding them Long Service Award in our Annual Dinner.
This award is a recognition of the employee’s commitment and contribution towards the growth and success of the Group.

Community
The Company provides industrial training opportunities to undergraduates in disciplines that are relevant to the Company’s operations. We recognise
our obligation to share our technological knowledge to undergraduates as part of the Company’s plans of working in partnership with institutions
of higher learning.

Safe Products
The Group provides safe and reliable products and services in compliance to all environmental laws and regulations. Processes are constantly
upgraded and services and products are improved to meet changing environmental laws, regulations and standards. Through this, we earn the
confidence of our customers and improve our brand image.

In the course of the year, the Company has successfully re-certified its quality management system for ISO 9001:2008 certification. This
demonstrates our strong commitment to quality at all levels of our organisation.

Acknowledgement
On behalf of the Board, I would like to thank our valued customers, suppliers, bankers, authorities, business partners and shareholders for their
unwavering support and confidence in us.

I also wish to extend my sincere appreciation to my fellow directors, the management and staff of the Group at all levels for their conscientious
contribution, untiring commitment, dedication and loyalty, which have been extremely supportive throughout the challenging year.
 Operation Highlights
19
annual report 2009

2009 Business Highlights

Industronics designs and manufactures its own range of Electronic Public Information Display Systems (PIDS) under the brand OLYMPEX. Apart
from this, the Industronics Group is also an established engineering and systems solutions provider with an extensive and strong presence in
many sectors including electronics products, telecommunications, security systems, mechanical & electrical engineering contracting, fabrication
& manufacturing and industrial automation.

Industronics’ services and solutions mostly centre around infrastructural development projects, airports and transportation hubs, roads & highways,
power plants, stadiums & sports venues, financial bourses, commercial & industrial buildings & structures, urban townships, universities &
educational institutions and other similar installations.

Electronic Products
Industronics designs, develops and manufactures Public Information Display Systems and Electronic LED Information Displays under the brand
OLYMPEX.

New Markets Nation-wide Communication and Display Systems

The year saw Industronics’ move into the architectural lighting and Industronics developed a data management, control and display system
enhancement market with its installation of an innovative seating matrix for Digi Telecommunications Berhad where it managed the information
display system for the new Meydan Race Course in Dubai. Over 11,000 and delivery of the telco’s international call rates information to specially
seats of the venue were fitted with individually controlled LED pixels developed OLYMPEX Displays throughout Malaysia through a GSM
which, when integrated, became a screen of 1 billion colours creating network.
a spectacular effect.
Sports and Scoreboards Systems
Transportation and Mass Transport Hubs Industronics saw continued strong demand of its OLYMPEX Electronic
Industronics is also very closely involved in the Transportation sector Scoreboards from the United States.
being one of the premier providers of Public Information Display
Systems in Airports, Train Stations, Ferry Terminals and other Mass In major sports events, OLYMPEX scoreboards were also exported to
Transportation hubs. Bangladesh for the upcoming South Asian Games in 2010.

The Company was awarded and successfully completed the deployment In Malaysia, the Company also won the project to supply a new Large
of a new enhanced version of its award-winning Flight Information Screen Electronic Scoreboard System to Sabah.
Display System (FIDS) which was first put in and in use since the airport
first opened over in 1997. Outdoor Large Screen Video Displays
Industronics was awarded a contract to supply and install an OLYMPEX
Apart from Public Information Display Systems, Industronics also n-Matrix Outdoor Large Screen Video Display in Kota Bahru, Kuantan.
provided a significant number of Bus Destination Displays specially
designed for RAPID Penang for its new buses.

The Company also enjoyed continued demand of its OLYMPEX LED

Traffic Lights in Singapore – being one of the very few that are approved
for use by the Land Transport Authority (LTA) in the country.
 Operation Highlights
21
annual report 2009
(cont’d)

Audio Visual Systems, Intelligent Transport Systems and Communications

This sector covers the business areas of integrated audio-visual systems, Intelligent Transport Systems (ITS) and Telecommunications equipment
solutions and other major system integration projects involving Information and Communication Technology (ICT).

In 2009, the key contributors to this Division’s revenue and profits were mainly from the completion of Parliament Malaysia ICT project and the
on-going service and maintenance works for its Variable Message Signs (VMS) systems that secured in 2008.

The major projects secured in 2009 included :-

• Traffic Control & Surveillance System (TCSS) Solution for South Luzon Expressway (SLEX) in Manila ; and
• Emergency Telephone System (ETS) and Traffic Control & Surveillance System (TCSS) for KL-Kuala Selangor Expressway ; and
• AV and Acoustic System for the Convention and Cultural Centre for a local university.

In the meantime, the Division is aggressively pursuing ICT projects in transportation sector, a sector that has been identified as the growth
contributor in 2010. With its inroads in highway sector and track records in the airport and railway sectors, the Division is well on its way to emerge
as a major player in the transportation sector for ICT.
member of the INDUSTRONICS Group of Companies
 Operation Highlights
23
annual report 2009
(cont’d)

Security Systems and Mechanical & Electrical (M&E) Engineering

The Industronics Group provides integrated systems and solutions for building and home security, fire protection systems and M&E Services through
our subsidiaries Ademco (M) Sdn Bhd (“Ademco”) and Sukitronics Sdn Bhd (“Sukitronics”).

Industronics itself has been a major supplier of conventional, microprocessor and addressable Fire Alarm Detection Panels under the Industronics
brand name since 1975.

Ademco is mainly involved in the provision of ELVE systems (Smart Home systems, Intruder Detection systems, CCTV systems, Access systems,
Barrier gate systems, Parking systems, Audio & Video Intercom systems and Guard Tour systems) to numerous housing developments, retail chain
stores, hyper-stores and government linked companies like Pos Malaysia Berhad and Bank Simpanan Nasional. The company also supplies a wide
range of fire alarm detection systems and accessories such as Secutron Intelligent Addressable Fire Alarm System, System Sensor devices, Home
Safeguard Smoke Detector, Battery Operated Smoke Alarm, Industronics Fire Alarm Panels and Fireman Intercom Systems.

In 2009, the company successfully completed the Fire Alarm systems projects for CIAST (Kementerian Sumber Manusia) Shah Alam, Public Bank
Cambodia, Hospital Adventist Penang, Legend Water Chalet Port Dickson and Wisma Gemas Kuala Lumpur.

Notable projects secured by Ademco in 2009 included :-

• CCTV System and Intruder Detection System for 62 Post Offices for Pos Malaysia Berhad ;
• Integrated Security and CCTV System for Pos Malaysia Berhad’s General Post Office at Dayabumi, Kuala Lumpur ;
• Integrated Security and CCTV System for Pos Malaysia Berhad’s General Post Office in Kuantan, Pahang ; and
• CCTV and Parking System for Aston Villa Sdn Bhd’s Metro Centre 5-storey Shop Office project in Kuala Lumpur.

Sukitronics is primarily focused on the growing business of M&E services for buildings, industrial plants, power stations, oil/petroleum downstream
engineering sectors and other similar markets.

For 2009, Sukitronics group’s revenues were largely derived from the spill-over projects secured in 2008. The group had, in the same year,
managed to secure a multi-million building project for Halal Hub hypermarket at Kuala Selangor.

Going forward, Sukitronics will continue to pursue businesses in M&E projects in the industrial and building sectors. The group is constantly looking
for opportunities of tied-up with main contractors and continuing to seek smart partnership on Private Funding Initiative (PFI) projects.
TTE Electronics Sdn. Bhd.
 Operation Highlights
25
annual report 2009
(cont’d)

Fabrication & Manufacturing

Industronics’ fabrication and manufacturing subsidiaries comprise Primeworth (M) Sdn Bhd (“Primeworth”) and TTE Electronics Sdn Bhd (“TTE”).

Primeworth’s core business is its 19” racking system and sheet fabrication which is primarily targeted at the Telecommunication and Networking
industry, Data Control and Storage Centres, Commercial and Industrial Equipment providers, Audio-Visual and Securities Installation markets. The
company had, during the downward trend of economy in 2009, expanded from its 19” rack core product to other new products such as DP Box,
CCTV Consoles and Multi-Protocol enclosures.

Throughout the year of 2009, the company remained firm on its course, accelerated changes to meet customers’ preferences and needs, stepped
up innovation in product designs, reduced wastes ad increased efficiencies of its business processes which the company believed have helped it
remains competitive in such a challenging environment.

While it is hopeful that the global economy recovery trend in fourth quarter 2009 would continue to 2010, the company believes that the various
initiatives undertaken during the crisis period of 2008/2009 have strengthened its fundamentals and will fully leverage this positive economy
sentiment for a better growth ahead.

TTE provides contract manufacturing, in house engineering and design solutions to both local and foreign companies that seek to outsource their
product manufacturing needs.

The global economic slowdown in 2009 had undoubtedly affected the performance of TTE’s business. The impact was particularly felt in the first
quarter but gradually picked up its momentum in the fourth quarter of the year when more positive signs of economy began to emerge. The company
has continuous orders from the existing customers of automobile and security industries.

During the year 2009, the company carried out an on-going quality rectifying processes on its products and customer service as its commitment
in quality assurance to all the customers.

Whilst many of TTE’s clients had reduced or stopped their production levels understandably due to the global economic slowdown, the company
endeavours to actively seek and develop new markets and opportunities in particular the mass production services primarily in the Automotive and
IT data storage infrastructure business segments.
 Operation Highlights
27
annual report 2009
(cont’d)

Industrial Automation
The Industronics Group provides integrated solutions in environmental monitoring and control systems that are used in the Waterworks, Irrigation and
Drainage, Rivers Management sectors through its subsidiary, Industronics Automation Sdn Bhd (“IASB”). These solutions which are mostly locally
designed and engineered are often used in applications for water quality monitoring and treatment, flood detection and control systems, irrigation
and tidal gates automation purposes. IASB undertakes all related works from conceptual design to actual system integration and construction and
the maintenance of the installed systems using local resources and expertise.

In 2009, IASB has developed an innovative Real Time Water Quality Online Monitoring system for river application and has successfully installed and
commissioned systems in several states in peninsular Malaysia for Jabatan Pengaliran Dan Saluran. With the proven initial successful installations,
the company embarked on an aggressive marketing plan to tap on other potential site opportunities and hopes to install more similar systems in
the immediate future. The company also has successfully delivered a mid range of building automation system for an overseas project in the same
year.

The major projects secured by IASB in 2009 included :-

• fire alarm automation system for campus building of the Politeknik Muadzam Shah, Pahang ;
• extension of the existing maintenance works for the SMART Flood Detection System into 2011; and
• contracts for fire alarm automation systems for public institutions of higher learning.

With the global economy expected to improve in 2010, the company is expected to secure more and better margin projects in light of emerging
improved business confidence and sentiments locally.
 Statement On Corporate Governance
28
annual report 2009

THE CODE
The Board of Industronics Berhad (“Industronics”) has adhered to the principles of the Malaysian Code of Corporate Governance (“the Code”)
as part of its duties to protect and to enhance all aspects of stakeholders’ value.

The Board has continued its commitment in maintaining high standards of corporate governance and the effective application of the
principles and best practices, as set out in the Code, throughout the Group.

Set out below is a statement which outlines the application by the Group of the principles of the Code and compliance with the best practices
provisions set out therein, throughout the year ended 31 December, 2009.

BOARD OF DIRECTORS
The Board is collectively responsible for setting policies which promote the success of the Group. The Board is entrusted with the proper stewardship
responsibility of providing strategic leadership, overseeing the business conduct ensuring the adequacy and integrity of financial information and
enhancing the effectiveness of the Group’s system of internal control and risk management process.

The Board meets on a scheduled basis and additional meetings may be convened when necessary should major issues arise that need to be
resolved between scheduled meetings. During the financial year ended 31 December 2009, seven (7) Board Meetings were held and details of the
attendance record of each Director is listed on page 39 of this Annual Report.

Board Balance and Composition

The Board of Industronics has a good balance of members who are executive, non-executive and independent directors such that no one individual
or a group of individuals in the Board can dominate the balance of power and authority. The Board comprises six (6) members comprising four (4)
non-executive directors and two (2) executive directors. Three (3) of the non-executive directors are Independent Directors. In compliance with the
Listing Requirements of Bursa Securities, three (3) of the six (6) members of the Board are Independent Directors.

The Board considers that its composition and size consisting of Directors with diverse background and experience in business, corporate and
technical knowledge, are optimum and well balanced.

In addition, the Independent Non-Executive Directors do not participate in the day-to-day management of the Company and do not engage in any
business dealing or other relationship with the Company so that they are capable of exercising independent views, advice and judgment and act in
the best interest of the Company and its shareholders.

There is a clear division of responsibility between the Chairman and the Acting Chief Executive Officer. The Chairman is responsible for ensuring
the Board’s effectiveness and conduct whilst the Acting Chief Executive Officer has overall responsibility over the operating units, organizational
effectiveness and implementation of the Board’s policies and decisions.

A brief profile and status of each director of the Company is presented in pages 36 to 39.

Supply of Information
Notice of meetings, setting out the agenda and accompanied by the relevant Board report and documents are provided to the Directors on a
timely manner to allow the Directors to review and consider the agenda items to be discussed at Board meetings. All directors are encouraged
to bring independent judgment to bear in decision-making.

Directors have access to all information within the Company whether as a full Board or in their individual capacity, in furtherance of their
duties. In addition, all Directors have full access to the advice and the services of the Company Secretary including where necessary, the
advice of independent professionals at the Company’s expense.

The Board has constantly advised the executive management to implement plans and processes to provide timely, quality information to the
Directors.
 Statement On Corporate Governance
29
annual report 2009
(cont’d)

Appointment and Re-election of Directors

In accordance with the provisions of the Company’s Articles of Association, at least one-third (1/3) of the Board of Directors are required to submit
themselves for re-election by rotation at each annual general meeting. Directors who are appointed by the Board are subject to re-election by
shareholders at the first annual general meeting after their appointment. Directors over seventy (70) years of age are required to submit themselves
for re-appointment annually pursuant to Section 129(6) of the Companies Act, 1965.

The Articles of Association of the Company also require all directors to retire from office once in every three (3) years, including the Managing
Director and such Directors shall be eligible for re-election.

Nomination Committee
New appointments to the Board are recommended by the Nomination Committee of the Board, which comprises of three (3) independent non-
executive directors. The Nomination Committee is empowered to bring to the Board recommendations on the appointment of any new Executive
and Non-Executive Directors by evaluating and assessing the suitability of candidates for Board membership. The role and responsibility of the
Nomination Committee include:

• composition of the Board and its subsidiaries;

• criteria for Board membership;
• recommendation for appointment and removal of directors;
• size and membership of the Board; and
• regularly assess the independence of each member.

Directors’ Remuneration
Remuneration Committee
The Remuneration Committee is primarily responsible for development and carries out review of the overall remuneration policy and packages for
the executive directors. The Committee is made up entirely of independent non-executive directors.

The non-executive directors are remunerated on the basis of their anticipated time commitment and the responsibilities entailed in their role. The
determination of the fees of non-executive directors is a matter for the Board as a whole, subject to shareholders’ approval.

Details of the remuneration of Directors during the year under review are as follows :-
Executive Non-Executive
RM RM

Fee - 117,000
Salaries, Employee Provident Funds & Allowances 881,501 38,500
Benefits-in-kind 23,950 -
Total 905,451 155,500

No. of Directors
Executive Non-Executive

RM 50,000 & below - 7

RM 50,001 - RM200,000 - -
RM200,001 - RM250,000 1 -
RM250,001 - RM300,000 - -
RM300,001 - RM350,000 1 -
RM350,001 - RM400,000 1 -
 Statement On Corporate Governance
30
annual report 2009
(cont’d)

Director’s Training and Education

All Directors have completed the Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad. For the year under review,
all Directors will continue to undergo other relevant training programmes from time to time to keep abreast of changes in legislation/regulations and
further enhance their skills and knowledge.

Board Committee
The Board has established several Board Committees whose compositions and terms of reference are in line with the best practices of the Code.
The functions and terms of reference of the Board committees as well as authority delegated to these Board Committees have been clearly defined
by the Board.

The Board Committees are as follows :-

• Audit Committee ;
• Nomination Committee ; and
• Remuneration Committee.

The composition of the Board Committees comprises members of the Board. The chairman of the committees will report to the Board on the
outcome of the respective committee meetings and such reports are incorporated into the minutes of Board meetings.

Investor Relations and Shareholder Communication

The Board acknowledges its role in representing and promoting the interest of the shareholders, and its accountability to shareholders for the
performance and activities of the Group. The Board also recognizes the importance of timely and thorough dissemination of information to
shareholders whereby announcements and releases of financial results on a quarterly basis provide the shareholders and investing public with a
continuous overview of the Group’s performances and operations.

The annual general meeting is the principal avenue for dialogue and interaction with the shareholders of the Company. Members of the Board
and the auditors of the Company are ready to respond to all queries and undertake to provide clarification on issues and concerns raised by the
shareholders.

Shareholders, investors and members of public are invited to access the Company’s website at www.Industronics.com.my and Bursa Malaysia’s
website at www.bursamalaysia.com.my for the latest corporate and market information on the Company and the Group.

Accountability and Audit

Financial Reporting
The Board takes due care and responsibility in presenting a balance and fair assessment of the Group’s financial statements. In this regard, the
Board is primarily responsible to present a fair and comprehensive report of the financial affairs of the Group, which is prepared in accordance with
the provisions of the Companies Act, 1965 and the approved accounting standards in Malaysia.

The Audit Committee plays a crucial role in reviewing information to be disclosed to ensure its accuracy, adequacy and compliance with the
appropriate accounting standards.

The Statement by Directors pursuant to Section 169 of the Companies Act 1965 is disclosed on page 46 of this Annual Report. The Statement of
Directors’ Responsibility is set out on the following page of this Annual Report.
 Statement On Corporate Governance
31
annual report 2009
(cont’d)

Internal Control
The Directors acknowledge its overall responsibility for maintaining a sound system of internal control to safeguard the shareholders’ investment and
the Company’s assets. The Board has appointed Messrs. BDO Governance Advisory Sdn Bhd to undertake the internal control function for continuous
review and maintenance of the system of internal control in the Group.

The Board shall work closely with the internal and external auditors to continuously improve the internal controls of the Group in terms of its integrity
and adequacy.

The Statement of Internal Control, as set out on pages 34 and 35, provides an overview of the state of internal controls within the Group.

Relationship with Auditors

The Company has established a formal and transparent relationship with the Company’s auditors through the Audit Committee. The role of the Audit
Committee in relation to the external auditors is stated on pages 32 and 33.

DIRECTORS’ RESPONSIBILITY STATEMENT

In preparing the annual financial statements of the Group and of the Company, the Directors are collectively responsible to ensure that these
financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia, the provisions of the
Companies Act, 1965 and the Listing Requirements of Bursa Malaysia Securities Berhad so as to give a true and fair view of the state of affairs of
the Group and of the Company as at 31 December 2009 and of their results and cash flows for the financial year ended on that date.

In preparing the financial statements for the year ended 31 December 2009 set out on pages 50 to 118 of this Annual Report, the Directors have :-

• applied appropriate accounting policies on a consistent basis ;

• made judgments and estimates that are reasonable and prudent ;
• ensured applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial
statements ; and
• prepared the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and the Company will
continue in business.

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 enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have the overall responsibility for taking such steps as are reasonable to them, to safeguard the assets of the Group and the Company,
to prevent and detect fraud and other irregularities.
 Audit Committee Report
32
annual report 2009

ESTABLISHMENT
The Audit Committee was established on 18 August 1994 to act as a Committee to the Board of Directors.

COMPOSITION AND MEETINGS

The composition of the Audit Committee and the attendance of each member at the Committee meetings during the year are set out below :-

Chairman
Ooi Soon Kiam – Independent Non-Executive Director

Members
Dr. Junid bin Abu Saham – Independent Non-Executive Director
Dato’ Haji Wan Abdullah B.W. Salleh – Independent Non-Executive Director

Name of Member No. of Meetings attended

Ooi Soon Kiam All 5 meetings
Dr. Junid bin Abu Saham 4 meetings
Dato’ Haji Wan Abdullah B.W. Salleh All 5 meetings

The Acting Chief Executive Officer, Financial Controller and Internal Audit Officers attended these meetings upon invitation by the Audit Committee.
The Group’s external auditors were invited to attend all of these meetings.

TERMS OF REFERENCE
The terms of reference of the Audit Committee are as follows :-

Membership

The Audit Committee must be appointed by the Board of Directors from amongst their members, which fulfils the following requirements:
a. the Audit Committee must comprise not fewer than 3 members.
b. a majority of the members must be independent directors.
c. at least one member of the Audit Committee must be a member of the Malaysian Institute of Accountants (MIA); or any other equivalent
qualification recognised by MIA.

The Chairman shall be an independent, non-executive director appointed by the Board.

The Company Secretary shall act as Secretary to the Committee and shall provide the necessary administrative and secretarial services for the
effective functioning of the Committee.

Objectives

The objective of the Audit Committee is to assist the Board in fulfilling its fiduciary responsibilities by reviewing the adequacy and integrity of the
Company and the Group’s internal control systems and management information systems, including systems for compliance with applicable laws,
regulations, rules, directives and guidelines.

The Audit Committee shall also provide greater emphasis on the audit functions by increasing the objectivity and independence of External and
Internal Auditors and providing a forum for discussion that is independent of the Management.

In addition, the Audit Committee shall encourage high standards of corporate disclosure and transparency in maintaining corporate responsibility,
integrity and accountability to shareholders and other stakeholders.
 Audit Committee Report
33
annual report 2009
(cont’d)

Authority

The Audit Committee shall have the following authority as empowered by the Board of Directors :-

a. to investigate any activity within its terms of reference ;

b. to have the resources which are required to perform its duties ;
c. to have full and unrestricted access to information and relevant to its activities, to the Internal and External Auditors, and to senior management
of the Company and its subsidiaries ;
d. to obtain independent professional or other advice as necessary ; and
e. to convene meetings with the External Auditors without the attendance of the executive board members, whenever deemed necessary.

Duties and Responsibilities

The duties and responsibilities of the Audit Committee are :-

a. to consider the appointment, resignation and dismissal of the External Auditors and the audit fees ;
b. to review the nature and scope of the audit with Internal and External Auditors before the audit commences ;
c. to review the quarterly and annual financial statements before submission to the Board ;
d. to review any related party transaction and conflict of interest situation that may arise ;
e. to discuss problems and reservations arising from the interim and final audits and any matter the Auditors may wish to discuss ;
f. to review the audit reports by the Internal and External Auditors, the major findings and management’s responses thereto ;
g. to review the effectiveness and efficiency of internal control systems ; and
h. to consider other matters relating to audit.

Quorum and Meeting Procedures

The Committee shall hold at least four (4) times a year with more meetings as the Committee deems necessary. The quorum for any meeting of the
Audit Committee shall be at least 2 Independent Directors. In the absence of the Chairman, the members present must elect a Chairman for the
meeting from amongst the members present.

ACTIVITIES DURING THE FINANCIAL YEAR

During the year, the Audit Committee carried out its duties as set out in its terms of reference.
The main activities undertaken by the Committee were as follows :-

• Reviewed the unaudited quarterly financial statements of the Group prior to recommending them to the Board for their consideration and
approval.
• Reviewed the annual audited financial statements of the Group with the external auditors prior to submission to the Board for their consideration
and approval.
• Reviewed the annual audit plan of the outsourced internal audit function.
• Reviewed the internal audit reports, recommendations made and management’s response to these recommendations.
• Reviewed financial statement audit plan of the external auditors and the results of the annual audit, their audit report and management letter
respectively.

INTERNAL AUDIT FUNCTION

The Board has engaged an independent professional firm for the provision of Internal Audit (IA) services to Industronics Group for the year
2008/2009 to 2011. The professional firm reviews the adequacy and integrity of the system of internal control systems in key business areas within
the Group independent of operations and reports to the Audit Committee on a quarterly basis.

The professional firm assisted the Audit Committee in discharging their roles and responsibilities with regards to assessing the adequacy and
integrity of the system of internal control systems by undertaking an Internal Audit Plan for Industronics Group.
 Statement On Internal Control
34
annual report 2009

The Board of Directors (“Board”) of Industronics Berhad recognizes the importance of a sound internal controls system to safeguard shareholders’
investments and the Group’s assets.

The Statement on Internal Control outlines the nature and scope of internal control of the Group during the year.

RESPONSIBILITY
The Board of Directors is committed to maintain a system of internal controls in financial, operational and compliance as well as risk management
to achieve the following objectives:

• Safeguard assets of the Group and shareholders’ interest;

• Identify and manage risks affecting the Group;
• Compliance with regulatory requirements; and
• Operational results are closely monitored and substantial variances are promptly explained.

The Board affirms the overall responsibility for maintaining a sound system of internal controls and for reviewing its adequacy and integrity so as to
safeguard shareholders’ investment and the Group’s assets.

However, there are limitations that are inherent in any system of internal controls and such system is designed to manage and control risks
appropriately rather than to eliminate them. Hence, it is imperative to note that any internal controls system can only provide reasonable and not
absolute assurance against material misstatement or loss.

The Board will continue to take necessary measures to strengthen its internal controls system to address any weaknesses identified.

The Board has outsourced the internal audit functions to BDO Governance Advisory Sdn Bhd (“BDO GA”), with the primary objective of assisting the
Board in reviewing the adequacy and integrity of the Group’s system of internal controls to manage the risks faced by the Group.

Towards this purpose, BDO GA has developed an annual Internal Audit Plan using a risk-based approach, which was presented to and approved by
the Audit Committee. BDO GA performed periodic internal control reviews according to the approved Internal Audit Plan to assess the adequacy and
integrity of the system of internal controls of the major business units within the Group. The audit observations, recommendations for improvement
and status of actions taken by the management to address the issues were reported to the Audit Committee. The annual cost incurred for the
internal audit function is RM80,000.

The Board also takes cognisance the improvement points highlighted by the external auditors and acknowledges that reviewing and enhancing the
Group’s system of internal controls is a continuing process.

Internal Control
Key elements of the Group’s system of internal controls are as follows:

• Operating structure with clearly defined lines of responsibility

The operating structure includes defined delegation of responsibilities to the committees of the Board, the senior management and the operating
units.

• Independence of the Audit Committee

The Audit Committee comprises non-executive members of the Board who are all independent directors. The Committee holds regular meetings
to deliberate on findings and recommendations and reports back to the Board.
 Statement On Internal Control
35
annual report 2009
(cont’d)

• Employees’ competency
Emphasis is placed on the continuing enhancement of the quality and abilities of employees where continuing education, training and development
are actively carried out through various programmes.

• Internal audit
Periodical internal control reviews were conducted by BDO GA to assess the adequacy and integrity of the system of internal controls and
compliance with policies, procedures and recommended business practices. Control deficiencies and relevant recommendations for business
improvement as well as management’s actions to address the control deficiencies were reported to the Audit Committee.

• Financial Reporting
Regular monitoring and review of financial results by the management and formulation of action plan to address areas of concern.

• ISO 9001: 2008

An ISO 9001: 2008 Quality Management System, which is subject to regular review and improvement, continually manages and administers the
quality requirement of the Group’s products and services.

• Insurance
Adequate insurance on major assets, i.e. stocks, property, plant and equipment of the Group is placed to ensure that the Group is sufficiently
covered against any mishap that may result in material losses to the Group.

The Board remains committed to strengthening the Group’s control environment and processes.

For the financial year under review, the Board is of the view that the system of internal controls is satisfactory and adequate. As an on-going
process of improvement, the Group will continue to take necessary measures to further strengthen its internal controls.
 Directors’ Profile
36
annual report 2009

Dato’ Haji Wan Abdullah B.W. Salleh

(Independent Non-Executive Chairman)

Dato’ Haji Wan Abdullah bin Wan Salleh, a Malaysian, aged 59, is an Independent Non-Executive Chairman of Industronics. He was appointed to
the Board on 27 August 2008. Dato’ Haji Wan Abdullah graduated from the University of Malaya in 1974 with an honours degree in Economics
and obtained a Master degree in Economic Policy from the Boston University in 1987.

Dato’ Haji Wan Abdullah is a retired top civil servant in the government service having served over 33 years in the Public Services as Senior
Diplomatic and Administrative Officer at both the Federal and State levels. He last served as the Pahang State Secretary when he retired recently in
November 2007. Dato’ Haji Wan Abdullah has held several offices during his tenure in the public sector, amongst which were :-

- Assistant Director in the Ministry of Trade & Industries (1974 -1978) ;

- Principal Assistant Secretary in Ministry of Finance (1979 - 1985) ;
- Chief Assistant District Officer in Tapah Land Office, Perak (1987 - 1993) ;
- Principal District Officer of Pekan Municipality (2 terms between 1997 - 2000) ;
- Director of Pahang State Economic Planning Unit (1997 -2000) ;
- Director for State of Pahang, in the Implementation and Coordination Unit of the Prime Minister Office at Putrajaya (2002 -2004) ;
- The Pahang State Financial Officer (2004 - 2006) ; and
- The Pahang State Secretary (2006 -2007)

In his tenure as a leading State Officer with the Pahang State Government, Dato’ has been involved in bringing much foreign direct investment from
abroad and economic development activities in the State.

Dato’ Haji Wan Abdullah is also active in the private sector and is currently a Chairman to 3 private companies, a Director with the Astana Golf &
Country Resort and Tioman Development Authority. He is also a Board member with the Majlis Ugama Islam & Adat Istiadat Melayu Pahang. Dato’
does not hold any directorship in any other public companies.

Dato’ Haji Wan Abdullah is a member of Audit Committee, and Chairman of the Remuneration Committee and Nomination Committee of
Industronics.

Dato’ Haji Wan Abdullah does not have any family relationship with any director and/or major shareholder of the Company. There is no business
relationship with the Company in which he has a personal interest. He has had no convictions for any offences within the law.
 Directors’ Profile
37
annual report 2009

Dr. Lim Jit Chow Dr. Junid Bin Abu Saham Ooi Soon Kiam
(Non-Executive Director) (Independent Non-Executive Director) (Independent Non-Executive Director)

Dr. Lim Jit Chow, a Malaysian, aged 70, is the Dr. Junid Bin Abu Saham, a Malaysian, aged Ooi Soon Kiam, a Malaysian, aged 66, is
founder of Industronics and its Managing 68, is an Independent Non-Executive Director an Independent Non-Executive Director of
Director from 1985 until his retirement on 1 of Industronics, appointed to the Board on 2 Industronics. He was appointed to the Board
May 2008. He was appointed to the Board on August 1994. A Colombo Plan Scholar who on 29 May 2001. Mr. Ooi is an Arts graduate
1 August 1985 and is now a Non-Executive graduated with a Bachelor and Master’s degree in Economics from the University of Malaya and
Director of Industronics. Dr. Lim was a Colombo in Economics from the University of Canterbury, a graduate in accounting from the University
Plan Scholar and obtained his degree in New Zealand in 1963 ad 1965 respectively, of British Columbia. He is a member of the
Electrical Engineering at the University of Dr. Junid Saham later read Economics at the Malaysian Institute of Accountants (MIA) and
Auckland, New Zealand in 1965. He continued University of Hull, United Kingdom in 1974 Canadian Institute of Chartered Accountants
his post-graduate studies in the same university where he graduated with Ph.D. under the (CICA).
and was awarded a Ph.D. degree in 1968. Inter-British Universities Scholarship.
Mr. Ooi is the former technical director of
In 1969, he served the Jabatan Telekom as an Dr. Junid Saham worked as an auditor with Malaysian Accounting Standards Board. He
Assistant Controller in charge of the Arthur Andersen & Co. in Sydney and in London has many years of working experience, inter-
implementation of the first Malaysian Satellite from 1969 to 1972. In 1975 he worked as an alia, as an educator in both public and private
Earth Station in Kuantan. He was later Investment Manager with Bank Rakyat. From education institutions, as an economic and
designated as Station Manager of the Earth 1976 to 1992, he was with Arab-Malaysian financial consultant to organisations and public
Station. He joined University of Malaya in Merchant Bank Berhad where he held the enterprises. Currently, Mr. Ooi also sits on the
1971 as lecturer in the Department of Electrical position of General Manager for several Board of Nilai Resources Group Berhad.
Engineering and was promoted to an Associate years. Presently, he is a director of Dialog
Professor of the University of Malaya in 1976. Group Berhad, Master-Pack Group Berhad and Mr. Ooi is the Chairman of Audit Committee. He
several private companies. Dr. Junid Saham is also a member of the Nomination Committee
Dr. Lim is a registered Professional Engineer also sits on the Board of Areca Capital, a fund and Remuneration Committee of Industronics.
and a Fellow of the Institution of Engineers management company.
Malaysia. Dr. Lim’s wealth of experience in Mr. Ooi does not have any family relationship
the electronics field contributes greatly to the Dr. Junid is a member of Audit Committee, with any director and/or major shareholder of
development and progress of Industronics, Nomination Committee and Remuneration the Company. There is no business relationship
notably the development of their own Committee of Industronics. with the Company in which he has a personal
proprietary designs in the products interest. He has had no convictions for any
manufactured by Industronics. Dr. Junid does not have any family relationship offences within the law.
with any director and/or major shareholder of
Dr. Lim does not hold any directorships in any the Company. There is no business relationship
other public companies. Dr. Lim is a substantial with the Company in which he has a personal
shareholder of Industronics. There is no other interest and he has never had any conviction
business relationship with the Company in for any offences within the law.
which Dr. Lim has a personal interest. He has
had no convictions for any offences within the
law.
 Directors’ Profile
38
annual report 2009
(cont’d)

Gan Boon Chuan Deepak Kumar Ruia RAJ KISHOR KHANDELWAL

(Executive Director) (Executive Director) (Alternate Director)

Gan Boon Chuan, a Malaysian, aged 51, Deepak Kumar Ruia, an Indian national, aged Raj Kishor Khandelwal, an Indian national,
is an Executive Director of Industronics. 56, is an Executive Director of Industronics. He aged 49, was appointed on 27 April 2010 as
He was appointed to the Board on 11 April was appointed to the Board on 30 June 2007. an alternate director to Mr. Deepak Kumar
1996. Mr. Gan graduated with a degree in Mr. Deepak K. Ruia is an experienced marketing Ruia. He is the Vice President (Finance &
Business Studies in 1982 and later on, a MBA person specializing in business start-ups and
Accounts) in Ruia Sons Pvt. Ltd. in India. Mr.
with honours from Massey University, New new product launches. He has 35 years of
Raj K. Khandelwal is a Bachelor of Commerce,
Zealand in 1984. Prior to joining Industronics experience in marketing and technology fusion.
Law graduate and Master of Business
in 1989, Mr. Gan had considerable previous He has a Post Graduate Diploma in Business
Administration from Calcutta University, India.
working experiences in marketing and Management specializing in Marketing, from
He is also a Cost and Works Accountant from
business development functions in the RF The Xavier Institute of Communications,
The Institute of Cost and Works Accountants of
communications and audio visual technology Mumbai. Mr. Deepak K. Ruia is experienced
India and Company Secretary from The Institute
industry in the ASEAN region. He joined in many areas of Direct, Mass and Industrial
of Company Secretaries of India. From 1984 to
Industronics as Manager in 1989 setting up Product Marketing and initiated the launch of
2008, he worked in various corporate in India
the Communication Division and was promoted the first business directory services in India.
as Cost Accountant - Hindustan Motors Ltd,
to the position of General Manager in 1994 Mr. Deepak K. Ruia is also one of the pioneers
Asst. Secretary - Kamarhatty Company Ltd,
and later appointed as a Director in 1996. to initiate the process of technology driven
Company Secretary- Martin Burn Ltd.,
Mr. Gan has over 25 years span of working database of investors and pave the way for
Company Secretary & Commercial Auditor -
experiences in the various technology related paperless trading. In this capacity, he was
Shalimar Paints Ltd., Vice President (Finance &
businesses since the mid 1980s and holds involved in creating over a million databases
Corporate Affairs) - IVL India and its group
varied marketing and business development for multinationals. Other than specializing
Companies, and Vice President (CFO and
responsibilities for Industronics Group. in the service industry, he was also involved
Company Secretary) - India Power Corporation
in marketing chemicals, ceramic tiles and
Ltd prior to joining the Ruia Group in January
Mr. Gan does not hold any directorships in industrial rubber products – conveyor belts
2008. He does not hold any directorships in
any other public companies. He does not have and industrial hoses. Mr. Deepak K. Ruia does
any public companies in Malaysia.
any family relationship with any director and/ not hold any directorship in any other public
or major shareholder of the Company. There companies in Malaysia.
Mr. Raj K. Khandelwal is not a shareholder
is no business relationship with the Company
of Industronics and does not have any
in which he has a personal interest. He has Mr. Deepak K. Ruia does not hold any share
family relationships with any director and/or
had no convictions for any offences within the in Industronics. He also does not have any
substantial shareholder. There is currently
laws. shareholding, directly or indirectly, in Bloom
no business relationship with Industronics
Billions Sdn Bhd, a single largest substantial
in which he has a personal interest. He has
shareholder of Industronics. Bloom Billions
had no convictions for any offences within the
Sdn Bhd has nominated Mr. Deepak K. Ruia
laws.
in his professional capacity to sit on the Board
of Industronics. Mr. Deepak K. Ruia is the
brother of Mr. Pawan Kumar Ruia, a deemed
substantial shareholder of Industronics.
There is currently no business relationship
with Industronics in which he has a personal
interest. He has had no convictions for any
offences within the laws.
 Directors’ Profile
39
annual report 2009
(cont’d)

Lim Jit Fu
(Alternate Director)

Lim Jit Fu, a Malaysian, aged 50, is currently the Acting Chief Executive Officer of Industronics. He was appointed to the Board on 27 August 2008
as an alternate director to Dr. Lim Jit Chow. Mr. Lim graduated with a degree in Bachelor of Electrical & Electronics Engineering from University of
Texas, Austin, Texas USA and Master of Business Administration from Texas Tech University, Texas USA.

Mr. Lim has over 20 years working experience in the electronic and semiconductor industries. He has 4 years experience working with a leading
multi-national semiconductor company in various positions – training development engineer, manufacturing and later in customer service planning.
He joined Industronics in 1991 as Head Marketing Department and was promoted to General Manager in 1997. Amongst others Mr. Lim had
vast experience in Public Information Display and Airport Systems and had successfully headed the implementation and integration of two major
international airports Flight Information Display Systems.

Mr. Lim does not hold any directorships in any other public companies. He does not have any family relationship with any director and/or major
shareholder of the Company. There is no other business relationship with the Company in which he has a personal interest. He has had no
convictions for any offences within the law.

Details of attendance of Directors at Board Meeting

A total of seven (7) Board meetings were held in the financial year ended 31 December 2009.

The details of attendance of each Director at the Board meetings held during the financial year ended 31 December 2009 are :-

% of
Name of Director Attendance Attendance

Dato’ Haji Wan Abdullah B.W. Salleh 7/7 100%
Dr. Lim Jit Chow 7/7 100%
Dr. Junid bin Abu Saham 6/7 86%
Ooi Soon Kiam 7/7 100%
Gan Boon Chuan 7/7 100%
Deepak Kumar Ruia 5/7 71%
Pawan Kumar Ruia * 1/2 -
Mazlan bin Duaji * 2/3 -
Raj Kishor Khandelwal * 2/3 -

* retired on 24 June 2009

FINANCIAL STATEMENTS
 Directors’ Report 42
Statement by Directors 46
Statutory Declaration 47
Independent Auditors’ Report 48
Consolidated Income Statement 50
Consolidated Balance Sheet 51
Consolidated Statement of Changes in Equity 52
Consolidated Cash Flow Statement 53
Income Statement 55
Balance Sheet 56
Statement of Changes in Equity 57
Cash Flow Statement 58
Notes to the Financial Statements 60
 Directors’ Report
42
annual report 2009
for the financial year ended 31 December 2009

The Directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the
financial year ended 31 December 2009.

PRINCIPAL ACTIVITIES
The principal activities of the Company include the design, manufacturing and installation of electronics and microprocessor controlled products,
telecommunication system, audio video multimedia systems, intelligent transportation systems and information communication technology related
system.

The principal activities of the subsidiaries are described in Note 41 to the financial statements.

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

RESULTS
GROUP COMPANY
RM RM

Profit for the year 244,073 1,116,180

Attributable to:
Equity holders of the Company 105,071 1,116,180
Minority interests 139,002 -
244,073 1,116,180

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

In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year were not substantially
affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS
No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend any payment of dividend in respect of the current financial year ended 31 December 2009.
 Directors’ Report
43
annual report 2009
(cont’d)
for the financial year ended 31 December 2009

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

Dr. Lim Jit Chow

Dr. Junid bin Abu Saham
Gan Boon Chuan
Ooi Soon Kiam
Deepak Kumar Ruia
Dato’ Wan Dollah @ Wan Abdullah B. W. Salleh
Lim Jit Fu (alternate to Dr Lim Jit Chow)
Mazlan bin Duaji (retired on 24 June 2009)
Pawan Kumar Ruia (retired on 24 June 2009)
Raj Kishor Khandelwal (retired on 24 June 2009 and appointed as alternate director to
Deepak Kumar Ruia on 27 April 2010)
Somesh Ganeriwal (ceased to be an alternate director following the retirement of
Pawan Kumar Ruia on 24 June 2009)

DIRECTORS’ BENEFITS
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party,
whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other than benefits included in the
aggregate amount of emoluments received or due and receivable by the Directors or the fixed salary of a full time employee of the Company as
shown in Note 10 of the financial statements) by reason of a contract made by the Company or a related corporation with any 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, except as disclosed in Note 38 to
the financial statements.

DIRECTORS’ INTERESTS
According to the register of Directors’ shareholdings, the interests of Directors in office at the end of the financial year in shares in the
Company and its related corporations during the financial year were as follows:

Number of Ordinary Shares of RM0.50 Each

The Company 1.1.2009 Acquired Sold 31.12.2009

Direct Interest:
Dr. Lim Jit Chow 19,550,000 - - 19,550,000
Gan Boon Chuan 332,500 - - 332,500
Lim Jit Fu 355,400 - - 355,400

Indirect Interest:
Dr. Lim Jit Chow 2,340,000 - - 2,340,000

Dr. Lim Jit Chow, by virtue of his interest in shares in the Company, is also deemed interested in shares in all the Company’s subsidiaries to the
extent the Company has an interest

None of the other Directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during
the financial year.
 Directors’ Report
44
annual report 2009
(cont’d)
for the financial year ended 31 December 2009

ISSUE OF SHARES
No share was issued during the financial year.

TREASURY SHARES
There was no share repurchased during the financial year.

As at 31 December 2009, the Company held a total of 1,131,000 of its 95,263,000 issued ordinary shares as treasury shares. Such treasury shares
are held at a carrying amount of RM545,154 and further relevant details are disclosed in Note 26(b) to the financial statements.

OTHER STATUTORY INFORMATION

(a) Before the income statements and balance sheets 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 allowance for doubtful debts
and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts;

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

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

(i) the amount written off for bad debts or the amount of the allowance for doubtful debts in these financial statements inadequate to any
substantial extent; and

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

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

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

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

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

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

(f) In the opinion of the Directors:

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

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date
of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in
which this report is made.
 Directors’ Report
45
annual report 2009
(cont’d)
for the financial year ended 31 December 2009

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 44 to the financial statements.

AUDITORS

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

Signed on behalf of the Board in accordance with a resolution of the Directors dated 27 April 2010.

Lim Jit Fu

Gan Boon Chuan

 Statement By Directors
46
annual report 2009
Pursuant to Section 169(15) of the Companies Act, 1965

We, Lim Jit Fu and Gan Boon Chuan, being two of the Directors of Industronics Berhad, do hereby state that, in the opinion of the Directors, the
accompanying financial statements set out on pages 50 to 118 are drawn up in accordance with the provisions of the Companies Act, 1965 and
Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31
December 2009 and of the results and the cash flows of the Group and of the Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the Directors dated 27 April 2010.

Lim Jit Fu

Gan Boon Chuan

 Statutory Declaration
47
annual report 2009
Pursuant to Section 169(16) of the Companies Act, 1965

I, Wong Ping Kong, being the officer primarily responsible for the financial management of Industronics Berhad, do solemnly and sincerely declare
that the accompanying financial statements set out on pages 50 to 118 are in my opinion correct, and I make this solemn declaration conscientiously
believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Wong Ping Kong

Financial Controller
(MIA 5951)

Subscribed and solemnly declared by the abovenamed Wong Ping Kong at Kuala Lumpur in the Federal Territory on 27 April 2010.

Before me,

R. Vasugi Ammal
No. W480
Pesuruhjaya Sumpah
Kuala Lumpur, Malaysia
 Independent auditors’ report to the members
48
annual report 2009

of Industronics Berhad
(Incorporated in Malaysia)

Report on the financial statements

We have audited the financial statements of Industronics Berhad, which comprise the balance sheets as at 31 December 2009 of the Group
and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the
Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 50 to
118.

Directors’ responsibility for the financial statements

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

Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in 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 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 entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of the 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 unqualified audit opinion in
respect of the Group and qualified audit opinion in respect of the Company.

Opinion on the Group’s financial statements

In our opinion, the financial statements have been properly drawn up in accordance with applicable Financial Reporting Standards and the Companies
Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group as at 31 December 2009 and of their financial
performance and cash flows of the Group for the year then ended.

Basis for Qualification in respect of the Company’s corresponding figures

The auditors’ report for the previous financial year ended 31 December 2008 was qualified for the unidentified differences between the
Company’s and a subsidiary’s carrying value of inventories based on physical inventory counts and the recorded amounts in their respective
books as at 31 December 2007 which were adjusted to the income statements of the Group and of the Company for the year ended 31
December 2007. The inventory records of the Company and the said subsidiary did not permit us to carry out adequate appropriate audit
procedures so as to satisfy ourselves as to the appropriateness of the said adjustments and consequently the appropriateness of the carrying
value of inventories as at 1 January 2008 of the Company. The matter referred to above does not have any effect on the Group’s financial
statements for the year ended 31 December 2008.

Qualified Opinion in respect of the Company’s financial statements

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act
1965 in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2009 and of their financial
performance and cash flows of the Company for the year then ended except for the effect, if any, insofar as the matter referred to in the Basis for
Qualified Opinion paragraph impact the corresponding figures of the Company presented in the current year financial statements.
 Independent auditors’ report to the members
49
annual report 2009

of Industronics Berhad
(Incorporated in Malaysia)

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

(a) In our opinion, except for the matter discussed in the Basis for Qualified Opinion paragraph insofar as it affects the accounting and other
records of the Company for the previous financial year ended 31 December 2008, the accounting and other records and the registers required
by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the
provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which
are indicated in Note 41 to the financial statements.

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

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment
required to be made under Section 174(3) of the Act except as disclosed in Note 41 to the financial statements.

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.

Ernst & Young

AF: 0039
Chartered Accountants

Low Khung Leong

No. 2697/01/11(J)
Chartered Accountant

Kuala Lumpur, Malaysia

27 April 2010
 Consolidated Income Statement
50
annual report 2009
for the year ended 31 December 2009

GROUP
2009 2008
Note RM RM

Revenue 3 56,052,372 66,082,096

Cost of sales 4 (34,191,449) (45,430,228)
Gross profit 21,860,923 20,651,868
Other income 5 1,599,592 1,331,260
Administrative expenses (16,294,015) (16,947,602)
Selling and marketing expenses (3,896,513) (4,902,048)
Other expenses (2,250,717) (5,563,288)
Operating profit/(loss) 1,019,270 (5,429,810)
Investing results 6 (153,588) (379,315)
Finance costs 7 (287,132) (476,990)
Profit/(loss) before tax 8 578,550 (6,286,115)
Income tax 11 (334,477) 300,120
Profit/(loss) for the year 244,073 (5,985,995)

Attributable to:
Equity holders of the Company 105,071 (6,078,645)
Minority interests 139,002 92,650
244,073 (5,985,995)
Earnings/(loss) per share attributable to equity holders
of the Company (sen):
- Basic, for earnings/(loss) for the year 12 0.11 (6.48)

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

 Consolidated Balance Sheet
51
annual report 2009
as at 31 December 2009

GROUP
2009 2008
Note RM RM

ASSETS
Non-current assets
Property, plant and equipment 13 13,932,795 14,939,344
Investment properties 14 816,131 1,219,895
Prepaid land lease payments 15 1,463,978 1,483,094
Other investments 18 535,559 411,888
Development costs 19 - 23,466
16,748,463 18,077,687
Current assets
Inventories 20 9,632,466 11,406,731
Trade receivables 21 22,537,108 21,153,450
Other receivables, deposits and prepayments 22 1,939,684 1,351,759
Due from customers on contract 23 1,323,849 2,973,906
Tax recoverable 2,347,065 2,903,777
Cash and bank balances 25 21,321,691 23,848,754
59,101,863 63,638,377
TOTAL ASSETS 75,850,326 81,716,064

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company
Share capital 26 47,631,500 47,631,500
Treasury shares 26 (545,154) (545,154)
Reserves 28 4,461,491 4,416,285
51,547,837 51,502,631
Minority interests 5,179,167 7,315,350
Total equity 56,727,004 58,817,981

Non-current liabilities
Borrowings 29 342,498 640,128
Deferred tax liabilities 31 446,933 685,612
789,431 1,325,740
Current liabilities
Provisions 32 79,327 140,298
Borrowings 29 1,886,228 2,497,114
Trade payables 33 7,272,264 7,909,433
Other payables and accruals 34 6,973,641 7,697,563
Due to customers on contract 23 1,511,174 2,741,810
Current tax payables 611,257 586,125
18,333,891 21,572,343
Total liabilities 19,123,322 22,898,083
TOTAL EQUITY AND LIABILITIES 75,850,326 81,716,064

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

 Consolidated Statement Of Changes In Equity
52
annual report 2009
for the year ended 31 December 2009

Attributable to Equity Holders of the Company

<-------------- Non-Distributable Reserves ----------------> Distributable
Share Foreign
Share Share Treasury Option Revaluation Currency Retained Minority Total
Capital Premium Shares Reserve Reserves Reserve Earnings Total Interests Equity
RM RM RM RM RM RM RM RM RM RM
Group Note (Note 26) (Note 28) (Note 26) (Note 28) (Note 28) (Note 28) (Note 28)

At 1 January 2008 46,193,000 330 (545,154) 14,988 1,892,893 31,746 8,472,596 56,060,399 7,222,700 63,283,099
Share option granted
under ESOS - - - 12,659 - - - 12,659 - 12,659
Currency translation
differences - - - - - 69,718 - 69,718 - 69,718
(Loss)/profit for the year - - - - - - (6,078,645) (6,078,645) 92,650 (5,985,995)
Issuance of ordinary
shares pursuant
to ESOS 26 1,438,500 402 - (402) - - - 1,438,500 - 1,438,500
Transfer to retained
earnings - - - (1,926) - - 1,926 - - -

At 31 December 2008 47,631,500 732 (545,154) 25,319 1,892,893 101,464 2,395,877 51,502,631 7,315,350 58,817,981

At 1 January 2009 47,631,500 732 (545,154) 25,319 1,892,893 101,464 2,395,877 51,502,631 7,315,350 58,817,981
Share option granted
under ESOS - - - 12,660 - - - 12,660 - 12,660

Currency translation
differences - - - - - (72,525) - (72,525) - (72,525)
Realisation due to
dissolution of
a subsidiary - - - - - (71,432) 71,432 - - -

Net expense recognised

directly in equity - - - - - (143,957) 71,432 (72,525) - (72,525)
Profit for the year - - - - - - 105,071 105,071 139,002 244,073
Dividends paid to
minority shareholders
of a subsidiary - - - - - - - - (2,365,125) (2,365,125)
Issuance of ordinary
shares by a subsidiary,
subscribed by minority
shareholders of a
subsidiary - - - - - - - - 89,940 89,940

At 31 December 2009 47,631,500 732 (545,154) 37,979 1,892,893 (42,493) 2,572,380 51,547,837 5,179,167 56,727,004

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

 Consolidated Cash Flow Statement
53
annual report 2009
for the year ended 31 December 2009

GROUP
2009 2008
RM RM

Cash Flows From Operating Activities

Profit/(loss) before tax 578,550 (6,286,115)
Adjustments for:
Interest income (361,118) (554,911)
Dividend income (8,305) (14,993)
Bad debts recovered (36,490) -
Bad debts written off 94,555 37,615
Deposits written off - 14,000
Loss on disposal of transferable membership in golf clubs 2,500 -
Reversal of provisions for maintenance warranties (63,483) -
Provisions for maintenance warranties 18,879 93,329
Property, plant and equipment written off 810 3,863
Amortisation of development cost 23,466 79,020
Reversal of impairment loss on transferable membership in golf clubs (29,000) -
Impairment loss on transferable membership in golf clubs - 129,000
Interest expense 129,759 246,562
Depreciation of property, plant and equipment 1,190,395 1,450,385
Depreciation of investment properties 39,764 39,764
Amortisation of prepaid lease rental payments 19,116 19,116
Loss on disposal of property, plant and equipment 17,553 62,820
Gain on disposal of property, plant and equipment - (4,315)
Write down of inventories 121,343 4,532,553
Reversal of write down of inventories (271,366) (45,016)
Allowance for doubtful debts
- third parties 970,802 3,990,428
- written back - third parties (437,189) (216,130)
- due from an associate - 73,826
Net unrealised foreign exchange (gains)/loss (169,203) 705,750
Impairment loss on quoted investments - 265,308
Reversal of impairment loss on quoted investments (120,671) -
Termination benefits - 165,000
Impairment loss on investment properties 364,000 -
Gain on dissolution of a subsidiary (Note 41(i)) (54,936) -
Share options granted under ESOS 12,660 12,659
Operating profit before working capital changes carried forward 2,032,391 4,799,518
Decrease in inventories 1,924,288 4,358,106
Increase in trade and other receivables (2,394,058) (919,052)
Decrease/(increase) in amount due from/to customers 419,421 (207,887)
Decrease in trade and other payables (1,322,522) (7,740,189)
Cash generated from operations 659,520 290,496
Interest paid (129,759) (246,562)
Tax refunded 258,585 212,373
Tax paid (248,033) (1,061,943)
Net cash generated from/(used in) operating activities 540,313 (805,636)
 Consolidated Cash Flow Statement
54
annual report 2009
(cont’d)
for the year ended 31 December 2009

GROUP
2009 2008
RM RM

Cash Flows From Investing Activities

Purchase of property, plant and equipment (222,001) (304,851)
Proceeds from disposal of property, plant and equipment 20,180 328,740
Proceeds from disposal of transferable membership in golf clubs 23,500 -
Proceed from insurance claim on property, plant and equipment - 4,432
Interest received 361,118 554,911
Dividend received 6,441 11,416
Net cash generated from investing activities 189,238 594,648

Cash Flows From Financing Activities

Dividend paid to minority shareholders of a subsidiary company (2,365,125) -
Net drawdown/(repayment) of bankers acceptance and trust receipts 126,406 (1,127,139)
Decrease/(increase) in pledged fixed deposits 6,729,156 (3,399,127)
Proceeds from issuance of ordinary shares pursuant
to Industronics Berhad Employee Share Option Scheme - 1,438,500
Proceeds from issuance of ordinary shares by a subsidiary,
subscribed by minority shareholders of the subsidiary 89,940 -
Repayment of term loan (37,028) (205,466)
Repayment of hire purchase liabilities (310,480) (572,583)
Net cash generated from/(used in) financing activities 4,232,869 (3,865,815)

Net increase/(decrease) in cash and cash equivalents 4,962,420 (4,076,803)

Effects of foreign exchange rate changes (72,913) 68,185
Cash and cash equivalent at beginning of year 15,559,136 19,567,754
Cash and cash equivalent at end of year 20,448,643 15,559,136

Cash and cash equivalent at end of year comprised:

Cash and bank balances 21,321,691 23,848,754
Less: Fixed deposits not readily available for use - (6,729,156)
21,321,691 17,119,598
Bank overdrafts - unsecured (873,048) (1,560,462)
20,448,643 15,559,136

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

 Income Statement
55
annual report 2009
for the year ended 31 December 2009

COMPANY
2009 2008
Note RM RM

Revenue 3 32,766,901 36,745,919

Cost of sales 4 (20,082,945) (27,904,722)
Gross profit 12,683,956 8,841,197
Other income 5 923,922 880,184
Administrative expenses (8,185,571) (8,887,258)
Selling and marketing expenses (3,341,157) (4,148,648)
Other expenses (2,595,539) (4,232,246)
Operating loss (514,389) (7,546,771)
Investing results 6 2,779,999 (374,132)
Finance costs 7 (112,131) (204,360)
Profit/(loss) before tax 8 2,153,479 (8,125,263)
Income tax 11 (1,037,299) 412,222
Profit/(loss) for the year 1,116,180 (7,713,041)

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

 Balance Sheet
56
annual report 2009
as at 31 December 2009

COMPANY
2009 2008
Note RM RM

ASSETS
Non-current assets
Property, plant and equipment 13 8,362,730 8,674,507
Investment properties 14 220,269 224,964
Prepaid land lease payments 15 1,042,103 1,054,969
Investments in subsidiaries 16 1,673,254 2,534,723
Due from subsidiaries 24 126,517 272,946
Other investments 18 486,059 340,888
Development costs 19 - 23,466
11,910,932 13,126,463

Current assets
Inventories 20 6,481,131 7,264,608
Trade receivables 21 15,884,388 8,963,922
Other receivables, deposits and prepayments 22 1,271,129 880,934
Due from customers on contract 23 207,084 1,772,000
Due from subsidiaries 24 1,057,614 593,494
Tax recoverable 1,820,502 2,194,442
Cash and bank balances 25 15,054,623 15,354,625
41,776,471 37,024,025
TOTAL ASSETS 53,687,403 50,150,488

EQUITY AND LIABILITIES

Equity attributable to equity holders of the Company
Share capital 26 47,631,500 47,631,500
Treasury shares 26 (545,154) (545,154)
Reserves 28 (4,712,621) (5,828,801)
Total equity 42,373,725 41,257,545

Non-current liabilities
Borrowings 29 - 34,868
Deferred tax liabilities 31 - 20,679
- 55,547

Current liabilities
Provisions 32 45,215 108,698
Borrowings 29 484,868 89,835
Trade payables 33 3,257,368 1,356,116
Other payables and accruals 34 4,896,555 6,085,007
Due to customers on contract 23 1,473,912 863,800
Due to subsidiaries 24 1,155,760 333,940
11,313,678 8,837,396
Total liabilities 11,313,678 8,892,943
TOTAL EQUITY AND LIABILITIES 53,687,403 50,150,488

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

 Statement Of Changes In Equity
57
annual report 2009
for the year ended 31 December 2009

<------------- Non-Distributable Reserves -------------> Distributable

Retained
Share Earnings/
Share Share Treasury Option Revaluation (Accumulated Total
Capital Premium Shares Reserve Reserves Losses) Equity
RM RM RM RM RM RM RM
Company Note (Note 26) (Note 28) (Note 26) (Note 28) (Note 28) (Note 28)

At 1 January 2008 46,193,000 330 (545,154) 2,328 1,908,782 (27,200) 47,532,086

Loss for the year - - - - - (7,713,041) (7,713,041)
Issuance of ordinary
shares pursuant to
ESOS 26 1,438,500 402 - (402) - - 1,438,500
Transfer to retained
earnings - - - (1,926) - 1,926 -
At 31 December 2008 47,631,500 732 (545,154) - 1,908,782 (7,738,315) 41,257,545

At 1 January 2009 47,631,500 732 (545,154) - 1,908,782 (7,738,315) 41,257,545

Profit for the year - - - - - 1,116,180 1,116,180
At 31 December 2009 47,631,500 732 (545,154) - 1,908,782 (6,622,135) 42,373,725

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

 Cash Flow Statement
58
annual report 2009
for the year ended 31 December 2009

COMPANY
2009 2008
RM RM

Cash Flows From Operating Activities

Profit/(loss) before tax 2,153,479 (8,125,263)
Adjustments for:
Interest income (249,625) (368,875)
Dividend income (2,736,805) (14,993)
Bad debts written off 2,589 6,000
Reversal of provision for maintenance warranties (63,483) -
Provision for maintenance warranties - 61,729
Property, plant and equipment written off - 595
Amortisation of development cost 23,466 79,020
Impairment loss on investment in subsidiaries 165,796 64,817
Gain on dissolution of a subsidiary (Note 41(i)) (63,819) -
Reversal of impairment loss on transferable membership in golf clubs (24,500) -
Impairment loss on transferable membership in golf clubs - 59,000
Interest expense 7,805 27,496
Depreciation of property, plant and equipment 366,272 546,372
Depreciation of investment properties 4,695 4,695
Amortisation of prepaid lease rental payments 12,866 12,866
Loss on disposal of property, plant and equipment 17,179 -
Write down of inventories - 4,356,241
Reversal of write down of inventories (271,366) -
Allowance for doubtful debts
- third parties 798,312 2,312,793
- written back - third parties (14,307) (69,818)
- advances due from subsidiaries 465,238 206,620
- amount due from subsidiaries 44,830 37,941
- due from an associate - 73,826
Reversal of impairment loss on quoted investment (120,671) -
Impairment loss on quoted investment - 265,308
Termination benefits - 165,000
Unrealised (gain) / loss on foreign exchange (304,711) 808,243
Operating profit before working capital changes 213,240 509,613
Decrease/(increase) in inventories 1,054,843 (1,669,268)
(Increase)/decrease in trade and other receivables (7,789,955) 1,747,199
Decrease/(increase) in amount due from/to customers 2,175,028 (1,829,597)
Increase/(decrease) in trade and other payables 712,800 (4,188,577)
Decrease in net amount due from subsidiary companies 310,281 69,708
Cash used in operations (3,323,763) (5,360,922)
Interest paid (7,805) (27,496)
Tax paid (49) (680,000)
Net cash used in operating activities (3,331,617) (6,068,418)
 Cash Flow Statement (cont’d)
59
annual report 2009
for the year ended 31 December 2009

COMPANY
2009 2008
RM RM

Cash Flows From Investing Activities

Purchase of property, plant and equipment (91,674) (96,452)
Proceeds from disposal of property, plant and equipment 20,000 -
Net cash inflows from dissolution of a subsidiary (Note 41(i)) 759,492 -
(Increase)/decrease in amount from subsidiary companies (non current) (318,809) 3,028,220
Interest received 249,625 368,875
Dividend received 2,052,816 11,416
Net cash generated from investing activities 2,671,450 3,312,059

Cash Flows From Financing Activities

Net drawdown/(repayment) of revolving credit and bankers acceptances 450,000 (350,196)
Decrease/(increase) in pledged fixed deposits 3,329,156 (11,151)
Proceeds from issuance of ordinary shares pursuant to ESOS - 1,438,500
Repayment of term loan - (170,586)
Repayment of hire purchase liabilities (33,315) (58,451)
Net cash generated from financing activities 3,745,841 848,116

Net increase/(decrease) in cash and cash equivalents 3,085,674 (1,908,243)

Cash and cash equivalents at beginning of year 11,968,949 13,877,192
Cash and cash equivalents at end of year 15,054,623 11,968,949

Cash and cash equivalents at end of year comprised:

Cash and bank balances 15,054,623 15,354,625
Less: Fixed deposits not readily available for use - (3,329,156)
15,054,623 12,025,469
Bank overdrafts - unsecured - (56,520)
15,054,623 11,968,949

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

 Notes To The Financial Statements
60
annual report 2009
31 December 2009

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 and principal place of business of the Company is located at 9, Jalan Taming 3, Taman
Tanming Jaya, 43300 Seri Kembangan, Selangor Darul Ehsan.

The principal activities of the Company include the design, manufacturing and installation of electronic and microprocessor controlled products,
telecommunication system, audio video multimedia systems, intelligent transportation systems and information communication technology
related system. The principal activities of the subsidiary companies are disclosed in Note 41. There have been no significant changes in the
nature of these principal activities during the financial year.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 27 April
2010.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation
These financial statements comply with the provisions of the Companies Act, 1965 and Financial Reporting Standards in Malaysia.
At the beginning of the current financial year, the Group and the Company had adopted new and revised FRSs as described in Note
2.3.

These financial statements are presented in Ringgit Malaysia (RM).

2.2 Summary Of Significant Accounting Policies

(a) Subsidiaries and Basis of Consolidation

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

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

(ii) Basis of Consolidation

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

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances,
transactions and unrealised gains are eliminated in full. Unrealised losses are eliminated on consolidation unless costs cannot
be recovered. Uniform accounting policies are adopted in the consolidated financial statements for similar transactions and
events in similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves
allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed
at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange,
of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the
acquisition.
 Notes To The Financial Statements
61
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(a) Subsidiaries and Basis of Consolidation (cont’d)

(ii) Basis of Consolidation (cont’d)

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

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

(b) Intangible Assets

Development costs
All research costs are recognised in the profit or loss as incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the
technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its
ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the
project and the ability to measure reliably the expenditure during the development. The expenditure capitalised includes the cost of
material, manpower cost and an appropriate proportion of overheads. Product development expenditures which do not meet these
criteria are expensed when incurred.

Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised using
the straight-line basis over a period of five (5) years. Impairment is assessed whenever there is an indication of impairment and the
amortisation period and method are also reviewed at least at each balance sheet date.

(c) Property, Plant and Equipment and Depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is
derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.

Subsequent to initial recognition, property, plant and equipment, except for freehold land and buildings, are stated at cost less
accumulated depreciation and any accumulated impairment losses.

Freehold land is stated at revalued amount, which is the fair value at the date of the revaluation less any accumulated impairment
losses. Buildings are stated at cost or valuation less accumulated depreciation and any accumulated impairment losses. Fair value
is determined from market-based evidence by appraisal that is undertaken by professionally qualified valuers. Revaluations are made
at least once in every five years based on a valuation by an independent valuer on an open market value basis. Revaluations are
performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would
be determined using fair values at the balance sheet date. Any revaluation surplus is credited to the revaluation reserve included
within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss,
in which case the increase is recognised in profit or loss to the extent of the decrease previously recognised. A revaluation deficit
is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter
recognised in profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is
transferred directly to retained earnings.
 Notes To The Financial Statements
62
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(c) Property, Plant and Equipment and Depreciation (cont’d)

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property, plant and equipment
is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the
following annual rates:

Buildings 2%
Plant and machinery 10% - 20%
Factory, tools and equipment 10% - 15%
Motor vehicles 20%
Computer and office equipment 10% - 33%
Furniture, fittings and renovation 5% - 15%

The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method
and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic
benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its
use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in profit or loss
and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings.

(d) Investment Properties

Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such
properties are stated at cost less accumulated depreciation and any accumulated impairment losses.

No depreciation is provided on the freehold land within investment properties as it has an indefinite useful life. Depreciation on the
building is provided on the straight lines basis to write off the cost of investment properties to its residual value over its estimated
useful life.

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

(e) Construction Contracts

Where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as
revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to
the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract
costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are
incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense
immediately.

When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress
billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus,
recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts.
 Notes To The Financial Statements
63
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(f) Impairment of Non-Financial Assets

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

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

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

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

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

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

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

Cost is determined using the weighted average method. The cost of raw materials comprises costs of purchase. The costs of finished
goods and work-in-progress comprise raw materials, direct labour, other direct costs and appropriate proportions of production
overheads based on normal operating capacity.

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.
 Notes To The Financial Statements
64
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(h) Financial Instruments

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

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

(i) Cash and Cash Equivalents

For the purposes of the cash flow statements, cash and cash equivalents include cash on hand and at bank, deposits at call and
short term highly liquid investments that are readily convertible to cash which have an insignificant risk of changes in value, net
of outstanding bank overdrafts.

(ii) Other Investments

Investments in transferable memberships in golf clubs are stated at cost less impairment losses. On disposal of an investment,
the difference between net disposal proceeds and its carrying amount is recognised in profit or loss.

Investments in quoted shares are carried at the lower of cost and market value, determined on an aggregate basis. Cost
is determined on the weighted average basis while market value is determined based on quoted market values. Increases
or decreases in the carrying amount of investments in quoted shares are recognised in profit or loss. On disposal of the
investments in quoted shares, the difference between net disposal proceeds and the carrying amount is recognised in profit or
loss.

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

(iv) Payables
Payables are stated at the fair value of the consideration to be paid in the future for goods and services received.

(v) Interest Bearing Loans and Borrowings

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

(vi) Equity Instruments

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

The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs
comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been
avoided.

The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that have not
been cancelled, are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in
profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the
difference between the sales consideration and the carrying amount is recognised in equity.
 Notes To The Financial Statements
65
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(i) Leases

(i) Classification
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to
ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other
assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease
classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases, with the
following exceptions:

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

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

(ii) Finance leases - the Group and the Company as lessees

Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and
the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment
losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the
minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine;
otherwise, the Group’s and the Company’s incremental borrowing rate is used. Any initial direct costs are also added to the
carrying amount of such assets.

Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which
represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the
profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance
of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described
in Note 2.2(c).

(iii) Operating Leases - the Group and the Company as lessees

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease.

In the case of a lease of land and buildings, the minimum lease payments or the upfront payments made are allocated,
whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests
in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid
lease payments and are amortised on a straight-line basis over the lease term.

(iv) Operating Leases - the Company as lessor

Assets leased out under operating leases are presented on the balance sheets according to the nature of the assets. Rental
income from operating leases is recognised on a straight-line basis over the term of the relevant lease (Note 2.2(o)(iv)). Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognised on a straight-line basis over the lease term.
 Notes To The Financial Statements
66
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(j) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for
capitalisation.

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

(k) Income Tax

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

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

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled,
based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income
or an expense and included in the profit or loss for the period, except when it arises from a transaction which is recognised directly
in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an
acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirer’s interest
is the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the cost of the combination.

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

(m) Employee Benefits

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

(ii) Defined Contribution Plans

Defined contribution plans are post-employment benefit plans under which the Group and the Company pay fixed contributions
into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds
do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial
years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in
Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiaries also make
contributions to their respective countries’ statutory pension schemes.
 Notes To The Financial Statements
67
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(m) Employee Benefits (cont’d)

(iii) Share-based Compensation

The Company’s Employee Share Options Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the
Group’s employees to acquire ordinary shares of the Company. For share options granted after 31 December 2004, the total
fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the
share option reserve within equity over the vesting period and taking into account the probability that the options will vest. The
fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which
the options were granted but excluding the impact of any non-market vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are expected to become exercisable on vesting date.

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

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

(iv) Termination Benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee
accepts voluntary redundancy in exchange for these benefits. The Group and the Company recognise termination benefits as a
liability and an expense when it is demonstrably committed to either terminate the employment of current employees according
to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination
benefits is based on the number of employees expected to accept the offer. Benefits falling due more than twelve months after
balance sheet date are discounted to present value.

(n) Foreign Currencies

(i) Functional and Presentation Currency

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

(ii) Foreign Currency Transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of
the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates
prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are
translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not translated.
 Notes To The Financial Statements
68
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(n) Foreign Currencies (cont’d)

(ii) Foreign Currency Transactions (cont’d)

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

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

(iii) Foreign Operations

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

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

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

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

The principal exchange rates used for each respective unit of foreign currency ruling at the balance sheet date are as follows:

2009 2008
RM RM

Singapore Dollar 2.45 2.41
Chinese Renminbi 0.50 0.51
100 Vietnam Dong 0.02 0.02

(o) Revenue Recognition

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

(i) Construction Contracts

Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.2(e).

(ii) Sale of Goods

Revenue is recognised net of sales taxes and discounts upon transfer of significant risks and rewards of ownership to the buyer.
Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due,
associated costs or the possible return of goods.
 Notes To The Financial Statements
69
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Summary Of Significant Accounting Policies (cont’d)

(o) Revenue Recognition (cont’d)

(iii) Revenue from Services

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

(iv) Rental Income

Rental income is recognised on a straight-line basis over the term of the lease on an accrual basis.

(v) Interest Income

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

(vi) Dividend Income

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

(vii) Management Fees

Management fees are recognised when services are rendered.

(p) Government Grants

Government grants are recognised initially at their fair value in the balance sheet as deferred income where there is reasonable
assurance that the grant will be received and all attaching conditions will be complied with. Grants that compensate the Group for
expenses incurred are recognised as income over the periods necessary to match the grant on a systematic basis to the costs that
it is intended to compensate. Grants that compensate the Group for the cost of an asset are recognised as income on a systematic
basis over the useful life of the asset.

(q) Related Parties

A party is considered to be related to the Group if:
(i) the party, directly or indirectly through one or more intermediaries,
- controls, is controlled by, or is under common control with, the Group;
- has an interest in the Group that gives it significant influence over the Group; or
- has joint control over the Group;
(ii) the party is a jointly-controlled entity;
(iii) the party is a member of the key management personnel of the Group or its parent;
(iv) the party is a close member of the family of any individual referred to in (i) or (iii);
(v) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which significantly voting power in
such entity resides with, directly or indirectly, any individual referred to in (iii) or (iv); or
(vi) the party is a post-employment benefit plan for the benefit of employees of the Group, or of any entity that is a related party of
the Group.

(r) Jointly Controlled Operation

The Company has an interest in a joint venture which is a jointly controlled operation. A joint venture is a contractual arrangement
whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled operation exists
when two or more venturers combine their operations, resources and expertise to manufacture, market and distribute jointly a
particular product.

The expenses incurred and share of income earned are recognised directly to the income statement.
 Notes To The Financial Statements
70
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

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

Effective for financial periods beginning on or after 1 July 2009

FRS 8: Operating Segments

Effective for financial periods beginning on or after 1 January 2010

FRS 4: Insurance Contracts
FRS 7: Financial Instruments: Disclosures
FRS 101: Presentation of Financial Statements (revised)
FRS 123: Borrowing Costs
FRS 139: Financial Instruments: Recognition and Measurement
Amendments to FRS 1: First-time Adoption of Financial Reporting Standards and FRS 127: Consolidated and Separate Financial
Statements: Cost of an Investment, Investment in a Subsidiary, Jointly Controlled Entity or Associate
Amendments to FRS 2: Share-based Payment - Vesting Conditions and Cancellation
Amendments to FRS 132: Financial Instruments: Presentation
Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and IC
Interpretation 9: Reassessment of Embedded Derivatives
Amendments to FRSs “Improvements to FRSs (2009)”
IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 10: Interim Financial Reporting and Impairment
IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions
IC Interpretation 13: Customer Loyalty Programmes
IC Interpretation 14: FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
TR i - 3: Presentation of Financial Statements of Islamic Financial Institutions

Effective for financial periods beginning on or after 1 July 2010

FRS 1: First-time Adoption of Financial Reporting Standards
FRS 3: Business Combinations (revised)
FRS 127: Consolidated and Separate Financial Statements (amended)
Amendments to FRS 2: Share-based Payment
Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations
Amendments to FRS 138: Intangible Assets
Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives
IC Interpretation 12: Service Concession Arrangements
IC Interpretation 15: Agreements for the Construction of Real Estate
IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17: Distributions of Non-cash Assets to Owners

Effective for Financial periods beginning on or 1 January 2011

Amendments to FRS 1: Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters
Amendments to FRS 7: Improving Disclosures about Financial Instruments
 Notes To The Financial Statements
71
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.3 Standards and Interpretations issued but not yet effective (cont’d)

The Group and the Company plan to adopt the above pronouncements when they become effective in the respective financial period.
Unless otherwise described below, these pronouncements are expected to have no significant impact to the financial statements of the
Group and the Company upon their initial application:

(a) FRS 8: Operating Segment

FRS 8 replaces FRS 1142004: Segment Reporting and requires a ‘management approach’, under which segment information is
presented on a similar basis to that used for internal reporting purposes. As a result, the Group’s external segmental reporting will
be based on the internal reporting to the “chief operating decision maker”, who makes decisions on the allocation of resources
and assesses the performance of the reportable segments. As this is a disclosure standard, there will be no impact on the financial
position or results of the Group.

(b) FRS 101: Presentation of Financial Statements (revised)

The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated statement of changes in equity
will now include only details of transactions with owners. All non-owner changes in equity are presented as a single line labelled
as total comprehensive income. The Standard also introduces the statement of comprehensive income: presenting all items of
income and expense recognised in the income statement, together with all other items of recognised income and expense, either
in one single statement, or in two linked statements. The Group is currently evaluating the format to adopt. In addition, a statement
of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the
correction of an error or the reclassification of items in the financial statements. This revised FRS does not have any impact on the
financial position and results of the Group and the Company.

(c) FRS 123: Borrowing Costs

This Standard supersedes FRS 1232004: Borrowing Costs that removes the option of expensing borrowing costs and requires
capitalisation of such costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part
of the cost of that asset. Other borrowing costs are recognised as an expense. In accordance with the transitional provisions of the
Standard, the Group will apply the change in accounting policy prospectively for which the commencement date for capitalisation of
borrowing cost on qualifying assets is on or after the financial period 1 January 2010.

(d) FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and Amendments to FRS
139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures

The new Standard on FRS 139: Financial Instruments: Recognition and Measurement establishes principles for recognising and
measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Requirements for presenting
information about financial instruments are in FRS 132: Financial Instruments: Presentation and the requirements for disclosing
information about financial instruments are in FRS 7: Financial Instruments: Disclosures.
 
FRS 7: Financial Instruments: Disclosures is a new Standard that requires new disclosures in relation to financial instruments. The
Standard is considered to result in increased disclosures, both quantitative and qualitative of the Group’s and Company’s exposure
to risks, enhanced disclosure regarding components of the Group’s and Company’s financial position and performance, and possible
changes to the way of presenting certain items in the financial statements.
 
In accordance with the respective transitional provisions, the Group and the Company are exempted from disclosing the possible
impact to the financial statements upon the initial application.
 Notes To The Financial Statements
72
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.3 Standards and Interpretations issued but not yet effective (cont’d)

(e) Amendments to FRSs ‘Improvements to FRSs (2009)’

(i) FRS 7 Financial Instruments: Disclosures: Clarifies on the presentation of finance costs whereby interest income is not a
component of finance costs.

(ii) FRS 8 Operating Segments: Clarifies that segment information with respect to total asset is required only if they are included in
measures of segment profit or loss that are used by the ‘chief operating decision maker’.

(iii) FRS 107 Statement of Cash Flows (formerly known as Cash Flow Statements): Clarifies that only expenditures that result in a
recognised asset in the statement of financial position can be classified as investing activities in the statement of cash flows.

(iv) FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors: Clarifies that only implementation guidance that is
an integral part of an FRS is mandatory when selecting accounting policies.

(v) FRS 110 Events after the Reporting Period (formerly known as Events After the Balance Sheet Date): Clarifies that dividends
declared after the end of the reporting period are not liabilities as at the balance sheet date.

(vi) FRS 116 Property, Plant and Equipment: The amendment replaces the term “net selling price” with “fair value less costs to
sell”. It also clarifies that items of property, plant and equipment held for rental that are routinely sold in the ordinary course of
business after rental, are transferred to inventory when rental ceases and they are held for sale.

(vii) FRS 118 Revenue: The amendment provides additional guidance on whether an entity is acting as a principal or an agent. It also
aligns the definition of costs incurred in originating a financial asset that should be deferred and recognised as an adjustment
to the effective interest by replacing the term ‘direct costs’ with ‘transaction costs’ as defined in FRS 139.

(viii) FRS 119 Employee Benefits: The amendment revises the definition of ‘past service costs’, ‘return on plan assets’ and ‘short
term’ and ‘other long-term’ employee benefits. It clarifies that the costs of administering the plan may be either recognised
in the rate of return on plan assets or included in the actuarial assumptions used to measure the defined benefit obligation.
The amendment further clarifies that amendment to plans that result in a reduction in benefits related to future services are
curtailments. It also deleted the reference to the recognition of contingent liabilities to ensure consistency with FRS 137
Provisions, Contingent Liabilities and Contingent Assets.

(ix) FRS 123 Borrowing Costs: The definition of borrowing costs is aligned with FRS 139 by referring to the use of effective interest
rate as a component of borrowing cost.

(x) FRS 127 Consolidated and Separate Financial Statements: The amendment clarifies that when a parent entity accounts for a
subsidiary at fair value in accordance with FRS 139 in its separate financial statements, this treatment continues when the
subsidiary is subsequently classified as held for sale.

(xi) FRS 136 Impairment of Assets: Clarifies that when discounted cash flows are used to estimate ‘fair value less cost to sell’
additional disclosure is required about the discount rate, consistent with disclosures required when the discounted cash flows
are used to estimate ‘value in use’. The amendment further clarifies that the largest cash-generating unit for group of units to
which goodwill should be allocated for purposes of impairment testing is an operating segment as defined in FRS 8.
 Notes To The Financial Statements
73
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.3 Standards and Interpretations issued but not yet effective (cont’d)

(e) Amendments to FRSs ‘Improvements to FRSs (2009) (cont’d)

(xii) FRS 139 Financial Instruments: Recognition and Measurement: Clarifies that changes in circumstances relating to derivatives are
not reclassifications and therefore may be either removed from, or included in, the ‘fair value through profit or loss’ classification
after initial recognition. It also clarifies on the scope exemption for business combination contracts. The amendments remove
the reference in FRS 139 to a ‘segment’ when determining whether an instrument qualifies as a hedge and requires the use of
the revised effective interest rate when remeasuring a debt instrument on the cessation of fair value hedge accounting. It also
provides additional guidance on determining whether loan prepayment penalties result in an embedded derivatives that needs
to be separated. In addition, the amendments state that the gains or losses on a hedged instrument should be reclassified from
equity to profit or loss during the period that the hedged forecast cash flows impact profit or loss.

2.4 Significant Accounting Estimates and Judgements

(a) Critical Judgements Made in Applying Accounting Policies

In the process of applying the Group’s accounting policies, management has made the following judgements which have the most
significant effect on the amounts recognised in the consolidated financial statements:

(i) Allowances for bad and doubtful debts

The Group makes allowance for doubtful debts based on objective evidence and the circumstances that affect the recoverability
of receivables and counterparties.

Allowances are applied to receivables and counterparties where events or changes in circumstances indicate that the carrying
amounts may not be recoverable. Management specifically reviewed historical bad debts, customer creditworthiness and current
economic trends when making a judgement to evaluate the allowance for doubtful debts on receivables and counterparties
where the expectation is different from the original estimate, such difference will impact the carrying amounts.

(ii) Classification between investment properties and property, plant and equipment
The Group has developed certain criteria based on FRS 140 in making judgement whether a property qualifies as an investment
property. Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for
use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or
leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be
sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply
of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether
ancillary services are so significant that a property does not qualify as investment property.

(b) Key Sources of Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below:

(i) Write-down of inventories

Significant judgement is exercised by Management when determining items of inventories considered slow-moving and the
amount of write-down required to net realisable value. Management takes into consideration the useful life of these inventories,
their alternative uses, the possible technological obsolescence, the number of customers who still rely on the Group and the
Company to provide maintenance service and other numerous factors before determining the amount of write-down required.
 Notes To The Financial Statements
74
annual report 2009
(cont’d)
31 December 2009

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.4 Significant Accounting Estimates and Judgements (cont’d)

(b) Key Sources of Estimation Uncertainty (cont’d)

(ii) Useful lives of property, plant and equipment

The Group estimates the useful lives of property, plant and equipment based on the period over which the assets are expected
to be available for use. The estimated useful lives of the property, plant and equipment are reviewed periodically and are
updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence
and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of property, plant and
equipment is based on internal technical evaluation and experience with similar assets. It is possible, however, that future
results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned
above. The Group also performs annual review of the assumptions made on useful lives to ensure that they continue to be
valid.

(iii) 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 profit 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. The total carrying value of recognised tax losses and capital allowances of the Group was
RM149,512 (2008: RM402,700) and the unrecognised tax losses and capital allowances of the Group was RM 13,062,484
(2008: RM12,751,892).

(iv) Contracts accounting

The Group recognises contracts revenue and expenses in the income statement by using the stage of completion method. The
stage of completion is determined by the proportion that costs incurred for work performed to date bear to the estimated total
costs.

Significant judgement is required in determining the stage of completion, the extent of the costs incurred, the estimated total
revenue and costs, as well as the recoverability of the projects. In making the judgement, the Group evaluates based on past
experience.

(v) Maintenance warranties

The Company gives an average one (1) year warranty on certain products and undertakes to repair or replace items that fail
to perform satisfactorily due to manufacturing defect. A provision is recognised for expected warranty claims on products sold
during the year, based on past experience of the level of repairs. Assumptions used to calculate the provision for warranties
were based on current sales levels and current data on repairs and replacement costs on past one year warranty period for all
products sold.

(vi) Income tax

Significant estimation is involved in determining the provision for income taxes. There are certain transactions and computations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for
expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that have been initially recognised, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.

(vii) Material litigations

The Group determines whether a present obligation in relation to a material litigation exists at the balance sheet date by taking
into account all available evidence, including the opinion of its solicitors and subsequent events after the balance sheet date.
On the basis of such evidence, the Group evaluates if a provision needs to be recognised in the financial statements. Further
details of the material litigations involving the Group are disclosed in Note 42.
 Notes To The Financial Statements
75
annual report 2009
(cont’d)
31 December 2009

3. REVENUE
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Revenue comprises:
Construction contract 43,035,296 52,505,577 32,766,901 36,745,919
Sales of goods 12,692,227 12,858,922 - -
Rendering of services 324,849 717,597 - -
56,052,372 66,082,096 32,766,901 36,745,919

4. COST OF SALES
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Cost of sales comprises:
Construction contract and other related costs 27,287,967 39,946,915 20,082,945 27,904,722
Cost of goods sold 6,654,557 5,011,195 - -
Cost of services rendered 248,925 472,118 - -
34,191,449 45,430,228 20,082,945 27,904,722

Included are the following in cost of sales:

Write-down of inventories 94,757 4,422,989 - 4,356,241
Reversal of write-down of inventories (271,366) (45,016) (271,366) -
Depreciation of property, plant and equipment 401,927 447,937 - -
Provision for maintenance warranties 18,879 93,329 - 61,729
Reversal of provision for maintenance warranties (63,483) - (63,483) -
Rent of equipment 2,700 - 2,700 -
Rent of premises 13,430 22,800 - -
 Notes To The Financial Statements
76
annual report 2009
(cont’d)
31 December 2009

5. OTHER INCOME
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Allowance for doubtful debts
written back - third parties 437,189 216,130 14,307 69,818
Bad debts recovered 36,490 - - -
Gain on disposal of property, plant and equipment - 4,315 - -
Gain on foreign exchange
- realised 223,977 212,671 - 118,684
- unrealised 312,618 159,165 304,711 -
Government grant 65,631 80,249 65,631 80,249
Interest income
- fixed deposits and short term deposits 360,866 554,320 249,625 368,875
- others 252 591 - -
361,118 554,911 249,625 368,875
Management fees receivable
from a subsidiary company - - 36,000 36,000
Rental income
- subsidiary companies - - 177,600 174,300
Other income 162,569 103,819 76,048 32,258
1,599,592 1,331,260 923,922 880,184

6. INVESTING RESULTS
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Dividend income
- Subsidiary companies - - 2,728,500 -
- Quoted shares 8,305 14,993 8,305 14,993
8,305 14,993 2,736,805 14,993
Loss on disposal of transferable membership
in golf clubs (2,500) - - -
Impairment loss on quoted investments - (265,308) - (265,308)
Reversal of impairment loss on quoted investments 120,671 - 120,671 -
Reversal of impairment loss on transferable
membership in golf clubs 29,000 - 24,500 -
Impairment loss on transferable
membership in golf clubs - (129,000) - (59,000)
Impairment loss on investment properties (364,000) - - -
Gain on dissolution of a subsidiary (Note 41(i)) 54,936 - 63,819 -
Impairment loss on investment in subsidiaries - - (165,796) (64,817)
(153,588) (379,315) 2,779,999 (374,132)
 Notes To The Financial Statements
77
annual report 2009
(cont’d)
31 December 2009

7. FINANCE COSTS
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Interest expense:
- bank overdrafts 63,627 108,986 5,360 20,808
- term loans 16,369 21,063 - 2,546
- hire purchase 37,594 66,072 2,445 4,142
- bankers’ acceptances 12,169 34,080 - -
- letter of credit - 14,943 - -
- trust receipts - 1,418 - -
129,759 246,562 7,805 27,496
Other finance costs 157,373 230,428 104,326 176,864
287,132 476,990 112,131 204,360

8. PROFIT/(LOSS) BEFORE TAX

The following amounts have been included at arriving at profit/(loss) before tax:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Employee benefits expenses (Note 9) 15,382,904 16,073,357 8,710,962 9,243,412
Non-executive directors’ remuneration excluding
benefits-in-kind (Note 10) 161,500 257,000 155,500 242,000
Allowance for doubtful debts
- third parties 970,802 3,990,428 798,312 2,312,793
- due from subsidiaries (non current) - - 465,238 206,620
- due from subsidiaries (current) - - 44,830 37,941
- due from an associate - 73,826 - 73,826
Amortisation of development costs 23,466 79,020 23,466 79,020
Amortisation of prepaid land lease 19,116 19,116 12,866 12,866
 Notes To The Financial Statements
78
annual report 2009
(cont’d)
31 December 2009

8. PROFIT/(LOSS) BEFORE TAX (cont’d)

The following amounts have been included at arriving at profit/(loss) before tax:(cont’d)
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Auditors’ remuneration:
Current year
- Statutory audits 150,000 150,000 65,000 65,000
- Other auditors 118,914 31,474 94,500 20,000
Underprovision in prior year 9,751 92,085 - 68,000
278,665 273,559 159,500 153,000
Bad debts written off 94,555 37,615 2,589 6,000
Deposits written off - 14,000 - -
Depreciation of property, plant and equipment
- included in administrative expenses 422,196 456,076 - -
- included in other expenses 366,272 546,372 366,272 546,372
788,468 1,002,448 366,272 546,372
Depreciation of investment properties 39,764 39,764 4,695 4,695
Loss on disposal of property, plant and equipment 17,553 62,820 17,179 -
Loss on foreign exchange
- realised 102,198 24,001 95,028 -
- unrealised 143,415 864,915 - 808,243
Rent of equipment
- included in administrative expenses - 930 - 150
- included in selling and marketing expenses 810 525 465 525
Rent of premises
- included in administrative expenses 345,208 362,110 133,600 127,800
Property, plant and equipment written off 810 3,863 - 595
Write-down of inventories
- included in other operating expenses 26,586 109,564 - -

9. EMPLOYEE BENEFITS EXPENSES

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Wages and salaries 13,424,476 13,390,421 7,695,710 7,662,248
Social security contributions 129,758 131,865 64,891 66,483
Contributions to defined contribution plan 1,400,096 1,410,941 820,836 814,078
Share options granted under ESOS 12,660 12,659 - -
Termination benefits - 565,550 - 565,550
Estimated benefits-in-kind 23,950 83,283 23,950 33,283
Other benefits 391,964 478,638 105,575 101,770
15,382,904 16,073,357 8,710,962 9,243,412

Included in employee benefits expense of the Group and of the Company are executive directors’ remuneration amounting to RM1,642,537
(2008: RM2,358,554) and RM905,451 (2008 : RM1,590,341) respectively as further disclosed in Note 10.
 Notes To The Financial Statements
79
annual report 2009
(cont’d)
31 December 2009

10. DIRECTORS’ REMUNERATION

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Executive directors’ remuneration:
- other emoluments 1,618,587 2,275,271 881,501 1,557,058
Estimated money value of benefits-in-kind 23,950 83,283 23,950 33,283
Total remuneration including
benefits-in-kind (Note 9) 1,642,537 2,358,554 905,451 1,590,341

Non-executive directors’ remuneration:

- fees 123,000 211,000 117,000 196,000
- other emoluments 38,500 46,000 38,500 46,000
Total remuneration (Note 8) 161,500 257,000 155,500 242,000
1,804,037 2,615,554 1,060,951 1,832,341

Total directors’ remuneration 1,780,087 2,532,271 1,037,001 1,799,058

Estimated money value of benefits-in-kind 23,950 83,283 23,950 33,283
Total directors’ remuneration including
benefits-in-kind 1,804,037 2,615,554 1,060,951 1,832,341

The details of remuneration receivable by directors of the Company during the year are as follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Executive:
- salaries and other emoluments 754,203 924,920 754,203 924,920
- bonus 63,080 - 63,080 -
- defined contribution plan 64,218 66,588 64,218 66,588
- termination benefits - 565,550 - 565,550
- estimated money value of benefits-in-kind 23,950 33,283 23,950 33,283
905,451 1,590,341 905,451 1,590,341

Non-Executive:
- fees 123,000 211,000 117,000 196,000
- other emoluments 38,500 46,000 38,500 46,000
1,066,951 1,847,341 1,060,951 1,832,341

Included in termination benefits in the previous financial year was a motor vehicle transferred to a director at its net book value of RM165,000
as disclosed in Note 13(e) and Note 38.
 Notes To The Financial Statements
80
annual report 2009
(cont’d)
31 December 2009

10. DIRECTORS’ REMUNERATION (cont’d)

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:
Number of Directors
2009 2008

Executive directors:
RM50,001 - RM150,000 - 1
RM200,001 - RM300,000 1 3
RM300,001 - RM350,000 1 1
RM350,001 - RM400,000 1 -
3 5
Non-Executive directors:
RM50,000 and below 7 8

11. INCOME TAX

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Malaysian income tax:
Current income tax 186,913 41,548 683,979 3,577
Under/(over) provision in prior years 386,243 (38,721) 373,999 (94,933)
573,156 2,827 1,057,978 (91,356)
Deferred tax (Note 31):
Relating to origination and
reversal of temporary differences (207,878) (270,048) - (318,993)
Relating to changes in tax rates - (36,593) - (13,587)
(Over)/underprovision in prior years (30,801) 3,694 (20,679) 11,714
(238,679) (302,947) (20,679) (320,866)
Total income tax 334,477 (300,120) 1,037,299 (412,222)

The Group is subject to income tax on an entity basis on the profit arising in or derived from the tax jurisdictions in which members of the
Group are domiciled and operates.

Domestic current income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the year.
 Notes To The Financial Statements
81
annual report 2009
(cont’d)
31 December 2009

11. INCOME TAX (cont’d)

A reconciliation of income tax applicable to profit/(loss) before tax at the statutory income tax rate to income tax at the effective income tax
rate of the Group and of the Company is as follows:
2009 2008
RM RM

Group
Profit/(loss) before tax 578,550 (6,286,115)

Taxation at statutory tax rate of 25% (2008: 26%) 144,638 (1,634,390)

Effect of taxation at preferential tax rate of 20% - (4,373)
Effect of changes in tax rates on opening balance of deferred tax - (36,593)
Expenses available for double deduction (2,878) (5,104)
Income not subject to tax (9,123) (25,817)
Expenses not deductible for tax purposes 173,196 1,559,993
Utilisation of previously unrecognised tax losses and unabsorbed capital allowances (308,950) (856,981)
Deferred tax assets recognised in respect of current year’s tax losses and unabsorbed
capital allowances 2,389 13,444
Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed
capital allowances (20,237) 724,728
Under/(over)provision of tax expense in prior years 386,243 (38,721)
(Over)/underprovision of deferred tax in prior years (30,801) 3,694
Income tax expense/(benefit) for the year 334,477 (300,120)

Company
Profit/(loss) before tax 2,153,479 (8,125,263)

Taxation at statutory tax rate of 25% (2008: 26%) 538,370 (2,112,568)

Effect of changes in tax rates on opening balance of deferred tax - (13,587)
Expenses available for double deduction (2,878) (5,104)
Income not subject to tax - -
Expenses not deductible for tax purposes 134,709 1,369,787
Utilisation of previously unrecognised tax losses and unabsorbed capital allowances (62,635) -
Deferred tax assets not recognised in respect of current year’s tax losses and unabsorbed
capital allowances 76,413 432,469
Under/(over)provision of tax expense in prior years 373,999 (94,933)
Underprovision of deferred tax in prior years (20,679) 11,714
Income tax expense/(benefit) for the year 1,037,299 (412,222)
 Notes To The Financial Statements
82
annual report 2009
(cont’d)
31 December 2009

12. EARNINGS/(LOSS) PER SHARE

(a) Basic
Basic earnings/(loss) per share amounts are calculated by dividing profit/loss for the year attributable to ordinary equity holders of
the Company by the weighted average number of ordinary shares in issue during the financial year, excluding treasury shares held
by the Company.
2009 2008
RM RM

Profit/(loss) attributable to ordinary equity holders of the Company 105,071 (6,078,645)
Weighted average number of ordinary shares in issue 94,132,000 93,827,000

2009 2008
sen sen

Basic earnings/(loss) per share 0.11 (6.48)

(b) Diluted
The Group does not have any potential dilutive ordinary shares as at balance sheet date.

There have been no other transactions involving ordinary shares as potential ordinary shares between the reporting date and the
date of completion of these financial statements.
 Notes To The Financial Statements
83
annual report 2009
(cont’d)
31 December 2009

13. PROPERTY, PLANT AND EQUIPMENT

Plant Factory, Computer Furniture,
Freehold Freehold Leasehold and tools and Motor and office fittings and
land buildings buildings machinery equipment vehicles equipment renovation Total
RM RM RM RM RM RM RM RM RM

Group
At 31 December 2009

Cost or valuation
At 1 January 2009
At cost - 32,100 - 8,151,342 1,956,104 2,952,219 5,363,536 3,508,139 21,963,440
At valuation 5,800,000 5,118,792 875,000 - - - - - 11,793,792
5,800,000 5,150,892 875,000 8,151,342 1,956,104 2,952,219 5,363,536 3,508,139 33,757,232
Additions - - - 42,700 5,655 - 156,366 17,280 222,001
Disposals - - - - (105,854) - (1,230) - (107,084)
Written off - - - - - - (24,294) - (24,294)
Exchange
differences - - - - - 718 (389) 810 1,139
At 31 December
2009 5,800,000 5,150,892 875,000 8,194,042 1,855,905 2,952,937 5,493,989 3,526,229 33,848,994

Representing:
At cost - 32,100 - 8,194,042 1,855,905 2,952,937 5,493,989 3,526,229 22,055,202
At valuation 5,800,000 5,118,792 875,000 - - - - - 11,793,792
At 31 December
2009 5,800,000 5,150,892 875,000 8,194,042 1,855,905 2,952,937 5,493,989 3,526,229 33,848,994

Accumulated depreciation
At 1 January 2009 - 498,015 37,586 6,472,361 1,684,560 2,705,725 4,705,217 2,714,424 18,817,888
Depreciation for
the year - 142,628 10,739 458,734 62,601 89,051 227,592 199,050 1,190,395
Disposals - - - - (68,675) - (676) - (69,351)
Written off - - - - - - (23,484) - (23,484)
Exchange
differences - - - - - 200 (171) 722 751
At 31 December
2009 - 640,643 48,325 6,931,095 1,678,486 2,794,976 4,908,478 2,914,196 19,916,199

Net carrying amount

At cost - 31,030 - 1,262,947 177,419 157,961 585,511 612,033 2,826,901
At valuation 5,800,000 4,479,219 826,675 - - - - - 11,105,894
At 31 December
2009 5,800,000 4,510,249 826,675 1,262,947 177,419 157,961 585,511 612,033 13,932,795
 Notes To The Financial Statements
84
annual report 2009
(cont’d)
31 December 2009

13. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Plant Factory, Computer Furniture,
Freehold Freehold Leasehold and tools and Motor and office fittings and
land buildings buildings machinery equipment vehicles equipment renovation Total
RM RM RM RM RM RM RM RM RM

Group (cont’d)
At 31 December 2008

Cost or valuation
At 1 January 2008
At cost - 32,100 - 8,158,224 2,129,008 4,027,777 5,405,690 3,452,122 23,204,921
At valuation 5,800,000 5,118,792 875,000 - - - - - 11,793,792
5,800,000 5,150,892 875,000 8,158,224 2,129,008 4,027,777 5,405,690 3,452,122 34,998,713
Additions - - - 8,870 14,549 61,211 166,705 53,516 304,851
Disposal - - - (15,752) (183,967) (1,140,492) (6,269) - (1,346,480)
Written off - - - - (3,486) - (203,330) - (206,816)
Exchange
differences - - - - - 3,723 740 2,501 6,964
At 31 December
2008 5,800,000 5,150,892 875,000 8,151,342 1,956,104 2,952,219 5,363,536 3,508,139 33,757,232

Representing:
At cost - 32,100 - 8,151,342 1,956,104 2,952,219 5,363,536 3,508,139 21,963,440
At valuation 5,800,000 5,118,792 875,000 - - - - - 11,793,792
At 31 December
2008 5,800,000 5,150,892 875,000 8,151,342 1,956,104 2,952,219 5,363,536 3,508,139 33,757,232

Accumulated depreciation
At 1 January 2008 - 355,388 26,847 5,972,417 1,757,144 3,085,778 4,655,318 2,501,936 18,354,828
Depreciation for
the year - 142,627 10,739 505,654 74,623 253,524 252,714 210,504 1,450,385
Disposals - - - (5,710) (147,149) (636,490) (4,886) - (794,235)
Written off - - - - (58) - (198,463) - (198,521)
Exchange
differences - - - - - 2,913 534 1,984 5,431
At 31 December
2008 - 498,015 37,586 6,472,361 1,684,560 2,705,725 4,705,217 2,714,424 18,817,888

Net carrying amount

At cost - 31,565 - 1,678,981 271,544 246,494 658,319 793,715 3,680,618
At valuation 5,800,000 4,621,312 837,414 - - - - - 11,258,726
At 31 December
2008 5,800,000 4,652,877 837,414 1,678,981 271,544 246,494 658,319 793,715 14,939,344
 Notes To The Financial Statements
85
annual report 2009
(cont’d)
31 December 2009

13. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Plant Factory, Computer Furniture,
Freehold Freehold Leasehold and tools and Motor and office fittings and
land buildings buildings machinery equipment vehicles equipment renovation Total
RM RM RM RM RM RM RM RM RM

Company
At 31 December 2009

Cost or valuation
At 1 January 2009
At cost - - - 198,483 860,213 2,093,797 3,300,377 1,901,058 8,353,928
At valuation 3,850,000 3,350,000 645,000 - - - - - 7,845,000
3,850,000 3,350,000 645,000 198,483 860,213 2,093,797 3,300,377 1,901,058 16,198,928
Additions - - - - 3,000 - 81,384 7,290 91,674
Disposals - - - - (105,854) - - - (105,854)
At 31 December
2009 3,850,000 3,350,000 645,000 198,483 757,359 2,093,797 3,381,761 1,908,348 16,184,748

Representing:
At cost - - - 198,483 757,359 2,093,797 3,381,761 1,908,348 8,339,748
At valuation 3,850,000 3,350,000 645,000 - - - - - 7,845,000
At 31 December
2009 3,850,000 3,350,000 645,000 198,483 757,359 2,093,797 3,381,761 1,908,348 16,184,748

Accumulated depreciation
At 1 January 2009 - 234,499 26,404 181,606 769,505 1,971,254 3,014,376 1,326,777 7,524,421
Depreciation for
the year - 67,000 7,544 4,289 18,751 44,434 106,559 117,695 366,272
Disposals - - - - (68,675) - - - (68,675)
At 31 December
2009 - 301,499 33,948 185,895 719,581 2,015,688 3,120,935 1,444,472 7,822,018

Net carrying amount

At cost - - - 12,588 37,778 78,109 260,826 463,876 853,177
At valuation 3,850,000 3,048,501 611,052 - - - - - 7,509,553
At 31 December
2009 3,850,000 3,048,501 611,052 12,588 37,778 78,109 260,826 463,876 8,362,730
 Notes To The Financial Statements
86
annual report 2009
(cont’d)
31 December 2009

13. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Plant Factory, Computer Furniture,
Freehold Freehold Leasehold and tools and Motor and office fittings and
land buildings buildings machinery equipment vehicles equipment renovation Total
RM RM RM RM RM RM RM RM RM

Company (cont’d)
At 31 December 2008

Cost or valuation
At 1 January 2008
At cost - - - 198,483 854,263 2,643,797 3,244,435 1,872,043 8,813,021
At valuation 3,850,000 3,350,000 645,000 - - - - - 7,845,000
3,850,000 3,350,000 645,000 198,483 854,263 2,643,797 3,244,435 1,872,043 16,658,021
Additions - - - - 5,950 - 61,487 29,015 96,452
Disposals (Note 13(e)) - - - - - (550,000) - - (550,000)
Written off - - - - - - (5,545) - (5,545)
At 31 December
2008 3,850,000 3,350,000 645,000 198,483 860,213 2,093,797 3,300,377 1,901,058 16,198,928

Representing:
At cost - - - 198,483 860,213 2,093,797 3,300,377 1,901,058 8,353,928
At valuation 3,850,000 3,350,000 645,000 - - - - - 7,845,000
At 31 December
2008 3,850,000 3,350,000 645,000 198,483 860,213 2,093,797 3,300,377 1,901,058 16,198,928

Accumulated depreciation
At 1 January 2008 - 167,499 18,860 177,317 747,115 2,154,035 2,898,450 1,204,723 7,367,999
Depreciation for
the year - 67,000 7,544 4,289 22,390 202,219 120,876 122,054 546,372
Disposals (Note 13(e)) - - - - - (385,000) - - (385,000)
Written off - - - - - - (4,950) - (4,950)
At 31 December
2008 - 234,499 26,404 181,606 769,505 1,971,254 3,014,376 1,326,777 7,524,421

Net carrying amount

At cost - - - 16,877 90,708 122,543 286,001 574,281 1,090,410
At valuation 3,850,000 3,115,501 618,596 - - - - - 7,584,097
At 31 December
2008 3,850,000 3,115,501 618,596 16,877 90,708 122,543 286,001 574,281 8,674,507
 Notes To The Financial Statements
87
annual report 2009
(cont’d)
31 December 2009

13. PROPERTY, PLANT AND EQUIPMENT (cont’d)

(a) Freehold land and buildings were revalued on 24 March 2005 by the directors based on a revaluation performed using the
comparison method by Ms. Susie Tiong, a registered valuer of Yap Burgess Rawson International who is a member of the Institution
of Surveyors, Malaysia.

Had the revalued land and buildings of the Group and of the Company been carried under the cost model, the carrying amount would
have been as follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Freehold land and buildings 7,190,870 7,345,750 5,108,350 5,217,684
Leasehold buildings 658,696 667,008 582,090 589,276
7,849,566 8,012,758 5,690,440 5,806,960

(b) The carrying amount of fully depreciated assets of the Group and of the Company that are still in use amounted to RM15,546,427
(2008: RM14,577,119) and RM6,237,004 (2008 : RM5,664,244) respectively.
(c) Net carrying amounts as at balance sheet date of property, plant and equipment held under hire purchase arrangements are as
follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Plant and machinery 849,676 1,319,574 - -
Motor vehicles 83,303 149,029 83,303 111,864
932,979 1,468,603 83,303 111,864

(d) Freehold land and building of the Group with a net carrying amount of RM525,053 (2008 : RM537,263) are pledged as securities
for borrowings as disclosed in Note 29.

(e) In the previous financial year, a motor vehicle of the Group and of the Company was transferred to a Director at its net book value
of RM165,000, which formed part of the termination benefit paid to the said director as disclosed in Note 10 and Note 38.

(f) In the previous financial year, another motor vehicle of the Group was disposed to a Director of a subsidiary at disposal price of
RM220,000 as disclosed in Note 38. The net book value of this motor vehicle amounted to RM276,320 as at the date of disposal.
 Notes To The Financial Statements
88
annual report 2009
(cont’d)
31 December 2009

14. INVESTMENT PROPERTIES

Buildings
RM

Group

At 31 December 2009
Cost
At 1 January 2009/31 December 2009 2,534,394

Accumulated depreciation
At 1 January 2009 114,987
Depreciation for the year 39,764
At 31 December 2009 154,751

Accumulated impairment loss

At 1 January 2009 1,199,512
Impairment for the year 364,000
At 31 December 2009 1,563,512

Net carrying amount at 31 December 2009 816,131

Estimated fair value 840,000

At 31 December 2008
Cost
At 1 January 2008/31 December 2008 2,534,394

Accumulated depreciation
At 1 January 2008 75,223
Depreciation for the year 39,764
At 31 December 2008 114,987

Accumulated impairment loss

At 1 January 2008/31 December 2008 1,199,512

Net carrying amount at 31 December 2008 1,219,895

Estimated fair value 1,260,000

The impairment loss recorded in the current financial year was in respect of the Group’s investment properties, and was derived after
considering the estimated fair value of those properties. The impairment was in respect of two shopping complex units in Johor Bahru.
 Notes To The Financial Statements
89
annual report 2009
(cont’d)
31 December 2009

14. INVESTMENT PROPERTIES (cont’d)

Buildings
RM

Company

At 31 December 2009
Cost
At 1 January/31 December 2009 234,745

Accumulated depreciation
At 1 January 2009 9,781
Depreciation for the year 4,695
At 31 December 2009 14,476

Net carrying amount at 31 December 2009 220,269

Estimated fair value 230,000

At 31 December 2008
Cost
At 1 January/31 December 2008 234,745

Accumulated depreciation
At 1 January 2008 5,086
Depreciation for the year 4,695
At 31 December 2008 9,781

Net carrying amount at 31 December 2008 224,964

Estimated fair value 230,000

 Notes To The Financial Statements
90
annual report 2009
(cont’d)
31 December 2009

15. PREPAID LAND LEASE PAYMENTS

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

At I January/31 December 1,550,000 1,550,000 1,100,000 1,100,000

Amortisation
At 1 January 66,906 47,790 45,031 32,165
During the year 19,116 19,116 12,866 12,866
At 31 December 86,022 66,906 57,897 45,031
1,463,978 1,483,094 1,042,103 1,054,969
Analysed as:
Long term leasehold land 1,463,978 1,483,094 1,042,103 1,054,969

The leasehold interest in land was revalued in March 2005 by the directors based on a valuation by an independent professional valuer, Ms.
Susie Tiong, a registered valuer of Yap Burgess Rawson International who is a member of the Institution of Surveyors, Malaysia to reflect
the market value on existing use basis. As allowed by the transitional provisions of FRS117, where the leasehold land had been previously
revalued, the unamortised revalued amount of leasehold land is retained as the surrogate cost of prepaid land lease payments and is
amortised over the remaining lease term of the leasehold land.

16. INVESTMENTS IN SUBSIDIARIES

COMPANY
2009 2008
RM RM

Unquoted shares at cost 2,370,004 3,130,494
Less: Accumulated impairment losses (696,750) (595,771)
1,673,254 2,534,723

During the financial year, Industronics (Guangzhou) Co Ltd, a wholly owned subsidiary incorporated in the People’s Republic of China, was
dissolved. Details of the dissolution are disclosed in Note 41(i).

The impairment loss of RM165,796 (2008: RM64,817) was recorded after considering the value-in-use of the subsidiary concerned, which
was based on the expected future cash-flow to be generated by the said subsidiary.
 Notes To The Financial Statements
91
annual report 2009
(cont’d)
31 December 2009

17. JOINTLY CONTROLLED OPERATION

A joint venture arrangement was established by the Company to undertake construction activities with a joint venture partner, Greenspan
Technology Pty Ltd, a corporation incorporated in Queensland, Australia. Each party uses its own assets to participate in the joint venture
activities and incur liabilities separately, which represents its own obligations.

The share of income and expenses of the Company in the jointly controlled operations is based on work done by the individual joint venture
partners and have been accounted for separately in the financial statements as follows:
GROUP/COMPANY
2009 2008
RM RM

Contribution/share of:
Construction revenue 183,564 164,681
Construction costs (177,099) (8,127)

18. OTHER INVESTMENTS

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Quoted shares in Malaysia, at cost 1,364,788 1,364,788 1,364,788 1,364,788
Less: Impairment losses (1,017,230) (1,137,901) (1,017,230) (1,137,901)
347,558 226,887 347,558 226,887
Unquoted shares in Malaysia 1 1 1 1
Transferable memberships in golf clubs, at cost 404,000 449,000 264,000 264,000
Less: Impairment losses (216,000) (264,000) (125,500) (150,000)
188,000 185,000 138,500 114,000
535,559 411,888 486,059 340,888
Market value:
Quoted shares in Malaysia 347,558 226,887 347,558 226,887
 Notes To The Financial Statements
92
annual report 2009
(cont’d)
31 December 2009

19. DEVELOPMENT COSTS

GROUP/COMPANY
2009 2008
RM RM

Cost
At 1 January/31 December 2,757,475 2,757,475

Accumulated amortisation
At 1 January 2,734,009 2,654,989
Amortised during the financial year 23,466 79,020
At 31 December 2,757,475 2,734,009

Net carrying value

At 31 December - 23,466

20. INVENTORIES
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Cost
Finished goods 1,580,909 2,689,368 957,319 684,014
Raw materials 6,221,031 7,672,308 4,926,521 6,096,672
Work-in-progress 574,568 712,956 531,291 483,922
Goods in transit 66,000 - 66,000 -
8,442,508 11,074,632 6,481,131 7,264,608

Net realisable value

Finished goods 1,003,794 92,159 - -
Raw materials 186,164 239,940 - -
1,189,958 332,099 - -
9,632,466 11,406,731 6,481,131 7,264,608

For the year ended 31 December 2007, the Company and a wholly-owned subsidiary, Industronics Manufacturing Sdn. Bhd. (“IMSB”),
conducted their annual stock count procedures in order to properly reflect the position of inventories as at financial year end. As a result
of this, both the Company and IMSB effected adjustments to recognise variances between the physical inventories balances and their book
balances by approximately RM5.9 million and RM2.7 million respectively. The effect of these adjustments was to reduce the income of the
Group and of the Company for the year ended 31 December 2007 by RM8.6 million and RM5.9 million respectively with corresponding
reductions in the inventories reflected in their respective balance sheets as of that date. Management attributed the cause of these variances
primarily to errors in recording consumption of these inventories.

The opening balance of inventories of the Company as at 1 January 2008 includes the effect of these adjustment and consequently, as the
auditors are not able to satisfy themselves over the appropriateness of these adjustment, their opinion are qualified over the comparative
figures of the Company in respect of this matter.
 Notes To The Financial Statements
93
annual report 2009
(cont’d)
31 December 2009

21. TRADE RECEIVABLES

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Trade receivables
Third parties 22,459,684 23,092,787 14,844,780 8,159,052
Retention sums on contracts (Note 23) 4,530,807 4,191,577 3,869,123 3,604,433
26,990,491 27,284,364 18,713,903 11,763,485
Less: Allowance for doubtful debts (4,453,383) (6,130,914) (2,829,515) (2,799,563)
Trade receivables, net 22,537,108 21,153,450 15,884,388 8,963,922

The Group’s and Company’s normal trade credit term ranges from 60 to 90 (2008: 60 to 90) days. Other credit terms are assessed and
approved on a case-by-case basis. As at balance sheet date, the Group has concentration of credit risk in the form of outstanding balances
due from seven (2008: eight) debtors representing 54% (2008: 51%) of total trade receivables. Trade receivables are non-interest bearing.

As at 31 December, trade receivables outstanding for greater than 1 year are as follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Debts greater than 1 year 694,514 1,160,554 277,782 374,874
Retention sums on contracts 2,314,002 2,673,373 2,269,494 2,673,373
3,008,516 3,833,927 2,547,276 3,048,247
Percentage of total trade receivables, net 13.3% 18.1% 16.0% 34.0%

In assessing the recoverability of these debts, the directors have given due consideration to all pertinent information relating to the ability of
these debtors to settle their debts. Aside from allowances for doubtful debts made above, the directors have assessed the remaining amounts
owing greater than 1 year to be fully recoverable, notwithstanding that these debts have exceeded the terms granted. Accordingly, no further
provision has been made in respect of these amount.
 Notes To The Financial Statements
94
annual report 2009
(cont’d)
31 December 2009

22. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Sundry receivables 1,388,203 1,426,542 1,292,116 1,167,518
Less: Allowance for doubtful debts (537,044) (562,890) (526,586) (477,553)
851,159 863,652 765,530 689,965
Deposits 876,134 267,743 425,003 112,660
Prepayments 212,391 220,364 80,596 78,309
1,939,684 1,351,759 1,271,129 880,934

In view of the fact that the Group’s and the Company’s sundry receivables relate to a large number of diversified customers, there is no
significant concentration of credit risk.

As at 31 December, sundry receivables outstanding greater than 1 year are as follows:

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Debts greater than 1 year 183,699 97,995 158,744 21,994

Percentage of total sundry receivables, net 21.6% 11.3% 20.7% 3.2%

In assessing the recoverability of these debts, the directors have given due consideration to all pertinent information relating to the ability of
these debtors to settle their debts. Aside from allowances for doubtful debts made above, the directors have assessed the remaining amounts
owing greater than 1 year to be fully recoverable, notwithstanding that these debts have exceeded the terms granted. Accordingly, no further
provision has been made in respect of these amount.

Other information on financial risks of other receivables are disclosed in Note 39.
 Notes To The Financial Statements
95
annual report 2009
(cont’d)
31 December 2009

23. DUE FROM/(TO) CUSTOMERS ON CONTRACT

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Contract costs incurred to date 24,779,820 42,440,287 18,794,028 32,588,327
Attributable profits 7,323,866 17,131,889 5,699,822 13,781,495
32,103,686 59,572,176 24,493,850 46,369,822
Less: Progress billings (32,291,011) (59,340,080) (25,760,678) (45,461,622)
(187,325) 232,096 (1,266,828) 908,200

Represented by:
Due from customers on contract 1,323,849 2,973,906 207,084 1,772,000
Due to customers on contract (1,511,174) (2,741,810) (1,473,912) (863,800)
(187,325) 232,096 (1,266,828) 908,200

Retention sum on contracts, included within

trade receivables (Note 21) 4,530,807 4,191,577 3,869,123 3,604,433

24. DUE FROM/(TO) SUBSIDIARIES

COMPANY
2009 2008
RM RM

Due from subsidiaries - non current 6,142,797 6,077,373
Less: Allowance for doubtful debts (6,016,280) (5,804,427)
126,517 272,946

Due from subsidiaries - current 1,359,580 930,738

Less: Allowance for doubtful debts (301,966) (337,244)
1,057,614 593,494
1,184,131 866,440

Due to subsidiaries (1,155,760) (333,940)

The amounts due from/(to) subsidiaries are non-interest bearing, unsecured and repayable on demand except for the non current amounts
due from subsidiaries which are not expected to be repaid within the foreseeable future.

The current balances with subsidiaries arose from trade transactions. The normal trade credit term given ranges from 60 to 90 (2008: 60 to
90) days.

Further details on related party transactions are disclosed in Note 38.

 Notes To The Financial Statements
96
annual report 2009
(cont’d)
31 December 2009

25. CASH AND BANK BALANCES

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Cash on hand and at banks 7,944,567 8,310,937 5,681,891 6,156,005
Fixed deposits with licensed banks 13,377,124 15,537,817 9,372,732 9,198,620
Cash and bank balances 21,321,691 23,848,754 15,054,623 15,354,625

Included in fixed deposits with licensed banks are fixed deposits of the Group and of the Company of RM Nil (2008: RM6,729,156)
and RM Nil (2008: RM3,329,156) respectively which are held under lien by a bank for contract financing granted to the Group and to the
Company.

The range of effective interest rates of deposits at the balance sheet date were as follows:
GROUP/COMPANY
2009 2008
% %

Licensed banks 1.80 to 2.50 3.40 to 3.70

The average maturities of deposits as at the end of the financial year were as follows:
GROUP COMPANY
2009 2008 2009 2008
Months Months Months Months

Licensed banks 1 to 8 1 to 7 4 to 8 4 to 7

Other information on financial risks of cash and cash equivalents are disclosed in Note 39.

For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Cash and bank balances 21,321,691 23,848,754 15,054,623 15,354,625
Less: Fixed deposits not readily available for use - (6,729,156) - (3,329,156)
21,321,691 17,119,598 15,054,623 12,025,469
Bank overdrafts (Note 29) (873,048) (1,560,462) - (56,520)
Total cash and cash equivalents 20,448,643 15,559,136 15,054,623 11,968,949
 Notes To The Financial Statements
97
annual report 2009
(cont’d)
31 December 2009

26. SHARE CAPITAL AND TREASURY SHARES

Number of ordinary
shares of RM0.50 each Amount
2009 2008 2009 2008
RM RM

Authorised share capital
At 1 January/31 December 200,000,000 200,000,000 100,000,000 100,000,000

Number of ordinary
share of RM0.50 each <---------- Amount ---------->
Share Share
capital capital
(issued and Treasury (issued and Treasury
fully paid) shares fully paid) shares
Unit Unit RM RM

At 1 January 2008 92,386,000 (1,131,000) 46,193,000 (545,154)
Ordinary shares issued during the year
pursuant to ESOS (Note 27) 2,877,000 - 1,438,500 -
At 31 December 2008 95,263,000 (1,131,000) 47,631,500 (545,154)

At 1 January 2009/31 December 2009 95,263,000 (1,131,000) 47,631,500 (545,154)

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

(a) Ordinary shares issued for cash

In the previous financial year, the Company issued 2,877,000 new ordinary shares of RM0.50 each through the exercise of
Company’s ESOS at an average exercise price of RM0.50 per ordinary shares for cash. The new ordinary shares rank pari passu in
all respects with the existing ordinary shares of the Company. The Company’s ESOS expired on 20 March 2008.

(b) Treasury shares

This amount relates to the acquisition costs of treasury shares.

The shareholders of the Company via the Annual General Meeting held on 9 June 2006 provided their mandate for the Company to
repurchase its own ordinary shares up to a maximum of 9,900,000 ordinary shares of RM0.50 each representing ten per cent (10%)
of the issued and paid up share capital of the Company (assuming that all the ESOS options which have been or may be granted
are fully exercised). The Directors of the Company are committed to enhancing the value of the Company for its shareholders and
believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.

The Company did not purchase any treasury share during the financial year. Cumulatively, the Company repurchased 1,131,000
of its issued ordinary shares from the open market at an average price of RM0.48 per share. The total consideration paid for the
repurchased including transaction costs was RM545,154. The repurchased transactions were financed by internally generated
funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act 1965.
None of the treasury shares were sold or cancelled during the financial year.

Of the total 95,263,000 (2008: 95,263,000) issued and fully paid ordinary shares as at 31 December 2009, 1,131,000 (2008:
1,131,000) are held as treasury shares by the Company. As at 31 December 2009, the number of outstanding ordinary shares in
issue after the set off is therefore 94,132,000 (2008: 94,132,000) ordinary shares of RM0.50 each.
 Notes To The Financial Statements
98
annual report 2009
(cont’d)
31 December 2009

27. INDUSTRONICS BERHAD EMPLOYEE SHARE OPTION SCHEME (“ESOS” or the “Scheme”)
The Company’s Employee Share Option Scheme (“ESOS” or the “Scheme”) was approved by the shareholders at the Extraordinary General
Meeting held on 10 February 2003 and became effective on 21 March 2003. The ESOS was in force for a duration of five (5) years
commencing 21 March 2003 and expired on 20 March 2008.

The principal features of the ESOS were as follows:

(i) The total number of options offered under the Scheme did not exceed 10% of the total issued and paid-up share capital of the
Company at any point in time during the duration of the Scheme.

(ii) Eligible employees and Executive Directors of the Company and its subsidiary companies were entitled to the ESOS for the
subscription of new ordinary shares of RM0.50 each in the Company. Employees who were eligible to participate in the Scheme
were in service with the Group for a continuous period of at least one (1) year for Malaysian employees (including full time Executive
Directors) and non-Malaysian employees. In the case of employees under employment contracts, the contracts’ duration should be
of at least 2 years for Malaysian employees and 5 years for non-Malaysian employees.

(iii) An option granted under the ESOS were capable of being exercised by the grantee by notice in writing to the Company during the
year commencing from the date of the offer and expired on 20 March 2008. The options granted were exercisable by the grantee
as follows:

Number of Options Maximum Percentage of Options Exercisable in Each Year

Granted Commencing from Date of Offer
Year 1 Year 2 Year 3 Year 4 Year 5
Below 10,000 100% - - - -
10,000 to less than 20,000 50% 50% - - -
20,000 to less than 100,000 #40% 30% *30% - -
100,000 and above 25% 25% 25% 25% -

# 40% or 20,000 Options, whichever is lower

* 30% or the remaining number of Options unexercised

(iv) The Scheme were administered by the Option Committee comprising senior management personnel appointed by the Board.

(v) All the new ordinary shares issued arising from the ESOS ranked pari passu in all respect with the existing ordinary shares of the
Company.

The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, share options in the previous
year up to the expiry of the ESOS:
Number of Share Options @ RM0.50 each
Outstanding
Outstanding <---------------- Movements During the Year ----------------> and exercisable
at 1 January Granted Exercised Forfeited Lapsed at 31 December

2008 4,166,000 - (2,877,000) - (1,289,000) -
WAEP RM0.50 RM0.50 RM0.50 RM0.50 RM0.50 RM0.50
 Notes To The Financial Statements
99
annual report 2009
(cont’d)
31 December 2009

28. RESERVES
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Non-distributable
Share option reserve (Note a) 37,979 25,319 - -
Share premium 732 732 732 732
Foreign currency translation reserve (Note b) (42,493) 101,464 - -
Revaluation reserves (Note c) 1,892,893 1,892,893 1,908,782 1,908,782
1,889,111 2,020,408 1,909,514 1,909,514

Distributable
Retained earnings/(Accumulated losses) 2,572,380 2,395,877 (6,622,135) (7,738,315)
4,461,491 4,416,285 (4,712,621) (5,828,801)

(a) Share option reserve

The share option reserve represents the equity-settled share options granted to employees. This reserve is made up of the
cumulative value of services received from employees recorded on grant of share options.

(b) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements
of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to
record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations,
where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.

(c) Revaluation reserve

Revaluation reserve comprise the cumulative changes, net of tax effects, arising from the revaluation of freehold and leasehold land
and buildings which are not distributable.
 Notes To The Financial Statements
100
annual report 2009
(cont’d)
31 December 2009

29. BORROWINGS
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Short term borrowings
Secured:
Term loans 39,410 37,221 - -
Hire purchase liabilities (Note 30) 302,770 354,837 34,868 33,315
342,180 392,058 34,868 33,315
Unsecured:
Bank overdrafts 873,048 1,560,462 - 56,520
Trust receipts - 39,594 - -
Bankers acceptances 671,000 505,000 450,000 -
1,544,048 2,105,056 450,000 56,520
1,886,228 2,497,114 484,868 89,835

Long term borrowings

Secured:
Term loans 199,337 238,554 - -
Hire purchase liabilities (Note 30) 143,161 401,574 - 34,868
342,498 640,128 - 34,868

Total borrowings
Bank overdrafts 873,048 1,560,462 - 56,520
Trust receipts - 39,594 - -
Bankers acceptances 671,000 505,000 450,000 -
Term loans 238,747 275,775 - -
Hire purchase liabilities (Note 30) 445,931 756,411 34,868 68,183
2,228,726 3,137,242 484,868 124,703

The range of effective interest rates during the financial year for these borrowings, excluding hire purchase payables, were as follows:
Group Company
Type of 2009 2008 2009 2008
rate % % % %

Bank overdrafts Floating 7.45 - 9.00 8.00 - 9.25 7.45 - 8.25 8.00 - 8.25
Trust receipts Floating - 8.25 - -
Bankers acceptances Floating 1.25 - 5.64 0.75 - 1.50 1.25 - 1.50 0.75 - 1.50
Term loans Fixed 6.25 6.25 - 8.25
 Notes To The Financial Statements
101
annual report 2009
(cont’d)
31 December 2009

29. BORROWINGS (cont’d)

The maturity periods for these borrowings, excluding hire purchase payables, were as follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Bank overdrafts On demand On demand On demand On demand
Trust receipts On demand On demand - -
Bankers acceptances On demand On demand On demand On demand
Term loans - secured 2015 2008 - 2015 - -

Term loans
The secured term loan of the Group is pledged against a freehold land and building of a subsidiary at carrying amount of RM525,053 (2008:
RM537,263) as disclosed in Note 13(d).

Other information on financial risk of borrowings are disclosed in note 39.

30. HIRE PURCHASE LIABILITIES

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Future minimum lease payments:
Not later than 1 year 326,100 392,459 35,740 35,760
Later than 1 year and not later than 2 years 140,665 296,484 - 35,740
Later than 2 years and not later than 5 years - 125,894 - -
Total minimum future lease payments 466,765 814,837 35,740 71,500
Less: Future finance charges (20,834) (58,426) (872) (3,317)
Present value of finance lease liabilities 445,931 756,411 34,868 68,183

Analysis of present value of finance lease liabilities:

Not later than 1 year 302,770 354,837 34,868 33,315
Later than 1 year and not later than 2 years 143,161 279,428 - 34,868
Later than 2 years and not later than 5 years - 122,146 - -
445,931 756,411 34,868 68,183
Less: Amount due within 12 months (Note 29) (302,770) (354,837) (34,868) (33,315)
Amount due after 12 months (Note 29) 143,161 401,574 - 34,868

The hire purchase liabilities of the Group and the Company bear effective interest rate range from 4.61% to 7.00% (2008: 4.61% to 13.51%)
and 4.61% (2008: 4.61%) per annum respectively.

Other information on hire purchase liabilities are disclosed in Note 39.

 Notes To The Financial Statements
102
annual report 2009
(cont’d)
31 December 2009

31. DEFERRED TAXATION

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

At 1 January 685,612 988,559 20,679 341,545
Recognised in income statement (238,679) (302,947) (20,679) (320,866)
At 31 December 446,933 685,612 - 20,679

Presented after appropriate offsetting as follows:

Deferred tax liabilities 446,933 685,612 - 20,679

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

Deferred Tax Liabilities of the Group:

Revaluation
Accelerated surplus of
capital leasehold
allowances buildings Total
RM RM RM

At 1 January 2009 590,593 237,052 827,645
Recognised in income statement (281,334) (20,679) (302,013)
At 31 December 2009 309,259 216,373 525,632

At 1 January 2008 835,501 245,600 1,081,101

Recognised in income statement (244,908) (8,548) (253,456)
At 31 December 2008 590,593 237,052 827,645

Deferred Tax Assets of the Group:

Unused tax losses
and unabsorbed
capital allowances Provisions Total
RM RM RM

At 1 January 2009 (100,675) (41,358) (142,033)
Recognised in income statement 63,297 37 63,334
At 31 December 2009 (37,378) (41,321) (78,699)

At 1 January 2008 (71,893) (20,649) (92,542)

Recognised in income statement (28,782) (20,709) (49,491)
At 31 December 2008 (100,675) (41,358) (142,033)
 Notes To The Financial Statements
103
annual report 2009
(cont’d)
31 December 2009

31. DEFERRED TAXATION (cont’d)

Deferred Tax Liabilities of the Company:
Revaluation
Accelerated surplus of
capital leasehold
allowances buildings Total
RM RM RM

At 1 January 2009 - 20,679 20,679
Recognised in income statement - (20,679) (20,679)
At 31 December 2009 - - -

At 1 January 2008 320,866 20,679 341,545

Recognised in income statement (320,866) - (320,866)
At 31 December 2008 - 20,679 20,679

Deferred tax assets have not been recognised in respect of the following items:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Unused tax losses 9,457,636 9,394,301 2,012,647 2,012,647
Unabsorbed capital allowance 3,604,848 3,357,591 387,611 363,369
Other temporary differences 5,962,339 7,651,104 6,524,439 6,493,570
19,024,823 20,402,996 8,924,697 8,869,586

The unutilised tax losses and unabsorbed capital allowances of the Group are available indefinitely for offsetting against future taxable profits
of the respective entities within the Group, subject to no substantial change in shareholdings of those entities under the Income Tax Act, 1967
and guidelines issued by the tax authority. Deferred tax assets have not been recognised in respect of these items as it is not probable that
taxable profit of subsidiaries will be available against which unused tax losses or deductible temporary differences can be utilised.

32. PROVISIONS
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Maintenance warranties
At 1 January 140,298 46,969 108,698 46,969
Provision made during the year 18,879 93,329 - 61,729
Written back during the year (63,483) - (63,483) -
95,694 140,298 45,215 108,698
Less: Utilisation during the year (16,367) - - -
At 31 December 79,327 140,298 45,215 108,698

Maintenance warranties
The Company gives an average one (1) year warranty on certain products and undertakes to repair or replace items that fail to perform
satisfactorily due to manufacturing defect. A provision is recognised for expected warranty claims on products sold during the year, based
on past experience of the level of repairs. Assumptions used to calculate the provision for warranties were based on current sales levels and
current data on repair and replacement costs on past one year warranty period for all products sold.
 Notes To The Financial Statements
104
annual report 2009
(cont’d)
31 December 2009

33. TRADE PAYABLES

The normal trade credit terms granted to the Group and the Company range from 60 to 90 (2008: 60 to 90) days.

Trade payables are non-interest bearing.

34. OTHER PAYABLES AND ACCRUALS

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Accruals 4,137,650 3,678,674 2,974,783 2,752,795
Other payables 2,835,991 4,018,889 1,921,772 3,332,212
6,973,641 7,697,563 4,896,555 6,085,007

35. OPERATING LEASE COMMITMENTS

Operating lease payments represent rentals payable by the Group and the Company for use of office buildings and warehouse.

The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the balance sheet date but not
recognised as liabilities, are as follows:
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Future minimum rental payments:
Not later than 1 year 105,195 132,198 28,800 28,300
Later than 1 year and not later than 5 years 55,405 15,585 - -
160,600 147,783 28,800 28,300

36. CAPITAL COMMITMENTS

GROUP/COMPANY
2009 2008
RM RM

Capital expenditure
Approved but not contracted for:
Property, plant and equipment 13,156 -
 Notes To The Financial Statements
105
annual report 2009
(cont’d)
31 December 2009

37. CONTINGENT LIABILITIES

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Unsecured:
Corporate guarantees given to banks for
credit facilities granted to subsidiaries - - 1,903,118 3,725,122
Contingent liabilities arising from
disputed claim (Note 43) 780,636 - 780,636 -
Contingent liabilities arising from
letter of indemnity given to third parties - 710,724 - -
Potential liquidated ascertained damages
chargeable by customers 260,212 - - -
1,040,848 710,724 2,683,754 3,725,122

38. RELATED PARTY DISCLOSURES

In addition to information disclosed elsewhere in the financial statements, the Group and the Company have the following transactions with
related parties during the year:

(a) Group
2009 2008
RM RM

Motor vehicle sold to a director of a subsidiary - 220,000
Motor vehicle transferred to a director as part of termination benefits - (165,000)
Allowance for doubtful debts on amount due from an associate - (73,826)

(b) Company
2009 2008
RM RM

Sales to subsidiary companies 1,708,185 675,878
Purchases from subsidiary companies (6,816,422) (13,818,613)
Allowance for doubtful debts on amount due from an associate - (73,826)
Motor vehicle transferred to a director as part of termination benefits - (165,000)
Management fee receivable from a subsidiary company 36,000 36,000
Dividend income from a subsidiary company 2,728,500 -
Rental income from subsidiary companies 177,600 174,300

Information regarding outstanding balances arising from related party transactions as at 31 December 2009 are disclosed in Note 24.
 Notes To The Financial Statements
106
annual report 2009
(cont’d)
31 December 2009

38. RELATED PARTY DISCLOSURES (cont’d)

(c) Remuneration package of key management personnel
The remuneration package of the Directors and other member of key management personnel during the year are as follows:-
GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Short-term employees benefits 4,479,188 4,220,775 2,354,622 2,276,772
Defined contribution plan 461,672 432,209 215,034 206,724
Estimated benefits-in-kind 23,950 83,283 23,950 33,283
Termination benefits - 565,550 - 565,550
4,964,810 5,301,817 2,593,606 3,082,329

Included in the total key management personnel are :

GROUP COMPANY
2009 2008 2009 2008
RM RM RM RM

Directors’ remuneration (Note 10) 1,642,537 2,358,554 905,451 1,590,341

In the previous financial year, executive directors of the Group and the Company and other members of key management had been
granted the following number of options under the Employee Share Option Scheme which expired on 20 March 2008:
Group Company
2008 2008
Unit Unit

At 1 January 2,553,000 1,762,000
Exercise (1,463,000) (1,015,000)
Expired (1,090,000) (747,000)
At 31 December - -

The share options were granted on the same terms and conditions as those offered to other employees of the Group as disclosed in Note
27.
 Notes To The Financial Statements
107
annual report 2009
(cont’d)
31 December 2009

39. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Objectives and Policies
The Group’s financial risk management policies were established to ensure the adequacy of financial resources for business
development and in managing its credit risk, liquidity risk, foreign currency risk, cash flow and interest rate risks. Capital resources
of the Group are managed and allocated centrally to ensure that all business units with the Group maintains sufficient and prudent
level of capital and liquidity at all times. The Group operates within clearly defined guidelines that are approved by the Board of
Directors.

The Group’s policies in respect of the major areas of financial risk activities are set out as follows:

(i) Credit Risk

Credit risk is the risk of default by clients and counterparties. Cash deposits and trade receivables may give rise to credit risk which
requires the loss to be recognised if a counterparty fails to perform as contracted. It is the Group’s policy to monitor the financial
standing of these counterparties on an on-going basis to ensure that the Group’s exposure to credit risk is minimal.

The Group manages its credit risk by controlling the application of credit approvals, limits and other monitoring procedures on
receivables.

As at the balance sheet date, the Group is subject to signification concentration of credit risk as disclosed in Note 21.

(ii) Liquidity Risk

Liquidity risk, also referred to as funding risk, is the risk of the Group in raising adequate funds to meet its commitments associated
with financial instruments.

The Group manages the funding needs and allocates funds in such manner that all business units maintains optimum levels of
liquidity sufficient in meeting their operating requirements. Furthermore, financial commitments are closely monitored to ensure that
the Group is able to meet its obligations as and when they fall due and that refinancing needs are met.

(iii) Foreign Currency Risk

Currency risk is the risk of fluctuation in the value of a financial instrument due to changes in foreign exchange rates. The Group is
exposed to foreign exchange risk arising from various currency exposures primarily with respect to United States Dollar, Singapore
Dollar, Thai Baht and Philippines Peso. Currency risks relating to operating activities in the ordinary course of business of the Group
are minimal as the Group’s activities are mostly transacted in Ringgit Malaysia. These currency risks are generally not hedged, such
risk may be naturally hedged through planned course of business and by matching income and expenditure to minimise currency
exchange fluctuation.
 Notes To The Financial Statements
108
annual report 2009
(cont’d)
31 December 2009

39. FINANCIAL INSTRUMENTS (cont’d)

(a) Financial Risk Management Objectives and Policies (cont’d)
(iii) Foreign Currency Risk (cont’d)
The net unhedged financial assets and financial liabilities of the Group companies that are not denominated in their functional
currencies are as follows:

Net Financial Assets/(Liabilties) Held in Non-Functional Currencies

Singapore United States Thai Philippines
Dollar Dollar Baht Peso Others Total
RM RM RM RM RM RM

Functional Currency
of Group Companies

At 31 December 2009
Ringgit Malaysia (58,695) 1,419,683 4,823,588 5,959,197 (18,503) 12,125,270
Singapore Dollar - 259,003 - - - 259,003
Vietnam Dong - 23,402 - - - 23,402
(58,695) 1,702,088 4,823,588 5,959,197 (18,503) 12,407,675

At 31 December 2008
Ringgit Malaysia (147,956) 5,861,370 3,329,515 1,034 (130,176) 8,913,787
Singapore Dollar - 11,039 - - - 11,039
Vietnam Dong - 100,201 - - - 100,201
(147,956) 5,972,610 3,329,515 1,034 (130,176) 9,025,027

(iv) Cash flow and interest rate risk

Cash flow risk is the risk fluctuation in the amounts of future cash flows associated with a monetary financial instrument. Cash flow
forecasts are prepared incorporating all major transactions. Any temporary excess funds, as and when available, from operating
cash cycles, are invested in short term placements and fixed deposits with a wide array of licensed financial institutions at the most
competitive interest rates obtainable.

The Group’s and the Company’s cash flow and interest rate risks are in respect of the floating interest rate borrowings.
 Notes To The Financial Statements
109
annual report 2009
(cont’d)
31 December 2009

39. FINANCIAL INSTRUMENTS (cont’d)

(b) Fair Values
In addition to information disclosed elsewhere in the financial statements, the carrying amounts of financial assets and liabilities of the
Group and of the Company at the balance sheet date approximated their fair values except for the following:
Group Company
Note Carrying Fair Carrying Fair
Amount Value Amount Value
RM RM RM RM

At 31 December 2009
Financial Assets:
Due from subsidiaries
- non current 24 - - 126,517 *
- current 24 - - 1,057,614 *

Financial Liabilities:
Due to subsidiaries 24 - - 1,155,760 *
Term loans 29 238,747 220,951 - -
Hire purchase liabilities 30 445,931 442,047 34,868 34,877

At 31 December 2008
Financial Assets:
Due from subsidiaries
- non current 24 - - 272,946 *
- current 24 - - 593,494 *

Financial Liabilities:
Due to subsidiaries 24 - - 333,940 *
Term loans 29 275,775 240,191 - -
Hire purchase liabilities 30 756,411 747,571 68,183 68,200

* It is not practical to estimate the fair value of amounts due to/from subsidiaries due principally to the inability to estimate the
settlement date without incurring excessive costs as these amounts lack a fixed repayment term. However, the Company does
not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from the values that would be
eventually settled.

The following methods and assumptions used by management to determine fair values of the following classes of financial instruments:

(i) Cash and cash equivalents, receivables/payables and short term borrowings.
The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments. The discounted
amounts are not material.

(ii) Other investments

The fair value of quoted shares is determined by reference to stock exchange quoted market bid prices at the close of the business
on the balance sheet date.

(iii) Borrowings
The fair value of borrowings is estimated by discounting the expected future cash flows using the current interest rates for assets
and liabilities with similar risk profiles.

(iv) Investment properties

Fair value for investment properties were arrived at by reference to desktop valuation reports provided by professional values.
 Notes To The Financial Statements
110
annual report 2009
(cont’d)
31 December 2009

40. SEGMENT INFORMATION - GROUP

(a) Reporting Format
The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected
predominantly by differences in the products and services produced. Secondary information is reported geographically.

(b) Primary reporting format - business segments

The Group comprises the following main business segments:
Telecommunication - Supply and service of telecommunication equipment, audio visual multimedia systems,
intelligent transportation system and major system integration projects involving Information
Communication Technology.

Security systems, - Supply and installation of security systems. Specialist in fire protection system design and
mechanical and electrical installation works and mechanical engineering services. Industrial maintenance and service works.
engineering (“M&E”) Trading of transport equipment and provision of related services. Manufacturing of filter inclusive
of import and marketing.

Electronic products - Design, manufacturing and installation of electronic and microprocessor controlled products.
Renting of electronic board. Trading, maintenance and supply of industrial electronic equipment.

Fabrication and manufacturing - Involving in precision sheet metal fabrications works and manufacturing of precision fabrication.

Other Operations - Advertising
Advertising agency providing services in all areas of commercial advertising. Media advertising
with a special focus on electronic media.

- Automation
Provide consultation project management and system integration services in industrial
automation. Design, manufacture and distribution of power electronic products.

(c) Secondary reporting format - geographical segments

The Group operates in four principal geographical areas based on location of assets:
Malaysia - all main businesses disclose in primary reporting format-business segments (Note 40(b))
Singapore - trading, maintenance and supply of industrial electronic equipment
China - inactive
Vietnam - supply, construction and maintenance of specialised mechanical and electrical equipment and
electronic display, engineering service provider for these equipment together with fire protection
and airconditioning/ventilation equipment

(d) Allocation basis and transfer pricing

Segment revenue, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on
a reasonable basis

Unallocated income mainly comprise interest income from short term deposits, dividend from other investments and gain on disposal
of marketable securities and derivatives derived by the Group’s non-core business. Segment assets consist primarily of long term and
current assets and mainly exclude short term investment in shares of the Group’s non-core business and tax recoverable. Segment
liabilities comprise operating liabilities and exclude current tax payable and borrowings.

Inter-segment sales comprise revenue from projects and trading, office rental and secretarial and management fees. The inter-segment
transactions have been entered into in the ordinary course of of business at terms mutually agreed between the companies concerned and
are not less favourable than those arranged with independent third parties.
 Notes To The Financial Statements
111
annual report 2009
(cont’d)
31 December 2009

40. SEGMENT INFORMATION - GROUP (cont’d)

2009
Primary reporting format - business segments

Security Fabrication
Telecom- systems Electronic and manu- Other
munication & M&E products facturing operations Elimination Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue
Revenue from
external customers 14,850 14,876 17,578 5,710 3,038 - 56,052
Inter-segment revenue 156 196 1,561 4,252 3,417 (9,582) -
Total revenue 15,006 15,072 19,139 9,962 6,455 (9,582) 56,052

Results
Segment results 1,675 758 (1,929) 35 241 239 1,019
Add : Unallocated income -
Operating profit 1,019
Less: Investing results (154)
Less : Finance costs (287)
Profit before tax 578
Income tax (334)
Profit for the year 244
Attributable to :
Equity holders of the Company 105
Minority Interests 139
244
Other information
Segment assets 13,597 15,825 39,478 6,614 1,446 (3,457) 73,503
Tax assets 2,347
75,850
Segment liabilities (5,075) (3,446) (8,317) (5,965) (5,755) 10,493 (18,065)
Tax liabilities (1,058)
(19,123)
Capital expenditure 6 73 89 14 40 - 222
Allowance for doubtful debts 311 50 1,002 25 114 (531) 971
Allowance for doubtful debts
written back - (300) (14) (237) (24) 138 (437)
Write down of inventories - 35 14 72 - - 121
Reversal of inventories written down - 10 (281) - - - (271)
Bad debts written off - 31 6 58 - - 95
Depreciation and amortisation 65 321 356 509 21 - 1,272
Reversal of impairment loss
on transferable membership
in golf clubs (11) (4) (14) - - - (29)
Impairment loss on investment
properties - 364 - - - - 364
Net unrealised foreign
exchange loss (9) 124 (301) 14 - 3 (169)
 Notes To The Financial Statements
112
annual report 2009
(cont’d)
31 December 2009

40. SEGMENT INFORMATION - GROUP (cont’d)

2009
Secondary reporting format - geographical segments

Malaysia Singapore Vietnam Elimination Consolidated

RM’000 RM’000 RM’000 RM’000 RM’000

Revenue
Revenue from external customers 54,559 1,369 124 - 56,052

Other information
Segment assets 75,749 1,127 84 (3,457) 73,503
Tax assets 2,347
75,850

Capital expenditure 219 3 - - 222

 Notes To The Financial Statements
113
annual report 2009
(cont’d)
31 December 2009

40. SEGMENT INFORMATION - GROUP (cont’d)

2008
Primary reporting format - business segments

Security Fabrication
Telecom- systems Electronic and manu- Other
munication & M&E products facturing operations Elimination Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Revenue
Revenue from
external customers 9,434 19,096 27,924 8,037 1,591 - 66,082
Inter-segment revenue - 213 713 13,706 834 (15,466) -
Total revenue 9,434 19,309 28,637 21,743 2,425 (15,466) 66,082

Results
Segment results 1,318 408 (8,438) 1,422 (379) 239 (5,430)
Add : Unallocated income -
Operating loss (5,430)
Less: Investing results (379)
Less : Finance costs (477)
Loss before tax (6,286)
Income tax 300
Loss for the year (5,986)
Attributable to :
Equity holders of the Company (6,079)
Minority Interests 93
(5,986)
Other information
Segment assets 6,209 24,498 42,852 7,034 2,015 (3,796) 78,812
Tax assets 2,904
81,716
Segment liabilities (6,160) (8,050) (4,948) (6,417) (5,877) 9,826 (21,626)
Tax liabilities (1,272)
(22,898)
Capital expenditure 19 100 127 51 8 - 305
Allowance for doubtful debts 44 1,346 2,587 238 99 (250) 4,064
Allowance for doubtful debts
written back (50) (110) (66) (3) (79) 92 (216)
Write-down of inventories 122 176 4,235 - - - 4,533
Reversal of inventories written
down - - - (45) - - (45)
Bad debts written off - 31 7 - - - 38
Depreciation and amortisation 120 334 539 574 21 - 1,588
Impairment loss on transferable
membership in golf clubs (6) 70 65 - - - 129
Property, plant and equipment
written off 1 3 - - - - 4
Net unrealised foreign
exchange loss 6 (150) 791 54 (15) 20 706
 Notes To The Financial Statements
114
annual report 2009
(cont’d)
31 December 2009

40. SEGMENT INFORMATION - GROUP (cont’d)

2008
Secondary reporting format - geographical segments

Malaysia Singapore China Vietnam Elimination Consolidated

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

Revenue
Revenue from external customers 64,765 1,288 - 29 - 66,082

Other information
Segment assets 80,770 1,019 776 43 (3,796) 78,812
Tax assets 2,904
81,716

Capital expenditure 253 49 - 3 - 305

 Notes To The Financial Statements
115
annual report 2009
(cont’d)
31 December 2009

41. SUBSIDIARIES
Details of subsidiaries are as follows:

Country of Equity Interest

Name of subsidiaries Incorporation 2009 2008 Principal Activities
% %

Held by the Company:

ScreenRental Sdn. Bhd. Malaysia 100 100 Dormant

Industronics Multimedia Sdn. Bhd. Malaysia 100 100 In the process of striking off pursuant to
Section 308 of the Companies Act 1965

Industronics Automation Sdn. Bhd. Malaysia 100 100 Provide consultation project management and
system integration services in industrial
automation

~ Industronics Manufacturing Sdn. Bhd. Malaysia 100 100 Assembly, installation and maintenance of high-
tech electronics appliances and communication

TTE Electronics Sdn. Bhd. Malaysia 100 100 Assembly of electronics device and contract
manufacturing

Olympex Sdn. Bhd. Malaysia 100 100 Dormant

* Industronics (Guangzhou) Co. Ltd. People’s Republic - 100 Inactive

of China

Ademco (Malaysia) Sdn. Bhd. Malaysia 95 95 Supply and installation of security systems

* Industrial Electronics (S) Pte. Ltd. Singapore 70 70 Trading, maintenance and supply of industrial
electronic equipment

Primeworth (M) Sdn. Bhd. Malaysia 69.2 69.2 Involving in precision sheet metal
fabrications works

Asian Advertising (M) Sdn. Bhd. Malaysia 55 55 Advertising agency providing services in all areas
of commercial advertising

Dasar Spektrum (M) Sdn. Bhd. Malaysia 55 55 Dormant

Sukitronics Sdn. Bhd. Malaysia 51 51 Specialist in fire protection system design and
installation works and mechanical engineering
services

* Industronics Corporation Ltd. Vietnam 100 100 Supply, assembly and maintenance of electronics
displays, mechanical & electrical equipment
 Notes To The Financial Statements
116
annual report 2009
(cont’d)
31 December 2009

41. SUBSIDIARIES (cont’d)

Country of Equity Interest

Name of subsidiaries Incorporation 2009 2008 Principal Activities
% %

Held through Sukitronics Sdn. Bhd.

Sukitronics PMC Sdn. Bhd. Malaysia 100 100 Mechanical engineering and contracting in fire
fighting system

SKT. Innova Sdn. Bhd. Malaysia 100 100 Manufacturing of filter inclusive of import and
marketing

Advance Power Trade Sdn. Bhd. Malaysia 81 81 In the process of Members’ Voluntary Winding-Up

@ Accumax Technology Sdn. Bhd. Malaysia 40 40 Engineering contracting work

Sukitronics Corporation Ltd. Vietnam 100 100 Providing engineering services on fire protection,
air-conditioning and ventilation, mechanical and
electrical/electronics equipment

Held through Primeworth (M) Sdn. Bhd.

PW Precision Sdn. Bhd. Malaysia 100 100 Manufacturing of precision fabrication

~ The auditors’ report on the financial statements of this subsidiary is qualified on the basis that due to the records of the subsidiary, Messrs. Ernst &
Young was not able to carry out adequate appropriate audit procedures so as to satisfy themselves as to the appropriateness of the adjustments with
regards to the unidentified differences between the subsidiary’s carrying value of inventories based on physical inventory count and that as recorded
in its books as at 1 January 2008. However, the above qualification has no impact on the Group’s financial statements.

* Subsidiary companies audited by firms of chartered accountants other than Messrs. Ernst & Young.

@ Pursuant to Shareholders Agreement dated 27 March 2002 entered into between Sukitronics Sdn. Bhd. (“SSB”) and Abdul Kudus bin Mohd Yunus and
Nordin bin Sarip for granting the control of the composition of the Board of Directors of Accumax Technology Sdn. Bhd. (“ATSB”) to SSB. Hence, ATSB
is deemed to be a subsidiary company of SSB pursuant to Section 5(1) of Companies Act, 1965.

Subsequently, on 22 August 2009, a new shareholder agreement was entered into between SSB, Abdul Kudus bin Mohd Yunus and Shariza Binti
Ashari for granting the control of the composition of the Board of Directors of ATSB to SSB.
 Notes To The Financial Statements
117
annual report 2009
(cont’d)
31 December 2009

41. SUBSIDIARIES (cont’d)

(i) Dissolution of a subsidiary
On 26 February 2008, the Board approved the deregistration of Industronics (Guangzhou) Co. Ltd, a wholly-owned subsidiary. The
dissolution of the subsidiary had the following effects on the financial position of the Group as at the end of the year:

The revenue, results and cash flow of the subsidiary was as follows:

Other than the net assets of the subsidiary to disclose as below, the subsidiary does not have any revenue or cash flow.
Group
2009
RM

Cash and bank balances 759,492
Other payables (54,936)
Net assets 704,556
Total proceeds (759,492)
Gain on dissolution of a subsidiary (54,936)

Company
2009
RM

Total proceeds 759,492
Investment in Industronics (Guangzhou) Co. Ltd. (695,673)
Gain on dissolution of a subsidiary 63,819
 Notes To The Financial Statements
118
annual report 2009
(cont’d)
31 December 2009

42. MATERIAL LITIGATIONS

Other than as disclosed below, the Group and the Company are not involved, either as plaintiff or defendant, in any other material litigations. In
this aspect, the Directors are not aware of any other proceedings pending and against the Group and the Company or any events likely to give
rise to a litigation which might materially or adversely affect the financial position and business operations of the Group and the Company.

Claim by Sukitronics PMC Sdn. Bhd. against Mustajab Indah Sdn. Bhd.
On 25 June 2001, Sukitronics PMC Sdn. Bhd. (“Sukitronics PMC”) claimed against Mustajab Indah Sdn Bhd (“Mustajab”) for an amount of
RM2,083,695.35 on account of work done, loss of profit, interest and finance charges arising from Mustajab’s breach of an agreement dated
29 October 1998 between the parties thereof. Sukitronics PMC pursued the claim under arbitration with the President of Persatuan Arkitek
Malaysia. On 8 March 2005, the Arbitrator awarded that Mustajab shall pay to Sukitronics PMC approximately RM1,460,666.58 being the
balance of progress claims unpaid, the loss and expense, storage charges, loss of profits and interests on outstanding amount; and Mustajab
shall also bear the costs of award and Sukitronics PMC’s costs of reference.

The solicitors of Sukitronics PMC have filed an Originating Summon to register the Arbitrator’s Award as Saman Pemula in the High Court of
Kuala Lumpur. The matter which was fixed for hearing on 3 March 2006 and postponed to 7 March 2007 and then to 24 September 2007,
has been adjourned to 20 November 2007. On 20 November 2007, Sukitronics PMC obtained the court judgement to enforce the award. As
Mustajab does not appear to be active, the only option would be to wind up Mustajab if this has not yet been done. Pursuant to a winding up
search on Mustajab, it was found that the said company has been wound up on 20 July 2004.

Upon further enquiry with the Insolvency Department, it was confirmed that Sukitronics PMC can still file their Proof of Claim against the
company with the Official Receiver. The Company had on 23 November 2009 filed the Proof of Debt form and General and Special Proxy Forms
with the Insolvency Department.

43. DISPUTED CLAIM

Claim by a customer against Sukitronics Sdn. Bhd.
On 21 December 2009, a customer of a subsidiary attempted to call upon a Performance Bond in relation to a subcontract agreement. The
value of the performance bond amounted to USD227,823 (equivalent to RM780,636) as at 31 December 2009 (Note 37).

The subsidiary had filed for an interim injunction against the claim by the said customer and were successful in the said filing.

The customer and the subsidiary are to file and serve their Affidavit In Reply.

The quantum of any liability arising from this contract is not presently quantified. However, the Group will rigouriously defend its case against
any possible losses, if any.

44. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 18 November 2009, the Company announced to Bursa Malaysia that Advance Power Trade Sdn Bhd ( APT ), a subsidiary of
Sukitronics Sdn. Bhd., had convened an Extraordinary General Meeting ( EGM ) for Members’ Voluntary Winding-Up pursuant to
Section 254(1) of the Companies Act,1965.

The Members’ Voluntary Winding-Up of APT has no material operational impact or financial impact on the share capital, shareholding
structure, earnings, gearing and net assets of the Group.

(b) On 23 December 2009, Industronics Multimedia Sdn. Bhd., a wholly-owned subsidiary of the Company, submitted its application to
Suruhanjaya Syarikat Malaysia to strike off its name pursuant to Section 308 of the Companies Act 1965.
 Additional Compliance Information
119
annual report 2009
(Pursuant to the Listing Requirements)

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

The Company has not issued any options, warrants or convertible securities during the financial year ended 31 December 2009.

AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT (GDR)

The Company did not sponsor any ADR or GDR programme for the financial year ended 31 December 2009.

IMPOSITION OF SANCTION AND/OR PENALTIES

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

NON-AUDIT FEES
There were no non-audit fees paid by the Company to external auditors for the financial year ended 31 December 2009 saved as disclosed
below.

During the financial year, a sum of RM8,850.00 was paid to Messrs. Ernst & Young for professioanl fees as Independent Scrutineers at the
Industronics’ Annual General Meeting held on 24 June 2009.

VARIATION IN RESULTS
There were no variances of 10% or more between the audited results for the financial year and the unaudited results previously announced.

PROFIT GUARANTEE
There was no profit guarantee given by the Company during the financial year ended 31 December 2009.

MATERIAL CONTRACT
There were no material contracts entered into by the Company and its subsidiary companies involving Directors’ and major shareholders’ interests
which were still subsisting as at the end of the financial year ended 31 December 2009 or if not then subsisting, entered into since the end of the
previous financial year.

REVALUATION POLICY OF LANDED PROPERTIES

The revaluation of landed properties are made at least once in every five (5) years based on a valuation by an independent valuer on an open
market value basis. The last valuation was carried out in year 2005.

SHARE BUY BACK

During the year, the Company did not enter into any share buy-back transaction.

Total number of shares bought back and held as treasury shares as at 31 December 2009 is 1,131,000 shares.
 List Of Properties
120
annual report 2009
as at 31 December 2009

Description Date of
of Property Existing Age of Value Revaluation /
Location Tenure (approximate use Building RM Acquisition
land area)

COMPANY

9 Jalan Taming 3 Freehold Industrial land Factory, 19 years 2,590,743 March 2005
Taman Tanming Jaya and building office and
43300 Seri Kembangan (14,876 sq. ft.) warehouse
Selangor D.E.

6 Jalan Perusahaan Utama Freehold Industrial land Factory, 12 years 4,307,757 March 2005
Taman Perindustrian Selesa Jaya and building office and
43300 Seri Kembangan (38,430 sq. ft.) warehouse
Selangor D.E.

39 Jalan Sungai Besi Indah 1/21 Leasehold Shop office General 9 years 833,683 March 2005
Taman Sungai Besi Indah (99 years) (143 sq. m.) Office
43300 Seri Kembangan Expire in 2091
Selangor D.E.

41 Jalan Sungai Besi Indah 1/21 Leasehold Shop office General 9 years 819,472 March 2005
Taman Sungai Besi Indah (99 years) (143 sq. m.) Office
43300 Seri Kembangan Expire in 2091
Selangor D.E.

HS (D) 159898 Leasehold Industrial land Vacant land N/A 220,269 December 2005
No. PT 1693, Pekan Panchor (99 years) (1,552 sq. m.)
Daerah Seremban Expire in 2103
Negeri Sembilan
 List Of Properties
121
annual report 2009
(cont’d)
as at 31 December 2009

Description Date of
of Property Existing Age of Value Revaluation /
Location Tenure (approximate use Building RM Acquisition
land area)

SUBSIDIARY COMPANIES

No. 8, Jalan 5/5 Freehold Industrial land Factory 14 years 525,053 March 2005
Taman Perindustrian Selesa Jaya and building and office
43300 Seri Kembangan (4,000 sq. ft.)
Selangor D.E

No. 60, Jalan Manis 3 Leasehold Shop office General 32 years 637,498 March 2005
Taman Segar, Cheras (99 years) (1,539 sq. ft.) Office
56100 Kuala Lumpur Expire in 2077

No. 20, Jalan Pendidik U1/31 Freehold Industrial land Factory 12 years 827,779 March 2005
Seksyen U1 and building and office
Hicom Glenmarie Industrial Park (3,900 sq. ft.)
40150 Shah Alam
Selangor D.E.

No. 22, Jalan Pendidik U1/31 Freehold Industrial land Office and 12 years 2,058,917 March 2005
Seksyen U1 and building warehouse
Hicom Glenmarie Industrial Park (9,750 sq. ft.)
40150 Shah Alam
Selangor D.E.

# GF53, Jalan Persiaran Leasehold Shoplot Retail 9 years 190,000 March 2005
Tun Sri Lanang, Daerah Sentral (99 years) (475 sq. ft.) outlet
80000 Johor Bahru Expire in 2095
Johor D.T.

# GF53A, Jalan Persiaran Leasehold Shoplot Retail 9 years 190,000 March 2005
Tun Sri Lanang, Daerah Sentral (99 years) (475 sq. ft.) outlet
80000 Johor Bahru Expire in 2095
Johor D.T.

No 6A-13-2A, Kondominium BBK Leasehold Condominium Vacant 8 years 215,863 November 2005
Persiaran Bukit Raja (99 years) (1,605 sq. ft.)
41150 Klang Expire in 2093
Selangor D.E.
 Analysis of Shareholdings
122
annual report 2009
as at 23 April 2010

Authorised Capital : RM100,000,000

Issued and Paid up Capital : RM47,631,500
Class of shares : Ordinary Shares of RM 0.50 each
Voting Rights : One Vote per Share

DISTRIBUTION OF SHAREHOLDINGS
Size of Holdings Number of % of Total % of
(Number of Ordinary Shares) Shareholders Shareholders Shareholdings^ Shareholdings

Less than 100 6 0.38 246 0.00

100 - 1,000 119 7.45 61,400 0.06
1,001 - 10,000 1,152 72.09 5,614,454 5.89
10,001 - 100,000 270 16.90 7,041,500 7.39
100,001 to less than 5% of issued shares 47 2.94 34,194,200 35.89
5% and above of issued shares 4 0.25 48,351,200 50.76
Total: 1,598 100.00 95,263,000 100.00

Note:
^ Inclusive the total number of shares bought back of 1,131,000 units held as Treasury Shares as at 23 April 2010.

DIRECTORS’ INTERESTS
Direct Interest Deemed Interest
In the Company No. of Shares % ^ No. of Shares %^

Dato’ Haji Wan Abdullah B. W. Salleh - - - -

Dr. Lim Jit Chow 19,550,000 1 20.77 2,340,000 2 2.49
Gan Boon Chuan 332,500 0.35 - -
Dr. Junid bin Abu Saham - - - -
Ooi Soon Kiam - - - -
Deepak Kumar Ruia - - - -
Lim Jit Fu (alternate to Dr. Lim Jit Chow) 353,400 0.38 - -
Raj Kishor Khandelwal (alternate to Deepak Kumar Ruia) - - - -

Notes:
^ Taking into account shares bought back and held as Treasury Shares as at 23 April 2010.
1. Shares are held in own name and nominee accounts.
2. Deemed to have interest by virtue of Section 6A(4) of the Companies Act, 1965, via spouse and children.
 Analysis of Shareholdings
123
annual report 2009
as at 23 April 2010

SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS

Direct Interest Deemed Interest

No. of Shares % ^ No. of Shares %^

1. Bloom Billions Sdn Bhd 26,003,900 27.62 - -

2. Zipco Industrial Finance Pvt. Ltd. - - 26,003,900 2 27.62
3. Indo Wagon Engineering Limited - - 26,003,900 2 27.62
4. Ruia Sons Private Limited - - 26,003,900 2 27.62
5. Pawan Kumar Ruia - - 26,003,900 2 27.62
6. Dr. Lim Jit Chow 19,550,000 1 20.77 2,340,000 3 2.49
7. Vertical Source Sdn Bhd 8,301,800 8.82 - -

Notes:
^ Taking into accounts shares bought back and held as Treasury Shares as at 23 April 2010.
1. Shares are held in own name and nominee accounts.
2. Deemed to have interest by virtue of Section 6A(4) of the Companies Act, 1965, via Bloom Billions Sdn Bhd.
3. Deemed to have interest by virtue of Section 6A(4) of the Companies Act, 1965, via spouse and children.

THIRTY LARGEST SHAREHOLDERS

Name of Shareholder No. of Shares %^

1. Bloom Billions Sdn Bhd 26,003,900 27.62
2. Lim Jit Chow 13,920,500 14.79
3. Vertical Source Sdn Bhd 8,426,800 8.95
4. Lim Hock Guan 4,618,100 4.91
5. Hontar Holdings Sdn Bhd 4,518,000 4.80
6. RHB Capital Nominees (Tempatan) Sdn Bhd 2,650,000 2.82
[Pledged Securities Account for Lim Jit Chow]
7. Tye Wai Pin 2,117,000 2.25
8. HSBC Nominees (Tempatan) Sdn Bhd 2,100,000 2.23
[Pledged Securities Account for Lim Jit Chow]
9. Lim Yit Peng 1,712,000 1.82
10. Mayban Securities Nominees (Tempatan) Sdn Bhd 1,469,500 1.56
[Pacific Trustees Berhad for Iifin Planners Sdn Bhd]
11. Ng Gat Cheng 1,220,000 1.30
12. Lim Fung Tao 1,120,000 1.19
13. Wealth Overseas Pte Ltd 1,018,000 1.08
14. Geoffrey Lim Fung Keong 819,800 0.87
15. Lim Hsiu Hoon 700,000 0.74
16. Zecon Engineering Berhad 689,500 0.73
17. Gan Wee Peng 655,800 0.70
18. RHB Capital Nominees (Tempatan) Sdn Bhd 640,000 0.68
[Pledged Securities Account for Lim Jit Chow]
 Analysis of Shareholdings
124
annual report 2009
(cont’d)
as at 23 April 2010

THIRTY LARGEST SHAREHOLDERS (cont’d)

Name of Shareholder No. of Shares %^

19. Inter-Pacific Equity Nominees (Asing) Sdn Bhd 594,000 0.63
[Kim Eng Securities Pte Ltd for Lim Jit Teng]
20. Mah Seong Huak 550,600 0.58
21. Tye Pei Pin 520,000 0.55
22. Mohd Tahir Bin Haji Abdul Manan 425,000 0.45
23. Lim Jit Teng @ Lim Yit Teng 363,500 0.39
24. Lim Hsiu Yen 342,000 0.36
25. Gan Boon Chuan 332,500 0.35
26. Lim Jit Fu 305,000 0.32
27. Ho Keong Bin 259,700 0.28
28. Chu Too Kiew 252,000 0.27
29. Cimsec Nominees (Tempatan) Sdn Bhd 239,500 0.25
[CIMB Bank for Lim Jit Chow]

30. Lim Poh Lian 230,000 0.24

78,812,700 83.73

^ Taking into account shares bought back and held as Treasury Shares as at 23 April 2010.
 Notice Of Annual General Meeting
125
annual report 2009

NOTICE IS HEREBY GIVEN THAT the Thirty Fifth Annual General Meeting of the shareholders of Industronics Berhad will be held at Hang Tuah
Room, Level 3, Mines Wellness Hotel (formerly known as Palace Beach & Spa), Jalan Dulang, Mines Resort City, 43300 Seri Kembangan,
Selangor Darul Ehsan at 10.00 a.m. on Tuesday, 22 June 2010 for purpose of transacting the following businesses:-

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements for the financial year ended 31 December 2009 together with the
Report of the Directors and Auditors thereon. Resolution 1
2. To approve the payment of Directors’ fees in respect of the financial year ended 31 December 2009. Resolution 2
3. To re-appoint Dr. Lim Jit Chow who retires pursuant to Section 129 of the Companies Act, 1965 and, being eligible, offers
himself for re-appointment. Resolution 3
4. To re-elect the following directors who retire in accordance with Article 97 of the Company’s Articles of Association and,
being eligible, offer themselves for re-election:
4.1 Mr. Gan Boon Chuan Resolution 4
4.2 Mr. Deepak Kumar Ruia Resolution 5
5. To appoint Messrs. Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration. Resolution 6

AS SPECIAL BUSINESS

6. As Special Business to consider and, if thought fit, pass the following resolution :
ORDINARY RESOLUTION - GENERAL AUTHORITY TO ALLOT AND ISSUE SHARES Resolution 7
“THAT, subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the
relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered, pursuant to Section
132D of the Companies Act, 1965, to issue shares in the Company from time to time and upon such terms and conditions
and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to
this resolution does not exceed ten percent (10%) of the total issued share capital of the Company for the time being and
that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

7. To transact any other business for which due notice shall have been given in accordance with the Company’s Articles of
Association and the Companies Act, 1965.

By Order of the Board

NG PEK WAN (BC No. N867)

LEE LAI HUAT (BC No. L787)
Secretaries

Selangor Darul Ehsan

27 May 2010
 Notice Of Annual General Meeting
126
annual report 2009
(cont’d)

1. NOTES ON APPOINTMENT OF PROXY

a. A member entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member
of the Company. Where a member appoints two or more proxies the appointment shall be invalid unless he specifies the proportions of his holding to be
represented by each proxy. The instrument appointing a proxy must be deposited at the Registered Office of the Company at No. 9 Jalan Taming 3, Taman
Tanming Jaya, 43300 Seri Kembangan, Selangor D.E. not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

b. In the case of a corporation, the Form of Proxy must be either under its common seal or signed by a duly authorised attorney.

2. EXPLANATORY NOTES ON SPECIAL BUSINESS

a. Resolution 7
The proposed Ordinary Resolution 7, if passed, will give the Directors of the Company, from the date of the above Annual General Meeting, authority to
allot and issue ordinary shares from the unissued capital of the Company up to an amount not exceeding in total 10% of the issued capital of the Company
for the time being, for such purposes as the Directors consider would be in the interest of the Company. This authority will, unless revoked or varied by
the Company at a general meeting, expire at the next Annual General Meeting.

The general mandate sought for issuing securities is a renewal to a general mandate sought in the preceding year. The previous mandate sought was not
utilized during the financial year ended 31 December 2009 and thus, no proceeds were raised.

3. STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING

The statement accompanying the notice of the 35th Annual General Meeting is set out in following page of this Annual Report 2009.
 Statement Accompanying The Notice Of
127
annual report 2009

Annual General Meeting

1. Directors Standing for Re-Appointment/Re-Election

The directors who are offering themselves for re-appointment / re-election at the 35th Annual General Meeting (“AGM”) of the
Company are:

1.1 In accordance to Section 129(6) of the Companies Act, 1965:

(a) Dr. Lim Jit Chow

1.2 In accordance to Article 97 of the Company’s Articles of Association:

(a) Mr. Gan Boon Chuan ; and
(b) Mr. Deepak Kumar Ruia.

The details of the directors seeking re-appointment / re-election are set out in their respective profile that appear in the Board
of Directors’ Profile on Pages 36 to 39. Their interests in the securities of the Company, if any, are disclosed in the Analysis of
Shareholdings on Page 122.

2. Details of attendance of Directors at Board Meeting

A total of seven (7) Board meetings were held in the financial year ended 31 December 2009.

The details of attendance of Directors are set out in the Directors’ Profile appearing on Page 39 of this Annual Report.

3. Renewal of General Authority to Allot and Issue Shares

The Company has not issued any new shares pursuant to Section 132D of the Companies Act, 1965, under the general authority
which was approved at the 34th AGM held on 24 June 2009 and which will be lapsed at the conclusion of the 35th AGM scheduled
on 22 June 2010. A renewal of this authority is being sought at the 35th AGM under proposed Resolution 7.
 PROXY FORM
(23699-X)

No. of shares held

I / We (Please Use Block Letters)

of
being a member/members of Industronics Berhad hereby appoint
of
or failing him
of
as my/our proxy to vote for me/us on my/our behalf at the Thirty Fifth Annual General Meeting of the Company to be held at Hang
Tuah Room, Level 3, Mines Wellness Hotel (formerly known as Palace Beach & Spa), Jalan Dulang, Mines Resort City, 43300 Seri
Kembangan, Selangor Darul Ehsan at 10.00 a.m. on Tuesday, 22 June 2010 and at any adjournment there of.

My/our proxy is to vote as indicated as below:-

RESOLUTIONS FOR AGAINST

1. Resolution 1
2. Resolution 2
3. Resolution 3
4. Resolution 4
5. Resolution 5
6. Resolution 6
7. Resolution 7

Please indicate with `X’ in the appropriate spaces how you wish your votes to be cast. If you do not indicate how you wish your
proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.

Signed this day of 2010

Signature of Shareholder

Notes : -
1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a
member of the Company. Where a member appoints two or more proxies, the appointment shall be invalid unless he specifies the proportions of his
holding to be represented by each proxy. The instrument appointing a proxy must be deposited at the Registered Office of the Company at No. 9, Jalan
Taming 3, Taman Tanming Jaya, 43300 Seri Kembangan, Selangor Darul Ehsan not less than 48 hours before the time set for holding the meeting or
any adjournment thereof.

2. In the case of a corporation, the Form of Proxy must be either under seal or signed by a duly authorised attorney.
fold this flap for sealing

Affix
Stamp

Company Secretary
INDUSTRONICS BERHAD
No. 9, Jalan Taming 3, Taman Tanming Jaya
43300 Seri Kembangan
Selangor Darul Ehsan
Malaysia

2nd fold here

1st fold here

 (23699-X)
(Incorporated in Malaysia)

ADDENDUM TO THE NOTICE OF 35TH ANNUAL GENERAL MEETING

To all Shareholders of Industronics Berhad,

Reference is made to the Notice of 35th Annual General Meeting (“AGM”) of Industronics Berhad (“the Company”) which was dispatched to the
Shareholders of the Company on 27 May 2010.

We wish to inform that an additional paragraph has been inserted as 3rd paragraph under Note 2 (Explanatory Notes on Special Business) for
Resolution 7 in the Notice of 35th AGM, as follows:-

“The authority will provide flexibility to the Company for any possible fund raising activities, including but not limited to placing of
shares, for purpose of funding future investment project(s), working capital and/or acquisition.”

BY ORDER OF THE BOARD

NG PEK WAN (BC No. N867)

LEE LAI HUAT (BC No. L787)
Secretaries

Selangor D.E.
2 June 2010