annual report 2009 - metrod (733kb).pdfa) y.bhg. datuk abu hassan kendut (resolution5) b) en....

METROD (MALAYSIA) BERHAD(66954 H)

Metrod

AnnualReport2009

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METROD (MALAYSIA) BERHAD (66954 H)

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C o r p o r a t e I n f o r m a t i o n

B O A R D O F D I R E C T O R S

The Lord Bagri CBE (Chairman)

The Hon. Apurv Bagri (Vice Chairman)

Y.Bhg. Dato’ Azlan Hashim

Y.Bhg. Dato’ Gumuri bin Hussain

Y.Bhg. Datuk Abu Hassan Kendut

Ash’ari bin Ayub

Pratik Basu

S E C R E T A R Y

Yeap Kok Leong (MAICSA No: 0862549)

A U D I T O R S

PricewaterhouseCoopers, Chartered Accountants

P R I N C I P A L B A N K E R S

RHB Bank BerhadHSBC Bank Malaysia BerhadStandard Chartered Bank Malaysia BerhadHong Leong Bank BerhadCIMB Bank BerhadBank Austria AGBank of ChinaIndustrial & Commerical Bank of ChinaAgriculture Bank of ChinaBank of BarodaHSBC Bank USA, N.A.Wachovia BankCapital City Bank

R E G I S T R A R S

TRICOR INVESTOR SERVICES SDN BHDLevel 17, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel: (03) 2264 3883Fax: (03) 2282 1886E-mail: [email protected]

R E G I S T E R E D O F F I C E

Level 18, The Gardens North TowerMid Valley CityLingkaran Syed Putra59200 Kuala LumpurTel: (03) 2264 8888Fax: (03) 2282 2733E-mail: [email protected]

W E B S I T E

www.metrod.com

S T O C K E X C H A N G E L I S T I N G

Bursa Malaysia Securities Berhad, Main Market


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NOTICE IS HEREBY GIVEN that the Twenty-Ninth Annual General Meeting of the Company will be held atCobalt 7, Level 1, The Ritz-Carlton, 168 Jalan Imbi, 55100 Kuala Lumpur on Thursday, 27 May 2010 at2.00 p.m. for the following purposes:

N o t i c e O f A n n u a l G e n e r a l M e e t i n g

A G E N D A

1. To receive the Statutory Financial Statements for thefinancial year ended 31 December 2009 and theReports of the Directors and Auditors thereon.

(Resolution 1)

2. To approve the First and Final Dividend of 12 senper share (tax exempt) for the financial year ended31 December 2009. (Resolution 2)

3. To approve payment of Directors' Fees ofRM192,000 for the financial year ended31 December 2009. (Resolution 3)

4. To re-elect The Hon. Apurv Bagri (Apurv Bagri)retiring in accordance with Article 65 of theCompany's Articles of Association and being eligibleoffers himself for re-election. (Resolution 4)

5. To re-elect the following Directors retiring inaccordance with Article 67 of the Company'sArticles of Association, and being eligible haveoffered themselves for re-election:

a) Y.Bhg. Datuk Abu Hassan Kendut(Resolution 5)

b) En. Ash’ari bin Ayub (Resolution 6)

6. To re-appoint Messrs PricewaterhouseCoopers asAuditors of the Company and to authorise theDirectors to fix their remuneration. (Resolution 7)

A S S P E C I A L B U S I N E S S

To consider and if thought fit, to pass the following asOrdinary Resolutions:

7. Re-appointment of The Lord Bagri CBE as aDirector pursuant to Section 129(6) of theCompanies Act, 1965

“THAT The Lord Bagri CBE, being over the age of70 years and retiring in accordance with Section129(6) of the Companies Act, 1965 be and is herebyre-appointed as a Director of the Company to holdoffice until the conclusion of the next AnnualGeneral Meeting of the Company.” (Resolution 8)

8. Authority to Issue Shares pursuant to Section132D of the Companies Act, 1965

“THAT subject always to the Act and the approvalsof the regulatory authorities, the Directors be and arehereby empowered pursuant to Section 132D of theCompanies Act, 1965 to issue shares in theCompany, at any time and upon such terms andconditions and for such purposes as the Directorsmay, in their absolute discretion, deem fit, providedthat the aggregate number of shares issued pursuantto this resolution does not exceed 10% of the issuedcapital of the Company for the time being and thatthe Directors be and are also empowered to obtainthe approval for the listing of and quotation for theadditional shares so issued on the Bursa MalaysiaSecurities Berhad and that such authority shallcontinue in force until the conclusion of the nextAnnual General Meeting of the Company.”

(Resolution 9)

9. Proposed Renewal of Shareholders' Mandate forRecurrent Related Party Transactions of aRevenue or Trading Nature as set out undersection 2.5.1(1) of the Circular to shareholdersdated 3 May 2010

“THAT the Mandate granted by the Shareholders ofthe Company on 28 May 2009 pursuant toparagraph 10.09 of the Listing Requirements ofBursa Malaysia Securities Berhad, authorising theCompany and/or its subsidiaries to enter into theRecurrent Related Party Transactions of a Revenue orTrading Nature (“RRPT”) as set out in section 2.4(a)of the Circular to shareholders dated 30 April 2009with the related parties mentioned therein which arenecessary for the Company and/or its subsidiaries'day-to-day operations, be and is hereby renewed.

THAT the Company and/or its subsidiaries is herebyauthorised to enter into the recurrent transactionswith the related parties mentioned therein providedthat:

(a) the transactions are in the ordinary course ofbusiness and on normal commercial termswhich are not more favourable to the relatedparties than those generally available to thepublic and are not to the detriment of theminority shareholders of the Company; and


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(b) disclosure of the breakdown of the aggregatevalue of the transactions conducted during afinancial year including the type of the RRPTmade, the names of the related parties involvedin each type of the RRPT made and theirrelationship with the Company will bedisclosed in the Annual Report for the saidfinancial year.

THAT the authority conferred by such renewedmandate shall continue to be in force until:

(a) the conclusion of the next Annual GeneralMeeting (“AGM”) of the Company followingthe forthcoming AGM at which the ProposedRenewal of the RRPT Mandate is approved, atwhich time it will lapse, unless by a resolutionpassed at the next AGM, the mandate is againrenewed;

(b) the expiration of the period within which thenext AGM of the Company after theforthcoming AGM is required to be heldpursuant to Section 143(1) of the CompaniesAct, 1965 (“the Act”) (but must not extend tosuch extension as may be allowed pursuant toSection 143(2) of the Act);

or

(c) revoked or varied by resolution passed by theshareholders in a general meeting,

whichever is earlier;

THAT the Directors of the Company be and arehereby authorised to complete and do all such actsand things as they may consider expedient ornecessary to give effect to the proposed renewal ofthe RRPT mandate.

AND THAT, the estimates given of the RRPTspecified in section 2.5.1(1) of the Circular toshareholders dated 3 May 2010 (“Circular”) beingprovisional in nature, the Directors of the Companyand/or any of them be and are hereby authorised toagree to the actual amount or amounts thereofprovided always that such amount or amountscomply with the procedures set out in section 2.7 ofthe Circular.” (Resolution 10)


“THAT the mandate granted by the shareholders ofthe Company on 28 May 2009 pursuant toparagraph 10.09 of the Listing Requirements ofBursa Malaysia Securities Berhad, authorising theCompany and/or its subsidiaries to enter into theRecurrent Related Party Transactions of a Revenue orTrading Nature (“RRPT”) as set out in section2.4(b) of the Circular to shareholders dated 30 April2009 with the related parties mentioned thereinwhich are necessary for the Company and/or itssubsidiaries' day-to-day operations, be and is herebyrenewed.





(a) the conclusion of the next Annual GeneralMeeting (“AGM”) of the Company followingthe forthcoming AGM at which the ProposedRRPT Mandate is approved, at which time itwill lapse, unless by a resolution passed at thenext AGM, the mandate is again renewed;


or






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“THAT the mandate granted by the shareholders ofthe Company on 28 May 2009 pursuant toparagraph 10.09 of the Listing Requirements ofBursa Malaysia Securities Berhad, authorising theCompany and/or its subsidiaries to enter into theRecurrent Related Party Transactions of a Revenue orTrading Nature (“RRPT”) as set out in section 2.4(c)of the Circular to shareholders dated 30 April 2009with the related parties mentioned therein which arenecessary for the Company and/or its subsidiaries'day-to-day operations, be and is hereby renewed.







or






“THAT the mandate granted by the shareholders ofthe Company on 28 May 2009 pursuant toparagraph 10.09 of the Listing Requirements of theBursa Malaysia Securities Berhad, authorising theCompany and/or its subsidiaries to enter into theRecurrent Related Party Transactions of a Revenue orTrading Nature (“RRPT”) as set out in section2.4(d) of the Circular to shareholders dated 30 April2009 with the related parties mentioned thereinwhich are necessary for the Company and/or itssubsidiaries' day-to-day operations, be and is herebyrenewed.







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or





To consider and if thought fit, to pass the followingas Special Resolution:

13. Proposed Amendments to the Articles ofAssociation of the Company

THAT the Articles of Association of the Companybe amended as follows:

THAT Article 100 of the Articles of Association beamended by the inclusion of the sentence: “Foravoidance of doubt, the Company shall be entitled tosend the copy of every balance sheet, profit and lossaccount (including every document required by law tobe annexed thereto) and the auditors’ report to themembers via CD-ROM or other electronic means.” atthe end of the existing article.

100. Accounts To Be Kept

The Directors shall cause proper accounting andother records to be kept and shall distribute copiesof balance sheets and other documents as requiredby the Act and shall from time to time determinewhether and to what extent and at what timesand places and under what conditions orregulations the accounting and other records of theCompany or any of them shall be opened to the

inspection of Members not being Directors and noMember (not being a director) shall have anyrights of inspecting any account or book or paperof the Company except as conferred by statute orauthorised by the Directors or by the Company ingeneral meeting. The interval between the close ofa financial year of the Company and the issue ofannual audited accounts, the directors’ report andauditors’ report shall not exceed 4 months. A copyof each such documents shall not less than fourteen(14) days before the date of the meeting be sent toevery member of the Company under theprovisions of the Act or of these Articles. Therequisite number of copies of each document asmay be required by the Stock Exchange shall at thesame time be likewise sent to the Exchange. Foravoidance of doubt, the Company shall beentitled to send the copy of every balancesheet, profit and loss account (includingevery document required by law to beannexed thereto) and the auditors’ report tothe members via CD-ROM or otherelectronic means.

THAT Article 108 of the Articles of Association bedeleted in its entirety and substituted thereof withthe following new article:

108. Payment By Post And Discharge

Any dividend, interest, or other monies payablein cash in respect of shares may be paid bycheque or warrant sent through the post and tothe last registered address of the member orperson entitled thereto or by direct transfer orsuch other mode of electronic means (subject tothe provision of the Act, the CentralDepositories Act and the Rules, the ListingRequirements and/or other regulatoryauthorities) to the bank account of the holderwhose name appear in the Register or Record ofDepositors respectively. Every such cheque orwarrant or payment by direct transfer shall bemade payable to the order of the person towhom it is sent or to such person as the holderor person or persons entitled to the share inconsequence of the death or bankruptcy of theholder may direct and the payment of thecheque or warrant by such electronic meansshall be a good discharge to the Company ofthe dividend to which it relates, regardless thatit may subsequently appear that the cheque orwarrant has been stolen or that endorsementthereon has been forged or of any discrepancygiven by the member in the details of the bankaccount(s). Every such cheque or warrant shallbe sent at the risk of the person entitled to themoney represented thereby.


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(old article)108. Payment By Post And Discharge

Any dividend, interest or other money payable incash in respect of shares may be paid by cheque orwarrant sent through the post directed to theregistered address of the member. Every suchcheque or warrant shall be made payable to theorder of the person to whom it is sent.

(Resolution 14)

NOTICE IS ALSO HEREBY GIVEN THAT subject tothe approval of Members at the Twenty-Ninth AnnualGeneral Meeting of the Company to be held onThursday, 27 May 2010, the first and final dividend of12 sen per share (tax exempt), for the financial year ended31 December 2009 will be paid on 16 July 2010 toDepositors whose name appear in the Record ofDepositors on 30 June 2010.

A depositor shall qualify for entitlement only in respect of:

a) Securities transferred into the Depositor's SecuritiesAccount before 4.00 p.m. on 30 June 2010 inrespect of ordinary transfer; and

b) Securities bought on the Bursa Malaysia SecuritiesBerhad on a cum entitlement basis according to therules of the Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

YEAP KOK LEONGCompany Secretary

Kuala Lumpur3 May 2010

Notes:

i) A member of the Company entitled to attend and vote at the meetingis entitled to appoint not more than two (2) proxies to attend and votein his stead. A proxy may but need not be a member of the Companyand the provisions of Section 149(1)(b) of the Companies Act, 1965shall not apply to the Company.

ii) The instrument appointing a proxy shall be in writing under thehand of the appointor or of his attorney duly authorised in writing orif the appointor is a Corporation either under seal or under the handof an officer or attorney duly authorised.

iii) Where a member of the Company is an authorised nominee as definedunder the Securities Industry (Central Depositories) Act 1991, it mayappoint at least one (1) proxy in respect of each securities account itholds with ordinary shares of the Company standing to the credit ofthe said securities account.

iv) An authorised nominee with more than one (1) securities accountmust submit separate instrument of proxy for each securities account.

v) The instrument appointing a proxy and the power of attorney or otherauthority, if any, under which it is signed or a notarially certified copyof that power or authority shall be deposited at the registered office ofthe Company at Level 18, The Gardens North Tower, Mid ValleyCity, Lingkaran Syed Putra, 59200 Kuala Lumpur not less thanforty-eight (48) hours before the time for holding the meeting oradjourned meeting at which the person named in the instrumentproposes to vote, or in the case of a poll, not less than twenty-four (24)hours before the time appointed for the taking of the poll, and indefault the instrument of proxy shall not be treated as valid.

vi) Explanatory Notes on Special Business:

Ordinary Resolution 8 – Section 129(6) of the Companies Act, 1965

Pursuant to Section 129(6) of the Companies Act, 1965, the proposedOrdinary Resolution 8 is to seek Shareholders' approval on there-appointment of a Director who is over the age of seventy years.

Ordinary Resolution 9 – Authority to Issue Shares pursuant to Section132D of the Companies Act, 1965

The proposed Ordinary Resolution No. 9, if passed, will avoid anydelay and cost involved in convening a general meeting and willempower the Directors to allot and issue shares in the Company up toan amount not exceeding in aggregate 10% of the issued share capitalof the Company for the time being. This authority unless revoked orvaried at a general meeting will expire at the next Annual GeneralMeeting of the Company. The Director did not allot nor issue anyshares under the same mandate granted last year. Nevertheless arenewal for the said mandate is sought to avoid any delay and costinvolved in convening such a general meeting. The Directors wouldutilize the proceeds raised from this mandate for working capital orsuch other applications they may in their absolute discretion deem fit.

Ordinary Resolutions 10, 11, 12 & 13 – Recurrent Related PartyTransactions

For further information, please refer to the Circular to Shareholdersdated 3 May 2010 accompanying the Company's Annual Report forthe year ended 31 December 2009.

Special Resolution 14 – Proposed Amendments to the Articles ofAssociation of the Company

The proposed special resolution to amend Articles 100 and 108 of theCompany’s Articles of Association is to facilitate the future payments ofdividends through electronic means and to allow the Company, shouldit be found expedient to do so, to send to the members the Company’sAnnual Report in CD-ROM format.

STATEMENT ACCOMPANYING NOTICE OFANNUAL GENERAL MEETING

There is no person seeking election as Director of theCompany at this Annual General Meeting.


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The Lord Bagri CBE (Rajkumar Bagri)Non-Independent, Non-Executive Director

The Lord Bagri is 79 years old and of British nationalitywas appointed to the Board of Metrod on 28 October1981. He is Chairman of the Metdist Group ofCompanies. The Group has extensive interests in non-ferrous metals trade and industry.

Lord Bagri was the first person of non-British origin to beelected as Chairman of the London Metal Exchange, thelargest metals futures Exchange in the world. He servedas Chairman for ten years up to 2002 and Hon. Presidentfor 4 years until 2006.

He was named Copper Man Of The Year in 2002 by theCopper Club in recognition of his life-long service to theinternational copper community.

Lord Bagri was made a Life Peer in 1997 and waspreviously awarded the Commander of the Order of theBritish Empire (“CBE”) in 1995 for services to the metalsmanufacturing industry.

Lord Bagri is actively involved in a number of charitableand cultural organisations.

He was awarded an Honorary Doctorates from CityUniversity, London and Nottingham University. He isalso an Honorary Fellow of London Business School.

D i r e c t o r s ’ P r o f i l e

The Hon. Apurv Bagri (Apurv Bagri)Non-Independent, Non-Executive Director

The Hon. Apurv Bagri who is 50 years old and of Indiannationality was appointed to the Board of Metrod on28 October 1981.

The Hon. Apurv Bagri is the Managing Director of theMetdist Group of Companies. The Group is involved ininternational non-ferrous metals trade and industry.

He is a past Chairman and current Board member of theInternational Wrought Copper Council that representsthe global copper fabricating industry.

He is an honours graduate from Cass Business School inLondon and was conferred with an Honor Degree ofDoctor of Science from the City University, London. Heis also an Alumnus of Wharton Business School.

He is Deputy Chairman of the Governing Body ofLondon Business School and is Pro Chancellor and Chairof Council of the City University, London.

He is a Member of the Board of Dubai Financial ServicesAuthority (DFSA), Chairman of The Royal Parks Boardand a Trustee of The Royal Parks Foundation, aCommissioner of the Crown Estate Paving Commission,a Trustee of Asia House and a Member of the AdvisoryBoard of the UK India Business Council.

The Hon. Apurv Bagri is also a Board member andformer Chairman of TiE Inc., a global not-for-profitorganisation operating in over 50 cities which has amembership of over 15,000. TiE is the world’s largestorganisation dedicated to the promotion ofentrepreneurship and wealth creation.


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Y.Bhg. Dato’ Azlan HashimIndependent, Non-Executive Director

Dato’ Azlan Hashim who is 68 years old and of Malaysiannationality was appointed to the Board of Metrod on24 May 1991. He also sits on the Board AuditCommittee of Metrod. Dato’ Azlan is a Fellow of theInstitute of Chartered Accountants (Ireland), EconomicDevelopment Institute (World Bank, Washington) andInstitute of Bankers Malaysia. Dato’ Azlan Hashim, aqualified Chartered Accountant, served the MalayanRailways from 1966 to 1971 and was its ChiefAccountant for two years. In 1972, he became a partnerof a public accounting firm, Azman Wong Salleh & Co.and was a Senior Partner of the firm prior to joining theBoard of AMDB Berhad in 1982 to July 2007.

He is the Deputy Chairman of AMMB Holdings Berhadand Chairman of AmInternational (L) Limited and PTAmCapital Indonesia. He is currently the Non-ExecutiveDirector of AmFraser Securities Pte Ltd & AmFraserInternational Pte Ltd. He also sits on the Boards ofKumpulan Perangsang Selangor Berhad, KumpulanHartanah Selangor Berhad, Global Carriers Berhad,Paramount Corporation Berhad, Sapura IndustrialBerhad, Kesas Holdings Berhad and Syarikat Permodalan& Perusahaan Selangor Berhad. He is also the ExecutiveChairman of Global Carriers Berhad.

Y.Bhg. Dato’ Gumuri bin HussainNon-Independent, Non-Executive Director

Dato’ Gumuri, aged 63, was appointed to Metrod’s Boardon 29 November 2006. Dato’ Gumuri was appointed asthe Chairman of SME Bank on 1 October 2005 and wasthe Managing Director and Chief Executive Officer ofPenerbangan Malaysia Berhad from August 2002 toAugust 2004. Prior to this, he was a Senior Partner andDeputy Chairman of Governance Board of

PricewaterhouseCoopers Malaysia. Dato’ Gumuri alsosits on the Boards of Kurnia Setia Berhad, and MediaPrima Berhad and KUB Malaysia Berhad. He had alsoserved as Non-Executive Director of Bank Industri &Teknologi Malaysia Berhad, Malaysian Airline SystemBerhad and Sabah Bank Berhad. He is a Fellow of theInstitute of Chartered Accountants in England and Wales,a member of MIA and MICPA.

Y.Bhg. Datuk Abu Hassan KendutIndependent Non-Executive Director

Datuk Abu Hassan who is 67 years old and of Malaysiannationality was appointed to the Board of Directors andBoard Audit Committee of Metrod on 28 December2001. He is a member of MICPA and MIA. Currently,he is a Director of Manulife Holdings Malaysia BerhadGroup, Standard Chartered Bank Malaysia BerhadGroup, I-Berhad, and several other private limitedcompanies. He was a past President of MICPA and theAsean Federation of Accountants and was formerly theSenior Partner of Coopers & Lybrand (currently knownas PricewaterhouseCoopers).

Ash’ari bin AyubIndependent Non-Executive Director

En. Ash’ari bin Ayub who is 67 years old and ofMalaysian nationality was appointed to the Board ofDirectors and Audit Committee of Metrod on28 December 2001. He is a member of MIA andMalaysian Association of Certified Public Accountants.He was previously a Senior Partner in one of the leadingaudit firm from 1974 to 1994. En. Ash’ari also holdsnon-executive directorships in AV Ventures CorporationBerhad, Ranhill Utilities Sdn Bhd and BCB Berhad.


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Pratik BasuManaging Director

Mr Pratik Basu, who is 65 years old and of Indiannationality is a member of the Institute of CharteredAccountants, India since 1967 and also of the Institute ofCost and Management Accountants, London since 1969.He started his career at Price Waterhouse and Co in 1964before moving over as the Group Finance Manager withAndrew Yule & Co Ltd in 1967. In 1969, he joined ICI(India) Ltd as Corporate Finance Manager and thereafterheld several responsibilities in finance, planning, supplymanagement, human resources, IT and managementservice functions during 14 years. In 1983, he joinedTVS-Suzuki Ltd as General Manager, Finance andAdministration to set up the first Japanese venture in theIndian automobile industry. He served ABB Asea BrownBoveri Ltd for 12 years as the Corporate Vice-Presidentresponsible for Power Transmission and Generationsegments and Corporate Finance during 1986 to 1997.Mr. Basu was trained in International Management at theSwedish Institute of Management, Stockholm. He joinedMetrod (Malaysia) Berhad in 1997 as the ManagingDirector and Chief Executive Officer.

Family RelationshipNone of the Directors has any family relationship withother Directors except for The Lord Bagri CBE who is thefather to The Hon. Apurv Bagri.

Conflict of interestThe Company and/or its subsidiaries have entered intorecurrent related party transactions of a revenue or tradingnature with Metdist Limited and Birlasoft (India) Limited(as disclosed in Corporate Governance Statement) inwhich the Directors of the Company, namely The LordBagri CBE and The Hon. Apurv Bagri are deemed tohave an interest. By virtue of their deemed interest, theyare deemed to be interested in the recurrent related partytransactions.

The Company and/or its subsidiaries have also enteredinto recurrent related party transactions of a revenue ortrading nature with MetTube Sdn Bhd in which PratikBasu is a common Director. MetTube Sdn Bhd, has amajor shareholding of 11.67% in the Company and iswholly owned by MetTube Malaysia Holdings S.A. whichis in-turn wholly owned by Metdist S.A. Metdist S.A. hasmajor shareholding of 42.14% in the Company.

The Company and/or its subsidiaries have also enteredinto recurrent related party transaction of a revenue ortrading nature with AM SGB Sdn Bhd in which Y.Bhg.Dato’ Azlan Hashim, a director of the Company andMetrod (OFHC) Sdn Bhd is also the director of AM SGBSdn Bhd.

Save for the above, none of the Directors have anyconflict of interest with the Company.

Securities holdings in the Company and its subsidiariesY.Bhg. Dato’ Azlan Hashim is deemed interested in2,950,000 (4.92%) shares in the Company by virtue ofhis shareholding of 99.99% and his wife’s shareholding of0.01% in Infinitive Growth Sdn Bhd, a shareholder of theCompany. His wife’s share was transferred to her fromDato’ Azlan’s sister on 5 April 2010.

Save for the above, none of the Directors hold any sharesin the Company and its subsidiaries.

Convictions for offencesNone of the Directors has been convicted for any offencewithin the past (10) years.


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5 Y e a r G r o u p F i n a n c i a l H i g h l i g h t s

2005 2006 2007 2008 2009

RM’000

Revenue 1,382,377 1,999,788 2,018,780 1,996,514 1,553,049

Profit After Tax 22,031 31,024 36,514 64,936 34,076

Shareholders' Funds (Net Assets) 169,117 194,134 225,814 285,896 313,806

Issued and Paid-up Capital 60,000 60,000 60,000 60,000 60,000

Net Assets per Share (RM) 2.82 3.24 3.76 4.76 5.23

Earnings per Share (Sen) 36.7 51.7 60.9 108.2 56.8

Gross Dividend rate (%) ( tax exempt) 11.0 12.0 12.0 12.0 12.0

Profit After Tax RM’000Shareholders’ Funds(Net Assets) RM’000Revenue RM’000

Earnings Per Share senDividend Per Share(sen) (tax exempt)Net Assets Per Share RM

2008 2009200720062005 2008 2009200720062005

169,

117

194,

134 225,

814

285,

896

313,806

2008 2009200720062005

22,0

31

31,0

24 36,5

14

64,9

36

34,076

2008 2009200720062005

2.82

3.24

3.76

4.76

2008 2009200720062005

11.0

12.0

12.0

12.0

2008 2009200720062005

36.7

51.7

60.9

108.

2

5.23

12.0

56.8

1,38

2,37

7

1,99

9,78

8

2,01

8,78

0

1,99

6,51

4

1,553,049


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O V E R V I E W

I am pleased to report that despite difficult business

conditions during the year and the costs associated with

newly commissioned green-field projects, the Group

performed well during 2009. Pre-tax profit for 2009 was

marginally lower by 4.4% at RM39.9 million as

compared to RM41.7 million for 2008. Net profit after

tax amounted to RM34.1 million. Group turnover of

RM1,553.0 million was lower than the previous year

turnover of RM1,996.5 million, influenced by relatively

lower copper prices during early 2009.

The Group achieved another year of good performance

across all its operating units. ASTA in Austria performed

well and in China capacity utilization steadily improved.

Malaysian operations performed satisfactorily under

challenging market conditions. Greenfield projects in

USA and India started production during the year though

both the plants remain under gestation period.

The Group’s sustained performance reflects the steps

taken to make strategic investments, enhance focus on

operating efficiencies to show demonstrable results and

optimize the product-mix. High copper prices during the

second half of 2009 together with greater volatility

presented major challenges in managing risks apart from

higher working capital and financing costs.

O n b e h a l f o f t h e B o a r d o f D i r e c t o r s , I

a m p l e a s e d t o p r e s e n t t h e A n n u a l

R e p o r t a n d t h e a u d i t e d F i n a n c i a l

S t a t e m e n t s o f M e t r o d ( M a l a y s i a )

B e r h a d a n d G r o u p f o r t h e f i n a n c i a l

y e a r e n d e d 3 1 D e c e m b e r 2 0 0 9 .

C h a i r m a n ’ s S t a t e m e n t

D I V I D E N D

Your Board proposes to maintain the dividend at 12% for

the year ended 31 December 2009, subject to the

approval of shareholders in the forthcoming Annual

General Meeting on 27 May 2010. The dividend is tax-

exempt in the hands of shareholders and upon approval

will be paid on 16 July 2010.

The Group plans to continue with the policy of

maintaining a sound balance sheet to support investments

in new opportunities while maintaining a stable dividend

record.

P R O S P E C T S

While the domestic and the world economy showed signs

of recovery in the fourth quarter 2009, the durability and

sustainability of the recovery remains uncertain. This lack

of visibility is likely to have a wide ranging adverse effect

on the business of the Group in different locations.


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The Malaysian economy seems to be recovering as a result

of stimulus spending. Notwithstanding this, demand for

the Group’s products remains weak both domestically as

well as in the region. Implementation of AFTA from 1st

January 2010 has eliminated the duty protection against

imports from Asean countries increasing competition in

an already oversupplied market. Free Trade Agreements

with China and Korea have further increased competition

and eroded margins.

The demand for the Group’s products from the power

transmission sector is weakening. Although the order

book of power transformer makers is not as strong as at

pre-financial crisis levels, it is now said to be stabilizing

and in some cases even improving as compared to 2009.

This would help in improving the demand for the

Group’s products in future. The intake of new orders at

ASTA’s production facilities in Austria have shown some

weakness. China has cut back new investments in the

power sector and ASTA’s new plant in China is facing

tough competition from local companies. ASTA’s green-

field projects in USA and India have commenced

production and as envisaged earlier will continue under

gestation period.

Copper prices remain extremely volatile and have resumed

their upward movement in the later half of 2009. The

Group has a policy of not exposing itself to copper price

fluctuations. However, the sharp variations in copper

prices increases credit and pricing risks on copper booked

forward by customers.

The Group expects business conditions during 2010 to be

impacted by the reduction in activity levels in some key

markets.

The Group’s strategy is to remain focused, pursue viable

opportunities for growth and to make best efforts to meet

the difficult market conditions in which it operates.

B O A R D C H A N G E S

On behalf of the Board, I wish to inform that The Lady

Bagri, Non-Executive Director has retired from the Board

on 28 May 2009. I take this opportunity on behalf of the

entire Board to thank The Lady Bagri for her

contribution during her term as a director over 24 years.

A C K N O W L E D G E M E N T

Our success would not have been possible without the

support of our valued customers, business partners and

associates, bankers and the relevant government

authorities. We sincerely thank them and look forward to

their continued support in the coming years.

The overall excellent performance of the Group was due

to the concerted effort, dedication and contribution of the

entire management team especially in the context of the

challenging business environment during 2009. I take

this opportunity to thank them all, as well as my fellow

directors, and all members of the Metrod family for their

valuable contribution.

On behalf of the Board of Directors, I would also like to

express our sincere thanks to our shareholders for their

continued support to the Company.

THE LORD BAGRI CBE

Chairman


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C o r p o r a t e G o v e r n a n c e S t a t e m e n t

I N T R O D U C T I O N

The Malaysian Code on Corporate Governance wasformalised in March 2000 which sets out the broadprinciples and best practices for public listed companies.It has recently been revised on 1 October 2007.

The Board of Directors is committed to ensure that thehighest standards of Corporate Governance are practicedthroughout the Group in discharging its responsibilitieswith the objective of safeguarding shareholders’investment and ultimately enhancing shareholders’ value.To this end, the Board fully supports good CorporateGovernance.

T H E B O A R D O F D I R E C T O R S

An effective Board leads and controls the Group. TheBoard of Metrod takes full responsibility in ensuring theeffective performance of the Company and Group in allareas of operation, finance, business development,research and development, administration as well ascustomer and shareholders’ satisfaction. The Boardrecognises that it has overall responsibility for CorporateGovernance and strategic direction and has adopted allthe six specific responsibilities as listed in the Code.

(a) Composition

Board of Directors of Metrod is made up of seven(7) members comprising a Non-Independent Non-Executive Chairman, two (2) Non-IndependentNon-Executive Directors, three (3) IndependentNon-Executive Directors and a Managing Director.The number of Independent Directors representsone-third of total Directors on the Board satisfyingthe Requirement of the Code for Independent Non-Executive Directors. The Board is satisfied with theBoard’s composition in respect of minorityrepresentation, as well as with regards torepresentation of the largest Shareholder and otherShareholders.

The current Directors with their diverse wealth ofskills, experience and knowledge of finance, bankingand general management contribute significantlytowards the objectives and advancement of theCompany.

Y.Bhg. Dato’ Azlan Hashim (Independent Non-Executive Director and Chairman of AuditCommittee) serves as Senior Independent Non-Executive Director of the Board to whom anyconcerns may be conveyed.

The roles of the Chairman and Managing Directorare separate with clear responsibilities dividedbetween them to ensure balance of power andauthority. Formal position descriptions for theChairman and the Managing Director outliningtheir respective roles and responsibilities are in place.

The Managing Director implements the policies anddecisions of the Board, overseeing both operationsand business development. Independent Directorstogether with other Non-Executive Directors alsocontribute significantly in the areas of policy,performance monitoring and allocation of resourcesand enhancements of control and governance.

The Company provides an orientation andeducation program for new recruits to the Board.

The profile of each of the Director is set out onpages 8 to 10 of this Annual Report. All Directorshave served for the full year.


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(b) Board Meetings

The Board meets ordinarily four times per financial year, with additional meetings being convened as necessary.

During the financial year ended 31 December 2009, five (5) Board Meetings were held. During the meetings, theBoard reviewed the Group’s finance and business performance, draft announcements on the quarterly results, majorinvestments decisions and other matters raised in relation to the business of the Group.

Details of the attendance of each Director are as follows:

Director Status No. of Meetings Total No. ofAttended Board Meetings

The Lord Bagri CBE Non-Independent, 5 5Non-Executive Director& Chairman

The Hon. Apurv Bagri Non-Independent, 5 5Non-Executive Director& Vice-Chairman

The Lady Bagri Non-Independent, 1 1(Retired since 28 May 2009) Non-Executive Director

Y.Bhg. Dato’ Azlan Hashim Independent, 5 5Non-Executive Director

Y.Bhg. Dato’ Gumuri bin Hussain Non-Independent, 3 5Non-Executive Director

Y.Bhg. Datuk Abu Hassan Kendut Independent, 5 5Non-Executive Director

Ash’ari bin Ayub Independent, 5 5Non-Executive Director

Pratik Basu Managing Director 5 5


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The Chairman undertakes primary responsibility fororganising information necessary for the Board todeal with the agenda and for providing thisinformation to Directors on a timely basis.

There is a schedule of matters reserved specificallyfor the Board’s decision, to ensure that the directionand control of the Company is firmly in its hands.

The Directors are notified well in advance of everymeeting and Board papers issued are circulatedsufficiently prior to the Meetings to enable Directorsto deliberate on the issues to be raised at themeetings and to obtain further explanations, wherenecessary, in order to be briefed properly before themeeting. Minutes of the Board Meetings aremaintained by the Company Secretary.

All Directors have access to the advice and services ofthe Company Secretary. Where necessary, theDirectors, whether as a Board or in their individualcapacity, may engage independent professionals atthe Company’s expense in the furtherance of theirduties. All Directors also have access to allinformation within the Company whether as a fullboard or in their individual capacity.

(c) Appointment and Re-election of the Board

In accordance with Article 67 of the Company’sArticles of Association, the Directors to retire inevery year shall be those who have been longest inoffice since their last election, but as between personswho become Directors on the same day those toretire shall (unless they otherwise agree amongthemselves) be determined by lot. Nonetheless, allIndependent Directors shall retire from office onceat least in each two (2) years and all Non-Independent Directors shall retire from office onceat least in each three (3) years, but all Directors whoretire shall be eligible for re-election.

The Company’s Articles of Association takes intoaccount the Main Market Listing Requirements(“Listing Requirements“) of Bursa MalaysiaSecurities Berhad (“BMSB”) requiring all Directorsto offer themselves for re-election once every threeyears.

At the forthcoming AGM, The Hon. Apurv Bagrishall retire by rotation and has offered himself forre-election. Y.Bhg. Dato’ Abu Hassan Kendut andEn. Ash’ari bin Ayub shall be retiring in accordancewith Article 67 of the Company’s Articles ofAssociation and being eligible have offeredthemselves for re-election.

Directors being over the age of 70 years are requiredto offer themselves for re-appointment annually inaccordance to Section 129(6) of Companies Act,1965. The Lord Bagri CBE is seekingre-appointment under this Section at theforthcoming annual general meeting.

The Board has access to the services of the CompanySecretary who ensures that all appointments areproperly made, and that all necessary information isobtained from Directors, both for the Company’sown records and for the purposes of meetingstatutory obligations, as well as obligations arisingfrom the Listing Requirements of BMSB or otherregulatory requirements.

(d) Directors’ Remuneration

The remuneration of the Directors is determined at alevel which enables the Group to attract and retainDirectors with relevant experience and expertiseneeded to assist in managing the Group effectively.Currently, the Board undertakes the process ofdetermining the Fee, Remuneration and otherRemuneration Packages payable to Executive andNon-Executive Directors on a competitive scale withother organisations within the same industry. Thedetermination of the remuneration of all Directors isa matter for the Board as a whole.

In the case of the Managing Director, Remunerationis linked to individual performance. Performance ismeasured against profits and targets set in theGroup’s annual plan having regard to prevailingmarket and economic conditions. In the case ofNon-Executive Directors, the level of Remunerationreflects the level of responsibilities undertaken by theparticular Non-Executive Director concerned.


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(e) Directors’ Training

All Members of the Board have completed theirMandatory Accreditation Programme andContinuous Education Programme as prescribed bythe Listing Requirements of BMSB. The Directorshave undergone and will continue to undergorelevant programs and seminars to further enhancetheir knowledge to enable them to discharge theirduties and responsibilities more effectively.

During the financial year under review, the Directorshave attended and participated in variousprogrammes and seminars which they haveindividually or collectively considered as relevant anduseful in contributing to the effective discharge oftheir duties as Directors. The programmes andseminars attended by them individually orcollectively included areas of economy, technology,leadership, strategic management, tax and regulatoryupdates.

An in-house training programme was also organizedfor the Board in the area of Corporate SocialResponsibility.

T H E B O A R D C O M M I T T E E S

Audit Committee

The Board has delegated specific responsibilities to anAudit Committee, the details of which are set out onpages 24 to 27. The terms of reference of the Committeeare consistent with the Listing Requirements of BMSB.The Committee has the authority to examine particularissues and report back to the Board with theirrecommendation. The ultimate responsibility for the finaldecision on all matters, however, lies with the entireboard. The Board has reviewed the terms of reference ofAudit Committee in view of the recent amendments tothe Listing Requirements of BMSB.

During the financial year ended 31 December 2009, the Remuneration of the Directors were as follows:

Salary and other Benefitsentitlements Fees * in kind Total

Nos. RM RM RM RM

DirectorNon-ExecutiveRM50,000 and below 4 – 192,000 – 192,000

ExecutiveRM2,000,000 to RM2,050,000 1 1,844,957 – 161,542 2,006,499

Total 5 1,844,957 192,000 161,542 2,198,499

* To be approved by shareholders at the forthcoming AGM.

The Board is of the view that the transparency and accountability aspects of Corporate Governance as applicable toDirectors’ Remuneration are appropriately served by the ‘band disclosure’ as required by the Listing Requirements ofBMSB.


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Nomination and Remuneration Committees

In the context of the present nature and size of theactivities of the Company, the Board feels that the needfor formation of these committees should be reviewed at alater date. The Board considers that matters such asappointments to the Board, annual review of requiredmix, skills and experience of the Board, process for annualassessment of the effectiveness of the Board as a wholeand contribution of each individual Director and theRemuneration paid to all Directors including ExecutiveDirector are matters to be considered by the Board as awhole.

S H A R E H O L D E R S

(a) Dialogue with Investors

The Company recognises the importance of timelydissemination of information to Shareholders andother Stakeholders. The Board is committed toensure that they are well informed of all majordevelopments of the Company and the informationis communicated to them through the following:

(i) the Annual Report;(ii) the Quarterly Financial Statements to provide

an overview of the Group’s Business Activitiesand Performance;

(iii) the various Disclosures and Announcementsmade to the BMSB; and

(iv) Metrod’s website at www.metrod.com.

BMSB also provides for the Company to publishall its Announcements electronically, includingfull versions of its Quarterly Results and AnnualReports. These can be accessed at anytime through the Company’s website(www.metrod.com.) as well as BMSB’s website(http://announcements.bursamalaysia.com.)

Enquiries by Shareholders are dealt with aspromptly as practicable. Shareholders are advisedto direct their enquiries to the Company Secretaryat: [email protected] (detailed contactparticulars are provided at page 2).

The Company has also participated in BMSB’sCMDF-Bursa Research Scheme (“Scheme”) duringthe year. Two research firms M/s: CIMB SecuritiesSdn Bhd and Standard & Poor’s Malaysia Sdn Bhdwere assigned to the Company. Both the researchhouses have initiated their coverage and their reportsare available on BMSB’s website as per the provisionsof the Scheme.

(b) General Meetings

The Company’s AGM serves as a principal forum fordialogue with Shareholders. Shareholders areencouraged to attend and opportunity is given tothem to ask questions and to seek clarifications onthe Business and Performance of the Group.Suggestions from Shareholders are reviewed andimplemented, if possible. Directors and SeniorManagement Staff are present at the AGM to attendto Shareholders’ questions. The Chairman of theAudit Committee is also usually available to respondto Shareholders’ questions.

Where appropriate, the Chairman of the Board willundertake to provide the questioner with a writtenanswer to any significant question that cannot bereadily answered on the spot.

Each item of special business included in the Noticeof the Meeting will be accompanied by a fullexplanation of the effects of a proposed resolution.


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A C C O U N T A B I L I T Y A N D

A U D I T

(a) Director’s Responsibility Statement

The Group and Company’s Financial Statements areprepared in accordance with the Requirements of theApplicable Approved Accounting Standards inMalaysia for Entities Other than Private Entities andthe provisions of the Companies Act, 1965. TheBoard of Directors is responsible to ensure that theFinancial Statements of the Group and theCompany give a true and fair view of the state ofaffairs of the Group and the Company at the end ofthe financial year and of the results and Cash Flowsof the Group and Company for the financial year.The Statement by Directors’ pursuant to Section169(15) of the Companies Act, 1965 is set out onpage 31 of this Annual Report. The Directors haveprepared these Financial Statements on an on-goingconcern basis as the Directors have a reasonableexpectation, having made enquiries, that the Groupand Company have adequate resources to continuein operational existence in the foreseeable future.

(b) Financial Reporting

In presenting the Annual Financial Statements andQuarterly Announcements to the Shareholders, theDirectors aim to present a balanced andunderstandable assessment of the Group’s positionand prospects. The Audit Committee of the Boardassists by scrutinizing the information to bedisclosed, to ensure accuracy, adequacy andtransparency. This also applies to other price-sensitive public reports and reports to regulators.

The Audit Committee and the Board approve allStatutory Accounts before releasing to BMSB.

(c) Statement on Internal Control

The Board acknowledges its responsibility forestablishing a sound system of internal control tosafeguard Shareholders’ Investment and Group’sAssets, and to provide reasonable assurance on thereliability of the Financial Statements. In addition,equal priority is given to Internal Control of itsbusiness management and operational techniques.While the Internal Control System is devised to caterfor the particular needs of the Group and the risks towhich it is exposed, such Controls by their naturecan only provide reasonable assurance but notabsolute assurance against material misstatement orloss. An internal audit function has been set-up byappointing an external audit agency. Internal auditorhas formulated the audit plan and accordinglyconducts audit of the internal controls across theGroup.

The Group’s Statement on Internal Control is set outon pages 22 to 23.

(d) Audit Committee

The Audit Committee meets regularly with theChief Financial Officer, and the External Auditors toreview the Group’s financial reporting, the natureand scope of audit review.

The composition and terms of reference are in linewith the revamped Listing Requirements of BMSB.The Audit Committee met four (4) times during thefinancial year. The activities of the Committeeduring the financial year ended 31 December 2009and terms of reference are set out under the AuditCommittee Report on pages 24 to 27 of this AnnualReport. As mentioned earlier, the terms of referencehave been reviewed in the context of recentamendments to the Listing Requirements of BMSB.


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(e) Relationship with Auditors

The Company, through the Audit Committee,maintains a transparent relationship with theExternal Auditors in seeking their professional adviceand towards ensuring compliance with ApplicableAccounting Standards and all statutoryrequirements.

The External Auditors attend Audit CommitteeMeetings which deliberate on the Audit Plan and theAnnual Financial Results.

From time to time, the External Auditors highlightto the Audit Committee and the Board on mattersthat require the Board’s attention.

(f ) Corporate Social Responsibility (CSR)

Pursuant to BMSB’s letter dated 11 September 2006pertaining CSR, the Board has reviewed the variousinitiatives undertaken. An in-house trainingprogramme had also been conducted to enhance theawareness and understanding of CSR. Currentinitiatives are in the field of Market place,Environment, Work place and the Community.These initiatives are being formalised and monitoredclosely.

(g) Compliance with the Code

Save as set out below, the Group has substantiallycomplied with the Principles and Best Practices ofthe Code:

The establishment of Nomination andRemuneration Committees has not been undertakenbecause the Board is primarily responsible formaking recommendations for any new appointmentsto the Board and assessment of Directors on anon-going basis. In addition, the full Boardrecommends the Directors’ fees to be approved at theAGM and determines the other emoluments of thedirectors with the individual director affectedabstaining from decisions in respect of theirindividual remuneration.

O T H E R I N F O R M A T I O N

(a) Non-Audit Fees

The amount of non-audit fees paid to the ExternalAuditors by the Group for the financial yearamounted to RM445,853.

(b) Recurrent Related Party Transactions Statement

The Group entered into Recurrent Related PartyTransactions of revenue nature as set out in Circularto Shareholders dated 30 April 2009. The belowitems (a) to (c) were approved in the Annual GeneralMeeting on 28 May 2009.

a) Purchase of copper raw materials:

Metdist Limited is a transacting party in whichcertain Directors of the Company namely TheLord Bagri CBE and The Hon. Apurv Bagri arethe Directors and indirectly hold 100% sharesin Metdist Limited.

The total value of the transactions for thefinancial year 2009 in pursuance of theShareholders’ Mandate amounted toRM735,929,300.

b) Sales of copper goods:

(i) MetTube Sdn. Bhd. (“MetTube”) is atransacting party in which the Director ofthe Company namely Mr. Pratik Basu isalso the Director.

MetTube owns 11.67% of shares inMetrod. MetTube is wholly owned byMetTube Malaysia Holdings S.A., whichin-turn is wholly owned by Metdist S.A.which has substantial shareholding of42.14% in Metrod.



21

(ii) AM SGB Sdn Bhd is a transacting party inwhich Y.Bhg. Dato’ Azlan Hashim, aDirector of the Company, is also aDirector. He is also deemed interested in2,950,000 shares in Metrod by virtue ofhis shareholdings of 99.99% and his wife’sshareholdings of 0.01% in InfinitiveGrowth Sdn Bhd, a shareholder of theCompany.


c) Purchase of IT Services:

Birlasoft (India) Limited is a transacting partyin which The Lord Bagri CBE and The Hon.Apurv Bagri who are the Directors of Metrodare interested by virtue of being related to amajor shareholder and Director of Birlasoft(India) Limited.

The total value of the transactions for thefinancial year 2009 in pursuance of theShareholders’ Mandate amounted toRM116,695.

The Directors are satisfied that all the transactionswere carried out in the ordinary course of business inaccordance with the established procedures to ensurethat the related party transactions were carried outon normal commercial terms not more favourable tothe related parties than those generally available tothe public and were not to the detriment of theminority shareholders of the Company. TheDirectors agreed that the transactions remainedessential to the smooth functioning of the operationsof the Group.

(c) Sanctions/Penalties

During the financial year, there were no sanctionsand/or penalties imposed on the Company and itssubsidiaries, directors or management by the relevantregulatory bodies.

(d) Material Contracts

During the year, there were no material contractsentered into by the Company and its subsidiaries(not being contracts entered into the ordinary courseof business) involving directors and substantialshareholders.

(e) Share Buybacks

There was no share buybacks for the financial year.

(f ) Options, Warrants or Convertible Securities

There were no options, warrants or convertiblesecurities issued by the Company in respect of thefinancial year.

(g) American Depository Receipt (ADR) or GlobalDepository Receipt (GDR) Programme

During the financial year, the Company did notsponsor any ADR or GDR programme.

(h) Profit Guarantees

During the year, there were no profit guaranteesgiven by the Company.

(i) Contracts Relating to Loans

There were no contracts relating to loans by theCompany.

(j) Revaluation of Landed Properties

The Company does not have a policy on revaluationof landed properties.

This statement was made in accordance with a resolutionof the Board dated 25 February 2010.

THE LORD BAGRI CBEChairman


22

I N T R O D U C T I O N

Paragraph 15.26(b) of the Listing Requirements of BMSBrequires the Board of Directors of Public ListedCompanies to include in its Annual Report a “statementabout the state of internal control of the listed issuer as agroup.”

Set out below is the Board’s Internal Control Statementwhich outlines the nature and state of internal control ofthe Group during the year.

B O A R D R E S P O N S I B I L I T Y

The Board acknowledges its responsibility for the Group’ssystem of internal control which includes theestablishment of an appropriate control environment andframework as well as reviewing its adequacy and integrity.

In view of the limitations that are inherent in any systemof internal control, this system is designed to manage,rather than eliminate the risk of failure to achievecorporate objectives. Accordingly, the system can provideonly reasonable but not absolute assurance againstmaterial misstatement, operational failures, fraud or loss.The system of internal control encompasses riskmanagement and financial, organisational, operationaland compliance controls.

R I S K M A N A G E M E N T

F R A M E W O R K

The Board fully supports the contents of the Statementon Internal Control: Guidance for Directors of PublicListed Companies (“Internal Control Guidance”). TheBoard confirms that the Group has an on-going processfor identifying, evaluating and managing significant risksfaced by the Group, that has been in place throughout theyear and that this process is regularly reviewed by theBoard.

A Risk Management Committee oversees and providesguidance to various business process owners on RiskPolicy and Procedures. Risk management training forselected management and staff has been conducted and is

continued on an on-going basis. Discussions have beenconducted during the year involving different levels ofmanagement to identify and address risks faced by theGroup.

Action plan for various management actions has beenformulated to strengthen the risk profile and manage therisks involved especially with respect to major risks. Whilethese action plans are being reviewed on an on-goingbasis, action plans for certain management actions inrespect of other risks are being formulated to manage therisks involved.

The Group has a set of well-established operatingprocedures that cover all critical and significant facets ofthe Group business processes. Procedures are mostlygeared towards prevention of asset loss but also coverother major functional aspects of the Group’s businessoperations. These functions include cost control, assetsecurity, occupational safety procedures, peoplemanagement, productivity measurement, product qualityassurance, compliance with regulatory standards anddisciplines etc. The procedures are also subject to reviewas processes change, or to meet new businessrequirements. Compliance with these procedures is anessential element of the internal control and riskmanagement framework.

These process are more established in case of Malaysianand Austrian units. Similar process is being set-up forChinese operations. As India and US greenfield projectshave recently been commissioned, these processes will beinstituted gradually.

The Group also maintains an annual business planningand review process to ensure that the interest of itsstakeholders are well-balanced.

Formal periodic reviews by the Board on the adequacyand integrity of the system of internal control will beconducted with the assistance of the Audit Committee.

These initiatives would ensure that the Group has in placea formalised ongoing process to identify, measure andmanage the significant risks affecting the achievement ofits business objectives.

S t a t e m e n t O n I n t e r n a l C o n t r o l


23

I N T E R N A L A U D I T F U N C T I O N

An internal audit function has been set-up with theappointment of an internal audit firm. The internalauditor has devised an audit plan for the Group and thequarterly review is being conducted. A system exists toalso follow-up on the agreed action plan.

O T H E R K E Y C O M P O N E N T S

O F I N T E R N A L C O N T R O L

S Y S T E M

The other key components of the Group’s internal controlsystems are described below:

• The Board meets at least quarterly and has a formalagenda on matters for discussion. The Chairmanleads the presentation of board papers and providescomprehensive explanation of pertinent issues. Inarriving at any major decision, a thoroughdeliberation and discussion by the Board isundertaken. In addition, the Board is updated on theGroup’s activities and operations at every boardmeeting.

• There is in place an organisational structure withformally defined responsibility lines and authoritiesto facilitate quick response to the changes in theevolving business environment and accountabilityfor operation performance. Capital and non-capitalexpenditures and acquisition and disposal of anyinvestment interests are subject to appropriateapproval processes.

• Comprehensive management reports are generatedon a regular and consistent basis to facilitate theBoard, the Group’s Management to performfinancial and operating reviews on the variousoperating units. The reviews encompass areas such asfinancial and non-financial key performanceindicators, operating results and compliance withlaws and regulations.

• The Group has in place a detailed and well-controlled budgeting process that provides aresponsible accounting framework.

• The documented policies and procedures form anintegral part of the internal control system tosafeguard the Group’s assets against material lossesand ensure complete and accurate financialinformation. The documents consist of memoranda,circulars, manuals and handbooks that arecontinuously being revised and updated to meetoperational needs.

• There were no material losses incurred during thefinancial year as a result of weaknesses in internalcontrol. The Board, together with Management,continues to take measures to strengthen the controlenvironment.

M O N I T O R I N G A N D R E V I E W

As mentioned in the Statement of Corporate Governance,the Board has delegated day-to-day functions to theManaging Director, who is aided by a team of officers toassist carrying out of his duties. Part of his role is to driveeach area of the business operations in a manner to ensurethe integrity of the internal control framework and thateffective risk management practice is in place throughoutthe year.

From a process viewpoint, the Managing Directorpresides over all regular management meetings in each ofthe business operations. These meetings review financialperformance, business issues including internal controlmatters and risk management.

This statement is made in accordance with a resolution ofthe Board of Directors dated 25 February 2010.


24

C O M P O S I T I O N O F T H E

A U D I T C O M M I T T E E

The present Audit Committee consists of three (3)Members of the Board of which all the Members areIndependent Directors. The Committee has two (2)directors who are also Members of the Malaysian Instituteof Accountants (“MIA”). The Chairman of theCommittee is an Independent Director.

The Audit Committee comprises of the following:

Audit Committee Designation

Y.Bhg. Dato’ Azlan Independent Non-Hashim (Chairman) Executive Director

Y.Bhg. Datuk Abu Hassan Independent Non-Kendut Executive Director

Ash’ari bin Ayub Independent Non-Executive Director

M E E T I N G S O F T H E A U D I T

C O M M I T T E E A N D

A T T E N D A N C E

The Audit Committee met four (4) times in year 2009and all the members attended all the meetings held duringthe financial year.

A C T I V I T I E S O F T H E A U D I T

C O M M I T T E E

During the financial year, the Audit Committee’s activitiesincluded review of:

• the Unaudited Quarterly Financial Results;

• the Audit Plan presented by External Auditors;

• the Annual Audited Financial Statements with theExternal Auditors as well as review of their findingsand recommendations;

• the Recurrent Related Party Transactions undertakenby the Group in the ordinary course of businesswhich were carried out on an arm’s length basis;

• the Compliance with Accounting Standards andother legal requirements and any changes inaccounting policies and practices;

• the Appointment of External Auditors and fixationof Audit Fees;

• the Risk Management Framework and StatusReports thereon;

• the Audit Committee Report and itsrecommendation to the Board for inclusion in theAnnual Report;

• the Statement on Internal Control and itsrecommendation to the Board for inclusion in theAnnual Report; and

• the New Development and updates on AccountingStandards issued by the Malaysian AccountingStandards Board.

.

A u d i t C o m m i t t e e R e p o r t

The Board of Directors of Metrod (Malaysia) Berhad is pleased to present the following Report on the Audit Committeeand its activities for the financial year ended 31 December 2009.

The Audit Committee was established by a resolution of the Board on 6 October 1995.


25

I N T E R N A L A U D I T

F U N C T I O N

An internal audit function has been set-up with theappointment of an internal audit firm. The internalauditor has devised an audit plan for the Group and thequarterly review is being conducted. A system exists toalso follow-up on the agreed action plan.

T E R M S O F R E F E R E N C E O F

T H E A U D I T C O M M I T T E E

Membership

1. The Committee shall be appointed by the Board ofDirectors amongst the Directors of the Companywhich fulfils the following requirements:

(a) the Committee must be composed of no fewerthan 3 Members;

b) all the Committee Members must be Non-Executive Directors, with all of them beingIndependent Directors; and

c) at least one member of the Committee:

(i) must be a member of the MalaysianInstitute of Accountants; or

ii) if he is not a member of the MalaysianInstitute of Accountants, he must have atleast 3 years’ working experience and:

(aa) he must have passed theexaminations specified in Part 1 ofthe 1st Schedule of the AccountantsAct, 1967; or

(ab) he must be a member of one of theassociations of accountants specifiedin Part II of the 1st Schedule of theAccountants Act, 1967

2. The members of the Committee shall elect aChairman from among themselves who shall be anindependent director.

3. No Alternate Director should be appointed as aMember of the Committee.

4. In the event of any vacancy in the Committeeresulting in the non-compliance of the ListingRequirement of the Exchange pertaining tocomposition of audit committee, the Board ofDirectors shall within three months of that event fillthe vacancy.

5. The terms of office and performance of theCommittee and each of its members must bereviewed by the Board of Directors at least onceevery 3 years to determine whether the Committeeand its members have carried out their duties inaccordance with their terms of reference.

Meetings

1. Secretary

The Company Secretary shall be the Secretary of theCommittee or in his absence, another personauthorised by the Chairman of the Committee.

2. Frequency

(a) Meetings shall be held not less than four (4)times a year.

(b) Upon the request of the External Auditor, theChairman of the Committee shall convene ameeting of the Committee to consider anymatter the external auditor believes should bebrought to the attention of the Directors orshareholders


26

3. Quorum

A quorum shall consist of a majority of IndependentDirectors.

4. Attendance

(a) The Financial Director, the Head of InternalAudit and a representative of the externalauditor shall normally attend meetings.

(b) Other Directors and Employees may attend anyparticular meeting only at the Committee’sinvitation, specific to the relevant Meeting.

.5. Reporting Procedure

The Minutes of each Meeting shall be circulated toall Members of the Board.

6. Meeting Procedure

The Committee shall regulate its own procedure, inparticular:

(a) the Calling of Meetings;

(b) the Notice to be given of such Meetings;

(c) the Voting and Proceedings of such Meetings;

(d) the Keeping of Minutes; and

(e) the Custody, Production and Inspection of suchMinutes

R I G H T S

The Committee in performing its duties shall inaccordance with a procedure to be determined by theBoard of Directors:

(a) have authority to investigate any matter within itsterms of reference;

(b) have the resources which are required to perform itsduties;

(c) have full and unrestricted access to any informationpertaining to the Company;

(d) have direct communication channels with theExternal Auditor and person(s) carrying out theinternal audit function or activity (if any);

(e) be able to obtain independent professional or otheradvice; and

(f ) be able to convene Meetings with External Auditors,the Internal Auditors or both, excluding theattendance of the other Director and Employees ofthe Company, whenever deemed necessary.

F U N C T I O N S

1. The Committee shall, amongst others, discharge thefollowing functions:

To review:

(a) the Quarterly Results and year end FinancialStatements, prior to the approval by the Boardof Directors, focusing particularly on:

(i) the going concern assumption;

ii) the changes in or implementation ofmajor accounting policy changes;

iii) the significant and unusual events; and

iv) the compliance with accounting standardsand other legal requirements

(b) any related party transaction and conflict ofinterest situation that may arise within theCompany or Group including any transaction,procedure or course of conduct that raisesquestions or management integrity.


27

(c) with the External Auditor:

(i) the Audit Plan;

ii) his evaluation of the system of internalcontrols;

iii) his Audit Report;

iv) his management letter and management’sresponse; and

v) the assistance given by the Company’semployees to the External Auditor.

2. In respect of the appointment of External Auditors:

(a) to review whether there is reason (supported bygrounds) to believe that the External Auditor isnot suitable for re-appointment;

(b) to consider the nomination of a person orpersons as External Auditors and the audit fee;and

(c) to consider any questions of resignation ordismissal of External Auditors.

3. Internal Audit

(a) to ensure the internal audit function isindependent of the activities it audits.

(b) to ensure the internal audit function reportsdirectly to the audit committee.

4. In respect of the Internal Audit Function:

(a) to review the adequacy of the scope, functions,competency and resources of the Internal AuditFunction and that it has the necessary authorityto carry out its work;

(b) to review the internal audit programme,processes, the results of the internal auditprogramme, processes or investigationundertaken and whether or not appropriateaction is taken on the recommendations of theInternal Audit Function;

(c) to review any appraisal or assessment of theperformance of members of the internal auditfunction;

(d) to approve any appointment or termination ofsenior staff members of the Internal AuditFunction;

(e) to be informed of any resignation of internalaudit staff member and provide the resigningstaff member an opportunity to submit hisreasons for resigning;

(f ) to ensure the Internal Audit Function isIndependent of the activities in Audits; and

(g) to ensure the Internal Audit Function reportsdirectly to the Audit Committee.

5. To promptly report such matter to the Exchange ifthe Committee is of the view that the matterreported by it to the Board of Directors has not beensatisfactorily resolved resulting in a breach of theBursa Malaysia Securities Listing Requirements.

6. To carry out such other functions as may be agreedto by the Committee and the Board of Directors.

This report is made in accordance with a resolution of theBoard of Directors dated 25 February 2010.

The Directors have pleasure in submitting their report to the members together with the audited financial statementsof the Group and the Company for the financial year ended 31 December 2009.

P R I N C I P A L A C T I V I T I E S

The principal activities of the Group consist of procurement of raw materials, manufacturing and marketing ofelectrical conductivity grade copper wires, rods, strips, and high-quality flat copper winding wire systems.

The principal activities of the Company are investment holding and manufacturing of electrical conductivity gradecopper rods, wires and strips.

There were no significant changes in the nature of the activities of the Group during the financial year.

F I N A N C I A L R E S U L T S

Group CompanyRM RM

Net profit for the financial year attributable to equity holders of the Company 34,075,775 15,178,344

D I V I D E N D S

The dividend on ordinary shares paid or declared by the Company since 31 December 2008 was as follows:

RM

In respect of the financial year ended 31 December 2008:First and final tax exempt dividend of 12 sen per share on 60,000,000 ordinary shares,paid on 17 July 2009 7,200,000

The Directors now recommend the payment of a final tax exempt dividend of 12 sen per share on 60,000,000ordinary shares amounting to RM7,200,000 which, subject to the approval of members at the forthcoming AnnualGeneral Meeting of the Company, will be paid on 16 July 2010 to shareholders registered on the Company’s Registerof Members at the close of business on 30 June 2010.

R E S E R V E S A N D P R O V I S I O N S

All material transfers to or from reserves or provisions during the financial year are shown in the financial statements.

D I R E C T O R S

The Directors who have held office during the period since the date of the last report are as follows:

The Lord Bagri CBE (Chairman)The Hon. Apurv Bagri (Vice Chairman)The Lady Bagri (Resigned on 28 May 2009)Y.Bhg. Dato' Azlan HashimY.Bhg. Dato’ Gumuri bin HussainY.Bhg. Datuk Abu Hassan KendutAsh’ari bin AyubPratik Basu

D i r e c t o r s ’ R e p o r tfor the financial year ended 31 December 2009

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D I R E C T O R S ' I N T E R E S T S I N S H A R E S A N D D E B E N T U R E S

According to the register of Directors' shareholdings, none of the Directors holding office at the end of the financialyear held any interests in the shares in the Company and its subsidiaries or shares, options over shares and debenturesof its related corporations during the financial year except as follows:

Number of ordinary shares of RM1.00 each in the CompanyAt At

1.1.2009 Addition Disposal 31.12.2009

Shareholdings in which the Directoris deemed to have an interest

Y.Bhg. Dato’ Azlan Hashim 2,950,000 0 0 2,950,000

D I R E C T O R S ' B E N E F I T S

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, beingarrangements with the object or objects of enabling Directors of the Company to acquire benefits by means of theacquisition 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 (otherthan Directors’ remuneration as disclosed in Note 7 to the financial statements) by reason of a contract made by theCompany or a related corporation with the Director or with a firm of which he is a member, or with a company inwhich he has a substantial financial interest, other than by virtue of transactions entered into in the ordinary courseof business as disclosed in Note 27 to the financial statements.

S T A T U T O R Y I N F O R M A T I O N O N T H E F I N A N C I A L S T A T E M E N T S

Before the income statements and balance sheets were made out, the Directors took reasonable steps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making ofallowance for doubtful debts and satisfied themselves that all known bad debts had been written off and thatadequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course ofbusiness their values as shown in the accounting records of the Group and the Company had been writtendown to an amount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

(a) which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts inthe financial statements of the Group and the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and theCompany misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of theGroup and the Company misleading or inappropriate.

No contingent or other liability has become enforceable or is likely to become enforceable within the period oftwelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the abilityof the Group or the Company to meet their obligations when they fall due.

29


S T A T U T O R Y I N F O R M A T I O N O N T H E F I N A N C I A L S T A T E M E N T S

( C O N T I N U E D )

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

(a) any charge on the assets of the Group or the Company which has arisen since the end of the financial yearwhich secures the liability of any other person; or

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

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report orthe financial statements which would render any amount stated in the financial statements misleading.

In the opinion of the Directors:

(a) the results of the Group's and the Company's operations during the financial year were not substantiallyaffected by any item, transaction or event of a material and unusual nature; and

(b) there has not arisen in the interval between the end of the financial year and the date of this report any item,transaction or event of a material and unusual nature likely to affect substantially the results of the operations ofthe Group or the Company for the financial year in which this report is made.

U L T I M A T E H O L D I N G C O M P A N Y

The Directors regard Metdist S.A., a company incorporated in Panama, as the ultimate holding company.

A U D I T O R S

The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution dated 25 February 2010.


PRATIK BASUManaging Director and Chief Executive Officer

30


We, The Lord Bagri CBE and Pratik Basu, two of the Directors of Metrod (Malaysia) Berhad, state that, in theopinion of the Directors, the financial statements set out on pages 34 to 81 are drawn up so as to give a true and fairview of the state of affairs of the Group and the Company as at 31 December 2009 and of the results and cash flowsof the Group and the Company for the financial year ended on that date in accordance with the provisions of theCompanies Act, 1965 and the MASB Approved Accounting Standards in Malaysia for Entities Other than PrivateEntities.

Signed on behalf of the Board of Directors in accordance with a resolution dated 25 February 2010.



I, Pratik Basu, the Director primarily responsible for the financial management of Metrod (Malaysia) Berhad, dosolemnly and sincerely declare that the financial statements set out on pages 34 to 81 are, in my opinion, correct,and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions ofthe Statutory Declarations Act, 1960.


Subscribed and solemnly declared by the abovenamed Pratik Basu at Klang on 25 February 2010.

Before me,

P. DEV ANAND PILLAI (B 253)Commissioner for Oaths

S t a t e m e n t B y D i r e c t o r spursuant to Section 169(15) of the Companies Act, 1965

S t a t u t o r y D e c l a r a t i o npursuant to Section 169(16) of the Companies Act, 1965

31


R E P O R T O N T H E F I N A N C I A L S T A T E M E N T S

We have audited the financial statements of Metrod (Malaysia) Berhad, which comprise the balance sheets as at31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equityand cash flow statements of the Group and of the Company for the year then ended, and a summary of significantaccounting policies and other explanatory notes, as set out on pages 34 to 81.

D I R E C T O R S ’ R E S P O N S I B I L I T Y F O R T H E F I N A N C I A L

S T A T E M E N T S

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

A U D I T O R S ’ R E S P O N S I B I L I T Y

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our auditin accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on our judgment, including the assessment of risks of materialmisstatement of the financial statements, whether due to fraud or error. In making those risk assessments, weconsider internal control relevant to the entity’s preparation and fair presentation of the financial statements in orderto design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluatingthe 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 auditopinion.

O P I N I O N

In our opinion, the financial statements have been properly drawn up in accordance with Financial ReportingStandards in Malaysia, the MASB Approved Accounting Standards in Malaysia for Entities Other than PrivateEntities and the Companies Act, 1965 so as to give a true and fair view of the financial position of the Group and ofthe Company as of 31 December 2009 and of their financial performance and cash flows for the year then ended.

I n d e p e n d e n t A u d i t o r s ’ R e p o r tto the members of Metrod (Malaysia) Berhad

32


R E P O R T O N O T H E R L E G A L A N D R E G U L A T O R Y

R E Q U I R E M E N T S

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by theCompany and its subsidiaries of which we have acted as auditors have been properly kept in accordance withthe provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we havenot acted as auditors, which are indicated in Note 15 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adversecomment made under Section 174(3) of the Act.

O T H E R M A T T E R S

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

PRICEWATERHOUSECOOPERS JAYARAJAN A/L U. RATHINASAMY(No. AF: 1146) (No. 2059/06/10 (J))Chartered Accountants Chartered Accountant

Kuala Lumpur25 February 2010

33


Group CompanyNote 2009 2008 2009 2008

RM RM RM RM

Revenue 4 1,553,049,285 1,996,514,444 37,492,238 37,808,677

Cost of sales (1,441,474,851) (1,867,263,325) (21,282,447) (23,344,898)

Gross profit 111,574,434 129,251,119 16,209,791 14,463,779

Other operating income 18,711,888 12,001,673 1,566,941 5,771,669

Selling and distribution costs (34,689,049) (33,986,804) (52,270) (104,684)

Administrative expenses (31,338,394) (24,519,647) (6,016,583) (6,025,046)

Other operating expenses (7,479,702) (16,958,621) (744,448) (1,144,888)

Profit from operations 5 56,779,177 65,787,720 10,963,431 12,960,830

Finance costs 8 (16,904,076) (24,090,250) (981,410) (2,033,319)

Profit before tax 39,875,101 41,697,470 9,982,021 10,927,511

Tax (expense)/credit 9 (5,799,326) 23,238,197 5,196,323 30,772,861

Net profit for the financial yearattributable to equity holdersof the Company 34,075,775 64,935,667 15,178,344 41,700,372

Earnings per share (sen)– basic 10 56.79 108.23

Dividend per ordinary sharein respect of the financialyear (sen) (tax exempt) 11 12 12 12 12

I n c o m e S t a t e m e n t sfor the financial year ended 31 December 2009

34



RM RM RM RM

Non-current assetsProperty, plant and equipment 12 288,063,314 263,982,820 18,408,062 20,091,714Prepaid lease payments 13 8,866,363 8,834,402 1,727,745 1,752,089Intangible assets 14 26,759,210 29,382,338 1,200,031 1,200,031Investments in subsidiaries 15 0 0 71,746,001 71,746,001Deferred tax assets 16 34,087,472 27,666,342 24,823,393 19,627,070

357,776,359 329,865,902 117,905,232 114,416,905

Current assetsInventories 17 168,703,901 185,380,003 3,657,430 3,701,187Receivables, deposits and prepayments 18 177,314,269 232,984,271 1,227,017 1,708,371Amounts due from subsidiaries 15 0 0 12,286,624 38,961,735Tax recoverable 745,161 5,994,666 0 2,710,410Marketable securities 32 11,107 4,794,687 0 0Deposits, bank and cash balances 19 167,281,370 215,461,125 76,091,208 41,767,599

514,055,808 644,614,752 93,262,279 88,849,302

Current liabilitiesPost-employment benefit obligations 20 738,608 595,069 438,070 346,520Provision for warranties 21 8,678,104 9,155,209 0 0Borrowings (interest bearing):– bank overdrafts 22 1,057,130 0 0 0– others 22 228,974,960 336,451,527 39,192,929 38,848,733Payables 23 131,036,413 112,732,944 3,528,830 4,871,378Loan from a subsidiary 23 0 0 3,911,271 3,786,075Current tax liabilities 994,732 5,570,145 577,420 0

371,479,947 464,504,894 47,648,520 47,852,706

Net current assets 142,575,861 180,109,858 45,613,759 40,996,596

Less: Non-current liabilitiesPost-employment benefit obligations 20 24,460,980 24,162,189 2,066,570 1,939,424Borrowings (interest bearing) 22 149,277,222 193,315,295 0 0Deferred tax liabilities 16 1,546,986 1,181,779 0 0Deferred income 24 5,351,971 5,420,011 0 0Non-current tax liabilities 33 5,909,318 0 0 0

186,546,477 224,079,274 2,066,570 1,939,424

313,805,743 285,896,486 161,452,421 153,474,077

Capital and reserves attributable toequity holders of the Company

Share capital 25 60,000,000 60,000,000 60,000,000 60,000,000Share premium 17,386 17,386 17,386 17,386Currency translation reserve 3,717,959 2,684,477 0 0Retained earnings 26 250,070,398 223,194,623 101,435,035 93,456,691

Total equity 313,805,743 285,896,486 161,452,421 153,474,077

B a l a n c e S h e e t sas at 31 December 2009

35


C o n s o l i d a t e d S t a t e m e n t O f C h a n g e s I n E q u i t yfor the financial year ended 31 December 2009

36


Issued and fully paid ordinaryshares of RM1.00 each

CurrencyNumber Nominal Share translation Retained

Note of shares value premium reserve earnings TotalRM RM RM RM RM

At 1 January 2009 60,000,000 60,000,000 17,386 2,684,477 223,194,623 285,896,486Net profit for thefinancial year 0 0 0 0 34,075,775 34,075,775

Currency translationdifferences arising inthe financial year 0 0 0 1,033,482 0 1,033,482

Net gain not recognisedin the income statement 0 0 0 1,033,482 0 1,033,482

Dividend for the financialyear ended31 December 2008 11 0 0 0 0 (7,200,000) (7,200,000)

At 31 December 2009 60,000,000 60,000,000 17,386 3,717,959 250,070,398 313,805,743

At 1 January 2008 60,000,000 60,000,000 17,386 338,060 165,458,956 225,814,402Net profit for thefinancial year 0 0 0 0 64,935,667 64,935,667

Currency translationdifferences arising inthe financial year 0 0 0 2,346,417 0 2,346,417

Net gain not recognisedin the income statement 0 0 0 2,346,417 0 2,346,417

Dividend for the financialyear ended31 December 2007 11 0 0 0 0 (7,200,000) (7,200,000)

At 31 December 2008 60,000,000 60,000,000 17,386 2,684,477 223,194,623 285,896,486

Issued and fully paid ordinary Non-shares of RM1.00 each distributable DistributableNumber Nominal Share Retained

Note of shares value premium earnings TotalRM RM RM RM

At 1 January 2009 60,000,000 60,000,000 17,386 93,456,691 153,474,077Net profit for thefinancial year 0 0 0 15,178,344 15,178,344

Dividend for the financialyear ended31 December 2008 11 0 0 0 (7,200,000) (7,200,000)

At 31 December 2009 60,000,000 60,000,000 17,386 101,435,035 161,452,421

At 1 January 2008 60,000,000 60,000,000 17,386 58,956,319 118,973,705Net profit for thefinancial year 0 0 0 41,700,372 41,700,372

Dividend for the financialyear ended31 December 2007 11 0 0 0 (7,200,000) (7,200,000)

At 31 December 2008 60,000,000 60,000,000 17,386 93,456,691 153,474,077

C o m p a n y S t a t e m e n t O f C h a n g e s I n E q u i t yfor the financial year ended 31 December 2009

37



RM RM RM RM

Operating activitiesCash receipts from customers 1,543,898,812 2,032,989,549 64,560,550 18,985,604Cash paid to suppliers and employees (1,379,545,079) (1,955,912,517) (25,529,256) (26,402,769)

Cash from/(used in) operations 164,353,733 77,077,032 39,031,294 (7,417,165)Tax refunded 3,607,680 7,907,421 3,372,831 6,681,099Tax paid (7,474,908) (5,933,806) 0 (36,903)Interest expense paid (17,102,041) (22,680,743) (1,103,635) (2,030,769)

Net cash flow from operating activities 143,384,464 56,369,904 41,300,490 (2,803,738)

Investing activitiesRepayment of loan by a subsidiary 0 0 0 8,121,247Purchase of property, plant andequipment 12 (54,966,786) (95,781,150) (121,049) (4,326,964)Purchase of intangible assets (1,200,031) 0 (1,200,031) 0Proceeds from disposal ofproperty, plant and equipment 3,953,001 6,955,375 0 1,016,926Proceeds from disposal of/(investment in) marketable securities 32 7,049,662 (3,167,798) 0 0Dividend received 89,513 211,335 255,000 777,000Interest income received 3,878,098 5,279,066 1,290,341 1,453,575

Net cash flow from investing activities (41,196,543) (86,503,172) 224,261 7,041,784

Financing activities(Repayment of )/proceed from shortterm bank borrowings (net) (112,661,501) 66,323,222 0 0Proceeds from long term bankborrowings 5,108,668 95,566,000 0 0Repayment of long term bankborrowings (37,248,953) 0 0 0(Repayment of )/loan from a subsidiary 0 0 (1,142) 3,786,075Cash grant received 347,193 1,988,165 0 0Dividends paid to shareholders (7,200,000) (7,200,000) (7,200,000) (7,200,000)Deposits pledged as security for bankborrowings 19 (10,073,128) (1,352,488) (10,236,050) 0

Net cash flow from financing activities (161,727,721) 155,324,899 (17,437,192) (3,413,925)

Increase in cash and cash equivalents (59,539,800) 125,191,631 24,087,559 824,121Currency translation differences 217,829 72,078 0 0Cash and cash equivalents– at start of year 173,581,011 48,317,302 1,267,599 443,478

– at end of year 19 114,259,040 173,581,011 25,355,158 1,267,599

C a s h F l o w S t a t e m e n t sfor the financial year ended 31 December 2009

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The following accounting policies have been applied consistently in dealing with items that are considered materialin relation to the financial statements. These policies have been consistently applied to all the years presented, unlessotherwise stated.

A B A S I S O F P R E P A R A T I O N

The financial statements of the Group and the Company have been prepared under the historical costconvention unless otherwise indicated in this summary of significant accounting policies.

The financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 andthe MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities.

The preparation of financial statements in conformity with the MASB Approved Accounting Standards forEntities Other than Private Entities requires the use of estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements, and the reported amounts of revenues and expenses during the financial year. It also requiresDirectors to exercise their judgment in the process of applying the Group’s accounting policies. Although theseestimates and judgment are based on the Directors’ best knowledge of current events and actions, actual resultsmay differ from those estimates.

(1) Standards, amendments to published standards and interpretations that are applicable to the Groupand are effective

There are no new accounting standards, amendments to published standards and interpretations toexisting standards effective for the Company's financial year ended 31 December 2009 and applicable tothe Group.

(2) Standards, amendments to published standards and interpretations to existing standards that areapplicable to the Group but not yet effective

The Group will apply the following new standards, amendments to standards and interpretations fromfinancial period beginning on 1 January 2010:

• The revised FRS 3 "Business combinations" (effective prospectively from 1 July 2010). The revisedstandard continues to apply the acquisition method to business combinations, with some significantchanges. For example, all payments to purchase a business are to be recorded at fair value at theacquisition date, with contingent payments classified as debt subsequently re-measured through theincome statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair vale or at the non-controlling interest’s proportionateshare of the acquiree’s net assets. All acquisition-related costs should be expensed.

• FRS 8 "Operating Segments" (effective from 1 July 2009) replaces FRS 1142004 Segment Reporting.The new standard requires a ‘management approach’, under which segment information is reportedin a manner that is consistent with the internal reporting provided to the chief operating decision-maker. The improvement to FRS 8 (effective from 1 January 2010) clarifies that entities that do notprovide information about segment assets to the chief operating decision-maker will no longer needto report this information. Prior year comparatives must be restated.

S u m m a r y O f S i g n i f i c a n t A c c o u n t i n g P o l i c i e sfor the financial year ended 31 December 2009

39


A B A S I S O F P R E P A R A T I O N ( C O N T I N U E D )

(2) Standards, amendments to published standards and interpretations to existing standards that areapplicable to the Group but not yet effective (continued)

• The revised FRS 101 “Presentation of financial statements” (effective from 1 January 2010) prohibitsthe presentation of items of income and expenses (that is, ‘non-owner changes in equity’) in thestatement of changes in equity. ‘Non-owner changes in equity’ are to be presented separately fromowner changes in equity. All non-owner changes in equity will be required to be shown in aperformance statement, but entities can choose whether to present one performance statement (thestatement of comprehensive income) or two statements (the income statement and statement ofcomprehensive income).

Where entities restate or reclassify comparative information, they will be required to present arestated balance sheet as at the beginning comparative period in addition to the current requirementto present balance sheets at the end of the current period and comparative period.

• FRS 123 "Borrowing costs" (effective from 1 January 2010) which replaces FRS 1232004, requires anentity to capitalise borrowing costs directly attributable to the acquisition, construction or productionof a qualifying asset (one that takes a substantial period of time to get ready for use or sale) as part ofthe cost of that asset. The option of immediately expensing those borrowing costs is removed. Theimprovement to FRS 123 clarifies that the definition of borrowing costs includes interest expensecalculated using the effective interest method defined in FRS 139.

• FRS 139 “Financial Instruments: Recognition and Measurement” (effective from 1 January 2010)establishes principles for recognising and measuring financial assets, financial liabilities and somecontracts to buy and sell non-financial items. Hedge accounting is permitted under strictcircumstances. The amendments to FRS 139 provides further guidance on eligible hedged items. Theamendment provides guidance for two situations. On the designation of a one-sided risk in a hedgeditem, the amendment concludes that a purchased option designated in its entirety as the hedginginstrument of a one-sided risk will not be perfectly effective. The designation of inflation as a hedgedrisk or portion is not permitted unless in particular situations. The improvement to FRS 139 clarifiesthat the scope exemption in FRS 139 only applies to forward contracts but not options for businesscombinations that are firmly committed to being completed within a reasonable timeframe.

• FRS 7 “Financial Instruments: Disclosures” (effective from 1 January 2010) provides information tousers of financial statements about an entity’s exposure to risks and how the entity manages thoserisks. The improvement to FRS 7 clarifies that entities must not present total interest income andexpense as a net amount within finance costs on the face of the income statement.

• IC Interpretation 10 "Interim Financial Reporting and Impairment" (effective from 1 January 2010)prohibits the impairment losses recognised in an interim period on goodwill and investments inequity instruments and in financial assets carried at cost to be reversed at a subsequent balance sheetdate.

• IC Interpretation 14 "FRS 119 The limit on a defined benefit asset, minimum funding requirementsand their interaction" (effective from 1 January 2010) provides guidance on assessing the limit inFRS 119 on the amount of the surplus that can be recognised as an asset.

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The Group has applied the transitional provision in the respective standards which exempts entities fromdisclosing the possible impact arising from the initial application of the following standards andinterpretations on the financial statements of the Group and Company.

• FRS 139, Amendments to FRS 139 on eligible hedged items and Improvement to FRS 139• FRS 7 and Improvement to FRS 7

The following amendments are part of the Malaysian Accounting Standards Board’s (“MASB”)improvements project:

• FRS 5 “Non-current assets held for sale and discontinued operations”

� Improvement effective from 1 January 2010 clarifies that FRS 5 disclosures apply to non-currentassets or disposal groups that are classified as held for sale and discontinued operations.

� Improvement effective from 1 July 2010 clarifies that all of a subsidiary's assets and liabilities areclassified as held for sale if a partial disposal sale plan results in loss of control. Relevantdisclosure should be made for this subsidiary if the definition of a discontinued operation ismet.

• FRS 107 “Statement of cash flows” (effective from 1 January 2010) clarifies that only expenditureresulting in a recognised asset can be categorised as a cash flow from investing activities. This is notexpected to have a material impact on the Group’s financial statements.

• FRS 110 “Events after the balance sheet date” (effective from 1 January 2010) reinforces existingguidance that a dividend declared after the reportng date is not a liability of an entity at that dategiven that there is no obligation at that time. It is not expected to have an impact on the Group'sfinancial statements.

• FRS 117 “Leases” (effective from 1 January 2010) clarifies that the default classification of the landelement in a land and building lease is no longer an operating lease. As a result, leases of land shouldbe classified as either finance or operating, using the general principles of FRS 117. It is not expectedto have an impact on the Group's financial statements.

• FRS 118 “Revenue” (effective from 1 January 2010) provides more guidance when determiningwhether an entity is acting as a ‘principal’ or as an ‘agent’. It is not expected to have a material impacton the Group's financial statements.

• FRS 119 “Employee benefits” (effective from 1 January 2010) clarifies that a plan amendment thatresults in a change in the extent to which benefit promises are affected by future salary increases is acurtailment, while an amendment that changes benefits attributable to past service gives rise to anegative past service cost if it results in a reduction in the present value of the defined benefitobligation. The definition of return on plan assets has been amended to state that plan administrationcosts are deducted in the calculation of return on plan assets only to the extent that such costs havebeen excluded from measurement of the defined benefit obligation. It is not expected to have amaterial impact on the Group's financial statements.

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• FRS 120 “Accounting for government grants” (effective from 1 January 2010) clarifies that thebenefit of a below market rate government loan is accounted for in accordance with FRS 120.

• FRS 127 “Consolidated and separate financial statements” (effective from 1 January 2010) clarifiesthat where an investment in a subsidiary that is accounted for under FRS 139 is classified as held forsale under FRS 5, FRS 139 would continue to be applied. The amendment will not have an impacton the Group’s operations because it is the Group’s policy for an investment in subsidiary to berecorded at cost in the standalone accounts of each entity.

• FRS 134 “Interim financial reporting” (effective from 1 January 2010) clarifies that basic and dilutedearnings per share (“EPS”) must be presented in an interim report only in the case when the entity isrequired to disclose EPS in its annual report. It is not expected to have a material impact on theGroup’s financial statements.

• FRS 136 “Impairment of assets” (effective from 1 January 2010) clarifies that the largest cash-generating unit (or group of units) to which goodwill should be allocated for the purposes ofimpairment testing is an operating segment before the aggregation of segments with similar economiccharacteristics. The improvement also clarifies that where fair value less costs to sell is calculated onthe basis of discounted cash flows, disclosures equivalent to those for value in use should be made. Itis not expected to have a material impact on the Group’s financial statements.

(3) Standards, amendments to published standards and interpretations to existing standards that are notyet effective and are not relevant to the Group

• The revised FRS 127 "Consolidated and separate financial statements" (effective prospectively from1 July 2010) requires the effects of all transactions with non-controlling interests to be recorded inequity if there is no change in control and these transactions will no longer result in goodwill or gainsand losses. The standard also specifies the accounting when control is lost. Any remaining interest inthe entity is re-measured to fair value, and a gain or loss is recognised in profit or loss.

• IC Interpretation 9 "Reassessment of Embedded Derivatives" (effective from 1 January 2010)requires an entity to assess whether an embedded derivative is required to be separated from the hostcontract and accounted for as a derivative when the entity first becomes a party to the contract.Subsequent reassessment is prohibited unless there is a change in the terms of the contract thatsignificantly modifies the cash flows that otherwise would be required under the contract, in whichcase reassessment is required. The improvement to IC Interpretation 9 (effective from 1 July 2010)clarifies that this interpretation does not apply to embedded derivatives in contracts acquired in abusiness combination, businesses under common control or the formation of a joint venture.

• FRS 4 “Insurance contract” (effective from 1 January 2010) allows entities to continue with theirexisting accounting policies for insurance contracts if those policies meet certain minimum criteria.One of the minimum criteria is that the amount of the insurance liability is subject to a liabilityadequacy test.

• IC Interpretation 12 "Service concession arrangements" (effective from 1 July 2010) applies tocontractual arrangements whereby a private sector operator participates in the development,financing, operation and maintenance of infrastructure for public sector services. Depending on thecontractual terms, this interpretation requires the operator to recognise a financial asset if it has anunconditional contractual right to receive cash or an intangible asset if it receives a right (license) tocharge users of the public service. Some contractual terms may give rise to both a financial asset andan intangible asset.

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(3) Standards, amendments to published standards and interpretations to existing standards that are notyet effective and are not relevant to the Group (continued)

• The amendment to FRS 1 "First-time adoption of financial reporting standards" and FRS 127"Consolidated and separate financial statements: Cost of an investment in a subsidiary, jointlycontrolled entity or associate" (effective from 1 January 2010) allows first-time adopters to use adeemed cost of either fair value or the carrying amount under previous accounting practice tomeasure the initial cost of investments in subsidiaries, jointly controlled entities and associates in theseparate financial statements. The amendment also removes the definition of the cost method fromFRS 127 and requires investors to present dividends as income in the separate financial statements.

• The amendment to FRS 2 "Share-based payment: Vesting conditions and cancellations" (effectivefrom 1 January 2010) deals with vesting conditions and cancellations. It clarifies that vestingconditions are service conditions and performance conditions only. Other features of a share-basedpayment are not vesting conditions. These features would need to be included in the grant date fairvalue for transactions with employees and others providing similar services; they would not impactthe number of awards expected to vest or valuation there of subsequent to grant date. Allcancellations, whether by the entity or by other parties, should receive the same accountingtreatment. The improvement to FRS 2 (effective from 1 July 2010) clarifies that contributions of abusiness on formation of a joint venture and common control transactions are outside the scope ofFRS 2.

• The amendments to FRS 132 “Financial instruments: Presentation” and FRS 101 (revised)“Presentation of financial statements” – “Puttable financial instruments and obligations arising onliquidation” (effective from 1 January 2010) require entities to classify puttable financial instrumentsand instruments that impose on the entity an obligation to deliver to another party a prorata share ofthe net assets of the entity only on liquidation as equity, if they have particular features and meetspecific conditions.

• IC Interpretation 11 "FRS 2 Group and treasury share transactions" (effective from 1 January 2010)provides guidance on whether share-based transactions involving treasury shares or involving groupentities should be accounted for as equity-settled or cash-settled share-based payment transactions inthe stand-alone accounts of the parent and group companies.

• IC Interpretation 13 "Customer loyalty programmes" (effective from 1 January 2010) clarifies thatwhere goods or services are sold together with a customer loyalty incentive, the arrangement is amultiple-element arrangement and the consideration receivable from the customer is allocatedbetween the components of the arrangement using fair values.

• IC Interpretation 15 "Agreements for construction of real estates" (effective from 1 July 2010)clarifies whether FRS 118 "Revenue" or FRS 111 "Construction contracts" should be applied toparticular transactions. It is likely to result in FRS 118 being applied to a wider range of transactions.

• IC Interpretation 16 "Hedges of a net investment in a foreign operation" (effective from 1 July 2010)clarifies the accounting treatment in respect of net investment hedging. This includes the fact that netinvestment hedging relates to differences in functional currency not presentation currency, andhedging instruments may be held by any entity in the group. The requirements of FRS 121 "Theeffects of changes in foreign exchange rates" do apply to the hedged item.

• IC Interpretation 17 "Distribution of non-cash assets to owners" (effective from 1 July 2010)provides guidance on accounting for arrangements whereby an entity distributes non-cash assets toshareholders either as a distribution of reserves or as dividends. FRS 5 has also been amended torequire that assets are classified as held for distribution only when they are available for distribution intheir present condition and the distribution is highly probable.

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B B A S I S O F C O N S O L I D A T I O N

The consolidated financial statements include the financial statements of the Company and all of itssubsidiaries made to the end of the financial year.

Subsidiaries are all entities (include special purpose entities) in which the Group has power to exercise controlover the financial and operating policies so as to obtain benefits from their activities.

Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisition method ofaccounting, subsidiaries are consolidated from the date on which control is transferred to the Group and are nolonger consolidated from the date that control ceases. The cost of an acquisition is the amount of cash paid andthe fair value at the date of acquisition of other purchase consideration given by the acquirer, together withdirectly attributable expenses of the acquisition (other than costs of issuing shares). At the date of acquisition,the fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidatedfinancial statements. The excess of the cost of acquisition over the fair value of the Group’s share of theidentifiable net asets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of thenet assets of the subsidiary acquired, the difference is recognised directly in the income statement.

All intragroup transactions, balances and unrealised gains on transactions are eliminated, unrealised losses arealso eliminated unless cost cannot be recovered. Accounting policies of subsidiaries have been changed wherenecessary to ensure consistency with the policies adopted by the Group.

The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the Group’sshare of its net assets together with any unamortised balance of goodwill on acquisition and exchangedifferences which were not previously recognised in the consolidated income statement.

C I N V E S T M E N T S

Investments in subsidiaries are stated at cost. Where an indication of impairment exists, the carrying amount ofthe investment is assessed and written down immediately to its recoverable amount. See accounting policy NoteH on impairment of non-financial assets. Marketable securities (within current assets) are carried at the lower ofcost and market value determined on an aggregate basis by category of investment. On disposal of aninvestment, the difference between net disposal proceeds and its carrying amount is charged/credited to theincome statement.

D P R O P E R T Y , P L A N T A N D E Q U I P M E N T

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairmentlosses. The cost of property, plant and equipment comprise purchase cost, together with any incidental costs ofacquisition.

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 thecost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All otherrepairs and maintenance are charged to income statement during the financial year in which they are incurred.

Freehold land is not depreciated. Depreciation on assets under construction commences when the assets areready for their intended use.

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D P R O P E R T Y , P L A N T A N D E Q U I P M E N T ( C O N T I N U E D )

Other property, plant and equipment are depreciated on a straight line basis to write off the cost of each asset toits estimated residual value over their expected economic useful lives at the following annual rates:

%

Buildings 3 – 5Plant, machinery and equipment 81/3 – 10Furniture, fixtures and fittings 10 – 20Motor vehicles 12½ – 20Computers 20 – 331/3

Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each balance sheet date.

At each balance sheet date, the Group assesses whether there is any indication of impairment. If suchindications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable.A write down is made if the carrying amount exceeds the recoverable amount. See accounting policy Note H onimpairment of non-financial assets.

Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included inprofit/(loss) from operations.

E P R E P A I D L E A S E P A Y M E N T S

Payment for rights to use land over a predetermined period is classified as prepaid lease payments and is statedat cost less amount amortised and accumulated impairment losses. Long-term leasehold land of the Companywas revalued in 1985 and stated at revalued amount less subsequent depreciation and impairment losses. TheDirectors had applied the transitional provision of International Accounting Standards No. 16 (Revised)“Property, Plant and Equipment”, as adopted by the MASB, which allows the carrying value of leasehold landto be retained on the basis of previous revaluations without update, subject to continuity in the depreciationpolicy. With the implementation of FRS 117 “Leases”, the Group has applied the transitional provision in thatstandard which allows the unamortised carrying amounts of previously revalued land to be retained assurrogated carrying amounts of the prepaid lease payments.

The prepaid lease payments are amortised on a straight-line basis over the lease period, which is similar to thedepreciation policy when they were classified as property, plant and equipment.

F I N T A N G I B L E A S S E T S

(i) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries over the Group’s share of the fairvalue of their identifiable net assets at the date of acquisition. Goodwill of subsidiaries is included in thebalance sheet as intangible assets. Capitalised goodwill on consolidation is tested annually for impairmentand stated at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill isallocated to each of the Group’s cash-generating units expected to benefit from the synergies of thecombination. If the recoverable amount of the cash-generating unit is less than the carrying amount of theunit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to theunit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset inthe unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

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F I N T A N G I B L E A S S E T S ( C O N T I N U E D )

(ii) Other intangible assets

Patents

Expenditure on acquired patents is capitalised and amortised over its estimated useful life of 5 years.

Brand name

Brand name is capitalised using the income valuation method and is amortised over its estimated usefullife of 7 years.

Software

Acquired software is capitalised on the basis of the costs incurred to acquire and bring to use the specificsoftware. This cost is amortised over the estimated useful life. Costs associated with developing ormaintaining software programmes are recognised as an expense when incurred.

G I N V E N T O R I E S

Inventories comprising raw materials, work-in-progress and finished goods are stated at the lower of cost andnet realisable value. Cost is determined on a first in first out basis. The cost of finished goods and work-in-progress comprises raw materials, direct expenditure and an appropriate proportion of production overheadsbased on the normal level of activity.

Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completionand selling expenses.

H I M P A I R M E N T O F N O N - F I N A N C I A L A S S E T S

Property, plant and equipment, intangible assets and investments in subsidiaries are reviewed for impairmentlosses whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.Impairment loss is recognised in the income statement for the amount by which the carrying amount of theasset exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sellor value in use. For purposes of assessing impairment, assets are grouped at the lowest level for which there areseparately identifiable cash flows (cash generating units). Non- financial assets other than goodwill that sufferedan impairment are reviewed for possible reversal of the impairment at each reporting date.

I T R A D E R E C E I V A B L E S

Trade receivables are carried at invoiced amount less an allowance for doubtful debts. Known bad debts arewritten off and an estimated allowance is made for any doubtful debts.

During the year, the Group carried out a reassessment of the current market conditions following the relativeacceptability of high raw material prices potentially affecting the quality of commercial and credit risk. As aresult of this change in estimate, a write-back of RM4,719,877 to other operating income was reflected in thecurrent year financial statements.

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J C A S H A N D C A S H E Q U I V A L E N T S

For purposes of the cash flow statements, cash and cash equivalents comprise cash on hand, bank balances,deposits held at call with banks (excluding deposits which are pledged for banking facilities), bank overdraftsand short-term, highly liquid investments that are readily convertible to known amounts of cash and which aresubject to an insignificant risk of changes in value. Bank overdrafts are included within borrowings in currentliabilities on the balance sheet.

K E M P L O Y E E B E N E F I T S

(i) Short-term employee benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in theperiod in which the associated services are rendered by employees of the Group and the Company.

(ii) Defined contribution plan

A defined contribution plan is a pension plan under which the Group and the Company pay fixedcontributions into a separate entity (a fund) and will have no legal or constructive obligations to payfurther contributions if the fund does not hold sufficient assets to pay all employees benefits relating toemployee service in the current and prior period.

The Group and the Company’s contributions to the defined contribution plan are charged to the incomestatement in the period to which they relate. Once the contributions have been paid, the Group and theCompany have no further payment obligations.

(iii) Defined benefit plan

A defined benefit plan is a retirement plan that defines an amount of retirement benefits to be paid,usually as a function of one or more factors such as age, years of service or compensation.

The Group and the Company operate non-funded defined benefit plans. Under the plans, retirementbenefits are determinable by reference to employees’ earnings, designation and years of service and payableupon attaining the normal retirement age. The liabilities in respect of defined benefit plans are the presentvalue of the defined benefit obligations at the balance sheet date together with adjustments for actuarialgains/losses and past service cost. The Group and the Company determine the present value of the definedbenefit obligations with sufficient regularity such that the amounts recognised in the financial statementsdo not differ materially from the amounts that would be determined at the balance sheet date.

The defined benefit obligations, calculated using the projected unit credit method, are determined byindependent actuaries, considering the estimated future cash outflows using market yields at balance sheetdate of government securities which have currency and terms to maturity approximating the terms of therelated liabilities. Actuarial gains and losses arise from experience adjustments and changes in actuarialassumptions. The amount of net actuarial gains and losses recognised in the income statement aredetermined by the corridor method in accordance with FRS 119 “Employee Benefits” and are charged orcredited to income statement over the average remaining service lives of the related employees participatingin the defined benefit plans.

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L P R O V I S I O N S

Provision for liabilities is recognised when the Group and the Company have a present legal or constructiveobligation as a result of past events, when it is probable that an outflow of resources will be required to settle theobligation and when a reliable estimate of the amount can be made. Provisions are reviewed at each balancesheet date and adjusted to reflect the current best estimate.

Warranties

Provision for warranties provided to customers within the contractual period where a constructive obligationexists due to quality reasons, arising from the Group’s complex manufacturing processes. The amount of theprovision is determined by the probable outflow of resources in terms of monetary values (for example, cost ofreplacement or additional expenses incurred by customers) based on past experience, product nature and theinherent quality risk of manufacturing process in the context of customer expectations.

M I N C O M E T A X E S

Current tax expense is determined according to the tax laws of each jurisdiction in which the Group and theCompany operate and include all taxes based upon the taxable profits, including real property gains taxespayable on disposal of properties.

Deferred tax is recognised in full, using the liability method, on temporary differences arising between theamounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financialstatements. However, deferred tax assets and liabilities are not recognised on temporary differences arising fromgoodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is nota business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available againstwhich the deductible temporary differences or unused tax losses can be utilised.

Tax rates enacted, or substantively enacted, by the balance sheet date are used to determine deferred tax.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assetsagainst current tax liabilities and when they relate to income taxes levied by the same taxation authority and theGroup intends to settle its current tax assets and liabilities on a net basis.

N S H A R E C A P I T A L

(i) Classification

Ordinary shares are classified as equity.

(ii) Dividends to shareholders of the Company

Dividends on ordinary shares are recognised as liabilities when declared before the balance sheet date. Adividend declared after the balance sheet date, but before the financial statements are authorised for issue,is not recognised as a liability at the balance sheet date. Upon the dividend becoming payable, it will beaccounted for as a liability.

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O B O R R O W I N G S

Borrowings are recorded at the amount of proceeds received.

Interest expense relating to borrowings is reported within finance costs in the income statement.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defersettlement of the liability for at least 12 months after the balance sheet date.

P R E V E N U E R E C O G N I T I O N

(i) Revenue

Revenue from the sale of goods is recognised upon delivery of products when significant risks and rewardsof ownership of the goods are transferred to the buyer.

(ii) Dividend income

Dividend income is recognised when the Company’s rights to receive payment is established.

(iii) Interest income

Interest income is recognised on a time proportion basis taking into account the principal outstanding andthe effective rate over the period to maturity, when it is determined that such income will accrue to theGroup.

Q F O R E I G N C U R R E N C I E S

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currencyof the primary economic environment in which the entity operates (‘the functional currency’). Theconsolidated financial statements are presented in Ringgit Malaysia, which is the Company’s functionaland presentation currency.

(ii) Foreign currency transactions and balances

In preparing the financial statements of the individual entities, foreign currency transactions are translatedinto the functional currency using the exchange rates prevailing at the dates of the transactions. Foreignexchange gains and losses resulting from the settlement of such transactions and from the translation offoreign currency monetary assets and liabilities at year-end exchange rates are recognised in the incomestatement.

(iii) Group companies

The results and financial position of all the group entities that have a functional currency different fromthe presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date ofthat balance sheet;

• income and expenses for each income statement are translated at average exchange rates; and• all resulting exchange differences are recognised as a separate component of equity.

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Q F O R E I G N C U R R E N C I E S ( C O N T I N U E D )

(iii) Group companies (continued)

On consolidation, exchange differences arising from the translation of the net investment in foreignoperations are taken to shareholders’ equity. When a foreign operation is partially disposed off or sold,exchange differences that were recorded in equity are recognised in the income statement as part of thegain or loss on the sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets andliabilities of the foreign entity and are translated at the closing rate.

R F I N A N C I A L I N S T R U M E N T S

(i) Description

A financial instrument is any contract that gives rise to both a financial asset of one enterprise and afinancial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset fromanother enterprise, a contractual right to exchange financial instruments with another enterprise underconditions that are potentially favourable, or an equity instrument of another enterprise.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial assetto another enterprise, or to exchange financial instruments with another enterprise under conditions thatare potentially unfavourable.

(ii) Financial instruments recognised on the balance sheet

The particular recognition method adopted for financial instruments recognised on the balance sheet isdisclosed in the individual policy statements associated with each item.

(iii) Financial instruments not recognised on the balance sheet

Foreign currency forward contracts

The Group is a party to financial instruments that comprise forward foreign exchange contracts. TheGroup enters into forward foreign exchange contracts to protect the Group from movements in exchangerates by establishing the rate at which a foreign currency asset or liability will be settled.

Forward copper contracts

In a subsidiary company, for sales to customers entered into where copper price is fixed on a forward basis,the subsidiary company enters into forward copper contracts to establish back-to-back hedging to protectagainst risk arising from the volatility of copper price movements.

Gains and losses arising on contracts entered into as hedges of anticipated future transactions are deferreduntil the date of such transactions, at which time they are included in the measurement of suchtransactions. All other gains and losses relating to hedge instruments are recognised in the incomestatement in the same period as the differences on the underlying hedged items. Gains and losses oncontracts that are no longer designated as hedges are included in the income statement.

These instruments are not recognised in the financial statements on inception.

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R F I N A N C I A L I N S T R U M E N T S ( C O N T I N U E D )

(iv) Fair value estimation for disclosure purpose

The fair values of forward foreign exchange contracts and forward copper contracts are determined usingforward market rates at the balance sheet date.

In assessing the fair value of forward foreign exchange contracts and forward copper contracts, the Groupuses assumptions that are based on market conditions existing at each balance sheet date.

The fair value of financial assets is estimated by discounting the future contractual cash flows using currentmarket interest rates available to the Group.

The fair value of financial liabilities is estimated by discounting the future contractual cash flows at thecurrent market rate available to the Group for similar financial instruments.

The face values of other financial assets (less any estimated credit adjustments) and financial liabilities witha maturity period of less than one year are assumed to approximate their fair values.

S S E G M E N T R E P O R T I N G

Segment reporting is presented for enhanced assessment of the Group’s risks and returns. Business segment is agroup of assets and operations engaged in providing products or services that are subject to risks and returnsthat are different from those of other business segments. Geographical segments provide products or serviceswithin a particular economic environment that is subject to risks and returns that are different from thosecomponents operating in other economic environments.

Segment revenue, expenses, assets and liabilities are those amounts resulting from the operating activities of asegment that are directly attributable to the segment and the relevant portion that can be allocated on areasonable basis to the segment. Segment revenue, expenses, assets and liabilities are determined beforeintragroup balances and intra group transactions are eliminated as part of the consolidation process, except tothe extent that such intragroup balances and transactions are between group enterprises within a single segment.

T G O V E R N M E N T G R A N T S

Government grants relating to purchase of assets are included in non-current liabilities as deferred income andare credited to the income statement on a straight line basis over the expected life of the related assets.

U C O N T I N G E N T L I A B I L I T I E S A N D C O N T I N G E N T A S S E T S

The Group does not recognise a contingent liability but discloses its existence in the financial statements. Acontingent liability is a possible obligation that arises from past events whose existence will be confirmed by theoccurrence or non-occurence of one or more uncertain future events beyond the control of the Group or apresent obligation that is not recognised because it is not probable that an outflow of resources will be requiredto settle the obligation. A contigent liability also arises in the extremely rare case where there is a liability thatcannot be recognised because it cannot be measured reliably.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by theoccurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. TheGroup does not recognise contingent assets but discloses its existence where inflows of economic benefits areprobable, but not virtually certain.

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1 G E N E R A L I N F O R M A T I O N

The principal activities of the Group consist of procurement of raw materials, manufacturing and marketing ofelectrical conductivity grade copper wires, rods, strips and high-quality flat copper winding wire systems. Theprincipal activities of the Company are investment holding and manufacturing of electrical conductivity gradecopper rods, wires and strips.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on theMain Board of Bursa Malaysia Securities Berhad.

The ultimate holding company is Metdist S.A., a company incorporated in Panama.

The address of the registered office of the Company is Level 18, The Gardens North Tower, Mid Valley City,Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia.

The address of the principal place of business of the Company is No. 3, Lengkuk Keluli 2, Bukit Raja PrimeIndustrial Park, 41720 Klang, Selangor Darul Ehsan, Malaysia.

2 F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S

The Group’s activities expose it to a variety of financial risks, including foreign currency exchange risk, marketrisk, credit risk, interest rate risk, liquidity and cash flow risk. The Group’s overall financial risk managementobjective is to ensure that the Group creates value for its shareholders. The Group focuses on theunpredictability of financial markets and seeks to minimise potential adverse effects on the financialperformance of the Group. Financial risk management is carried out through risk reviews, internal controlsystems, a comprehensive insurance programme and adherence to Group financial risk management policies.The Board reviews these risks and approves the treasury policies, which covers the management of these risks.The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge certainexposures. It does not trade in derivative financial instruments.

Foreign currency exchange risk

The foreign currency exchange risk of the Group arises as a result of the foreign currency transactions enteredinto by Group companies in currencies other than their functional currencies. Foreign currency tradetransactions entered into by the Group are mainly in US Dollar and Euro. The Group enters into forwardforeign exchange contracts to limit its exposure on foreign currency receivables and payables, and on cash flowsgenerated from anticipated transactions denominated in foreign currencies.

Market risk

Copper raw material costs represent a significant part of total cost over the Group’s product range. Copper,being a traded commodity, is by nature highly volatile and fluctuates significantly. The Group purchases copperraw material from its suppliers on the basis of Metal Exchange copper price plus premium according to tradepractice. These suppliers provide back-to-back hedging for the Group’s sales to customers. A subsidiarycompany also enters into forward copper contracts to ensure back-to-back copper pricing for sales to itscustomers. Therefore, pricing risk is optimally managed allowing the Group to concentrate on itsmanufacturing activities without any market exposure in terms of copper price itself.

Through the facility made available from its suppliers and market, the Group is able to manage various risks ofquantity, delivery, pricing, currency and payment on a cost effective basis.

N o t e s T o T h e F i n a n c i a l S t a t e m e n t sfor the financial year ended 31 December 2009

52


2 F I N A N C I A L R I S K M A N A G E M E N T O B J E C T I V E S A N D P O L I C I E S


Credit risk

Credit risk arises when sales are made on credit terms. The Group has a credit policy in place and the exposureto credit risk is monitored on an ongoing basis. Credit evaluations are performed on customers requiring credit.The Board of Directors approves the credit policy and reviews credit limits periodically. The Group manages theoverall credit risk by limiting the aggregate exposure to any individual customer.

Cash assets are invested safely and profitably.

The Group considers the risk of material loss in the event of non-performance by a financial counter party to beunlikely.

Interest rate risk

The Group’s and the Company’s income and operating cash flows are dependent on changes in market interestrates. Interest rate exposure arises from the Group’s and the Company’s borrowings and deposits.

Liquidity and cash flow risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through anadequate amount of committed credit facilities, and the ability to meet financial obligations. Due to thedynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keepingcommitted credit lines available.

3 C R I T I C A L A C C O U N T I N G E S T I M A T E S

Estimates are continuously evaluated by the Directors and are based on historical experience and other factors,including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, bydefinition, rarely equal the related actual results. The estimates and assumptions that have a significant risk ofcausing a material adjustment to the carrying amount of assets and liabilities within the next financial year areoutlined below.

Estimated impairment of goodwill

The Group tests goodwill for impairment annually in accordance with its accounting policy.

The recoverable amounts of cash generating units were determined based on the value-in-use calculations. Thecalculations require the use of estimates and assumptions as set out in Note 14.

4 R E V E N U E

Revenue of the Company represents invoiced value of goods processed and dividend income from investments.Revenue of the Group represents invoiced value of goods sold, net of returns and discounts, after eliminatingsales within the Group.

Group Company2009 2008 2009 2008RM RM RM RM

Invoiced value of goods sold/processed 1,553,049,285 1,996,514,444 37,152,238 36,758,677Dividend income 0 0 340,000 1,050,000

1,553,049,285 1,996,514,444 37,492,238 37,808,677

53


5 P R O F I T F R O M O P E R A T I O N S

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


Property, plant and equipment– depreciation charge 30,613,306 26,594,156 1,804,701 2,703,503– impairment losses reversal (includedunder other operating income) 0 (4,986,598) 0 0

Rental of premises 951,980 897,243 293,300 245,714Staff cost (including other Directors’emoluments) (Note 6) 111,026,315 96,272,953 8,321,695 8,870,632

Contract labour costs 2,760,197 3,424,971 501,711 738,698Write back of allowance for doubtfuldebts (net) (5,793,021) (1,342,547) 0 0

Inventories written off/(back) 209,844 (788) 141,247 (127,223)Amortisation of prepaid lease payments 137,119 136,950 24,344 24,344Amortisation of intangible assets 1,261,075 2,033,098 0 0Impairment loss on goodwill 1,607,012 0 0 0(Write back of )/provision forwarranties (net) (537,993) 1,299,272 0 0

Rental income 0 0 (374,500) (374,500)Dividend income from marketable securities (89,514) (211,385) 0 0Foreign exchange gains (2,320,488) (4,289,339) (105,713) (134,619)Foreign exchange losses 3,302,358 14,161,424 496,268 138,510Insurance claim received (468,136) (7,297) (6,034) (3,287)Interest income (3,949,202) (5,696,944) (1,048,373) (1,348,386)Gain on disposal of property, plantand equipment (net) (2,663,229) (910,789) 0 (906,961)

Reversal of impairment loss in investmentin a subsidiary 0 0 0 (3,044,000)

Amount due from a subsidiary waived 0 0 0 829,519

Auditors' remuneration:Statutory audit– PricewaterhouseCoopers, Malaysia 194,800 149,800 112,000 72,000– Affiliates of PricewaterhouseCoopersMalaysian firm 777,776 647,748 0 0

– Other non-affiliated audit firms 30,448 142,870 0 0

1,003,024 940,418 112,000 72,000

Non-audit fees– PricewaterhouseCoopers, Malaysia 5,700 5,700 5,700 5,700– Affiliates of PricewaterhouseCoopersMalaysian firm 440,153 605,593 53,550 123,200

445,853 611,293 59,250 128,900

54


6 S T A F F C O S T


Wages, salaries and bonus 87,625,967 75,132,935 6,987,943 7,568,926Social contribution cost 18,034,013 16,734,535 40,843 44,241Defined benefit plans (Note 20) 2,956,395 2,247,307 499,273 436,596Defined contribution plan 2,409,940 2,158,176 793,636 820,869

111,026,315 96,272,953 8,321,695 8,870,632

7 D I R E C T O R S ’ R E M U N E R A T I O N


Directors’ fees 192,000 192,000 192,000 192,000Other emoluments* 1,844,957 1,824,720 1,844,957 1,824,720Estimated monetary value ofbenefits-in-kind 161,542 138,828 161,542 138,828

2,198,499 2,155,548 2,198,499 2,155,548

* Directors’ other emoluments are included within staff cost (Note 6).

8 F I N A N C E C O S T S


Interest expense on borrowings 15,651,217 22,659,363 936,692 1,988,424Bank charges and commitment fee 1,252,859 1,430,887 44,718 44,895

16,904,076 24,090,250 981,410 2,033,319

55


9 T A X E X P E N S E / ( C R E D I T )


Current tax– Malaysian income tax 172,133 (13,446,662) 0 (12,843,469)– Foreign tax 11,638,507 7,412,185 0 0

Deferred tax (Note 16) (6,011,314) (17,203,720) (5,196,323) (17,929,392)

5,799,326 (23,238,197) (5,196,323) (30,772,861)

Current year income tax 11,635,006 7,139,529 0 0Under/(over) accrual of income taxin prior years 175,634 (13,174,006) 0 (12,843,469)

(Over)/under accrual of deferred taxin prior years (122,729) 230,874 (17,291) 293,443

Previously unrecognised deductibletemporary differences 0 (12,583,219) 0 (12,583,219)

Origination and reversal of temporarydifferences (5,888,585) (4,851,375) (5,179,032) (5,639,616)

5,799,326 (23,238,197) (5,196,323) (30,772,861)

The explanation of the relationship between tax expense and profit before tax is as follows:


Numerical reconciliation between taxexpense and the product of accountingprofit multiplied by the Malaysian tax rate

Profit before tax 39,875,101 41,697,470 9,982,021 10,927,511

Tax calculated at the Malaysian tax rateof 25% (2008: 26%) 9,968,775 10,841,342 2,495,505 2,841,153

Tax effects of:– income not subject to tax (3,922,870) (3,527,768) 0 (806,387)– expenses not deductible for tax purposes 1,975,619 3,316,523 440,522 540,176– under/(over) accrual of income taxin prior years 175,634 (13,174,006) 0 (12,843,469)

– (over)/under accrual of deferred taxin prior years (122,729) 230,874 (17,291) 293,443

– deductible temporary differencespreviously not recognised 0 (12,583,219) 0 (12,583,219)

– current year’s tax loss not recognised 9,490,010 1,912,402 0 0– utilisation of tax incentive (8,115,059) (8,439,661) (8,115,059) (8,439,661)– subsidiaries’ profits not subject to tax 0 (41,767) 0 0– different tax rates in other countries (3,136,665) (1,322,958) 0 0– change in deferred tax recognition rate 0 246,308 0 225,103– utilisation of previously unrecognisedtax losses 0 (514,692) 0 0

– others (513,389) (181,575) 0 0

Tax expense/(credit) 5,799,326 (23,238,197) (5,196,323) (30,772,861)

56


9 T A X E X P E N S E / ( C R E D I T ) ( C O N T I N U E D )

In 2008, the Company was granted a tax incentive which resulted in a resubmission of tax computations of theearlier years. This has resulted in an over accrual of income tax and an under accrual of deferred tax assets ofRM12,843,469 and RM12,583,219 in respect of prior years which was reflected in the prior year’s financialstatements. As at 31 December 2008, the deferred tax assets on the remaining estimated tax credit ofapproximately RM8 million relating to financial year 2009 was not recognised as the Board of Directors wereuncertain that the Company could meet all conditions required to claim the tax inventive.

As at the balance sheet date, the remaining portion of the tax incentive has been fully utilised in the currentfinancial year and the tax impact is reflected in these financial statements as all conditions were met.

10 E A R N I N G S P E R S H A R E

Basic earnings per share of the Group is calculated by dividing the net profit for the financial year attributableto equity holders of the Company by the number of ordinary shares in issue during the financial year.

Group2009 2008

Net profit for the financial year attributable to equity holdersof the Company (RM) 34,075,775 64,935,667

Number of ordinary shares in issue 60,000,000 60,000,000

Basic earnings per share (sen) 56.79 108.23

11 D I V I D E N D S I N R E S P E C T O F O R D I N A R Y S H A R E S

Group and Company2009 2008

Gross Amount of Gross Amount ofper share dividend per share dividendsen RM sen RM

Proposed/declared first and final taxexempt dividend 12 7,200,000 12 7,200,000

At the forthcoming Annual General Meeting, a final tax exempt dividend in respect of the financial year ended31 December 2009 of 12 sen per share will be proposed for members approval. The financial statements do notreflect this dividend which will be recognised in the financial year ending 31 December 2010 when approved bymembers.

57


12 P R O P E R T Y , P L A N T A N D E Q U I P M E N T

Plant, Furniture,machinery fixtures Assets

Freehold and and Motor underland Buildings equipment fittings vehicles Computers construction TotalRM RM RM RM RM RM RM RM

GroupNet book valueAt 1 January 2009 16,386,968 54,234,264 100,438,245 9,826,862 1,449,277 1,951,959 79,695,245 263,982,820Additions 0 11,588,038 32,869,579 5,603,153 925,716 1,945,405 1,935,489 54,867,380Disposals 0 (336,835) (1,269,841) (10,724) (11,983) (3,812) 0 (1,633,195)Reclassifications 0 0 83,747,097 0 0 0 (83,747,097) 0Depreciation charge 0 (3,300,346) (22,697,313) (2,773,872) (523,338) (1,318,437) 0 (30,613,306)Currency translation differences 30,434 143,826 (901,807) (22,219) 5,910 (7,987) 2,211,458 1,459,615

At 31 December 2009 16,417,402 62,328,947 192,185,960 12,623,200 1,845,582 2,567,128 95,095 288,063,314

At 31 December 2009Cost 19,855,830 85,627,225 349,946,619 29,256,176 3,874,408 9,083,387 95,095 497,738,740Accumulated depreciation 0 (23,298,278) (157,760,659) (16,632,976) (2,028,826) (6,516,259) 0 (206,236,998)Accumulated impairment losses (3,438,428) 0 0 0 0 0 0 (3,438,428)

Net book value 16,417,402 62,328,947 192,185,960 12,623,200 1,845,582 2,567,128 95,095 288,063,314

At 1 January 2008 20,058,117 44,515,647 73,814,745 10,935,888 975,774 1,947,903 33,861,578 186,109,652Additions 0 8,625,994 10,909,543 1,624,144 881,016 1,047,473 80,731,720 103,819,890Disposals (1,878,771) (3,595,170) (714,350) (147,276) (4,062) (7,712) 0 (6,347,341)Reclassifications 662,078 5,288,221 29,447,964 92,852 0 0 (35,491,115) 0Reclassification to prepaid leasepayments (Note 13) (2,507,962) 0 0 0 0 0 0 (2,507,962)

Depreciation charge 0 (3,552,152) (18,816,326) (2,774,202) (408,541) (1,042,935) 0 (26,594,156)Impairment losses reversal 0 1,570,450 3,294,254 121,894 0 0 0 4,986,598Currency translation differences 53,506 1,381,274 2,502,415 (26,438) 5,090 7,230 593,062 4,516,139

At 31 December 2008 16,386,968 54,234,264 100,438,245 9,826,862 1,449,277 1,951,959 79,695,245 263,982,820

At 31 December 2008Cost 19,825,396 74,233,209 238,203,318 23,934,482 3,068,125 7,159,198 79,695,245 446,118,973Accumulated depreciation 0 (19,998,945) (137,765,073) (14,107,620) (1,618,848) (5,207,239) 0 (178,697,725)Accumulated impairment losses (3,438,428) 0 0 0 0 0 0 (3,438,428)

Net book value 16,386,968 54,234,264 100,438,245 9,826,862 1,449,277 1,951,959 79,695,245 263,982,820

58


12 P R O P E R T Y , P L A N T A N D E Q U I P M E N T ( C O N T I N U E D )

Plant, Furniture,machinery fixtures

Freehold and and Motorland Buildings equipment fittings vehicles Computers TotalRM RM RM RM RM RM RM

CompanyNet book valueAt 1 January 2009 6,985,044 7,519,832 4,942,456 181,349 382,023 81,010 20,091,714Additions 0 70,000 0 30,301 0 20,748 121,049Depreciation charge 0 (1,048,735) (466,931) (96,090) (138,421) (54,524) (1,804,701)

At 31 December 2009 6,985,044 6,541,097 4,475,525 115,560 243,602 47,234 18,408,062

At 31 December 2009Cost 6,985,044 18,203,822 73,440,062 1,881,138 1,116,700 1,303,709 102,930,475Accumulated depreciation 0 (11,662,725) (68,964,537) (1,765,578) (873,098) (1,256,475) (84,522,413)

Net book value 6,985,044 6,541,097 4,475,525 115,560 243,602 47,234 18,408,062

At 1 January 2008 6,985,044 8,565,066 2,566,253 238,932 169,024 53,899 18,578,218Additions 0 0 3,805,659 69,669 351,420 100,216 4,326,964Disposals 0 0 (105,645) (4,320) 0 0 (109,965)Depreciation charge 0 (1,045,234) (1,323,811) (122,932) (138,421) (73,105) (2,703,503)

At 31 December 2008 6,985,044 7,519,832 4,942,456 181,349 382,023 81,010 20,091,714

At 31 December 2008Cost 6,985,044 18,133,822 73,440,062 1,850,837 1,116,700 1,282,961 102,809,426Accumulated depreciation 0 (10,613,990) (68,497,606) (1,669,488) (734,677) (1,201,951) (82,717,712)

Net book value 6,985,044 7,519,832 4,942,456 181,349 382,023 81,010 20,091,714

59


13 P R E P A I D L E A S E P A Y M E N T S


Long-term leasehold landNet book valueAt 1 January 8,834,402 4,982,718 1,752,089 1,776,433Additions 0 1,687,950 0 0Reclassification from property, plantand equipment (Note 12) 0 2,507,962 0 0

Amortisation (137,119) (136,950) (24,344) (24,344)Currency translation differences 169,080 (207,278) 0 0

At 31 December 8,866,363 8,834,402 1,727,745 1,752,089

Long-term leasehold lands of the Company were revalued in 1985 and stated at revalued amount lesssubsequent depreciation and impairment losses. The Directors had applied the transitional provision ofInternational Accounting Standards No. 16 (Revised) “Property, Plant and Equipment”, as adopted by theMASB, which allows the carrying value of leasehold lands to be retained on the basis of previous revaluationswithout update, subject to continuity in the depreciation policy. With the implementation of FRS 117 “Leases”the Group has applied the transitional provision in that standard which allows the unamortised carryingamounts of previously revalued lands to be retained as surrogated carrying amounts of the prepaid leasepayments.

14 I N T A N G I B L E A S S E T S

Goodwill Patents Brand name Software TotalRM RM RM RM RM

GroupNet book valueAt 1 January 2009 25,988,847 587,547 1,605,913 1,200,031 29,382,338Amortisation charge 0 (591,776) (669,299) 0 (1,261,075)Impairment loss (1,607,012) 0 0 0 (1,607,012)Currency translation differences 227,608 4,229 13,122 0 244,959

At 31 December 2009 24,609,443 0 949,736 1,200,031 26,759,210

At 31 December 2009Cost 26,219,106 7,113,019 4,692,821 1,200,031 39,224,977Accumulated amortisation 0 (7,113,019) (3,743,085) 0 (10,856,104)Accumulated impairment losses (1,609,663) 0 0 0 (1,609,663)

Net book value 24,609,443 0 949,736 1,200,031 26,759,210

60


14 I N T A N G I B L E A S S E T S ( C O N T I N U E D )

Goodwill Patents Brand name Software TotalRM RM RM RM RM

GroupNet book valueAt 1 January 2008 25,987,248 1,997,534 2,270,288 0 30,255,070Additions 0 0 0 1,200,031 1,200,031Amortisation charge 0 (1,381,884) (651,214) 0 (2,033,098)Currency translation differences 1,599 (28,103) (13,161) 0 (39,665)

At 31 December 2008 25,988,847 587,547 1,605,913 1,200,031 29,382,338

At 31 December 2008Cost 25,988,847 7,050,551 4,651,609 1,200,031 38,891,038Accumulated amortisation 0 (6,463,004) (3,045,696) 0 (9,508,700)

Net book value 25,988,847 587,547 1,605,913 1,200,031 29,382,338

Software2009 2008RM RM

CompanyNet book valueAt 1 January 1,200,031 0Addition 0 1,200,031

At 31 December 1,200,031 1,200,031

During the year 2008, the Company acquired a software for a project. The implementation of the project hasnot yet commenced at the balance sheet date. As a result, the software is not amortised.

Recoverable amount based on value in use

Goodwill is allocated to the Group’s cash generating units (“CGU”) identified according to business segmentand country of operations. The recoverable amount of a CGU is determined based on value in use calculations.These calculations use pre-tax cash flow projections derived from the most recent financial budgets approved bymanagement for the next five years and applying a terminal value multiple using longer term sustainable growthrate of 2% and a pre-tax discount rate of 6.06%. The discount rate reflects the specific risks relating to theCGU’s.

The Group undertakes an annual test for impairment of goodwill by assessing pre-tax cash flow projectionsrelating to the underlying CGU’s. As a result, an impairment loss of RM1,607,012 was recorded in theconsolidated income statement for goodwill arising from business acquisitions.

61



62

15 I N T E R E S T I N S U B S I D I A R I E S

Company2009 2008RM RM

Non-current assetsUnquoted shares at cost 73,189,001 73,189,001Accumulated impairment losses (1,443,000) (1,443,000)

Investments in subsidiaries 71,746,001 71,746,001

Current assetsAmounts due from subsidiaries 12,286,624 38,961,735

Amounts due from subsidiaries are trade in nature and are repayable based on normal credit terms.

Company2009 2008RM RM

The currency profile of amounts due from subsidiaries is as follows:– Ringgit Malaysia 11,322,506 38,493,610– US Dollar 761,781 322,258– Singapore Dollar 202,337 137,629– Euro 0 8,238

12,286,624 38,961,735

Details of the subsidiaries are as follows:

Group’s effective interestCountry of 2009 2008

Name incorporation Direct Indirect Direct Indirect Principal activities% % % %

* Metrod (OFHC) Sdn Bhd Malaysia 100 – 100 – Procurement of rawmaterials and marketingof electrical conductivitygrade copper wires, rodsand strips and providingapproved OperationalHeadquarters (“OHQ”)services to relatedcompanies.

* Metrod Flat Products Malaysia 100 – 100 – Manufacturing ofSdn Bhd insulated and non

insulated copper strips.


63

15 I N T E R E S T I N S U B S I D I A R I E S ( C O N T I N U E D )

Details of the subsidiaries are as follows: (continued)



ø Metrod Industries Limited Thailand 99.99 – 99.99 – Ceased operations(Dissolved on28 November 2008).

∞ Metrod (Singapore) Pte Ltd Singapore 100 – 100 – Investment holding andtrading of copper wires,rods, strips and relatedproducts.

∞,1 ASTA Holdings GmbH Austria – 100 – 100 Investment holding.

∞,2 ASTA Elektrodraht GmbH Austria – 100 – 100 To function as a generalpartner of the limitedcommercial partnership,ASTA ElektrodrahtGmbH & Co. and theleasing of premises toASTA ElektrodrahtGmbH & Co.

∞,3 ASTA Elektrodraht GmbH Austria – 100 – 100 Production of high& Co. (Limited Partnership) quality flat copper

winding wire systems foruse in heavy electricalmachinery, specificallyproducts such asContinuously TransposedConductors (“CTC”),machine made RoebelBars and EnameledMultiple Conductors.

ø,4 Insulated Conductors & Netherlands – 100 – 100 Investment holding.Enameled Wires N.V.

15 I N T E R E S T I N S U B S I D I A R I E S ( C O N T I N U E D )

Details of the subsidiaries are as follows: (continued)



∞,5 ASTA Conductors Co. China – 100 – 100 Production of highLtd. quality flat copper

winding wire systems foruse in heavy electricalmachinery, specificallyproducts such asContinuously TransposedConductors (“CTC”),Enameled MultipleConductors and otherancillary products.

∞,4 ASTA International Pte Ltd Singapore – 100 – 100 Investment holding.

∞,6 ASTA Singapore Pte Ltd Singapore – 100 – 100 Investment holding.

∞,5 ASTA Inc. USA – 100 – 100 Manufacture of specialitycopper wires and strips,specifically ContinuouslyTransposed Cables(“CTC”).

∞,7 ASTA India Private India – 100 – 100 Manufacture of specialityLimited copper wires and strips,

specifically ContinuouslyTransposed Cables(“CTC”).

* Audited by PricewaterhouseCoopers, Malaysia.∞ Audited by member firms of PricewaterhouseCoopers International Limited which is a separate and

independent legal entity from PricewaterhouseCoopers, Malaysia.ø Audited by firms other than member firms of PricewaterhouseCoopers International Limited.1 Indirect interest is held through Metrod (Singapore) Pte Ltd.2 Indirect interest is held through ASTA Holdings GmbH and Metrod (Singapore) Pte Ltd.3 Indirect interest is held through ASTA Holdings GmbH and ASTA Elektrodraht GmbH.4 Indirect interest is held through ASTA Holdings GmbH.5 Indirect interest is held through Insulated Conductors & Enameled Wires N.V.6 Indirect interest is held through ASTA International Pte Ltd.7 Indirect interest is held through ASTA Singapore Pte Ltd.

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16 D E F E R R E D T A X

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assetsagainst current tax liabilities and when the deferred taxes relate to the same tax authority. The followingamounts, determined after appropriate offsetting, are shown in the balance sheet:


Deferred tax assets (34,087,472) (27,666,342) (24,823,393) (19,627,070)Deferred tax liabilities 1,546,986 1,181,779 0 0

(32,540,486) (26,484,563) (24,823,393) (19,627,070)

At 1 January (26,484,563) (9,372,846) (19,627,070) (1,697,678)

Charged/(credited) to income statement(Note 9)

Property, plant and equipment (737,748) 626,380 (29,494) 289,099Post-employment benefit obligations (137,589) (15,358) (45,274) (94,121)Accruals, provisions and allowance fordoubtful debts 1,543,079 203,132 (43,051) (59,600)

Unutilised tax losses (6,674,727) (15,849,069) (4,782,076) (15,790,069)Unabsorbed capital allowances 48,671 (2,021,040) (296,428) (1,922,936)Unutilised reinvestment allowances 0 (351,765) 0 (351,765)Unrealised profit on inventories (53,000) 204,000 0 0

(6,011,314) (17,203,720) (5,196,323) (17,929,392)Currency translation differences (44,609) 92,003 0 0

At 31 December (32,540,486) (26,484,563) (24,823,393) (19,627,070)

Subject to income taxDeferred tax assets (before offsetting)Property, plant and equipment 918,402 896,212 796,142 766,648Post-employment benefit obligations 6,516,575 6,267,147 530,130 484,856Accruals, provisions and allowance fordoubtful debts 3,176,323 3,825,500 353,847 310,796

Unutilised tax losses 23,670,210 15,849,069 20,572,145 15,790,069Unabsorbed capital allowances 2,228,369 2,575,533 2,219,364 1,922,936Unutilised reinvestment allowances 351,765 351,765 351,765 351,765Unrealised profit on inventories 151,000 98,000 0 0

37,012,644 29,863,226 24,823,393 19,627,070Offsetting (2,925,172) (2,196,884) 0 0

Deferred tax assets (after offsetting) 34,087,472 27,666,342 24,823,393 19,627,070

65


16 D E F E R R E D T A X ( C O N T I N U E D )


Deferred tax liabilities (before offsetting)Property, plant and equipment 3,862,910 3,378,663 0 0Post employment benefit obligations 30,254 0 0 0Accruals provisions and allowance fordoubtful debts 578,994 0 0 0

4,472,158 3,378,663 0 0Offsetting (2,925,172) (2,196,884) 0 0

Deferred tax liabilities (after offsetting) 1,546,986 1,181,779 0 0

Deferred tax assets have not been recognised in respect of the following items:


Deductible temporary differences 941,427 0 0 0Unutilised tax losses 10,169,375 2,618,777 0 0

11,110,802 2,618,777 0 0

17 I N V E N T O R I E S


Finished goods 59,450,565 39,362,473 0 0Raw materials 34,439,107 18,207,771 0 0Raw materials in transit 47,181,164 100,392,144 0 0Work-in-progress 22,386,153 22,701,371 0 0Spares and consumables 5,246,912 4,716,244 3,657,430 3,701,187

168,703,901 185,380,003 3,657,430 3,701,187

66


18 R E C E I V A B L E S , D E P O S I T S A N D P R E P A Y M E N T S


Trade receivables 172,348,852 192,154,592 0 0Allowance for doubtful debts (2,372,463) (8,133,502) 0 0

169,976,389 184,021,090 0 0Other receivables 6,031,674 39,917,343 949,424 1,380,471

176,008,063 223,938,433 949,424 1,380,471Deposits 684,016 949,455 249,616 286,050Prepayments 622,190 8,096,383 27,977 41,850

177,314,269 232,984,271 1,227,017 1,708,371

Prepayments include advances of RM192,111 (2008: RM7,281,973) for purchase of property, plant andequipment.


The currency profile of receivables,deposits and prepayments is as follows:– Ringgit Malaysia 54,727,209 63,961,745 1,108,431 1,469,986– US Dollar 59,454,671 36,402,307 109,928 234,008– Euro 53,101,162 64,769,513 8,658 4,377– Chinese Renminbi 5,801,205 59,798,862 0 0– Indian Rupee 2,940,166 7,228,909 0 0– Singapore Dollar 719,139 822,935 0 0– Others 570,717 0 0 0

177,314,269 232,984,271 1,227,017 1,708,371

Credit terms of sales range from payment in advance to 180 days (2008: payment in advance to 180 days).

Concentration of credit risk with respect to trade receivables is limited due to the Group’s large number ofcustomers and the policy of limiting the aggregate risk to any individual customer. The Group’s historicalexperience in collection of accounts receivable falls within the amounts allowed for. Due to these factors, theGroup believes that no additional credit risk beyond amounts already allowed for doubtful debts is likely in theGroup’s trade receivables.

67


19 C A S H A N D C A S H E Q U I V A L E N T S

Cash and cash equivalents included in the cash flow statements of the Group and the Company comprise thefollowing:


Deposits with licensed banks 124,188,334 196,154,636 65,636,050 40,500,000Bank and cash balances 43,093,036 19,306,489 10,455,158 1,267,599

167,281,370 215,461,125 76,091,208 41,767,599

Less: Deposit pledged as security for– term loan (Note 22) (40,500,000) (40,500,000) (40,500,000) (40,500,000)– bank guarantee (11,465,200) (1,380,114) (10,236,050) 0– bank overdrafts (Note 22) (1,057,130) 0 0 0

Cash and cash equivalents 114,259,040 173,581,011 25,355,158 1,267,599

The currency profile of deposits,bank and cash balances is as follows:

– Ringgit Malaysia 68,882,548 98,443,051 66,435,071 41,586,582– US Dollar 15,337,738 26,733,742 9,622,165 131,107– Euro 63,619,927 87,545,400 18,922 21,684– Chinese Renminbi 17,493,946 1,141,287 0 0– Indian Rupee 1,896,484 1,471,849 0 0– Others 50,727 125,796 15,050 28,226

167,281,370 215,461,125 76,091,208 41,767,599

Weighted average interest rate per annumof deposits that was effective at financialyear end 1.66% 3.16% 1.90% 3.30%

Average maturity period of depositsoutstanding as at year-end 26 days 24 days 37 days 83 days

Bank balances are deposits held on call and earn no interest.

68


20 P O S T - E M P L O Y M E N T B E N E F I T S O B L I G A T I O N S


CurrentDefined contribution plan 630,416 595,069 376,414 346,520Defined benefit plans 108,192 0 61,656 0

738,608 595,069 438,070 346,520

Non-currentDefined benefit plans 24,460,980 24,162,189 2,066,570 1,939,424

TotalDefined contribution plan 630,416 595,069 376,414 346,520Defined benefit plans 24,569,172 24,162,189 2,128,226 1,939,424

25,199,588 24,757,258 2,504,640 2,285,944

The movements during the financial year in the amounts recognised in the balance sheets of the Group and theCompany in respect of the defined benefit plans are as follows:


At 1 January 24,162,189 23,105,680 1,939,424 1,502,828Charged to income statement (Note 6) 2,956,395 2,247,307 499,273 436,596Benefits paid (2,744,712) (1,200,455) (310,471) 0Currency translation differences 195,300 9,657 0 0

At 31 December 24,569,172 24,162,189 2,128,226 1,939,424

The latest actuarial valuations of the defined benefit plans were carried out in October 2009 for subsidiaries inAustria, in March 2009 for a subsidiary in India and February 2009 for the Company and subsidiaries inMalaysia.

The amount recognised in the balance sheets may be analysed as follows:


Present value of unfunded obligations 28,302,799 25,088,243 3,111,645 2,881,900Unrecognised actuarial loss (2,822,655) (32,112) (459,344) (476,124)Unrecognised past service cost (910,972) (893,942) (524,075) (466,352)

Net liability recognised in the balance sheets 24,569,172 24,162,189 2,128,226 1,939,424

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20 P O S T - E M P L O Y M E N T B E N E F I T S O B L I G A T I O N S ( C O N T I N U E D )

The expense recognised in the income statements of the Group and the Company may be analysed as follows:


Current service cost 1,090,893 1,188,002 237,871 224,407Interest cost 1,492,103 1,319,687 167,641 150,424Past service cost 132,963 98,802 76,981 61,765Amortisation of net actuarial loss/(gain) 240,436 (359,184) 16,780 0

Expense recognised in theincome statements 2,956,395 2,247,307 499,273 436,596

The charge to the income statements of the Group and the Company is included in the following line items:


Cost of sales 2,126,801 1,580,638 284,476 241,045Selling and distribution costs 410,309 314,820 0 0Administrative expenses 419,285 351,849 214,797 195,551

2,956,395 2,247,307 499,273 436,596

The principal actuarial assumptions used in respect of the Group’s defined benefit plans are as follows:

Group Company2009 2008 2009 2008% % % %

Discount rates 6 to 8 6 to 8 6 6 to 8Expected rate of salary increases 3 to 7 3 to 7 6 3 to 7

21 P R O V I S I O N F O R W A R R A N T I E S

2009 2008Group RM RM

At 1 January 9,155,209 7,698,858(Reversal)/provision during the financial year (net) (537,993) 1,299,272Currency translation differences 60,888 157,079

At 31 December 8,678,104 9,155,209

70


22 B O R R O W I N G S ( I N T E R E S T B E A R I N G )


CurrentSecuredBank overdraft (Note 19) 1,057,130 0 0 0Working capital loan 17,160,050 0 0 0Term loans 64,329,530 63,764,582 39,192,929 38,848,733

82,546,710 63,764,582 39,192,929 38,848,733

UnsecuredExport financing 41,812,350 51,196,950 0 0Bankers’ acceptance 0 50,780,000 0 0Working capital loan 11,732,598 57,526,195 0 0Foreign currency trade loan 70,544,700 103,432,000 0 0Term loans 23,395,732 9,751,800 0 0

147,485,380 272,686,945 0 0

230,032,090 336,451,527 39,192,929 38,848,733

Non-currentSecuredTerm loans 110,950,301 134,891,774 0 0

UnsecuredTerm loans 38,326,921 58,423,521 0 0

149,277,222 193,315,295 0 0

Total borrowings 379,309,312 529,766,822 39,192,929 38,848,733

Repayments due:– less than 1 year 230,032,090 336,451,527 39,192,929 38,848,733– later than 1 year and not later than 2 years 53,413,495 47,162,630 0 0– later than 2 years and not later than 3 years 34,001,927 54,242,925 0 0– later than 3 years and not later than 4 years 21,281,380 30,657,709 0 0– later than 4 years and not later than 5 years 19,899,605 22,244,831 0 0– more than 5 years 20,680,815 39,007,200 0 0

379,309,312 529,766,822 39,192,929 38,848,733

The currency profile of borrowings isas follows:

Current– Ringgit Malaysia 0 50,780,000 0 0– US Dollar 87,704,751 103,432,000 0 0– Euro 129,537,612 124,713,332 39,192,929 38,848,733– Chinese Renminbi 9,537,031 57,526,195 0 0– Indian Rupee 3,252,696 0 0 0

230,032,090 336,451,527 39,192,929 38,848,733

Non-current– Euro 149,277,222 193,315,295 0 0

71


22 B O R R O W I N G S ( I N T E R E S T B E A R I N G ) ( C O N T I N U E D )

The effective interest rates per annum of bank borrowings at the balance sheet date are as follows:

Group Company2009 2008 2009 2008% % % %

Bank overdrafts 11.00 N/A N/A N/AExport financing 1.22 4.87 N/A N/AWorking capital loan 2.32 – 2.75 4.86 N/A N/ABankers’ acceptance N/A 3.97 N/A N/AForeign currency trade loan 1.19 4.37 N/A N/ATerm loans 1.60 – 3.45 4.35 – 4.42 1.60 4.42

The bank overdraft is secured by a charge on the stock in trade of a subsidiary. The working capital loan of asubsidiary is secured by the pledge of deposits with a licensed bank of the Company (Note 19). The foreigncurrency trade loan of a subsidiary is secured by pledge of shares of related companies. Term loan of theCompany is secured by pledge of deposits with a licensed bank of the Company (Note 19).

23 P A Y A B L E S


Trade payables 77,785,923 52,468,328 0 0Accrued liabilities 53,250,490 60,264,616 3,528,830 4,871,378

131,036,413 112,732,944 3,528,830 4,871,378Loan from a subsidiary 0 0 3,911,271 3,786,075

131,036,413 112,732,944 7,440,101 8,657,453

Credit terms of copper raw material suppliers vary from 3 to 14 days. (2008: 3 to 14 days). The credit terms ofthe other trade payables and accrued liabilities granted to the Group and Company vary from no credit to 60days (2008: no credit to 60 days). The loan from a subsidiary is denominated in Thai Baht, unsecured, interestfree and repayable on demand.


The currency profile of trade payables andaccrued liabilities is as follows:– Ringgit Malaysia 6,161,330 10,049,105 3,485,990 4,675,111– US Dollar 59,543,078 48,519,716 37,254 16,270– Euro 51,222,800 43,333,518 0 175,817– Thai Baht 5,190,676 0 5,586 0– Chinese Renminbi 4,009,589 6,697,302 0 0– Indian Rupee 4,848,519 3,972,859 0 0– Others 60,421 160,444 0 4,180

131,036,413 112,732,944 3,528,830 4,871,378

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24 D E F E R R E D I N C O M E

The subsidiary ASTA Elektrodraht GmbH & Co., Austria received a cash grant of EUR70,697 (equivalent toRM347,193) during the year from the Government of Austria for the purpose of acquisition of machinery. Thegrant received has been shown under non-current liabilities as deferred income. The grant shall be recognised asincome over the period of 9 years.

Grants received during the previous years were as follows:

• In the year 2008 the subsidiary ASTA Inc., USA received a cash grant of USD480,000 (equivalent toRM1,660,234) from the Government of the state of Georgia for carrying out modification to buildings tofacilitate the installation of machinery. The grant received is shown under non-current liabilities asdeferred income. The grant shall be recognised as income over the period of 12 years.

• In the year 2008 the subsidiary ASTA Elektrodraht GmbH & Co., Austria received a cash grant ofEUR89,849 (equivalent to RM438,096) from the Government of Austria for the purpose of acquisition ofmachinery. The grant received is shown under non-current liabilities as deferred income. The grant shall berecognised as income over the period of 10 years.

• In the year 2006 the subsidiary ASTA Conductors Co. Ltd., China received a cash grant ofRMB7,237,235 (equivalent to RM3,354,074) from the Government of China for the purchase of land userights. The grant received is shown under non-current liabilities as deferred income. The grant shall berecognised as income over the period of lease of 50 years.

The movement during the year is as follows:

2009 2008Group RM RM

At 1 January 5,548,959 3,193,632Grant received during the year 347,193 2,098,330Released to income statement (227,639) (126,365)Currency translation differences (23,767) 383,362

At 31 December 5,644,746 5,548,959

Current (included in Payables under accrued liabilities in Note 23) 292,775 128,948Non-current 5,351,971 5,420,011

5,644,746 5,548,959

25 S H A R E C A P I T A L

Group and Company2009 2008RM RM

Authorised ordinary shares of RM1.00 each:At 1 January/31 December 150,000,000 150,000,000

Issued and fully paid ordinary shares of RM1.00 each:At 1 January/31 December 60,000,000 60,000,000

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26 R E T A I N E D E A R N I N G S

Under the single-tier tax system which came into effect from the year of assessment 2008, companies are notrequired to have tax credits under Section 108 of the Income Tax Act, 1967 for dividend payment purposes.Dividends paid under this system are tax exempt in the hands of shareholders.

Companies with Section 108 credits as at 31 December 2007 may continue to pay franked dividends until theSection 108 credits are exhausted or 31 December 2013, whichever is earlier unless they opt to disregard theSection 108 credits to pay single-tier dividends under the special transitional provisions of the Finance Act,2007. As at 31 December 2009, subject to agreement with the tax authorities, the Company has a tax creditbalance under Section 108(6) of the Income Tax Act, 1967 to frank up to approximately RM57,350,000(2008: RM54,400,000) of its retained earnings as at 31 December 2009, if paid out as dividends. TheCompany also has exempt profits as at 31 December 2009 amounting to RM21,189,000 (2008:RM28,389,000) available for distribution as tax exempt dividends to shareholders.

27 S I G N I F I C A N T R E L A T E D P A R T Y T R A N S A C T I O N S

In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are othersignificant related party transactions and balances. The related party transactions described below were carriedout on normal commercial terms not more favourable to the related parties than those generally available tounrelated parties unless otherwise stated.

(a) Transactions with related parties


Transactions with subsidiariesInvoiced value of goods processedto Metrod (OFHC) Sdn Bhd 0 0 37,152,238 36,758,677

Purchase of property plant and equipmentfrom Metrod Industries Limited 0 0 0 59,261

Rental income from Metrod FlatProducts Sdn Bhd 0 0 374,500 374,500

Amount due from Metrod IndustriesLimited waived 0 0 0 829,519

Dividend received from Metrod (OFHC)Sdn Bhd 0 0 340,000 1,050,000

Transactions with other related partiesPurchase of goods– Metdist Ltd 1 735,929,300 1,055,516,652 0 0

Sale of goods– MetTube Sdn Bhd 2 1,127,487 1,436,489 0 0– AM SGB Sdn Bhd 3 4,673,298 8,419,609 0 0

Deposit paid for IT services– Birlasoft (India) Limited 4 0 61,600 0 61,600

Purchase of IT services– Birlasoft (India) Limited 4 178,296 0 0 0

74




(b) Significant outstanding balances

The outstanding balances with subsidiaries are shown in Note 15 and Note 23. The significantoutstanding balances with other related parties as at 31 December 2009 were as follows:


Amount due to related party– Metdist Ltd. 1 49,438,098 36,339,707 0 0

Amounts due from related parties– MetTube Sdn Bhd 2 83,577 366,385 0 0– AM SGB Sdn Bhd 3 458,875 371,631 0 0– Birlasoft (India) Limited 4 0 61,600 0 61,600

1. Metdist Ltd. is a company in which certain directors of the Company namely The Lord Bagri CBEand The Hon. Apurv Bagri, are Directors and indirectly hold 100% shares in Metdist Ltd. The creditterms granted to the Company are consistent with the disclosure in Note 23 to the financialstatements.

2. MetTube Sdn Bhd (“MetTube”) is a company under common significant shareholding in which Mr.Pratik Basu, a Director of the Company, is also a Director. MetTube also has direct shareholdings of11.67% in Metrod (Malaysia) Bhd.

3. AM SGB Sdn Bhd is a company in which Y.Bhg. Dato’ Azlan Hashim is a Director. He is alsodeemed interested in 2,950,000 shares in Metrod (Malaysia) Bhd by virtue of his shareholdings of99.99% and his sister’s shareholding of 0.01% in Infinitive Growth Sdn Bhd, a shareholder of theCompany.

4. Birlasoft (India) Limited (“Birlasoft”) is a company in which The Lord Bagri CBE and The Hon.Apurv Bagri, who are Directors of the Company, are interested by virtue of being related to a majorshareholder and Director of Birlasoft.

75




(c) Remuneration of key management personnel


Salaries, bonus and allowances 6,176,192 6,423,750 2,698,747 2,637,160Social contribution cost 263,236 248,081 0 0Defined benefit plans 354,061 345,192 146,675 134,932Defined contribution plan 715,676 642,458 418,408 392,902Estimated monetary value of benefitsby way of usage of Group andCompany’s assets 613,278 1,002,633 329,152 280,146

Others 2,974 2,788 0 0

8,125,417 8,664,902 3,592,982 3,445,140

Key management personnel are the persons who have authority and responsibility for planning, directingand controlling the activities of the Company or the Group either directly or indirectly.

(d) Loans to key management personnel


At 1 January 500,000 359,200 500,000 359,200Loans granted during the year 500,000 140,800 0 140,800Loan repaid (128,000) 0 (88,000) 0

At 31 December 872,000 500,000 412,000 500,000

The loans to key management personnel are unsecured, interest free and repayable over a period of 5 years..

28 C A P I T A L C O M M I T M E N T S

Capital expenditure not provided for in the financial statements are as follows:


Property, plant and equipment:– Authorised and contracted for 3,330,078 22,488,129 780,786 2,500,000– Authorised but not contracted for 1,319,742 7,668,649 1,000,000 0

4,649,820 30,156,778 1,780,786 2,500,000

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29 S E G M E N T R E P O R T I N G

(a) Primary reporting format – geographical segment by location

Segment Rest of European Northreporting Malaysia * Asia Union America Elimination Group

RM RM RM RM RM RM

Financial year ended31 December 2009

RevenueExternal 898,759,245 134,684,530 502,841,998 16,763,512 0 1,553,049,285Inter segmentrevenue 24,435,167 0 1,050,830 0 (25,485,997) 0

Total revenue 923,194,412 134,684,530 503,892,828 16,763,512 (25,485,997) 1,553,049,285

ResultsSegment results 23,761,548 3,278,169 48,566,216 (17,215,941) (1,610,815) 56,779,177Finance costs (16,904,076)Tax expense (5,799,326)

Net profit for thefinancial year 34,075,775

As at31 December 2009

Net assetsSegment assets 368,229,472 203,366,005 568,278,040 92,534,617 (395,408,600) 836,999,534Unallocated assets 34,832,633

Total assets 871,832,167

Segment liabilities 63,221,156 24,255,857 81,902,608 13,160,297 (12,273,842) 170,266,076Unallocated liabilities 387,760,348

Total liabilities 558,026,424


Other informationDepreciation 2,607,868 7,831,004 16,184,450 3,989,984 0 30,613,306Amortisation of prepaidlease payments 24,344 112,775 0 0 0 137,119

Amortisation ofintangible assets 0 0 1,261,075 0 0 1,261,075

Impairment of goodwill 0 1,607,012 0 0 0 1,607,012Capital expenditure 162,225 23,596,765 10,356,615 20,751,775 0 54,867,380

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29 S E G M E N T R E P O R T I N G ( C O N T I N U E D )

(a) Primary reporting format – geographical segment by location (continued)

Segment Rest of European Northreporting Malaysia * Asia Union America Elimination Group

RM RM RM RM RM RM


RevenueExternal 1,258,539,471 132,128,147 605,846,826 0 0 1,996,514,444Inter segmentrevenue 20,675,236 167,745 782,093 0 (21,625,074) 0

Total revenue 1,279,214,707 132,295,892 606,628,919 0 (21,625,074) 1,996,514,444

ResultsSegment results 21,317,689 1,149,435 45,826,856 (5,690,279) 1,753,133 64,356,833Finance costs (22,659,363)Tax credit 23,238,197

Net profit for thefinancial year 64,935,667

As at31 December 2008

Net assetsSegment assets 433,498,040 239,909,251 547,736,975 64,970,036 (345,294,656) 940,819,646Unallocated assets 33,661,008

Total assets 974,480,654

Segment liabilities 61,008,977 25,220,829 78,097,508 7,957,164 (20,219,056) 152,065,422Unallocated liabilities 536,518,746

Total liabilities 688,584,168


Other informationDepreciation 3,105,962 4,979,159 18,265,817 661,458 (418,240) 26,594,156Amortisation of prepaidlease payments 24,344 112,606 0 0 0 136,950

Amortisation ofintangible assets 0 0 2,033,098 0 0 2,033,098

Impairment loss 0 (4,986,598) 0 0 0 (4,986,598)Capital expenditure 5,988,070 51,818,091 3,379,989 45,521,721 0 106,707,875

* Company’s home country

78


29 S E G M E N T R E P O R T I N G ( C O N T I N U E D )

(a) Primary reporting format – geographical segment by location (continued)

The Group’s revenue by geographical location of customers is as follows:

2009 2008RM RM

Malaysia 661,354,835 907,566,381Other Asian countries 358,421,358 446,837,979Europe 410,211,433 488,416,382North America 46,271,044 80,561,710Others 76,790,615 73,131,992

1,553,049,285 1,996,514,444

Intersegment revenue comprises sale of copper products and rendering of OHQ services to othersegments. These transactions are conducted on an arms length basis under terms, conditions and pricesnot materially different from transactions with unrelated parties.

Unallocated assets and liabilities of the Group are made up of borrowings, tax liabilities and deferred taxes.

(b) Secondary reporting format – business segment

The Group is principally engaged in one business segment, which is the manufacturing and marketing ofelectrical conductivity grade copper wires, rods, strips and high-quality flat copper winding wire systems.

79


30 F I N A N C I A L I N S T R U M E N T S

The Group’s activities expose it to a variety of financial risks as mentioned in Note 2 to the financial statements.

(a) Forward foreign exchange contracts

Forward foreign exchange contracts are entered into by the Group in currencies other than its functionalcurrencies to manage exposure to fluctuations in foreign currency exchange rates on specific transactions.It does not trade in derivative financial instruments.

At 31 December 2009, the settlement dates on open forward contracts ranged between 1 to 12 months(2008: 1 to 12 months). The foreign currency amounts to be received and contractual exchange rates ofthe Group’s outstanding forward contracts as at balance sheet date are as follows:

Currency Currency Foreignto be to be currency Contractual rates Total

Group received paid amount range amountRM

At 31 December 2009

Future sales RM USD 5,000,000 3.4510 17,255,000Trade payables USD RM 1,778,225 3.4260 to 3.4463 6,106,197

At 31 December 2008

Future sales RM USD 7,683,031 3.3810 to 3.5635 26,568,919Future sales EURO USD 1,540,000 3.4991 5,388,638Trade payables USD RM 3,043,000 3.4718 to 3.5660 10,704,214Capital contribution USD EURO 4,095,800 3.5714 14,627,700

The fair value of the outstanding forward contracts of the Group at the balance sheet date was anunfavourable net position of approximately RM45,608 (2008: favourable RM510,370). The net exchangegain/loss is deferred until the related transactions take place, at which time they are included in themeasurement of such transactions.

(b) Forward copper contracts

A subsidiary company enters into forward copper contracts to hedge against risk arising from the volatilityof copper price movements. Such forward copper contracts are denominated in Renminbi and withmaturities less than a year. As at balance sheet date, the Group’s outstanding forward copper contracts areas follows:

2009 2008RM RM

Purchase contracts 5,855,051 30,849,944Favourable/(unfavourable) position (net) 3,124,270 (9,804,420)

The net position as at 31 December 2009 is recoverable from the customers.

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81


31 F A I R V A L U E S

The carrying amounts of financial assets and liabilities of the Group and the Company at the balance sheet dateapproximated their fair values except as set out below:


Term loansCarrying value 237,002,484 266,831,677 39,192,929 38,848,733Fair value 240,364,863 262,464,685 39,192,929 38,848,733

In the previous financial year, the loan from a subsidiary company (Note 23) is a current asset and the carryingvalue at balance sheet date approximates its fair value.

32 M A R K E T A B L E S E C U R I T I E S

Marketable securities are denominated in Indian Rupees and comprise short term investments in quoted unitsof a mutual fund. The carrying value approximates the market value at the balance sheet date.

33 N O N - C U R R E N T T A X L I A B I L I T I E S

Under Austrian tax laws, ASTA Holdings GmbH and ASTA Inc. form an Austrian tax group headed by ASTAHoldings GmbH. ASTA Holdings GmbH is entitled to claim group relief on losses of ASTA Inc. as foreignlosses of ASTA Inc. were included in the current tax calculation of ASTA Holdings GmbH.

Due to the first time adoption of the AFRAC (“Austrian Financial Reporting And Auditing Committee”)opinion on “Questions Regarding The IFRS Accounting And Reporting In Connection With TheImplementation Of The Group Taxation”, future tax liabilities resulting from the consideration of foreignsubsidiaries’ losses by the parent company have to be treated like a tax deferral. As a result, the non-current taxliabilities will become payable once ASTA Inc. starts making taxable profits.

34 A P P R O V A L O F F I N A N C I A L S T A T E M E N T S

The financial statements have been approved for issue in accordance with a resolution of the Board of Directorson 25 February 2010.

Analysis Of Shareholdings By Range GroupSize of Shareholdings No. of Shares % No. of Holders %

1 – 99 391 0.00 14 1.31100 – 1000 116,329 0.20 148 13.86

1,001 – 10,000 2,432,420 4.05 821 76.8710,001 – 100,000 1,656,700 2.76 70 6.56100,001 – 2,999,999 16,751,200 27.92 12 1.123,000,000 and above 39,042,960 65.07 3 0.28

60,000,000 100.00 1,068 100.00

Thirty (30) Largest Securities Account HoldersName No. of Shares % of Total

1. Metdist S.A. 25,281,000 42.142. CIMSEC Nominees (Asing) Sdn Bhd 7,002,960 11.67

For Mettube Sdn Bhd3. Bank Perusahaan Kecil & Sederhana Malaysia Berhad 6,759,000 11.274. Infinitive Growth Sdn Bhd 2,950,000 4.925. Crystal Coast Sdn Bhd 2,900,000 4.836. Warna Sensasi Sdn Bhd 2,884,400 4.817. HLG Nominee (Asing) Sdn Bhd 2,600,000 4.33

Commerzbank (Sea) Ltd For Tieton Group Ltd8. Bank Perusahaan Kecil & Sederhana Malaysia Berhad 2,238,500 3.739. Quarry Lane Sdn Bhd 850,000 1.4210. Neoh Choo Ee & Company, Sdn Berhad 610,000 1.0211. Neoh Choo Ee & Company, Sdn Berhad 457,200 0.7612. Muhammad Marzuki bin A Samad 400,000 0.6713. Cartaban Nominees (Asing) Sdn Bhd 387,000 0.65

Caceis Bank Paris For HMG Globetrotter14. Lim Kew Seng 314,400 0.5215. Amanahraya Trustees Berhad

Public Smallcap Fund 159,700 0.2716. Lee Hau Hian 87,800 0.1517. Public Nominees (Tempatan) Sdn Bhd 70,000 0.12

Pledged Securities Account For Cheam Heng Ming (E-Ktn/Rau)18. Wong Thian Soon 61,500 0.1019. Public Nominees (Tempatan) Sdn Bhd 61,100 0.10

Pledged Securities Account For Ngeo Ah Kau (E-Spi)20. Quah Lake Jen 59,600 0.1021. Mayban Nominees (Tempatan) Sdn Bhd 58,500 0.10

Tan Seng22. Gau Ngoo Jin @ Goh Ngoo Jin 53,000 0.0923. TCL Nominees (Tempatan) Sdn Bhd 50,000 0.08

Lee Choo Boo @ Lee Lay Keng24. Loke Leng Seak 46,500 0.0825. Toh Kam Choy 41,000 0.0726. Ng Kim Neo 38,500 0.0627. Law Ah Leong 37,000 0.0628. Quah Say Beng 34,500 0.0629. Lee Tong Choo 34,100 0.0630. Eu Hoi Lim 30,000 0.05

TOTAL 56,557,260 94.29

Substantial ShareholdersDirect Holding Indirect Holding

No. of Shares % of Total No. of Shares % of Total

1. Metdist S.A. 25,281,000 42.14 – –2. Bank Perusahaan Kecil & Sederhana Malaysia Berhad 8,997,500 15.00 – –3. CIMSEC Nominees (Asing) Sdn Bhd 7,002,960 11.67 – –

For Mettube Sdn Bhd4. Bank Pembangunan Malaysia Berhad – – * 8,997,500 15.00

TOTAL 41,281,460 68.81 8,997,500 15.00

* Deemed interest by virtue of its wholly-owned subsidiary, Bank Perusahaan Kecil & Sederhana Malaysia Berhad.

A n a l y s i s O f S h a r e h o l d i n g sas at 31 March 2010

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Description/ Land area/ Net bookexisting use (built-up value as Date of

Registered owner (age of area) Tenure/ at 31.12.2009 Valuation (V) orand location building) Sq. Ft. Expiring date (‘000) Acquisition (A)

Metrod (Malaysia) Berhad

2 Solok Waja Satu Land 152,460 Unexpired RM1,780 31-12-1985 (V)Bukit Raja Industrial Estate leasehold of (Note 13,41720 Klang approximately Page 60)

79 years(22-10-2088)

3 Lengkuk Keluli 2 Factory 283,139/ RM9,358 16-06-1993 (A)Bukit Raja Prime (15 years old) (107,500)Industrial Park Freehold41720 Klang Warehouse (22,217) RM1,993 19-08-2005 (A)

(5 years old)

Metrod Flat ProductsSdn Bhd

2 Solok Waja Satu Office & factory * (78,500) _ RM5,268 04-04-2007 (A)Bukit Raja Industrial Estate building41720 Klang (2 years old)

Metrod (OFHC) Sdn Bhd

Lot 48, Bukit Raja Vacant land 141,569 Freehold RM4,670 19-09-2005 (V)Prime Industrial Park41720 Klang

ASTA ElektrodrahtGmbH

A-2761 Reichental Vacant Land 52,304 Freehold EUR 276 04-06-2004 (A)crossing Reichental-federal road B21, Austria

A-2755 Oed, Austria Factory 434,958/ Freehold EUR 2,462 04-06-2004 (A)(more than (207,001)34 years old)

* Built on land owned by Metrod (Malaysia) Berhad

L i s t O f P r o p e r t i e sowned by the Metrod Group

83


}

Description/ Land area/ Net bookexisting use (built-up value as Date of

Registered owner (age of area) Tenure/ at 31.12.2009 Valuation (V) orand location building) Sq. Ft. Expiring date (‘000) Acquisition (A)

ASTA ElektrodrahtGmbH & Co.

A-2755 Oed, Austria Office building * (2,766) Freehold EUR 155 04-06-2004 (A)(9 years old)

A-2755 Oed, Austria Factory building * (7,911) Freehold EUR 1,074 01-08-2007 (A)

ASTA ConductorsCo. Ltd. (ASTA China)

No. 62 Taishan East Road Office & factory 651,071 Unexpired RMB 34,107 14-10-2006 (A)Bayoing building ** (130,394) leaseholdJiangsu China (3 years old) period approx.

47 years(13-10-2056)

ASTA India Pvt. Ltd.

Plot No. 725/726 Office & factory 1,183,413 Unexpired Rs 207,914 25-07-2007 (A)GIDC Manjusar building (80,259) leaseholdTaluka Savli (1 year old) of approx.Vadodara, India 97 years

ASTA Inc.

770 Mills Road Office & factory 2,165,455 Freehold USD 3,697 31-12-2007 (A)Waynesboro building (209,000)District of Burke Country (1 year old)Georgia (GA) 30830, USA

* Built on land owned by ASTA Elektrodraht GmbH.** the land on which the office and factory building is constructed, was acquired and paid by way of government grant.

84


I/We NRIC No. (New) (Old)ofbeing a member of Metrod (Malaysia) Berhad hereby appoint * the Chairman of the meeting or

NRIC No. (New) (Old)ofor failing him/her NRIC No. (New) (Old)ofas my / our proxy to vote for me / us on my / our behalf at the Twenty-Ninth (29th) Annual General Meeting of the Company to be heldat Cobalt 7, Level 1, The Ritz-Carlton, 168 Jalan Imbi, 55100 Kuala Lumpur on Thursday, 27 May 2010 at 2.00 p.m. and at anyadjournment thereof.

* Delete if not applicable

My/Our proxy is to vote as indicated with an “X” below:If no specific direction as to voting is given, the proxy will vote or abstain from voting at his discretion.

No. Resolutions For Against

1. To receive the Statutory Financial Statements for the financial year ended31 December 2009 and the Reports of the Directors and Auditors thereon.

2. To approve the First and Final Dividend of 12 sen per share (tax-exempt) for thefinancial year ended 31 December 2009.

3. To approve payment of Directors' Fees of RM192,000 for the financial year ended31 December 2009.

4. To re-elect The Hon. Apurv Bagri (Apurv Bagri) as a Director of the Company.

5. To re-elect Y.Bhg. Datuk Abu Hassan Kendut as a Director of the Company.

6. To re-elect En. Ash’ari bin Ayub as a Director of the Company.

7. To re-appoint Messrs PricewaterhouseCoopers as Auditors of the Company andto authorise the Directors to fix their remuneration.

8. To re-appoint The Lord Bagri CBE as a Director of the Company pursuant toSection 129(6) of the Companies Act, 1965.

9. Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965.

10. Proposed Renewal of Shareholders' Mandate for Recurrent Related Party Transactionsof a Revenue or Trading Nature (“RRPT”) as set out under section 2.1.5(1) of the Circularto shareholders dated 3 May 2010.

11. Proposed Renewal of Shareholders' Mandate for RRPT as set out under section 2.1.5(2)of the Circular to shareholders dated 3 May 2010.



14. Proposed Amendments to the Articles of Association of the Company.

Dated this day of 2010

Signature of Shareholder or Common Seal

Notes:i) A member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. A

proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.ii) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a

Corporation either under seal or under the hand of an officer or attorney duly authorised.iii) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least

one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.iv) An authorised nominee with more than one (1) securities account must submit separate instrument of proxy for each securities account.v) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power

or authority shall be deposited at the registered office of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting at which the person named in theinstrument proposes to vote, or in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of the poll, and in defaultthe instrument of proxy shall not be treated as valid.

FORM OF PROXY

Metrod

METROD (MALAYSIA) BERHAD(66954 H)

No. of Shares held CDS Account No.

annual report 2009 - metrod (733kb).pdfa) y.bhg. datuk abu hassan kendut (resolution5) b) en....

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