panaflo controls pte ltd pantech steel industries … · shah alam office no. 3, jalan trompet 33/8...

PANTECH CORPORATION SDN BHD(176321-P)

Johor Bahru Head OfficePLO 234, Jalan Tembaga Satu

Pasir Gudang Industrial Estate

81700 Pasir Gudang

Johor Darul Takzim, Malaysia

Tel: +607 259 7979 / 252 1767

Fax: + 607 251 2877 / 252 0835

Email: [email protected]

Shah Alam OfficeNo. 3, Jalan Trompet 33/8

Seksyen 33, 40400 Shah Alam

Selangor Darul Ehsan, Malaysia

Tel : +603 5192 7995

Fax : +603 5192 7992

Email : [email protected]

Pulau Indah (Warehouse Office)Persiaran Port Klang FZ 7, Jalan FZ 6-P1

Port Klang Free Zone / KS 12

42920 Pulau Indah


Tel : +603 3101 3767

Fax : +603 3101 4767

PANTECH (KUANTAN) SDN BHD(191606 U)

Lot 5, Jalan Industri Semambu 2

Kawasan Perindustrian Semambu

25350 Kuantan

Pahang Darul Makmur, Malaysia

Tel: +609 568 7550

Fax: +609 568 7553


PANAFLO CONTROLS PTE LTD(200413822 D)

Singapore OfficeNo. 5

Tuas View Close

Tradelink Place

Singapore 637490

Tel: +65 6562 3048

Fax: +65 6562 3148


PANTECH INTERNATIONAL (KSA)

SDN BHD(890670-K)

PLO 234, Jalan Tembaga Satu


81700 Pasir Gudang



PANTECH STEEL INDUSTRIES SDN BHD(509731-A)

ManufacturerLot 13258 & 13259

Jalan Haji Abdul Manan

Off Jalan Meru

42200 Kapar


Tel: +603 3393 1633

Fax: +603 3392 8966


PANTECH STAINLESS & ALLOY

INDUSTRIES SDN BHD(733428-W)

ManufacturerPLO 234, Jalan Tembaga Satu


81700 Pasir Gudang



01 Financial Highlights

02 Corporate Information

03 Corporate Structure

04 Notice of Fourth Annual General Meeting

07 Directors’ Profile

09 Executive Chairman’s Statement

13 Corporate Social Responsibility Activities

15 Corporate Events

17 Audit Committee Report

20 Statement on Internal Control

22 Corporate Governance Statement

28 Additional Compliance Statement

29 Financial Statements

89 List of Properties

90 Analysis of Shareholdings

92 30 Largest Shareholders

93 Implementation of

Electronic Dividend Payment

(”eDividend”)

Form of Proxy

contents

Annual Report 2010

PANTECH GROUP HOLDINGS BERHAD

1

Revenue Profit After Taxation

Earnings Per Share Shareholders’ Fund

RM’000

0

100,000

200,000

300,000

600,000

400,000

500,000

24

3,0

00

*

40

1,5

78

‘08

51

1,5

95

31

3,3

23

‘07 ‘09 ‘10

Sen

0

5

20

10

15

7.1

4*

13

.60

‘08

16

.43

9.1

0

‘07 ‘09 ‘10

RM’000

0

10,000

20,000

30,000

40,000

50,000

70,000

60,000

‘07

26

,75

8

61

,45

9

50

,87

1

‘08

34

,14

2

‘09 ‘10

RM’000

0

50,000

100,000

150,000

250,000

200,000

‘07

11

7,8

39

19

9,8

85

‘08

14

6,4

74

‘09 ‘10

*Based on 375,000,000 Shares

*Proforma

5

‘10‘1010

‘10‘1010

4

‘10‘1010

13

‘10‘10‘10

‘07

22

‘07

1

‘07

‘07 ‘08

16

‘09

‘08

3

51

‘09 ‘08

‘08

1

1

‘09

6

‘09

23

2,8

91

FINANCIAL HIGHLIGHTS

Annual Report 2010


2

BOARD OF DIRECTORS

Dato’ Chew Ting Leng

Executive Chairman /

Group Managing Director

Dato’ Goh Teoh Kean

Group Deputy Managing Director

Mr. Tan Ang Ang

Executive Director

Mr. To Tai Wai

Executive Director

Tn Haji Abdul Karim Bin Ahmad

Non-Independent Non-Executive Director

Mr. Tan Sui Hin

Independent Non-Executive Director

Mr. Loh Wei Tak


Tn Haji Yusoff Bin Mohamed


NOMINATION COMMITTEE

Chairman

Mr. Tan Sui Hin

Members

Mr. Loh Wei Tak


COMPANY SECRETARIES

Lim Seck Wah

(MAICSA NO.: 0799845)

Liang Siew Ching

(MAICSA NO.: 7000168)

REGISTERED OFFICE

Level 15-2, Faber Imperial Court

Jalan Sultan Ismail

50250 Kuala Lumpur

Tel : 03-2692 4271

Fax : 03-2732 5388

PRINCIPAL BANKERS

CIMB Bank Berhad

Citibank Berhad

EON Bank Berhad

HSBC Bank Malaysia Berhad

United Overseas Bank (Malaysia) Berhad

Hong Leong Bank Berhad

Affin Bank Berhad

OCBC Bank (Malaysia) Berhad

United Overseas Bank Limited

The Bank of Nova Scotia Berhad

AmBank (M) Berhad

SOLICITORS

Adi Radlan & Co

AUDITORS

Messrs SJ Grant Thornton

Chartered Accountants

Level 11, Faber Imperial Court

Jalan Sultan Ismail

50250 Kuala Lumpur

AUDIT COMMITTEE

Chairman

Mr. Tan Sui Hin

Members

Mr. Loh Wei Tak


REMUNERATION COMMITTEE

Chairman


Members


Mr. Tan Sui Hin

SHARE REGISTRAR

Mega Corporate Services Sdn. Bhd.

(Company No.: 187984-H)


Jalan Sultan Ismail

50250 Kuala Lumpur

Tel No. : 03-2692 4271

Fax No. : 03-2732 5388

STOCK EXCHANGE LISTING

Main Market

Bursa Malaysia Securities Berhad

STOCK CODE: 5125

CORPORATE INFORMATION

Annual Report 2010


3

100%Pantech Corporation Sdn. Bhd.

100% Pantech (Kuantan) Sdn. Bhd. 100% Jayee Holdings Sdn. Bhd. 30% Tuah Nusa Sdn. Bhd.

100%Pantech Steel Industries Sdn. Bhd.

100%Pantech Stainless & Alloy Industries Sdn. Bhd.

100%Panaflo Controls Pte. Ltd.

70% JC Flow Controls Pte. Ltd.

90%Pantech International (KSA) Sdn. Bhd.( )

CORPORATE STRUCTURE

Annual Report 2010


4

NOTICE IS HEREBY GIVEN that the Fourth Annual General Meeting of Pantech Group Holdings Berhad (“Pantech” or the

“Company”) will be held at Hotel Nikko Kuala Lumpur, Ballroom 1, 2nd floor, 165, Jalan Ampang, 50450 Kuala Lumpur on Thursday,

26th August 2010 at 11.00 a.m. for the following purposes:-

AGENDA

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 28 February 2010 together with the

Directors’ and Auditors’ Reports thereon.

2. To approve the payment of a Final Single Tier Dividend of 1.2 sen per ordinary share of RM0.20 each for the

financial year ended 28 February 2010.

3. To approve the payment of Directors’ fees of RM126,000 for the financial year ending 28 February 2011.

4. To re-elect the following directors retiring pursuant to Article 122 of the Company’s Articles of Association

and being eligible, offered themselves for re-election:

4.1 Dato’ Chew Ting Leng

4.2 Mr. To Tai Wai

4.3 Mr. Loh Wei Tak

5. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the Directors to fix

their remuneration.

AS SPECIAL BUSINESS

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

6. AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION 132D OF THE COMPANIES

ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the relevant

governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in

the Company from time to time and upon such terms and conditions and for such purposes as the Directors

may in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant

to this resolution does not exceed ten (10) per cent of the issued share capital of the Company for the time

being excluding the number of ordinary shares arising from the exercise of the Employees’ Share Option

Scheme (ESOS), AND THAT the Directors be and are also hereby empowered to obtain the approval from

the Bursa Malaysia Securities Berhad for the listing and quotation of the additional shares so issued AND

THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of

the Company.”

7. PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY

THAT subject to compliance with all applicable rules, regulations and orders made pursuant to the

Companies Act, 1965 (“ACT”), provisions in the Company’s Memorandum and Articles of Association,

the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant

authorities, the Company be and is hereby authorised to purchase such number of ordinary shares of the

Company (“Proposed Renewal of Share Buy-Back Authority”) as may be determined by the Directors of the

Company from time to time through Bursa Securities upon such terms and conditions as the Directors may

deem fit and expedient in the interest of the Company PROVIDED THAT:-

(1) the aggregate number of shares purchased does not exceed ten per centum (10%) of the issued and

paid-up share capital of the Company as quoted on Bursa Securities as at the point of purchase;

Please refer

to Note A

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

NOTICE OF FOURTH ANNUAL GENERAL MEETING

Annual Report 2010


5

(2) the maximum fund to be allocated by the Company for the purpose of purchasing such number of

ordinary shares shall not exceed the retained profit and share premium account of the Company. As

at the latest financial year ended 28 February 2010, the audited retained profit and share premium

account of the Company stood at RM7,841,094 and RM16,067,022 respectively;

(3) the authority conferred by this resolution will commence immediately upon passing of this resolution

and will continue to be in force until:-

(a) at the conclusion of the next AGM of the Company following the general meeting in which the

authorisation is obtained, at which time it shall lapse unless by ordinary resolution passed at

that meeting, the authority is renewed either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM of the Company is required by law to

be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a

general meeting.

whichever occurs first;

AND THAT upon completion of the purchase(s) of the ordinary shares of the Company, the Directors of

the Company be and are hereby authorised to deal with the ordinary shares so purchased in the following

manners:-

(a) to cancel the ordinary shares so purchased; or

(b) to retain the ordinary shares so purchased as treasury shares for distribution as dividend to

shareholders and/or resell on Bursa Securities or subsequently cancelled; or

(c) to retain part of the ordinary shares so purchased as treasury shares and cancel the remainder; or

(d) in any other manner prescribed by the Act, rules, regulations and orders made to the Act, the Listing

Requirements of Bursa Securities and any other relevant authorities for the time being in force.

AND THAT the Board of the Company be and are hereby authorised to take all such steps as are necessary or

expedient to implement, finalise or to effect the aforesaid share buy-back with full powers to assent to any

conditions, modifications, variations, and/or amendments as may be required or imposed by the relevant

authorities and to do all such acts and things (including executing all documents) as the Board may deem

fit and expedient in the best interest of the Company.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

Subject to the approval of the shareholders, a Final Single Tier Dividend of 1.2 sen per ordinary share of RM0.20 each for the

financial year ended 28 February 2010 will be paid on 22 September 2010 to Depositors registered in the Record of Depositors at

the closed of business at 5.00 p.m. on 30 August 2010.

A Depositor shall qualify for entitlement only in respect of:

(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 30 August 2010, in respect of ordinary shares;

and

(b) Shares bought on Bursa Securities on a cum entitlement basis according to the Rules of the Bursa Securities.

By order of the Board

LIM SECK WAH (MAICSA 0799845)

LIANG SIEW CHING (MAICSA 7000168)

Company Secretaries

Kuala Lumpur

4 August 2010

NOTICE OF FOURTH ANNUAL GENERAL MEETING cont’d

Annual Report 2010


6

Notes

A. The item 1 of the Agenda is meant for discussion only as it does not require a formal approval of the shareholders and hence, is not put forward for

voting.

1. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint

up to two (2) proxies to attend the same meeting provided that he/she specifies the proportion of his/her shareholding to be represented by each

proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his/her proxy without limitation and

the provisions of Section 149(1)(b) & (c) of the Companies Act, 1965 shall not apply.

2. Where a member is an authorised nominee as defined under the Security 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.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorized in writing or, if the

appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

4. The Proxy Form must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala

Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

5. Explanatory Notes on Special Businesses:

Ordinary Resolution 7

The proposed Resolution 7 is a renewal of mandate given by the shareholders at the previous Annual General Meeting held on 18 August 2009,

primarily to give flexibility to the Board of Directors to issue and allot shares at any time in their absolute discretion and for such purposes as they

consider would be in the interest of the Company without convening a general meeting. This authority, unless revoked or varied at a general

meeting, will expire at the next annual general meeting of the Company.

The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/diversification proposals involves the

issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve

the issue of new shares even though the number involved may be less than 10% of the issue capital.

In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate

that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of

the Company for the time being, for such purposes. The renewed authority for allotment of shares will provide flexibility to the Company for the

allotment of shares for the purpose of funding future investment, working capital and/or acquisitions. This authority, unless revoked or varied at a

general meeting will expire at the conclusion of the next Annual General Meeting of the Company.

No shares have been issued and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General

Meeting held on 18 August 2009 except for new shares arising from the ESOS conversion.

Ordinary Resolution 8

This resolution will empower the Directors of the Company to purchase the Company’s shares up to ten per centum (10%) of the issued and paid-up

share capital of the Company by utilising the funds allocated which shall not exceed the total retained profits and share premium of the Company.

This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

Further information on the Proposed Renewal of Share Buy-Back Authority are set out in the Share Buy-Back Statement dated 4 August 2010 which

is dispatched together with the Company’s Annual Report 2010.

NOTICE OF FOURTH ANNUAL GENERAL MEETING

cont’d

Annual Report 2010


7

DATO’ CHEW TING LENG

Executive Chairman/Group Managing Director

Dato’ Jimmy Chew, a Malaysian, aged 55, is one of the

co-founders of the Group. He has more than 30 years of

experience in the PFF solutions industries. He was appointed

as Group Managing Director and Executive Chairman of

Pantech Group Holdings Berhad (PGHB) on 11 November

2006 and 13 November 2006 respectively.

He is a member in the Remuneration Committee.

He does not hold any directorships in any other public

companies.

He has an indirect interest of 84,330,400 ordinary shares via

CTL Capital Holding Sdn. Bhd. in PGHB.

DATO’ GOH TEOH KEAN

Group Deputy Managing Director

Dato’ Goh, a Malaysian, aged 54, graduated with Diploma in

Commerce (Financial Accounting) from Tunku Abdul Rahman

College.

He has more than 20 years of experience in the PFF solutions

industry. He is one of the co-founders of the Group and

was appointed as the Group Deputy Managing Director on

11 November 2006. He is responsible for the financial and

administrative functions of the Group.


companies.

He has an indirect interest of 62,413,300 ordinary shares via

GL Management Agency Sdn. Bhd. in PGHB.

TAN ANG ANG

Executive Director

Mr. Adrian Tan, a Malaysian, aged 54, was appointed as the

Executive Director on 11 November 2006. He is also the

Managing Director of Pantech Steel Industries Sdn. Bhd.

He obtained his professional Diploma from the Chartered

Institute of Marketing in 1989. He is responsible for the overall

operation and performance of the Group’s manufacturing

business.


companies.

He holds 6,620,500 ordinary shares in PGHB and an indirect

interest of 1,065,000 ordinary shares through his spouse

interest in PGHB.

TO TAI WAI

Executive Director

Mr. David To, a Malaysian, aged 39, was appointed as the

Executive Director on 11 November 2006. He is primarily

responsible for the domestic and international sales activities

of the Group’s trading division. He started his career in Pantech

Corporation Sdn. Bhd. since 1989.


companies.

He holds 10,267,150 ordinary shares in PGHB.

DIRECTORS’ PROFILE

Annual Report 2010


HAJI ABDUL KARIM BIN AHMAD

Non-Independent Non-Executive Director

Tn. Haji Abdul Karim Bin Ahmad, a Malaysian, aged 56, was

appointed as a Non-Independent Non-Executive Director

of PGHB on 30 November 2006 representing the interest of

Koperasi Permodalan Felda Berhad (KPFB). He graduated with

a Bachelor Degree in Economics (Honours) from University

Kebangsaan Malaysia in 1978. He is presently the Regional

General Manager for Felda Wilayah Johor Bahru.


companies.

He holds 25,000 ordinary shares in PGHB.

TAN SUI HIN


Mr. Tan Sui Hin, a Malaysian, aged 60, was appointed as an

Independent Non-Executive Director of PGHB on 30 November

2006. He graduated with a Diploma in Mechanical Engineering

from Ungku Omar Polytechnic in 1971. He has more than 35

years of experience in the building engineering field.

He is the Chairman of both the Audit and the Nomination

Committees.

He is also a member of the Remuneration Committee.


companies.

He holds 75,000 shares in PGHB.

LOH WEI TAK


Mr. Loh Wei Tak, a Malaysian, aged 37, was appointed as

an Independent Non-Executive Director of PGHB on 30

November 2006. He is a qualified accountant and a member

of the Malaysian Institute of Accountants. He completed his

Bachelor of Business Degree (Majoring in Accounting) from

Monash University, Melbourne, Australia in 1994 and obtained

his status as a Certified Practicing Accountant from Australia

in 1998. In 2000, he was admitted as a Chartered Accountant

to the Malaysian Institute of Accountants.

He is a member in both Audit and Nomination Committees.


companies.

He does not hold any shares in PGHB.

HAJI YUSOFF BIN MOHAMED


Tn. Haji Yusoff Bin Mohamed, a Malaysian, aged 59, was

appointed as an Independent Non-Executive Director of PGHB

on 10 August 2007. He graduated from University Kebangsaan

Malaysia with a Bachelor Degree in Economics (Hons). Upon

his graduation, he joined Land and District Office and Royal

Custom Department. After 5 years in public sector, he moved

to Petronas and served in various positions within Petronas’s

subsidiaries and associate company. He was involved in a

number of local and international major oil and gas projects

and stayed with the oil and gas industry for more than 24

years.

He is the chairman of the Remuneration Committee

and a member of the Audit Committee and Nomination

Committee.


companies.

He holds 2,500 shares in PGHB.

All directors have no family relationship with each other or major

shareholders of PGHB. They have no conflict of interest with PGHB and

have no convictions of offences within the past 10 years saves for traffic

offences, if any.

DIRECTORS’ PROFILEcont’d

8

Annual Report 2010


Dear Shareholders,

It is my pleasure to bring to you our fourth annual report in which

Pantech Group registered a revenue of RM401.6 million for the

full year ended 28 February 2010 under a cloud of volatile global

economy of 2009/2010.

9

EXECUTIVE CHAIRMAN’S STATEMENT

Annual Report 2010


10

EXECUTIVE CHAIRMAN’S STATEMENTcont’d

In comparison to the spectacular

performance of the year before, the

revenue for this financial year in review

is more reflective of the steady long

term growth of the company. The

RM511.6 million revenue reported for

the year ended 28 February 2009 was an

exceptional performance attributable

to the priority placed on energy security

when the price of crude oil had unusually

volatility and vaulted sky high in 2008.

The business has normalized over

the past year, aligned with the

developments of the oil and gas

industry, and the revenue recorded is in

line with the growth trend charted by

our company except for financial year

2009.

In reviewing the Profit Before Tax (PBT)

and Profit After Tax (PAT) margins, we

have recorded marginal improvements

from 16% to 16.6% and from 12% to

12.7% respectively. The Group posted

a PBT of RM66.8 million and a PAT of

RM50.9 million for this financial year.

As the oil and gas industry heads

toward energy security to support long

term economic growth, more jobs are

expected to come onstream. Each capex

investment that an oil and gas company

announces presents an opportunity for

Pantech Group.

Our strategies of having a wide product

range which includes high-yield exotic

products and manufacturing of more

product types will further consolidate

our position as a One-stop Centre for

Pipes, Fittings and Valves. Our aim is to

provide value for our customers and

enhance the value for our shareholders.

As such, Pantech Group will continue

to focus and expand on our existing

revenue generating businesses and

seek opportunities to grow, both locally

and overseas. We are expanding our

capacity as the major pipes, fittings

and flow controls solutions provider

to the oil and gas industry and related

industries.

The new manufacturing plant in Pasir

Gudang which has an initial capacity of

7,000 MT per year will come onstream

with production expected to commence

at the end of this year. The products that

will be manufactured here are mainly

stainless steel welded pipes and fittings

for use in palm oil refinery, biodiesel

plant, paper and pulp, food processing,

petrochemical, pharmaceutical, oil and

gas and other related industries.

The products manufactured will be

serving both domestic and overseas

markets and we expect it to also increase

the manufacturing contribution to the

group.

The new plant is built on a 20-acre land

which was purchased in October 2009.

Besides housing the manufacturing

facilities, Pantech Group also plans to

build a new warehouse and corporate

office which will incorporate a state-

of-the-art supply chain system on the

same grounds. The remainder of the

land will be held as land-bank for future

expansion.

Demands for exotic products are gaining

traction as oil and gas exploration goes

into harsher conditions and safety

requirements are even more critical.

The deepwater fields development in

Malaysia is an exciting area for Pantech

Group especially with our enhanced

capability of supplying exotic pipes,

fittings and valves that can withstand

immense pressure and increasingly

harsher exploration terrain.

On the international front, we have also

signed a joint venture Memorandum

of Understanding (MoU) in March 2010

with the Abdul Rahman Al-Otaishan

Trading Group of Saudi Arabia via our

subsidiary Pantech International (KSA)

Sdn. Bhd.

This MoU will strengthen our presence

in the oil-rich Gulf countries. It will also

be the predecessor of larger plans and

investments by both Pantech Group

and the Abdul Rahman Al-Otaishan

Trading Group to service the oil and

gas industry in the Gulf Cooperation

Council (GCC) region. The plan is to

establish a joint-investment company

in Saudi Arabia that will eventually set

up a manufacturing facility in Dammam

in the eastern province of the Kingdom

of Saudi Arabia. The Eastern Province is

Perspective view of new manufacturing plant

Annual Report 2010


11


the largest province of Saudi Arabia in

which Saudi Aramco, the state-owned

oil company is based. This province is

where the kingdom’s main oil and gas

fields are located and where most of the

oil policies and production decisions

that have global impact are made. Saudi

Arabia currently ranks first in the world

in oil reserves.

Concurrently, an agency agreement was

also signed with the Al-Otaishan Group

to enable us to immediately start tapping

the opportunities of shipping our pipes,

fittings and valves to Saudi Arabia. The

Agency Agreement appoints the Abdul

Rahman Al-Otaishan Trading Group to

be the exclusive sole distributor and

agent for Pantech’s products in Saudi

Arabia, and non-exclusive distributor

and agent in the other GCC countries.

Pantech Group is constantly looking

to open new doors, in particular in

emerging oil and gas greenfields by

participating in niche markets and

specialized field exhibitions. Among

such exhibitions were the Oil & Gas

Indonesia 2009 in Jakarta, Indonesia,

the International Energy Week 2009 in

Sarawak and the recently concluded

Subsea Asia 2010 Exhibition on 9-11

June 2010 in Kuala Lumpur.

Our calendar of marketing activities

includes participation in the upcoming

Asean Oil & Gas Expo 2010 in Sabah and

the Australasian Oil & Gas Exhibition &

Conference 2011 in Perth, Australia.

We will continue with our marketing

efforts on both the domestic and

international fronts and prudently

select effective marketing platforms to

support our initiatives.

GROUP RESULTS

The financial year 2010 was a year

whereby we charted steady growth in

line with the progress pattern of the

group. Group revenue for FY2010 stood

at RM401.6 million, in accordance with

expectations.

This point is driven home particularly

with the recent spate of unfortunate

incidents such as the oil spill disaster

which is still unfolding in the Gulf of

Mexico. It is not surprising that more

oil and gas companies are even more

cautious and strict in their standards

and requirements especially now.

Our product range, stringent quality

control and requirements as well as

safety and environmental performance

are key areas which we focus on in

meeting our customers’ needs. We do

not compromise on this focus. Pantech

Group possesses the inherent abilities

to be at the forefront of meeting the

needs of the oil and gas companies as

they increase their capex investments.

DIVIDENDS

Creating value and providing attractive

returns on investment to shareholders

are part of Pantech Group’s philosophy.

For FY2010, our total shareholder return

amounted to RM15.7 million or 31% of

Pantech Group’s reported net profit of

RM50.9 million.

The dividends were paid out in tiers as

the Group chart our performance. The

first interim dividend for the 2010 fiscal

year was announced on 9 October 2009

and paid on 8 January 2010. This single

tier dividend was 1.5 sen per ordinary

share of RM0.20 each.

The Profit After Tax was at a margin of

12.7% at RM50.9 million.

Pantech Group continues to derive

revenue from both our trading and

manufacturing divisions. The trading

division contributed 85% to the

revenue with the balance 15% coming

from the manufacturing division. This

contribution of RM61 million from the

manufacturing division is in accordance

with expectations in view of lack-lustre

demand from the USA due to their

economic contraction.

Underlining our position as the preferred

one-stop centre for pipes, fittings

and valves, we continue to upkeep

our extensive inventory which now

stands at 26,000 items. The extensive

inventory holding has enabled us to

service our existing clients and tap into

opportunities as they arise. Our existing

customers regularly return to us for

replacement and refurbishment parts

as well as to meet their expansion plans.

This has formed a good base of recurring

business for Pantech Group.

MARKET TRENDS

Global demand for energy and the

security of its supply will continue

at unabated pace. While alternative

sources of energy are being explored,

the oil and gas industry will continue to

remain a major energy source.

The oil and gas industry, from which

Pantech Group derives the bulk of its

revenue, is technically stringent and

the margin of error uncompromising. It

is a business that exacts precision, and

knowledge and expertise are essential.

Annual Report 2010


12


We announced a second single tier

interim dividend of 1.5 sen per ordinary

share on 25 January 2010 and paid out

the announced dividend on 20 April

2010.

In view of our commendable

performance, we announced a final

single tier dividend of 1.2 sen per

ordinary share on 26 April 2010, which

is subject to shareholder’s approval at

the forthcoming Fourth Annual General

Meeting on 26 August 2010.

Our total dividend payout for FY2010

will amount to RM15.7 million upon

completion of the third dividend

payout.

CORPORATE GOVERNANCE

It is our firm belief that business

prospers when its strategy and practices

are bordered on integrity and ethics. We

make transparency, accountability and

commitment to delivering quality an

integral part of the essence of Pantech

Group. Ultimately, these core values will

manifest itself in the best protection of

shareholders’ interest.

Our statement of corporate governance

and related reports are on pages 17 to

28.

ACKNOWLEDGEMENTS AND

CONCLUSION

It is my honour to once-again record the

heartfelt appreciation of the Directors

to our staff, partners, customers and

shareholders for their faith and support.

Your trust in us has spurred us on and we

will hold steadfast to our commitment

of growing the business and increasing

value to each and every one of our

stakeholders.

We will continue in our commitment

of operational excellence, stringent

business practices and controls,

and prudent capital investment to

ensure that Pantech Group is able to

continuously meet the challenges of the

volatile business landscape.

Uncertainties of the world economies

in particular concerns of the Eurozone

economy are undoubtedly casting

shadows on business outlook.

Notwithstanding this and the spreading

debt crisis, the long-term outlook of the

oil and gas industry remains positive.

Our fundamentals are strong and

strategies are clear; we will respond to

opportunities and challenges as we

work towards delivering value to our

shareholders.


Executive Chairman

Annual Report 2010


13

CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

Employees’

In-house

Training

Back To School

Campaign

Corporate Social Responsibility or CSR has always been an

important element to our company’s success and is priority

within the Group. Delivery of performing revenue and profits

takes place more effectively when there is workplace joy and

continuous improvement.

Pantech Group undertakes our responsibility and commitment

to our stakeholders from shareholders, employees, customers,

business partners and other organizations seriously. We are

unrelenting in putting in place policies, programmes and

activities to promote CSR as an integral part of the Group.

WORKPLACE

As the saying goes, “Happy Employees are Productive

Employees”. The Board of Directors understands this and values

the contribution from employees by providing an encouraging

working culture through development programmes.

In 2009, various training programmes emphasizing on

business communication, presentation and writing skills,

positive thinking and teamwork were provided in-house for

employees’ skills improvement. Four sessions of this training

were held in the months from July to December 2009.

Employee safety is an important area for us. Pantech Group

places great emphasis on safety improvements all year round.

To ensure the safety of our employees, various practices were

put in place at our headquarters in Johor Bahru. Emergency

evacuation drill, first aid drill, fire drill and chemical spillage

drill were the practices performed to ensure employees

understand the methods and systems to further enhance

their knowledge.

The Pantech Group Annual Dinner was held on 23 January 2010

in Johor Bahru, and held in conjunction was the 20 years Long

Service Appreciation Awards ceremony for the employees.

Seven staff were recognized for their two-decade long loyalty

with a Special Award. The recognition and celebration also

created a closer bond between employees of the Group as

their service and contribution are appreciated.

To promote work place balance, Pantech Group formed a

futsal team and it has been actively participating in various

futsal tournaments in 2009.

Understanding the constraints of Pantech’s employees

with schooling children, a ‘Back to School’ campaign was

organized whereby the Group contributed 121 school bags

to employees’ children in primary and secondary school.

Tesco Cash Vouchers were also distributed for the purchase of

school shoes and uniform. In addition, basic stationeries and

UPSR English workbooks were included for the primary school

children. The presentation was done as a small cozy event in

Johor Bahru and created a good opportunity for Pantech staff

and management to strengthen internal ties.

Annual Report 2010


14

CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

cont’d

“TV3 Bersamamu”

charity

programme

“Buka Puasa”

with children from

‘Pertubuhan

Kebajikan

Anak-Anak

Yatim Islam,

Kota Tinggi’

COMMUNITY

Staying true to our commitment to benefit the community

in which we operate, Pantech Group knows the impact of

charity and caring deeds on the less fortunate. We believe

charity starts with remembering the ones nearest to us and

opening a generous heart to them. Hence, in reaching out

to the community around us, we extended invitation to

Pertubuhan Kebajikan Anak-Anak Yatim Islam which is located

in Kota Tinggi, Johor to a special Buka Puasa event during the

last Ramadan. Pantech Group Deputy Managing Director and

approximately 40 staff played host to the 62 children present.

In appreciation, the children performed two ‘Nasyid’ songs for

all present.

In extending a helping hand beyond our shores, Pantech

Group donated to MERCY Malaysia’s humanitarian fund in

response to the recent tropical storm Ketsana that pummeled

the northern Island of Luzon and Metro Manila; and also

towards the 2009 Sumatra earthquake.

Pantech Group via one of our subsidiaries, also participated in

the ‘TV3 Bersamamu’ programme where viewers were able to

help the poor and handicap family. Contributions in the form

of items such as food, clothes, schoolbags and standing fans

for a selected family were amongst the donations extended

by Pantech Group. Beyond material items, we also assisted in

spring-cleaning the home of the impoverished family.

Pantech Group believes that our long-term future depends on

our long-term commitment towards the people, planet and

profit. Being a responsible citizen is not a once off duty. It is a

continuous effort. We will continue to build our programmes

and activities to support our community. This is part of our

core values.

Annual Report 2010


15

CORPORATE EVENTS

Memorandum of Understanding Signing Ceremony between Pantech and Abdul Rahman Al-Otaishan Trading Group

Ground Breaking Ceremony for Pantech new stainless steel plant at PLO 809Pasir Gudang Industrial Estate Zone 12B, Pasir Gudang

Annual Report 2010


16

CORPORATE EVENTS cont’d

Oil & Gas Indonesia 2009Jakarta, Indonesia

Annual Dinner 2010The Zon Regency Hotel, Johor Bahru

2nd Asia’s Subsea Conference & Exhibition KLCC, Malaysia

International Energy Week (IEW 2009 Kuching, Malaysia)

& E hibi i KLCC M l i

Annual Report 2010


17

1. COMPOSITION

The Audit Committee was established by the Board on 1 December 2006. The Committee presently comprises of three (3)

members of the Board which consists of Non-Executive Directors.

Chairman Mr. Tan Sui Hin Independent Non-Executive Director

Members Mr. Loh Wei Tak Independent Non-Executive Director

Tn. Haji Yusoff Bin Mohamed Independent Non-Executive Director

2. TERMS OF REFERENCE OF THE AUDIT COMMITTEE

2.1 Constitution

The Audit Committee was formed pursuant to a resolution passed by the Board of Directors on 1 December 2006.

2.2 Membership

The Audit Committee shall be appointed by the Board of Directors from among their members and shall comprise

of not less than three (3) members, all members must be non-executive directors, with a majority of them being

independent directors.

The members of the Audit Committee shall elect a chairman from among their members who is not an executive

director or employees of the Company or any related corporation. The chairman elected shall be subjected to

endorsement by the Board.

If a member of the Audit Committee resigns, dies or for any other reason ceases to be a member with the results that

the number is reduced below 3, the Board of Directors shall, within 3 months of that event, appoint such number of

new members as may be required to make up the minimum number of 3 members.

No alternate Director shall be appointed as a member of the Audit Committee.

At least one member of the Committee:-

(a) shall be a member of the Malaysian Institute of Accountants; or

(b) if he is not a member of the Malaysian Institute of Accountants, he shall have at least three (3) years’ working

experience and:-

i) he must have passed the examination specified in Part 1 of the 1st Schedule of the Accountants Act, 1967;

or

ii) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of

the Accountants Act, 1967.

The term of office and performance of the Committee and each of its members must be reviewed by the Board at least

once every three (3) years.

2.3 Notice of Meeting and Attendance

The agenda for Audit Committee meetings shall be circulated before each meeting to members of the Committee.

The Committee may require the external auditors and any official of the Company to attend any of its meetings as it

determined. The external auditors shall have the right to appear and be heard at any meeting of the Audit Committee

and shall appear before the Committee when required to do so by the Committee.

Meetings shall be held at least four (4) times a year with a minimum quorum of two (2) members and the majority of

members present shall be independent non-executive Directors. Additional meetings may be called at any time at the

discretion of the Committee.

AUDIT COMMITTEE REPORT

Annual Report 2010


18

2. TERMS OF REFERENCE OF THE AUDIT COMMITTEE cont’d

2.3 Notice of Meeting and Attendance cont’d

At least twice a year, the Committee shall meet with the external and/or internal auditors without any executive Board

member present and upon the request of the external auditors, the Chairman of the Committee shall convene a

meeting to consider any matter which the external auditors believe should be brought to the attention to the Board

or shareholders.

The Company Secretary of the Company shall be the Secretary of the Committee.

2.4 Authority

The Audit Committee is authorised to investigate any activity of the Company within its terms of reference and

all employees shall be directed to co-operate with any request made by the Committee. The Committee shall be

empowered to retain persons having special competence as necessary to assist the Committee in fulfilling its

responsibilities.

The Committee shall have direct communication channels with the external and internal auditors.

The Committee is authorised by the Board to obtain independent professional or other advice at the Company’s

expense and to invite outsiders with relevant experience and expertise to attend meetings if necessary.

The Committee would be able to convene meetings with the external auditors, internal auditors or both, excluding the

attendance of the other Directors and employees of the Company, whenever deemed necessary.

2.5 Duties and Responsibilities

The duties and responsibilities of the Audit Committee shall be:-

2.5.1 To review the quarterly results and year end financial statements prior to the approval by the Board of Directors

focusing particularly on:-

- the going concern assumption;

- compliance with accounting standards and other legal requirements;

- any changes in accounting policies and practices;

- significant issues from the audit and significant and unusual events.

2.5.2 To review with External Auditors on the following:-

- the audit plan;

- evaluation of system of internal controls;

- problems and observation arising from interim and final audits.

2.5.3 To review:-

- any letter of resignation from External Auditors of the Company or Group;

- whether there is reason to believe that the Company or Group’s External Auditors is not suitable for re-

appointment;

- any recommendations on the nomination of a person or persons as External Auditors and to consider

audit fees;

- the appointment or re-appointment of Internal Auditors or recommend the nominations of a person or

persons as Internal Auditors.

- any related party transaction and conflict of interest situation that may arise within the Company or

Group including any transaction, procedure or course of conduct that raises questions of management

integrity.

- internal audit program, processes, the results of the internal audit program, processes or investigation

undertaken and whether or not appropriate action is taken on the recommendations of the internal audit

function .

AUDIT COMMITTEE REPORTcont’d

Annual Report 2010


19

2. TERMS OF REFERENCE OF THE AUDIT COMMITTEE cont’d

2.5 Duties and Responsibilities cont’d

2.5.4 To assess the adequacy and effectiveness of the system of internal control and accounting control procedures of

the Company and Group by reviewing the reports from the Internal Auditors and External Auditors’ management

letter and Management’s response.

2.5.5 To undertake such other responsibilities as may be agreed by the Committee and the Board.

3. SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

A total of five (5) meetings were held during the financial year under review. The details of the attendance of each member

of the Audit Committee are as per table below:-

Audit Committee Members Number of Meetings Attended

Mr. Tan Sui Hin 5/5

Mr. Loh Wei Tak 5/5

Tn Haji Yusoff Bin Mohamed 5/5

The summary of the activities of the Audit Committee in discharging of its duties and responsibilities for the financial year

ended 28 February 2010 included the following:-

i) Reviewed the External Auditors’ scope of work and audit plans for the financial year under review.

ii) Reviewed the results of audit, the audit report and management letter with management’s response.

iii) Reviewed the Group’s compliance with the Listing Requirements of Bursa Malaysia Securities Berhad, Financial

Reporting Standards (FRS) in Malaysia and other relevant legal and regulatory requirements with regards to the

quarterly and year-end financial statements.

iv) Reviewed and approved the Internal Audit Plan and the Internal Audit Report.

v) Reviewed the financial statements of the Group prior to submission to the Directors for their perusal and approval. This

was to ensure compliance of the financial statements with the provisions of the Companies Act, 1965 and Financial

Reporting Standards (FRS).

vi) Reviewed the unaudited quarterly financial results announcements before recommending them for the Board

approval.

vii) Considered and recommended to the Board the re-appointment of External Auditors and their fees.

4. INTERNAL AUDIT FUNCTIONS

The Audit Committee is aware of the fact that an independent and adequately resourced internal audit function is essential

to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control.

The Board has outsourced its internal audit function to an independent professional service firm. The Outsourced Internal

Auditors (“Internal Auditors”) report to the Audit Committee at least half yearly. Findings arising from the internal audit

review together with the level of concern, the Management’s response, recommendations and personnel responsible for

implementing corrective actions are presented to the Audit Committee for its review. The costs incurred for the internal audit

function for the financial year 2010 is RM 56,000.

During the period under review, the Internal Auditors carried out the following activities:-

i) Presented and obtained approval from the Audit Committee the annual internal audit plan, its audit strategy and

scope of audit work.

ii) Performed audits according to the annual internal audit plan, to review the adequacy and effectiveness of the internal

control system, compliance with policies and procedures and reported ineffective and inadequate controls and made

recommendations to improve their effectiveness.

iii) Monitored and followed-up to ensure Management implemented the action plans as agreed.

AUDIT COMMITTEE REPORTcont’d

Annual Report 2010


20

The Malaysian Code on Corporate Governance stipulates that the Board of Directors of a listed company should maintain a sound system of internal control to safeguard shareholders’ investment and the Company’s assets. The system of internal control covers not only financial controls but operational and compliance controls as well. This Statement on Internal Control is made pursuant to paragraph 15.26 (b) of the Listing Requirements of Bursa Malaysia Securities Berhad.

In addition, the Group has requested that the external auditors to review this Statement in accordance to paragraph 15.23 of the Listing Requirements and Recommended Practice Guide 5 (“RPG 5”) issued by the Malaysian Institute of Accountants. The Board is pleased to note that external auditors find this Statement to be consistent with their understanding of the internal control processes implemented by the Group during their review.

BOARD RESPONSIBILITY

The Board acknowledges its responsibility for the Group’s system of internal control and for reviewing adequacy and integrity of the system on an on-going basis. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable but not absolute assurance against material misstatement, loss and fraud.

The Board also takes into consideration the need to balance the business risks and the potential returns to stakeholders in its daily operations, with the dynamic business climate it operates in. The Board also recognises the need for a concerted effort from the management, head of department and senior staff members in ensuring that the integrity, effectiveness and adequacy of the control mechanism are monitored and maintained throughout the financial period.

ENTERPRISE RISK MANAGEMENT FRAMEWORK

The Board recognizes risk management as an important element of the business operations in order to identify and evaluate principal risks and implement appropriate controls to manage significant risks faced by the Group. As such, the Board has adopted an Enterprise Risk Management (“ERM”) framework, which is developed within its risk appetite.

An ERM report together with the Group’s detailed key risk profile, were presented to the Board. The Board has set up a Risk Management Committee (“RMC”) which comprises of Executive Directors and Senior Management of the Group to identify, evaluate, and manage significant risks faced by the Group as well as report to the Board on a regular basis.

INTERNAL AUDIT FUNCTION

The internal audit function has been outsourced by the Group to a professional firm, who reports directly to the Audit Committee. An internal audit charter and internal audit plan has been submitted and approved by the Audit Committee.

For the financial year under review, the internal auditors have carried out their review according to the approved internal audit plan. The review covered the assessment on the adequacy and effectiveness of the Group’s internal controls system. Upon completion of the internal audit, the internal audit observations, recommendations and management comments were reported to the Audit Committee.

Total cost incurred for the internal audit function in respect of the financial year ended 28 February 2010 was RM56,000.

KEY ELEMENTS OF THE GROUP’S INTERNAL CONTROLS

The key elements of the Group’s system of internal controls include:

business and operational matters including potential risks and control issues;

and operation of the Board at regular Board meeting. Major capital investment, acquisition, disposals or any other transaction

not in the ordinary course of business exceeding a certain threshold must be referred to the Board for approval;

STATEMENT ON INTERNAL CONTROL

Annual Report 2010


21

KEY ELEMENTS OF THE GROUP’S INTERNAL CONTROLS cont’d

to the Group and advise accordingly;

performance, business planning, control environment and other key issues;

performance;

memorandums, staff briefings and operational meetings to achieve the Group’s overall business objectives;

compliance with occupational safety and health policies and procedures on a continuous basis.

INTERNAL CONTROL SUMMARY

There is no material internal control failures occurred during the financial period that could have resulted in material losses or

contingencies. The Board is of the opinion that the internal control system in place is adequate at its current level of operations and

will continuously strive to enhance the Group’s system of internal control in safeguarding shareholders’ investment and Company’s

assets.

STATEMENT ON INTERNAL CONTROLcont’d

Annual Report 2010


22

The Board of Directors (“the Board”) of Pantech Group Holdings Berhad supports the objectives of the Malaysian Code on Corporate Governance (“the Code”) and also acknowledges their roles in ensuring that shareholders’ interest are properly looked after. For this reason, the Board of Directors is committed in maintaining highest standard of corporate governance pursuant to the Code.

The Group will continue to endeavor to comply with all the key Principles and Best Practices of the Malaysian Code on Corporate Governance in its effort to maintain shareholders value, whilst taking into account the interest of other stakeholders.

This Corporate Governance Statement contained the principles and practices of the Code that the Group has adhered to.

A. BOARD OF DIRECTORS

i. Composition and Attendance The composition of the Board and the individual Directors’ attendance of meetings during the financial year ended 28

February 2010 were as follows:-

Meetings Attended

(out of 5 held)

Dato’ Chew Ting Leng Executive Chairman/Group Managing Director 5/5

Group Deputy Managing Director 5/5

Mr. Tan Ang Ang Executive Director 5/5

Mr. To Tai Wai Executive Director 5/5

Mr. Tan Sui Hin Independent Non-Executive Director 5/5

Mr. Loh Wei Tak Independent Non-Executive Director 5/5

Tn Haji Yusoff Bin Mohamed Independent Non-Executive Director 5/5

Non-Independent Non-Executive Director 5/5

The Group is lead by an effective Board which overseas the activities of the Group. The Board has overall responsibility for corporate governance, strategic planning, formulation of policies and overseeing the investments and business of the Company.

The Board currently consists of eight (8) members, comprising of an Executive Chairman who is also the Group

Managing Director, one (1) Group Deputy Managing Director, two (2) Executive Directors and four (4) non-executive directors.

The Board of Directors has complied with the Best Practices in Corporate Governance except that the Chairman also holds an Executive position as Group Managing Director. Although of combined roles, the Board is of the opinion that there is a balanced view at all deliberations due to the presence of at least 1/3 Independent Directors who are unbiased and provide independent views, advice and judgment in compliance with Paragraph 15.02 of the Bursa Securities Listing Requirements.

Although all the Directors have an equal responsibility for the Company’s operations, the presence of Independent Non-Executive Directors brings additional element of balance to the Board. Besides providing valuable expertise and business inputs, the Independent Directors have the caliber to exercise independent judgment in the Board’s decision.

ii. Appointment and Re-election of Directors

According to the Articles of Association of the Company, one-third (or the number nearest to one-third) of the Directors are required to retire from office at each annual general meeting. Further, all the Directors are required to retire from office at least once in every three (3) years. However, a retiring Director is eligible for re-election at the meeting at which he or she retires. An election of the retiring Directors shall take place every year.

Any person appointed as a Director, either to fill a casual vacancy or as an addition to the existing Directors shall hold office only until the conclusion of the next annual general meeting, and shall be eligible for re-election but shall not

be taken into account in determining the Directors who are to retire by rotation at that meeting.

CORPORATE GOVERNANCE STATEMENT

Annual Report 2010


23

A. BOARD OF DIRECTORS cont’d

iii. Directors’ Training

All the Board members have completed its Mandatory Accreditation Programme. There has been greater awareness

on the importance and benefits of attending and participating in the training and continuing education programme.

The Board is committed to equip themselves in discharging their duties and responsibilities and shall continue to

attend relevant seminars, conferences and other training programme deemed appropriate for the Directors.

Pursuant to paragraph 15.08(2) and Appendix 9C (Part A, paragraph 28) of the Listing Requirements, the Directors

either individually or collectively have attended and participated in programmes and forums relating to leadership

and governance as well as current changes to laws and regulations. Descriptions on types of training attended by the

Directors are as follows:-


Dato’ Goh Teoh Kean

Mr. Tan Ang Ang

Industry Federation (MISIF)

Mr. To Tai Wai

Mr. Tan Sui Hin

and Bursa Listing Requirements

Mr. Loh Wei Tak

and Bursa Listing Requirements

Tn Haji Abdul Karim Bin Ahmad


Throughout the financial year, all the Directors have also been briefed in meetings by the respective professionals that

covered the following topics:-

The Company Secretaries also circulate the relevant guidelines on statutory and regulatory requirements from time to

time for the Directors’ reference and brief the Board members on the update.

CORPORATE GOVERNANCE STATEMENTcont’d

Annual Report 2010


24


iv. Supply of Information

The Board members are updated on the Company’s activities and its operations on a regular basis. All Directors have

access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable

them to discharge their duties and responsibilities. All Directors have access to the advice and services of the Company

Secretaries and to obtain independent professional advice, whenever necessary, at the expense of the Company.

v. Board Committees

The Board delegates specific responsibilities to three committees; namely, Audit Committee, Nomination Committee

and Remuneration Committee. All the Committee has written terms of reference and the Board receives reports of

their proceedings and deliberations.

a. Audit Committee

The Audit Committee was formed on 1st December 2006. The Committee plays an active role in assisting the

Board in discharging its governance responsibilities which include maintaining a sound system of internal

control. The Audit Committee Report is set out separately on pages 17 to 19 of this Annual Report.

b. Nomination Committee

The Nomination Committee presently comprises the following members:-

Chairman Mr. Tan Sui Hin Independent Non-Executive Director

Members Mr. Loh Wei Tak Independent Non-Executive Director

Tn Haji Yusoff Bin Mohamed Independent Non-Executive Director

The Board has established the Nomination Committee on 1st December 2006. The Committee is empowered to

make recommendations of nominees to the Board. All decisions on appointments are made by the Board after

considering the recommendations of the Nomination Committee in accordance with the Company’s Articles of

Association.

The Committee comprising of three (3) Non-Executive Directors, involved in assessing the existing Directors

and identifying, nominating, recruiting, appointing and orientating new Directors. The Committee also ensures

the selection of Board members has an appropriate balance of expertise and abilities by reviewing the skills,

experiences and other qualities of the Directors thus strengthen the composition of the Board and contributes

extensively to the effectiveness of the Board.

c. Remuneration Committee

The Remuneration Committee presently comprises the following members:-

Chairman Tn Haji Yusoff Bin Mohamed Independent Non-Executive Director

Members Dato’ Chew Ting Leng Executive Chairman/Group Managing Director

Mr. Tan Sui Hin Independent Non-Executive Director

The Remuneration Committee was formed on 1st December 2006. The Committee is responsible for, among

others, recommending to the Board the remuneration of all Executive Directors in all its forms, by referring to

Committee, then he or she would not be part of the decision making process to arrive at his or her own

remuneration. The determination of remuneration packages of non-executive directors would be a matter for

the Board as a whole. Nonetheless, the non-executive directors concerned would abstain from discussion of

their own respective remuneration. The Committee is entrusted under its terms of reference to assist the Board.


Annual Report 2010


25


v. Board Committees cont’d

d. Risk Management Committee

The Company has established a Risk Management Committee (“RMC”) and is headed by the executive director

and comprises members of key management team. The Board delegates to the RMC the responsibility for

evaluating, reviewing and monitoring the vital enterprise risks that affecting the business and operations as an

on-going basis. The Board is committed to the development and implementation of an effective Enterprise Risk

Management framework to assist the Group to manage all key businesses risk with the intent to strengthening

the risk management and internal control system as a whole.

Continuous efforts will be made to monitor and re-assess the existing ERM framework in regards to maintaining

a proper system of managing risks as well as the related control activities.

B. DIRECTOR’S REMUNERATION

i. The Level and Make-Up of Remuneration

The aggregate Directors’ remuneration for the financial year ended 28 February 2010 are set out below:

Remuneration

(RM)

Executive Directors 4,872,214

Non-Executive Directors 126,000

Total 4,998,214

The remuneration paid to the Directors, analysed in the following bands, is as below:-

Range of Remuneration (RM) Executive Non-Executive

50,000 and below - 4

1 -

1 -

1 -

1 -

There is no service contract made between any Director and the Company or its subsidiary companies.

ii. Procedure

The remuneration Committee shall ensure that the levels of remuneration are sufficient to attract and retain Directors

of the quality required to manage the business of the Group.

The Directors’ Fees will be recommended by the Remuneration Committee and submitted to the Board for

endorsements. These Directors’ Fees are submitted for shareholders approval at the Annual General Meeting.


Annual Report 2010


26

C. SHAREHOLDERS

i. Dialogue with Investors

The Board recognizes the values of the dialogue with investors and shareholders and the importance of accountability to them. As such, the Board is disseminating proper, timely and adequate information to the investors and shareholders through annual reports, announcements, circulars to shareholders and press releases. Through such channels, the Company is able to provide an overview of the Group’s performance and operation and to disclose material information.

Shareholders and Investors who would like to obtain further understanding on the Group’s activities or request a copy of some publicly available documents are welcome to send their letters or emails to the Company Secretary at the registered office.

ii. General Meetings

The Company’s annual general meetings and extraordinary general meetings are the main forum for communication by the Company with its shareholders and for shareholder to participate in questions and answers session in obtaining latest development of the Group.

D. ACCOUNTABILITY AND AUDIT

i. Financial Reporting

The Directors are responsible to present a true and fair assessment of the Group’s position and prospects in the annual reports and quarterly reports. The quarterly financial results were reviewed by the Audit Committee and approved by the Board of Directors prior to submission to Bursa Malaysia Securities Berhad.

A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuing section.

ii. Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is responsible to ensure that the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs of the Group as at the end of the financial year and of the results and cash flows of the Group for the financial year then ended. The matter will be further enhanced in the forthcoming year.

The Directors are satisfied that in preparing the financial statements of the Group for the year ended 28 February 2010, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the financial statements, subject to any material departures being disclosed and explained in the notes to the financial statements. The financial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps sufficient accounting records to disclose with reasonable accuracy, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

iii. Internal Control

The Board of Directors acknowledges their responsibility for the Group’s system of internal control, which is designed to identify and manage the risks of the businesses of the Group in pursuit of its objectives. In addition, the system of internal control practiced by the Group spans over financial, operational and compliance aspects, particularly to safeguard the Group assets and hence shareholders’ investment. In executing this responsibility, the Board via the Audit Committee and the internal auditors, has adopted procedures to monitor the ongoing adequacy and integrity of the system of internal control.

Further details of the state of the system of internal control of the Group are presented on pages 20 and 21 of this Annual Report.


Annual Report 2010


27

D. ACCOUNTABILITY AND AUDIT cont’d

iv. Relationship with the Auditors

The Board has established a formal and transparent arrangement for maintaining appropriate relationships with

the external auditors in seeking professional advice and ensuring the compliance with the appropriate accounting

standards. The Audit Committee met with the external auditors to discuss their audit plan, audit findings and the

financial statements.

v. Directors’ Responsibility Statement on Annual Audited Accounts

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which

are made in accordance with the applicable approved accounting standards in Malaysia and to give a true and fair

view of the state of affairs of the Company and of the Group as at the end of each financial year and of the result and

cash flows of the Company and of the Group for the financial year end.

E. COMPLIANCE STATEMENT

The Company is committed in achieving high standards of corporate governance throughout the Group and to the highest

level of integrity and ethical standards in all its business dealings. The Board considers that the Company has complied with

the principles and best practices as set out in parts 1 and 2 respectively of the Code.


Annual Report 2010


28

1. UTILISATION OF PROCEEDS FROM CORPORATE EXERCISE

No proceeds were raised by the Company from any corporate proposals during the financial year.

2. SHARE BUY-BACKS

There was no share buy-back during the financial year ended 28 February 2010.

At the end of the financial year, a total of 820,800 ordinary shares at RM0.20 each were retained as treasury shares.

There was no sale or cancellation of treasury shares during the financial year.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

There were no options, warrants or convertible securities exercised in respect of the current financial year.

4. AMERICAN DEPOSITORY PROGRAMME

The Company did not sponsor any depository receipt programme during the financial year.

5. IMPOSITION OF SANCTIONS / PENALTIES

There were no public impositions of sanctions or penalties imposed on the Company and its subsidiaries, directors or

management by the regulatory bodies during the financial year.

6. NON-AUDIT FEES

The amount of non-audit fees incurred for services rendered to the Company and its subsidiaries during the financial year

ended 28 February 2010 by Messrs SJ Grant Thornton was RM20,300.

7. PROFIT ESTIMATE, FORECAST AND PROJECTION

The Company did not release any profit estimate, forecast or projections during the financial period.

8. VARIANCE IN RESULTS

There is no significant variance between the profit after tax for the financial statement ended 28 February 2010 and the

unaudited results previously announced.

9. PROFIT GUARANTEE

The Company did not give any form of profit guarantee to any parties during the financial year under review.

10. MATERIAL CONTRACTS AND CONTRACTS RELATING TO LOANS

There were no contracts relating to loan and material contracts of the Company and its subsidiaries involving the Directors

and substantial shareholders since the end of the previous financial year.

11. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE (“RRPT”)

There is no RRPT entered during the financial year.

12. REVALUATION POLICY ON LANDED PROPERTIES

The Group’s revaluation policies on landed properties held by the Group are disclosed in note 3(e) to the financial

statements.

ADDITIONAL COMPLIANCE STATEMENT

FINANCIAL STATEMENTS

Annual Report 2010


DIRECTORS’ REPORT

PRINCIPAL ACTIVITIES

FINANCIAL RESULTS

Group Company

RM RM

DIVIDENDS

RM

RESERVES AND PROVISIONS

Annual Report 2010


DIRECTORS’ REPORTcont’d

ISSUE OF SHARES AND DEBENTURES

TREASURY SHARES

EMPLOYEE SHARE OPTION SCHEME (“ESOS”)

INFORMATION ON THE FINANCIAL STATEMENTS

Annual Report 2010


INFORMATION ON THE FINANCIAL STATEMENTS cont’d

OTHER STATUTORY INFORMATION

DIRECTORS

(Executive Chairman/Group Managing Director)

(Group Deputy Managing Director)

(Executive Director)

(Executive Director)

(Non-Independent Non-Executive Director)

(Independent Non-Executive Director)




Annual Report 2010


DIRECTORS cont’d

Ordinary shares of RM0.20 each

As at Transfer in/ As at

1.3.2009 Bought (out) (Sold) 28.2.2010

deemed interest 84,330,400


direct interest 6,620,500


direct interest 10,267,150

direct interest 25,000



DIRECTORS’ BENEFITS

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE


Annual Report 2010


AUDITORS


DATO’ GOH TEOH KEAN


Annual Report 2010


DATO’ CHEW TING LENG DATO’ GOH TEOH KEAN

STATUTORY DECLARATION

WANG WOON CHIN

STATEMENT BY DIRECTORS

Annual Report 2010


REPORT ON THE FINANCIAL STATEMENTS

Directors’ Responsibilities for the Financial Statements

Auditors’ Responsibilities

Opinion

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

INDEPENDENT AUDITORS’ REPORT

Annual Report 2010


OTHER MATTERS

INDEPENDENT AUDITORS’ REPORT

cont’d

Annual Report 2010


BALANCE SHEETS

Group Company

Note 2010 2009 2010 2009

RM RM RM RM

75,000,000 75,000,000

16,067,022 16,067,022

(380,002) (380,002)

242,819 -

141,961,553 7,841,094

232,891,392 98,528,114

1 -

232,891,393 98,528,114

1,446,962 -

20,933,449 -

3,538,844 -

258,810,648 98,528,114

58,321,926 -

18,894,227 -

3,040,000 -

- 82,271,444

1,771,224 -

323,626 -

6,900 -

166,932 -

2,719,000 -

85,243,835 82,271,444

153,667,520 -

39,644,851 -

6,114,487 741

- 17,610,226

41,339,687 -

2,148,500 -

10,330,304 3,550,000

52,285,615 943,448

305,530,964 22,104,415

Annual Report 2010


BALANCE SHEETS

cont’d

Group Company

Note 2010 2009 2010 2009

RM RM RM RM

18,216,329 -

5,147,956 158,958

79,045 -

1,057,260 -

96,122,172 -

5,612,688 5,612,688

5,728,701 76,099

131,964,151 5,847,745

173,566,813 16,256,670

258,810,648 98,528,114

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

Annual Report 2010


INCOME STATEMENTS

Group Company

Note 2010 2009 2010 2009

RM RM RM RM

401,578,364 21,202,328

(290,922,812) -

110,655,552 21,202,328

3,916,673 11,619

(8,263,201) -

(28,068,012) (2,070,072)

(5,233,296) -

(6,645,049) -

66,362,667 19,143,875

348,780 -

46,859 -

66,758,306 19,143,875

(15,887,326) (3,538,042)

50,870,980 15,605,833

Attributable to:-

50,870,980 15,605,833

13.60 -


Annual Report 2010


STATEMENTS OF CHANGES IN EQUITY

Attributable to equity holders of the Company

Non-distributable Distributable

Share

capital

Share

premium

Treasury

shares

Exchange

reserve

Unappropriated

profit Total

Minority

interest

Total

equity

RM RM RM RM RM RM RM RM

Group

75,000,000 16,067,022 (380,002) 242,819 141,961,553 232,891,392 1 232,891,393

Annual Report 2010


STATEMENTS OF CHANGES IN EQUITY

cont’d

Non-distributable Distributable

Share

capital

Share

premium

Treasury

shares

Unappropriated

profit Total

RM RM RM RM RM

Company

75,000,000 16,067,022 (380,002) 7,841,094 98,528,114


Annual Report 2010


CASH FLOW STATEMENTS

Group Company

Note 2010 2009 2010 2009

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

66,758,306 19,143,875

Adjustments for:-

22,444 -

4,970,534 -

- -

- -

101,437 -

5,172,808 -

5,990,072 -

19,557 -

(60,055) -

(4,108,216) -

- -

50,113 -

(348,446) (11,619)

(46,859) -

(348,780) -

(296) (18,922,328)

(6,728) -

(425,959) -

47,751 -

77,787,683 209,928

48,313,677 -

11,301,214 -

(12,743,760) (92,227)

- 10,698,239

5,531,369 -

63,165 -

(49,098,719) -

81,154,629 10,815,940

120,296 15,700,641

(12,347,914) (12,347,914)

347,705 10,878

(5,990,072) -

(20,876,851) (262,440)

42,407,793 13,917,105

Annual Report 2010



cont’d

Group Company

Note 2010 2009 2010 2009

RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

(7,336,751) -

- (10,000,009)

1 -

67,200 -

(12,854,505) -

(166,932) -

(20,290,987) (10,000,009)

CASH FLOWS FROM FINANCING ACTIVITIES

- -

(1,497,232) -

(10,485,179) -

18,529,098 -

6,546,687 -

CASH AND CASH EQUIVALENTS

28,663,493 3,917,096

95,603 -

33,856,823 576,352

62,615,919 4,493,448

NOTES TO THE CASH FLOW STATEMENTS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

Annual Report 2010



cont’d

NOTES TO THE CASH FLOW STATEMENTS cont’d

B. ACQUISITION OF SUBSIDIARY COMPANIES

Group

RM

C. CASH AND CASH EQUIVALENTS

Group Company

2010 2009 2010 2009

RM RM RM RM

52,285,615 943,448

10,330,304 3,550,000

62,615,919 4,493,448


Annual Report 2010


NOTES TO THE FINANCIAL STATEMENTS

1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

2. FINANCIAL RISK MANAGEMENT POLICIES

(a) Foreign Currency Risk

(b) Interest Rate Risk

(c) Credit Risk

(d) Market Risk

(e) Liquidity and Cash Flow Risks

Annual Report 2010


3. SIGNIFICANT ACCOUNTING POLICIES

(a) Accounting Convention

(b) Adoption of Revised Financial Reporting Standards (“FRSs”)


cont’d

Annual Report 2010


3. SIGNIFICANT ACCOUNTING POLICIES cont’d

(b) Adoption of Revised Financial Reporting Standards (“FRSs”) cont’d

cont’d

FRS 3 Business Combination

FRS 7 Financial Instruments: Disclosures


cont’d

Annual Report 2010



(b) Adoption of Revised Financial Reporting Standards (“FRSs”) cont’d

FRS 7 Financial Instruments: Disclosures cont’d

FRS 8 Operating Segments

FRS 123 Borrowing Costs

FRS 127 Consolidated and Separate Financial Statements

FRS 139 Financial Instruments: Recognition and Measurement

IC Interpretation 17 Distributions of Non-cash Assets to Owners

(c) Significant Accounting Estimates and Judgements


cont’d

Annual Report 2010



(c) Significant Accounting Estimates and Judgements cont’d

(i) Key Sources Of Estimation Uncertainty

Income taxes/Deferred tax liabilities

Depreciation of property, plant and equipment

Deferred tax assets

Impairment of property, plant and equipment

(ii) Critical Judgement Made In Applying Accounting Policies

Classification between investment properties and owner-occupied properties


cont’d

Annual Report 2010



(c) Significant Accounting Estimates and Judgements cont’d

(ii) Critical Judgement Made In Applying Accounting Policies cont’d

Classification between investment properties and owner-occupied properties cont’d

(d) Basis of Consolidation

(e) Property, Plant and Equipment


cont’d

Annual Report 2010



(e) Property, Plant and Equipment cont’d

(f) Subsidiary Companies

(g) Associate Company


cont’d

Annual Report 2010



(g) Associate Company cont’d

(h) Joint Venture

(i) Other Investments

(j) Investment Properties

(k) Inventories


cont’d

Annual Report 2010



(l) Receivables

(m) Payables

(n) Assets Acquired Under Lease Agreements

Accounting by Lessees

Finance Leases

Operating Leases

Leased Assets

Leasehold Land At Cost

(o) Foreign Currency Transactions and Balances


cont’d

Annual Report 2010



(o) Foreign Currency Transactions and Balances cont’d

(p) Income Tax

(q) Financial Instruments

(r) Impairment of Assets


cont’d

Annual Report 2010



(r) Impairment of Assets cont’d

(s) Revenue Recognition

(t) Employee Benefits

(i) Short Term Benefits


cont’d

Annual Report 2010



(t) Employee Benefits cont’d

(ii) Defined Contribution Plan

(u) Interest-Bearing Borrowings

(v) Dividends

(w) Provisions

(x) Cash and Cash Equivalents

(y) Segmental Results


cont’d

Annual Report 2010



(z) Inter-Segment Transfers

(aa) Equity Instruments

(ab) Treasury Shares

(ac) Capital Work-In-Progress

4. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION


cont’d

Annual Report 2010


5. SHARE CAPITAL

Group and Company

2010 2009

RM RM

500,000,000

-

500,000,000

75,000,000

-

75,000,000

6. TREASURY SHARES


cont’d

Annual Report 2010


7. FINANCE LEASE PAYABLE

Group

2010 2009

RM RM

1,198,689

1,564,158

2,762,847

(258,625)

2,504,222

1,057,260

1,446,962

2,504,222

8. BORROWINGS

Group

2010 2009

RM RM

Current

75,269

75,269

5,977,514

59,728,084

7,655,823

20,835,704

1,849,778

96,122,172


cont’d

Annual Report 2010


8. BORROWINGS cont’d

Group

2010 2009

RM RM

Non-current

214,617

214,617

20,718,832

-

20,933,449

117,055,621


cont’d

Annual Report 2010


8. BORROWINGS cont’d

Group

2010 2009

RM RM

107,550,020

9,203,728

301,873

-

117,055,621

9. DEFERRED TAXATION

Group

2010 2009

RM RM

3,244,560

267,539

26,568

177

3,538,844

Group

2010 2009

RM RM

3,543,674

(4,830)

3,538,844


cont’d

Annual Report 2010


10. PROPERTY, PLANT AND EQUIPMENT

Group

Freehold

land

Freehold

building

Total

freehold

land and

building

Short

leasehold

building

Renovation

and

electrical

installation

Machinery,

equipments,

furniture

and fittings

Forklift,

crane and

motor

vehicles Total

RM RM RM RM RM RM RM RM

Cost

14,739,517 14,029,350 28,768,867 8,632,777 4,339,523 27,255,131 8,568,176 77,564,474

Accumulated depreciation

Net carrying amount

14,739,517 12,151,831 26,891,348 7,810,602 2,508,173 18,702,996 2,408,807 58,321,926


cont’d

Annual Report 2010


10. PROPERTY, PLANT AND EQUIPMENT cont’d

11. PREPAID LAND LEASE PAYMENTS

Group

2010 2009

Short leasehold land:- RM RM

Cost

6,275,939

12,854,505

19,130,444

Accumulated amortisation

134,780

101,437

236,217

Net carrying amount 18,894,227


cont’d

Annual Report 2010


12. INVESTMENT PROPERTIES

Freehold

land

Freehold

buildings

Total

freehold

land &

buildings

Freehold

land &

shophouse

building Renovation Total

Group

At fair value: - RM RM RM RM RM RM

13. INVESTMENT IN SUBSIDIARY COMPANIES

Company

2010 2009

RM RM

72,271,435

10,000,000

9

82,271,444

Name of company

Place of

incorporation

Effective equity

interest Principal activities

2010 2009

% %

100


cont’d

Annual Report 2010


13. INVESTMENT IN SUBSIDIARY COMPANIES cont’d

Subsidiary companies of Pantech Corporation Sdn. Bhd.: -

Name of company

Place of

incorporation

Effective equity


2010 2009

% %

100

100

100

100

100

90


cont’d

Annual Report 2010


14. INVESTMENT IN AN ASSOCIATE COMPANY

Group

2010 2009

RM RM

26,217

1,516,227

348,780

1,856,007

(120,000)

1,771,224

Group

2010 2009

RM RM

1,771,224

Name of company

Place of

incorporation

Effective equity


2010 2009

% %

30

2010 2009

RM RM

27,891,219

11,319,077

2,129,391

41,339,687


cont’d

Annual Report 2010


15. INVESTMENT IN A JOINT VENTURE COMPANY

Group

2010 2009

RM RM

160,440

114,069

46,859

2,258

163,186

323,626

Group

2010 2009

RM RM

323,626

Name of company

Place of

incorporation

Effective equity


2010 2009

% %

70


cont’d

Annual Report 2010


16. OTHER INVESTMENTS

Group

2010 2009

RM RM

6,900

2,000,000

2,006,900

(2,000,000)

6,900

6,240

17. CAPITAL WORK-IN-PROGRESS

Group

Short

leasehold

building

Renovation

and electrical

installation

Machinery,

equipments,

furniture and

fittings

Forklift,

crane and

motor vehicles Total

RM RM RM RM RM

154,907 - 12,025 - 166,932

18. DEFERRED TAX ASSETS

Group

2010 2009

RM RM

(1,540,000)

(1,179,000)

(2,719,000)


cont’d

Annual Report 2010


18. DEFERRED TAX ASSETS cont’d

Group

2010 2009

RM RM

243,192

(2,250,491)

(711,701)

(2,719,000)

19. INVENTORIES

Group

2010 2009

RM RM

10,791,745

1,095,779

155,957,236

167,844,760

(9,041,664)

(5,135,576)

153,667,520

20. TRADE RECEIVABLES

Group

2010 2009

RM RM

42,643,809

(2,998,958)

39,644,851


cont’d

Annual Report 2010


20. TRADE RECEIVABLES cont’d

Group

2010 2009

RM RM

33,921,887

6,818,923

1,902,999

-

42,643,809

21. OTHER RECEIVABLES

Group Company

2010 2009 2010 2009

RM RM RM RM

227,210 741

4,688,319 -

564,660 -

634,298 -

6,114,487 741

Group Company

2010 2009 2010 2009

RM RM RM RM

1,230,929 741

4,524,430 -

359,128 -

6,114,487 741


cont’d

Annual Report 2010


22. FIXED DEPOSITS WITH LICENSED BANKS

Group Company

2010 2009 2010 2009

RM RM RM RM

10,330,304 3,550,000

23. CASH AND BANK BALANCES

Group Company

2010 2009 2010 2009

RM RM RM RM

44,441,988 943,448

4,452,417 -

56,268 -

3,334,942 -

52,285,615 943,448

24. TRADE PAYABLES

Group

Group

2010 2009

RM RM

10,538,976

5,162,590

2,438,485

63,403

12,875

18,216,329


cont’d

Annual Report 2010


25. OTHER PAYABLES

Group Company

2010 2009 2010 2009

RM RM RM RM

2,517,740 53,934

85,836 -

2,544,380 105,024

- -

5,147,956 158,958

Group Company

2010 2009 2010 2009

RM RM RM RM

5,117,981 158,958

29,975 -

5,147,956 158,958

26. REVENUE

Group Company

2010 2009 2010 2009

RM RM RM RM

401,578,364 -

- 18,922,328

- 2,280,000

401,578,364 21,202,328


cont’d

Annual Report 2010


27. PROFIT BEFORE TAXATION

Group Company

2010 2009 2010 2009

RM RM RM RM

22,444 -

4,970,534 -

- -

- -

101,437 -

99,000 10,000

20,300 3,400

33,814 -

50,113 -

5,172,808 -

326,000 126,000

5,727,276 1,441,267

305,227 -

81,637 -

200,754 -

2,801,507 -

116,986 -

- -

55,459 -

2,815,366 -

19,557 -

866,696 -

832,539 -

11,168 -

17,673 -

- -

1,100 -

(1,342,248) 22,267

47,751


cont’d

Annual Report 2010


27. PROFIT BEFORE TAXATION cont’d

Group Company

2010 2009 2010 2009

RM RM RM RM

(60,055) -

- -

(4,108,216) -

(425,959) -

- (18,922,328)

(296) -

(6,728) -

(348,446) (11,619)

(318,600) -

Fees Other

emoluments

Benefits-

in-kind

Total

RM RM RM RM

2010

150,000 4,651,064 71,150 4,872,214

126,000 - - 126,000

276,000 4,651,064 71,150 4,998,214

2009


cont’d

Annual Report 2010


27. PROFIT BEFORE TAXATION cont’d

Number of Directors

<RM100,000

RM100,000

to

RM1,000,000

RM1,000,001

to

RM2,000,000

2010

- 2 2

4 - -

2009

28. TAXATION

Group Company

2010 2009 2010 2009

RM RM RM RM

In Malaysia

14,833,734 3,489,778

(91,382) 48,264

277,200 -

(1,179,000) -

13,840,552 3,538,042

Outside Malaysia

2,029,867 -

- -

(9,661) -

26,568 -

2,046,774 -

15,887,326 3,538,042


cont’d

Annual Report 2010


28. TAXATION cont’d

Group Company

2010 2009 2010 2009

RM RM RM RM

66,758,306 19,143,875

16,689,577 4,785,969

- -

- -

1,916,786 212,703

(123,290) -

(2,430,933) (1,508,894)

(100,000) -

26,568 -

(91,382) 48,264

15,887,326 3,538,042

29. EARNINGS PER SHARE


cont’d

Annual Report 2010


30. EMPLOYEE BENEFITS EXPENSES

Group Company

2010 2009 2010 2009

RM RM RM RM

19,246,799 1,453,635

31. RELATED PARTY DISCLOSURE

Group Company

2010 2009 2010 2009

RM RM RM RM

- 2,280,000

- 15,700,640

154,248,705 -

2,081 -

60,000 -

120,000 -

692,300 -

12,847 -


cont’d

Annual Report 2010


32. FINANCIAL INSTRUMENTS

(a) Interest Rate Risk

Less than

1 year

2 to 5

years

More than

5 years Total

Effective

interest rates

during the

financial year

RM RM RM RM

Group

2010

Financial asset

10,330,304 - - 10,330,304 1.30% - 2.00%

Financial liabilities

6,052,783 18,912,945 2,020,504 26,986,232 4.18% - 7.25%

20,835,704 - - 20,835,704 8.38%

7,655,823 - - 7,655,823 1.41% - 6.25%

59,728,084 - - 59,728,084 2.21% - 5.15%

1,849,778 - - 1,849,778 1.45% - 1.70%

1,057,260 1,446,962 - 2,504,222 2.33% - 4.25%

2009

Financial asset

Financial liabilities

Less than

1 year

2 to 5

years Total

Effective

interest rates

during the

financial year

RM RM RM

Company

2010

Financial asset

3,550,000 - 3,550,000 1.30% -1.45%


cont’d

Annual Report 2010


32. FINANCIAL INSTRUMENTS cont’d

(b) Credit Risk

(c) Fair Values

Group Company

Carrying

amount

Fair value Carrying

amount

Fair value

2010 RM RM RM RM

- - 82,271,444 *

1,771,224 * - -

323,626 * - -

6,900 6,240 - -

- # - -

2009


cont’d

Annual Report 2010


32. FINANCIAL INSTRUMENTS cont’d

(c) Fair Values cont’d

cont’d

2010 2009

RM RM

Group

5,751,579

462,325

Company

220,456,189

(d) Forward Exchange Contracts

33. CAPITAL COMMITMENTS

Group

2010 2009

RM RM

20,523,041

-

11,830,341


cont’d

Annual Report 2010


34. RENTAL COMMITMENTS

Group

2010 2009

RM RM

-

1,009,654

3,562,443

4,572,097

35. OPERATING LEASE COMMITMENTS

Group

2010 2009

RM RM

109,800

11,250

121,050

36. CONTINGENT LIABILITIES

Company

2010 2009

RM RM

503,083,100

37. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR


cont’d

Annual Report 2010


37. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR cont’d

38. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE


cont’d

Annual Report 2010


39. SEGMENTAL REPORTING - GROUP

(a) Primary Segmental Reporting - Business Segment

Business segments Business activities

Trading of

pipes, fittings

and flow

controls

Manufacturing

of pipes

fittings

Investments

and

management Eliminations Consolidated

RM RM RM RM RM

2010

Revenue

340,521,261 61,057,103 - - 401,578,364

22,976,219 3,217,396 21,202,328 (47,395,943) -

363,497,480 64,274,499 21,202,328 (47,395,943) 401,578,364

Results

65,241,597 9,099,985 (1,682,312) - 72,659,270

524,804 14,719 11,619 (202,696) 348,446

(5,716,882) (928,127) (202,736) 202,696 (6,645,049)

60,049,519 8,186,577 (1,873,429) - 66,362,667

348,780 - - - 348,780

46,859 - - - 46,859

60,445,158 8,186,577 (1,873,429) - 66,758,306

(14,441,293) (933,000) (513,033) - (15,887,326)

46,003,865 7,253,577 (2,386,462) - 50,870,980


cont’d

Annual Report 2010


39. SEGMENTAL REPORTING - GROUP cont’d

(a) Primary Segmental Reporting - Business Segment cont’d

Trading of

pipes, fittings

and flow

controls

Manufacturing

of pipes

fittings

Investments

and


RM RM RM RM RM

2009

Revenue

Results


cont’d

Annual Report 2010




Trading of

pipes, fittings

and flow

controls

Manufacturing

of pipes

fittings

Investments

and


RM RM RM RM RM

2010

Other information

293,342,990 86,345,336 111,320,613 (107,196,490) 383,812,449

1,771,224 - - - 1,771,224

323,626 - - -- 323,626

2,719,000 - - - 2,719,000

- 2,148,500 - - 2,148,500

298,156,840 88,493,836 111,320,613 (107,196,490) 390,774,799

125,359,361 38,276,079 8,270,917 (23,290,496) 148,615,861

5,583,350 - 145,351 - 5,728,701

1,251,844 2,287,000 - - 3,538,844

132,194,555 40,563,079 8,416,268 (23,290,496) 157,883,406

439,086 8,325,353 - - 8,764,439

3,025,392 2,147,416 - - 5,172,808


cont’d

Annual Report 2010




Trading of

pipes, fittings

and flow

controls

Manufacturing

of pipes

fittings

Investments

and


RM RM RM RM RM

2009

Other information


cont’d

Annual Report 2010



(b) Secondary Segmental Reporting - Geographical Segment

Revenue Total assets Capital expenditure

2010 2009 2010 2009 2010 2009

RM RM RM RM RM RM

361,377,691 372,947,188 8,628,704

40,200,673 15,732,761 135,735

401,578,364 388,679,949 8,764,439

1,771,224

323,626

390,774,799


cont’d

Annual Report 2010


No. Tittle deed Address

( Land area )

Gross

build-up

area Sq.ft. Tenure

Description /

existing use

Net book

Value @

28.2.2010

RM’000

Approximate

age of

building

Years

Date of

last

revaluation

LIST OF PROPERTIES

Annual Report 2010


ANALYSIS OF SHAREHOLDINGS as at 15 July 2010

DISTRIBUTION OF SHAREHOLDINGS AS AT 15 JULY 2010

Category

No. of

Shareholders

% of

Shareholders No. of Shares

% of

Shares

Total 2,462 100.00 375,026,000* 100.00

Notes:

* The number of 375,026,000 ordinary shares is inclusive of treasury shares retained by the Company.

LIST OF SUBSTANTIAL SHAREHOLDERS AS AT 15 JULY 2010

Direct Indirect

No. Names No. of Shares %* No. of Shares %*

Notes:

* Excluding a total of 820,800 shares bought-back by the Company and retained as treasury shares

Annual Report 2010


ANALYSIS OF SHAREHOLDINGS as at 15 July 2010 cont’d

DIRECTORS’ INTERESTS IN SHARES AS AT 15 JULY 2010

Direct Indirect

No. Names No. of Shares %* No. of Shares %*

Notes:

(a) Deemed Interest pursuant to Section 6A of the Act through his and his spouse Datin Shum Kah Lin’s interest in CTL Capital Holding Sdn. Bhd.

(b) Deemed Interest pursuant to Section 6A of the Act through her and her spouse Dato’ Chew Ting Leng’s interest in CTL Capital Holding Sdn. Bhd.

(c) Deemed Interest pursuant to Section 6A of the Act through his and his spouse Datin Lee Sock Kee’s interest in GL Management Agency Sdn. Bhd.

(d) Deemed Interest pursuant to Section 6A of the Act through her and her spouse Dato’ Goh Teoh Kean’s interest in GL Management Agency Sdn.

Bhd.

(e) Deemed interest pursuant to section 134 (12) of the Act through the shares held by his spouse, Madam Yong Yui Kiew


NON-EXECUTIVE DIRECTORS’ OPTIONS UNDER EMPLOYEE SHARE OPTION SCHEME as at 15 JULY 2010

No. Name

Number

of options

offered

Number

of options

exercised

Annual Report 2010


30 LARGEST SHAREHOLDERS as at 15 July 2010

No. Shareholders Shareholding %*

- PHEIM ASSET MANAGEMENT SDN. BHD. FOR EMPLOYEES PROVIDENT FUND

- EXEMPT AN FOR PRUDENTIAL FUND MANAGEMENT BERHAD

- GREAT EASTERN LIFE ASSURANCE (MALAYSIA) BERHAD

- EXEMPT AN JPMORGAN CHASE BANK, NATIONAL ASSOCIATION



- PUBLIC ISLAMIC OPPORTUNITIES FUND

- AS BENEFICIAL OWNER

- HSBC (M) TRUSTEE BERHAD FOR MAAKL PROGRESS FUND


Annual Report 2010


What is eDividend?

eDividend Benefits

•

•

•

•

•

Registration of eDividend

19 April 2010 until 18 April 2011

How do I provide my bank account information for eDividend?

What supporting documents are required?

•

•

•

•

Contact Details

IMPLEMENTATION OF ELECTRONIC DIVIDEND PAYMENT (“eDividend”)

Annual Report 2010


This pages is intentionally left blank

PROXY FORM

PANTECH GROUP HOLDINGS BERHAD,

Name of proxy, NRIC No. & Address No. of shares to be represented

RESOLUTION

FIRST PROXY SECOND PROXY

FOR AGAINST FOR AGAINST

ORDINARY BUSINESS

SPECIAL BUSINESS

*

Notes:1. A member entitled to attend and vote at the Meeting is entitled to appoint up to two (2) proxies attend and vote in his/her stead provided that he/

she specifies the proportion of his/her shareholding to be represented by each proxy. A proxy may but need not be a member of the Company. The provisions of Section 149(1)(b) & (c) of the Companies Act, 1965 shall not apply.

2. Where a member is an authorised nominee as defined under the Security 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.

3. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorised.

4. The Proxy Form must be deposited at the Registered Office of the Company at Level 15-2, Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than forty-eight (48) hours before the time set for holding the meeting or any adjournment thereof.

No. of ordinary shares held

AFFIX

STAMP

1st Fold Here

Fold This Flap For Sealing

Then Fold Here

THE SECRETARY

PANTECH GROUP HOLDINGS BERHAD (733607-W)


Jalan Sultan Ismail

50250 Kuala Lumpur

panaflo controls pte ltd pantech steel industries … · shah alam office no. 3, jalan trompet 33/8...

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