Laporan Tahunan 2009 Annual Report - sersol.com.my · Laporan Tahunan 2009 Annual Report SERSOL TECHNOLOGIES BERHAD (602062-X) T : (62)-21-89841081 Laporan Tahunan 2009 Annual Report

Laporan Tahunan 2009 Annual Report

SERSOL TEC

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(602062-X)

Multi Square Sdn. Bhd.No. 28, Jalan Canggih1,Taman Perindustrian Cemerlang,81800 Ulu Tiram, Johor, Malaysia.T : (6)07-8611112/3 F : (6)07-8633116/8619261E : [email protected] / [email protected]

珠海马品涂料有限公司中国广东省珠海市金湾区红旗三板村一号厂邮编 : 519045电话 : (86)756 7793533 / 7798330传真 : (86)756 7794300电邮 : [email protected]

PT. Multi SquareJL Industri Selatan IV Block EE 2HKawasan Industri Jababeka II,Cikarang Selatan,17550 Jawa Barat, IndonesiaT : (62)-21-89841081 F : (62)-21-89841082E : [email protected]

Multi Square Coating (Thailand) Co.Ltd19/37 Moo 10, Tambol Klong Neung,Amphur Klong Luang Pathumthani,12120 ThailandT : (66)-2529 6240 F : (66)-2529 6241E : [email protected]

Multi Square (S) Pte.LtdReg Add: Blk 336 Smith Street,#05-303 New Bridge Centre,Singapore 050336

Asset Capital Holdings LtdReg Add: Rooms 3703-4,37/F West Tower, Shun Tak Centre,168-200 Connaught Road Central,Hong Kong.

Deco Coatings Sdn. Bhd.No. 28, Jalan Canggih1,Taman Perindustrian Cemerlang,81800 Ulu Tiram, Johor, Malaysia.T : (6)07-8611112/3Fax : (6)07-8633116/8619261E : [email protected]

www.sersoltech.com www.multisquare.com

“我们确保您的产品涂层可靠性，并且常与您分享最新涂料技术”We ensure your finishing coatings are reliable and will always update you with the latest coating technologies”

Annual Report 2009 �

Content

Corporate Information 4

Corporate Calender 5

Letter To Shareholders 6 - 7

股东汇报 8 -9

Directors’ Profile 10 - 11

Corporate Governance Statement 12 - 16

Report Of Audit Committee 17 - 20

Additional Listing Requirements Compliance Information 21

Statement On Internal Control 22 - 23

Statement Of Directors’ Responsibility 24

Financial Statements 25

List Of Properties 71

Analysis Of Shareholding 72

Notice Of Seventh Annual General Meeting 74

Statement Accompanying

The Notice Of Seventh Annual General Meeting 75

Proxy Form Enclosed

Malaysia

Thailand

Indonesia

China

G-Earthmate

Our special product G-Earthmateproducts are apply on building.

� SerSol Technologies Berhad (602062-X)

Corporate Information

COMPANY SECRETARIES

Rokiah Binti Abdul Latiff (LS 0000�9�)Ow Pee Juan (f) (MAICSA 70�330�)Noriah Binti Md Yusof (LS 0009298)

REGISTERED OFFICE

3�-0� Level 3�, Menara Landmark Mail Box �72, �2 Jalan Ngee Heng80000 Johor Bahru Tel : 07 – 278 �338Fax : 07 – 223 9330

SHARE REGISTRAR

Symphony Share Registrars Sdn BhdLevel 6, Symphony HouseBlock D�3, Pusat Dagangan Dana �Jalan PJU �A/�6, �730� Petaling Jaya,SelangorTel : 03 – 78�� 8000Fax : 03 – 78�� 8008

AUDITOR

Crowe Horwath (Formerly known as Horwath)30-0� Level 30, Menara LandmarkMail Box �7�, �2 Jalan Ngee Heng80000 Johor BahruTel : 07 – 278 �268Fax : 07 – 278 �238

PRINCIPAL BANKER

EON Bank Berhad37 & 39 Jalan Johar �,Taman Desa Cemerlang 8�800 Ulu Tiram JohorTel : 07 – 86� 7�88

STOCK EXCHANGE LISTING

ACE MARKET OF BURSA MALAYSIA SECURITIES BERHADStock Name : SERSOLStock Code : 0055

CORPORATE WEBSITE

www.sersoltech.com

BOARD OF DIRECTORS

Tan Fie Ping - Chairman and Managing DirectorTan Fie Jen - Executive DirectorTan Bee Ngoh - Executive DirectorTan Lay Beng - Independent Non-Executive DirectorAzahar bin Baharudin - Independent Non-Executive DirectorWinston Paul Wong Chi Huang - Independent Non-Executive Director

Annual Report 2009 5

Corporate Calender

DATE EVENTS

�� August 2009 The Company announced that the Company’s wholly-owned subsidiary company, Multi Square Sdn Bhd (“MSSB”), has on �9 June 2009, subscribed an additional 900,000 ordinary shares of Thai Baht (“THB”) �00 each in MSCT, a wholly-owned subsidiary company of MSSB. In this regard, MSSB has on 30 June 2009, �5 July 2009 and �� August 2009 remitted a total of THB 9,000,000 to MSCT. The cash proceeds received by MSCT will be utilised for working capital purposes.

The authorised share capital of MSCT was increased from THB9,000,000 comprising 90,000 ordinary shares of THB�00 each to THB�8,000,000 comprising �80,000 ordinary shares of THB�00 each in MSCT.

MSCT was incorporated on �6 January 2007 and is principally involved in the business of manufacturing and sales of industrial coating for consumer products, parts and components for industrial goods.

6 SerSol Technologies Berhad (602062-X)

Dear Shareholders, on behalf of my fellow Board members, I am pleased to present to you the annual report of our Company and our review of the financial results of our SerSol Group for the financial year ended 31 December 2009 (“FYE 2009”). This review marks my sixth report as your chairman since we were listed on the ACE Market of the Bursa Securities more than 5 years ago. During the past five years we have grown from a group with operations only in Malaysia to one where we now have operations in various countries in Asia including China, Indonesia, Singapore and Thailand.

PERFORMANCE REVIEW

Like most other economic sectors, our SerSol Group also suffered as a result of the global financial crisis. For FYE 2009, our SerSol Group recorded a loss after taxation of RM1.35 Million as compared to financial year ended 31 December 2008 (“FYE 2008”) where we recorded a profit after taxation of RM1.96 Million. Our SerSol Group’s revenue for FYE 2009 only registered RM22.�� Million which represents a decrease of approximately ��.8�% from FYE 2008. After the deduction of minority interest, our SerSol Group’s loss after taxation was RM828,000 as compared to the profit after taxation for FYE 2008 of RM1.75 Million.

I will now go on to discuss the results of our Group’s subsidiaries and measures going forward:-

1. MALAYSIA

A. MULTI SQUARE SDN. BHD. (“MSSB”)

MSSB’s turnover decline from RM27.�86 Million to RM�5.30� Million for FYE 2009, representing a decrease of ��.32% as compare to FYE 2008. Our turnover declined as our major customers suffered a major decrease in demand for their products in global market as well as extreme price competition. Some of our major customers took immediate action by changing most of their products from coating to in-mould high gloss surface to reduce paint costs and labour costs thus, causing the decline in our SerSol Group’s sales. Furthermore, with fast changing technology new products were launched with advanced technology and glossy raw parts, for example i-POD with touch screen; which had directly impaired the demand for coating. MSSB recorded a profit before taxation of RM 842,000 for FYE 2009 after deducting the written off of bad debts, research and development and plant and machinery. There is an under provided taxation of RM �85,000 during the year whereby the Inland Revenue Department had disallowed certain tax incentives and hence MSSB’s profit after taxation is RM 473,000 for FYE 2009. MSSB will continue with its research and development efforts to increase high value products range and to continue searching for other potential business opportunities.

B. DECO COATINGS SDN. BHD. (“DCSB”)

FYE 2009, DCSB sales turnover remains stagnant, and profit after taxation was recorded at RM 30,000. This was due to DCSB changing its strategy by promoting products for contract painting works rather than selling products to distributors and contractors. The management team will continue to implement new marketing strategies to enhance DCSB’s profitability.

2. THAILAND

MULTI SQUARE COATING THAILAND CO. LTD. (“MSCT”)

MSCT has not produced any positive results since its inception and had continued to incur losses. For FYE 2009, MSCT recorded a loss after taxation of RM207,000 as compare to loss after taxation of RM652,000 for FYE 2008. It has accumulated losses of RM�.39 Million since operations began. Despite the political instability in Thailand, we are confident that our management will be able to turn around MCST in the forseeable future.

Letter To Shareholders


Letter To Shareholders (Cont’d)

3. CHINA

ASSET CAPITAL HOLDINGS LTD. (“ACHL”) AND ZHUHAI MS COATING LTD. (“ZMCL”)

For FYE 2009, ACHL and ZMCL contributed negative results which affected the performance of SerSol Group with a loss after taxation of RM�.07 million. The performance for FYE 2009 for both ACHL and ZMCL were very much lower as compared to FYE 2008. The primary reason for this sharp fall in profits was due to two major customers (with contribution of 50% revenue to ZMCL for previous financial years) changing their products to non-coating raw parts. In addition ZMCL was focused only on good credit international customers in the past, and not local China E&E customers. Further, there were more than �0,000 factories that closed down in Quangdong province due to global financial crisis as well as the toxic toys fiasco which affected factories in southern China. We realise that China is a competitive market with a number of international coating players, however ZMCL will seek ways to stay in this competitive market.

4. INDONESIA

PT MULTI SQUARE (“PTMS”)

For FYE 2009, PTMS had a slight improvement in his performance with a profit after taxation RM 37,000 as compare to a loss after taxation of RM326,000 in FYE 2008. Although PTMS in essence does not contribute significantly to SerSol Group, PTMS is important to our SerSol Group as it services the consumer market in general and not just limited to the E&E market. It is noted that Indonesia is expected to enjoy positive growth and we believe that with new strategies for PTMS, PTMS’s results will improve in near future.

5. SINGAPORE

MULTI SQUARE (S) PTE. LTD. (“MSPL”) Our presence in Singapore is purely for marketing and strategic considerations.

PROSPECTS FOR FYE 2010

For the financial year ending 2010, I believe that it will be a challenging year for SerSol Group due to current uncertainties in the global economy .However, I believe that with our new business strategies and continuous efforts to seek for new partnerships and other business ventures, I believe that the financial results for FYE 20�0 would turn positive.

ACKNOWLEDGEMENTS

On behalf of the Board of Directors, I would like to thank our management team and our employees for their dedication, loyalty and hard work. Further on behalf of our Board of Directors and management, I would also like to express my sincere gratitude to all our shareholders, customers, business associates, vendors, bankers and regulatory authorities for their continuous support and trust in our SerSol Group and our Board.

Finally, on a personal note, I would like to thank my fellow directors for their invaluable advise and contribution to the success of SerSol Group.

Tan Fie PingChairman


亲爱的股东们：

你们好！

本人非常荣幸代表董事局向各位股东们汇报盛资科技集团与属下子公司（以下简称“盛资集团” 或“本集团”）截止至2009年12月31日的年终报告，这已是本人自五年前在自动报价市场上市后的第六个报告。在过去的五年，盛资集团从马来西亚扩展至亚洲其他国家，包括中国、印尼、新加坡和泰国。

回顾2009年度的整个财政，本集团同其他行业一样，遭受金融风暴的影响，以致本集团从2008年的税后盈利马币一百九十六万，跌至2009 年税后亏损马币一百三十五万。盛资集团的总营业额在2009年达马币二千二百一十四万，比2008年的营业额少了44.84%。在扣除少数权益后，股东净盈从2008年的马币一百七十五万，跌至股东净亏马币八十二万八千。

本人在此进一步汇报各个子公司的发展状况和新的策略。

1. 马来西亚

A. MULTI SQUARE SDN. BHD. (“MSSB”)

在2009年， MSSB的总营业额从去年的马币二千七百万下降至马币一千五百万，跌幅达44.32%。总营业额下降的主要原因是我们的有些主要客户在金融风暴和价格竞争的影响下，立即采取行动,把大部分的产品从涂料改变成注塑高光成型从而减少劳工成本，因此造成MSSB的销售下跌。再加上日新月异的科技新产品的推出和先进的技术和光泽的塑材,例如i-POD与触摸屏,直接影响了对涂料的需求。MSSB 在扣除坏账处理，注销研究与开发、厂房和设备之后的税前盈利为马币八十四万二千。由于政府取消一些税务奖掖，使MSSB得把去年未预提的所得税加在今年，所以MSSB的税后盈利只有马币四七万三千。MSSB 将会继续开发高端产品和寻找其他潜在的商机。

B. DECO COATINGS SDN. BHD. (“DCSB”)

在2009年, DCSB 的营业额仍然无法达到很好的业绩，税后盈利为马币三万块。这是由于DCSB改变其战略,促销承包式的工程,而不是把产品买给产品经销商和承包商。管理团队将继续实施新的营销策略以提高DCSB的盈利。

2. 泰国

MULTI SQUARE COATING THAILAND CO. LTD. (“MSCT”)

到目前为止，MSCT还是未达到理想的业绩。MSCT的税后亏损从去年的马币六十五万二千减少至2009年的马币二十万七千。从开业至今，它的累积亏损达到马币一百三十九万。尽管泰国政局不稳定，我们还是有信心能在不久的将来让MCST转亏为盈。

3. 中国

ASSET CAPITAL HOLDINGS LTD. (“ACHL”) AND ZHUHAI MS COATING LTD. (“ZMCL”)

ACHL和ZMCL 在2009年无法取得盈利，它的税后亏损为马币一百零七万。同2008年相比，利润急剧下降，其主要原因是有两个主要的客户(50%的贡献为先前ZMCL的财政收入)采用较少涂料的塑材。此外，ZMCL过去太注重良好信用的国际客户，而不是中国电子业的客户。加上在广东省,有超过10,000个工厂，由于全球金融危机以及有毒玩具事件的影响下而关闭，这也影响了中国南方工厂的市场。我们深知中国是一个充满竞争的涂料市场, 但是ZMCL会寻求新策略，以在这个竞争激烈的市场上分一杯羹。

股东汇报


4. 印尼

PT MULTI SQUARE (“PTMS”)

2009年 PTMS 的表现稍微进步，从去年的马币三十二万六千亏损转至税后盈利马币三万七千。虽然PTMS 无法为盛资集团贡献庞大的利润，但是它为本集团在消费市场的总体上扮演重要的角色,因为他的市场不仅局限于电子业。我们相信，印尼的经济将会持续正增长,在新策略采用的结果下，PTMS的利润在不久的将来会提高。

5. 新加坡

MULTI SQUARE (S) PTE. LTD. (“MSPL”) 本集团涉足于新加坡是基于行销和策略性的原因。

展望

由于全球经济还存在着许多不明朗的元素，2010 年将会是充满挑战性的一年。本集团会全力以赴，积极实施新的商业策略，不断努力去寻找新的合作伙伴和其他的商业企业，我们相信集团在2010年将会转亏于盈。

鸣谢

本人代表董事局，感谢我们的管理层和全体员工一直以来尽忠职守和竭诚服务，同时也由衷感谢各位尊贵的股东、客户、商业同仁、供应商，政府机关和有关当局一直以来给于盛资集团及属下子公司的支持与合作。

最后，本人谨此感谢董事局成员过去一年来对本集团的支持与信任，对于各董事局成员提出的宝贵意见深感谢意。

Tan Fie Ping主席

股东汇报(续)

�0 SerSol Technologies Berhad (602062-X)

TAN FIE PINGAge �8, Malaysian(Chairman and Managing Director)

Mr Tan Fie Ping, began his career as a production supervisor in Daihwa (M) Sdn Bhd in �986. He was appointed to the Board of SerSol Technologies Berhad on � September 200�. He is currently the Chairman and Managing Director of the Company.

He graduated with a Bachelor of Business Studies degree in �985 from the University of Winnipeg, Canada. While serving in Daihwa, he was holding several key positions in the company during different period of time. These positions include Head of Department for the 2nd Process Department, Head of Secondary Sales and Marketing Department and Head of the Purchasing Department. He left Daihwa and joined Lea Tat (M) Sdn Bhd as Manager in �99� before leaving the Company in �992 to set up his own business. He is the pioneer of the Group and has vast working experience in the Electrical and Electronics and industrial coatings industries.

He is the spouse of Tan Bee Ngoh and the brother of Tan Fie Jen. He has no conflict of interest with the company and has no conviction for any offences within the past �0 years.

TAN FIE JENAged �5, Malaysian (Executive Director)

Mr Tan Fie Jen, was appointed to the Board on � September 200�. He is currently the Executive Director of the Company. He graduated from the Tunku Abdul Rahman College with a Diploma in Building in �989. He began his career as Sales Executive in various companies such as Hunter Products (M) Sdn Bhd, Supermax Enterprise and Lea Tat (M) Sdn Bhd. He joined the Group of the Company as Sales Executive in �992 and has been promoted as Assistant General Manager in 200�. He has �7 years of experience in the industrial coating industries. He was promoted to Chief Operating Officer in Multi Square Sdn Bhd in 2006 and currently, he is working in SerSolTechnologies Berhad as Marketing Director since 2008.

He is the brother of Tan Fie Ping. He has no conflict of interest with the company and has no conviction for any offences within the past �0 years.

TAN BEE NGOHAged �8, Malaysian (Executive Director)

Ms Tan Bee Ngoh was appointed as an executive Director on � September 200�. She graduated with a Bachelor of Economics degree from the University of Winnipeg, Canada in �986. She has started her career as a Purchaser in Claytan Industries Sdn Bhd for three years before she joined Fairwood Furniture (M) Sdn Bhd as a Personnel Officer. She then joined the Group in 1992 as a Director and the Administrator of the Company.

She is the spouse of Tan Fie Ping. She has no conflict of interest with the company and has no conviction for any offences within the past �0 years.

TAN LAY BENGAged, 56, Malaysian(Independent Non-Executive Director)

Ms Tan Lay Beng was appointed as Independent Non-Executive Director of the Company on � September 200�. She obtained her certificate as a Certified & Chartered Accountants (ACCA) from the Association of Certified and Chartered Accountants United Kingdom in 1984 and was subsequently accredited with Fellow Certified and Chartered Accountant (FCCA). She is currently a Chartered Accountant of the Malaysian Institute of Accountants, Certified Financial Planner of the Financial Planning Association of Malaysia and a Fellow Member of the Malaysian Institute of Taxation.

She has started her career in the accounting and auditing field in 1973. After eight (8) years, she chose to specialize in taxation work whereby she became the Tax manager of a medium size firm and then continued her career in taxation work with Price Waterhouse in 1989. She left the firm to set-up her own consultancy firm.

She does not have any family relationship with any Director and / or substantial shareholder of the Company, nor does she have any personal interest in any business arrangement involving the Company. She has no convictions for any offences within the past �0 years.

Directors’ Profile

Annual Report 2009 ��

AZAHAR BIN BAHARUDINAged 5�, Malaysian(Independent Non-Executive Director) En Azahar was appointed as Independent Non-Executive Director of the Company on � September 200�. He graduated from MARA Institute of Technology in �98�. He began his career in �977 in United Asian Bank and joined Affin Bank Berhad in 1991 as an Executive Officer. In 1992 he was promoted to Head of Credit and became a Deputy Branch Manager of Johor Jaya branch in �993. In �99� he has been promoted as Branch Manager and worked in various branches of the Bank in Johor. He served with the Bank until 2003 with his last position as its Johor, Business Centre Head. He is currently a freelance financial consultant. Overall he has 27 years of experience in the banking industry.

He does not have any family relationship with any Director and / or substantial shareholder of the company, nor any personal interest in any business arrangement involving the company. He has no convictions for any offences within the past �0 years.

WINSTON PAUL WONG CHI HUANG Age �0, Malaysian(Independent Non-Executive Director)

Mr Winston Paul Wong Chi-Huang was appointed as Independent Non-Executive Director on 3� December 2007. He graduated from the University of Keele, UK in �993 with a Bachelor of Arts Degree Second Class Upper (Hons) in Law and Management. In �997 he obtained his Masters of Laws degree from the National University of Singapore.

He was called to English Bar in �99� and admitted to practice to the Malaysian Bar in �995. In 2008 he was admitted to practice in Singapore. He started his career as a lawyer in the firm of Messrs Abdul Raman Saad & Associates in 1995 and was with the firm until February 2006. While he was at Messrs Abdul Raman Saad & Associates, he was a Partner and Head of Department of the Corporate Finance and Capital Markets Department.

In March 2006, Mr. Winston Wong joined Messrs Adi Radlan & Co as a Partner and he was also the Head of the Corporate and Commercial Department of Messrs Adi Radlan & Co until March 2007. In April 2007, he and Ms Pamela Wong set up a new law firm under the name of Winston Wong Law Chambers. In May 2009, his firm of Winston Wong Law Chambers was merged with Tea, Kelvin Kang & Co under the name Tea, Kelvin Kang & Co (incorporating Winston Wong Law Chambers) and he is currently a partner of Messrs Tea, Kelvin Kang & Co. Mr Winston Wong is currently also. a partner of Wong Partnership LLP, Singapore, one of Singapore’s leading law firms and he has been with Wong Partnership LLP since June 2007, where he was first appointed as a Foreign Legal Consultant.

Winston’s main area of practice is equity and debt capital markets including Islamic Debt Capital Market, mergers and acquisitions, corporate banking and finance, securities and advisory and corporate and commercial affairs.

He does not have any family relationship with any Director and/or substantial shareholder of the Company, nor does he have any personal interest in any business arrangement involving the Company. He has no convictions for any offences within the past �0 years.

He is currently also an Independent Non-Executive Director of Plastrade Technology Berhad, a company listed on the ACE Market of Bursa Securities and Pelangi Publishing Group Berhad, a company listed on the Main Market of Bursa Securities, respectively.

Directors’ Profile (Cont’d)


The Board recognizes the importance of corporate government in discharging its responsibilities, protecting and enhancing shareholders’ value through promoting and practicing high standards of corporate governance throughout the Group. The Board adopts and applies the principles and best practices as governed by the Listing Requirements of Bursa Malaysia Securities Berhad for the ACE Market and the Malaysia Code on Corporate Governance (Revised 2007) (Code).

The following statements set out the Group’s compliance with the principles of the Code.

A. DIRECTORS

1. The Board

The Board of Directors has primary responsibility for the governance and management of the Group and fiduciary responsibility for the financial health of the company. The Group acknowledges the importance of having an effective Board to lead and control the Group. The Board’s responsibilities include:-

a) Review and approve the annual corporate plan for the Group.b) Review and approve strategic initiatives including corporate business restructuring or streamlining

and strategic alliances.c) Oversee the conduct of the Group’s businesses to evaluate whether the businesses are being

properly managed.d) Indentify principal risks and ensure the implementation of appropriate systems to manage these

risks.e) Develop succession plan for senior management and an investor relations programme. f) Regularly review the adequacy and the integrity of the Group’s internal control system and

management information systems to ensure compliance with the applicable laws, regulations, directives and guidelines.

g) Review the Memorandum and Articles of Association of the Company if there is any change of object clause and Company’s internal affair.

h) Regularly review the adequacy and ensure the Group’s operation is compliance with the requirements and regulations of Bursa Malaysia and Securities Commission.

i) Define the limits of management responsibility. Review the information from management which include:i) Customers’ satisfactionii) Products and service qualityiii) Market response and market reactioniv) Environmental performance

2. Board Balance

The Board of Directors comprises six (6) Members, of whom three (3) are Executive Directors and three (3) are Independent Non-Executive Directors. The Board comprises professionals drawn from various backgrounds in business, finance, technical and legal. They are bringing in-depth and diversify in experience, expertise and perspectives to the Group’s business operations.

The Chairman of the Board, Mr Tan Fie Ping is the pioneer of the Group and has vast working experience in the coating industry. He is also the Managing Director of the Company. The role of Chairman and Managing Director is combined due to his proven track record in displaying his entrepreneurship and leadership skills and in-depth experience in coating industry. Despite the combined roles, the Board is of the view that there are sufficient Independent Directors on the Board to ensure fair and objectives deliberations at Board meetings.

The Independent Directors play a crucial role in exercising independent judgment and objective participation in the proceedings and decision making process of the Board. The Board is satisfied that the current Board composition fairly reflects the interests of minority shareholders.

2.1 Board Meeting

Four (4) Board meetings were held within the financial year ended 31 December 2009. Directors’ attendance to the meeting can be found in the Statement Accompanying the Notice of the Seventh Annual General Meeting on page 75.

Corporate Governance Statement

Annual Report 2009 �3

3. Supply of Information

All Board members are provided with documents and relevant information for them to review the agenda items prior to Board meetings. Senior management staff are invited to attend Board meetings when necessary to provide further clarifications on matters being tabled. The Board has access to information with regard to the activities within the Group and to the advice and services of the Company Secretary, who is responsible for ensuring the Board meeting procedures are adhered to. As and when necessary, the Board may seek independent advice, at the Company’s expense.

4. Board Committees

The following principal Board Committees that have been established to assist the Board in discharging its duties effectively:-

• Audit Committee• Nomination Committee• Remuneration Committee

The terms of reference of each Board Committee have been approved by Board and, where applicable, comply with the recommendations of the Code. These Committees have the authority to examine particular issues and report to the Board and report to the Board with their recommendations. Nonetheless, the ultimate responsibility for the final decision on such matters lies with the Board.

4.1 Audit Committee

The Board has established the Audit Committee to assist the Board in discharging its duties. The Audit Committee works closely with the external and internal auditors and maintains a transparent professional relationship with them. The composition, term of reference, duties and responsibilities and other information of Audit Committee are set out on page �7 to 20 in this Annual Report.

4.2 Nomination Committee

The Nomination Committee consists of three Non-Executive Directors and meets as and when required. The Nomination Committee is responsible for annual review of Board’s required mix of skill, experience, quality and core competences of the Directors, annual assessment of the effectiveness of the Board as a whole and the contribution of each individual Director.

The Nomination Committee is also responsible for making recommendations for new appointment to the Board by considering the skills, knowledge, professionalism required by the Group. The actual decision as to who should be nominated will be the responsibility of the full board after considering the recommendations of the committee. The Company Secretaries will ensure that all appointments are properly made; all the necessary information is obtained as well as all legal and regulatory obligations are met. The members of the Nomination Committee are as follows:-

Tan Lay Beng (Independent Non-Executive Director)Azahar bin Baharudin (Independent Non-Executive Director)Winston Paul Wong Chi Huang (Independent Non-Executive Director)

4.3 Remuneration Committee

The Committee was set up on 22 November 200�. Its responsibilities include reviewing and recommending the remuneration package for each director base on the employment conditions within the industry. The Executive Directors’ remuneration package will be assessing base on individual performance while the remuneration of Non-Executive Director will be evaluated on individual contribution and responsibilities. Director does not participate in the discussion of his individual remuneration. It is, nevertheless, the ultimate responsibility of the entire Board to approve the remuneration of these Directors. The determination of the remuneration of Non-Executive Directors is a mater of the Board as a whole. The members of the Remuneration Committee are as follows:-

Tan Fie Ping (Chairman and Managing Director)Tan Lay Beng (Independent Non-Executive Director)Azahar bin Baharudin (Independent Non-Executive Director)

Corporate Governance Statement (Cont’d)

�� SerSol Technologies Berhad (602062-X)


5. Appointment and Re-election of Directors

Any appointment of a new Director to the Board or Board Committee is recommended by Nomination Committee for consideration and approval by the Board.

In accordance with the Company’s Articles of Association, one-third of the Directors for the time being shall retire from office at each Annual General Meeting (“AGM”). A retiring director shall be eligible for re-election.

Directors who are appointed by the Board during the financial year are subject to re-election by the shareholders at the next AGM held following their appointments.

Details of Directors seeking re-election at the Seventh Annual General Meeting are disclosed in the Statement Accompanying the Notice of AGM on page 75 in this Annual Report.

6. Directors’ Training

All the Directors have attended various training as a continuous effort to enhance management skills. Stated below is the list of courses attended during financial year ended 31 December 2009:-

Name of Directors Name of Courses Date

Tan Fie Ping Cross Border Tax Strategic �7 & �8 February 2009 FRS Workshop: Cash Flows Statement �8 August 2009 Lateral Thinking 26 November 2009 Finance For Non-Finance Managers �9 & 20 December 2009

Tan Bee Ngoh Lateral Thinking 26 November 2009 Finance For Non-Finance Managers �9 & 20 December 2009

Tan Fie Jen Six Thinking Hats �� October 2009 Lateral Thinking 26 November 2009 Finance For Non-Finance Managers �9 & 20 December 2009

Tan Lay Beng Corporate restructuring & tax management 05 March 2009 Practical implication on new Public Rulings �7 March 2009 Taxation Seminar 2009 02 April 2009 Income Reconstruction 25 April 2009 A ctitique of recent tax cases �2 May 2009 Liberalization & government support for 28 May 2009 Malaysian Professional Services Sector Latest Development on Transfer Pricing 2� June 2009 in Malaysia and The 2009 Mini Budget Withholding tax and Cross Border Transactions �5 September 2009 Latest updates on tax exemptions for employment income & individual tax statutory 30 September 2009 requirements by employer Fundamental of budgeting & cash �2 October 2009 flows forecasting Panelist for 20�0 Budget for LHDN 29 October 2009 20�0 Budget 5 November 2009

Azahar Bin Baharudin Performance and Evaluation Skill 20 - 22 April 2009 Leadership & Teamwork Dynamic �6 - �7 November 2009

Winston Paul Derivatives Workshop January 200 Wong Chi Huang Analysis & Understanding Financial Statements January 2009 Legal Practice Management Course March 2009 Dynamics of a Motivational Leader August 2009 Offshore Security Enforcement & Offshore September 2009 Insolvency & Restructuring


B. DIRECTORS’ REMUNERATION

The Directors’ fees are subject to the approval of shareholders at the Company’s Annual General Meeting (AGM). The aggregate remuneration of Directors of the Company during the financial year are as follows:-

Salaries & other Emoluments Fees Total (RM) (RM) (RM) Executive Directors 753,�20 57,�06 8�0,526 Non-Executive Directors �3,750 72,000 85,750 Total 767,�70 �29,�06 896,276

Number of Directors

Range of remuneration per annum Executive Non-Executive Below RM50,000 – 3 RM 50,00�- RM�00,000 – – RM�00,00�- RM�50,000 – – RM�50,00�- RM200,000 � – RM200,00�- RM250,000 � – RM250,00�- RM300,000 – – RM300,00�- RM350,000 – – RM350,00�- RM�00,000 – – RM�00,00�- RM�50,000 � – RM�50,00�- RM500,000 – – RM500,00�- RM550,000 – –

C. SHAREHOLDERS

1. Dialogue Between Companies and Investors

The Group recognizes the importance of keeping shareholders and investors informed of the Group’s business and corporate developments. Such information is disseminated via the Group’s annual report, circulars to shareholders, quarterly financial results and the various announcements made from time to time. The Group’s website is www.sersoltech.com and shareholders as well as members of the public are invited to access for the latest information of the Group.

2. Annual General Meeting

The Annual General Meeting (AGM) is the principal forum for dialogue with individual shareholders and investors. Shareholders are given opportunity to seek clarification on any matter pertaining to the business activities and financial performance.



D. ACCOUNTABILITY AND AUDIT

1. Financial Reporting

It is the Board’s responsibility and commitment to provide a balanced and comprehensive assessment of the Group’s operation and prospects in all the quarterly reports and annual financial statements to shareholders, investors and Regulatory Authorities.

The Board is assisted by the Audit Committee to review information for disclosure, the quality of the financial reporting and to ensure accuracy and completeness. The statement of Directors’ Responsibility in respect of the Audited Financial Statements of SerSol Technologies Berhad is set out on page 2� of this annual report.

2. Internal Control The Board recognizes the responsibilities to maintain an effective system of internal controls to safeguard

the shareholders’ interest and the Group’s assets. The Group’s system of internal controls is presented in the Statement on Internal Control on page 22 to 23 in this Annual Report.

3. Relationship with Auditors

The Board ensures that there are formal and transparent arrangements for the achievement of objectives and maintenance of professional relationship with external auditors. The external auditors have full access to the books and records of the Group at all times.

From time to time, the external auditors highlight and update the Board and Audit Committee on matters that require their attention.

E. OTHERS

Audit Committee The composition and terms of reference of Audit Committee together with its report are presented on page

�7 to 20 of this annual report.

Non-Audit Fees During the financial year under review, the amount of non-audit fees paid out or payable to the external auditors

of the Group is RM�3,250.



1. COMPOSITION

The Audit Committee shall be appointed by the Board amongst its directors and shall be financially literateAt least one member of the Audit Committee

a. must be a member of the Malaysian Institute of Accountants (MIA); or

b. if he is not a member of MIA, he must have at least three years’ working experience; and

1) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act �967; or

2) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act �967

c. fulfills such other requirements as prescribed by Bursa Malaysia Securities Berhad or approved by the Securities Commission.

The present Audit Committee comprises of 3 members of the Board. The Company has complied to the Bursa Securities Listing Requirements that came into effect on � June 200�, which require a majority of Audit Committee members to be independent Directors. In addition, the Audit Committee has one Director who is also member of the Malaysian Institute of Accountants (“MIA”) and the Chairman of the Audit Committee is an Independent Director.

1.1 Members Members of the Audit Committee are as follows:-

Ms Tan Lay Beng Independent Non-Executive Director (Appointed with effect from 0�/09/200�) En Azahar bin Baharudin Independent Non-Executive Director (Appointed with effect from 0�/09/200�) Mr Winston Paul Wong Chi Huang Independent Non-Executive Director (Appointed with effect from 3�/�2/2007)

1.2 Chairman of Audit Committee The Chairman of the Audit Committee is Ms Tan Lay Beng, an Independent Non-Executive Director.

1.3 Constitution The Audit Committee of SerSol Techonologies Berhad was established by the Board of Directors in

200�. The terms of Reference of Audit Committee are set out in next page of this Annual Report.

Report Of Audit Committee


2. TERMS OF REFERENCE

2.1 Composition of the Audit Committee

The Audit Committee shall be appointed by the Board of Directors from amongst its members, which fulfills the following requirements:-

a. The Audit Committee must comprise at least 3 members. b. A majority of the Audit Committee must be Independent Directors. c. No Alternate Director shall be appointed as a member of the Audit Committee. d. None of the Audit Committee members must be Executive Directors The Members of Audit Committee shall then elect a Chairman from among themselves who shall be an

Independent Director. All members of Audit Committee, including the Chairman, will hold office only so long they serve as Directors of SerSol Technologies Berhad. The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at least once every 3 years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference.

2.2 Secretaries of the Audit Committee The Company Secretaries of SerSol Technologies Berhad shall be the Secretaries of the Audit

Committee.

2.3 Objective of the Audit Committee The objective of the Audit Committee is to assist the Board to discharge its responsibilities by reviewing

the adequacy and integrity of the Company and the Group’s internal control systems and management information systems, including system for compliance with applicable laws, regulations, rules, directives and guidelines.

Audit Committee is also to reinforce the independence of the external auditors and thereby helps

assure that they will have rein in the audit process and to provide, by way of regular meetings, a line of communication between the Board and the external auditors.

Report Of Audit Committee (Cont’d)


3. DUTIES AND RESPONSIBILITIES OF AUDIT COMMITTEE

The following are the main duties and responsibilities of the Audit Committee:-

a. To recommend to the Board on the appointment and annual reappointment of the external auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and cost effectiveness.

b. Discuss with the external auditors before the audit commences the nature and scope of the audit, the audit plan and ensure co-ordination where more than one audit firm is involved.

c. To review the quarterly interim results, half year and annual financial statements of the Company and the Group prior to the approval by the Board and focusing on:-

i) change in accounting policies and practices ii) significant adjustments arising from the audit iii) the going concern assumption and iv) compliance with accounting standard and other regulatory requirements.d. Discuss problems arising from the interim and final audits and any matter the auditor may wish to discuss

in the absence of the management where necessary.e. Review the external auditor’s management letter and management’s response.f. Evaluate the internal audit function on:- i) adequacy of the scope, functions and resources of the internal audit function and that it has

the necessary authority to carry out its work. ii) the internal audit programme and results of the internal audit process and, where necessary, ensure

that appropriate actions are taken on the recommendations of the internal audit function. iii) the review of appraisal or assessment of the performance of members of the internal audit

function. iv) the approval of any appointment or termination of senior staff members of the internal audit

function; and v) the resignations of internal audit staff members and provide the resigning staff member

an opportunity to submit his reasons for resigning.g. Consider the major findings of internal investigations and management’s response.h. Review any related party transactions and conflict of interest situation that may arise within SerSol

Group, including any transaction, procedure or source of conduct that raises questions of management integrity.

i. Consider other issues as defined by the Board.

4. AUTHORITY OF THE AUDIT COMMITTEE

a. Have explicit authority to investigate any matter within its terms of reference.b. Have the resources required to perform its duties.c. Have full and unrestricted access to any information, records, properties and personnel of SerSol

Technologies Berhad and any of other companies within the Group.d. Have direct communication channels with the external auditors and person(s) carrying out the internal

audit function or activity (if any).e. Be able to obtain independent professional or other advice and to invite outsiders with relevant experience

and expertise to attend the Audit Committee’s meeting (if required) and to brief the Audit Committee;f. Be able to convene meetings with external auditors or management team without the presence of the

executive board members, whenever deemed necessary.



5. FREQUENCY OF MEETINGS

The Audit Committee shall hold a minimum of at least four (4) meetings in a financial year. The number of Committee meetings held during a financial year and the details of attendance of each individual member in respect of meetings held shall be disclosed annually.

The meeting shall be chaired by the Chairman of Audit Committee or in the absence of the Chairman, another committee member who is an Independent Director nominated by the committee members. The quorum of the meeting is the majority of whom shall be Independent Directors. The Chairman also has the discretion to call for additional meetings at any time.

The Committee Secretaries shall attend each Audit Committee Meeting and record the proceedings of the meeting.

6. MEETINGS

Five (5) Audit Committee meeting were held within the financial year ended 31 December 2009 during the tenure of the present Audit Committee. Details of the attendance of the members at the Audit Committee meeting are as follows:-

Name of Audit Committee Member No. of Meeting Attended

Ms Tan Lay Beng 5/5 En Azahar bin Baharudin �/5 Mr Winston Paul Wong Chi Huang �/5

The Managing Director of the Company and the representatives from the External Auditors have attended the Audit Committee meetings conducted during the financial year under review.

7. ACTIVITIES

During the financial year, the Audit Committee has conducted its activities in accordance with its existing Terms of Reference, which include:-

a. Quarterly meetings to review the quarterly results.b. Discuss with the management on the business performance.c. Review Risk Management reports and Internal Audit reports with Head of Internal Audit to assess the

effectiveness of the system of internal controls in the areas audited. d. Discuss the annual audited financial statements with the external auditors as well as their findings and

recommendations. e. Review and consider any related party transaction that may or have arisen within the Group.


Annual Report 2009 2�

The information set out in the Annual Report is made up to a date not earlier than 6 weeks from the date of Annual General Meeting of the Company.

To comply with the Listing Requirements of Bursa Securities, the following additional information is provided:-

SHARE BUYBACKS

There were no share buy backs during the financial year ended 31 December 2009.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES EXERCISED

The Company has not issued any options, warrants or convertible securities in respect of the financial year ended 3� December 2009.

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

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

SANCTIONS AND / OR PENALTIES

The Company and its subsidiaries, Directors and management have not been imposed with any sanctions and/or penalties by any regulatory bodies.

PROFIT GUARANTEE

No profit guarantee was given by the Company in respect of the financial year ended 31 December 2009.

MATERIAL CONTRACTS

There were no material contracts by the Company and its subsidiaries involving Directors’ and major shareholders’ interest.

REVALUATION OF LANDED PROPERTIES

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

CONTRACT RELATED TO LOAN BY THE COMPANY

There were no contracts relating to loan by the Company.

CORPORATE SOCIAL RESPONSIBILITY

The Company and its subsidiaries have made regular cash donations to welfare organizations and charitable institutions. The Group also emphasize on quality work environment by adopting strict health and safety measures where safety values are inculcated into the staff force as part of their work ethics. The Company and its subsidiaries also play a part in the conservation of the environment by promoting paperless whereby using software systems which include E-Document System and ERP(Enterprise Resources Planning) System to store the documents and information without having to print hardcopies.

Additional Listing Requirements Compliance Information


INTRODUCTION

The Malaysian Code on Corporate Governance (“the Code”) requires that the Board should maintain a sound system of internal control to safeguard the Company’s shareholders’ investments and the Group’s assets. This statement of internal control has been prepared pursuant to paragraph �5.26 (b) of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for ACE Market.

BOARD RESPONSIBILITIES

The Board of Sersol Technologies Berhad (“STB”) acknowledges the principal responsibilities in relation to internal control which are outlined in the Best Practices Provision AA � Part 2 of the Code:-

– Continuously identifying the principal risks and have designed protective measures against such risks for the Group.

– Ensuring the implementation of internal control procedures and systems to manage these risks.– Ensuring that internal control audit reports and corrective action reports are properly documented and

continuously carrying out improvement plans to meet this objective.– Ensuring the integrity of the Group’s internal control systems.

Nevertheless, the Board is aware that the internal control established can only provide reasonable but not absolute assurance against material misstatement or loss, as it is designed to manage rather than eliminate the risk of failure to achieve business objectives.

RISK MANAGEMENT FRAMEWORK

The Board is aware that an effective risk management system is an integral part of the daily operations of the Group. In this regard, the management of STB has included the risk management system as part of its business practice. The management of STB will continue to employ risk assessment and risk profile techniques as part of its business practice and the Group’s risk management is managed internally by the Risk Management Committee (“RMC”). The processes adopted by RMC include identifying the strategic, financial and operational risks in the critical areas, assessing the likelihood of occurrence and impact of material risks and recommended measures to minimize and eliminate such risks in its daily operations.

The management will continue to identify, review the potential risks, implementing the protective and corrective plan to ensure that risks are being minimized in the Group.

Statement Of Internal Controls


INTERNAL AUDIT

The Board acknowledges the importance of the internal audit function and had established an in-house internal audit unit known as Sersol Audit Services (“SAS”) to carry out audits and strengthen the overall control. SAS also ensures the recommended improvements have been carried out. SAS has presented its audit findings with recommended actions to the audit committee. The costs incurred in respect of internal audit functions for the financial year ended 3� December 2009 amounted to RM22,000 which included travelling expenses and staff salary.

SAS has identified the areas to be audited based on the Group’s own risk management methodology planned by the risk management committee and a total of �0 audits had been conducted across the subsidiaries’ operations during the financial year ended 31 December 2009.

Meanwhile the Board permits SAS to attend the audit committee meeting as and when is necessary.

OTHER KEY ELEMENTS OF INTERNAL CONTROL

In addition to the above, other key elements of internal control are as follows:-

– An organization structure with clear defined lines of responsibility and authority;– Internal control policies, manuals, procedures and work instruction are documented based on the guidelines

of the International Organization for Standardization (“ISO”) accreditation programme. During the year, the Group’s handbook has been revised and updated to meet the changing environment;

– Regular management meetings are held where information covering operational performances are – reviewed. Additionally, the yearly financial projection of each subsidiary is tabled to the Board for approval at the beginning of the financial year;

– Regular training programs are being attended by employees with the objective of enhancing their knowledge and competency.

CONCLUSION

The Board is aware that it is essential to maintain a sound system of internal control that supports the achievement of the organization’s policies, aims and objectives. The Board is also aware that continual improvement is needed in the system to ensure that all activities and functions are conducted in an organized and competent manner.

The Board is of the opinion that based on the current level of activities, the Group’s system of internal control is adequate and is in accordance with provisions set out in the Code.

Statement Of Internal Controls (Cont’d)

2� SerSol Technologies Berhad (602062-X)

Directors are legally required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results of the Group and of the Company for the financial year then ended.

In preparing those financial statements, the Directors of the Company have:-

• adopted suitable accounting policies and then applied them consistently;• made judgments and estimates that are prudent and reasonable;• ensured applicable accounting standards have been followed, subject to any material departures disclosed

and explained in the financial statements; and• prepared the financial statement on the going concern basis unless it is inappropriate to presume that the

Group and the Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the Companies Act. �965 and applicable approved accounting standards. The Directors are also responsible for the assets of the Group and of the Company and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement Of Directors’ResponsibilityIn respect of the Audited Financial Statements


Financial Statements

Directors’ Report 26

Statement By Directors & Statutory Declaration 30

Independent Auditors’ Report 31

Balance Sheets 33

Income Statements 35

Statements Of Changes In Equity 36

Cash Flow Statements 38

Notes To The Financial Statements 40

SerSol Technologies Berhad (602062-X)26

Directors’ Report

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2009.

PRINCIPAL ACTIVITIES

The Company is principally involved in investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

THE THE GROUP COMPANY RM RM

(Loss)/Profit after tax for the financial year (827,892) 41,625Minority interest (520,373) –

(Loss)/Profit attributable to equity holders of the Company (1,348,265) 41,625

DIVIDEND

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year except as disclosed in the statements of changes in equity.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised and issued and paid up share capital of the Company; and

(b) there were no issues of debentures by the Company.

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would further require the writing off of bad debts, or the making of additional allowance for doubtful debts in the financial statements of the Group and of the Company.


Directors’ Report (Cont’d)

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down 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 which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liabilities of the Group and of the Company are set out in Note 43 to the financial statements. At the date of this report, there does not exist:-

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

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

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

CHANGE OF CIRCUMSTANCES

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

ITEMS OF AN UNUSUAL NATURE

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

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, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

HOLDING COMPANY

The holding company is Sersol Holdings Sdn. Bhd., a company incorporated in Malaysia, which the directors also regard as the ultimate holding company.



DIRECTORS

The directors who served since the date of the last report are as follows:-

AZAHAR BIN BAHARUDINTAN BEE NGOHTAN FIE PINGTAN FIE JENTAN LAY BENGWINSTON PAUL WONG CHI HUANG

Pursuant to Article 101 of the Articles of Association of the Company, Azahar Bin Baharudin and Winston Paul Wong Chi Huang retire by rotation at the forthcoming annual general meeting and, being eligible, offer themselves for re-election.

DIRECTORS’ INTERESTS

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

NUMBER OF ORDINARY SHARES OF RM0.10 EACH AT ATTHE COMPANY 1.1.2009 BOUGHT SOLD 31.12.2009

Direct InterestsTAN BEE NGOH 1,385,489 – – 1,385,489TAN FIE JEN 372,824 – – 372,824TAN FIE PING 547,448 – – 547,448

Indirect InterestsTAN FIE JEN 50,328,949 – – 50,328,949TAN FIE PING 50,328,949 – – 50,328,949

NUMBER OF ORDINARY SHARES OF RM1.00 EACHHOLDING COMPANY AT ATSERSOL HOLDINGS SDN. BHD. 1.1.2009 BOUGHT SOLD 31.12.2009

Direct InterestsTAN FIE JEN 725 – – 725TAN FIE PING 1,195 – – 1,195

By virtue of their interests in the holding company, Tan Fie Jen and Tan Fie Ping are deemed to have interest in shares in the subsidiaries to the extent of the Company’s interest, in accordance with Section 6A of Companies Act 1965.

None of the other directors holding office at the end of financial year had any interests in shares in the Company or its related corporations during the financial year.



DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with certain directors as disclosed in Note 41 to the financial statements.

Neither during nor at the end of the financial year was the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

AUDITORS

The auditors, Messrs. Crowe Horwath (formerly known as Horwath), have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 19 MARCH 2010

Tan Fie Ping

Tan Bee Ngoh


Statement By Directors

We, Tan Fie Ping and Tan Bee Ngoh, being two of the directors of Sersol Technologies Berhad, state that, in the opinion of the directors, the financial statements set out on pages 33 to 70 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 December 2009 and of their results and cash flows for the financial year ended on that date.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 19 MARCH 2010

Tan Fie Ping Tan Bee Ngoh

I, Tan Fie Ping, I/C No.: 620824-01-5799, being the director primarily responsible for the financial management of Sersol Technologies Berhad, do solemnly and sincerely declare that the financial statements set out on pages 33 to 70 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declaration Act 1960.

Subscribed and solemnly declared by Tan Fie Ping, I/C No.: 620824-01-5799,at Johor Bahru in the state of Johoron this 19 March 2010

Before me Tan Fie PingRUSLY B. MOHD. YUNUS P.I.S. (No. J112)Commissioner For Oaths

Statutory Declaration


Independent Auditors’ ReportTo the members of SerSol Technologies Berhad

Report on the Financial Statements

We have audited the financial statements of Sersol Technologies Berhad, which comprise the balance sheets as at 31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out in pages 33 to 70.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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


Independent Auditors’ ReportTo the members of SerSol Technologies Berhad (Cont’d)

Report on Other Legal and Regulatory Requirements

In accordance with the requirement of the Companies Act 1965 in Malaysia, we also report the followings:-

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

(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of we have not acted as auditors, which are indicated in Note 7 to the financial statements.

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

(d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Matters

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

Crowe Horwath Wong Tak MunFirm No.: AF 1018 Approval No: 1793/09/10 (J)Chartered Accountants Partner

Johor Bahru19 March 2010


Balance SheetsAt 31 December 2009

THE GROUP THE COMPANY 2009 2008 2009 2008 NOTE RM RM RM RM

ASSETSNON-CURRENT ASSETS Investments in subsidiaries 7 – – 8,994,145 8,994,145Investment in an associate 8 163,967 163,108 150,000 150,000Property, plant and equipment 9 8,253,384 9,137,246 174,193 31,665Goodwill on consolidation 10 166,392 166,392 – –Other intangible assets 11 511,333 841,454 – –Deferred tax assets 23 – 2,012 – –

9,095,076 10,310,212 9,318,338 9,175,810CURRENT ASSETSInventories 12 3,521,297 3,887,410 – –Trade receivables 13 6,401,995 10,052,313 – –Other receivables, deposits and prepayments 14 929,277 797,231 4,040 34,706Tax recoverable 47,551 188,388 32,432 32,432Amount owing by subsidiaries 15 – – 3,116,025 3,166,904Amount owing by an associate 16 368,087 436,955 – –Marketable securities 17 285,830 110,040 – –Fixed deposits with licensed banks 18 82,985 241,353 – –Cash and bank balances 2,653,689 3,948,374 28,316 10,463

14,290,711 19,662,064 3,180,813 3,244,505

TOTAL ASSETS 23,385,787 29,972,276 12,499,151 12,420,315

The annexed notes form an integral part of these financial statements.


Balance SheetsAt 31 December 2009 (Cont’d)


EQUITY AND LIABILITIESEQUITYShare capital 19 9,493,100 9,493,100 9,493,100 9,493,100Share premium 20 3,538,387 3,538,387 3,538,387 3,538,387Exchange translation reserves 21 69,976 111,808 – –Retained profits/(Accumulated losses) 541,603 1,386,235 (624,160) (665,785)

SHAREHOLDERS’ EQUITY 13,643,066 14,529,530 12,407,327 12,365,702MINORITY INTERESTS 1,578,430 2,249,147 – –

TOTAL EQUITY 15,221,496 16,778,677 12,407,327 12,365,702

NON-CURRENT LIABILITIESLong term borrowings 22 591,041 1,247,359 – –Deferred tax liabilities 23 684,427 560,446 – –

1,275,468 1,807,805 – –CURRENT LIABILITIESTrade payables 24 3,496,656 5,093,810 – –Other payables and accruals 25 1,171,577 1,537,654 91,824 54,613Tax payable 343 8,692 – –Amount owing to an associate 26 158,240 342,394 – –Short term borrowings 27 2,062,007 4,306,221 – –Bank overdrafts 30 – 97,023 – –

6,888,823 11,385,794 91,824 54,613

TOTAL LIABILITIES 8,164,291 13,193,599 91,824 54,613

TOTAL EQUITY AND LIABILITIES 23,385,787 29,972,276 12,499,151 12,420,315

Net assets per share (sen) 31 14.37 15.31



Income StatementsFor the financial year ended 31 December 2009

THE GROUP THE COMPANY 2009 2008 2009 2008 NOTE RM RM RM RM REVENUE 32 22,144,130 40,147,379 1,135,632 808,540COST OF SALES (15,860,772) (28,049,527) – –

GROSS PROFIT 6,283,358 12,097,852 1,135,632 808,540OTHER OPERATING INCOME 581,160 624,265 31,832 39,226ADMINISTRATIVE AND GENERAL EXPENSES (5,501,851) (7,238,182) (1,124,628) (1,073,223)SELLING AND DISTRIBUTION EXPENSES (2,100,548) (2,589,376) – –FINANCE COSTS (241,000) (465,148) (1,211) (214)

(978,881) 2,429,411 41,625 (225,671)SHARE OF PROFIT OF AN ASSOCIATE 859 13,560 – –

(LOSS)/PROFIT BEFORE TAX 33 (978,022) 2,442,971 41,625 (225,671)TAX EXPENSE 34 (370,243) (482,342) – –

(LOSS)/PROFIT AFTER TAX (1,348,265) 1,960,629 41,625 (225,671)

ATTRIBUTABLE TO:-EQUITY HOLDERS OF THE COMPANY (827,892) 1,750,125 41,625 (225,671)MINORITY INTERESTS (520,373) 210,504 – –

(1,348,265) 1,960,629 41,625 (225,671)

(Loss)/Earnings per share- basic (sen) 35 (0.87) 1.84- diluted (sen) 35 (0.87) 1.84



Statements Of Changes In EquityFor the financial year ended 31 December 2009

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Statements Of Changes In EquityFor the financial year ended 31 December 2009 (Cont’d)

Non- Distributable DistributableTHE COMPANY Reserve Reserve

Share Share Accumulated Capital Premium Losses Total RM RM RM RM

Balance at 1.1.2008 9,493,100 3,538,387 (440,114) 12,591,373Loss after tax for the financial year – – (225,671) (225,671)

Balance at 31.12.2008/1.1.2009 9,493,100 3,538,387 (665,785) 12,365,702Profit after tax for the financial year – – 41,625 41,625

Balance at 31.12.2009 9,493,100 3,538,387 (624,160) 12,407,327



Cash Flow StatementsFor the financial year ended 31 December 2009


CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES(Loss)/Profit before tax (978,022) 2,442,971 41,625 (225,671)

Adjustments for:-Allowance for doubtful debts 1,151 1,377 – –Amortisation of development expenditure 248,146 275,202 – –Amortisation of intangible assets – 14,120 – –Bad debts recovered (167,916) (5,425) – –Bad debts written off 54,739 279,330 – –Deposit forfeited – 13,670 – –Depreciation of property, plant and equipment 1,280,712 1,261,021 15,138 7,371Dividend income (6,594) (3,521) – –Gain on disposal of marketable securities (39,826) – – –Gain on disposal of plant and equipment – (52,185) – (19,863)Loss on foreign exchange - unrealised 18,007 – – –Impairment loss on investment in marketable securities 19,089 – – –Impairment of goodwill – 102,519 – –Intangible assets written off 81,975 232,897 – –Interest expense 177,137 379,133 – –Interest income (6,923) (5,787) – (18,771)Plant and equipment written off 58,131 36,802 – –Share of profit of an associate (859) (13,560) – –

Operating profit/(loss) before working capital changes 738,947 4,958,564 56,763 (256,934)Decrease in inventories 366,113 406,948 – –Decrease/(Increase) in trade and other receivables 3,612,291 384,971 30,666 (33,706)Increase in amount owing by an associate (115,286) (32,493) – –Decrease in amount owing by subsidiaries – – 50,879 167,968(Decrease)/Increase in trade and other payables (2,146,295) (850,144) 37,211 36,370

CASH FROM/(FOR) OPERATIONS 2,455,770 4,867,846 175,519 (86,302)Interest paid (177,137) (379,133) – –Tax (paid)/refunded (104,231) 627,870 – –

NET CASH FROM/(FOR) OPERATING ACTIVITIES 2,174,402 5,116,583 175,519 (86,302)

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIESDividend received 3,147 – – –Interest received 6,923 5,787 – 18,771Increase in development expenditure – (51,941) – –Proceeds from disposal of marketable securities 587,479 – – –Proceeds from disposal of plant and equipment – 143,340 – 100,932Purchase of plant and equipment 36 (441,704) (808,931) (157,666) (32,700)Purchase of marketable securities (739,085) – – –

NET CASH (FOR)/FROM INVESTING ACTIVITIES (583,240) (711,745) (157,666) 87,003

BALANCE CARRIED FORWARD 1,591,162 4,404,838 17,853 701



Cash Flow StatementsFor the financial year ended 31 December 2009 (Cont’d)


BALANCE BROUGHT FORWARD 1,591,162 4,404,838 17,853 701

CASH FLOWS FOR FINANCING ACTIVITIESNet repayment of bankers’ acceptances (2,155,991) (253,345) – –Repayment of hire purchase obligations (248,510) (388,923) – –Repayment of term loans (497,390) (679,666) – –

NET CASH FOR FINANCING ACTIVITIES (2,901,891) (1,321,934) – –

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (1,310,729) 3,082,904 17,853 701

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 4,092,704 667,534 10,463 9,762

Effect of changes in exchange rates (45,301) 342,266 – –

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 37 2,736,674 4,092,704 28,316 10,463



Notes To The Financial StatementsFor the financial year ended 31 December 2009

1. GENERAL INFORMATION

The Company is incorporated as a public company limited by shares under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered office and principal place of business are as follows:-

Registered office : 31-04, Level 31, Menara Landmark Mail Box 172, No. 12, Jalan Ngee Heng 80000 Johor Bahru Johor

Principal place of business : No. 28, Jalan Canggih 1 Taman Perindustrian Cemerlang 81800 Ulu Tiram Johor Bahru Johor

The financial statements were authorised for issue by the board of directors in accordance with a resolution of the directors dated 19 March 2010.

2. PRINCIPAL ACTIVITIES

The Company is an investment holding company and a provider of management services. The principal activities of the subsidiaries are set out in Note 7 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. HOLDING COMPANY

The holding company is Sersol Holdings Sdn. Bhd., a company incorporated in Malaysia, which the directors also regard as the ultimate holding company.

4. FINANCIAL RISK MANAGEMENT POLICIES

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows:-

(a) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on sales, purchases, assets and liabilities that are denominated in foreign currency.

Foreign currency risk is closely monitored and kept at an acceptable level.

(ii) Interest Rate Risk

The Group obtains financing through bank borrowings. Its policy is to obtain the most favourable interest rates available.

Information relating to the Group’s borrowings are disclosed in their respective notes.

(iii) Price Risk

The Group’s principal exposure to price risk arises mainly from changes in quoted securities prices. Price risk is closely monitored and kept at an acceptable level.


Notes To The Financial StatementsFor the financial year ended 31 December 2009 (Cont’d)

4. FINANCIAL RISK MANAGEMENT POLICIES (CONT’D)

(b) Credit Risk

Credit risks, or the risk of counterparties defaulting, are controlled by the application of credit approvals, limits and monitoring procedures. Credit risks are minimised by monitoring receivables regularly and by mostly trading with creditworthy customers.

The carrying amounts of cash and cash equivalents, trade receivables and other receivables represent the Group’s maximum exposure to credit risk in relation to financial assets. No other financial assets carry a significant exposure to credit risk.

(c) Liquidity and Cash Flow Risk

The Group manages its liquidity risk by maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet estimated commitments arising from operational expenditure and financial liabilities. The Group also has an effective control of cash management to ensure that the Group can pay its operating expenses and targeted dividends to shareholders at appropriate times.

5. BASIS OF PREPARATION

The financial statements of the Group and of the Company are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Financial Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia.

The Group has not applied in advance the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:-

FRSs/IC Interpretations Effective date

Revised FRS 1 (2010) First-time Adoption of Financial Reporting Standards 1 July 2010Revised FRS 3 (2010) Business Combinations 1 July 2010FRS 4 Insurance Contracts 1 January 2010FRS 7 Financial Instruments: Disclosures 1 January 2010FRS 8 Operating Segments 1 July 2009Revised FRS 101 (2009) Presentation of Financial Statements 1 January 2010Revised FRS 123 (2009) Borrowing Costs 1 January 2010Revised FRS 127 (2010) Consolidated and Separate Financial Statements 1 July 2010Revised FRS 139 (2010) Financial Instruments: Recognition and Measurement 1 January 2010Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate 1 January 2010Amendments to FRS 2: Vesting Conditions and Cancellations 1 January 2010Amendments to FRS 2: Scope of FRS 2 and Revised FRS 3 (2010) 1 July 2010Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010Amendments to FRS 7, FRS 139 and IC Interpretation 9 1 January 2010Amendments to FRS 138: Consequential Amendments Arising from Revised FRS 3 (2010) 1 July 2010IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010IC Interpretation 11: FRS 2: Group and Treasury Share Transactions 1 January 2010IC Interpretation 12 Service Concession Arrangements 1 July 2010IC Interpretation 13 Customer Loyalty Programmes 1 January 2010IC Interpretation 14: FRS 119: The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction 1 January 2010IC Interpretation 15 Agreements for the Construction of Real Estate 1 July 2010IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and Revised FRS 3 (2010) 1 July 2010Annual Improvements to FRSs (2009) 1 January 2010



5. BASIS OF PREPARATION (CONT’D)

The above FRSs, IC Interpretations and amendments are not relevant to the Group’s operations except as follows:-

Revised FRS 3 (2010) The revised FRS 3 (2010) introduces significant changes to the accounting for business combinations, both

at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be applied prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements.

FRS 7, Revised FRS 139 (2010) and subsequent Amendments The possible impacts of FRS 7 (including the subsequent amendments) and the revised FRS 139 (2010) on

the financial statements upon their initial applications are not disclosed by virtue of the exemptions given in these standards.

Revised FRS 8 FRS 8 replaces FRS 1142004 Segment Reporting and requires a “management approach”, under which segment

information is presented on the same basis as that used for internal reporting purposes. The adoption of this standard only impacts the form and content of disclosures presented in the financial statements of the Group. This FRS is expected to have no material impact on the financial statements of the Group upon its initial application.

Revised FRS 101 (2009) The revised FRS 101 (2009) has introduced terminology changes (including revised titles for the financial

statements) and changes in the format and content of the financial statements. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of items in the financial statements. The adoption of this revised standard will only impact the form and content of the presentation of the Group’s financial statements in the next financial year.

Revised FRS 123 (2009) The revised FRS 123 (2009) removes the option of immediately recognising as an expense borrowing costs

that are directly attributable to the acquisition, construction or production of a qualifying asset. In accordance with the transitional provision, the Group will apply this revised standard to borrowing costs related to qualifying assets for which the commencement date of capitalisation is on or after 1 January 2010. This change in accounting policy will not have any financial impact on the financial statements for the current financial year but may impact the accounting for future transactions or arrangements.

Revised FRS 127 (2010) The revised FRS 127 (2010) requires accounting for changes in ownership interests by the group in a

subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. The revised standard also requires all losses attributable to the minority interest to be absorbed by the minority interest instead of by the parent. The Group will apply the major changes of the revised FRS 127 (2010) prospectively and therefore there will not have any financial impact on the financial statements of the Group for the current financial year but may impact the accounting for future transactions or arrangements.

Amendments to FRS 1 and FRS 127 Amendments to FRS 1 and FRS 127 remove the definition of “cost method” currently set out in FRS 127, and

instead require an investor to recognise all dividend from subsidiaries, jointly controlled entities or associates as income in its separate financial statements. In addition, FRS 127 has also been amended to deal with situations where a parent reorganises its group by establishing a new entity as its new parent. Under this circumstance, the new parent shall measure the cost of its investment in the original parent at the carrying amount of its share of the equity items shown in the separate financial statements of the original parent at the reorganisation date. The amendments will be applied prospectively and therefore there will not have any financial impact on the financial statements of the Company for the current financial year but may impact the accounting for future transactions or arrangements.



5. BASIS OF PREPARATION (CONT’D)

Amendments to FRS 5 Amendments to FRS 5 requires assets and liabilities of a subsidiary to be classified as held for sale if the

parent is committed to a plan involving loss of control of the subsidiary, regardless of whether the entity will retain a non-controlling interest after the sale. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application.

Amendments to FRS 138 Amendments to FRS 138 clarify the requirements under the revised FRS 3 (2010) regarding accounting for

intangible assets acquired in a business combination. These amendments are expected to have no material impact on the financial statements of the Group upon their initial application.

IC Interpretation 10 IC Interpretation 10 prohibits the impairment losses recognised in an interim period on goodwill, investments

in equity instruments and financial assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation is expected to have no material impact on the financial statements of the Group upon its initial application.

Amendments to IC Interpretation 9 Amendments to IC Interpretation 9 are a consequential amendment from the revised FRS 3 (2010). These

amendments are expected to have no material impact on the financial statements of the Group upon its initial application.

Annual Improvements 2009 Annual Improvements to FRSs (2009) contain amendments to 21 accounting standards that result in accounting

changes for presentation, recognition or measurement purposes and terminology or editorial amendments. These amendments are expected to have no material impact on the financial statements of the Group’s upon their initial application.

6. SIGNIFICANT ACCOUNTING POLICIES

(a) Critical Accounting Estimates and Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, incomes and expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial and production factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made.



6. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Critical Accounting Estimates and Judgements (Cont’d)

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the Group is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(iv) Amortisation of Development Costs

Changes in the expected level of usage and technological development could impact the economic useful lives. Therefore future amortisation charges could be revised.

(v) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical bad debt, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

(vi) Write down of Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require management to consider the future demand for the products, ageing analysis, technical assessment and subsequent events. In general, such an evaluation process requires significant judgement and estimates. Possible changes in these estimates could result in revision to the valuation of inventories.

(b) Functional and Foreign Currencies

(i) Functional and Presentation Currency

The functional currency of each entity in the Group are the currency of the primary economic environment in which the entity operates.

The Group financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are measured in the respective functional currencies of the Group and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are taken to the income statement.

(iii) Foreign Operations

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

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;




(b) Functional and Foreign Currency (Cont’d)

(iii) Foreign Operations (Cont’d)

(ii) income and expenses for the income statement are translated at average exchange rates for the year; and

(iii) all resulting exchange differences are recognised as a separate component of equity, as a foreign currency translation reserve. On disposal, accumulated translation differences are recognised in the consolidated income statements as part of the gain or loss on sale.

(c) Financial Instruments

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

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheets are disclosed in the individual policy statement associated with each item.

(d) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December 2009.

A subsidiary is defined as a company in which the parent company has the power, directly or indirectly to exercise control over its financial and operating policies so as to obtain benefits from its activities.

The subsidiary is consolidated using the purchase method. Under the purchase method, the results of the subsidiary acquired or disposed off are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiary’s net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.

Intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiary to ensure consistency of accounting policies with those of the Group.

(e) Goodwill on Consolidation

Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group’s share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually, or whenever there are circumstances which indicate that the carrying value may be impaired. The impairment value of goodwill is recognised immediately in the consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period.

If, after assessment, the Group’s interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated income statement.




(f) Investments

(i) Investments in Subsidiaries and Associates

Investments in subsidiaries and associates are initially stated at cost in the balance sheet of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable.

On the disposal of such investments in subsidiaries and associates, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the income statement.

(ii) Marketable Securities

Marketable securities are carried at the lower of cost and market value, determined on an aggregate basis. Market value is determined based on quoted market values. Increases or decreases in the carrying amount of these investments are recognised in the income statement. On disposal of these investments, the difference between the net disposal proceeds and the carrying amount of the investment is taken to the income statement.

(g) Associates

An associate is an entity in which the Group has a long term equity interest and where it exercises significant influence over the financial and operating policies.

The investment in associate in the consolidated financial statements is accounted for under the equity method, based on the financial statements of the associate made up to 31 December 2009. The Group’s share of the post acquisition profits of the associate is included in the consolidated income statement and the Group’s interest in associate is stated at cost plus the Group’s share of the post-acquisition retained profits and reserves.

Unrealised gains or transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

(h) Property, Plant and Equipment

Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Freehold land is stated at cost less impairment losses, if any and is not depreciated.

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Buildings 2%Factory equipment 10%Motor vehicles 20%Furniture, fittings and office equipment 10%Renovation and electrical installation 10%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the income statement in the year the asset is derecognised.




(i) Impairment of Assets

The carrying values of assets, other than financial assets, goodwill on consolidation, deferred tax assets and inventories, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ net selling price and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is charged to the income statement immediately.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately.

(j) Research and Development Expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that expenditure incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an entity can demonstrate all of the following:-

(i) its ability to measure reliably the expenditure attributable to the asset under development;(ii) the product or process is technically and commercially feasible;(iii) its future economic benefits are probable;(iv) its ability to use or sell the developed asset;(v) the availability of adequate technical, financial and other resources to complete the asset under

development; and(vi) its intention to complete the intangible asset and use or sell.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of not exceeding 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

(k) Assets Acquired under Hire Purchase

Plant and equipment acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 6 (h) above.

Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding outstanding obligations due under the hire purchase after deducting finance charges are included as liabilities in the financial statements.

Finance charges are allocated to the income statement over the period of the respective hire purchase agreements.

Plant and equipment acquired under hire purchase are depreciated over the useful lives of the assets.




(l) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes the cost of materials, labour and an appropriate proportion of production overheads.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

(m) Receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

(n) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(o) Income Taxes

Income taxes for the year comprise current and deferred tax.

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

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly to equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.




(p) Interest-bearing Borrowings

Interest-bearing borrowings are recorded at the amount of proceeds received, net of transaction costs.

All borrowing costs are charged to the income statement as expenses in the period in which they are incurred.

(q) Equity Instruments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(r) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(s) Segmental Information

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated depreciation, where applicable), other investments, inventories, receivables, and cash and bank balances.

Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets do not include income tax assets, whilst segment liabilities do not include income tax liabilities and borrowings from financial institutions.

Segment revenue, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation.

(t) EmployeeBenefits

(i) Short-termBenefits

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

(ii) DefinedContributionPlans

The Group’s contributions to defined contribution plans are charged to the income statement in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.




(u) Related Parties

A party is related to an entity if:-

(a) directly, or indirectly through one or more intermediaries, the party:- (i) controls, is controlled by, or is under common control with, the entity (this includes parents,

subsidiaries and fellow subsidiaries);(ii) has an interest in the entity that gives its significant influence over the entity; or(iii) has joint control over the entity;

(b) the party is an associate of the entity;(c) the party is a joint venture in which the entity is a venturer;(d) the party is a member of the key management personnel of the entity or its parent;(e) the party is a close member of the family of any individual referred to in (a) or (d);(f) the party is an entity that is controlled, jointly controlled or significantly influenced by, or for which

significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

(g) the party is a post-employment benefit plan for the benefit of employees of the entity, or of any entity that is a related party of the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.

(v) Contingent Liabilities and Contingent Assets

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

A contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group.

(w) Revenue Recognition

(i) Sale of Goods

Revenue is recognised upon delivery of goods and customers’ acceptance and where applicable, net of sales tax, returns and trade discounts.

(ii) Rendering of Services

Revenue is recognised upon rendering of services and when the outcome of the transaction can be estimated reliably. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.

(iii) Dividend Income

Dividend income from investment is recognised when the right to receive dividend payment is established.



7. INVESTMENTS IN SUBSIDIARIES

THE COMPANY 2009 2008 RM RM

Unquoted shares, at cost 9,225,524 9,225,524Less : Impairment loss on investment in a subsidiary (231,379) (231,379) 8,994,145 8,994,145

Details of subsidiaries are as follows:-

Effective Equity Country ofName of Company Interest (%) Incorporation Principal Activities 2009 2008

Multi Square Sdn. Bhd. 100 100 Malaysia Manufacture and sale of coatings, thinners and industrial chemicals.

Asset Capital Holdings 50 50 Hong Kong Investment holding and trading of coatings, Limited * thinners and related products.

Multi Square (S) 100 100 Singapore Trading of coatings, thinners and related Pte. Ltd. * products.

PT Multi Square * 60 60 Republic of Manufacture and sale of coatings, thinners and Indonesia industrial chemicals.

Subsidiaries of Multi Square Sdn. Bhd.

Deco Coatings Sdn. Bhd. 70 70 Malaysia Distribution of coating paints.

Multi Square Coating 100 100 Thailand Manufacture and sale of coatings, thinners and (Thailand) Co. Ltd. * industrial chemicals.

Subsidiary of Asset Capital Holdings Limited

Zhuhai MS Coating Ltd. 50 50 The People’s Manufacture and sale of coatings, thinners and Republic of China industrial chemicals.

* Not audited by Messrs. Crowe Horwath



8. INVESTMENT IN AN ASSOCIATE

THE GROUP THE COMPANY 2009 2008 2009 2008 RM RM RM RM

Unquoted shares, at cost 150,000 150,000 150,000 150,000Group’s share of post acquisition reserves 13,967 13,108 – –

163,967 163,108 150,000 150,000

Represented by:-Share of net tangible assets 152,994 152,135Goodwill on acquisition 10,973 10,973

163,967 163,108

Details of the associate are as follows:-

Effective Equity Country ofName of Company Interest (%) Incorporation Principal Activities 2009 2008

TN Industries Sdn. Bhd. * 30 30 Malaysia Blending and trading of chemical products.

* Not audited by Messrs. Crowe Horwath

9. PROPERTY, PLANT AND EQUIPMENT

THE GROUP Foreign At currency Depreciation At 1.1.2009 Additions translation Written off charge 31.12.2009Net book value RM RM RM RM RM RM

Freehold land 1,234,600 – – – – 1,234,600Buildings 2,059,504 – – – (48,239) 2,011,265Factory equipment 3,639,119 191,294 7,356 (1,968) (707,937) 3,127,864Motor vehicles 435,739 – 3,027 – (165,819) 272,947Furniture, fittings and office equipment 636,438 245,981 2,292 (56,163) (150,270) 678,278Renovation and electrical installation 1,131,846 4,429 602 – (208,447) 928,430

9,137,246 441,704 13,277 (58,131) (1,280,712) 8,253,384

Foreign At currency Depreciation At 1.1.2008 Additions translation Disposals Written off charge 31.12.2008Net book value RM RM RM RM RM RM RM

Freehold land 1,234,600 – – – – – 1,234,600Buildings 2,107,743 – – – – (48,239) 2,059,504Factory equipment 4,081,061 291,873 3,447 (5,664) (5,514) (726,084) 3,639,119Motor vehicles 515,529 155,737 6,733 (82,417) – (159,843) 435,739Furniture, fittings and office equipment 657,697 119,803 7,389 (3,074) – (145,377) 636,438Renovation and electrical installation 967,540 331,729 45,343 – (31,288) (181,478) 1,131,846

9,564,170 899,142 62,912 (91,155) (36,802) (1,261,021) 9,137,246



9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

THE GROUP Accumulated Net book At cost depreciation valueAt 31.12.2009 RM RM RM

Freehold land 1,234,600 – 1,234,600Buildings 2,370,545 (359,280) 2,011,265Factory equipment 8,149,035 (5,021,171) 3,127,864Motor vehicles 1,651,987 (1,379,040) 272,947Furniture, fittings and office equipment 1,659,911 (981,633) 678,278Renovation and electrical installation 1,960,128 (1,031,698) 928,430 17,026,206 (8,772,822) 8,253,384

Accumulated Net book At cost depreciation valueAt 31.12.2008 RM RM RM

Freehold land 1,234,600 – 1,234,600Buildings 2,370,545 (311,041) 2,059,504Factory equipment 7,944,867 (4,305,748) 3,639,119Motor vehicles 1,643,610 (1,207,871) 435,739Furniture, fittings and office equipment 1,536,789 (900,351) 636,438Renovation and electrical installation 1,943,866 (812,020) 1,131,846

16,674,277 (7,537,031) 9,137,246

THE COMPANY At Depreciation At 1.1.2009 Additions charge 31.12.2009Net book value RM RM RM RM

Office equipment 31,665 157,666 (15,138) 174,193

31,665 157,666 (15,138) 174,193

At Depreciation At 1.1.2008 Additions Disposal charge 31.12.2008Net book value RM RM RM RM RM

Motor vehicles* 86,859 – (81,069) (5,790) –Office equipment 546 32,700 – (1,581) 31,665

87,405 32,700 (81,069) (7,371) 31,665

2009 2008 RM RM

Office equipment, at cost 190,976 33,310Accumulated depreciation (16,783) (1,645)

Net book value 174,193 31,665

* Held in trust for the Company by a director.



9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Included in property, plant and equipment of the Group are the following assets acquired under hire purchase terms:-

2009 2008 RM RM

At net book value:-Factory equipment 407,184 461,837Motor vehicles 100,885 186,878

508,069 648,715

The following assets of the Group have been pledged to financial institutions as securities for banking facilities as disclosed in Notes 27, 29 and 30 to the financial statements:-

2009 2008 RM RM

At net book value:-Freehold land 1,234,600 1,234,600Buildings 2,011,265 2,059,504Factory equipment 500,192 593,324

3,746,057 3,887,428

10. GOODWILL ON CONSOLIDATION

THE GROUP 2009 2008 RM RM

Carrying value at 1 January 166,392 268,911Impairment of goodwill – (102,519)

Carrying value at 31 December 166,392 166,392

At 31 DecemberCost 486,272 486,272Accumulated amortisation (9,180) (9,180)Impairment of goodwill (210,865) (210,865)Realised on deemed disposal (99,835) (99,835)

Carrying value 166,392 166,392

Impairment tests for cash-generating units (“CGU”) containing goodwill

Carrying amount of goodwill are allocated as follows:

RM Asset Capital Holding Limited and its subsidiary 166,392



10. GOODWILL ON CONSOLIDATION (CONT’D)

The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use cash flow forecast based on the budget and financial projections covering subsequent five financial years duly approved by the directors of the Company.

The assumptions applied for the budget and financial forecast were determined based on business past performance and management’s expectations of future performance of the CGU.

The Group believes that any reasonably possible changes in the assumptions applied are not likely to materially cause recoverable amount to be lower than its carrying amount.

11. OTHER INTANGIBLE ASSETS

Development Technology Expenditure License TotalTHE GROUP RM RM RM

CostAt 1.1.2008 1,791,532 105,900 1,897,432Additions 51,941 – 51,941Written off (360,889) (105,900) (466,789)

At 31.12.2008/1.1.2009 1,482,584 – 1,482,584Written off (141,088) – (141,088)

At 31.12.2009 1,341,496 – 1,341,496

Amortisation and impairment lossAt 1.1.2008 564,520 21,180 585,700Amortisation charge for the year 275,202 14,120 289,322Written off (198,592) (35,300) (233,892)

At 31.12.2008/1.1.2009 641,130 – 641,130Amortisation charge for the year 248,146 – 248,146Written off (59,113) – (59,113)

At 31.12.2009 830,163 – 830,163

Carrying amountAt 31 December 2008 841,454 – 841,454

At 31 December 2009 511,333 – 511,333

Included in the additional development expenditure capitalised are the following expenses:-


Staff costs – 37,992



12. INVENTORIES


At cost:-Raw materials 2,518,876 3,032,792Work-in-progress 67,969 63,862Finished goods 934,452 790,756

3,521,297 3,887,410

None of the inventories are carried at net realisable value at the balance sheet date.

13. TRADE RECEIVABLES


Trade receivables 6,404,662 10,053,587Less : Allowance for doubtful debts (2,667) (1,274)

6,401,995 10,052,313

Allowance for doubtful debts at 1 January 1,274 43,558Addition for the financial year 1,151 1,377Foreign currency translation 242 (103)Written off during the financial year – (43,558)

Allowance for doubtful debts at 31 December 2,667 1,274

The Group’s normal trade credit terms range from 30 to 90 days (2008: 30 to 90 days). Other credit terms are assessed and varied on a case-by-case basis.

The foreign currency exposure profile of trade receivables is as follows:-


Chinese Renminbi 755,648 2,210,507Indonesia Rupiah 8,832 3,428Singapore Dollar 41,696 106,218Thai Baht 444,149 253,724United States Dollar 1,714,635 3,020,898



14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


Other receivables 632,310 476,106 – –Deposits 134,992 138,019 1,000 31,666Prepayments 161,975 183,106 3,040 3,040

929,277 797,231 4,040 34,706

15. AMOUNT OWING BY SUBSIDIARIES


Non trade related balancesSubsidiaries 3,116,025 3,166,904

The amount owing by subsidiaries are unsecured, interest-free and repayable on demand.

16. AMOUNT OWING BY AN ASSOCIATE


Trade related balances 368,087 436,955

The amount owing by an associate is unsecured, interest-free and repayable on demand.

17. MARKETABLE SECURITIES


Quoted securities in Malaysia, at cost 287,439 110,040Quoted securities outside Malaysia, at cost 17,480 –

304,919 110,040Less: impairment loss on investment in marketable securities (19,089) –

285,830 110,040

Market value of quoted securities 285,830 110,040



18. FIXED DEPOSITS WITH LICENSED BANKS

Included in the fixed deposits of the Group are RM43,905 (2008: RM41,353) which have been pledged with licensed banks for banker’s guarantees issued on behalf of the subsidiaries.

The effective interest rates of fixed deposits at the balance sheet date was 2.5% (2008: 3.10% to 3.70%) per annum. The fixed deposits have a maturity period of 12 months (2008: 1 and 12 months).

19. SHARE CAPITAL

THE COMPANY 2009 2008 2009 2008 Number of shares RM RM

ORDINARY SHARES OF RM0.10 EACH:-AUTHORISED 100,000,000 100,000,000 10,000,000 10,000,000

ISSUED AND FULLY PAID 94,931,000 94,931,000 9,493,100 9,493,100

20. SHARE PREMIUM

The share premium is not distributable by way of cash dividends and may be utilised in the manner as set out in Section 60(3) of the Companies Act 1965.

21. EXCHANGE TRANSLATION RESERVES

Exchange translation reserves arose from the exchange differences on translation of foreign subsidiaries.

22. LONG TERM BORROWINGS


Hire purchase payables (Note 28) 72,155 249,473Term loans (Note 29) 518,886 997,886

591,041 1,247,359

23. DEFERRED TAX LIABILITIES/(ASSETS)


At 1 January 558,434 115,238Recognised in the income statement (Note 34) 126,012 443,116Translation difference (19) 80 At 31 December 684,427 558,434



23. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)


Presented after appropriate offsetting as follows:-- Deferred tax assets – (2,012)- Deferred tax liabilities 684,427 560,446 684,427 558,434

The deferred taxation arise as a result of:-


Deferred tax liabilities:-- Accelerated capital allowances 561,427 574,446- Development expenditure capitalised 128,000 210,000- Unrealised foreign exchange gain – 45,000

Gross deferred tax liabilities 689,427 829,446

Deferred tax assets:-- Unabsorbed capital allowances – (2,012)- Unrealised foreign exchange loss (5,000) –- Unutilised income tax incentives – (269,000)

Gross deferred tax assets (5,000) (271,012)

Net deferred tax liability 684,427 558,434

The components and movements of deferred tax liabilities and assets during the financial year are as

follows:-

Unrealised Accelerated foreign capital Development exchange allowance expenditure gain TotalDeferred tax liabilities: RM RM RM RM

Balance at 1 January 2009 574,446 210,000 45,000 829,446Recognised in income statement (13,000) (82,000) (45,000) (140,000)Translation difference (19) – – (19)

Balance at 31 December 2009 561,427 128,000 – 689,427

Balance at 1 January 2008 557,754 319,000 – 876,754Recognised in income statement 16,797 (109,000) 45,000 (47,203)Translation difference (105) – – (105) Balance at 31 December 2008 574,446 210,000 45,000 829,446



23. DEFERRED TAX LIABILITIES/(ASSETS) (CONT’D)

Unrealised Unutilised Unabsorbed foreign Unutilised income capital exchange business tax allowance loss loss incentives TotalDeferred tax assets: RM RM RM RM RM

Balance at 1 January 2009 (2,012) – – (269,000) (271,012)Recognised in income statement 2,012 (5,000) – 269,000 266,012

Balance at 31 December 2009 – (5,000) – – (5,000)

Balance at 1 January 2008 (720,218) (39,000) (2,298) – (761,516)Recognised in income statement 718,021 39,000 2,298 (269,000) 490,319Translation difference 185 – – – 185

Balance at 31 December 2008 (2,012) – – (269,000) (271,012)

24. TRADE PAYABLES

The normal trade credit terms granted to the Group range from 30 to 90 days (2008: 30 to 90 days).

The foreign currency exposure profile of trade payables is as follows:-


Chinese Renminbi 524,629 700,060Euro – 1,737Hong Kong Dollar 33,080 –Indonesia Rupiah 31,487 38,315Singapore Dollar 7,225 372,197Thai Baht 232,832 40,367United States Dollar 396,490 259,385

25. OTHER PAYABLES AND ACCRUALS


Other payables 422,226 182,113 73,608 3,558Payroll liabilities 327,287 827,103 – 36,372Accrued expenses 388,585 528,438 18,216 14,683Staff welfare obligation 33,479 – – – 1,171,577 1,537,654 91,824 54,613

A subsidiary of the Group has appropriated 5% of its profit after tax to the staff welfare obligation. The staff welfare obligation would be used for the collective welfare of the employees. This obligation represents amount set aside in compliance with the local laws in the People’s Republic of China where the subsidiary operates.



26. AMOUNT OWING TO AN ASSOCIATE


Trade related balance 158,240 342,394

The amount owing to an associate is unsecured, interest-free and repayable on demand.

27. SHORT TERM BORROWINGS


Bankers’ acceptances 1,395,009 3,551,000Hire purchase payables (Note 28) 180,786 250,619Term loans (Note 29) 486,212 504,602 2,062,007 4,306,221

Bankers’ acceptances are drawn for a period of up to 148 days (2008: 112 days) which are renewable on maturity. Interest is charged at rates ranging from 3.23% to 3.90% (2008: 4.47% to 5.19%) per annum.

Bankers’ acceptances are secured by way of:-

(i) corporate guarantee from the Company; and

(ii) legal charges over the landed properties of the Group.

28. HIRE PURCHASE PAYABLES


Minimum hire purchase payment:-- not later than one year 189,262 270,186- later than one year and not later than five years 75,613 265,880 264,875 536,066Less : Future finance charges (11,934) (35,974) Present value of hire purchase payables 252,941 500,092



28. HIRE PURCHASE PAYABLES (CONT’D)


The net hire purchase payables are repayable as follows:-

Current:-- not later than one year (Note 27) 180,786 250,619 Non-current:-- later than one year and not later than five years (Note 22) 72,155 249,473 252,941 500,092

The hire purchase payables bore interest at the balance sheet date of between 3.75% to 7.34% (2008: 3.75% to 7.34%) per annum.

29. TERM LOANS


Current portion:-- repayable within one year (Note 27) 486,212 504,602 Non-current portion:-- repayable between one and two years 181,888 458,091- repayable between two and five years 336,998 539,795 Total non-current portion (Note 22) 518,886 997,886 1,005,098 1,502,488

Term loans bore interest at the balance sheet date at rates ranging from 5.55% to 8.00% (2008: 6.00% to 8.00%) per annum and are secured as follows:-

(i) by way of corporate guarantee from the Company;

(ii) by way of legal charges over the landed properties of the Group; and

(iii) by way of fixed charges over the machineries of the Group.

30. BANK OVERDRAFTS - THE GROUP

The bank overdrafts to a limit of RM2,150,000 (2008: RM2,150,000) are repayable on demand and interest is charged at the rate of 7.05% (2008: 8.05%) per annum. The bank overdrafts are secured in the same manner as the short term borrowings as disclosed in Note 27 to the financial statements.

31. NET ASSETS PER SHARE

The net assets per share of the Group is calculated based on the net assets of RM13,643,066 (2008: RM14,529,530) attributable to ordinary shares divided by the number of ordinary shares in issue at the balance sheet date of 94,931,000 shares of RM0.10 each.



32. REVENUE


Sale of goods 22,144,130 40,147,379 – –Dividend income (Note 41) – – 697,649 –Rendering of services to subsidiaries (Note 41) – – 437,983 808,540 22,144,130 40,147,379 1,135,632 808,540

33. (LOSS)/PROFIT BEFORE TAX


(Loss)/Profit before tax is arrived at after charging:-Allowance for doubtful debts (Note 13) 1,151 1,377 – –Amortisation of development expenditure (Note 11) 248,146 275,202 – –Amortisation of intangible asset (Note 11) – 14,120 – –Audit fees 83,542 73,447 15,000 13,000Bad debts written off 54,739 279,330 – –Deposits forfeited – 13,670 – –Depreciation of property, plant and equipment (Note 9) 1,280,712 1,261,021 15,138 7,371Intangible assets written off (Note 11) 81,975 232,897 – –Directors’ remuneration:-- fees 129,106 230,725 120,000 120,000- other emoluments 767,170 846,643 576,630 499,962Impairment of goodwill (Note 10) – 102,519 – –Impairment loss on investment in marketable securities (Note 17) 19,089 – – –Interest expense 177,137 379,133 – –Loss on foreign exchange- realised 271,493 387,230 2,067 19,865- unrealised 18,007 – – –Plant and equipment written off (Note 9) 58,131 36,802 – –Rental of equipments 3,033 2,780 – –Rental of premises 347,852 338,107 – –Rental of motor vehicles 47,568 55,337 – –Research and development expenditure:-- Staff costs 248,160 580,129 – –- Other expenses 43,743 37,203 – – And crediting:-Bad debts recovered (167,916) (5,425) – –Dividend income (6,594) (3,521) – –Gain on disposal of marketable securities (39,826) – – –Gain on disposal of plant and equipment – (52,185) – (19,863)Gain on foreign exchange - realised (108,003) (279,079) (31,832) (592)Interest income (6,923) (5,787) – (18,771)Rental of machinery (2,550) (400) – –



34. TAX EXPENSE


Income tax for the financial year 193,341 39,348 – –Deferred taxation (Note 23) (8,988) 361,116 – – 184,353 400,464 – –Under/(Over)provision in previous financial years- Malaysian income tax 50,890 (122) – –- Deferred taxation (Note 23) 135,000 82,000 – – 370,243 482,342 – –

During the financial year, the Malaysian statutory tax rate was reduced from 26% to 25%.

Subject to agreement with the tax authorities, at the balance sheet date, the unutilised tax losses, unabsorbed capital allowances and unutilised reinvestment allowances available to be carried forward for offset against future taxable business income are as follows:-

THE GROUP THE COMPANY 2009 2008 2009 2008 RM RM RM RM Unutilised tax losses 2,795,000 2,539,000 182,000 216,000Unabsorbed capital allowances 84,000 24,000 84,000 20,000Unutilised reinvestment allowances – 1,075,000 – – 2,879,000 3,638,000 266,000 236,000

A reconciliation of the tax expense applicable to the (loss)/profit before tax at the statutory tax rates to tax

expense at the effective tax rates of the Group and of the Company is as follows:-

THE GROUP THE COMPANY 2009 2008 2009 2008 RM RM RM RM (Loss)/Profit before tax (978,022) 2,442,971 41,625 (225,671) Malaysian taxation at statutory rates (244,500) 635,200 10,400 (58,674)

Tax effects of:-Non-deductible expenses 175,553 293,664 12,304 8,456Differential in tax rate of first RM500,000 – (9,400) – –Different tax rates in other countries 88,400 (140,000) – –Income tax incentive (39,000) (684,500) – –Deferred tax assets not recognised 244,904 356,500 – 48,087Reduction in income tax rate – (15,900) – 2,131Utilisation of deferred tax assets not recognised in prior years (41,004) (35,100) (22,704) –Under/(Over)provision of current tax in prior years 50,890 (122) – –Underprovision of deferred tax in prior years 135,000 82,000 – – 370,243 482,342 – –



34. TAX EXPENSE (CONT’D)

No deferred tax assets are recognised on the following:-

THE GROUP THE COMPANY 2009 2008 2009 2008 RM RM RM RM Unutilised tax losses 2,705,000 2,539,000 92,000 216,000Unabsorbed capital allowances – 5,000 – 20,000 2,705,000 2,544,000 92,000 236,000

35. (LOSS)/EARNINGS PER SHARE


Basic(Loss)/Profit attributable to ordinary shareholders (827,892) 1,750,125

Number of shares in issue as at 31 December 94,931,000 94,931,000

Basic (loss)/earnings per share (sen) (0.87) 1.84

Diluted (loss)/earnings per share is equal to the basic (loss)/earnings per share as there were no potential ordinary shares outstanding in both the previous and current financial years.

36. PURCHASE OF PLANT AND EQUIPMENT


Cost of plant and equipment purchased 441,704 899,142 157,666 32,700Amount financed through hire purchase – (90,211) – –

Cash disbursed for the purchase of plant and equipment 441,704 808,931 157,666 32,700

37. CASH AND CASH EQUIVALENTS

For the purpose of the cash flow statements, cash and cash equivalents comprise the following items:- THE GROUP THE COMPANY

2009 2008 2009 2008 RM RM RM RM

Fixed deposits with licensed banks (Note 18) 82,985 241,353 – –Cash and bank balances 2,653,689 3,948,374 28,316 10,463Bank overdrafts (Note 30) – (97,023) – – 2,736,674 4,092,704 28,316 10,463

As disclosed in Note 18 to the financial statements, fixed deposits of the Group totaling RM43,905 (2008: RM41,353) that have been pledged to banks for banking facilities granted to certain subsidiaries are not available for the general use of the Group other than to meet the obligations under the banking facilities.



37. CASH AND CASH EQUIVALENTS (CONT’D)

The foreign currency exposure profile of cash and bank balances is as follows:-

THE GROUP 2009 2008 RM RM Chinese Renminbi 546,296 457,545Euro 5,009 2,271Hong Kong Dollar 18,583 459,143Indian Rupee 169 169Indonesia Rupiah 16,350 6,989Taiwan Dollar 431 446Thai Baht 161,564 165,667Singapore Dollar 66,801 1,285,724United States Dollar 1,227,022 457,545

38. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments paid and payable to the directors of the Group and the Company during the financial year are as follows:-


Non-executive directors:-- fees 72,000 72,000 72,000 72,000- other emoluments 13,750 13,750 13,750 13,750 85,750 85,750 85,750 85,750

Executive directors:-- fees 57,106 158,725 48,000 48,000- other emoluments 753,420 832,893 562,880 486,212 810,526 991,618 610,880 534,212 896,276 1,077,368 696,630 619,962

The details of emoluments for the directors of the Group and the Company received/receivable for the financial

year by category and in bands of RM50,000 are as follows:-

THE GROUP THE COMPANY 2009 2008 2009 2008

Non-executive directorsBelow RM50,000 3 3 3 3

Executive directorsBelow RM50,000 – – 1 1RM50,001 - RM100,000 – – – –RM100,001 - RM150,000 – – – 1RM150,001 - RM200,000 1 – – –RM200,001 - RM250,000 1 1 1 –RM250,001 - RM300 000 – 1 – –RM300,001 - RM350,000 – – – –RM350,001 - RM400,000 – – 1 1RM400,001 - RM450,000 1 – – –RM450,001 - RM500,000 – – – –RM500,001 - RM550,000 – 1 – –



39. EMPLOYEE BENEFITS


Short term employee benefits 3,898,115 5,221,997 705,947 635,811Defined contribution retirement plan 269,455 268,958 95,831 87,100 4,167,570 5,490,955 801,778 722,911

Included in employee benefits are executive directors’ remuneration.

40. SEGMENTAL REPORTING - GROUP

BY GEOGRAPHICAL SEGMENT:- People’s Republic of China and Malaysia Hong Kong Others Elimination Consolidated RM RM RM RM RM

Year ended 31 December 2009 Revenue - Sales to external customers 13,326,591 4,354,327 4,463,212 – 22,144,130- Inter-segment sales 3,330,383 – 13,800 (3,344,183) – Total revenue 16,656,974 4,354,327 4,477,012 (3,344,183) 22,144,130

Segment results 1,124,344 (1,061,595) (157,093) (643,537) (737,881)

Finance costs (241,000)Share of profit of an associate 859

Loss before tax (978,022)

At 31 December 2009 Segment assets 30,113,836 4,408,347 3,894,268 (15,242,182) 23,174,269Investment in associate 163,967Income tax assets 47,551

Total assets 23,385,787

Segment liabilities 6,146,065 1,625,953 2,591,133 (5,536,678) 4,826,473Interest bearing-borrowings 2,653,048Income tax liabilities 684,770

Total liabilities 8,164,291

Other segment information Capital expenditure 325,129 92,377 24,198 – 441,704Depreciation of property, plant and equipment 964,164 161,969 155,889 (1,310) 1,280,712



40. SEGMENTAL REPORTING - GROUP (CONT’D)

BY GEOGRAPHICAL SEGMENT:- (CONT’D) People’s Republic of China and Malaysia Hong Kong Others Elimination Consolidated RM RM RM RM RM

Year ended 31 December 2008 Revenue - Sales to external customers 23,088,213 10,486,097 6,573,069 – 40,147,379- Inter-segment sales 5,574,528 – – (5,574,528) –

Total revenue 28,662,741 10,486,097 6,573,069 (5,574,528) 40,147,379

Segment results 1,486,606 732,395 (653,308) 1,328,866 2,894,559

Finance costs (465,148)Share of profit of an associate 13,560

Profit before tax 2,442,971

At 31 December 2008 Segment assets 34,695,274 6,477,281 4,893,480 (16,447,267) 29,618,768Investment in associate 163,108Income tax assets 190,400

Total assets 29,972,276

Segment liabilities 7,997,427 2,280,781 4,363,998 (7,668,348) 6,973,858Interest bearing-borrowings 5,650,603Income tax liabilities 569,138

Total liabilities 13,193,599

Other segment information Capital expenditure 278,180 582,844 139,051 (100,933) 899,142Depreciation of property, plant and equipment 1,011,685 103,073 147,573 (1,310) 1,261,021

41. RELATED PARTY DISCLOSURES

(a) The Company carried out the following transactions with the related parties during the year:-


Subsidiaries Dividend income (697,649) – Management fees received/receivable (400,240) (431,000) Technical transfer fee (37,743) (377,540)



41. RELATED PARTY DISCLOSURES (CONT’D)

(a) The Company carried out the following transactions with the related parties during the year:- (Cont’d)


Directors Legal services paid/payable – 3,350


Directors Legal services paid/payable – 3,000

(b) Compensation of key management personnel


Short-term employee benefits 787,014 983,030 618,741 550,069Defined contribution retirement plan 109,262 94,338 77,889 69,893 896,276 1,077,368 696,630 619,962

42. CAPITAL COMMITMENTS


Approved and contracted for:-- Motor vehicle 443,218 –

43. CONTINGENT LIABILITY


UnsecuredCorporate guarantees given to licensed banks for credit facilities granted to a subsidiary 14,490,000 14,490,000



44. FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial assets and liabilities:-

(a) Quoted and unquoted investments

The fair values of quoted investments are estimated based on quoted market prices for these investments.

For unquoted investments, it is not practicable to determine the fair values because of the lack of quoted market prices and the assumptions used in valuation models to value these investments cannot be reasonable determined.

(b) Bank balances and other liquid funds and short term receivables

The carrying amounts approximated their fair values due to the relatively short term maturity of these instruments.

(c) Short term borrowings and other current liabilities

The carrying amounts approximated their fair values due to the relatively short term maturity of these instruments.

(d) Long term bank loans

The carrying amount approximated their fair values as these instruments bear interest at variable rates.

(e) Hire purchase obligations

The hire purchase payables approximates its fair value as there is no material change in the interest charged on similar kind of borrowings in the market.

(f) Amount owing by/(to) associate/related companies

The carrying amount approximated their fair value at the balance sheet date.

(g) Contingent Liability

The nominal amount and net fair value of contingent liability not recognised in the balance sheets of the Company are as follows:-

The Company Nominal Net Fair Amount Value Note RM RM

At 31 December 2009Corporate guarantees 42 14,490,000 *

At 31 December 2008Corporate guarantees 42 14,490,000 *

* The fair value of contingent liability is expected to be minimal as the subsidiary is expected to be able to repay the banking facilities.


List Of PropertiesAs at 31 December 2009

Tenure/ Date of Approximate Expiry of Age of Total Total Built Title/Location/ Description/ Leasehold Building Land Area Up Area NBV Year ofRegistered Owner Address Existing Use Land (years) (square feet) (square feet) 31.12.09 Acquisition

Multi Square Sdn Bhd No.1 Marketing Freehold 13 5,909 4,550 454,353 2000 Jalan Anggerik office, Mokara 31/59, warehouse & Kota Kemuning, factory. Seksyen 31, 40460 Shah Alam Selangor.

Multi Square Sdn Bhd No.28 Office, Freehold 16 52,889 35,416 2,791,511 2002 Jalan Canggih 1 warehouse & Taman factory Perindustrian Cemerlang, 81800 Ulu Tiram Johor.


Analysis Of ShareholdingAs at 31 March 2010

Share Capital

Authorised Share Capital : RM10,000,000.00Issued and Fully Paid-Up Capital : RM9,493,100.00Class of Equity Securities : Ordinary Shares of RM0.10 eachVoting Rights : One vote per share

Distribution of Shareholders

No. No. ofRange of shareholdings Shareholders % Shares %

Less than 100 6 0.58 250 0.00100 – 1,000 158 15.18 142,900 0.151,001 – 10,000 418 40.15 2,825,600 2.9810,001 – 100,000 384 36.88 14,707,776 15.49100,001 to less than 5% of issued shares 74 7.11 26,925,525 28.36

5% and above of issued shares 1 0.10 50,328,949 53.02

Total 1,041 100.00 94,931,000 100.00

Thirty (30) Largest Securities Account Holders

No. Name No of Shares Held %

1. SerSol Holdings Sdn Bhd 50,328,949 53.022. Alliancegroup Nominees (Tempatan) Sdn Bhd 2,244,200 2.36 Pledged Securities Account For Ng Soh Kian (100692)3. Tan Bee Ngoh 1,385,489 1.464. Tan Yan Wah 1,375,489 1.455. Susan Karen Radzi @ Rodziah Dato’ Radzi 1,055,200 1.116. Guok Nam Fa 924,900 0.977. Kamarudin Bin Meranun 860,000 0.918. Abd Hamid Bin Ibrahim 786,000 0.839. Tan Chuan Thye 739,686 0.7810. Yeo Hee Sing 700,000 0.7411. Wong Vee Fah 677,000 0.7112. Pang Chwan Fatt 607,500 0.6413. Raja Mohd Azmi Bin Raja Razali 602,800 0.6314. Teo Kim Hock 569,600 0.6015. Tan Fie Ping 547,448 0.5816. Mohammad Nasseri Bin Ali 539,200 0.5717. Choo On Nee 484,000 0.5118. Tan Yan Wah 470,000 0.5019. Ong Eng Seng 420,000 0.4420. TA Nominees (Tempatan) Sdn Bhd 400,000 0.42 Pledged Securities Account For Wong Cher Hua21. Siew Kok Tim 400,000 0.4222. Public Nominees (Tempatan) Sdn Bhd 395,100 0.42 Pledged Securities Account For Wong Choo Mok (E-JBU)23. Tan Fie Jen 372,824 0.3924. Wong Kim Hai 362,000 0.3825. Koh Thin Min 340,300 0.3626. Ooi Eng Boon 324,000 0.3427. Wong Hong Choon 310,000 0.3328. Yap Nam Huat 300,000 0.3229. Ang Choon Lai 300,000 0.3230. RHB Capital Nominees (Tempatan) Sdn Bhd 300,000 0.32 Lee Leong Lai (T-471274)


Analysis Of ShareholdingAs at 31 March 2010 (Cont’d)

Substantial Shareholders

Direct Indirect No. of No. ofNo. Name Shares % Shares %

1. SerSol Holdings Sdn Bhd 50,328,949 53.02 – –2. Tan Fie Ping 547,448 0.58 50,328,949* 53.023. Tan Fie Jen 372,824 0.39 50,328,949* 53.02

Directors’ Shareholdings

Direct Indirect No. of No. ofNo. Name Shares % Shares %

1. Tan Bee Ngoh 1,385,489 1.46 – –2. Tan Fie Ping 547,448 0.58 50,328,949* 53.023. Tan Fie Jen 372,824 0.39 50,328,949* 53.02

* Deemed interest by virtue of their interests in SerSol Holdings Sdn Bhd pursuant to Section 6A of the Companies Act, 1965


Notice Of Seventh Annual General Meeting

NOTICE IS HEREBY GIVEN that the Seventh Annual General Meeting of SerSol Technologies Berhad will be held at the Meeting Room of Multi Square Sdn. Bhd. No. 28 Jalan Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor on Friday, 21 May 2010 at 3.00 p.m. to transact the following business:-

AGENDA

ORDINARY BUSINESSES:-

1. To receive and adopt the Audited Financial Report for the financial year ended 31 December 2009 together with the Reports of the Directors and Auditors thereon.

2. To re-elect the following Directors who retire by rotation pursuant to Articles 101 of the Company’s Articles of Association:

a) En Azahar Bin Baharudinb) Mr Winston Paul Wong Chi Huang

3. To approve the payment of Directors’ fees of RM120,000 for the financial year ended

31 December 2009.

4. To re-appoint Crowe Horwath (formerly known as Horwath) as Auditors of the Company and to authorize the Directors to fix their remuneration.

AS SPECIAL BUSINESS:-

5. AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132 D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 165, the Directors be authorized to issue shares in the Company at any time until the conclusion of the next Annual General Meeting 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 to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to be approval of all relevant regulatory bodies being obtained for such allotment and issue”.

By Order of the BoardSERSOL TECHNOLOGIES BERHAD

ROKIAH BINTI ABDUL LATIFF (LS 0000194)OW PEE JUAN (F) (MAICSA 7013304)NORIAH BINTI MD YUSOF (LS 0009298)Company Secretaries

Johor BahruDated: 29 April 2010

Note:

1. A member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but not be a member of the Company. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

2. Where a member appoints two (2) or more proxies, the appointment shall not be valid unless the Member specifies the proportion of his shareholding to be presented by each proxy.

3. Where the Form of Proxy is executed by a corporation, it must be executed under its seal or under the hand of its attorney.

4. The instruments appointing a proxy must be deposited at the registered office, 31-04 Level 31, Menara Landmark, Mail Box 172, No 12 Jalan Ngee Heng, 80000 Johor Bahru not less than 48 hours before the time for holding the meeting or at any adjournment thereof.

Ordinary Resolution 1

Ordinary Resolution 2Ordinary Resolution 3





Statement Accompanying The NoticeOf The Seventh Annual General Meeting

1. DIRECTORS WHO ARE SEEKING RE-ELECTION AT THE SEVENTH ANNUAL GENERAL MEETING OF THE COMPANY

The Directors retiring pursuant to Article 101 of the Company’s Articles of Association and seeking re-election are as follows:-

• En Azahar Bin Baharudin• Mr Winston Paul Wong Chi Huang

2. BOARD MEETINGS HELD IN THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

2.1 There were Four (4) Board of Directors meeting held during the financial year ended 31 December 2009, details of which are as follows:-

Date Time Venue

20 February 2009 2.00 pm No.28 Jln Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor

22 May 2009 2.00 pm No.28 Jln Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor

19 August 2009 2.00 pm No.28 Jln Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor

21 November 2009 2.00 pm No.28 Jln Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor

2.2 Details of attendance of individual Directors at the Board Meeting are as follows:

No. ofName of Director meetings Attended Percentage of Attendance

Mr Tan Fie Ping 4/4 100%Mr Tan Fie Jen 4/4 100%Ms Tan Bee Ngoh 4/4 100%Ms Tan Lay Beng 4/4 100%En Azahar Bin Baharudin 3/4 75%Mr Winston Paul Wong Chi Huang 3/4 75%

3. DATE, TIME AND PLACE OF THE SEVENTH ANNUAL GENERAL MEETING

Date : 21 May 2010Time : 3.00 p.m.Place : Meeting Room of Multi Square Sdn. Bhd. No. 28 Jalan Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor

4. FURTHER DETAILS OF DIRECTORS WHO ARE STANDING FOR RE-ELECTION

Details of Directors who are standing for re-election are set out in the Directors’ profile appearing on page 10 of the Annual Report.

(This page has been intentionally left blank)

Number of Ordinary Shares Held

I/We, ......................................................................................................................................................................................(FULL NAME AND NRIC/PASSPORT NO)

of.............................................................................................................................................................................................(FULL ADDRESS)

being a member of SERSOL TECHNOLOGIES BERHAD hereby appoint ..........................................................................

................................................................................................................................................................................................(FULL NAME AND NRIC/PASSPORT NO)

of.............................................................................................................................................................................................(FULL ADDRESS)

or failing him/her, the Chairman of the meeting as *my/our proxy to attend and vote for *me/us and on *my/ our behalf at the Seventh Annual General Meeting of the Company to be held at the Meeting Room of Multi Square Sdn. Bhd. No. 28 Jalan Canggih 1, Taman Perindustrian Cemerlang, 81800 Ulu Tiram Johor on Friday, 21 May 2010 at 3.00 p.m. or any adjournment thereof.If you wish to appoint other person(s) to be your proxy/proxies, kindly delete the words “The Chairman of the Meeting or failing him” and insert the name(s) of the person(s) desired.Mark either box if you wish to direct the proxy how to vote. If no mark is made the proxy may vote on the resolution or abstain from voting as the proxy thinks fit. If you appoint two proxies and wish them to vote differently this should be specified.My/our proxy/proxies is/are to vote as indicated below

No. ORDINARY RESOLUTIONS FOR AGAINST

1. To receive and adopt the Audited Financial Report for the financial year ended 31 December 2009 together with the Reports of the Directors and Auditors thereon.

2. To re-elect En Azahar Bin Baharudin as Director who retires pursuant to Article 101 of the Company’s Articles of Association.

3. To re-elect Mr Winston Paul Wong Chi Huang as Director who retires pursuant to Article 101 of the Company’s Articles of Association.

4. To approve the payment of Directors’ fees of RM120,000 for the financial year ended 31 December 2009.

5. To re-appoint Crowe Horwath (formerly known as Horwath) as Auditors of the Company and to authorize the Directors to fix their remuneration.

SPECIAL RESOLUTION 6. AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE

COMPANIES ACT, 1965 “THAT pursuant to Section 132D of the Companies Act, 165, the Directors be authorized

to issue shares in the Company at any time until the conclusion of the next Annual General Meeting 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 to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to be approval of all relevant regulatory bodies being obtained for such allotment and issue”.

* Strike out whichever not applicable

Signed this ......................... day of………......……… 2010

..………………………………………..Signature of Member/Common Seal

Notes:(i) A member entitled to attend and vote at the above meeting is entitled to appoint a proxy/proxies who may but need not be a member

of the Company to vote in his/her stead. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the Companies Commission of Malaysia.

(ii) Where a member appoints two proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy.

(iii) This 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 its common seal or under the hand of an officer or attorney duly authorized.

(iv) This instrument appointing a proxy must be deposited at the Registered Office of the Company not less than forty-eight (48) hours before the time appointed for holding the meeting or at any adjournment thereof.

proxy form (Company No: 602062-X)(Incorporated In Malaysia)

✄

Fold this flap for sealing

Then fold here

1st fold here

AFFIXSTAMP

THE COMPANY SECRETARY31-04 Level 31, Menara LandmarkMail Box 172, No. 12 Jalan Ngee Heng80000 Johor Bahru

Documents

Laporan Tahunan 2009 Annual Report - sersol.com.my · Laporan Tahunan 2009 Annual Report SERSOL TECHNOLOGIES BERHAD (602062-X) T : (62)-21-89841081 Laporan Tahunan 2009 Annual Report