ACOSTEC-AnnualReport2010 (1.4MB)

8/3/2019 ACOSTEC-AnnualReport2010 (1.4MB)

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Annual Report

as at 31 December 2010


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Contents

Notice of Annual General Meeting

Statement Accompanying Notice ofAnnual General Meeting

Financial Highlights

Group Structure

Corporate Information

Chairmans Statement

Profile of Directors

Corporate Social Responsibility

Audit Committee Report

Corporate Governance StatementOther Information

Statement of Internal Control

Financial Statements

Analysis of Shareholdings

List of Properties

20

2328

29

31

115

117

04

07

08

09

10

12

14

17 Proxy Form


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Our ExcellenceEnsures Ultimate Convenience


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4 | Acoustech Berhad (496665-W)

NOTICE IS HEREBY GIVEN that the Twelfth Annual GeneralMeeting of the Company will be held at Crystal Room, Level 1,Crystal Crown Hotel Harbour View, 217 Persiaran Raja MudaMusa, 42000 Port Klang, Selangor Darul Ehsan on Thursday,16 June 2011 at 11.30 a.m. for the following purposes:

1. To receive the Audited Financial Statements for the financial period ended 31 December 2010 and the

Reports of the Directors and the Auditors thereon. (Please refer to Note No. 2)

2. To approve the payment of Directors Fees in respect of the financial period ended 31 December 2010.Ordinary Resolution 1

3. To re-elect the following Directors retiring in accordance with Article 103 of the Articles of Association of the

Company:

(a) Mr Soon Kwai Choy Ordinary Resolution 2

(b) Mr Chen Po Hsiung Ordinary Resolution 3

(c) Mr Su Cheng Tao Ordinary Resolution 4

4. To re-appoint Messrs BDO as the Auditors of the Company for the ensuing year and to authorise the

Directors to fix their remuneration. Ordinary Resolution 5

As Special BusinessTo consider and if thought fit, to pass the following resolutions:

5. Authority to Allot and Issue Shares Pursuant to Section 132D of the Companies Act, 1965

THAT pursuant to Section 132D of the Companies Act, 1965 and approvals from Bursa Malaysia for the

listing of and quotation for the additional shares so issued and other relevant authorities, where approval is

necessary, authority be and is hereby given to the Directors to allot and issue shares in the Company at any

time upon such terms and conditions and for such purposes as the Directors may in their absolute discretion

deem fit provided always that the aggregate number of shares to be issued shall not exceed 10% of the

issued share capital of the Company at any point of time AND THAT such authority shall continue to be in

force until the conclusion of the next Annual General Meeting of the Company. Ordinary Resolution 6



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Acoustech Berhad (496665-W) | 5


6. Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a

Revenue or Trading Nature

THAT approval be and is hereby given for the renewal of the Shareholders Mandate for the Acoustech

Berhad Group of Companies to enter into any category of recurrent transactions of a revenue or trading

nature falling within the types of transactions as set out in Section 3.3 in the Circular to Shareholders dated

24 May 2011 with the related parties falling within the classes of persons set out in Section 3.2 in the Circular

which are necessary for day-to-day operations and are carried out in the ordinary course of business on

terms which are not more favorable to the related parties than those generally available to the public and

are not to the detriment of minority shareholders;

AND THAT the authority conferred by such mandate shall commence upon the passing of this resolution

and continue to be in force until;-

(a) the conclusion of the next Annual General Meeting (AGM) of the Company at which time the mandatewill lapse, unless by a resolution passed at the next AGM, the mandate is renewed; or

(b) the expiration of the period within which the next AGM of the Company is required to be held pursuant

to Section 143(1) of the Act (but must not extend to such extension as may be allowed pursuant to

Section 143(2) of the Act); or

(c) revoked or varied by resolution passed by the shareholders in general meeting.

whichever is earlier;

AND THAT the Directors be and are hereby authorised to complete and do all such acts and things including

executing such documents as may be required to give effect to the transactions contemplated and/or

authorised by this mandate. Ordinary Resolution 7

7. Proposed Renewal of the Authority for Share Buy-Back

THAT, subject to the Companies Act, 1965 (Act), the Listing Requirements of Bursa Malaysia Securities

Berhad and the approval of all relevant governmental and/or regulatory authorities, the Company be and is

authorized to purchase such number of ordinary shares of RM0.50 each in the Company (Proposed Share

Buy Backs) as may be determined by the Board from time to time on Bursa Malaysia Securities Berhad

upon such terms and conditions as the Board may deem fit and expedient in the interest of the Company

provided that the aggregate number of shares purchased pursuant to this resolution does not exceed ten

percent (10%) of the issued and paid-up share capital of the Company and an amount not exceeding the

total retained earnings of RM22,340,071 and share premium account of RM7,342,201 based on the latest

audited accounts of the Company as at 31 December 2010, be allocated by the Company for the Proposed

Share Buy-Backs.

(Contd)


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THAT such authority shall commence upon the passing of this resolution and shall remain in force until the

conclusion of the next Annual General Meeting (AGM) of the Company unless earlier revoked or varied by

ordinary resolution of the shareholders of the Company in general meeting.

THAT authority be and is hereby given to the Directors of the Company to decide in their discretion to retain

the ordinary shares in the Company so purchased by the Company as treasury shares and/or cancel them

and/or resell the treasury shares or distribute them as share dividend and/or subsequently cancel them.

AND THAT authority be and is hereby given to the Directors of the Company to take all such steps as are

necessary (including executing all such documents as may be required) and to enter into any agreements

and arrangements with any party or parties to implement, finalise and give full effect to the aforesaid with

full powers to assent to any conditions, modifications, variations and/or amendments (if any) as may be

imposed by the relevant authorities and to do all such acts and things as the Directors may deem fit and

expedient in the interest of the Company. Ordinary Resolution 8

8. To transact any other business of the Company of which due notice shall have been given.

By Order of the Board

LIM HOOI MOOI (MAICSA 0799764)

TAN ENK PURN (MAICSA 7045521)

Joint Company Secretaries

Kuala Lumpur24 May 2011

NOTES

1. Appointment of Proxy

A Member of the Company entitled to attend and vote at the meeting may appoint a proxy to attend

and vote instead of him. A member of the Company who is an authorised nominee as defined under

the Securities Industry (Central Depositories) Act 1991 may appoint at least one (1) proxy in respect of

each securities account it holds with ordinary shares of the Company standing to the credit of the said

securities account.

A proxy need not be a member of the Company.

The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly

authorised in writing, or if the appointer is a corporation, either under its common seal or in some othermanner approved by its Directors.

The instrument of proxy must be deposited at the Companys Registered Office at Level 18, The

Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur at least forty-eight

hours before the time appointed for holding the meeting.

Notice of Annual General Meeting(Contd)


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Statement AccompanyingNotice of Annual General Meeting

2. Agenda No. 1

This item of the Agenda is meant for discussion only. The provisions of Section 169 of the Companies Act,

1965 require that the audited financial statements and the Reports of the Directors and Auditors thereon be

laid before the Company at its Annual General Meeting. As such this Agenda item is not a business which

requires a resolution to be put to vote by shareholders.

3. Explanatory Notes on Special Businesses

Ordinary Resolution No. 6

The proposed Ordinary Resolution No. 6, seeking a renewal of the general mandate is to provide flexibility

to the Company to issue new securities without the need to convene separate general meeting to obtain its

shareholders approval so as to avoid incurring additional cost and time. The purpose of this general

mandate is for possible fund raising exercise including but not limited to further placement of shares for

purpose of funding current and/or future investment projects, working capital, repayment of bankborrowings, if any, acquisitions and/or for issuance of shares as settlement of purchase consideration.

Should the mandate be exercised, the Directors will utilize the proceeds raised for working capital or such

other applications they may in their absolute discretion deem fit.


For further information, please refer to the Circular to Shareholders dated 24 May 2011 accompanying the

Companys Annual Report for the financial period ended 31 December 2010.


The proposed Ordinary Resolution No. 8, if passed will empower the Directors of the Company to purchase

up to 10% of the issued and paid-up share capital of the Company (Proposed Share Buy-Backs) by

utilizing the funds allocated which shall not exceed the retained profits and share premium account of theCompany. This authority, unless revoked or varied at a general meeting will expire at the conclusion of the

next Annual General Meeting of the Company.

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

(Contd)


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Financial Highlights

* EBITDA : Earnings before interest expense, tax expense, depreciation and amortisation charges.

Profit from operations EBITDA*

30

0

20

10

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

(9-months)

RM million

16.9

29.7

19.6

28.2

17.8

25.8

9.7

17.0

14.4

20.0

9.3

13.0

Cash from operations Profit from operat ion

40

-10

10

0

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

(9-months)

RM million

28.9

16.9

27.6

19.614.5

17.8

30.7

9.7

37.4

14.4

(3.5)

9.3

30

20

Net dividend per share Net earnings per share

12

0

6

3

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

(9-months)

Sen

10.510.111.0

9.8

8.38.6

4.54.9

5.5

6.1

3.54.1

9

Shareholders fund Net return on shareholders fund %

150

30

90

60

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

(9-months)

RM million Percentage

139.3

11.9

147.8

11.4

145.6

10.4

142.7

6.0

141.5

7.3

145.8

4.8

120

15

0

6

3

9

12


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Group Structure

100%

Formosa Prosonic

Technics Sdn Bhd

Formosa Prosonic

Chemicals Sdn Bhd

100%

Formosa Prosonic

Equipment Sdn Bhd

75%

Aerotronic Sdn Bhd

58.19%

Elkay Pacific Rim

(Malaysia) Sdn Bhd

50%


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AUDIT COMMITTEE

1) Soon Kwai Choy

(Chairman, Independent

Non-Executive Director)

2) Dato Nik Abdul AzizBin Mohamed Kamil

(Independent


3) Leong Ngai Seng

(Independent


OPTION COMMITTEE

1) Su Cheng Tao

(Managing Director)

2) Chen Po Hsiung

(Executive Director)

NOMINATION COMMITTEE

1) Chang Song Hai

(Chairman, Non-Independent


2) Leong Ngai Seng

(Independent Non-Executive

Director)

3) Soon Kwai Choy


Director)

BOARD OF DIRECTORS

Chang Song Hai

Chairman, Non-Independent Non-Executive Director

Su Cheng Tao

Managing Director

Dato Nik Abdul Aziz Bin Mohamed Kamil

Independent Non-Executive Director

Chen Po Hsiung

Executive Director

Huang Huai Son

Executive Director

Leong Ngai Seng


Shih Chao Yuan

Non-Independent Non-Executive Director

Soon Kwai Choy




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REMUNERATION COMMITTEE

1) Chang Song Hai

(Chairman, Non-Independent


2) Leong Ngai Seng(Independent Non-Executive

Director)

3) Dato Nik Abdul Aziz

Bin Mohamed Kamil


Director)

COMPANY SECRETARIES

1) Lim Hooi Mooi

(MAICSA 0799764)

2) Tan Enk Purn

(MAICSA 7045521)

AUDITORS

BDO (AF : 0206)

Chartered Accountants

12th Floor, Menara Uni.Asia

1008 Jalan Sultan Ismail

50250 Kuala Lumpur

REGISTERED OFFICE

Level 18, The Gardens North Tower

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Tel : 03-2264 8888

Fax: 03-2282 2733

SHARE REGISTRAR

Tricor Investor Services Sdn Bhd

Level 17, The Gardens North Tower

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur

Tel : 03-2264 3883

Fax: 03-2282 1886

PRINCIPAL PLACE OF BUSINESS

No. 2, Jalan 1

Bandar Sultan Suleiman

Taiwanese Industrial Park

42000 Port Klang

Selangor Darul Ehsan

Tel : 03-3176 1145

Fax: 03-3176 2003

PRINCIPAL BANKERS

RHB Bank Berhad

Malayan Banking Berhad

CIMB Bank Berhad

Citibank Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia

Securities Berhad

WEBSITE

www.acoustech.com.my

(Contd)


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Chairmans Statement

Dear shareholders,

On behalf of the Board ofDirectors of AcoustechBerhad, I am pleased topresent you the AnnualReport and AuditedFinancial Statements of theGroup and the Company

for the financial periodended 31 December 2010.

Operationally, 2010 was a slow year as the

Group was feeling the effects from the

downturn in the chemical paints and

electrical equipment divisions which faced

relatively soft end market demand in

certain economies. As a result of the slow

order intake in 2010, these divisions

recorded drop in sales and profit. Despitethe year-on-year increase in the sales of

audio division, its profitability was impacted

by rising material and operating costs.

During the financial period under review,

there were indeed some challenging

situations such as the fluctuating and

surging commodity prices which fanned

inflation concerns and the strengthening of

the Japanese Yen against the US Dollar.

During the financial period, the Group changed its financial year end from 31 March to 31

December which resulted in a 9-month financial period ended 31 December 2010. The

sales and operating profit contributions by division are as follow:

9-month ended 12-month ended

31.12.2010 31.3.2010

RM mil % RM mil %

Sales:

Audio 165.8 80.0 156.7 67.4

Electrical equipment 24.4 11.8 47.2 20.3

Chemical paints 17.0 8.2 28.5 12.3

207.2 100.0 232.4 100.0

Operating profit:

Audio 6.7 72.0 7.6 52.4

Electrical equipment (0.1) (1.0) 3.9 26.9

Chemical paints 3.2 34.4 3.6 24.8

Unallocated expenses (0.5) (5.4) (0.6) (4.1)

9.3 100.0 14.5 100.0


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Chairmans Statement

believe that the outlook is overall positive.

Barring unforeseen circumstances, we

expect our Group to remain profitable in

the financial year ending 2011.

Dividends

The Directors had paid an interim single tiertax exempt dividend of 3.5 sen per

ordinary share or RM6.0 million in respect

of the current financial period on 7 April

2011.

Appreciation

On behalf of the Board, I would like to

thank our shareholders, business partners

and associates, management and staff for

their staunch support and invaluable

contribution over the years. I would also

like to extend my gratitude to the Board ofDirectors for their guidance and inputs,

which have contributed towards the

Groups performance.

Chang Song Hai

Chairman

24 May 2011

Kuala Lumpur, Malaysia

(Contd)

Financial review

Total sales dropped 11% to RM207.2

million for the 9-month period ended 31

December 2010 from RM232.4 million for

the previous full financial year. Gross profit

declined to RM21.4 million from RM29.6

million, or a decline of 28% mainly due to

increases in material costs which had been

aggravated by lower economies of scale.

As a result, profit attributable to

shareholders dropped to RM7.5 million for

the 9-month period from RM11.6 million

for the previous full financial year. This

translated to lower earnings per share of

4.1 sen as compared to 6.0 sen for the

previous financial year.

Nevertheless the Group ended the financial

period with a healthy balance sheet. The

Group is debt free and has cash and cashequivalents (inclusive of short term funds)

of RM56.1 million. Turnover for trade

receivables and inventories stood at 70

days and 41 days respectively, compared

to 60 days and 49 days at the end of the

last financial year.

Outlook

As economies undergo a gradual but

uneven recovery going into 2011, we


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Taiwanese, aged 65, Managing Director, was appointed to the Board of Acoustech

on 18 September 2001. Mr Su holds a Diploma in Mechanical Engineering and he

has more than 36 years of experience in the manufacturing industry. He started his

career with Capetronics Group in Taiwan where he served for more than 10 years,

gaining experience and expertise in manufacturing plastic components. Mr Su

joined Formosa Prosonic Industries Berhad Group in 1988 where he served, as a

General Manager in Formosa Prosonic Manufacturing Sdn Bhd until he left 2001

to join Acoustech.

Mr Su holds directly 1,505,956 ordinary shares or 0.88% interest in the Company.

Malaysian, aged 68, Independent Non- Executive Director, was appointed to the

Board of Acoustech on 3 September 2001. Dato Nik graduated from Universiti

Malaya with a Bachelor of Arts Degree, Middlesex University, London with a

Postgraduate Diploma in Personnel Management and Asian Institute of

Management, Philippines with a Master in Management. He also attended the

Senior Executive Program at the London Business School.

Dato Nik has over 39 years of working experience in the human resource

management/industry with attachments ranging from Petroliam Nasional Berhad

(PETRONAS), Malaysian LNG Sdn Bhd, Bank Bumiputra Malaysia Berhad,

Rothmants of Pall Mall (Malaysia) Sdn Bhd and the National Electricity Board. In

1997 he set up his own business, NA & Associates Sdn Bhd, a company involved

in human resource training and skills management. Dato Nik is a Member of both

the Audit and Remuneration Committee of the Company.

Dato Nik does not hold any shares in the Company or its subsidiary companies.


Taiwanese, aged 65, Non-Executive Chairman, was appointed to the Board of

Acoustech on 22 September 2001. Mr Chang had been involved in the plastic

moulding industry for more than 42 years. Since 1968, he has been the Executive

Chairman of Song Hai Plastic Industrial Co. Ltd., Taiwan, a company involved in

the plastic moulding business. Mr Chang is the Chairman of both the Nomination

and Remuneration Committee of the Company.

Mr Chang holds directly 400,000 ordinary shares or 0.23% interest in the

Company. Mr Chang is a Non-Independent Director as he is a major shareholder

of Formosa Prosonic Industries Berhad (FPIB), whose wholly owned subsidiary

Formosa Prosonic Manufacturing Sdn Bhd holds 46,442,474 ordinary shares or

27.09% interest in the Company.

Profile of Directors

CHANG SONG HAI

SU CHENG TAO

DATO NIK ABDUL AZIZ BIN MOHAMED KAMIL


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Profile of Directors(Contd)

Taiwanese, aged 67, Executive Director, was appointed to the Board of Acoustech

on 3 September 2001. He obtained a Diploma in Mechanical Engineering from Air

Asia Jet Engine Training Center, Taiwan in 1971. Upon his graduation in 1971, Mr

Chen joined Air Asia (Aircraft Co.) as a Technician. In 1980, he joined Great Century

Paints Co. Ltd as a General Manager until his resignation in 1991. He was

appointed as the General Manager of Formosa Prosonic Chemicals Sdn Bhd

(FPC) in 1991 where his experience in the aircraft industry as well as in the

chemical industry has contributed to the success story of FPC. Mr Chen manages

the daily operations of FPC.

Mr Chen holds directly 7,209,876 ordinary shares or 4.21% interest in the

Company and is deemed interested in 265,846 ordinary shares held by hisspouse.

CHEN PO HSIUNG

Taiwanese, aged 63, Executive Director, was appointed to the Board of Acoustech

on 22 May 2002, Mr Huang holds a Diploma in Business Management and has

accumulated 38 years of experience in the manufacturing industry. Mr Huang was

involved with Foster Electric Co.Ltd, Taiwan, a manufacture of speaker units, for

over 15 years until his resignation as its Vice President in 1987. Mr Huang is

presently the advisor of New Advance Electronic Co. Ltd, Taiwan, a company

specializing in the business of home theatre and multimedia speaker systems.

Mr Huang holds directly 10,552,732 ordinary shares or 6.16% interest in the

Company.

Malaysian, aged 39, Independent Non- Executive Director, was appointed to the

Board of Acoustech on 25 February 2002. He obtained his Law Degree and

Commerce Degree LLB (Hons) B. Comm. from University of Melbourne and

became a member of the Malaysian Bar in 1997. He was formerly an Assistant

Vice- President in the Corporate Finance Department of a leading merchant bankin Malaysia. Mr Leong is currently a partner in his own law firm.

Mr Leong is a Member of the Audit Committee, Nomination and Remuneration

Committee of the Company.

Mr Leong holds directly 300,000 ordinary shares or 0.17% interest in the

Company.

HUANG HUAI SON

LEONG NGAI SENG


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Profile of Directors(Contd)

Taiwanese, aged 55, Non-Independent Non-Executive Director, was appointed

to the Board of Acoustech on 25 February 2003. He holds a Master Degree in

Management Science from Taiwan National Chiao Tung University. Prior to coming

to Malaysia he was the assistant to the President of Friendship Corporation in

Taiwan and was actively involved in the management and affairs of Friendship

Corporation gaining experience and in-depth knowledge of speaker systems

operations. In 1986 Mr Shih came to Malaysia to set up Formosa Prosonic

Industries Sdn Bhd which has since listed on the Bursa Malaysia Securities

Berhad.

Mr Shih is currently the Group Managing Director of the Formosa Prosonic

Industries Berhad (FPIB) Group of Companies. Mr Shih holds directly 1,854,290ordinary shares or 1.08% interest in the Company and is deemed interested in

1,440,000 ordinary shares held by his spouse. As a representative of FPIB, Mr

Shih is deemed to have an interest in 46,442,474 ordinary shares or 27.09% stake

in the Company to the extent the Formosa Prosonic Industries Berhad Group has

an interest in Acoustech.

Malaysian, aged 60, Independent Non- Executive Director was appointed to the

Board of Acoustech on 3 September 2001. He has held several senior positions

in various major Malaysian corporations and was admitted as a member of the

Association of Chartered Certified Accountants (ACCA) (UK) in 1979 and amember of the Malaysian Institute of Accountants (MIA) since 1980. He was the

Past President of the Confederation of Asian and Pacific Accountants and former

Vice-President of MIA. He sat in the International Council of the ACCA

headquarters in London, United Kingdom from 1996-2008. He was awarded an

honorary CPA by the Chinese Government in 1996.

Mr Soon is the Chairman of the Audit Committee of the Company and a member

of the Nomination Committee. Mr Soon holds directly 400,000 ordinary shares or

0.23% interest in the Company and is deemed interested in 610,000 ordinary

shares held by his spouse.

SHIH CHAO YUAN

SOON KWAI CHOY

Family RelationshipNone of Directors have any family relationship with any other director and/or major shareholder of

the Company.

Conflict of Interest

The Company and/or its subsidiaries have entered into recurrent related party transactions of a

revenue or trading nature with the Formosa Industries Berhad Group of Companies (FPIB Group)

in which the Directors of the Company, namely Mr Shih Chao Yuan and Mr Chang Song Hai have

interests. By virtue of their interest, they are deemed to be interested in the recurrent related party

transactions entered with the FPIB Group.

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

Conviction For Offences

None of the Directors has been convicted for any offences within the past ten (10) years.


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Acoustech Group views responsibility as a key issue in its management system. The Group strives for stable and responsible operations

in term of smooth-running processes, high standard of occupational safety and minimising environmental impact.

Financial responsibility

A profitable business is essential for financially responsible operations. A financially responsible company benefits a companys

shareholders, its employees and partners, and society as a whole.

The Group offers a solid source of business to numerous suppliers and sub-contractors. The Group purchased RM162 million worth

of materials (before consolidation adjustment) during the 9-month ended 31 December 2010 for use in production. Employee benefits

which comprised salaries and wages, contribution to retirement fund and other remuneration amounted to RM28 million during the same

period.



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

MATERIALS CONSUMED

RM million

EMPLOYEE BENEFITS

RM million

0

100

200

300

0

10

20

40

30

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


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Corporate Social Responsibility(Contd)

As the below graph depicts, the financial position of the Group remains strong and sound.

CAPITAL STRUCTURE

RM million

0

50

100

150

shareholders equity

cash & cash equivlents

(inclusive of short term funds)

interest-bearing debts

Shareholders benefit from their holdings through dividends and possible capital gain with rise in share price. During the financial period

ended 31 December 2010, the Company paid tax-exempt dividend of 3 sen per share equivalent to RM5.1 million.

DIVIDEND PAID

RM million

0

5

10

20

15

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

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


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Environmental responsibility

As a manufacturer of audio, chemical paints and electrical products to consumers worldwide, the Group is fully committed to

implementing environmental management system based on ISO14001 Standard and aims to conserve global environment and to

create a sustainable society. This underpins our approach to environmental responsibility.

To achieve our goal, we strive to make continuous improvement in our efforts to comply with all applicable legal environmental legislations

and regulations and other requirements to which the Group subscribes.

Environmental impacts are minimised and reduced by:-

Proper control of the usage of chemicals;

Eliminating the use of ozone-depleting substances;

Reduction in the generation of solid and schedule waste through recycling and reuse of materials;

Engineering control on noise and air pollution; Proper control of discharging of sewage and industrial effluents;

Non-use of environmental hazardous substances as prohibited by customers; and

Proper control and management of energy consumption.

We set and review targets and objectives in order to improve our environmental performance. We create and promote environmental

awareness to all suppliers and employees through meeting, training and education. We make available relevant environmental information

to all interested parties upon written request.

Our approaches fully complement and support environmental conservation programmes undertaken by our major customers. We have

been a green partner to Sony Green Partner Environment Quality Approval Programmes and in compliance with Green Procurement

Standards by Panasonic.

Safety and health responsibility

The Group would continuously work at enhancing safety and health management systems. The Group is committed to zero accidents.

Poor safety and health performance impacts financial performance, either in the form of additional expenses or lost revenue, while

good safety performance contributes to better employee well-being and competitiveness.

Our Safety Committee meets regularly to review safety issues. In-house risk assessment exercises are carried out prior to the

commencement of any production activity to ensure that our workers will not be at risk. To enhance work safety and competency in

equipment handling, our employees are given training on safety protocols. We are also mindful of the health of our employees and

have put in place a set of precautionary measures in the event of pandemic:

We take and record the temperature and travel history of all visitors before entry into our premises.

For those who show symptoms of being unwell, quarantine procedures are undertaken to protect both themselves and others

around them. Employees who return from affected countries are quarantined at home, if necessary, to ascertain their physical condition before

returning to work.

(Contd)


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THE BOARD OF DIRECTORS (the board) of Acoustech Berhad (the Company) is pleased to present the report of the Audit

Committee for the financial period ended 31 December 2010.

Chairman

Soon Kwai Choy


Members



Leong Ngai Seng


TERMS OF REFERENCE

Constitution

The Audit Committee was constituted per resolution of the Board on 4 September 2001 and its terms of reference are consistent with

the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (the Exchange).

Authority

The Audit Committee is authorised by the Board to investigate any activity within its terms of reference.

It has unlimited access to all information relevant to its activities.

It is authorised by the Board to obtain legal or other professional advice if it deems necessary.

COMPOSITION

The Audit Committee shall comprise at least 3 directors all of which must be non-executive directors with a majority of them being

independent directors;

Alternate director shall not be appointed as members of the Audit Committee;

At least one member of the Audit committee shall be a member of the Malaysian Institute of Accountants or a person who fulfills

the specific requirements as prescribed or approved by the Exchange.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of the Exchanges Listing Requirements, the

vacancy shall be filled within 3 months.

The members of the Audit Committee shall elect a chairman from among their number who shall be an independent director.

Members of the Committee shall serve for a period of two years and then retire from office but shall be eligible for

re-appointment.



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FUNCTIONS

The Audit Committee shall, amongst others, discharge the following functions:-

Review the following and report the same to the Board of Directors;

- with the external auditors, the audit plan;

- with the external auditors, his evaluation of the system of internal controls;

- the assistance given by employees to the external auditors;

- the adequacy of the scope, functions, competency and resources of the internal audit functions and the necessary authority

of the internal auditor has to carry out the work;

- the internal audit program, processes, the results of the internal audit program, processes or investigations undertaken and

whether or not appropriate action is taken on the recommendations of the internal audit function;

- the quarterly results and year-end financial statements, prior to the approval by the Board focusing particularly on;-

(i) changes in or implementation of major accounting policy changes;

(ii) significant and unusual events;

(iii) the going-concern assumptions; and

(iv) compliance with accounting standards and other legal requirements;

- any related party transactions and the conflict of interest situation including any transaction, procedure or course of conduct

that raises questions of management integrity;

- any letter of resignation from the external auditors; and

- whether there is any reason and supported by grounds, to believe that the external auditors is not suitable for re-appointment;

Recommend the nomination of a person or persons as external auditors;

Report promptly to the Exchange on any matter the Audit Committee had reported to the Board of Directors, which was not

satisfactorily resolved and/or resulted in a breach of the Exchanges Listing Requirements;

Consider and report on matter requested by the Board of Directors; and

To verify the basis of allocation of the options under the Employees Share Option Scheme (ESOS) in accordance with theBy-Laws of ESOS.

(Contd)


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ACTIVITIES

The Committee met four (4) times for the period ended 31 December 2010 under review and carried out the following activities:-

Reviewed the unaudited quarterly financial statements before submission to the Board for approval;

Reviewed the internal audit programs, reports and remedial action taken;

Assessed the Groups overall system of internal control; and

Reviewed the Related Party Transactions, the conflict of interest declarations and the Circular to Shareholder in relation to Recurrent

Related Party Transactions.

MEETINGS

The Audit Committee met four (4) times during the financial period ended 31 December 2010. Details of attendance are as follows:

Name of Director Attendance

Soon Kwai Choy 4/4

Dato Nik Abdul Aziz Bin Mohamed Kamil 2/4

Leong Ngai Seng 4/4

INTERNAL AUDIT FUNCTION

An Internal Audit Function was set up to undertake continuous systematic reviews of the Groups internal control systems so as to

provide the Board with reasonable assurance that such systems continue to operate satisfactorily and effectively.

The Group has adopted a risk-based approach to the implementation and monitoring of controls and had carried out an exercise to

identify and evaluate the risks associated with the Group.

Audit Committee Report(Contd)


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Corporate Governance Statement

The Board of the Company is committed to ensure the fulfillment of the highest standards of Corporate Governance as set out in the

Malaysian Code on Corporate Governance, which highlights the principles and best practices on structures and processes that the

Company may use in their operations towards achieving the optimal governance framework.

1. THE BOARD OF DIRECTORS

1.1 Board Responsibilities

The Board retains effective control of the Company and the Group and is responsible for the overall corporate affairs, strategic

direction, formulation of policies and the overall performance of the Company and the Group.

The Executive Directors take on primary responsibility for managing the Groups business and resources.

1.2 Board BalanceThe Company is led by an experienced Board comprising eight (8) members of whom three (3) are Independent Non-Executive

Directors, two (2) are Non-Independent Non-Executive Directors and three (3) are Executive Directors.

No individual or group of individuals dominates the Boards decision making. Independent Directors constitute more than one-

third of the Board and the interest of the significant shareholder is fairly represented on the Board. The present Directors bring

a wide range of experience and skills relevant to the business of the Group. Brief descriptions on the background of each

Director are set out on pages 14 to 16.

There is clear division of responsibility between the Chairman and Managing Director to ensure the balance of power and

authority. The Managing Director is under the control of the Board. The Independent Non-Executive Directors provide

independent judgement and check and balance on the Board.

1.3 Board Meeting

The Board meets at least four (4) times a year and has a formal schedule of matters reserved for it. Additional meetings are

held as and when necessary. During the financial period ended 31 December 2010, three meetings were held in which the

Board deliberated upon and considered various issues including the Groups financial results, annual budgets, performance

of the Groups business, major investment, business plan and policies and strategic issues affecting the Groups business.

Details of attendance of the Directors at Board meetings held during the financial period are as follows:-

Total Number Number of

Meetings Meetings Attended

Chang Song Hai 3 3

Su Cheng Tao 3 3Dato Nik Abdul Aziz Bin Mohamed Kamil 3 2

Chen Po Hsiung 3 3

Huang Huai Son 3 3

Leong Ngai Seng 3 3

Shih Chao Yuan 3 3

Soon Kwai Choy 3 3


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1.4 Supply of Information

The Board has unrestricted access to timely and accurate information necessary in the furtherance of their duties. At each

Board meeting, the Managing Director briefs the Board on the Groups activities and operations.

Directors have access to the advice and services of the Company Secretary and where necessary, obtain independent

professional advise at the Groups expense.

1.5 Board Committees

The Board of Directors delegates certain responsibilities to Board Committees namely the Audit Committee, Remuneration

Committee and Nomination Committee in order to enhance business and operational efficiency and effectiveness.

1.6 Appointments to the Board

The duties and functions of the Nomination Committee encompass the following:-

- Recommend to the Board, candidates nominated by shareholders or the Board for directorships to be filled;

- Recommend to the Board, directors to fill seats on board committees;

- Review annually the required skills and experience and other qualities and core competencies non-executive directors

should bring to the Board; and

- Assess annually the effectiveness of the Board as a whole and the contribution of each individual director.

The decision on new appointment of directors rests with the Board after considering the recommendation of the Nomination

Committee.

The members of the Nomination Committee are as follows:-

Chang Song Hai - Chairman Non-Independent Non-Executive Director

Leong Ngai Seng - Independent Non-Executive Director

Soon Kwai Choy - Independent Non-Executive Director

During the financial year under review, the Committee met once to conduct the annual review on the Directors core

competencies, contribution and effectiveness.

1.7 Re-election of Directors

In accordance with the Companys Articles of Association, one-third of the Directors are required to submit themselves for

re-election by rotation at least once every three years at each Annual General Meeting (AGM). Retiring Directors can offer

themselves for re-election.

Directors who are appointed during the financial year are, in accordance with the Companys Articles of Association, requiredto retire at the AGM following their appointment but are eligible for re-election by the shareholders.

Corporate Governance Statement(Contd)


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1.8 Directors Training

All Directors of the Company have attended Bursa Malaysias Mandatory Accreditation Programme (MAP). The Directors will

also attend relevant training programmes from time to time.

All members of the Board also attended a briefing on Goods and Services Tax done by Messrs BDO on 19 May 2010.

During the period, the following Director attended external training as listed below:-

Name of Director Title

Soon Kwai Choy World Congress of Accountants 2010 by MIA on 8-11 November 2010

2. DIRECTORS REMUNERATION

The Board has set up the Remuneration Committee whose primary responsibility include reviewing and making recommendations

on remuneration packages and policies applicable to the Chairman, Managing Director, Senior Executives and Directors themselves.

The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages. Individual Directors

are required to abstain from discussion on their own remuneration. The determination of the remuneration of Non-Executive

Directors is a matter for the Board as a whole.

The members of the Remuneration Committee are as follows:-

Chang Song Hai

Chairman, Non-Independent Non-Executive Director

Dato Nik Abdul Aziz Bin Mohamed KamilIndependent Non-Executive Director

Leong Ngai Seng


During the financial period under review, the Committee met once to review the principles and guidelines on directors remuneration

adopted by the Board and the levels of remuneration applied.

(Contd)


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For the financial period ended 31 December 2010, the remuneration of the Directors are as follows:-

Total

Fees Emoluments Benefits-in-kind Remuneration

RM RM RM RM

Executive Directors 90,000 784,080 34,197 908,277

Non-Executive Directors 165,000 82,050 - 247,050

Total 255,000 866,130 34,197

The number of Directors whose total remuneration falls within the following bands is as follows:-

Executive Directors Non-Executive Directors

Below RM50,000 1 2

RM50,001 RM100,000 - 3

RM100,001 RM250,000 - -

RM250,001 RM300,000 - -

RM300,001 RM350,000 1 -

RM350,001 RM400,000 - -

RM400,001 RM450,000 - -

RM450,001 RM500,000 - -

RM500,001 RM550,000 - -

RM550,001 RM600,000 1 -

3. SHAREHOLDERS

The Board of Directors recognizes the importance of communication and timely dissemination of information to shareholders.

Information is communicated through announcements to the Bursa Malaysia and the distribution of annual reports to shareholders.

General Meetings serve as the principal forum for communicating with the shareholders of the Company. The Board encourages

participation of shareholders at the General Meeting to ensure a high level of accountability and identification with the Groups

strategy and goals.

The Company follows a continuous disclosure policy, making announcements to the Bursa Malaysia when it becomes aware of

information which might materially affect the price of its shares.

Corporate Governance Statement(Contd)


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4. ACCOUNTABILITY AND AUDIT

4.1 Financial Reporting

The Board aims to provide and present a balanced and clear assessment of the Groups financial performance and prospect

primarily through the annual financial statements and quarterly report as well as announcements to the Bursa Malaysia. The

Audit Committee assists the Board in scrutinizing information for disclosure to ensure compliance with accounting standard,

accuracy, adequacy and completeness.

4.2 Statement of Directors Responsibility in respect of audit financial statements

The Board is responsible for ensuring that the financial statements of the Group gives a true and fair view of the state of affairs

of the Group and of the Company as at the end of the accounting period and of their income statements and cashflows for

the period. These involve Directors selecting suitable accounting policies and then applying them consistently and make

judgements and estimates that are reasonable and prudent.

The Directors have the responsibility of ensuring that proper accounting records are kept which disclose with reasonable

accuracy the financial position of the Group and of the Company and which ensures that the financial statements comply with

the Companies Act, 1965.

4.3 Internal Control

The Board of Directors is ultimately responsible for the overall system of internal control which includes not only financial

controls but also controls relating to operations, compliance and risk management. The internal control system was designed

to manage rather than eliminate risks of failure in achieving the Groups business objectives; and as such could only provide

reasonable but not absolute assurance against material misstatement or loss.

The Statement on Internal Control as set out on pages 29 to 30 in this Annual Report provides an overview of the state of

internal controls with the Group.

4.4 Statement of Internal Audit Function

Internal Audit activities are conducted in-house. During the financial period, the Internal Audit Unit (IAU) conducted various

internal audit engagements in accordance with the risk-based audit plans which are consistent with the organisations goals.

The internal audit function is carried out impartially, proficiently and with due professional care. The IAU reports to the Audit

Committee on regular audits and appraisals of key operations of the Group.

Its activities for the year under review include:-

Procedural checks in relation to the acquisition and/or disposal of investments and changes to the Groups structure;

Reviewing of approval and payments processes, receipts for deposit and miscellaneous payment;

Observing the stock take to ensure that the stock take was conducted in a proper and orderly manner;

Identifying the Related Party Transactions and Recurrent Related Party Transactions to ensure that the transactions were

conducted at arms length; and

Conducting reviews requested by the Audit Committee

4.5 Relationship with the Auditors

The external auditors, Messrs BDO have continued to report to members of the Company on their findings which are included

as part of the Companys financial reports with respect to each years audit on the statutory financial statements. In doing so

the Company has established a transparent arrangement with the auditors to meet their professional requirements.

The auditors have, from time to time, highlighted to the Audit Committee and the Board matters requiring the Boards attention.

(Contd)


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Conflict of Interests

None of the Directors has any family relationships with other Directors or major shareholders of the Company.

Convictions for Offences

None of the Directors has been convicted for offences within the past ten years other than traffic offences, if any.

Utilisation of Proceeds

There were no issuance of new shares, rights issue or issuance of bonds during the financial period.

Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or Management by relevant regulatory

bodies during the financial period.

Share Buybacks

During the financial period the company bought back 10,000 of its shares.

Option, Warrants or Convertible Securities

There was no exercise of option, warrant or convertible securities during the financial period.

American Depository Receipts (ADR) and Global Depository Receipts (GDR)

The Company has not sponsored any ADR or GDR programme for the financial period.

Non-Audit Fees

There were RM33,558 non-audit fees paid to the external auditors for the financial period.

Profit Estimate, Forecast or Projection

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

Profit Guarantee

There was no profit guarantee given by the Company during the financial period.

Material Contracts

There were no material contracts entered into by the Company and/or its subsidiary companies which involved Directors and major

shareholders interests either still subsisting at the end of the financial period ended 31 December 2010 or entered into since the end

of the previous financial year.

Recurrent Related Party Transactions of a Revenue or Trading Nature

Details of transactions with related parties undertaken by the Group during the financial year under review are disclosed in note 29 to

the financial statements.

Contracts Relating to Loans

There was no contract relating to loans by the Company.

Revaluation of Landed Properties

The Company and the Group have not adopted a policy for regular revaluation of its landed properties.

Other Information


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Statement of Internal Control

Introduction

Pursuant to paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Board of Directors

is pleased to provide the following statement on the state of internal controls of the Group.

Board Responsibility

The Board of Directors acknowledges its responsibility for the Groups system of internal control that is designed to manage rather than

eliminate the risks of failure to achieve business objectives; and as such could only provide reasonable, but not absolute assurance

against material misstatement or loss.

The Board confirms that there is an ongoing process which is in place for the financial period under review for identifying, evaluating

and managing significant risks that may affect the achievement of our business objectives. Our system of internal controls cover financial,

organizational, operational, and administrative and compliance controls. The Board regularly reviews the control processes with the

assistance of the Audit Committee.

Key Processes

Salient features of the key processes of the system of internal control of the Group are as follows:-

1. The management structure is well defined, with clear lines of authority and responsibility.

2. The Board continually assesses business performance and evaluates operation controls at all levels, and where necessary takes

appropriate remedial action.

3. The Managing Director regularly updates the Board on industry trend, key customers and performance of various units within the

Group, and the Board endorses responses taken.

4. Financial results are reviewed quarterly by the Audit Committee and the Board and compared to budgets and forecasts.

5. Executive Directors and Heads of Departments meet regularly to discuss operational, management issues, financial performance

and indicators focusing on the evaluation of applicable risks.

6. Operations ISO Standards 9001:2000 and 14001 and Accounting procedures are communicated to staff at all levels.

7. The Groups Internal Audit Unit (IAU) which reports to the Audit Committee performs regular reviews to assess the effectiveness of

internal controls and to identify significant risks. The internal audit control assessment excludes the joint venture company.

8. The Audit Committee reviews actions taken on internal control issues raised by the IAU and external auditors.

9. Formal recruitment, training and development, and performance appraisals are in place to ensure and maintain the professionalism

and competency of staff.

10. The Audit Committee reviews the Recurrent Related Party Transactions undertaken by the Group twice a year.

11. The Group had established a set of corporate values, ethical behaviour, and guidance for quality products and services and these

are set out in the Groups Employee Handbook and Safety Handbook.


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Conclusion

The Board is satisfied with the ongoing process for identifying, evaluating, managing and monitoring significant risks, and is of the

opinion that the Groups internal control systems are adequate.

The Board also confirmed that they have reviewed the integrity and the effectiveness of the system of internal control through the

monitoring process set out above and are not aware of any significant weakness or deficiency in the Groups system of internal control

for the financial period under review and to the date of approval of this annual report and financial statements.

Statement of Internal Control(Contd)


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Financial Statements

Directors Report

Statement by Directors

Statutory DeclarationIndependent Auditors Report

Statements of Financial Positions

Statements of Comprehensive Income

Statements of Changes in Equity

Statements of Cash Flows

Notes to The Financial Statements

32

37

3738

40

42

43

46

49


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Directors Report

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the

financial period from 1 April 2010 to 31 December 2010.

PRINCIPAL ACTIVITIES

The Company is an investment holding company. The principal activities of the subsidiaries are set out in Note 9 to the financial

statements. There have been no significant changes in the nature of these activities during the financial period.

CHANGE OF FINANCIAL YEAR END

During the financial period, the Company changed its financial year end from 31 March to 31 December.

RESULTS

Group Company

RM RM

Profit for the financial period 7,500,559 5,595,824

Attributable to:

Owners of the parent 7,023,420 5,595,824

Minority interests 477,139 -

7,500,559 5,595,824

DIVIDENDS

Dividends paid and declared since the end of the previous financial year were as follows:

Company

RM

In respect of financial year ended 31 March 2010:

Second interim single tier tax exempt dividend of 3.0 sen per ordinary share, paid on 22 July 2010 5,143,353

The Directors declared a first interim single tier tax exempt dividend of 3.5 sen per ordinary share, amounting to RM6,000,579 in respect

of the financial period ended 31 December 2010 and paid to the shareholders on 7 April 2011, whose names appeared on the Record

of Depositors of the Company at the close of business on 24 March 2011.

The Directors do not recommend the payment of any final dividend in respect of the current financial period.


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Directors Report(Contd)

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial period other than those disclosed in the financial

statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial period.

TREASURY SHARES

During the financial period, the Company repurchased 10,000 ordinary shares of RM0.50 each from the open market at an average

price of RM0.78 per ordinary share. The total consideration paid for the shares repurchased including transaction costs was RM7,857.

The shares repurchased were financed by internally generated funds and are held as treasury shares in accordance with the requirementof Section 67A of the Companies Act, 1965 in Malaysia.

As at 31 December 2010, the Company had 6,376,300 treasury shares. Such treasury shares are being held at carrying amounts of

RM5,528,318. Further details are disclosed in Note 18 to the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued ordinary shares of the Company during the financial period.

DIRECTORS

The Directors who have held for office since the date of the last report are:

Chang Song Hai

Su Cheng Tao


Chen Po Hsiung

Huang Huai Son

Leong Ngai Seng

Shih Chao Yuan

Soon Kwai Choy


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DIRECTORS INTERESTS

The Directors holding office at the end of the financial period and their beneficial interests in the ordinary shares of the Company and

of its related corporations during the financial period ended 31 December 2010 as recorded in the Register of Directors Shareholdings

kept by the Company under Section 134 of the Companies Act, 1965 were as fol lows:

---Number of ordinary shares of RM0.50 each---

Balance Balance

as at as at

1.4.2010 Bought Sold 31.12.2010

Shares in the Company

Direct interests

Chang Song Hai 400,000 - - 400,000

Su Cheng Tao 1,505,956 - - 1,505,956

Chen Po Hsiung 7,209,876 - - 7,209,876

Huang Huai Son 10,552,732 - - 10,552,732

Leong Ngai Seng 300,000 - - 300,000

Shih Chao Yuan 1,854,290 - - 1,854,290

Soon Kwai Choy 400,000 - - 400,000

Indirect interests

Chen Po Hsiung * 95,723 170,123 - 265,846

Shih Chao Yuan # 44,135,914 3,746,560 - 47,882,474

Soon Kwai Choy * 610,000 - - 610,000

* Deemed interests held through spouse.# Deemed interests pursuant to Section 6A of the Companies Act, 1965 in Malaysia and held through spouse.

By virtue of their interests in the ordinary shares of the Company and pursuant to Section 6A to the Companies Act, 1965 in Malaysia,

Su Cheng Tao, Chen Po Hsiung, Huang Huai Son and Shih Chao Yuan are deemed to be interested in the ordinary shares of all the

subsidiaries to the extent that the Company has an interest.

The other Director holding office at the end of the financial period did not have any interest in the ordinary shares of the Company or

ordinary shares, options over ordinary shares and debentures of its related corporations during the financial period.

DIRECTORS BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than

a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial

statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director

is a member, or with a company in which the Director has a substantial financial interest other than the transactions entered into in the

ordinary course of business with companies in which the Directors of the Company have substantial financial interests as disclosed in

Note 29 to the f inancial statements.

There were no arrangements during and at the end of the financial period, to which the Company is a party, which had the object of

enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any

other body corporate.



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Directors Report

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL PERIOD

(a) Before the statements of comprehensive income and statements of financial positions of the Group and of the Company were

made out, the Directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for

doubtful debts and satisfied themselves that there are no known bad debts and that provision need not be made for

doubtful debts; and

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course

of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial period havenot been substantially affected by any item, transaction or event of a material and unusual nature.

(II) FROM THE END OF THE FINANCIAL PERIOD TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would necessitate the writing off of bad debts or the provision for doubtful debts in the financial statements of the

Group and of the Company; or

(ii) which would render the values attributed to current assets in the financial statements of the Group and of the Company

misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group

and of the Company misleading or inappropriate.

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results

of the operations of the Group and of the Company for the financial period in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12)

months after the end of the financial period which will or may affect the abilities of the Group and of the Company to meet

their obligations as and when they fall due.

(Contd)


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OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued)

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial period

to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial period.

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would

render any amount stated in the financial statements of the Group and of the Company misleading.

AUDITORS

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

Signed on behalf of the Board in accordance with a resolution of the Directors.

Su Cheng Tao Chen Po Hsiung

Director Director

Port Klang27 April 2011



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Statement by Directors

In the opinion of the Directors, the financial statements set out on pages 40 to 114 have been drawn up in accordance with applicable

approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view

of the financial positions of the Group and of the Company as at 31 December 2010 and of their f inancial performance and cash flows

of the Group and of the Company for the financial period from 1 April 2010 to 31 December 2010.

On behalf of the Board,

Su Cheng Tao Chen Po HsiungDirector Director

Port Klang

27 April 2011

I, Gan Ah Chu, being the officer primarily responsible for the financial management of Acoustech Berhad, do solemnly and sincerely

declare that the financial statements set out on pages 40 to 114 are, to the best of my knowledge and belief, correct and I make this

solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )

the abovenamed at Kuala Lumpur this ) GAN AH CHU

27 April 2011 )

Before me:

S.Ideraju

No. W451

Pesuruhjaya Sumpah Malaysia

Tingkat 18, Wisma Sime Darby

Jalan Raja Laut

50350 Kuala Lumpur

Statutory Declaration


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Report on the Financial Statements

We have audited the financial statements of Acoustech Berhad, which comprise the statements of financial positions as at 31 December

2010 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements

of cash flows of the Group and of the Company for the financial period from 1 April 2010 to 31 December 2010, and a summary of

significant accounting policies and other explanatory information, as set out on pages 40 to 114.

Directors Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance

with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine

are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance

with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The

procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements,

whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation of the

financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not

for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as

evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting

Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the

Group and of the Company as of 31 December 2010 and of their financial performance and cash flows for the financial period from 1

April 2010 to 31 December 2010.

Report on Other Legal and Regulatory Requirements

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

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its

subsidiaries have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial

statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the

Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made

under Section 174(3) of the Act.

Independent Auditors ReportTo the Members of Acoustech Berhad


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Independent Auditors Report

Other Reporting Responsibilities

The supplementary information set out in Note 19(c) to the financial statements is disclosed to meet the requirement of Bursa Malaysia

Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary

information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the

Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of

Accountants (MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is

prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in

Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

BDO Tang Seng Choon

AF : 0206 2011/12/11 (J)

Chartered Accountants Chartered Accountant

Kuala Lumpur

27 April 2011

To the Members of Acoustech Berhad (Contd)


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Group Company

31.12.2010 31.3.2010 31.12.2010 31.3.2010

(Restated) (Restated)

Note RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 8 50,240,661 49,134,834 - -

Investments in subsidiaries 9 - - 74,893,666 74,893,666

Investment in a jointly controlled entity 10 2,242,427 2,281,229 - -

Other investments 11 6,160,000 3,755,630 - -

58,643,088 55,171,693 74,893,666 74,893,666Current assets

Inventories 12 22,435,420 22,057,393 - -

Derivative assets 13 198,968 - - -

Trade and other receivables 1454,266,504 39,117,812 27,961,411 37,518,952

Current tax assets 3,839,230 3,657,443 328,134 309,542

Short term funds 15 13,088,636 - 6,495,772 -

Cash and cash equivalents 16 43,055,287 70,433,521 6,191,252 242,715

136,884,045 135,266,169 40,976,569 38,071,209

TOTAL ASSETS 195,527,133 190,437,862 115,870,235 112,964,875

Statements of Financial PositionAs at 31 December 2010

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


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Statements of Financial Position

Group Company

31.12.2010 31.3.2010 31.12.2010 31.3.2010


Note RM RM RM RM

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 17 88,910,700 88,910,700 88,910,700 88,910,700

Treasury shares 18(5,528,318) (5,520,461) (5,528,318) (5,520,461)

Reserves 19 62,403,411 58,087,317 29,682,272 29,229,801

145,785,793 141,477,556 113,064,654 112,620,040

Minority interests 7,512,740 7,025,048 - -

TOTAL EQUITY 153,298,533 148,502,604 113,064,654 112,620,040

LIABILITIES

Non-current liabilities

Deferred tax liabilities 20 2,704,015 2,831,340 - -

Current liabilities

Trade and other payables 2138,586,496 38,046,192 2,805,581 344,835

Current tax liabilities 938,089 1,057,726 - -

39,524,585 39,103,918 2,805,581 344,835

TOTAL LIABILITIES 42,228,600 41,935,258 2,805,581 344,835

TOTAL EQUITY AND LIABILITIES 195,527,133 190,437,862 115,870,235 112,964,875

As at 31 December 2010 (Contd)



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Group Company

1.4.2010 to 1.4.2009 to 1.4.2010 to 1.4.2009 to

31.12.2010 31.3.2010 31.12.2010 31.3.2010


Note RM RM RM RM

Revenue 23 207,184,530 232,376,892 8,000,000 21,678,000

Cost of sales (185,783,547) (202,734,824) - -

Gross profit 21,400,983 29,642,068 8,000,000 21,678,000

Other income 3,537,889 2,416,628 96,673 -

Selling and distribution costs (6,493,091) (6,689,116) - -

Administrative expenses (5,246,592) (5,924,609) (526,616) (412,383)

Other expenses (3,832,165) (4,928,443) (100,955) (139,435)

Finance costs (67,128) (91,814) - -

Share of profits of an associate - 173,235 - -

Share of profits of a jointly controlled entity 281,198 368,225 - -

Profit before tax 24 9,581,094 14,966,174 7,469,102 21,126,182

Tax expense 25(2,080,535) (3,321,146) (1,873,278) (5,307,289)

Profit for the financial period/year 7,500,559 11,645,028 5,595,824 15,818,893

Other comprehensive loss:

Fair value adjustment on available-for-sale financial asset (1,260,000) - - -

Total comprehensive income 6,240,559 11,645,028 5,595,824 15,818,893

Profit attributable to:

Owners of the parent 7,023,420 10,357,559 5,595,824 15,818,893

Minority interests 477,139 1,287,469 - -

7,500,559 11,645,028 5,595,824 15,818,893

Total comprehensive income attributable to:

Owners of the parent 5,763,420 10,357,559 5,595,824 15,818,893

Minority interests 477,139 1,287,469 - -

6,240,559 11,645,028 5,595,824 15,818,893

Single tier tax exempt dividend per ordinary share (sen) 26

- First interim dividend 3.50 2.50 3.50 2.50

- Second interim dividend - 3.00 - 3.00

Earnings per ordinary share attributable

to owners of the parent

- Basic 27 4.10 6.05

Statements of Comprehensive IncomeFor the Financial Period From 1 April 2010 to 31 December 2010



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Total

attributable

Share Share Retained Treasury to owners of Minority Total

capital premium earnings shares the parent interests equity

Group Note RM RM RM RM RM RM RM

Balance as at

1 April 2009 88,592,100 7,266,493 52,366,815 (5,520,461) 142,704,947 6,157,079 148,862,026

Total comprehensive

income - - 10,357,559 - 10,357,559 1,287,469 11,645,028

Transactions with

owners

Dividends paid 26 - - (11,979,258) - (11,979,258) - (11,979,258)

Dividends paid to

minority interests

of subsidiaries - - - - - (419,500) (419,500)

Ordinary shares

issued pursuant to

ESOS 17 318,600 75,708 - - 394,308 - 394,308

Total transactions

with owners 318,600 75,708 (11,979,258) - (11,584,950) (419,500) (12,004,450)

Balance as at

31 March 2010 88,910,700 7,342,201 50,745,116 (5,520,461) 141,477,556 7,025,048 148,502,604

For the Financial Period From 1 April 2010 to 31 December 2010



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Total

Available attributable

Share Share -for-sale Retained Treasury to owners of Minority Total

capital premium reserve earnings shares the parent interests equity

Group Note RM RM RM RM RM RM RM RM

Balance as at

31 March 2010 88,910,700 7,342,201 - 50,745,116 (5,520,461) 141,477,556 7,025,048 148,502,604

Effects of the adoption

of FRS 139 34 - - 3,664,370 31,657 - 3,696,027 10,553 3,706,580

Restated balance as at

1 April 2010 88,910,700 7,342,201 3,664,370 50,776,773 (5,520,461) 145,173,583 7,035,601 152,209,184

Total comprehensive

income - - (1,260,000) 7,023,420 - 5,763,420 477,139 6,240,559

Transactions with

owners

Dividends paid 26 - - - (5,143,353) - (5,143,353) - (5,143,353)

Repurchase of shares 18 - - - - (7,857) (7,857) - (7,857)

Total transactions with

owners - - - (5,143,353) (7,857) (5,151,210) - (5,151,210)

Balance as at

31 December 2010 88,910,700 7,342,201 2,404,370 52,656,840 (5,528,318) 145,785,793 7,512,740 153,298,533

Statements of Changes in EquityFor the Financial Period From 1 April 2010 to 31 December 2010 (Contd)



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Share Share Retained Treasury

capital premium earnings shares Total

Company Note RM RM RM RM RM

Balance as at 1 April 2009 88,592,100 7,266,493 18,047,965 (5,520,461) 108,386,097

Total comprehensive income - - 15,818,893 - 15

Transactions with owners

Dividends paid 26 - - (11,979,258) - (11,979,258)

Ordinary shares issued pursuant to ESOS 17 318,600 75,708 - - 394,308

Total transactions with owners 318,600 75,708 (11,979,258) - (11,58

Balance as at 31 March 2010 88,910,700 7,342,201 21,887,600 (5,520,461) 112,620,040Total comprehensive income - - 5,595,824 - 5,595,824

Transaction with owners

Dividends paid 26 - - (5,143,353) - (5,143,353)

Repurchase of shares 18 - - - (7,857) (7,857)

Total transactions with owners - - (5,143,353) (7,857) (5,151,210)

Balance as at 31 December 2010 88,910,700 7,342,201 22,340,071 (5,528,318) 113,064,654

For the Financial Period From 1 April 2010 to 31 December 2010 (Contd)



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Group Company

1.4.2010 to 1.4.2009 to 1.4.2010 to 1.4.2009 to

31.12.2010 31.3.2010 31.12.2010 31.3.2010


Note RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 9,581,094 14,966,174 7,469,102 21,126,182

Adjustments for:

Bad debt written off - 40,415 - -

Depreciation of property, plant and equipment 8 3,436,996 4,864,420 - -

Dividend income (490,000) (595,000) - -Fair value adjustments on

- derivative assets (142,688) - - -

- short term funds (58,523) - (31,741) -

Loss/(Gain) on disposal of property, plant and equipment 2,275 (14,212) - -

Loss on disposal of an associate (a) - 112,428 - -

Impairment loss on trade receivables 14(f) - 29,728 - -

Interest expenses 31,562 51,580 - -

Income distribution from short term funds (143,150) - (64,031) -

Interest income (428,812) (486,931) (901) -

Inventories written off 12 99,797 248,402 - -

Inventories written down 12 1,860 47,063 - -

Net unrealised loss on foreign exchange 213,663 447,607 - -

Property, plant and equipment written off 8 1,294 28,089 - -Reversal of inventories previously written down 12 (45,970) - - -

Share of profits of a jointly controlled entity (281,198) (368,225) - -

Share of profits of an associate (a) - (173,235) - -

Operating profit before working capital changes 11,778,200 19,198,303 7,372,429 21,126,182

Changes in working capital:

Inventories (433,714) 1,531,826 - -

Trade and other receivables (15,996,478) 2,562,955 - -

Trade and other payables 1,190,872 14,062,190 16,480 (45,093)

Cash (used in)/generated from operations (3,461,120) 37,355,274 7,388,909 21,081,089

Interest paid (31,562) (51,580) - -

Tax paid, net of refund (2,523,354) (3,501,078) (1,891,870) (5,419,499)

Net cash (used in)/from operating activities (6,016,036) 33,802,616 5,497,039 15,661,590

Statements of Cash FlowsFor the Financial Period From 1 April 2010 to 31 December 2010



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Statements of Cash Flows

Group Company

1.4.2010 to 1.4.2009 to 1.4.2010 to 1.4.2009 to

31.12.2010 31.3.2010 31.12.2010 31.3.2010


Note RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES

Dividend received from quoted investments 490,000 595,000 - -

Dividend received from a jointly controlled entity 320,000 360,000 - -

Income distribution received from short term funds 143,150 - 64,031 -

Interest received 428,812 486,931 901 -

(Advances to)/Repayments by a jointly controlled entity (10,631) 10,308 - -

Repayments by/(Advances to) subsidiaries - - 12,001,807 (4,066,620)Purchase of property, plant and equipment 8 (4,547,712) (7,054,952) - -

Placements of short term funds (13,030,113) - (6,464,031) -

Proceeds from disposal of property, plant and equipment 1,320 42,388 - -

Proceeds from disposal of an associate (a) - 5,700,000 - -

Net cash (used in)/from investing activities (16,205,174) 139,675 5,602,708 (4,066,620)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of ordinary shares - 394,308 - 394,308

Purchase of treasury shares 18 (7,857) - (7,857) -

Dividends paid 26 (5,143,353) (11,979,258) (5,143,353) (11,979,258)

Dividends paid to minority interests of subsidiaries - (419,500) - -

Net cash used in financing activities (5,151,210) (12,004,450) (5,151,210) (11,584,950)

Net (decrease)/increase in cash and cash equivalents (27,372,420) 21,937,841 5,948,537 10,020

Effects of exchange rate fluctuations on cash and cash equivalents (5,814) (669,562) - -

Cash and cash equivalents at beginning of financial period/year 70,433,521 49,165,242 242,715 232,695

Cash and cash equivalents at end of financial period/year 16 43,055,287 70,433,521 6,191,252 242,715

For the Financial Period From 1 April 2010 to 31 December 2010 (Contd)



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Note to the statements of cash flows

Investment in an associate

(a) In previous financial year, Formosa Prosonic Chemical

Documents

ACOSTEC-AnnualReport2010 (1.4MB)