LAPORAN TAHUNAN - malaysiastock.biz file2010 LAPORAN TAHUNAN ANNUAL REPORT TOYO INK GROUP BERHAD Company No.590521-D Cvr.qxp:Layout 1 9/2/10 2:07 PM Page 1

2010LAPORAN TAHUNANA N N U A L R E P O RT

TOYO INK GROUP BERHAD Company No.590521-D

Cvr.qxp:Layout 1 9/2/10 2:07 PM Page 1

2 Notice of Annual General Meeting

4 Financial Highlights

5 Directorsʼ Profile

8 Corporate Structure

9 Corporate Information

11 Chairmanʼs Statement

13 Managing Directorʼs Statement

15 Corporate Governance Statement

20 Statement on Internal Control

21 Audit Committee Report

25 Additional Compliance Information

27 Financial Statements

73 Analysis of Shareholdings

76 List of Properties

Proxy Form

Contents

Toyo AR2010 Front 01-26.qxp:TOYO annual report 2010 9/2/10 1:58 PM Page 1

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Annual Report 2010•

TOYO INK GROUP BERHAD (590521-D)

NOTICE IS HEREBY GIVEN THAT the Eighth Annual General Meeting of the Company will beheld at the Dewan Tan Sri Hamzah, Royal Selangor Club, Kiara Sports Annexe, Jalan Bukit Kiara, Off JalanDamansara, 60000 Kuala Lumpur on Wednesday, 29 September 2010, at 10.30 a.m. for the transaction ofthe following businesses:-

AGENDA

1. To receive the Audited Financial Statements for the year ended 31 March 2010 together with theReports of the Directors and the Auditors thereon.

2. To approve the Directors’ fees of RM87,500.00 (2009: RM87,500.00) in respect of the year ended31 March 2010.

3. To re-elect the following Directors who retire pursuant to Article 92 of the Company’s Articlesof Association and, being eligible, offer themselves for re-election:-(a) Mr. Lim Guan Lee (b) Tuan Hj. Ir. Yusoff bin Daud

4. To consider and, if thought fit, pass the following ordinary resolution in accordance with Section129(6) of the Companies Act, 1965 (“Act”):-

“THAT Mr. You Tong Lioung @ Yew Tong Leong, retiring pursuant to Section 129(2) of the Act, beand is hereby re-appointed as a Director of the Company to hold office until the conclusion of thenext Annual General Meeting.”

5. To re-appoint Messrs. Sha, Tan & Co. as Auditors of the Company and to authorise the Directorsto fix their remuneration.

6. As Special Business:-To consider and, if thought fit, to pass the following resolutions:-

(a) As Ordinary Resolution Authority to issue shares pursuant to Section 132D of the CompaniesAct, 1965

“THAT subject always to the Companies Act, 1965, Articles of Association of the Companyand approvals of the relevant governmental/regulatory bodies where such approvals shall benecessary, the Directors be and are hereby authorised and empowered pursuant to Section132D of the Companies Act, 1965 to allot and issue shares in the Company at any time untilthe conclusion of the next annual general meeting and upon such terms and conditions andfor such purposes as the Directors may, in their absolute discretion, deem fit, provided thatthe aggregate number of shares issued pursuant to this resolution does not exceed 10% ofthe issued capital for the time being of the Company and that the Directors be and are alsoempowered to obtain the approval for the listing of and quotation for the additional sharesso issued on Bursa Malaysia Securities Berhad.”

(b) As Special ResolutionProposed Amendment to the Company’s Articles of Association(“PROPOSED AMENDMENT”)

“THAT the existing Article 129 of the Company’s Articles of Association be deleted in itsentirety and in substitution therefore the following new Article 129:-

Existing Article 129 - Payment of dividends by cheque

“Any dividend may be paid by cheque sent through the post to the registered address of themember or person entitled thereto. Every such cheque shall be made payable to the orderof the person to whom it is sent, and payment of the cheque shall be a good discharge tothe Company of the dividend to which it relates.”

(Resolution 1)

(Resolution 2)

(Resolution 3)(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

NOTICE OF ANNUAL GENERAL MEETING


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•Annual Report 2010


New Article 129 - Payment of dividends

“Subject to the provisions of the Listing Requirements and the Rules, any dividend payablein cash may be paid by cheque or warrant sent through the post directed to the registeredaddress of the holder or paid via electronic transfer of remittance to the account providedby the holder who is named on the Register of Depositors. Every such cheque or warrantor electronic transfer of remittance shall be made payable to the order of the person towhom it its sent or remitted, and the payment of any such cheque or warrant or electronictransfer of remittance shall operate as a good discharge to the Company in respect of thedividend represented thereby, notwithstanding that it may subsequently appear that thesame has been stolen or that the endorsement thereon, or the instruction for the electronictransfer of remittance, has been forged. Every such cheque or warrant or electronic transferof remittance shall be sent or remitted at the risk of the person entitled to the moneythereby represented.”

AND FURTHER THAT the Directors be and are hereby authorised to take all such steps asthey shall deem necessary and expedient to effect and complete the Proposed Amendment.”

7. To transact any other business of which due notice shall have been given.

BY ORDER OF THE BOARD,

CHOW CHOOI YOONG (MAICSA 0772574)HAZLINA BT HARUN (LS 03078)Company Secretaries

Kuala Lumpur6 September 2010

Notes:1. A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote instead of him/her. A

proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her shareholdings to berepresented by each proxy.

3. In the case of a corporate member, the instrument appointing a proxy shall be under its common seal or under the hand of some officer of the corporation,duly authorised on that behalf.

4. The instrument appointing a proxy must be deposited at the Company’s Registered Office at Lot 4.100, Tingkat 4, Wisma Central, Jalan Ampang, 50450Kuala Lumpur not less than 48 hours before the time set for the meeting or any adjournment thereof.

5. Explanatory Notes on Special BusinessResolution pursuant to Section 132D of the Companies Act, 1965 Resolution No. 7 proposed under item 6(a) is to seek a renewal of the general mandate for the issue of new ordinary shares pursuant to Section 132Dof the Companies Act, 1965 and, if passed, will give the Directors of the Company from the date of the above General Meeting, authority to allot and issueordinary shares from the unissued capital of the Company being for such purposes as the Directors consider would be in the interest of the Company.This would avoid any delay and costs in convening a general meeting to specifically approve such an issue of shares. This authority will, unless revoked orvaried by the Company in General Meeting, expire at the next Annual General Meeting.

The renewed general mandate will provide flexibility to the Company for allotment of shares for any possible fund raising activities, including but not limitedto further placing of shares, for the purpose of funding investment project(s), working capital and/or acquisition.

As at the date of this Notice, no new shares were issued pursuant to the general mandate granted to the Directors at the Seventh Annual General Meetingof the Company held on 29 September 2009 and which will lapse at the conclusion of the Eighth General Meeting.

Resolution in respect of the Proposed Amendment to the Company’s Articles of AssociationThe Special Resolution proposed under item 6(b), if passed, will update Article 129 of the Company’s Articles of Association to facilitate the implementationof Electronic Dividend Payment (“eDividend”) in line with the directive from Bursa Malaysia Securities Berhad pertaining to eDividend.

NOTICE OF ANNUAL GENERAL MEETING


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FINANCIAL HIGHLIGHTS - 31 MARCH 2006 TO 31 MARCH 2010

65,911 68,091

104,547 104,00793,605

2006 2007 2008 2009 2010Year ended 31 March

48,137 49,616 53,51857,604 60,912

2006 2007 2008 2009 2010Year ended 31 March

1.201.24

1.34 1.35

1.42

2006 2007 2008 2009 2010Year ended 31 March

2,1762,820

4,943

(1,074)

4,015

2006 2007 2008 2009 2010Year ended 31 March

5.447.05

12.36

(2.67)

9.38

2006 2007 2008 2009 2010Year ended 31 March

4 4

2

0 0

2006 2007 2008 2009 2010Year ended 31 March

Net Assets per Share (RM)Net Profit after Tax RM('000)

Net Earnings per Share (Sen) Gross dividend per Share (Sen)

Group Turnover RM('000) Total Shareholders' Funds RM('000)

2006 2007 2008 2009 2010

Group Turnover RM(’000) 65,911 68,091 104,547 104,007 93,605

Total shareholders' funds RM(’000) 48,137 49,616 53,518 57,604 60,912

Net assets per share (RM) 1.20 1.24 1.34 1.35 1.42

Net profit after tax RM(’000) 2,176 2,820 4,943 (1.074) 4,015

Net earnings per share (Sen) 5.44 7.05 12.36 (2.67) 9.38

Gross dividend per share (Sen) 4 4 2 0 0


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DIRECTORS’ PROFILE

Tuan Hj. Ir. Yusoff bin Daud(Malaysian, aged 65)Non-Independent Non-Executive Chairman

Tuan Hj. Ir. Yusoff bin Daud is the Non-Independent Non-Executive Chairman of the Board of Directors of Toyo Ink GroupBerhad. He was appointed to the Board on 4 August 2003. He is a member of the Nomination Committee and AuditCommittee.

He graduated from the University of Brighton with a Bachelor of Science (Honours) Degree in Electrical Engineering in 1968.He joined the National Electricity Board (LLN), Kota Bharu immediately after his graduation and in 1970 he was posted to Kedah as Assistant Engineer, consumers. In 1974 he was promoted to District Engineer where he was responsible for theplanning and implementation of electricity supply for Northern Kedah and the State of Perlis. In 1977 he took the positionof Senior District Manager, Kuala Terengganu where he was responsible for the overall management and operations ofelectricity supply in the State of Terengganu. From 1979 to 1980 he was attached to Petronas in the Special ProjectsDepartment as its Deputy Head responsible for the planning of the Peninsula Gas Utilization Project.

Tuan Haji Ir. Yusoff bin Daud was appointed a Director of Zaidun-Leeng Sdn Bhd in 1981 and was subsequently made ManagingDirector in 1994, a position which he held until 2002. He was then appointed Chairman of the Board and continues to holdthis position up to the present. He is also a Director of Lingkaran Trans Kota Holdings Berhad since 1995.

He has attended all Board meetings held during his tenure in office in the financial year ended 31 March 2010.

He has no conflict of interest with the Company.

Mr. Song Kok Cheong(Malaysian, aged 58)Managing Director

Mr. Song Kok Cheong is the Managing Director of Toyo Ink Group Berhad and was appointed to the Board on 4 August 2003.Mr. Song has more than 34 years experience in the printing ink and printing related businesses. Mr. Song is a member of theRemuneration Committee.

He started his career in 1970 as a printing technician in Federal Metal Printing Company and subsequently joined DIC (M)Sdn Bhd, the world’s largest printing ink manufacturer operating in Malaysia, in 1975. He left in 1980 to join Toyo Ink Sdn Bhdand has been instrumental in building up the businesses of Toyo Ink Group Berhad up to the present day.

Mr. Song is also a Director of Halex Holdings Berhad since January 2009.



Mr. Tham Kut Cheong(Malaysian, aged 65) Independent Non-Executive Director

Mr. Tham Kut Cheong is an Independent Non-Executive Director of Toyo Ink Group Berhad and was appointed to the Boardon 4 August 2003. He is the Chairman of the Audit, Nomination and Remuneration Committees.

He graduated from University of Malaya in 1970 with a Bachelor of Economics degree and completed his training inaccountancy under Deloittes & Co., United Kingdom. He is a fellow of the Institute of Chartered Accountants in Ireland andwas admitted to the Malaysian Institute of Accountants in 1980 as a Public Accountant.

Upon completing his training he started his own practice, K.C.Tham & Co. in 1980.

Mr. Tham sits on the Boards of Techventure Berhad and several private limited companies in Malaysia. He is also a Directorof Halex Holdings Berhad since January 2009.

He has attended all Board meetings held during his tenure in office in the year ended 31 March 2010.



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Mr. You Tong Lioung @ Yew Tong Leong(Malaysian, aged 74)Independent Non-Executive Director

Mr. You Tong Lioung @ Yew Tong Leong was appointed to the Board of Toyo Ink Group Berhad as an Independent Non-Executive Director on 4 August 2003. He is also a member of the Audit, Nomination and Remuneration Committees.

Upon graduation from Nanyang University in Singapore with a Bachelor of Commerce degree majoring in Banking, Mr. Yewnaturally chose banking as his career by joining UMBC (the short of United Malayan Banking Corporation Berhad and ispresently known as RHB Bank) on 16 December 1960. It was there he was trained intensively as a Bills Officer specializingin import and export trade financing. After one year, Mr. Yew was posted to several branches throughout the country as aBranch Manager for a period of about 23 years.

After his round in the branches, Mr. Yew resigned from UMBC and joined the then Malaysian French Bank (fondly known asFrench Bank, and now known as Alliance Bank) in 1985 as a Branch Manager serving in several branches for a period of about11 years.

To further his career development, Mr. Yew retired from the bank in November 1996 to join a construction company as aSenior Operation Manager in Kedah.

He left the construction company in July 1998 to join Kurnia Insurans (M) Bhd, a leading general insurance company inMalaysia and Asean, as a Senior Manager until the present.

Mr. Yew is also sitting on the Board of SKB Shutters Corporation Berhad and chairs their Internal Audit Committee.

In addition to that, he is also a Financial Advisor to LumiGLASS Sdn Berhad, a subsidiary company of LTKM Berhad . LTKMBerhad is listed in Bursa Securities.

The Board of Toyo Ink Group stands to benefit significantly from Mr. Yew's vast experience and rich knowledge earned fromthe financial sector and other sectors over the years.



Mr. Ng Chong You(Malaysian, aged 60)Executive Director

Mr. Ng Chong You is an Executive Director of Toyo Ink Group Berhad and was appointed to the Board on 4 August 2003. Mr.Ng has vast experience in the printing business, particularly in the technical and production aspects of ink manufacturing andis responsible for all production matters in Toyo Ink Group Berhad.

With more than 34 years experience in the manufacture of the various types of printing inks, he is further responsible fortechnical customer support, research and development of new varieties of inks and the sourcing for raw materials for theproduction processes.




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Mr. Lim Guan Lee(Singaporean, aged 60)Non-Independent Non-Executive Director

Mr. Lim Guan Lee is a Non-Independent Non-Executive Director appointed to the Board on 4 August 2003. Mr. Lim has 40years of involvement in the printing industry and is currently the Chairman of Toyo Ink Pte. Ltd. He is also the Chairman andManaging Director of Lim Keenly Holdings Pte. Ltd.

He has attended 4 Board meetings held during his tenure in office in the financial year ended 31 March 2010.


Mr. Lim Kee Min(Singaporean, aged 32)Non-Independent Non-Executive Alternate Director to Mr. Lim Guan Lee

Mr. Lim Kee Min is the Non-Independent Non-Executive Alternate Director to Mr. Lim Guan Lee and was appointed to theBoard on 29 November 2004. Mr. Lim Kee Min is a graduate with a Bachelor of Arts degree in Sociology and Information &Communications Management from the National University of Singapore. He has 7 years of involvement in the printing inkindustry and is currently serving as the Managing Director of Toyo Ink Pte. Ltd.

He has not attended any Board meetings held during his tenure in office in the financial year ended 31 March 2010.



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CORPORATE STRUCTURE

100%

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100% 25%

25%

100%

60%

60%

* Incorporated in Vietnam

Toyo Photo Products Sdn BhdCo. No.: 111062 - D

Toyo Color Pte Ltd.Co. No.: 197802936H

Toyo Ink (Penang) Sdn BhdCo. No.: 405702 - X

Toyo Ink (Perak) Sdn BhdCo. No.: 236746 - H

Toyo Dai-Nichi Ink Sdn BhdCo. No.: 192049 - M

Toyo Ink Sdn BhdCo. No.: 45097 - M

Toyo Ink Group BerhadCo. No.: 590521 - D

Toyo Ink (Melaka) Sdn BhdCo. No.: 68344 - X

Total Young Ink VietnamCo., Ltd. *

Citi Ink Manufactured Joint VentureCo., Ltd. *

EDM-Tools (M) Sdn BhdCo. No.: 171231 - D

ELO Dunia Manufacturing (M) Sdn BhdCo. No.: 569467 - W

INMAC EDM-Tools (M) Sdn BhdCo. No.: 555967 - H

EDM-Tools (Penang) Sdn BhdCo. No.: 450191 - U

Toyo Laser Technology Sdn BhdCo. No.: 789238 - W


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CORPORATE INFORMATION

BOARD OF DIRECTORS

Tuan Hj. Ir. Yusoff bin Daud (Chairman)

Song Kok Cheong

Ng Chong You

Lim Guan Lee

Tham Kut Cheong

You Tong Lioung @ Yew Tong Leong

Lim Kee Min (alternate director to Lim Guan Lee)

AUDIT COMMITTEE

Tham Kut Cheong (Chairman)

Tuan Hj. Ir. Yusoff bin Daud


NOMINATION COMMITTEE


Tuan Hj. Ir. Yusoff bin Daud


REMUNERATIONCOMMITTEE



Song Kok Cheong

COMPANY SECRETARIES

Chow Chooi Yoong, MAICSA 0772574

Hazlina Bt Harun, LS 03078

REGISTERED OFFICE

Lot 4.100, Tingkat 4, Wisma CentralJalan Ampang, 50450 Kuala LumpurTelephone: 03-21619733Fax: 03-21628157

PRINCIPAL PLACE OFBUSINESS

PT 3477, Jalan 6/1Kawasan Perusahaan Seri Kembangan43300 Seri Kembangan Selangor Darul EhsanTelephone: 03-89423335Fax: 03-89421161

SHARE REGISTRAR

Insurban Corporate Services Sdn. Bhd.149, Jalan Aminuddin BakiTaman Tun Dr. Ismail60000 Kuala LumpurTelephone: 03-77295529Fax: 03-77285948

AUDITORS

Sha, Tan & Co (AF: 0185)Chartered AccountantsBox #289, Lots 4.122 - 4.125Tingkat 4, Wisma CentralJalan Ampang, 50450 Kuala Lumpur

PRINCIPAL BANKERS

Standard Chartered Bank MalaysiaBerhadUnited Overseas Bank (Malaysia) Bhd.HSBC Bank Malaysia BerhadRHB Bank BerhadMalayan Banking BerhadAmBank (M) BerhadAmIslamic Bank Berhad

SOLICITORS

Tan Kim Soon & CoEe & Associates

STOCK EXCHANGE LISTING

Bursa Malaysia Securities BerhadMain Market - Stock Code 7173


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CORPORATE INFORMATION

TOYO INK GROUP BHDPT 3477, Jalan 6/1, Kawasan Perusahaan Seri Kembangan,43300 Seri Kembangan, Selangor, MALAYSIA.

CITI INK MANUFACTURED JOINT VENTURE CO, LTDLot A-2C-CN My Phuoc Industrial Zone Ben CatBinh Duong ProvinceVIETNAM

EDM-TOOLS (M) SDN BHD6 & 8 Jalan TPP 1/1ATaman Industri Puchong 47100 PuchongSelangor, MALAYSIA.

TOYO DAI-NICHI INK SDN BHDLot 21, Jalan Pahat 16/8A40000 Shah Alam Selangor, MALAYSIA.

TOYO INK (PERAK) SDN BHD17 & 19, Dataran Kledang 4Taman Perindustrian Chandran Raya31450 Menglembu Perak, MALAYSIA.

TOYO INK (PENANG) SDN BHD48 Lorong Mak Mandin 5/1Kawasan Perindustrian Mak Mandin13400 Butterworth, Penang, MALAYSIA.

TOYO INK PTE LTDTOYO COLOR PTE LTD63 Joo Koon CircleSingapore 629076

TOYO INK (MELAKA) SDN BHD29 Jalan IMJ 5Taman Industri Malim Jaya75250 Melaka, MALAYSIA.

TOYO INK SDN BHD (Johor Bahru Branch)8 Jalan Bayu 2/5, Taman Perindustrian Tampoi Jaya81200 Johor Bahru, Johor, MALAYSIA.


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Let me, first of all, bid all of you a verywarm welcome to the 8th AnnualGeneral Meeting of Toyo Ink GroupBerhad. The past financial year hadbeen one that had tested the skills,resourcefulness and perseverance ofthe Management Team and the Board. Iwould like to take this opportunity tohighlight the progress made in the pastfinancial year and the new challengeswe foresee as we move into 2011 andbeyond.

Overall business environment

The financial year ended 31 March 2010 was extremelyunpredictable. We witnessed the gradual stabilization ofmajor western economies through governmental efforts byearly 2009. This brought about the much needed uplift inconsumer confidence and demand across the globaleconomy which had a positive effect and arrested thedownward business trend in most sectors of the worldeconomy. The silver lining in the dark cloud of depressionwas however short-lived in the later part of 2009 whenminor economies of the European Union faced economicdifficulties and thereby arresting the steadily improving worldeconomy to some extent.

However, I am happy to report that in spite of all theseuncertainties in the financial year to 31 March 2010 yourToyo Ink Group had ended the year with much improvedresults. This achievement was due in no small measure to thededication and commitment of our staff and the support ofour long-term customers and business partners Your Boardis in constant communication with your Managing Directorto ensure that he is adequately guided in steering the Groupthrough these difficult times.

Operating results

I would like to report that your Group, in spite of the volatilemarket conditions, achieved a group turnover of RM93.605million which was lower by 10.0% against the RM104.007million recorded in the previous financial year.

CHAIRMAN’S STATEMENT


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Notwithstanding the lower group business turnover for thefinancial year ended 31 March 2010, we were able to recordhealthier net earnings after tax of RM4.015 million. This wasa commendable improvement over the loss after tax ofRM1.074 million in the previous financial year. This bearstestimony to the result of the extensive cost-reductionprogrammes and productivity improvement measuresundertaken by the Managing Director and his ManagementTeam throughout a most difficult financial year.

In view of the prevailing economic conditions and theuncertainty in the global economic outlook your Board istaking a prudent view in the near term to conserve financialresources and does not recommend a dividend payment forthis financial year.

Future Prospects

Trading conditions in the current financial year are expectedto be equally challenging and globally the economic scenariowill still need time to fully stabilize. Your Board is confidentthat measures put in place in the past year by theManagement to improve efficiency and productivity willensure the Group’s competitiveness in the years ahead.

Your Board is aware of the need to continuously look out foropportunities to enhance the Group’s earnings and increasevalue to stakeholders. In this respect, all members of yourBoard are tasked with the responsibility of new businessdevelopment and all new proposals are thoroughly studied byManagement and relevant business professionals and thenecessary announcements to Bursa Securities are made asand when final decisions are determined by the Board.

On the status of our proposed power plant project inVietnam, we have been called for a final meeting in Vietnamon 28 December 2009 to make a presentation to theVietnamese authorities on the proposed coal-fired thermo-electric power plant. Relevant announcements had beenmade to Bursa Securities and we are now awaiting finalapproval from the Vietnamese Government.

Appreciation

On behalf of the Board of Directors let me take thisopportunity to convey our sincere thanks to our businesspartners, associates and customers who had given us theirloyalty and support and helped us in making the past year avery successful one.

To our suppliers and services providers, a big thank you forall your patience and perseverance through a very difficultyear.

Last but not least, the dedication and commitment shown byall our staff is greatly appreciated.

Thank you.

Tuan Hj. Ir. Yusoff bin DaudChairman

CHAIRMAN’S STATEMENT


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MANAGING DIRECTOR’S STATEMENT

On behalf of my colleagues on theBoard of Toyo Ink Group Berhad I takethis opportunity once again towelcome all of you to our 8th AnnualGeneral Meeting. The financial yearended 31 March 2010 was one withsevere ups and downs. We hadcompleted yet another eventful yearand I am happy to note that in spite ofso much uncertainty in the marketplacethe Toyo Ink Group had ended the yearwith much improved results and sitspoised with confidence to face the newchallenges in the year ahead.

Financial Performance

For the financial year ended 31 March 2010 Toyo Ink Groupconsolidated turnover stood at RM93.605 million. This wasRM10.402 million or 10.0% lower than the previous yearconsolidated turnover of RM104.007 million due to thesluggish global economic condition. However, theManagement’s efforts in costs control and productivityinitiatives implemented during the year had resulted inimproved margins all round.

We are happy to report that, in spite of a 10.0% contractionin turnover and business volume, the Group ended thefinancial year to 31 March 2010 with a net profit after tax ofRM4.015 million against the previous year’s loss after tax ofRM1.074 million, i.e. an improvement of 473.8%.

As a result of your Group’s improved performance, your netearnings per share for this financial year stands at 9.4 senagainst a loss of 2.7 sen in the previous financial year.

Review of Operations

The financial year ended 31 March 2010 was fraught withuncertainties with the global economic climate sufferingbouts of ups and downs. What started of as a gradualrecovery in the early part of the financial year was short-livedwhen some European Union nations faced economicdifficulties towards the end of the year. Under such uncertainconditions the management team was put to the test andexercised very stringent cost control measures and institutedinitiatives in productivity and efficiency enhancements toremain competitive. Towards the end of the last financial yearmarket conditions had begun to stabilize and we areconfident that the current financial year, though challenging,will be rewarding.


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MANAGING DIRECTOR’S STATEMENT

The Group will continue to exercise stringent cost controland make further improvements in internal efficiencies toface the expected competition in the market place.Challenges to the current working environment are everpresent and I would like to assure all stakeholders that theBoard and Management will continue in their vigorous reviewof current practices and productivity improvement measuresand ensure that we remain one of the leaders in the printingink and related products sector of the Malaysian Economy.

We have a trading arm (subsidiary) called Total Young Ink inVietnam. Due to recent government legislation in Vietnamwe need to dispose of our stake of 60% in this outfit to ourVietnamese business partner. A decision will soon be madeby the Board and the proper announcements will be made toBursa Securities when such a decision is finalized.

Corporate Social Responsibility

Your Board is fully aware of the need to maintain arespectable and responsible corporate presence and be acaring corporate citizen in the community that we operatein. In the past financial year, due to the enthusiastic responsefrom the public, we had carried out a blood donationexercise. Staff members in the Group were encouraged todo their part in this good cause and the positive responsefrom the community was a most satisfying experience. YourBoard will continue to look for opportunities in ourcommunity to lend a helping hand whenever needed to builda better tomorrow for all.

Moving forward

Your Board is confident that we are moving forward in theright direction and shall continuously look out foropportunities to further enhance the earnings and returns toour stakeholders. Efforts made over the last year toovercome the difficult economic conditions will bolster theGroup’s overall competitiveness and efficiency. The lastcouple of months have seen things stabilizing and your Boardis confident the next financial year, although challenging, willalso be a satisfying one.

On the progress of our power plant project in Vietnam, wehad appointed a local Vietnamese Consultant in January 2010and submitted the final project proposal with the strongrecommendation of the local provincial committee and a finalapproval from the Vietnamese Government is expectedsoon.

Appreciation

I would like to take this opportunity, on behalf of my Board,to say thank you and convey our appreciation to our many

business partners and financiers for their support andconfidence in working together with us to realize ourdreams.

To our suppliers and other service providers we convey ourappreciation for their patience and understanding as welaboured through the financial year. Without their support,understanding and perseverance we would not have achievedwhat we did.

To our loyal staff throughout the Toyo Ink Group ofcompanies I extend my sincere appreciation of yourendeavours which have made the job of Board members thatmuch easier through difficult times.

To my Chairman and my colleagues on the Board I expresssincere thanks for their invaluable guidance, advice andcounsel to help me steer the Group towards a brighter andmore prosperous future.

Last but not least, to our loyal shareholders and otherstakeholders, your patience and encouragement areacknowledged with thanks.

Thank you.

Song Kok CheongManaging Director


15



CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Toyo Ink Group Berhad (“Board”) is committed to ensure that the highest standards of corporategovernance are observed throughout the Group so that the affairs of the Group are conducted with integrity andprofessionalism with the objective of safeguarding shareholders’ investment and ultimately shareholders’ value.

The following paragraphs describe how the Group has applied the principles of good corporate governance and the extentto which it has complied with the best practices set out in the Malaysian Code of Corporate Governance (“Code”). Theseprinciples and best practices have been applied and complied with throughout the financial year ended 31 March 2010.

A. BOARD OF DIRECTORS

Principal ResponsibilitiesThe Group continues to be led and managed by an effective Board. The Board is primarily responsible for the Group’soverall strategic plans for business performance, overseeing the proper conduct of business, succession planning, riskmanagement, investor relations programmes, internal control and management information systems.

Composition of the BoardWith the resignation of Mr. Yap Yee Kiean, an Executive Director, on 2 July 2010, the Board currently has six (6)Directors of whom two are Executive Directors, two are Non-Executive Directors and two are Independent Non-Executive Directors. The composition of the Board complies with paragraph 15.02 of the Listing Requirements ofBursa Malaysia Securities Berhad (“Bursa Securities”).

Board BalanceThe Board comprises a balanced mix of members with professional and business experience relevant to the Group’sbusinesses. A brief profile of each Director is presented on pages 5 to 7 of this Annual Report.

The roles and responsibilities of the Non-Executive Chairman and Managing Director are separated and assumed bydifferent Directors to ensure balance of authority. The Non-Executive Chairman is primarily responsible for theorderly conduct and working of the Board whilst the Managing Director has the overall responsibility for the day-to-day management of the Group’s businesses and implementation of the Board’s policies and decisions. All major mattersand issues are referred to the Board for consideration and approval.

The presence of the Non-Executive Directors and Independent Non-Executive Directors fulfil a pivotal role incorporate governance accountability as they provide an element of objectivity, independent judgment and balance ofthe Board. In addition, Mr. Tham Kut Cheong continues to act as the Senior Independent Non-Executive Directorserving as an alternative for shareholders to convey their concerns and seek clarification from the Board.

Supply of InformationThe Directors have full access to the advice and services of the senior management and the Company Secretaries.

In addition, the Directors, under appropriate circumstances, may seek independent professional advice at theCompany’s expense to assist them in making well-informed decisions whether as a full Board or in their individualcapacity.


16




Appointments to the BoardWith the establishment of the Nomination Committee on 28 August 2003, a formal and transparent procedure is inplace for the appointment of new directors to the Board.

The members of the Nomination Committee comprised wholly of Non-Executive Directors with majority beingIndependent Non-Executive Directors. The composition of the Nomination Committee is as follows

ChairmanTham Kut Cheong (Independent Non-Executive Director)

MembersTuan Hj. Ir. Yusoff bin Daud (Non-Independent Non-Executive Chairman)You Tong Lioung @ Yew Tong Leong (Independent Non-Executive Director)

The Nomination Committee is responsible for making recommendations on any nomination to the Board and toCommittees of the Board. In making these recommendations, due consideration is given to the required mix of skillsand experience that the proposed directors should bring to the Board and to the respective Board Committees. Thedecision as to who shall be nominated shall be the responsibility of the full Board after considering therecommendations of the Nomination Committee.

The Nomination Committee will also assess annually, the effectiveness of the Board as a whole, the Committees of theBoard and contribution of each individual Director including Independent Non-Executive Directors.

The Nomination Committee had held one (1) meeting during the financial year ended 31 March 2010.

Re-election of DirectorsDirectors’ re-election provides an opportunity for shareholders to renew their mandate conferred to the Directors.In this respect, the Articles of Association (“Articles”) of the Company provide that an election of Directors shall takeplace each year and all Directors shall retire from office at least once in every three years but shall be eligible for re-election at the Annual General Meeting (“AGM”).

Any Director appointed during the year is required under the Company’s Articles to retire and seek re-election byshareholders at the following AGM immediately after his appointment. In addition, Directors over seventy (70) yearsof age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of theCompanies Act, 1965.

Directors’ TrainingThe Directors view continuous learning and training as an integral part of the directors’ development. The Directorsare informed of the various directors’ development programmes and encouraged to attend these programmes to keepabreast with the development in the industry and relevant regulatory requirements in furtherance of their duties.

During the financial year under review, all the Directors have attended a professional training on “Strengthening theCorporate Planning Framework for Effective Results”.


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Board Structures and Procedures The Board meets at least four (4) times a year, with additional meetings convened as and when necessary. During thefinancial year ended 31 March 2010, five (5) meetings were held. The number of meetings attended by members of theBoard is set out below:-

DirectorsNumber of Board Meetings

Held Attended

Tuan Hj. Ir. Yusoff bin Daud 5 5Song Kok Cheong 5 5Ng Chong You 5 5Yap Yee Kiean (resigned wef 2 July 2010) 5 5Lim Guan Lee 5 4Tham Kut Cheong 5 5You Tong Lioung @ Yew Tong Leong 5 5Lim Kee Min (Alternate Director to Lim Guan Lee) 5 0

The Board members are supplied with the relevant documents and information in advance of each meeting so that theyhave a comprehensive understanding of the matters to be deliberated upon to enable them to arrive at an informeddecision.

Senior management and advisers are invited to attend Board meetings, where necessary, to provide additionalinformation and insights on the relevant agenda items tabled at Board meetings. All proceedings from the Boardmeetings are minuted and signed by the Chairman of the meeting.

Board CommitteesThe Board maintains specific Board Committees, namely the Audit Committee, Nomination Committee andRemuneration Committee to allow greater attention and objectivity to be provided by the relevant Committeemembers to the specific Board agenda. However, in order to ensure that the control of the Group is firmly within theBoard, the Board has defined the terms of reference for each Committee. The ultimate responsibility and decision onall matters however rests with the Board.

B. DIRECTORS’ REMUNERATION

The Remuneration Committee was established on 28 August 2003. The members of the Remuneration Committee,comprising a majority of independent directors, are as follows:-


MembersYou Tong Lioung @ Yew Tong Leong (Independent Non-Executive Director)Song Kok Cheong (Managing Director)

The Remuneration Committee’s duty is to make recommendations to the Board on the remuneration framework forall Executive Directors. The policy practiced on Directors’ remuneration is to provide the remuneration necessary toattract, retain and motivate Executive Directors of the quality required to manage the businesses of the Company.

Annually, the Remuneration Committee reviews the remuneration of the Executive Directors to ensure that itcommensurate with the market expectation, the Directors’ experience and competency and the performance of theGroup. Directors do not participate in decisions regarding their own remuneration. The Remuneration Committeehad held two (2) meetings during the financial year ended 31 March 2010.

In respect of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilitiesundertaken and is a matter for consideration by the Board as a whole. The Non-Executive Directors shall abstain fromdiscussions pertaining to their own remuneration.


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The details of the Directors’ remuneration for the financial year ended 31 March 2010 are as follows:-

(a) Analysis of aggregate remuneration of Directors categorised into appropriate components:-

Fees Salaries Benefits TotalRM’000 & Other in Kind RM’000

EmolumentsRM’000 RM’000

Executive Directors 153 1,207 100 1,460

Non-Executive Directors 105 96 - 201

(b) Analysis of Directors’ remuneration categorised in successive band of RM50,000:-

Range of remuneration (per annum)Number of Directors

Executive Non-Executive

RM50,000 and below - 2

RM50,001 to RM100,000 - 2

RM350,001 to RM400,000 1 -

RM500,001 to RM550,000 2 -

C. SHAREHOLDERS

Relationship With Shareholders And InvestorsThe Board recognises the importance of shareholders and investors communications and as a matter of policy, reportson a timely basis all material information in relation to the Company. Whilst the Company endeavours to provide asmuch information as possible to its shareholders, it is also fully aware of the legal regulatory framework governing therelease of material and price sensitive information. In this respect, the Company strictly adheres to the disclosurerequirements of Bursa Securities.

The Board communicates information on the operations, activities and performance of the Company to theshareholders and the public through the following:-

• the Annual Report, which contains the financial and operational review of the Company’s business, corporateinformation, financial statements and information on Audit Committee and Board of Directors;

• various disclosures and announcements made to Bursa Securities, which includes announcements on quarterlyresults; and

• Toyo Ink Group Berhad’s website at http://www.toyoink.com.my.

The Annual General MeetingThe Board regards the AGM as an opportunity to communicate directly with shareholders and encourages attendanceand participation in dialogue. At each AGM, the Board is prepared to answer questions to be raised by shareholders.Suggestions and comments by shareholders are also welcome by the Board for continuous improvement.

Notice of the AGM and Annual Report are sent to shareholders 21 days prior to the meeting. The Board has ensuredthat an explanatory statement will accompany each item of special business included in the notice of meeting on theeffects of the proposed resolution.


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D. ACCOUNTABILITY AND AUDIT

Financial ReportingThe Board is responsible to present a balanced and understandable assessment of the Group’s financial position andprospects to the stakeholders and general public. In presenting the annual financial statements and quarterlyannouncements of its results, the Board assures that the Company uses appropriate accounting policies consistentlyand estimates are supported by reasonable and prudent judgments.

Directors’ Responsibility Statement The Board is responsible for ensuring that:-

(i) the annual audited financial statements of the Group and of the Company are drawn up in accordance withapplicable approved accounting standards in Malaysia, the provisions of the Companies Act, 1965 and the MainMarket Listing Requirements so as to give a true and fair view of the state of affairs of the Group and theCompany for the financial year, and

(ii) Proper accounting and other records are kept which enable the preparation of the financial statements withreasonable accuracy and taking reasonable steps to ensure that appropriate systems are in place to safeguardthe assets of the Group and to prevent and detect fraud and other irregularities.

In the preparation of the financial statements for the financial year ended 31 March 2010, the Board has adoptedappropriate accounting policies and has applied them consistently in the financial statements with reasonable andprudent judgments and estimates. The Board is also satisfied that all relevant approved accounting standards have beenfollowed in the preparation of the financial statements.

Internal ControlThe Board also acknowledges the internal audit function as in integral part of an effective system of corporategovernance. The Statement on Internal Control set out on page 20 of this Annual Report provides an overview of theCompany’s approach in maintaining a sound system of internal control to safeguard shareholders’ investment and theCompany’s assets.

Relationship with External AuditorsThe Board, via the Audit Committee, maintains a formal and transparent relationship with the Company’s externalauditors. Through the Audit Committee, the external auditors are invited to discuss the annual financial statements,audit findings and other special matters that require the Board’s attention. During the financial year, the AuditCommittee conducted two (2) meetings with the external auditors without the presence of executive board members.

The external auditors have continued to report to members of the Company on their findings, which are included inthe auditors’ report with regard to each year’s audit on the statutory financial statements.

This statement was made in accordance with a resolution of the Board dated 23 July 2010.


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STATEMENT ON INTERNAL CONTROL

The Board of Directors of Toyo Ink Group Berhad acknowledges the importance of the systems of internal control andrecognises that it is their responsibility to maintain a sound system of internal control to safeguard the Group’s assets. Inthis respect, the Board undertakes to identify principal risks, ensure the implementation of appropriate systems to managethese risks and review the Group’s systems of internal control.

The Board collectively oversees and reviews the conduct of the Group’s business while the Managing Director and theManagement execute business strategies and controls to ensure that risks are effectively managed. The external and relevantprofessionals are drawn on to assist and provide advice to the Board from time to time when needed. Essentially, theseprocesses are embedded and carried out as the Group’s business management process.

Heads of management and credit control meetings are held monthly. These meetings provide a channel of communicationand information to enable the management to share, monitor and decide on the business development, changes and actionsto ensure businesses are under control. In order to be kept informed of matters affecting the operation of the Group, theAudit Committee Chairman is also invited to attend this meeting as part of his continuous engagement with the managementof the Group.

The systems of internal control are monitored by the management and reviewed by the Audit Committee. The fundamentalcontrol procedures such as board and management authorisation and approval limits, management reporting anddocumented operational procedures are in place. The presence of the internal audit function and their inputs on auditfindings, views and recommendations on the systems of management control supplement the Audit Committee review of theeffectiveness of the systems of internal control and the financial information produced by the management. Annually, inconsultation with the external auditors the Audit Committee also reviews and deliberates the integrity of the financial results.

Toyo Ink Sdn Bhd being the major subsidiary of the Group continues to be certified under the ISO 9001:2008 andISO14001:2004 on quality and environmental management systems respectively. Similarly, Inmac ED-Tools (M) Sdn Bhd, oneof key subsidiaries of the EDM Group had also obtained its certification in ISO 9001:2008. These management systems formthe guiding principles for the operational procedures. Internal quality audits are carried out and annual surveillance auditsare conducted by external certification body to provide assurance of compliance with the ISO requirements.

In making this statement, the Board had considered the Bursa’s Guidance on Statement on Internal Control. The Board viewsthat the existing level of systems of internal control is reasonable to achieve the Group’s objectives. However, it should benoted that risk management system and systems of internal control are only designed to manage rather than to eliminaterisks of failure to achieve business objectives. Therefore, these systems can only provide reasonable but not absoluteassurance against material misstatements, frauds and losses.

This Statement is made in accordance with a resolution of the Board of Director dated 23 July 2010.


21



AUDIT COMMITTEE REPORT

COMPOSITION

The Audit Committee of Toyo Ink Group Berhad was established on 28 August 2003. For the financial year ended 31 March2010, the Audit Committee comprises the following directors:-


MembersYou Tong Lioung @ Yew Tong Leong (Independent Non-Executive Director)

Tuan Hj. Ir. Yusoff bin Daud (Non-Independent Non-Executive Chairman)

TERMS OF REFERENCE

1) POLICYThe policy of the Audit Committee is to ensure that internal and external audit functions are properly conducted andthat audit recommendations are being carried out effectively by the TOYO INK GROUP BERHAD group of companies.

2) OBJECTIVESThe objectives of this policy are:-2.1) to assure the shareholders of the Company that the Directors of the Company have complied with Malaysian

financial standards and required disclosure policies developed and administered by Bursa Securities;

2.2) to ensure consistency with Bursa Securities’ commitment to encourage high standards of corporate disclosureand to adopt best practices aimed at maintaining appropriate standards of corporate responsibility, integrity andaccountability to all the Company’s shareholders; and

2.3) to relieve the full Board of Directors from detailed involvement in the review of the results of internal andexternal audit activities and yet ensure that audit findings are brought to the highest level for consideration.

3) MEMBERSHIP3.1) The Committee shall be appointed by the Board from amongst the directors of the Company and shall be

composed exclusively of Non-Executive Directors of no fewer than three members, of whom the majority shallbe independent.

3.2) The Committee shall include at least one person who is a member of the Malaysian Institute of Accountants oralternatively a person who must have at least 3 years’ working experience and have passed the examinationsspecified in Part 1 of the 1st Schedule of the Accountants Act, 1967 or is a member of one of the associationsof accountants specified in Part II of the said Schedule or alternatively a person who has fulfilled such otherrequirements as prescribed or approved by Bursa Securities.

3.3) No alternate director shall be appointed as a member of the Committee.

3.4) The members of the Committee shall elect from among their number a chairman who is non-executive andindependent, as defined above.

3.5) If one or more members of the Committee resign, die or for any other reason cease to be a member with theresult that the Listing Requirements of the Bursa Securities are breached, the Board shall, within three monthsof the event, appoint such number of new members as may be required to correct the breach.

3.6) The Board shall review the term of office of Committee members no less than once every three years.


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4) AUTHORITY4.1) The Committee is authorised by the Board, in accordance with the procedures to be determined by the Board

(if any) and at the cost of the Company, to:-

(a) investigate any activity within the Committee’s terms of reference;

(b) have resources which are reasonably required to enable it to perform its duties;

(c) have full and unrestricted access to any information pertaining to the Company or its subsidiaries;

(d) have direct communication channels with the external auditors and person(s) carrying out the internalaudit function or activity;

(e) obtain outside legal or other independent professional advice and secure the attendance of outsiders withrelevant experience and expertise if it considers this necessary;

(f) convene meetings with the external auditors, internal auditors or both, excluding the attendance of theother directors and employees of the Company, whenever deemed necessary.

5) FUNCTIONS The functions of the Committee shall be, amongst others, to review the following and report the same to the Board:-

(a) with the External Auditors, the scope of the audit and the audit plan;

(b) with the External Auditors, their evaluation of the system of internal controls;

(c) with the External Auditors, their management letter and the management’s response;

(d) with the External Auditors, their audit report;

(e) the assistance given by the employees to the External Auditors;

(f) the nomination or re-appointment of the External Auditors and their audit fees as well as matters pertaining toresignation or change of the External Auditors;

(g) the adequacy of the scope, functions, competency and resources of the internal audit function and that it has thenecessary authority to carry out its work;

(h) the internal audit programme, processes, the results of the internal audit programme, processes or investigationundertaken and whether or not appropriate action is taken on the recommendations of the internal auditfunction;

(i) the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusingparticularly on:-

(i) any changes in or implementation of major accounting policy changes;(ii) significant adjustments arising from the audit;(iii) significant and unusual events; (iv) the going concern assumption; and(v) compliance with accounting standards and other legal requirements.

(j) any related party transaction and conflict of interest situation that may arise within the Company or the Groupincluding any transaction, procedure or course of conduct that raises questions of management integrity; and

(k) any other matters as directed by the Board.


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6) OVERSEEING THE INTERNAL AUDIT FUNCTION6.1) The Committee shall establish an internal audit function which is independent of the activities it audits.

6.2) The Committee shall oversee the internal audit function and is authorised to commission investigations to beconducted by internal audit as it deems fit.

6.3) The Internal Auditor shall report directly to the Committee and shall have direct access to the Chairman of theCommittee.

6.4) All proposals by management regarding the appointment, transfer or dismissal of the Internal Auditor shallrequire the prior approval of the Committee.

7) QUORUM FOR MEETINGSThe quorum shall be formed only if there is a majority of members present at the meeting who are independentdirectors.

8) ATTENDANCE AT MEETINGSThe Head of Finance, the Head of Internal Audit and a representative of the External Auditors shall normally attendmeetings. Other Board members and employees may attend any particular meeting upon the invitation of the AuditCommittee, specific to the relevant meeting. However, at least twice a year the Committee shall meet with the ExternalAuditors without executive Board members present.

9) FREQUENCY OF MEETINGSThe Chairman shall call for meetings, to be held not less than four times a year. The External Auditors may request ameeting if they consider one necessary.

10) PROCEEDINGS OF MEETINGS10.1) A member may at any time and the Secretary shall on the requisition of a member summon a meeting of the

Audit Committee by giving the members not less than seven days notice thereof unless such requirement iswaived.

10.2) In the absence of the Chairman, the Committee shall appoint one of its members present to chair that meeting.

10.3) A resolution put to vote shall be decided by a majority of votes of the members present, each member havingone vote.

11) REPORTING PROCEDURES11.1) The Company Secretary shall be the Secretary of the Committee. He shall record attendance of all members

and invitees and take minutes to record the proceedings of every meeting of the Committee. All minutes ofmeetings shall be circulated to every member of the Board.

11.2) The Committee shall prepare an annual report to the Board that provides a summary of the activities of theCommittee and the internal audit function or activity for inclusion in the Company’s annual report.

11.3) The Committee shall assist the Board in preparing the following for publication in the Company’s annual report:-

(a) Statement on the Company’s application of the principles set out in Part 1 of the Malaysian Code onCorporate Governance;

(b) Statement on the extent of compliance with the Best Practices in Corporate Governance set out in Part2 of the Malaysian Code on Corporate Governance, specifying reasons for any areas of non-compliance(if any) and the alternatives adopted in such areas;

(c) Statement on the Board’s responsibility for preparing the annual audited accounts; and

(d) Statement about the state of internal control of the Group.

11.4) The Committee may report any breaches of the Listing Requirements, which have not been satisfactorilyresolved, to the Bursa Securities.


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AUDIT COMMITTEE MEETINGS

The Audit Committee met five times during the financial year ended 31 March 2010. The details of Audit Committee’smeetings held and attended by the Committee during the financial year are as follows:-

Audit Committee MemberNo. of Audit Committee Meetings

Held Attended

ChairmanTham Kut Cheong (Independent Non-Executive Director) 5 5

MembersYou Tong Lioung @ Yew Tong Leong (Independent Non-Executive Director) 5 5

Tuan Hj. Ir. Yusoff bin Daud (Non-Independent Non-Executive Chairman) 5 5

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR ENDED31 MARCH 2010

During the financial year ended 31 March 2010, the activities of the Audit Committee included the following:-

(a) reviewed the unaudited quarterly financial results and announcements of the company and the Group prior tosubmission to the Board of Directors for consideration and approval;

(b) reviewed the External Auditors’ audit plan and scope of audit for the financial year ended 31 March 2009;

(c) reviewed the audited financial statements for the year ended 31 March 2009;

(d) reviewed the External Auditors’ report to the Committee in relation to the audit and accounting issues arising fromthe audit of the Group’s financial statements;

(e) considered the audit fee payable and the nomination of the External Auditors for recommendation to the Board forre-appointment;

(f) reviewed the assistance and cooperation given by the employees to the External Auditors in respect of the audit forthe financial year ended 31 March 2009;

(g) met with the External Auditors twice during the financial year ended 31 March 2010 without the presence of anyexecutive board members;

(h) reviewed internal audit reports prepared by the Internal Auditor on the Company and its subsidiaries, managementimplementation of audit recommendations and recurrent related party transactions;

(i) reviewed the Internal Audit Plan for 2010 outlining its scope and focus; and

(j) reviewed the disclosure statements on Corporate Governance, Audit Committee Report and the Statement of InternalControl for the year ended 31 March 2009 and recommended their adoption to the Board.

INTERNAL AUDIT FUNCTION

The Group outsourced its internal audit function to an independent audit service company and the selected team isindependent of the activities audited by them.

The internal audit function is to ensure a regular review of the adequacy and integrity of the Group’s internal control systems.The Internal Auditors review and assess the Group’s system of internal control as well as carry out audit assignments inaccordance with approved audit plan.

During the financial year, the Internal Auditors conducted audit reviews on key operating subsidiaries and recommendedimprovements to the existing system of controls. The final audit reports containing audit findings and recommendationstogether with management’s responses thereto were circulated to all members of the Audit Committee. Areas ofimprovement identified were communicated to the management for further action. All internal audit reports were reviewedby the Audit Committee and discussed at Audit Committee Meetings. Follow-up reviews were performed to ascertain theextent of the management implementation of the recommended corrective action for improvements.

The cost incurred for the internal audit function in respect of the financial year ended 31 March 2010 was RM76,000/-.


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ADDITIONAL COMPLIANCE INFORMATION

Utilisation of ProceedsDuring the financial year, there were no proceeds raised by the Company from any corporate proposal.

Share Buy-backsThe Company did not have a share buy-back programme in place during the financial year.

Options, Warrants or Convertible SecuritiesThere were no options, warrants or convertible securities issued during the financial year.

Depository Receipt ProgrammeDuring the financial year, the Company did not sponsor any Depository Receipt Programme.

Sanctions and/or PenaltiesThere was no public imposition of sanctions or penalties imposed on the Company and its subsidiaries, directors ormanagement by the regulatory bodies during the financial year.

Non-Audit feesNon-audit fees paid to the external auditors of the Group for the financial year ended 31 March 2010 amounted to RM4,900/-

Profit GuaranteeDuring the financial year, there were no profit guarantees given by the Company.

Variation in ResultsThere were no material variance between the Company’s audited Financial Statements for the financial year ended 31 March2010 and the unaudited results previously announced.

Revaluation PolicyThe Group has no revaluation policy on landed properties.

Family Relationship of DirectorsSave as disclosed below, none of the Directors has any family relationship with any Directors and/or substantial shareholdersof the Company:

(a) Mr. Song Kok Cheong and Madam Fong Po Yin are husband and wife.(b) Mr. Lim Guan Lee and Mr. Lim Kee Min are father and son.(c) Mr. Ng Chong You and Madam Ling Ka Hee are husband and wife.

Conflict Of Interest With The CompanyNone of the Directors has any conflict of interest with the Company.

List of Conviction of OffencesNone of the Directors has been convicted of any offences within the past ten (10) year other than traffic offences.

Material Contracts Involving Directors and Major ShareholdersThere were no material contracts (not being contracts entered into in the ordinary course of business) of the Company andits subsidiaries, involving Directors’ and major shareholders’ interests, still subsisting at the end of the financial year.


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28 Directorsʼ Report

31 Statement by Directors

31 Statutory Declaration

32 Independent Auditorsʼ Report to the Members

34 Balance Sheets

35 Income Statements

36 Statements of Changes in Equity

37 Cash Flow Statements

39 Notes to the Financial Statements

FinancialStatements

Toyo AR2010 Back 27-80.qxp:TOYO AR2010 Back 9/2/10 2:03 PM Page 27

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DIRECTORS’ REPORT


The Directors have pleasure to submitting their report together with the audited financial statements of the Group and ofthe Company for the financial year ended 31 March 2010.

PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiary companies and associate are disclosed in Notes 8 and 9 to the financial statements.

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

RESULTSGroup Company

RM RM

Profit/(Loss) for the financial year 3,499,629 (136,973)

Attributable to:Equity holders of the Company 4,014,970 (136,973)Minority interests (515,341) -

3,499,629 (136,973)

DIVIDENDSNo dividend has been paid or declared since the end of the previous financial year.

RESERVES AND PROVISIONSThere were no material transfers to or from reserves or provisions during the financial year except as disclosed in thefinancial statements.

SHARES AND OPTIONSNo shares or debentures were issued, and no options to take up unissued shares were granted during the financial year, andat the end of the financial year, no options over unissued shares of the Company were outstanding.

DIRECTORSThe names of the directors of the Company in office since the date of the last report and the date of this report are:

Tuan Hj. Ir. Yusoff Bin Daud Song Kok CheongNg Chong YouLim Guan Lee Tham Kut Cheong You Tong Lioung @ Yew Tong LeongLim Kee Min (alternate director to Lim Guan Lee) Yap Yee Kiean (resigned on 2.7.2010)

In accordance with Article 92 of the Company’s Articles of Association, Tuan Hj. Ir. Yusoff Bin Daud and Mr. Lim Guan Leeretire by rotation and being eligible, offer themselves for re-election at the forthcoming Annual General Meeting.

Mr. You Tong Lioung @ Yew Tong Leong retires pursuant to Section 129(2) of the Companies Act, 1965 at the forthcomingAnnual General Meeting and offers himself for re-appointment in accordance with Section 129(6) of the Companies Act, 1965.



29

DIRECTORS’ REPORT


DIRECTORS’ BENEFITSDuring and at the end of the financial year, no arrangement subsisted to which the Company nor its subsidiary companies isa party with the objects of enabling the Directors of the Company to acquire benefits by means of the acquisition of sharesin or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit (other thanbenefits disclosed as Directors’ remuneration in the financial statements) by reason of a contract made by the Company ora related corporation with the Director or with a firm of which he is a member or with a company in which he has asubstantial financial interest other than transactions in the ordinary course of business between the company and a companyin which certain Directors of the Company have substantial financial interests as disclosed in Note 33 to the financialstatements.

DIRECTORS’ INTERESTS IN SHARESThe shareholdings in the Company and in the subsidiary companies of those who were Directors at the end of the financialyear, as recorded in the Register of Directors’ shareholdings kept by the Company and the subsidiary companies are asfollows:

NUMBER OF ORDINARY SHARES OF RM1 EACHAt At

1.4.09 Acquired Disposed 31.3.10

The Company:Tuan Hj. Ir. Yusoff Bin Daud 160,964 - 70,000 90,964Song Kok Cheong- direct 3,449,525 - - 3,449,525- indirect* 642,926 139,900 - 782,826Ng Chong You- direct 3,838,743 - - 3,838,743- indirect* 46,000 - - 46,000Lim Guan Lee 4,579,281 - - 4,579,281Lim Kee Min (alternate director to Lim Guan Lee) 204,600 - 204,600 -Yap Yee Kiean 575,560 - 537,651 37,909

*Via spouse/children

No other Directors in office at the end of the financial year held any interest in shares or debentures of the Company or thesubsidiary companies.

SIGNIFICANT EVENTS The significant events during the financial year are disclosed in Note 37 to the financial statements.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTSBefore the financial statements of the Group and of the Company were made out, the Directors took reasonable steps:

a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowancefor doubtful debts and satisfied themselves that all known bad debts have been written off and that adequate allowancehad been made for doubtful debts; and

b) to ensure that any current assets other than the debts which were unlikely to realise in the ordinary course of businessas shown in the accounting records of the Group and of the Company have been written down to an amount whichthey might be expected so to realise.

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

a) which would render the amount written off for bad debts or the allowance for doubtful debts in the financialstatements of the Group and of the Company inadequate to any substantial extent; or

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

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



30



DIRECTORS’ REPORT

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

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

a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year whichsecures the liability 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 otherthan those arising in the ordinary course of business.

OTHER STATUTORY INFORMATIONThe Directors state that at the date of this report, they are not aware of any circumstances not otherwise dealt with in thisreport or in the financial statements of the Group and of the Company which would render any amount stated in the financialstatements of the Group and of the Company misleading.

In the opinion of the directors:

a) the results of the Group’s and of the Company’s operations during the financial year were not substantially affected byany item, transaction, or event of a material and unusual nature except for the profit guarantee received from vendorsof the subsidiaries as disclosed in Note 26 to the financial statements; and

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

AUDITORSThe auditors, Sha, Tan & Co, have indicated their willingness to continue in office.

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

SONG KOK CHEONG NG CHONG YOUDirector Director

Kuala LumpurDate: 23 July 2010


31



STATEMENT BY DIRECTORS

STATUTORY DECLARATION

We, SONG KOK CHEONG and NG CHONG YOU, being two of the directors of TOYO INK GROUP BERHAD,do hereby state that, in the opinion of the Directors, the financial statements set out on pages 39 to 72 are drawn up inaccordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysiaso as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2010 and of theirresults and cash flows for the financial year then ended.

Signed on behalf of the Board of Directorsin accordance with a resolution of the directors,

SONG KOK CHEONG NG CHONG YOUDirector Director

Kuala LumpurDate: 23 July 2010

I, LAW KEEN HENG, being the officer primarily responsible for the accounting records and financial management ofTOYO INK GROUP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 39 to72 are to the best of my knowledge and belief correct, and I make this solemn declaration conscientiously believing the sameto be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )

LAW KEEN HENG )

at Kuala Lumpur in the Federal Territory )

on 23 July 2010 ) LAW KEEN HENG

Before me,


32



INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS

Report on the Financial Statements

We have audited the financial statements of TOYO INK GROUP BERHAD, which comprise the balance sheets of theGroup and of the Company as at 31 March 2010, and the income statements, statements of changes in equity and cash flowstatements of the Group and of the Company for the financial year then ended, and a summary of significant accountingpolicies and other explanatory notes, as set out on pages 39 to 72.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation and fair presentation of these financial statements inaccordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting andapplying 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 inaccordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free frommaterial misstatement.

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

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 FinancialReporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the stateof affairs of the Group and of the Company as at 31 March 2010 and of their results and cash flows for the financial year thenended.


33


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 andits subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of theAct.

b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted asauditors, and unaudited management financial statements of a subsidiary, which are indicated in Note 8 to the financialstatements.

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

d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment madeunder Section 174(3) of the Act except as disclosed in Note 8 to the financial statements.

Other Matters

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

SHA, TAN & CO [AF: 0185]Chartered Accountants

SHA THIAM FOOK[853/03/11(J/PH)]Chartered Accountant

Kuala LumpurDated: 23 July 2010

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS



34


BALANCE SHEETS as at 31 MARCH 2010

Group Company Note 2010 2009 2010 2009

RM RM RM RM

NON CURRENT ASSETSProperty, plant and equipment 5 30,833,598 33,077,128 - - Prepaid lease payments 6 6,498,838 7,690,089 - - Investment property 7 1,688,000 1,704,000 - - Investment in subsidiary companies 8 - - 31,611,684 31,611,684Investment in associate 9 481,383 451,194 - -Goodwill on consolidation 10 17,496,312 17,496,312 - -

56,998,131 60,418,723 31,611,684 31,611,684

CURRENT ASSETSInventories 11 16,244,081 18,918,578 - - Trade receivables 12 25,815,447 21,794,341 - - Other receivables, prepayments and deposits 13 49,696,561 43,298,526 - 109,315 Amount owing by a subsidiary company 14 - - 15,307,942 17,413,066 Tax recoverable 722,453 1,996,386 99,165 33,212 Fixed deposits with licensed banks 16,493 116,263 - -Cash and bank balances 3,626,423 2,635,178 29,605 44,290 Assets classified as held for sale 15 4,541,407 - - -

100,662,865 88,759,272 15,436,712 17,599,883 CURRENT LIABILITIES Trade payables 16 11,892,361 9,437,064 - - Other payables, accruals and deposits 17 36,382,516 35,447,404 205,529 231,727 Amount owing to directors 18 3,720,000 2,850,000 - - Hire purchase creditors 19 981,196 516,777 - - Bank borrowings 20 32,240,263 29,540,908 - 2,000,000 Taxation 227,175 145,584 - - Liabilities classified as held for sale 15 36,128 - - -

85,479,639 77,937,737 205,529 2,231,727 NET CURRENT ASSETS 15,183,226 10,821,535 15,231,183 15,368,156

72,181,357 71,240,258 46,842,867 46,979,840

EQUITYShare capital 21 42,800,000 42,800,000 42,800,000 42,800,000 Reserves 22 18,112,348 14,803,852 4,042,867 4,179,840 Total equity attributable to shareholders of the Company 60,912,348 57,603,852 46,842,867 46,979,840 Minority interests 23 6,535,686 6,965,449 - - TOTAL EQUITY 67,448,034 64,569,301 46,842,867 46,979,840

NON CURRENT LIABILITIESHire purchase creditors 19 1,184,284 819,192 - - Bank borrowings 20 1,473,608 4,127,485 - - Deferred tax liabilities 24 2,075,431 1,724,280 - -

4,733,323 6,670,957 - -

72,181,357 71,240,258 46,842,867 46,979,840

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



35


INCOME STATEMENTS for the financial year ended 31 MARCH 2010


RM RM RM RM

Continuing operationsRevenue 25 93,604,589 104,006,654 240,000 240,000 Cost of sales (76,262,933) (81,940,245) - -

Gross Profit 17,341,656 22,066,409 240,000 240,000

Other income 6,458,446 528,030 150 4,071 Selling and distribution costs (7,770,940) (9,520,117) - - Administration expenses (7,733,563) (11,297,511) (348,978) (351,631)Finance costs (1,934,829) (2,706,139) - (20,000) Share of results in associate (3,658) (127,623) - -

Profit/(Loss) Before Taxation 26 6,357,112 (1,056,951) (108,828) (127,560) Taxation 27 (2,582,113) (973,083) (28,145) (20,000)

Profit/(Loss) from continuing operations 3,774,999 (2,030,034) (136,973) (147,560)

Discontinued operation 28Loss from discontinued operation, net of tax (275,370) - - -

Profit/(Loss) For The Financial Year 3,499,629 (2,030,034) (136,973) (147,560)

Attributable to:Equity holders of the Company 4,014,970 (1,074,436) (136,973) (147,560) Minority interests (515,341) (955,598) - -

3,499,629 (2,030,034) (136,973) (147,560)

Basic earnings/(loss)per ordinary share (sen) 29From continuing operations 9.77 (2.67)From discontinued operation (0,39) -

9,38 (2,67)

Dividend per ordinary share (sen)-gross 30 - - - -



(2.67)

9.38 (2.67)

(0.39)


36



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37


CASH FLOW STATEMENTS for the financial year ended 31 MARCH 2010


RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before taxation-Continuing operations 6,357,112 (1,056,951) (108,828) (127,560)-Discontinued operation 28 (275,370) - - -

6,081,742 (1,056,951) (108,828) (127,560)Adjustments for:Allowance for doubtful debts 209,121 1,144,617 - - Reversal of allowance for doubtful debt (1,043,791) (8,315) - - Bad debts recovered - (33,138) - - Bad debts written off 182,505 -Depreciation of investment property 16,000 16,000 - -Amortisation of prepaid lease payments 260,824 273,759 - - Depreciation and amortisation ofproperty, plant and equipment 2,941,826 3,090,178 - - Gain on disposal of property, plantand equipment (816) (38,462) - - Plant and equipment written off 29,838 1,068 - - Share of results in associate 3,658 127,623 - -Interest expense 1,798,286 2,522,264 - -Interest income (1,513) (5,572) - -Operating Profit/(Loss) Before WorkingCapital Changes 10,477,680 6,033,071 (108,828) (127,560)

Decrease in inventories 2,674,497 943,769 - - (Increase)/Decrease in receivables (9,766,976) 4,988,854 2,214,439 (5,499,612)Increase/(Decrease) in payables 4,260,409 (5,904,796) (26,198) 87,690 Net cash from operating activities assetsheld for sale 87,680 - - -Cash Generated From/(Used In)Operations 7,733,290 6,060,898 2,079,413 (5,539,482)

Tax refunded 1,267,964 325,852 - - Tax paid (2,104,087) (2,812,487) (94,098) (98,776)Interest received 1,513 5,572 - - Interest paid (1,798,286) (2,522,264) - - Translation reserve (321,617) 533,041 - - Net Cash From/(Used In) Operating Activities 4,778,777 1,590,612 1,985,315 (5,638,258)

CASH FLOWS FROM INVESTING ACTIVITIES

Additional investment in a subsidiarycompany by minority interest 451,804 3,031,941 - - Proceeds from disposal of property,plant and equipment 2,324 38,600 - - Purchase of property, plant and equipment 31 (522,407) (3,780,319) - - Net cash used in investing activities assetsheld for sale (3,203,714) - - - Net Cash Used In Investing Activities (3,271,993) (709,778) - -



38


CASH FLOW STATEMENTS for the financial year ended 31 MARCH 2010


RM RM RM RM

CASH FLOWS FROM FINANCING ACTIVITIESDecrease in revolving credit - (6,400,000) - - Increase/(Decrease) in bankers' acceptances,trust receipts and bills payable 4,612,850 (2,992,322) - - Issue of shares - 4,097,075 - 4,097,075 Term loans raised - 2,160,000 - 2,000,000 Refinanced of property, plant andequipment by hire purchase - 151,416 - -Repayment of hire purchase creditors (660,787) (719,494) - - Repayment of term loans (4,641,341) (2,760,796) (2,000,000) -Dividend paid - (600,000) - (600,000)Net Cash (Used In)/From Financing Activities (689,278) (7,064,121) (2,000,000) 5,497,075

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS 817,506 (6,183,287) (14,685) (141,183)CASH AND CASH EQUIVALENTS ATBEGINNING OF FINANCIAL YEAR (6,982,378) (799,091) 44,290 185,473 CASH AND CASH EQUIVALENTS ATEND OF FINANCIAL YEAR (6,164,872) (6,982,378) 29,605 44,290

CASH AND CASH EQUIVALENTSCOMPRISE: Cash and bank balances 3,626,423 2,635,178 29,605 44,290 Fixed deposits with licensed banks 16,493 116,263 - - Bank overdrafts (9,807,788) (9,733,819) - -

(6,164,872) (6,982,378) 29,605 44,290




39


NOTES TO THE FINANCIAL STATEMENTS as at 31 MARCH 2010

1. GENERALThe financial statements of the Group and of the Company are stated in Ringgit Malaysia (RM).

The Company was incorporated in Malaysia as a public limited liability company and listed on the Main Market of BursaMalaysia Securities Berhad. It is domiciled in Malaysia with its registered office at Lot 4.100, Tingkat 4, Wisma Central,Jalan Ampang, 50450 Kuala Lumpur and principal place of business at PT 3477, Jalan 6/1, Kawasan Perusahaan SeriKembangan, 43300 Seri Kembangan, Selangor Darul Ehsan.

At the end of the financial year, the Group and the Company have 263 employees (2009 : 258) and 3 (2009 : 3)employees respectively.

2. DATE OF AUTHORISATION OF ISSUE OF FINANCIAL STATEMENTSThe financial statements of the Group and of the Company were authorised for issue by the Board of Directors on 23July 2010.

3. PRINCIPAL ACTIVITIESThe principal activities of the Company are investment holding and provision of management services.

The principal activities of the subsidiary companies and associate are disclosed in Notes 8 and 9.

4. SIGNIFICANT ACCOUNTING POLICIES

a. Basis of PreparationThe financial statements of the Group and of the Company have been prepared in accordance with applicableapproved Financial Reporting Standards (“FRSs”) and the provisions of the Companies Act, 1965 in Malaysia.

The Group and the Company have not early adopted the followings FRSs, Interpretations and amendments tocertain Standards and Interpretations issued by the Malaysian Accounting Standards Board (“MASB”) but are notyet effective for the Group and the Company:

FRSs/Interpretations Effective date

FRS 1 First-time Adoption of Financial Reporting Standards (revised) 1 July 2010FRS 3 Business Combinations (revised) 1 July 2010FRS 7 Financial Instruments: Disclosures 1 January 2010FRS 7 Amendment to FRS 139 Financial Instruments: Recognition and 1 January 2010

Measurement, FRS 7 Financial Instrument: Disclosures and IC Interpretation 9 Reassessment of Embedded Derivatives

FRS 8 Operating Segments 1 July 2009FRS 101 Presentation of Financial Statements (revised) 1 January 2010FRS 123 Borrowing Costs (revised) 1 January 2010FRS 127 Consolidated and Separate Financial Statements (revised) 1 July 2010FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010Amendment to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 1 January 2010

127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for 1 January 2011First-time Adopters

Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations 1 July 2010Amendment to FRS 7 Improving Disclosures about Financial Instruments 1 January 2011Amendment to FRS 8 Operating Segments 1 January 2010Amendment to FRS 108 Accounting policies: Changes in Accounting Estimates and Errors 1 January 2010Amendment to FRS 117 Leases 1 January 2010Amendment to FRS 118 Revenue 1 January 2010Amendment to FRS 119 Employee Benefits 1 January 2010Amendment to FRS 123 Borrowing Costs 1 January 2010



40



Amendment to FRS 127 Amendments to FRS 1 and FRS 127 Consolidated and Separate 1 January 2010 Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

Amendment to FRS 128 Investment in Associates 1 January 2010Amendment to FRS 132 Financial Instruments: Presentation 1 January 2010/

1 March 2010Amendment to FRS 134 Interim Financial Reporting 1 January 2010Amendment to FRS 136 Impairment of Assets 1 January 2010Amendment to FRS 138 Intangible Assets 1 January 2010/

1 July 2010Amendment to FRS 139 Financial Instruments: Recognition and Measurement 1 January 2010Amendment to FRS 140 Investment Property 1 January 2010IC Interpretation 9 Reassessment of Embedded Derivatives 1 January 2010/

Amendment to FRS 139, FRS 7 and IC Interpretation 9 1 July 2010IC Interpretation 10 Interim Financial Reporting and Impairment 1 January 2010

The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statements uponthe initial applications of FRS 7 and 139.

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

i. FRS 101: Presentation of Financial Statements (Revised 2009)The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the statements ofchanges in equity will now includes only details of transactions with owners. All non-owner changes inequity are presented as a single line labelled as total comprehensive income. The Standard also introducesthe statement of comprehensive income: presenting all items of income and expense recognised in theincome statement, together with all other items of recognised income and expense, either in one singlestatement, or in two linked statements of comprehensive income. The Group is currently evaluating theformat to adopt.

In addition, a statement of financial position is required at the beginning of the earliest comparative periodfollowing a change in accounting policy, the correction of an error or the reclassification of items in thefinancial statements. This revised FRS does not have any impact on the financial position and results of theGroup and of the Company.

ii. FRS 3: Business Combination (Revised 2010) and FRS 127: Consolidated and Separate Financial Statements(Revised) FRS 3 (Revised 2010) introduces a number of changes to the accounting for business combinationsoccurring on or after 1 July 2010. These include changes that affect the valuation of non-controllinginterest, the accounting for transaction costs, the initial recognition and subsequent measurement of acontingent consideration and business combination achieved in stages. These changes will impact theamount of goodwill recognised, the reported results in the period that an acquisition occurs and futurereported results.

FRS 127 (Revised) requires that a change in the ownerships interest of a subsidiary company (without lossof control) is accounted for as a transaction with owner in his capacity as owner and to be recorded inequity. Therefore, such transaction will no longer rise to goodwill, nor will it give rise to be a gain or loss.Furthermore, the amended Standard changes the accounting for losses incurred by the subsidiary companyas well as loss of control of a subsidiary company.

The changes by FRS 3 (Revised) and FRS 127 (Revised) will be applied prospectively and only affect futureacquisitions or losses of control of subsidiary companies and transactions with non-controlling interests.

iii. FRS 117: LeasesThe amendments clarify the classification of lease of land and require entities with existing leases of landand buildings to reassess the classification of land as finance or operating lease. Leasehold land which insubstance is a finance lease will be reclassified to property, plant and equipment. The adoption of theseamendments will result in a change in accounting policy which will be applied retrospectively in accordancewith the transitional provisions.



41



This change in accounting policy will result in reclassification of relevant lease land as at 31 March 2010from prepaid lease payments to property, plant and equipment.

The financial statements of the Group and of the Company have also been prepared under the historical costbasis except as disclosed in notes to the financial statements.

b. Subsidiaries and Basis of Consolidation

i. SubsidiariesSubsidiaries are entities over which the Group has the ability to control the financial and operating policiesso as to obtain benefits from their activities. The existence and effect of potential voting rights that arecurrently exercisable or convertible are considered when assessing whether the Group has such powerover another entity.

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

ii. Basis of ConsolidationThe consolidated financial statements comprise the financial statements of the Company and its subsidiarycompanies as at balance sheet date. The financial statements of the subsidiaries are prepared for the samereporting date as the Company.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtainscontrol, and continue to be consolidated until the date that such control ceases. In preparing theconsolidated financial statements, intergroup balances, transactions and unrealised gains or losses areeliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for liketransactions and events in similar circumstances.

Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method ofaccounting involves allocating the cost of the acquisition at the fair value of the assets acquired andliabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition ismeasured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurredor assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiableassets, liabilities and contingent liabilities represents goodwill.

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

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

c. Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of businesscombination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingentliabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses.Goodwill is not amortised but instead, it is reviewed for impairment annually or more frequently if events orchanges in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal ofany entity include the carrying amount of goodwill to the entity sold.

d. Associates

Associates are those companies in which the Group has a long term equity interest of between 20 and 50percent of equity capital and in which the Group exercises significant influence but not control throughparticipation in the financial and operating policy decision of the companies.

Investments in associated companies are stated at cost less accumulated impairment losses, if any.



42



When the Group’s share of losses exceeds its interest in an equity associate, the carrying amount of that interest(including any long-term investment) is reduced to nil and the recognition of further losses is discontinuedexcept to the extent that the Group has an obligation or has made payments on behalf of the investee.

The Group’s share of profit of associated company is included in the consolidated income statement by usingthe equity method of accounting based on the audited or management financial statements of the associatedcompany, and Group’s interest in associates is stated at cost plus adjustments to reflect changes in the Group’sshare of the net assets of the associates.

e. Property, Plant and Equipment, and Depreciation and Amortisation

Property, plant and equipment are stated at cost and at valuation/deemed cost less accumulated depreciation andamortisation, and accumulated impairment losses, if any.

Freehold land is stated at cost less impairment losses, if any. No amortisation is provided on the freehold land.

Building under construction is stated at cost less impairment losses, if any. No depreciation is provided onbuilding under construction until it is ready for its intended use.

Long term leasehold industrial and factory buildings, and shophouse are amortised evenly over their remaininglease periods of 62 to 86 years and 5 to 10% per annum.

The other property, plant and equipment are depreciated on the straight line basis to write off the cost of theassets over their estimated useful lives. The annual rates used are as follows:

Freehold buildings 2%Plant and machinery 6.5% - 20%, replacement basisMotor vehicles 20%Office equipment 10% - 50%Furniture and fittings 10%Factory equipment 10%Electrical installations 10%Renovation 10% - 20%Signboards 10%Laboratory equipment 10%Tools and equipment 10%Other plant and equipment 10%

Fully depreciated assets are retained in the financial statements until they are no longer in use.

Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceedsand the carrying amount is charged or credited to the income statement.

f. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined on the first in, first outbasis.

Net realisable value is the estimate of the selling price in the ordinary course of business, less the costs ofcompletion and selling expenses.

The cost of raw materials comprises the original cost of purchases plus the cost of bringing the inventories totheir present conditions and locations.

The cost of finished goods comprises cost of raw materials, direct labour and overheads.



43



g. Investment Properties

Investment properties are properties which are held to earn rental income or for capital appreciation or both.The investment properties are stated at valuation/deemed cost less accumulated depreciation and impairmentlosses if any.

Depreciation of investment properties is provided for on the straight line basis over their estimated useful livesof 50 years.

Investment properties are derecognised when either they have been disposed of or when the investmentproperties are permanently withdrawn from uses and no future benefits are expected from their disposals. Anygains or losses on their retirements or disposals of the investment properties are recognised in profit or loss inthe financial year in which they arise.

h. Prepaid Lease Payments

Leasehold land that normally has an indefinite economic life and title is not expected to pass to the lessee bythe end of the lease term is treated as an operating lease. The payment made on entering into or acquiring aleasehold land is accounted as prepaid lease payments that are amortised over the lease term in accordance withthe pattern of benefits provided.

The Group has previously classified a lease of land as finance lease and had recognised the amount of prepaidlease payments as property within its property, plant and equipment. On adoption of FRS 117, Leases, as fromthe financial year 2007, the Group treats such a lease as an operating lease, with the unamortised carryingamount classified as prepaid lease payments in accordance with the transitional provisions in FRS 117.67A.

The Group had previously revalued its leasehold land and has retained the unamortised revalued amount as thesurrogate carrying amount of prepaid lease payments in accordance with the transitional provisions of FRS117.67A. Such prepaid lease payment is amortised over the lease term.

i. Hire Purchase

Assets financed by hire purchase arrangements which transfer substantially all the benefits and rewards ofownerships to the Group are capitalised as plant and equipment and the corresponding obligations are treatedas liabilities. The plant and equipment capitalised are depreciated on the same basis as owned assets.

Finance charges are allocated to the income statement to give a constant periodic rate of charge on theremaining hire purchase liabilities.

j. Provision for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a past event andit is probable that an outflow of resources embodying economic benefits will be required to settle the obligation,and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date andadjusted to reflect the current best estimate. Where the effect of the time value of money is material, theamount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Contingent LiabilitiesWhere it is not probable that an outflow of economic benefits will be required, or the amount cannot beestimated reliably, the obligation is disclosed as contingent liability, unless the probability of outflow of economicbenefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability ofoutflow of economic benefits is remote.

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of othercompanies within the Group, the Company treats the guarantee contract as a contingent liability until such atime as it becomes probable that the Company will be required to make payment under the guarantee.



44



k. Income Tax

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

Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle,deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognisedfor all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probablethat taxable profit will be available against which the deductible temporary differences, unused tax losses andunused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from theinitial recognition of an asset or liability affects neither accounting profit nor taxable profit.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised orthe liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheetdate. Deferred tax is recognised in the income statement, except when it arises from a transaction which isrecognised directly in equity, in which case the deferred tax is also recognised directly in equity.

l. Foreign Currencies

i. Functional and presentation currenciesThe individual financial statements of each entity in the Group are measured using the currency of primaryeconomic environment in which the equity operates (the functional currency). The consolidated financialstatements are presented in Ringgit Malaysia (RM) which is also the Company’s functional currency.

ii. Foreign currency transactionsIn preparing the financial statements of the individual entities, transactions in currencies other than theentity’s functional currency (foreign currencies) are recorded in the functional currencies using theexchange rates prevailing at the dates of the transactions. At the balance sheet date, monetary itemsdenominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at the fair value that are denominated in foreign currencies are translated at therates prevailing on the date when the fair value was determined. Non-monetary items that are measuredin terms of historical currency are not translated.

Exchange differences arising on the settlement of monetary items, and on the translation of monetaryitems, are included in profit and loss for the financial period.

iii. Foreign operationsThe results and financial position of foreign operations that have a functional currency different from thepresentation currency (RM) of consolidated financial statements are translated into RM as follows:

- Assets and liabilities for each balance sheet are translated at the closing rates prevailing at thebalance sheet date.

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

- All resulting exchange differences are taken to the exchange fluctuation reserve within equity.

The closing rates used in the translations are as follows:

2010 2009RM RM

1 US Dollar 3.40 3.701 Singapore Dollar 2.40 2.201 Euro 4.66 4.551 Sterling Pound n/a 6.71

100 Japanese Yen 3.85 3.881 Swiss Franc 3.20 3.21


Japanese Yen


45



m. Employee Benefits

i. Short term benefitsWages, salaries, bonuses and social security contributions are recognised as an expense in the financial yearin which the associated services are rendered by employees of the Group. Short term accumulatingcompensated absences such as paid annual leave are recognised when services are rendered by employeesthat increase their entitlement to future compensated absences, and short term non-accumulatingcompensated absences such as sick leave are recognised when the absences occur.

ii. Defined contribution plansAs required by the law, the Group and the Company makes contribution to the state pension scheme, theEmployee Provident Fund (EPF). Such contribution is recognised as an expense in the income statementas incurred.

n. Revenue Recognition

Revenue from the sale of goods and services is recognised in the financial statements when the significant risksand rewards of ownership of the goods have been transferred to the buyer or when services rendered.

Dividend income from investments in subsidiaries and associates are recognised when the right to receivepayment is established.

o. Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents include cash on hand and at bank, depositsat call and short term highly liquid investments which have an insignificant risk of changes in value, net ofoutstanding bank overdrafts.

p. Interest Income and Borrowing Costs

Interest income is recognised as it accrues, using the effective interest method.

All borrowing costs are recognised in the income statement using the effective interest method, in theperiod in which they are incurred except to the extent that they are capitalised as being directly attributable tothe acquisition, construction or production of an asset which necessarily takes a substantial period of time to beready for its intended use.

q. Non-Current Assets (or disposal group) held for sale and discontinued operations

Non-current assets (or disposal group) are classified as held for sale if their carrying amount will be recoveredprincipally through a sale transaction rather than through continuing use. This condition is regarded as met onlywhen the sale is highly probable and the asset (or disposal group) is available for immediate sale in its presentcondition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the non-current assets (or all the assetsand liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs. Then, on initialclassification as held for sale, non-current assets or disposal groups (other than investment properties, deferredtax assets, employee benefits assets, financial assets and inventories) are measured in accordance with FRS 5 thatis at the lower of carrying amount and fair value less costs to sell. Any differences are included in profit or loss.

A component of the Group is classified as a discontinued operation when the criteria to be classified as held forsale have been met or it has been disposed of and such a component represents a separate major line of businessor geographical area of operations, is part of a single co-ordinated major line of business or geographical area ofoperations or is a subsidiary acquired exclusively with a view to resale.

r. Earnings per ordinary share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by theweighted average number of ordinary shares outstanding during the period.



46



Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weightedaverage number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, whichcomprise convertible notes and shares options granted to employees.

s. Impairment of Assets

The carrying amounts of assets, other than deferred tax assets, financial assets (other than investments insubsidiaries and associates) and inventories, are reviewed at each balance sheet date to determine whether thereis any indication of impairment. If any such indication exists, the assets recoverable amount is estimated todetermine the amount of impairment loss. Impairment is measured by comparing the carrying values of the assetswith their recoverable amounts. The recoverable amount is the higher of an asset’s net selling price and its valuein use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimated forindividual assets, or if it is not possible, for the cash-generating unit.

An impairment loss is charged to the income statement immediately, unless the assets is carried at revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of previouslyrecognised revaluation surplus for the same asset.

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous impairment lossand is recognised to the extent of the carrying amount of the asset that would have been determined (net ofamortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in theincome statement immediately, unless the assets are carried at the revalued amount. A reversal of an impairmentloss on a revalued asset is credited directly to revaluation surplus. However, to the extent that an impairmentloss on the same revalued asset was previously recognised as an expense in the income statement, a reversal ofthat impairment loss is recognised as income in the income statement.

t. Financial Instruments

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

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

.i. ReceivablesReceivables are carried at anticipated realisable value. Bad debts are written off in the financial year inwhich they are identified and allowances are made for any debts considered to be doubtful of collection.

ii. PayablesPayables are stated at cost which is the fair value of the consideration to be paid in the future for goodsand services received.

iii. Equity instrumentsOrdinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in theperiod in which they are declared.

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



47



u. Segment Reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services(business segment), or in providing products or services within a particular economic environment (geographicalsegment), which is subject to risks and rewards that are different from those of other segments.

v. Significant accounting judgements and estimates

Critical judgements made in applying accounting policiesThere were no significant judgements made by the management in the process of applying the Group’saccounting policies which may have significant effects on the amounts recognised in the financial statements.

Key sources of estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheetdate, that may have significant risks of causing material adjustments to the carrying amounts of assets andliabilities within the next financial year are discussed below:

i. Useful lives of property, plant and equipmentThe Group estimates the useful lives of property, plant and equipment based on the period over which theassets are expected to be available for use. The estimated useful lives of property, plant and equipmentare reviewed periodically and are updated if expectations differ from previous estimates due to physicalwear and tear, technical or commercial obsolescence and legal or limits on the use of the relevant assets.A reduction in the estimated useful lives of the property, plant and equipment would increase the recordedexpenses and decrease the non-current assets.

In addition, the estimation of the useful lives of property, plant and equipment are based on the internaltechnical evaluation and experience with similar assets. It is possible, however, that future results ofoperations could be materially affected by changes in the estimates brought about by changes in factorsmentioned above. The amounts and timings of recorded expenses for any period would be affected bychanges in these factors and circumstances. A reduction in the estimated useful lives of property, plant andequipment would increase the recorded expenses and decrease the non-current assets.

ii. Income taxesSignificant estimation is involved in determining the group-wide provision for income taxes. There arecertain transactions and computations for which the ultimate tax determination is uncertain during theordinary course of business. The Group recognised liabilities for expected tax issues based on estimatesof whether additional taxes will be due. Where the final tax outcome of these matters is different fromthe amounts that were initially recognised, such differences will impact the income tax and deferred taxprovisions in the period in which such determination is made.

iii. Impairment of goodwill on consolidationThe Group determines whether goodwill is impaired at least on an annual basis. This requires anestimation of the value-in-use of the Cash-generating Units (“CGUs”) to which goodwill is allocated.Estimating a value-in-use amount requires management to make an estimate of the expected future cashflows from the CGU and also to choose a suitable discount rate in order to calculate the present value ofthose cash flows.



48



5. PROPERTY, PLANT AND EQUIPMENT

Group Transferto assets

Disposals/ Exchange held forAt 1.4.09 Additions Write off difference sale At 31.3.10

RM RM RM RM RM RM

At cost unlessotherwise stated:Freehold land and buildingsat cost 1,286,405 - - - - 1,286,405- at valuation/deemedcost (2004 & 2005) 3,347,110 - - - - 3,347,110Long termleasehold industrial andfactory buildingsat cost 16,446,045 - - (506,341) (361,770) 15,577,934- at valuation/deemedcost (2004) 2,290,000 - - - - 2,290,000Long term leaseholdshophouse- at valuation/deemedcost (2004) 180,000 - - - - 180,000Plant and machinery 14,900,477 1,883,005 - (124,166) (135,999) 16,523,317Motor vehicles 2,367,277 - - (103,203) (807,574) 1,456,500Office equipment 2,480,568 44,836 (39,107) (33,727) (154,449) 2,298,121Furniture and fittings 503,566 10,534 (2,809) - - 511,291Factory equipment 2,641,630 2,820 (3,782) - - 2,640,668Electrical installations 694,572 33,728 - - - 728,300Renovation 2,209,673 29,374 - - - 2,239,047Signboards 5,712 - - - - 5,712Laboratory equipment 1,356,518 - - - - 1,356,518Tools and equipment 318,699 8,408 - - - 327,107*Other plant andequipment 10,280 - - - - 10,280

51,038,532 2,012,705 (45,698) (767,437) (1,459,792)) 50,778,310



49



Transferto assets

Disposals/ Exchange held forAt 1.4.09 Additions Write off difference sale At 31.3.10

RM RM RM RM RM RM

Accumulated depreciation/amortisation:Freehold land and buildingsat cost 28,059 1,767 - - - 29,826- at valuation/deemedcost (2004 & 2005) 159,884 27,063 - - - 186,947Long term leasehold industrialand factory buildingsat cost 1,233,975 512,951 - (37,517) (141,693) 1,567,716- at valuation/deemedcost (2004) 216,030 36,127 - - - 252,157Long term leaseholdshophouse- at valuation/deemedcost (2004) 14,210 2,368 - - - 16,578Plant and machinery 8,385,223 1,419,451 - (54,963) (135,999) 9,613,712Motor vehicles 1,255,104 230,033 - (31,605) (380,065) 1,073,467Office equipment 1,788,943 220,298 (8,736) (14,188) (148,136) 1,838,181Furniture and fittings 281,831 11,897 (2,809) - - 290,919Factory equipment 1,530,629 213,051 (2,807) - - 1,740,873Electrical installations 456,370 36,319 - - - 492,689Renovation 1,341,885 133,304 - - - 1,475,189Signboards 5,352 60 - - - 5,412Laboratory equipment 1,013,785 72,793 - - - 1,086,578Tools and equipment 144,680 24,344 - - - 169,024*Other plant andequipment 10,280 - - - - 10,280

17,866,240 2,941,826 (14,352) (138,273) (805,893) 19,849,548

Accumulated impairment loss:- Freehold land and

building 95,164 - - - 95,164



50



Depreciation/Net carrying amount Amortisation2010 2009 2009

RM RM RMFreehold land and buildingsat cost 1,161,415 1,163,182 1,767- at valuation/deemed cost (2004 & 2005) 3,160,163 3,187,226 27,064Long term leasehold industrial and factory buildingsat cost 14,010,218 15,212,070 535,379- at valuation/deemed cost (2004) 2,037,843 2,073,970 36,126Long term leasehold shophouse- at valuation/deemed cost (2004) 163,422 165,790 2,368Plant and machinery 6,909,605 6,515,254 1,506,892Motor vehicles 383,033 1,112,173 250,073Office equipment 459,940 691,625 238,154Furniture and fittings 220,372 221,735 13,578Factory equipment 899,795 1,111,001 213,784Electrical installations 235,611 238,202 34,778Renovation 763,858 867,788 131,832Signboards 300 360 280Laboratory equipment 269,940 342,733 74,328Tools and equipment 158,083 174,019 23,775*Other plant and equipment - - -

30,833,598 33,077,128 3,090,178

*Other plant and equipment of the Group comprise portable cabin, reflector lamp box, sliding beam, etc.

Net carrying amount of property, plant and equipment charged to banks for banking facilitiesgranted to the Group are:

Group2010 2009

RM RM

Freehold land and buildingsat cost 816,251 913,182- at valuation/deemed cost (2004 & 2005) 2,910,163 2,937,226Long term leasehold industrial and factory buildingsat cost 9,040,189 9,240,730- at valuation/deemed cost (2004) 2,037,843 2,073,970

Net carrying amount of property, plant and equipment acquired under hire purchase are:

Group2010 2009

RM RM

Plant and machinery 2,846,422 3,833,057Motor vehicles 112,089 166,322



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During the financial years 2004 and 2005, the following assets of the Group were revalued upwards by the Directorsof the Group based on the open market value as appraised by independent firm of professional valuers.

Had those assets revalued during the financial year 2004 been stated at cost less accumulateddepreciation and amortisation, the net carrying amount would had been as follows:

Group At 1.4.09 Additions Disposals At 31.3.10RM RM RM RM

At cost:Freehold land 200,000 - - 200,000Long term leasehold industrial andfactory buildings 2,310,522 - - 2,310,522Long term leasehold shophouse 131,493 - - 131,493

2,642,015 - - 2,642,015

Accumulateddepreciation/amortisation:Freehold land - - - -Long term leasehold industrial andfactory buildings 476,535 32,859 - 509,394Long term leasehold shophouse 27,944 1,644 - 29,588

504,479 34,503 - 538,982

Net carrying amount Depreciation/Amortisation

2010 2009 2009RM RM RM

Freehold land 200,000 200,000 -Long term leasehold industrial andfactory buildings 1,801,128 1,833,987 32,861Long term leasehold shophouse 101,905 103,549 1,644

2,103,033 2,137,536 34,505

Due to absence of historical records, the net carrying amount of those assets revalued during the financial year 2005,had these assets been stated at costs are not disclosed. The revaluation was done by a subsidiary which was acquiredby the Group during the financial year 2008.



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6. PREPAID LEASE PAYMENTS

Group Transfer to

Exchange Assets heldAt 1.4.09 Additions Disposals difference for sale At 31.3.10

RM RM RM RM RM RM

At cost unlessotherwise stated:Long term leasehold land- at cost 2,508,245 - - (198,507) (1,268,177) 1,041,561- at valuation/deemedcost (2004) 6,130,000 - - - - 6,130,000

8,638,245 - - (198,507) (1,268,177) 7,171,561

Accumulatedamortisation:Long term leasehold land- at cost 458,597 179,149 - (39,554) (496,703) 101,489- at valuation/deemedcost (2004) 489,559 81,675 - - - 571,234

948,156 260,824 - (39,554) (496,703) 672,723

Net carrying amount Amortisation2010 2009 2009

RM RM RM

Long term leasehold land andat cost 940,072 2,049,648 192,085- at valuation/deemed cost (2004) 5,558,766 5,640,441 81,674

6,498,838 7,690,089 273,759

The long term leasehold land at deemed cost of RM6,130,000 (2009 : RM6,130,000) was revalued by the Directors ofthe Group based on the open market value as appraised by independent firm of professional valuers in the financialyear 2004. This asset is charged to the banks for banking facilities granted to the Group.

Had this revalued asset been stated at cost less accumulated amortisation, the net carryingamount would had been as follows:


Long term leasehold land- at cost 3,379,130 - - 3,379,130- accumulated amortisation 565,405 40,976 - 606,381

Net carrying amount Amortisation2010 2009 2009

RM RM RM

Long term leasehold land 2,772,749 2,813,725 41,375



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7. INVESTMENT PROPERTY

Group Freehold land Freehold Factory TotalRM RM RM

At valuation/deemed cost:At 1 April 2008 1,000,000 800,000 1,800,000Addition/disposal - - -At 31 March 2009/2010 1,000,000 800,000 1,800,000

Accumulated depreciation:At 1 April 2008 - 80,000 80,000Depreciation for the financial year - 16,000 16,000At 31 March 2009/1 April 2009 - 96,000 96,000Depreciation for the financial year - 16,000 16,000At 31 March 2010 - 112,000 112,000

Net carrying amount:At 1 April 2008 1,000,000 720,000 1,720,000At 31 March 2009/1 April 2009 1,000,000 704,000 1,704,000At 31 March 2010 1,000,000 688,000 1,688,000

The freehold land and factory building were revalued by the Directors of the Group based on the open market valueas appraised by independent firm of professional valuers in the financial year 2004. These assets are charged to the bankfor banking facilities granted to the Group.

Had these revalued assets been stated at cost less accumulated depreciation, the net carryingamount would had been as follows:


At cost:Freehold land 1,157,558 - - 1,157,558Freehold factory building 590,000 - - 590,000

1,747,558 - - 1,747,558

Accumulated depreciation:Freehold land - - - -Freehold factory building 153,400 11,800 - 165,200

153,400 11,800 - 165,200

Net carrying amount Depreciation/Amortisation

2010 2009 2009RM RM RM

Freehold land 1,157,558 1,157,558 -Freehold factory building 424,800 436,600 11,800

1,582,358 1,594,158 11,800



54



8. INVESTMENT IN SUBSIDIARY COMPANIES

Company2010 2009

RM RM

Unquoted shares - at cost 31,611,684 31,611,684

The details of the subsidiary companies are as follows:-

EffectiveName of Companies Group Interest Principal Activities

2010 2009% %

Direct subsidiary:Toyo Ink Sdn. Bhd. 100 100 Investment holding and as ink manufacturer.

Subsidiaries of Toyo Ink Sdn. Bhd.:Toyo Photo Products Sdn. Bhd. 100 100 Dealers of graphic art, films, chemicals, machineries

and equipment for lithography and allied industries.

Toyo Dai-Nichi Ink Sdn. Bhd. 60 60 Manufacturers and dealers of printing ink and otherprinting materials.

Toyo Ink (Perak) Sdn. Bhd. 100 100 Suppliers, distributors and dealers of printing ink, colour pigment, colourants for plastic and other printing materials.

Toyo Ink (Penang) Sdn. Bhd. 100 100 Suppliers, distributors and dealers of printing ink, colour pigment, colourants for plastic and other printing materials.

^Toyo Ink (Melaka) Sdn. Bhd. 100 100 Suppliers, distributors and dealers of printing ink, colour pigment, colourants for plastic and other printing materials.

#EDM-Tools (M) Sdn. Bhd. 100 100 Sales and distributions of electrical discharge machining tools.

#ELO Dunia Manufacturing 100 100 Manufacturing and fabrication of metal and graphite(M) Sdn. Bhd. parts

#INMAC EDM-Tools (M) Sdn. Bhd. 100 100 Manufacturing of EDM cut-wire.

#EDM-Tools (Penang) Sdn. Bhd. 100 100 Dealer of all kinds of engineering and aviation equipment, accessories and attachments.

#Toyo Laser Technology Sdn. Bhd. 100 100 Sales and distributions of machinery and machine parts.

*Total Young Ink Vietnam Co., Ltd. 60 60 Trading in printing ink and printing consumables.

#@Citi Ink Manufactured Joint 60 60 Manufacturer of printing inks.Venture Co., Ltd.

parts.

2010%



55



All the subsidiaries are incorporated in Malaysia except for Total Young Ink Vietnam Co., Ltd. and Citi Ink ManufacturedJoint Venture Co., Ltd. are incorporated in Vietnam.

#. Audited by other auditors.

^ Toyo Ink (Melaka) Sdn. Bhd.The financial statements of Toyo Ink (Melaka) Sdn. Bhd. are prepared on accounting principles applicable to agoing concern.

* Total Young Ink Vietnam Co., Ltd. (“TYI”)Unaudited management financial statements of this subsidiary has been used for preparation of consolidatedfinancial statements. The management have furnished the information and explanations required for the purposeof preparation of consolidated financial statements. This subsidiary, TYI is presented as a disposal group held forsale following the commitment of the Group’s management on 22 July 2009 to a proposal to divest the Group’sequity interest in TYI. Efforts to sell the disposal group have commenced and the sale is expected to materialisein the financial year 2011.

@ Citi Ink Manufactured Joint Venture Co., Ltd. (“CITI”)The auditors of CITI do not express an opinion on the financial statements due to the following matters:

i. They have not participated in the checking of cash in hand, stock inventory and fixed assets of CITI at 31December 2009 because at that time, they were not appointed as auditors for CITI. With availabledocuments at CITI, they could not check the accuracy and the existence of cash, stock and fixed assets atthat time by other alternative procedures, with the values of RM172,782 (VND 942,371,918); RM164,751(VND 898,573,553); and RM1,053,306 (VND 5,744,856,294) respectively.

ii. CITI lent Ms. Diep Thi Hai the amount RM10,267,472 (VND 56,000,000,000) without agreement andterms of payment.

iii. The factory construction finished practically and was in use for production in May 2008, but CITI has notrecorded it as fixed asset temporarily and depreciated yet. If CITI records it as fixed asset, the profit andloss account will be increased a correlative loss.

iv. For the factory construction, CITI hired contractors to design, execute and supervise the construction.About the materials, CITI purchased themselves without budgeted statement. Therefore, they did not haveenough related documents to check the material expenses if they matched with the budgeted statementor not.

v. CITI has not allocated insurance expense for factory and office, and expense for engineers who studyabroad with the amount of RM106,042 (VND 578,366,423). If those expenses were allocated, the profitand loss account will be increased a correlative loss.

vi. On November 13th, 2009 Toyo Ink Sdn. Bhd. transferred to CITI’s account with the amount of RM339,908(USD 99,973) (equivalent : VND 1,786,717,456), the accountant recorded this amount as payables to Ms.Diep Thi Hai, however, up to the date of their report issued, they have not received any documents whichinvolve to the record of the above transaction.

vii. CITI has not depreciated some tangible fixed assets and intangible fixed assets is term land use right withthe estimated amount is RM56,253 (VND 306,811,135). If CITI depreciate fixed assets in compliance withthe regulations, the profit and loss account will be increased a correlative loss.

The management of Toyo Ink Group Berhad has reviewed the financial statements of CITI. Where necessary,adjustments are made to the financial statements of CITI to ensure consistency of accounting principles andpolicies with those adopted by the Group and also furnished the information and explanations required for thepurpose of preparation of consolidated financial statements. The management do not envisage any furthersignificant adjustments that may adversely affect the financial results as presented.



56



9. INVESTMENT IN ASSOCIATE

Group2010 2009

RM RM

Unquoted shares - at cost 309,751 309,751Share of post acquisition results (35,642) (31,984)Adjustment for exchange gain arising on yearend translation of investment in foreign associate 207,274 173,427

481,383 451,194

Represented by:Share of net assets of associate 528,877 498,688Discount on acquisition (47,494) (47,494)

481,383 451,194

The details of the associate which was incorporated in Singapore are as follows:-

EffectiveName of Company Group Interest Principal Activities

2010 2009% %

Toyo Color Pte. Ltd. 50% 50% Dealers, importers and exporters of printing ink and graphite products.

The summarised financial information of the associate are as follows:

2010 2009RM RM

Assets and Liabilities:Current assets 46,912 169,567Non current assets 1,041,569 856,981Total assets 1,088,482 1,026,548

Current liabilities 30,727 29,172Non current liabilities - -Total liabilities 30,727 29,172

Results:Revenue - -Loss for the financial year (7,316) (255,246)

10. GOODWILL ON CONSOLIDATION

Group2010 2009

RM RM

At cost/carrying amount 17,496,312 17,496,312



57



For the purpose of impairment testing, goodwill has been allocated to the Group’s cash-generating units, identifiedaccording to the business segments as follows:

Group2010 2009

RM RM

Manufacturing 10,205,616 10,205,616Trading 7,290,696 7,290,696

17,496,312 17,496,312

The carrying amount of the goodwill was assessed for impairment on an annual basis. The recoverable amount of thegoodwill is determined based on the assessment of the value in use. The recoverable amount is higher than the carryingamount of the investments in the subsidiaries, and accordingly, an allowance for impairment loss is not recognised.

The recoverable amount was determined based on value-in-use calculations using cash flow projections based onfinancial budgets approved by management covering a five-year period.

The key assumptions used for each of the cash-generating unit’s value-in-use calculations areas follows:

i. Gross marginThe projected gross margin reflects the average historical gross margin, adjusted for projected market andeconomic conditions and internal resource efficiency.

ii. Growth rateGrowth rate are determined based on the industry trends and past performances of the segments.

iii. Discount rateThe discount rate used is 6% which approximates the cash-generating units’ average cost of funds.

The management is not aware of any reasonably possible change in the above key assumptions that would cause thecarrying amounts of the cash-generating units to materially exceed their recoverable amounts.

11. INVENTORIES

Group2010 2009

RM RM

At cost: 4,627,646 4,780,639Raw materials 3,740,203 6,140,268Finished goods 100,158 -Goods in transit 7,776,074 7,997,671Trading merchandise 16,244,081 18,918,578

12. TRADE RECEIVABLES

Group2010 2009

RM RM

Trade receivables 27,311,022 24,124,586Allowance for doubtful debts (1,495,575) (2,330,245)

25,815,447 21,794,341

The Group’s normal trade credit terms are 30 to 150 days. Other credit terms are assessed and approved on case bycase basis.


as follows:


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13. OTHER RECEIVABLES, PREPAYMENTS AND DEPOSITS

Group Company2010 2009 2010 2009

RM RM RM RM

Other receivables 413,155 539,854 - 60,000Prepaymentss 49,057,183 42,497,028 - 2,000Deposits 226,223 261,644 - 47,315

49,696,561 43,298,526 - 109,315

The amounts owing by other receivables of the Group and of the Company are unsecured, interest free and with nofixed term of repayments.

Included in prepayments are the following payments for the Group’s Power Plant project in Vietnam:

Group2010 2009

RM RM

Payments 48,689,504 42,206,675

On 9 April 2007, the Company entered into an in-principle Agreement with Becamex IDC Corporation for lease of apiece of land with a total area of 320,000 square meter in Thoi Hoa Industrial Park, Vietnam for the purpose of buildinga gas fired power plant for a total lease consideration of USD7,744,000.

The Ministry of Industry and Commerce of Vietnam has informed the Company there is no source of gas supply forthe development of new electric project in the South of Vietnam, and has advised the Company to implement aresearch to select other locations in the South of Vietnam, that is suitable for the development of the electric projectby using imported coal.

Further to this advice, on 31 October 2007, the Company and Becamex IDC Corporation mutually agreed to terminatethe in-principle Agreement dated 9 April 2007 and lease payments for the land were refunded to the Company inDecember 2007.

On 9 May 2008, the Company entered into a Memorandum of Understanding with Power Engineering Consulting JointStock Company 2 to develop and expand a framework of cooperation with each other in the interest of fulfillingstrategic plans on thermal power projects in the South of Vietnam.

On 28 December 2009, the Company was called for a meeting in Vietnam to make a presentation to the Vietnameseauthorities on the proposed investment project of building a coal-fired thermo-electric plant in Duyen Hai 3, Tra VinhProvince, Vietnam. The leaders of Tra Vinh Province, Vietnam, have made proposals to the Vietnamese Ministry ofIndustry and Trade, Office of the Government and Vietnam Electricity Board for the Company to invest in Duyen Hai3 Thermo-electric plant.

The Company is working with Power Engineering Consulting Joint Stock Company 2 to identify suitable land in DuyenHai 3, Tra Vinh Province, Vietnam for the proposed power plant with capacity of 2 x 1,000MW.

On 19 January 2010, the Company entered into an Agreement with CTTE Consultancy & Training Co., Ltd. (“CTTE”)to appoint CTTE as the consultant to provide services pertaining to the preparation of preliminary investment reportfor the 2000MW Duyen Hai 3 Coal-Fired Power Project.

The Company is now awaiting approval from the Vietnamese Government.



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14. AMOUNT OWING BY A SUBSIDIARY COMPANY

Company2010 2009

RM RM

Amount owing by a subsidiary company:Toyo Ink Sdn. Bhd.- trade 210,000 220,000- non trade 15,097,942 17,193,066

15,307,942 17,413,066

The trade terms are as stated in Note 12.

The non trade amount owing by subsidiary company is unsecured, interest free and with no fixed term of repayment.

15. DISPOSAL GROUP HELD FOR SALE

The Group’s subsidiary, Total Young Ink Vietnam Co., Ltd., (“TYI”) a company incorporated in Vietnam is presented as adisposal group held for sale following the commitment of the Group’s management on 22 July 2009 to a proposal todivest the Group’s equity interest in TYI. Efforts to sell the disposal group have commenced and the sale is expectedto materialise in the financial year 2011. As at 31 March 2010, the assets and liabilities of the disposal group are asfollows:

Group2010

Note RM

Assets classified as held for saleProperty, plant and equipment 15a 653,899Prepaid lease payments 15b 771,474Inventories 15c 1,055,646Receivables 15d 332,431Cash and bank balances 1,727,957

4,541,407

Liabilities classified as held for saleTaxation 36,128

Note15a. Property, plant and equipment held for sale comprise the followings:

Cost 1,459,792Accumulated depreciation/amortisation 805,893

653,899

15b. Prepaid lease payments held for sale comprise the followings:Cost 1,268,177Accumulated amortisation 496,703

771,474

15c. The inventories held for sale comprise finished goods and are stated at cost.

15d. Receivables are stated at cost.

16. TRADE PAYABLES

The normal trade credit terms granted to the Group are 60 to 150 days.



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17. OTHER PAYABLES, ACCRUALS AND DEPOSITS

Group Company2010 2009 2010 2009

RM RM RM RM

Other payables 34,517,386 34,009,063 - 19,460Accruals 1,845,780 1,420,791 205,529 212,267Deposits 19,350 17,550 - -

36,382,516 35,447,404 205,529 231,727

Included in other payables are the following advances received for the Group’s Power Plant project in Vietnam, asdisclosed in Note 13:

Group2010 2009

RM RM

Advances received 34,197,600 31,097,600

The amounts owing to other payables of the Group and of the Company are unsecured, interest free and with no fixedterm of repayment.

18. AMOUNT OWING TO DIRECTORS

The amount owing to directors is unsecured, interest free and with no fixed term of repayment.

19. HIRE PURCHASE CREDITORS

Group2010 2009

RM RM

Minimum hire purchase payments:Not later than 1 financial year. 1,079,159 584,102Later than 1 financial year and not later than 5 financial years 1,233,128 861,986

2,312,287 1,446,088Less: Future interest charges 146,807 110,119Present value of hire purchase liabilities 2,165,480 1,335,969

Repayable as follows: Current – not later than 1 financial year 981,196 516,777Non-current – later than 1 financial year and not later than 5 financial years 1,184,284 819,192

2,165,480 1,335,969

Interest rate per annum (%) 2.77-3.75 2.77-3.75

20. BANK BORROWINGS

Group Company2010 2009 2010 2009

RM RM RM RM

Repayable within 12 months: -Unsecured - - - - -Trust receipts - 45,654 - -Bankers’ acceptances 12,347,000 10,183,000 - -Bank overdrafts 3,700,382 5,398,041 - -Term loan - 2,000,000 - 2,000,000

16,047,382 17,626,695 - 2,000,000



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Secured -Bills payable 4,938,000 3,930,000 - -Bankers’ acceptances 2,495,504 1,009,000 - -Bank overdrafts 6,107,406 4,335,778 - -Term loans 2,651,971 2,639,435 - -

16,192,881 11,914,213 - -32,240,263 29,540,908 - 2,000,000

Repayable after 12 months:Term loans - secured 1,473,608 4,127,485 - -

33,713,871 33,668,393 - 2,000,000

The bank borrowings bear interest ranging from 1.25 to 1.75 (2009: 1.00 to 1.75) percent per annum above base lendingrates and are secured as follows:-

a. Charges over the freehold and leasehold land and buildings of the subsidiary companies.b. Negative pledge by a subsidiary company.c. Execution of the General Security Agreement Relating to Goods.d. Debentures over all the property, plant and equipment of a subsidiary both present and future.e. Charge on the ordinary share of RM1 each in the share capital of certain subsidiary companies by way of

Memorandum of Deposit of Shares and a Power of Attorney.f. Corporate guarantee of the Company for the subsidiary companies.

21. SHARE CAPITAL

Ordinary shares of RM1 each:

2010 2009No. of No . of

Ordinary OrdinaryShares RM Shares RM

Authorised 50,000,000 50,000,000 50,000,000 50,000,000

Issued and fully paid:At 1 April 42,800,000 42,800,000 40,000,000 40,000,000Issued during the financial year - - 2,800,000 2,800,000At 31 March 42,800,000 42,800,000 42,800,000 42,800,000

22. RESERVES

Group Company2010 2009 2010 2009

Note RM RM RM RM

Non-distributable:Share premium 21a 4,320,938 4,320,938 4,320,938 4,320,938Translation reserve 21b (235,773) 470,701 - -

4,085,165 4,791,639 4,320,938 4,320,938

Distributable:Retained earnings/(Accumulated loss) 14,027,183 10,012,213 (278,071) (141,098)

18,112,348 14,803,852 4,042,867 4,179,840

Non distributable reserves are not distributable by way of dividends.



62



Movements of the reserves are shown in the statements of changes in equity.

Note21a. Share premium represents premium from allotment of shares by the Company net of listing expenses. 21b. Translation reserve represents all foreign exchange differences arising from translation of investment in foreign

subsidiary companies and associate

23. MINORITY INTERESTS.

This consists of the minority shareholders’ proportion of share capital and reserves of subsidiaries, net of their sharesof subsidiary’s goodwill and negative goodwill on consolidation and impairment of goodwill if any, charged to theminority shareholders.

24. DEFERRED TAX LIABILITIES

Group2010 2009

RM RM

At 1 April: 1,724,280 1,783,110Transfer from/(to) income statements. 364,579 (132,970)Deferred tax relating to revaluation of property (13,428) 74,140At 31 March 2,075,431 1,724,280

The components of deferred tax liabilities at the end of the financial year comprise tax effect of:

Group2010 2009

RM RM

Excess of capital allowance over corresponding depreciation 1,219,304 988,261Revaluation reserve 865,930 879,358Unabsorbed capital allowances (4,682) (14,734)Other deductible temporary differences (11,301) (128,605)Deferred tax assets not recognised 6,180 -

2,075,431 1,724,280

With effect from the year of assessment 2009, corporate tax rate is at 25% according to the Malaysian Budget 2009.Consequently, deferred tax liabilities are measured using this tax rate.

25. REVENUE

Group Company 2010 2009 2010 2009

Note RM RM RM RM

Continuing operationsSales of goods 93,604,589 104,006,654 - -Management fee - - 240,000 240,000

93,604,589 104,006,654 240,000 240,000

Discontinued operation - -Sales of goods 28 1,258,023 - - -

94,862,612 104,006,654 240,000 240,000



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26. PROFIT/(LOSS) BEFORE TAXATION

Profit/(Loss) before taxation is arrived at:

Group Company 2010 2009 2010 2009

RM RM RM RMAfter charging:Auditors’ remuneration- statutory- current financial year 116,500 111,000 16,000 16,000- overstated in prior financial year (1,500) - - -

- non statutory 4,900 28,148 - 500Rental of premises 275,603 224,661 - -Amortisation of prepaid lease payments 260,824 273,759 - -Depreciation of investment property 16,000 16,000 - -Depreciation and amortisation ofproperty, plant and equipment 2,941,826 3,090,178 - -Hire of machinery 37,711 200 - -Interest expense 1,798,286 2,522,264 - -Allowance for doubtful debts 209,121 1,144,617 - -Loss on foreign exchange - realised 17,335 333,054 - -Management fee 441,763 534,240 - -Plant and equipment written off 29,838 1,068 - -Bad debt written off 182,505 - - -Staff and labour costs 11,616,482 12,556,943 87,500 87,500

And crediting:Bad debts recovered 20,911 33,138 - -Reversal of allowance for doubtful debts 1,043,791 8,315 - -Gain on foreign exchange - realised 359,604 91,111 - -Gain on disposal of property, plant andequipment 816 38,462 - -Grant received 249,507 36,967 - -Interest income 1,513 5,572 - -Rental income 304,480 252,000 - -Royalties received 20,000 20,000 - -Profit guarantee from vendors of subsidiaries 3,575,588 - - -

Staff and labour costs comprise: -Directors’ remuneration 2,064,834 2,225,282 87,500 87,500Salaries, wages, allowance, overtime - -and bonus 8,410,920 9,021,575 - -Social security costs 117,895 97,099 - -Pension cost (defined contribution plan) 1,022,833 1,212,987 - -

11,616,482 12,556,943 87,500 87,500

Included in staff and labour costs is: -Directors’ remuneration- fees 313,500 293,090 87,500 87,500- salaries and other emoluments 1,751,334 1,932,192 - -- social security costs 1,860 1,860 - -- pension costs (defined contribution plan) 227,488 272,336 - -

2,294,182 2,499,478 87,500 87,500



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27. TAXATION

Group Company 2010 2009 2010 2009

RM RM RM RM

Provision for taxation for the financial year- Malaysia (2,353,200) (996,732) (18,000) (20,000)Over/(Under)provision of Malaysianincome tax in prior financial years 122,238 (35,181) (10,145) -Deferred tax (expense)/income relating toorigination and reversal of temporary differences (364,579) 132,970 - -Crystallisation of deferred tax resulting from revaluation of property 13,428 (74,140) - -

(2,582,113) (973,083) (28,145) (20,000)Share of taxation in associated company - - - -

Tax expense for the financial year (2,582,113) (973,083) (28,145) (20,000)

The numerical reconciliation between profit/(loss) before taxation at the statutory income taxrate to income tax expense at the effective income tax rate of the Group and of the Companyare as follows:

Group Company 2010 2009 2010 2009

RM RM RM RM

Profit/(Loss) before taxation excludingshare of results in associate 6,085,400 (929,328) (108,828) (127,560)

Taxation at Malaysian statutory tax rate (1,521,350) 232,332 27,207 31,890

Tax effects in respect of: -Double deduction of expenses - 1,171 - -Depreciation and amortisation on nonqualifying property, plant and equipment,prepaid lease payments and investmentproperty (355,040) (348,831) - -Non allowable expenses (960,830) (691,706) (43,777) (57,376)Over/(Under)provision of Malaysianincome tax in prior financial years 122,238 (35,181) (10,145) -Deferred tax assets not recognised during thefinancial year 129,764 (939) - -(Under)/Over provision of deferred tax inprior financial years (26,395) 109,529 - -Crystallisation of deferred taxresulting from revaluation of property 13,428 (74,140) - -Tax exempt income under pioneer status - 106,981 - -Effect of tax on foreign jurisdiction (143,444) (304,018) - -Income not subject to income tax 239,841 1,265 - -Others (80,325) 30,454 (1,430) 5,486Tax expense for the financial year excludingshare of taxation in associated company (2,582,113) (973,083) (28,145) (20,000)



65



28. DISCONTINUED OPERATION

As stated in Note 15, the Group has decided to dispose of its foreign subsidiary Total Young Ink Vietnam Co., Ltd.. Asat the end of the financial year, the results from this subsidiary is presented separately on the consolidated incomestatements as discontinued operation.

Group 2010

Note RMResults of discontinued operationRevenue 25 1,258,023Expenses 1,533,393)Loss before taxation (275,370)Taxation -Loss for the financial year (275,370)

Included in loss before taxation are:Amortisation of prepaid lease payments 128,683Depreciation/Amortisation of property, plant and equipment 130,063Staff and labour cost 407,457

Cash flows from/(used in) discontinued operationNet cash from operating activities 87,680Net cash used in investing activities (3,203,714)Net cash from financing activities -Net cash flows (3,116,034)

29. EARNINGS/(LOSS) PER ORDINARY SHARE

The basic earnings/(loss) per ordinary share is calculated by dividing the Group’s profit/(loss) attributable to ordinaryshareholders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

Group 2010 2009

RM RMProfit/(loss) attributable to ordinary shareholdersContinuing operations 4,180,192 (1,074,436)Discontinued operation (165,222) -

4,014,970 (1,074,436)

Group 2010 2009

Weighted average number of ordinary shareWeighted average number of ordinary share 42,800,000 40,233,333

Group 2010 2009

sen senBasic earnings/(loss) per ordinary shareContinuing operations 9.77 (2 67)Discontinued operation (0.39) -

9.38 (2.67)

The Company does not have any dilutive potential ordinary shares. Accordingly, the diluted earnings/(loss) per ordinaryshare is not presented.



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30. DIVIDENDS

The Directors of the Company do not recommend any dividend in respect of the financial year ended 31 March 2010(2009: nil).

31. NOTE TO CASH FLOW STATEMENTS

Group 2010 2009

RM RMPurchase of Property, Plant and Equipment

Mode of payments: 1,490,298 595,000Hire purchase 522,407 3,780,319Cash 2,012,705 4,375,319

32. SECTION 108 TAX CREDIT AND TAX EXEMPT INCOME ACCOUNT

At 31 March 2010, the Group’s and the Company’s tax credit under Section 108 of the Income Tax Act, 1967 and taxexempt income account under Income Tax Act (Amendment) 1999 to be utilised to frank the payment of dividend outof its distributable profit; subject to the approval of the tax authorities are as follows:

Group Company 2010 2009 2010 2009

RM RM RM RM

Section 108 Tax Credit 20,148,826 21,032,500 - -Tax Exempt Income Account 247,586 227,000 - -

The Malaysian Budget 2008 introduced a single tier company income tax system with effect from year of assessment2008. As such, the Section 108 tax credit as at 31 March 2010 will be available to the Group and to the Company untilsuch time the credit is fully utilised or upon expiry of the six year transitional period on 31 December 2013 whicheveris earlier.

33. SIGNIFICANT RELATED PARTIES TRANSACTIONS

Identity of Related Parties

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has theability, directly or indirectly, to control the party or exercise significant influence over the party in making of financialand operating decisions, or vice versa, or where the Group and the party are subject to common control or commonsignificant influence. Related parties may be individuals or other entities.

The Group has related party relationships with the following parties:

Subsidiaries (refer Note 8)Associate (refer Note 9)

In the normal course of business, the Group undertakes transactions with certain of its related parties listed above.Significant transactions with related parties other than those disclosed elsewhere in the financial statements are asfollows:




67


Group Company 2010 2009 2010 2009

RM RM RM RM

Sales to a related party in which certain Directors of the Company have substantial financial interests:Toyo Ink Pte. Ltd. 6,480 5,702 - -

Management fee received from subsidiary company:Toyo Ink Sdn. Bhd.. - - 240,000 240,000

The Directors of the Group and of the Company are of the opinion that the above transactions have been enteredinto in the ordinary course of business and have been established under terms that are no less favourable than thosearranged with independent third parties.

34. CONTINGENT LIABILITIESCompany

2010 2009RM RM

Corporate guarantee for banking facilities extended to subsidiary companies- unsecured 73,915,000 71,415,000

35. MATERIAL LITIGATIONS

a. Civil Suit: D5-22-517-2004 (Writ of Summons against E-Toyo Global Stationery Sdn. Bhd. (“ETGS”)

The Writ of Summons was issued on 22 April 2004 and served by Toyo Ink Sdn. Bhd. (“TISB”), a subsidiary companyof the Company to ETGS on 10 May 2004. TISB holds the registered trademark “Toyo” for use of stationeryproducts. TISB has filed an action on ETGS for infringement of its trademark “Toyo”. There is no amount claimedfor under the Writ of Summons except for the claim that all costs of the application to be borne by ETGS.

The Directors of the Group are of the opinion that the financial impact on the Group’s operations arising from theabove Writ of Summons against ETGS is expected to be minimal as TISB receives royalty of RM20,000 per annum only for the use of its trademark “Toyo” on stationery products.

Court decision has been given in favour of TISB on 19 February 2010 and the case is now closed.

b. Originating Motion No. D5-21-29-04 between ETGS (Applicant) vs (i)TISB (ii)Popular Mate Sdn.Bhd. (Respondents) and Registrar of Trade Marks (Interested Party)

The Originating Motion was served on TISB on 23 April 2004. ETGS has requested the Court to expunge TISB’sright of use of the trademark “Toyo” for stationery products due to non-usage of the trademark for some years.There is no amount claimed for under the Originating Motion except for the claim that all costs of application to be borne by TISB. The case has been dismissed with cost but ETGS had appealed against the decision.

The Directors of the Group are of the opinion that the Group will not suffer any material loss arising from theabove Originating Motion.

A decision has been made by the Court of Appeal in favour of TISB on 11 November 2009 and the case is nowclosed.

c. Civil Suite: D5-22-577-2004 (Writ of Summons against Parkson Corporation Sdn. Bhd. (“Parkson")

The Writ of Summons was issued on 6 May 2004 and served by TISB to Parkson on 19 May 2004. This suit is raisedto ensure that Parkson does not carry stationery products with the logo “Toyo” which is a trademark belonging to TISB. There is no amount claimed for under the Writ of Summons except for the claim that all costs of theapplication to be borne by Parkson.




The Directors of the Group do not foresee any operational impact or material losses arising from this Writ ofSummons against Parkson.

Court decision has been given in favour of TISB on 19 February 2010 and the case is now closed.

36. SEGMENTAL INFORMATION

Segment information is presented in respect of the Group’s business and geographical segments. The primary format,business segments, is based on the Group’s management and internal reporting structure.

The Group has restated segment results in prior financial years relating to discontinued operation which has beenclassified as discontinued operation as at 31 March 2010.

Business SegmentsThe Group is organised into 2 major segments:a. Manufacturingb. Trading and investment holding

The Directors of the Group are of the opinion that all inter-segment transactions have been entered into in theordinary course of business and have been established under terms that are no less favourable than those arrangedwith independent third parties.

2010Trading

andinvestment Discontinued

Manufacturing holding operation Elimination ConsolidatedRM RM RM RM RM

RevenueExternal 57,094,230 36,510,359 1,258,023 - 94,862,612Inter-segment 25,435,045 4,133,788 1,167,439 (30,736,272) -Total revenue 82,529,275 40,644,147 2,425,462 (30,736,272) 94,862,612ResultsSegment results 3,743,988 4,660,439 (275,355) (108,828) 8,020,244Finance costs (2,091,040) (545,156) (15) 701,367 (1,934,844)Share of resultsin associate - (3,658) - - (3,658)Taxation (2,582,113)Minority interests 515,341Net profit for thefinancial year 4,014,970OtherInformationSegment assets 102,123,984 32,295,457 4,541,407 - 138,960,848Associate 481,383Unallocatedcorporate assets 18,218,765Consolidated totalassets 157,660,996

Segment liabilities 49,770,666 2,224,211 - - 51,994,877Unallocated corporate liabilities 38,218,085Consolidated totalliabilitiesl 90,212,962

Capital expenditure 1,975,133 34,941 2,631 - 2,012,705Depreciation/amortisation 2,631,392 332,816 258,746 (4,304) 3,218,650Non cash expenditure 205,077 216,387 - - 421,464

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69


2009(restated)

Tradingand

investment DiscontinuedManufacturing holding operation Elimination Consolidated

RM RM RM RM RM

RevenueExternal 57,447,625 44,452,145 2,106,884 - 104,006,654Inter-segment 25,272,868 6,404,634 1,457,184 (33,134,686) -Total revenue 82,720,493 50,856,779 3,564,068 (33,134,686) 104,006,654ResultsSegment results 1,073,815 957,913 (254,917) - 1,776,811Finance costs (2,380,986) (703,468) - 378,315 (2,706,139)Share of resultsin associate - (127,623) - (127,623)Taxation (973,083)Minority interests 955,598Net loss for thefinancial year (1,074,436)Other InformationSegment results 96,129,556 28,819,167 4,285,380 - 129,234,103Associate 451,194Unallocated corporate assets 19,492,698Consolidated totalassets 149,177,995

Segment liabilities 45,345,406 2,389,062 - - 47,734,468Unallocatedcorporate liabilitiess 36,874,226Consolidated totalliabilities 84,608,694

Capital expenditure 4,268,548 99,206 7,566 (1) 4,375,319Depreciation/amortisation 2,650,746 359,064 366,427 3,700 3,379,937Non cashexpenditure 253,703 891,982 - - 1,145,685

Geographical SegmentsThe Group operates in two principal geographical areas, Malaysia and Vietnam. In Malaysia, the Group’s areas ofoperation are mainly production and sale of products. In Vietnam, the Group’s area of operation is mainly sale ofproducts.

Revenue from externalcustomers by location of Segment assets by Capital expenditure by

customers location of assets location of assets2010 2009 2010 2009 2010 2009

(restated) (restated) (restated)RM RM RM RM RM RM

Continuing operationsMalaysia 93,604,589 100,053,134 127,504,819 116,280,631 2,008,343 1,055,333Vietnam - 1,846,636 7,396,005 9,119,286 1,731 3,312,420Discontinued operationVietnam 1,258,023 2,106,884 4,541,407 4,285,380 2,631 7,566

94,862,612 104,006,654 139,442,231 129,685,297 2,012,705 4,375,319




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37. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

a. On 28 December 2009, the Company was called for a meeting in Vietnam to make a presentation to the Vietnameseauthorities on the proposed investment project of building a coal-fired thermo-electric plant in Duyen Hai 3, Tra VinhProvince, Vietnam. The leaders of Tra Vinh Province, Vietnam, have made proposals to the Vietnamese Ministry ofIndustry and Trade, Office of the Government and Vietnam Electricity Board for the Company to invest in Duyen Hai3 Thermo-electric plant.

On 19 January 2010, the Company entered into an Agreement with CTTE Consultancy & Training Co., Ltd. (“CTTE”)to appoint CTTE as the consultant to provide services pertaining to the preparation of preliminary investment reportfor the 2000MW Duyen Hai 3 Coal-Fired Power Project.

b. On 24 March 2008, the Company had announced a proposed private placement of new ordinary shares of RM1.00each in Toyo Ink Group Berhad (“TIGB”) representing not more than ten percent (10%) of the issued and paid-upshare capital of TIGB. The proposals had been approved by the Securities Commission and Ministry of InternationalTrade and Industry, Malaysia. On 19 September 2008, the Company had further announced that the SecuritiesCommission had via its letter dated 18 September 2008 granted approval to the Company’s application for anextension of time for a further six (6) months until 23 March 2009 to complete the Private Placement.

On 4 March 2009, the issued and fully paid share capital of the Company was increased from RM40,000,000 dividedinto 40,000,000 ordinary shares of RM1 each to RM42,800,000 divided into 42,800,000 ordinary shares of RM1 eachby way of allotment of 2,800,000 new ordinary shares of RM1.00 each at an issue price of RM1.48 per shares to anon-bumiputra placee. The balance of 1,200,000 ordinary shares, being the bumiputra portion, was not taken up.

The Company had subsequently applied to the Securities Commission for an extension of time for a further 6 monthsto complete the Private Placement exercise, which application was approved on 16 March 2009. The Private Placementwas extended to be completed by 23 September 2009.

The Company had been notified by the Securities Commission on 3 August 2009 that the above requirement of thebumiputra portion was no longer applicable. The remaining 1,200,000 ordinary shares from the private placementwere however not taken up and the approval for completion of the private placement lapsed on 23 September 2009.

c. During the financial year, Toyo Ink Sdn. Bhd., a wholly owned subsidiary of the Company increase its investment in its60% owned subsidiary, Citi Ink Manufactured Joint Venture Co., Ltd., a company incorporated in Vietnam, for a totalconsideration of RM698,489. The increase of investment in the subsidiary company does not increase the Group’seffective equity interest.

38. FINANCIAL INSTRUMENTS

Financial Risk Management Objectives And PoliciesThe Group’s financial risk management policy seeks to ensure that adequate financial resources are available for thedevelopment of the Group’s business whilst managing its risks. The Group operates within clearly defined guidelines andthe Group’s policy is not to engage in speculative transactions.

Interest rate riskThe Group is exposed to interest rate risk through the impact of rate changes on interest-earning financial assets andinterest-bearing financial liabilities.

The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. TheGroup actively reviews its debt portfolio, taking into account the level and nature of borrowings. This strategy allows itto capitalise on cheaper funding in a low interest rate environment and achieve a certain level of protection against ratehikes.

Effective interest rates and repricing analysisIn respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates theiraverage effective interest rates at the balance sheet date and the financial periods in which they mature, or if earlier,reprice.




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Effective 2010 Effective 2009interest interestrate per Within 1 rate per Within 1

annum Total year annum Total year% RM RM % RM RM

Group

Financial assets:Fixed deposits withlicensed banks 1.89 16,493 16,493 2.89 116,263 116,263

Financial liabilities:Trust receipts - - - 5.38 45,654 45,654Bankers’ acceptances 3.85 14,482,504 14,482,504 6.08 11,192,000 11,192,000Bills payable 3.88 4,938,000 4,938,000 5.89 3,930,000 3,930,000Bank overdrafts 6.08 9,807,788 9,807,788 5.66 9,733,819 9,733,819Term loans 5.64 4,125,579 4,125,579 4.89 8,766,920 8,766,920

Company

Financial liabilities:Term loan - - - 4.66 2,000,000 2,000,000

Foreign currency riskThe Group is exposed to foreign currency risk as a result of its normal course of business where the currency denominationdiffers from the local currency, Ringgit Malaysia (RM).

The Group has overseas subsidiaries which operate in Vietnam, and revenues and expenses therewith are denominatedexclusively in US Dollar.

The Group minimises the exposure of the overseas operating subsidiaries to transaction risk by matching local currencyrevenue against local currency costs.

The financial assets and liabilities of the Group as at 31 March 2010 that are not denominatedin its functional currency (Ringgit Malaysia) are as follows:

Singapore Swiss JapaneseCurrency Equivalent US Dollar Dollar Franc Yen Euro Total

RM RM RM RM RM RM

The GroupTrade receivables 571,654 39,088 - - 352,246 962,988Cash and bank balances 137,902 101,263 - - 1,017 240,182Trade payables (3,289,039) - (298,381) (146,870) (343,884) (4,078,174)

Liquidity riskThe Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensurethat all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Groupmaintains sufficient levels of cash and cash equivalents to meet its working capital requirements. In addition, the Groupstrives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible, theGroup raises committed funding from financial institutions and prudently balances its portfolio with some short termfunding so as to achieve overall cost effectiveness.

Credit riskCredit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits andmonitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group’s associations tobusiness partners with high creditworthiness. Trade receivables are monitored on an ongoing basis via the Group’smanagement reporting procedures.




72


As at 31 March 2010, certain trade receivables of the Group have exceeded its normal trade credit terms. However,the Group does not anticipate the carrying amounts recorded at the balance sheet date to be significantly different fromthe values that will eventually be received.

The Group does not have any significant exposure to any individual customer or counter party nor does it have anymajor concentration of credit risk related to any financial instruments.

The maximum credit risk associated with recognised financial assets is the carrying amount shown in the balance sheet.

Market riskThe Group’s principal exposure to market risk arises mainly from changes in prices of raw material supplies. The Groupdoes not use derivative instruments to manage these risks.

Fair valuesAll financial assets and financial liabilities are carried at the amounts approximating their fair values on the balance sheetof the Group and the Group does not anticipate the carrying amounts recorded at the balance sheet date to besignificantly different from the values that would eventually be received or settled.

The following methods and assumptions are used to estimate the fair values of the following classes of financialinstruments:

a. Deposits, cash and cash equivalents, trade and other receivables/payablesThe carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments.

b. Related company balancesIt is not practical to estimate the fair values of the amount owing by subsidiary company due principally to a lack offixed repayment term entered by the parties involved and without incurring excessive costs. However, the Groupdoes not anticipate the carrying amounts recorded at the balance sheet date to be significantly different from thevalues that would eventually be received.

c. BorrowingsThe carrying amounts of short term borrowings approximate fair value because of the short period to maturity ofthese financial instruments. The fair value of long term borrowings is estimated based on the current rates availablefor borrowings with the same maturity profile.

39. COMPARATIVE FIGURES

The following comparative figures have been reclassified to conform with current financial year’s presentation.

GroupAs previously

As restated StatedRM RM

Balance sheetOther receivables, prepayments and deposits 43,298,526 12,200,926Other payables, accruals and deposits 35,447,404 4,349,804




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ANALYSIS OF SHAREHOLDINGS as at 11 August 2010

SHARE CAPITAL

Authorised Share Capital : RM50,000,000/-Issued and fully paid-up capital : RM42,800,000/-Class of Shares : Ordinary Shares of RM1/- EachVoting Rights : 1 vote per shareNo. of Shareholders : 1,056

ANALYSIS BY SIZE OF SHAREHOLDINGS

Size of shareholdings No. of No. ofshareholders % shares held %

Less than 100 7 0.66 190 0.00

100 to 1,000 352 33.33 193,152 0.45

1,001 to 10,000 469 44.42 2,271,363 5.30

10,001 to 100,000 179 16.95 5,960,686 13.93

100,001 and below 5% of issued shares 44 4.17 16,886,918 39.46

5% and above of issued shares 5 0.47 17,487,691 40.86

TOTAL 1,056 100.00 42,800,000 100.00

LIST OF THIRTY LARGEST SHAREHOLDERS

No. Name No. Of Shares Held %

1. Lim Guan Lee 4,396,281 10.27

2. Eng Lian Enterprise Sdn. Bhd. 3,891,410 9.09

3. Kenanga Nominees (Tempatan) Sdn. Bhd.[Beneficiary:Kenanga Capital Sdn. Bhd. for Ng Chong You] 3,500,000 8.18

4. Amsec Nominees (Tempatan) Sdn. Bhd.[Beneficiary:Pledged Securities Account– Ambank (M) Berhad for Song Kok Cheong] 3,000,000 7.01

5. Bukit Asa Sdn. Bhd. 2,700,000 6.31

6. Kok Sow May 1,823,409 4.26

7. Kenanga Nominees (Tempatan) Sdn. Bhd. [Beneficiary:Kenanga Capital Sdn. Bhd. forKok Sau Lan @ Kwok Sow Lan] 1,500,000 3.50

8. Kenanga Nominees (Tempatan) Sdn. Bhd.[Beneficiary:Kenanga Capital Sdn. Bhd. for Kwok Sow Yoong] 1,500,000 3.50

9. Kok Sau Lan @ Kwok Sow Lan 1,177,173 2.75

10. Kwok Sow Yoong 1,050,429 2.45

11. Kwok Hon Wun 750,257 1.75



74


No. Name No. Of Shares Held %

12. Cheah Chee Meng @ Cheah Seak Tong 680,656 1.59

13. Foo Fong Lee 663,300 1.55

14. Fong Po Yin 642,826 1.50

15. HLG Nominee (Tempatan) Sdn. Bhd.[Beneficiary: pledged securities account forExpo HoldingsSdn. Bhd.] 637,300 1.49

16. Song Kok Cheong 341,125 0.80

17. MERSEC Nominees (Tempatan) Sdn. Bhd.[Beneficiary: pledged securities account forNg Thiam Seong] 334,900 0.78

18. Diep Thi Hai 331,100 0.77

19. Tan Yee Koh @ Tan Yee Khoo 300,000 0.70

20. Ng Chong You 294,743 0.69

21. TA Nominees (Tempatan) Sdn. Bhd.[Beneficiary:pledged securities account for Tan Yu Wei] 280,000 0.65

22. Chan Pooi Chuen 266,800 0.62

23. Chew Cheong Loong 238,000 0.56

24. Mayban Nominees (Tempatan) Sdn. Bhd.[Beneficiary: pledged securities account for Ng Siyu Lian] 216,400 0.51

25. Ting Buoi Ho 213,500 0.50

26. Fong Yuet Peng 212,000 0.50

27. HLG Nominee (Tempatan) Sdn. Bhd.[Beneficiary: pledged securities account forTan Yee Koh @Tan Yee Khoo] 208,500 0.49

28. Mayban Securities Nominees (Tempatan) Sdn. Bhd.[Beneficiary:pledged securities account forNg Loo Soon(RF1-Margin] 204,000 0.48

29. Mayban Securities Nominees (Tempatan) Sdn. Bhd.[Beneficiary: Pledged securities account forIsmail @ Mustapha bin Ibrahim (Rem 167)] 204,000 0.47

30. Ngo Hea Bing 200,000 0.47

31,754,109 74.19




75



SUBSTANTIAL SHAREHOLDERS(As shown in the Register of Substantial Shareholders)

No. of Ordinary Shares of RM1/- EachName of Substantial Shareholders

Direct % Indirect %

1. Lim Guan Lee 4,579,281 10.70 - -

2. Song Kok Cheong 3,449,525 8.06 782,836 1.83

3. Fong Po Yin 742,826 1.74 3,489,525 8.15

4. Ng Chong You 3,838,743 8.97 46,000 0.11

5. Ling Ha Kee 46,000 0.11 3,838,743 8.97

6. Kok Sau Lan @ Kwok Sow Lan 2,677,173 6.26 - -

7. Kwok Sow Yoong 2,550,429 5.96 2,700,000 6.31

8. Eng Lian Enterprise Sdn. Bhd. 3,891,410 9.09 2,700,000 6.31

9. Ng Eng Hiam Plantations Sdn. Bhd. - - 2,700,000 6.31

10. Ng Ling Li 100,000 0.23 2,700,000 9.73

11. Bukit Asa Sdn. Bhd. 2,700,000 6.31 - -

12. Lu Pat Sdn. Bhd. - - 6,591,410 15.40

13. The Nehsons Trust Company Berhad - - 6,591,410 15.40

STATEMENT OF DIRECTORS’ SHAREHOLDINGS

No. of Ordinary Shares of RM1/- EachDirectors’ Name

Direct % Indirect %

1. Tuan Hj. Ir. Yusoff bin Daud 90,964 0.21 - -

2. Song Kok Cheong 3,449,525 8.06 782,826 1.83

3. Ng Chong You 3,838,743 8.97 46,000 0.11

4. Lim Guan Lee 4,579,281 10.70 - -

5. Tham Kut Cheong - - - -

6. You Tong Lioung @ Yew Tong Leong - - - -

7. Lim Kee Min - - - -(alternate director to Lim Guan Lee)



76


LIST OF PROPERTIES as at 31 MARCH 2010

Property Description/ Approximate Tenure Land Area Built-up Net Book Date of Existing Use Age of (Sq / ft) Area Value as at Acquisition*/

Building (Sq / ft) 31/3/10 Valuation**(RM)

Lot No. 376, One (1) unit of 27 years 87 years 7,561 4,890 1,224,194 23 Sept 2002**Section 32, Bandar Industrial building leaseholdPetaling Jaya, District with a two (2) storey expiring on 23 rdof Petaling, State of office and single May 2065Selangor storey factory annexe

PT No. 3477, Mukim Industrial building 6 years 99 years 119,113 78,792 12,001,165 10 Sept 2002**of Petaling, Distrcit of with a three (3) leasehold Petaling, State of storey office and interestsSelangor single storey expiring on 10th

factory annexe January 2089

Lot No. 64200 1 1/2 storey 15 years Freehold 3,091 2,400 439,200 27 Aug 2002**Mukim of Tebrau terrace District of Johor Bahru. industrial State of Johor building

Lot No. 64199 1 1/2 storey 15 years Freehold 3,091 2,400 396,596 23 July 2003*Mukim of Tebrau terrace District of Johor Bahru. industrial State of Johor building

Lot No. 57765, Mukim Two (2) storey 30 years 99 years 1,680 3,000 163,421 22 Aug 2002**of Hulu Kinta, District terrace leasehold interestsof Kinta, State of shophouse expiring onPerak 9th January 2079

Lot No. 013814 Industrial building 30 years Freehold 11,300 9,480 1,688,000 17 Sept 2002**(PT 9407) Mukim of with a two (2) storeyDamansara, District office and singleof Petaling, State of storey singleSelangor factory annexe

L.O. 7/65/Sub-Jacket/ Semi-detached 35 years 90 years 24,590 13,704 1,870,312 17 Sept 2002**21/Ind Industrial building with leaseholdMukim of Damansara a two (2) storey office interestsDistrct of Klang and single storey expiring on 16 thState of Selangor single factory annexe January 2067

Lot Nos. 212808 & Two (2) adjoining 14 years 90 years 4,500 and 3,010 and 237,530 and 22 Aug 2002**212809, units of 1 1/2 storey leasehold 4,500 3,010 237,530 Mukim of Hulu Kinta semi-detached interestsDistrict of kinta industrial building expiring on 3rdState of Perak May 2084

Lot Nos. 2788 and 2789, Two (2) 16 years 99 years 2,250 and 2,850 and 311,364 and 22 Aug 2002**Bandar Butterworth adjoining units leasehold 2,250 2,850 311,364Seksyen 3, District of of 1 1/2 storey interestsPerai Utara, State of terrace industrial expiring on 3rdPulau Pinang buildings May 2069

Lot No. 5952 1 1/2 storey 13 years 99 years 1,920 1,920 187,609 31 May 2005*Mukim Bachang, terrace factory leasehold interestsDaerah Melaka Tengah expiring on 18 thMelaka Nov 2095

642/36 Le Duc Tho Three (3) storey 6 years Freehold 3,249 3,539 632,321 10 Dec 2003*Ward 15, Go Vap District office factoryHCM City, Vietnam

262/3A, Thoi An Ward Single storey 5 years Freehold 3,276 3,662 359,230 16 Dec 2004*District 12, HCM City, Vietnam warehouse

Lot A-2C-CN Industrial building 2 years 50 years 97,413 48,278 5,722,492 4 May 2006*My Phuoc 3 Industrial with a two (2) storey leasehold interests Zone, Ben Cat District office, single - expiring on 14thBinh Duong Province storey factory and Jan 2055HCM City, Vietnam warehouse



77


LIST OF PROPERTIES as at 31 MARCH 2010

Property Description/ Approximate Tenure Land Area Built-up Net Book Date of Existing Use Age of (Sq / ft) Area Value as at Acquisition*/

Building (Sq / ft) 31/3/10 Valuation**(RM)

Lot PT 22 & PT 23 1 1/2 storey 5 years Freehold 22,000 15,000 2,528,927 24 Apr 2002*Mukim Dan Daerah Freehold Semi- 5 Jan 2005**Petaling, No.6 & 8 Detached LightJln TPP 1 1A, Tmn Industrial BuildingIndustri PuchongSelangor Darul Ehsan

Pajakan Negeri 27168/ Leasehold Light 22 years 99 years - 1350 107,545 7 Aug 1990*M1/4/75, Petak No. 75 Industrial Premises leasehold expiringTkt No.4, Bangunan (Flatted Factory) on 22 Oct 2062No.M1,Lot 33468,MukimPetaling,Daerah & NegeriWilayah Persekutuan

H.S.(D) 61625 Lot No. 1 1/2 Storey Semi 9 years Freehold 8,396 4,376 1,024,126 03 Sept 2001*PT 11380,Mukim Detached Light 05 Jan 2005**Petaling,State of Industrial FactorySelangor

H.S.(M) No.854 & 1 1/2 storey terrace 18 years Freehold 2,820 2,610 268,525 18 Oct 1999*H.S.(D) No.521 factory (base on OC) 28 Oct 2004**Lot 3073 & PT Lot 2998Mukim 6, DaerahSeberang Perai TengahNegeri Pulau Pinang



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PROXY FORM

I/We (FULL NAME IN BLOCK LETTERS)

of (ADDRESS)

being a member(s) of TOYO INK GROUP BERHAD hereby appoint

(FULL NAME)

of (ADDRESS)

or failing him/her, (FULL NAME)

of (ADDRESS)

or failing *him/her, the Chairman of the meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the EIGHTHANNUAL GENERAL MEETING of the Company to be held at the Dewan Tan Sri Hamzah, Royal Selangor Club, Kiara SportsAnnexe, Jalan Bukit Kiara, Off Jalan Damansara, 60000 Kuala Lumpur on Wednesday, 29 September 2010, at 10.30 a.m. and atany adjournment thereof.

(* strike out whichever is not desired)

My/Our proxy is to vote as indicated below:

NO. RESOLUTIONS FOR AGAINST

1. To receive the Audited Financial Statements and Reports2. To approve Directors’ fees 3. Re-election of Mr. Lim Guan Lee as Director4. Re-election of Tuan Hj. Ir. Yusoff bin Daud as Director5. Re-appointment of Mr. You Tong Lioung @ Yew Tong Leong as Director6. Re-appointment of Messrs. Sha, Tan & Co. as Auditors7. Ordinary Resolution - Authority to issue shares pursuant to Section 132D

of the Companies Act, 1965

8. Special Resolution - Proposed Amendment to the Company’s Articles of Association

Please indicate with an "X" in the spaces provided how you wish your vote to be cast. If no instruction as to voting is given,the Proxy will vote or abstain from voting at his discretion.

Dated this day of 2010

No. of Shares held

CDS Account No. Signature

Tel No. (during office hours)

Notes:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend andvote instead of him/her. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) ofthe Companies Act, 1965 shall not apply to the Company.

2. Where a member appoints two (2) proxies, the appointment shall be invalid unless he specifies the proportion of his/hershareholdings to be represented by each proxy.

3. In the case of a corporate body, the proxy appointed must be in accordance with the Memorandum and Articles of Association,and the instrument appointing a proxy shall be given under the Company’s Common Seal or under the hand of an officer orattorney duly authorised.

4. The Form of Proxy must be deposited at the Company’s Registered Office at Lot 4.100, Tingkat 4, Wisma Central, Jalan Ampang,50450 Kuala Lumpur not less than 48 hours before the time set for the meeting or any adjournment thereof.


Fold this flap for sealing

Then fold here

First fold here

The Company SecretaryTOYO INK GROUP BERHAD (590521-D)Lot 4.100, Tingkat 4, Wisma Central,Jalan Ampang, 50450 Kuala Lumpur

AFFIXSTAMPHERE


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