Msian company

7/30/2019 Msian company

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Panasonic Manuacturing Malaysia Berhad (6100-K)

2009ANNUAL REPORT

or the fnancial year ended 31 March


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Cover rationale

The cover symbolises how we, the Panasonic Group

o Companies lead the way with eco ideas. As a

responsible corporate citizen, Panasonic greatly value

the conservation o our environment and is committed

to conducting business activities with minimal adverse

impact on the environment. We pledge to produce

energy-efcient products and strive or reduction o

CO2 emissions at our manuacturing sites. We also

encourage the spread o environmental conservation

activities throughout the world.


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Contents

2 Corporate Inormation

3 Chairmans Statement

7 Financial Highlights

7 Financial Calendar

8 Five-Year Trend

9 Five-Year Financial Smmary

10 Share Perormance

11 Board o Directors Profle

15 Statement on Corporate Governance

22 Adit Committee Report

26 Statement on Internal Control

30 Additional Compliance Inormation

31 Directors Report

35 Income Statements

36 Balance Sheets

37 Combined Entity Statement o Changes in Eqity

38 Company Statement o Changes in Eqity

39 Cash Flow Statements

41 Smmary o Signifcant Acconting Policies

49 Notes to the Combined Entity Financial Statements

68 Statement by Directors

68 Stattory Declaration

69 Independent Aditors Report

70 Statistics on Shareholdings

72 List o Properties Owned by the Company

73 Notice o 44th Annal General Meeting

74 Notice o Dividend Entitlement

Form o Proy


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Panasonic Manufacturing Malaysia Berhad (6100-K) 2

Corporate Inormation

BOARD OF DIRECTORS

Tan Sri Datuk Asmat bin Kamaludin (Chairman)

Naoya Nishiwaki (Managing Director)

Raja Dato Seri Abdul Aziz bin Raja Salim

Ramanaidu a/l Semenchalam

Soh Beng Kuan

Chen Ah Huat

Razman Hadz bin Abu Zarim

Nobuyuki Kochi

Datuk Supperamaniam a/l Manickam

Takeo Endo

AuDIT COMMITTEE

Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)(Independent Non-Executive Director)


(Independent Non-Executive Director)

Datuk Supperamaniam a/l Manickam


REMuNERATION COMMITTEE

Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)(Independent Non-Executive Director)



Nobuyuki Kochi

(Executive Director)

NOMINATION COMMITTEE

Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)




Takeo Endo

(Non-Independent Non-Executive Director)

COMPANY SECRETARIES

Leong Oi Wah (MAICSA 7023802)

Pang Chia Tyng (MAICSA 7034545)

SOLICITORS

Shook Lin & Bok

Ramadass & Associates

REGISTRAR

Symphony Share Registrars Sdn Bhd

Level 26 Menara Multi-Purpose

Capital SquareNo. 8 Jalan Munshi Abdullah

50100 Kuala Lumpur

Tel : +603 - 2721 2222

Fax : +603 - 2721 2530 / 2721 2531

PRINCIPAL BANkERS

Bank o Tokyo-Mitsubishi UFJ (Malaysia) Berhad

Malayan Banking Berhad

AuDITORS

Jaar Hussein & Co.

Chartered Accountants

Kuala Lumpur

REGISTERED OFFICE

No. 3 Jalan Sesiku 15/2

Section 15

Shah Alam Industrial Site

40200 Shah Alam

Selangor Darul Ehsan

Tel : +603 - 5891 5000

Fax : +603 - 5891 5102

STOCk ExCHANGE

Main Board o Bursa Malaysia Securities Berhad

Sector : Consumer Products

Stock Code : PANAMY 3719


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Annual Report 20093

Dear Shareholders

On behal o the Board o Directors, I am pleased to

present the Annual Report and Annual Audited Financial

Statements o the Company or the nancial year ended

31 March 2009.Tan Sri Datuk Asmat bin Kamaludin

(Chairman)

Chairmans Statement

OVERVIEW

In 2008, the world suered rom the global nancial crisis and severe economic recession. This was a major setback or the

electrical and electronic industries which experienced a downturn in global demand. Amid this adverse condition o the operating

environment, the Company delivered a commendable perormance with sales growth or most o its products or the nancial year

ended 31 March 2009. The Company ocused its eort in strengthening and expanding the Companys businesses through cost

reductions initiatives and structural reorms in order to secure stable earnings and to sustain strong shareholders returns.

FINANCIAL REVIEW

For the nancial year ended 31 March 2009, the Companys revenue o RM600.9 million increased by RM38.4 million or 6.8% comparedwith RM562.5 million recorded in the previous nancial year.

The combined entitys prot beore taxation or the nancial year was recorded at RM60.8 million. This was however, RM4.1 million

or 6.3% lower than the previous nancial years combined entitys prot beore taxation o RM64.9 million mainly due to the gain rom

disposal o property amounting to RM3.5 million recognised in the previous nancial year.

With the prudent and steady cash fow management, the Company was able to maintain a solid cash position and strong Balance Sheet

against the market turmoil. The Company continues to develop strong returns or its stakeholders, in particular, maximising shareholders

wealth via dividend distribution.


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Chairmans Statement

ASSOCIATED COMPANY

Panasonic Malaysia Sdn Bhd recorded its consolidated revenue o RM1.4 billion or the nancial year ended 31 March 2009; an

improvement o 7.7% or RM0.1 billion over the previous nancial years consolidated revenue o RM1.3 billion. The pre-tax and post-tax

prots rom its group operations were RM29.1 million (2008: RM23.1 million) and RM22.3 million (2008: RM16.2 million) respectively. The

Companys share o its associated companys post-tax prot was RM8.9 million (2008: RM6.5 million).

DIVIDENDS

In respect o the nancial year ended 31 March 2009, the Board o Directors is pleased to recommend a nal dividend o 35 sen per

ordinary share and a special dividend o 55 sen per ordinary share less 25% income tax, payable on 18 September 2009. Together with

an interim dividend o 15 sen per ordinary share which was paid on 20 January 2009, this brings to total gross dividends o 105 sen per

ordinary share or the nancial year ended 31 March 2009.

OPERATIONS REVIEW

During nancial year under review, the Company made notable progress in its manuacturing activities, amongst others, strengthened

quality management, attained manuacturing innovation through various implementation on the production foor, continuous application

o cost reduction activities, enhancement o product development capability and realised eorts to reduce CO2 in manuacturing and

other acilities.

Product saety and quality underline the Companys determination to deliver a sense o security and satisaction in its products to all

Panasonics customers around the world. The Companys improved quality o products was through enhancement in Product Evaluation

System encompassing product development, design and manuacturing, implemented visualisation by alarm system and strengthened

suppliers quality control, aimed to promote prompt and transparent quality administration. At the same time, the Company also ensures

product saety by enhancing product designs, adhering strictly to Panasonics Saety Design Standard, regulatory requirements and

Restriction o Hazardous Substances (RoHS) compliance, and leveling-up its manuacturing abilities.

During the rst hal o nancial year, the Company aced steep price increase in raw materials. However, the Company was able to

cushion it with cost reduction initiatives by applying the Itakona concept especially during the early stage o product development.

Throughout the year, the Company had continuous price-down negotiations with suppliers and localisation o imported material parts in

order to achieve cost reduction targets. In addition, the Company implemented several in-house production projects this year to achieve

greater cost eciency and to improve quality o products. Signicant cost reduction has also been achieved through this exercise.

In urtherance o successul completion o the conveyorless and one piece fow production systems, the Company reconstructed its

assembly lines rom U and L shapes to a straight line concept in order to standardise the material supply fow and simpliy the product

model changing process. This new concept makes available space or installation o new assembly lines. The Company is working

relentlessly to bolster production lines geared towards achieving better production eciency.

In the enhancement o development capability, the Company concentrated on increasing manpower or the development unction,

urther upgrading o technical skills and knowledge o engineers through introduction o the Quality Stability Design Scientic Method

which is geared towards eciency at designing stage. The Company also relocated its prototyping and test acilities next to the Product

Development & Engineering Department to improve engineers productivity.

New evolutionary designs were developed in-house; such as the slim body and anti bacteria shower head or home showers, saety

cover eatures or blenders, remote control eatures or ceiling ans and tank type models or vacuum cleaners.

The production activities are strongly supported by aggressive marketing activities. The Company will continue to develop and produce

equatorial region oriented products with emphasis on sales especially to the Asian region. Collaboration activities with marketing arms

in Malaysia, Singapore and Hong Kong to capture a wider consumer market in the Asian region have proven to be successul. Besides

this, the Company also organised various sales promotional, marketing and advertising activities this year including sales conventions,

road shows and dealers workshops.


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Annual Report 20095

Chairmans Statement

The Company has through its eco ideas activities contributed to the prevention o global warming by implementing projects that help to

reduce CO2 emissions. Several awareness campaigns on energy eciency and recycling projects were initiated. The internal operations

have also been reviewed to improve energy eciency by reducing energy, uel and diesel consumptions in our daily operations which

have a direct impact on CO2 emissions. Concrete eorts taken included installation o inverters, reactive power energy savers and eco

power meters to heavy energy consuming machines, improvement o machine cycle time, replacement o high bay lamps with high

requency lamps and removal o unnecessary fuorescent tubes.

The Company also reormed its physical oce layout with the implementation o One Oce where all departments are relocated to be

adjacent to each other. This is to create a conducive oce environment under 6C Concept i.e. Communication, Cleaning, Convenient,

CO2 reduction, Comortable and Cost-saving.

As a responsible corporate citizen, the Company is committed to adopting best practices in all aspects o its business as guided by

Panasonic Code o Conduct issued on 1 October 2008. The Code refects the basic ideas o airness, honesty and a general concern

or people that determines all our actions in the course o enhancing shareholders value and customers satisaction. The Companys

emphasis is on transparency and good governance practices, as well as prudent nancial and operational decisions.

The Company will continue to strengthen employer-employee relationship by providing a conducive working environment and oering a

competitive compensation package through Perormance Linked Wage System and career development opportunities. In line with the

Companys strategy to create a bigger pool o potential leaders, the employees were provided with managerial and leadership programs

to keep their skills abreast with the Companys aspirations. The Company also nurtured its talented employees or uture leadership

positions under the newly enhanced Succession Planning Program. Under this program, the selected employees will be given the

opportunity to learn the Japanese Language in order to improve the communication with the headquarter and other divisional oces.

COMMITMENT TO CORPORATE RESPONSIBILITY

The Company continuously embeds corporate responsibility in every aspect o its business, making it an integral part o the Companys

DNA. It is essential to closely align the corporate responsibility agenda to the Company values, culture and strategy.

In collaboration with the Klang City Council, the Company was involved in engaging the community in Klang Town Clean-up Campaign

to cultivate greater awareness on the cleanliness and protection o our environment. Over 500 sta rom Panasonic Group o Companies

in Malaysia and Klang communities participated in this program.

At the same time, the Company continues to support its aliate companies in various corporate responsibility activities during the

nancial year such as Panasonic Eco Exhibition, Panasonic Scholarship, Marine Conservation Project at Marine Park at Redang Island,

adoption o an area in Perhentian Island and Kids Witness News education program or children.

ACHIEVEMENTS AND ACCOMPLISHMENTS

We are proud to announce that the Company was named as The Most Competitive Employer o the Year by the Ministry o Human

Resource. Our winning points were having manuactured a competitive range o electrical home appliance products and channelled

our sales worldwide, strengthening operational eciency through various innovation activities, good human resource development and

corporate responsibility practices. The award was presented by the Honourable Prime Minister, YAB Datuk Seri Najib Tun Abdul Razak

during National Labour Day Celebration at Putra Stadium, Bukit Jalil on 2 May 2009.

On 5 September 2008, a stylish celebration was held in conjunction with the 10 million sets production achievement o the Vacuum

Cleaner. This marked another milestone or the Company to progress urther and achieve the world class production excellence. We are

united in team spirit and ready to rise to the challenge.

On 23 June 2008, through continued eorts to reduce the environmental impact on its operations, the Company had been awarded

the Clean Factory Award 2008 by Panasonic Corporation, Japan Head Oce. On 2 December 2008, the Company received Innovation

Activity Highest Award rom Panasonic Ecology Systems Co. Ltd., Japan in recognition or its eort or cost reduction and quality

achievements o Fan Products o the Company.

We are also very pleased to inorm that or the 12th consecutive year, the Company had been awarded the prestigious Malaysia Good

Design Mark by Malaysia Design Council or various product categories. This year, another 4 home shower models and 2 ceiling an

models were accredited with Good Design Mark.


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Chairmans Statement

INDuSTRY OuTLOOk AND PROSPECTS FOR 2009

The current weak global and domestic economic condition and consumer demand is likely to prevail in 2009 and thus, we expect a

challenging year ahead or the Company. To overcome these main challenges, the Company will urther enhance its cost eectiveness,

improve business agility to steer the Company to the next level o operational eciency and ensure innovations in the manuacturing

process to meet the fexibility in demand and supply chain.

We are perceptive to the constant changes in the current market environment and will respond prudently and constantly to the voice o

customers in order to win, develop and retain our committed and loyal Panasonics customers. With this in mind, we aim or improving

our business perormance through customer communication and accelerating protable growth to enhance values or our shareholders,

customers and employees. We are condent that the steps that we are taking will place the Company in a stronger market leadership

position.

DIRECTORATE

The Board bade arewell to our ormer Director, Mr Hironori Otsuka who resigned on 29 April 2009 and recorded our sincere thanks and

appreciation to him or his invaluable guidance and contributions to the Company.

ACkNOWLEDGEMENT

On behal o the Management, I would like to express my proound gratitude to our stakeholders the Malaysian Government, our

shareholders, employees, regulators, business associates, customers and the media or the strong trust and consistent support

extended to the Company. My sincere appreciation also goes to our Board o Directors or their commitment and skills embedded in

the Companys perormance.

As we continue to grow and expand, we look orward to sharing our success in the years ahead with all our stakeholders.

Tan Sri Dat Asmat bin kamaldin

Chairman


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Annual Report 20097

Financial Highlights

Financial Data (Combined Basis)Year Ended

31 March 2009

Year Ended

31 March 2008

Turnover RM000 600,868 562,490

Prot beore taxation RM000 60,818 64,923

Prot ater taxation RM000 49,776 52,630

Percentage o turnover % 8.3 9.4

Return on shareholders unds % 8.3 8.7

Earnings per share sen 82 87

Dividend rate % 105 115

Dividend cover times 1.0 1.0

Shareholders unds RM000 602,315 604,932

Net assets per share RM 9.92 9.96

Total assets RM000 697,961 702,299

Capital expenditure RM000 18,098 17,900

Financial Year Ended 31 March 2009

Annoncement o Reslts

- First Quarter 21 August 2008

- Second Quarter 10 November 2008

- Third Quarter 19 February 2009

- Fourth Quarter / Annual 27 May 2009

Isse o 2009 Annal Report and Financial Statements 29 July 2009

44th Annal General Meeting 20 August 2009

Interim Dividend

- Notice o Dividend Entitlement 10 November 2008

- Entitlement Date 31 December 2008

- Payment Date 20 January 2009

Proposed Final and Special Dividends

- Notice o Dividend Entitlement 29 July 2009

- Entitlement Date 26 August 2009

- Payment Date 18 September 2009

Financial Calendar


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Five-Year Trend

2005

702

Turnover / Export

(RM Million)

Earnings per share

(Sen)

Total Assets / Shareholders Funds

(RM Million)

Net assets per share

(RM)

Combined Entitys Profit/(Loss) After Taxation /

Net Dividends Paid/Proposed

(RM Million)

Employment

(Number of persons)

359

Turnover Export

322274 278 292

645

541562

601

847

697645

622 605 602

775736

702 698

-3

87

55

-5

59

77

8782

11.48

10.63 10.24 9.96 9.92

1,482

1,107 1,070

986960

2006 2007 2008 2009

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009 2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

Earnings per share

Total assets Shareholders funds Net assets per share

Combined entitysprofit/(loss) after taxation

Net dividends Employment

53

6770

3647

4850


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Annual Report 20099

Five-Year Financial Summary

Financial Data (Combined Basis) 2005 2006 2007 2008 2009

INCOME STATEMENTS

Turnover RM000 702,208 644,872 541,115 562,490 600,868

Prot/(Loss) beore taxation * RM000 (41,431) 48,590 57,556 64,923 60,818

Prot/(Loss) ater taxation * RM000 (2,756) 35,554 46,589 52,630 49,776

Net dividends paid / proposed RM000 87,473 67,306 69,858 54,671 47,837

BALANCE SHEETS

Total assets * RM000 847,033 774,885 736,285 702,299 697,961

Share capital RM000 60,746 60,746 60,746 60,746 60,746

Shareholders unds * RM000 697,347 645,429 622,160 604,932 602,315

FINANCIAL RATIOS

Return on shareholders unds % (0.4) 5.5 7.5 8.7 8.3

Earnings per share sen (5) 59 77 87 82

Net assets per share RM 11.48 10.63 10.24 9.96 9.92

Dividend rate % 200 115 115 115 105

Dividend cover times 0.0 0.5 0.7 1.0 1.0

Note:

* In accordance with FRS 128 Investment in Associates, associates are accounted for using the equity method, which has

been applied retrospectively.


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Share Perormance

2008 2009

Apr May Jn Jl Ag Sep Oct Nov Dec Jan Feb Mar

High (RM) 11.80 12.00 11.90 11.70 11.80 11.90 10.70 10.60 10.50 10.50 10.60 10.50

Low (RM) 10.70 11.50 11.50 11.20 11.50 10.30 10.00 10.30 10.20 10.20 10.20 10.20

Closing Share Price (RM) 11.80 11.70 11.60 11.60 11.70 10.60 10.10 10.30 10.40 10.30 10.50 10.30

Lots Traded (100 shares) 2,412 3,308 2,553 4,486 3,510 8,572 12,413 2,217 2,578 3,715 3,787 3,510

6

7

Apr

Closing Share Price (RM)

May Jun Jul Aug

2008 2009

Sep Oct Nov Dec Jan Feb Mar

8

10

12

13

11

9


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Annual Report 200911

Board o Directors Profle

TAN SRI DATuk ASMAT BIN kAMALuDIN

Aged 65 . Ma laysian. Tan Sri Datuk Asmat is the Senior Independent Non-Execut ive Director and Chairman o the Board since

29 August 2001. Tan Sri Datuk Asmat obtained a Bachelor o Arts (Hons) Degree in Economics rom the University o Malaya in 1966 and

subsequently obtained a Diploma in European Economic Integration rom the University o Amsterdam in 1970. He had a distinguishedcareer with the Ministry o International Trade and Industry, Malaysia (MITI) or 35 years until his retirement as Secretary-General in

January 2001. Tan Sri Datuk Asmat also had wide exposure in both domestic and international trade sectors whilst at MITI. He served as

Economic Counsellor or Malaysia in Brussels and worked with international bodies such as ASEAN, WTO and APEC and was actively

involved in national organisations such as Johor Corporation, SMIDEC and MATRADE.

Currently, Tan Sri Datuk Asmat is the Group Chairman o UMW Holdings Berhad, Scomi Group Berhad, Symphony House Berhad,

Trans-Asi a Sh ippi ng Co rporat ion Be rh ad and Compugates Ho ld ings Be rh ad and is a Non-Execut ive Vi ce-Cha irman o

YTL Cement Berhad. He also s its on the Board o Malays ian Pac ii c Industr ies Berhad, Lion Indust ries Corporation Berhad,

Permodalan Nasional Berhad, The Royal Bank o Scotland Berhad and JACTIM Foundation. In 2008, he was appointed by MITI to

represent Malaysia as Governor on the Governing Board o The Economic Research Institute or ASEAN and East Asia.

Tan Sri Datuk Asmat has no shareholdings in the Company and its associated company. He also has no amily relationship with any

Director and/or major shareholder o the Company nor any confict o interest with the Company. He attended all the Board Meetingsheld during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.

NAOYA NISHIWAkI

Aged 50. Japanese. Mr Nishiwaki was appointed the Managing Director o the Company on 11 May 2007. Mr Nishiwaki graduated

with a Bachelor Degree in Industrial Engineering rom Osaka Preectural University in March 1981.

Mr Nishiwaki joined Panasonic Corporation (ormerly known as Matsushita Electric Industrial Co., Ltd.) (PC) in April 1981. He has

more than 28 years experience through various positions held in the production engineering, production control, procurement,

assembly, parts manuacturing and planning sections o the Vacuum Cleaner Division o Panasonic, Japan and USA between the

years rom 1981 to 2007.

Amongst the overseas job assignments, Mr Nishiwaki was the Manager o Panasonic Floor Care Company in USA rom 1990 to 1996

and the President o PCs Mexican subsidiary, Panasonic Home Appliances de Mexico, S.A. de C.V. Prior to joining the Company in

May 2007, Mr Nishiwaki was the President and Chie Operating Ocer o Panasonic Home Appliances Company o America. He was

recently appointed the Director o JACTIM Foundation.

Mr Nishiwaki has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director and/or

major shareholder o the Company nor any confict o interest with the Company. Mr Nishiwaki attended 3 out o 4 Board Meetings held

during the nancial year and he has no convictions or any oences within the past 10 years other than trac oences, i any.

RAJA DATO SERI ABDuL AzIz BIN RAJA SALIM

Aged 70. Malays ian. Raja Dato Ser i Abdul Aziz was appointed the Independent Non-Executive D irector o the Company on

1 April 2002. He is also the Chairman o the Audit Committee, Nomination Committee and Remuneration Committee o the Company.Raja Dato Seri Abdul Aziz is a Chartered Accountant and also an Honorary Fellow Member o the Chartered Tax Institute o Malaysia

(ormerly known as Malaysian Institute o Taxation), the Chartered Association o Certied Accountants UK, the Chartered Institute o

Management Accountants UK and Member o the Malaysian Institute o Accountants.

Raja Dato Seri Abdul Aziz began his service with the Malaysian Government as an accountant in 1965. He was appointed the

Deputy Accountant-General o Malaysia rom 1974 to 1979 and subsequently served as Director-General o Inland Revenue Board o Malaysia

or a period o over 10 years. Raja Dato Seri then held the position o Accountant-General o Malaysia rom 1990 and retired rom service

in 1994.

Raja Dato Seri Abdul Aziz currently holds directorships in Jerneh Asia Berhad, K & N Kenanga Holdings Berhad, Gamuda Berhad,

PPB Group Berhad, Southern Steel Berhad, Hong Leong Industries Berhad, Amanah Saham Mara Berhad, Jerneh Insurance Berhad,

Kenanga Fund Management Berhad (ormerly known as Kenanga Unit Trust Berhad) and Kenanga Investment Bank Berhad.

Raja Dato Seri Abdul Aziz has no shareholdings in the Company and its associated company. He also has no amily relationship with any

Director and/or major shareholder o the Company nor any confict o interest with the Company. Raja Dato Seri attended all the

Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences,

i any.


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DR. RAMANAIDu A/L SEMENCHALAM

Aged 58. Malaysian. Dr. Ramanaidu was appointed the Executive Director o the Company on 5 April 2004. He obtained his

Bachelor o Laws (LLB) in 1994 and Doctorate in Business Administration, majoring in Organisational Development in 2007. He joined

the Company in 1973 and has 36 years experience in the Human Resource and Industrial Relations unctions o the Company.Dr. Ramanaidu is a Council Member o Selangor Human Resource Development Centre (SHRDC), Federation o Malaysian Manuacturers (FMM),

Electrical Industry Employers Group (EIEG) and the Chairman o Panasonic Human Resource Managers Group in Malaysia.

Currently, he is responsible or the Human Resource and Corporate Aairs unctions o the Company. He also oversees the

Risk Management and Inormation Security Management unctions o the Company.

Dr. Ramanaidu has no shareholdings in the Company and its associated company. He has no amily relationship with any Director and/or

major shareholder o the Company nor any confict o interest with the Company. He attended all the Board Meetings held during the

nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.

SOH BENG kuAN

Aged 51. Malaysian. Ms Soh was appointed the Executive Director o the Company on 5 April 2004. She is an Associate Member o theMalaysian Institute o Chartered Secretaries and Administrators since 1994 and an Associate Member o the Institute o Internal Auditors

Malaysia since 2008. She is also a Certied Member o the Financial Planning Association o Malaysia. Ms Soh joined the Company in

February 1978 and has 30 years experience in nance and accounting unctions o the Company. She was also the Joint Company

Secretary o the Company rom 2004 to 2007. Currently, she is responsible or acilitating the risk management and management audit

unctions o the Company since October 2007.

Ms Soh has direct interest in 504 shares o the Company but has no shareholdings in the associated company. She has no amily

relationship with any Director and/or major shareholder o the Company nor any confict o interest with the Company. Ms Soh attended

all the Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac

oences, i any.

CHEN AH HuAT

Aged 49. Malaysian. Mr Chen was appointed the Executive Director o the Company on 5 April 2004. Mr Chen holds a Certicate

in Mechanical Engineering rom Polytechnic Kuantan in 1981. He joined the Company in 1981 and has 28 years experience in the

manuacturing operations o various home appliances products. Currently, he is responsible or the actory operation management and

procurement unctions o the Companys Home Appliances and Dry Battery Divisions. Mr Chen also oversees the Internal Audit unctions

o the Company.

Mr Chen has indirect interest in the shares o the Company by virtue o his spouses interest in 2,000 shares in the Company but has no

shareholdings in the associated company. He has no amily relationship with any Director and/or major shareholder o the Company nor

any confict o interest with the Company. Mr Chen attended all the Board Meetings held during the nancial year and has no convictions

or any oences within the past 10 years other than trac oences, i any.


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RAzMAN HAFIDz BIN ABu zARIM

Aged 54. Malaysian. Encik Razman was appointed the Independent Non-Executive Director o the Company on 21 June 2004. He

is also a member o the Audit Committee, Nomination Committee and Remuneration Committee o the Company. Encik Razman

graduated with a Joint-Honours Degree in Economics and Accounting, BSc (Econ) rom University College, Cardi, University o Wales.He is a Chartered Accountant and is a Fellow Member o the Institute o Chartered Accountants in England and Wales and a Member

o the Malaysian Institute o Accountants.

Encik Razman has more than 31 years experience in the elds o auditing, mergers and acquisitions, corporate nance and management

consulting. He has worked with chartered accountancy rms in UK and Malaysia and was the Partner-in-charge o the Management

Consulting Practice o Price Waterhouse, Malaysia (now known as PricewaterhouseCoopers). In 1994, he established Norush Sdn Bhd,

an investment holding and business advisory rm where he is the Chairman. He is currently the Managing Director/Chie Executive

Oicer o Mithril Berhad and holds independent directorships in several public companies, namely Malaysian Oxygen Berhad,

eBworx Berhad, Yeo Hiap Seng (Malaysia) Berhad and J.P. Morgan Chase Bank Berhad.

Encik Razman has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director

and/or major shareholder o the Company nor any confict o interest with the Company. Encik Razman attended all the Board Meetings

held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.

NOBuYukI kOCHI

Aged 45. Japanese. Mr Kochi was appointed the Executive Director o the Company and a member o the Remuneration Committee on

28 June 2007. Mr Kochi graduated with a Bachelor Degree in Business Administration rom Kobe University in March 1986. He joined

PC, Japan in April 1986 and has held various positions in the Accounting Department o the Electronic Equipment Division,

Matsushita Industrial Equipment Co. Ltd. (MIECO) which was a subsidiary o PC rom November 1991 to February 1995.

Mr Kochi was posted to PCs subsidiary in UK, Matsushita Industrial Equipment Co. (U.K.) Ltd. as the Accounting General Manager in

February 1995 and also the Administration General Manager in April 1999. In April 2002, he was assigned as Assistant Councilor o

Headquarter Accounting Department in MIECO/PC. In February 2004, Mr Kochi joined the Human Resources Development Team o

Corporate Accounting Group, PC and was promoted to Councilor prior to joining the Company in June 2007. Mr Kochi has 23 yearsexperience in the accounting, administration and human resources unctions. Currently, he is responsible or the Finance, Inormation

Systems, Administration, Risk Management and Internal Audit unctions o the Company.

Mr Kochi has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director and/or

major shareholder o the Company nor any confict o interest with the Company. Mr Kochi attended all the Board Meetings held during

the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.


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DATuk SuPPERAMANIAM A/L MANICkAM

Aged 64. Malaysian. Datuk Supperamaniam was appointed the Independent Non-Executive Director o the Company and a member

o Audit Committee on 1 January 2008. Datuk Supperamaniam graduated with a Bachelor o Arts (Hons) Degree in Economics rom

University o Malaya in 1970. He joined the Malaysian Administrative and Diplomatic Service in October 1970 and was posted to theMinistry o International Trade and Industry, Malaysia (MITI) as Assistant Director. He served in the civil service or 33 years in various

capacities and held position as Deputy Secretary-General o MITI rom 1997 until his ocial retirement in March 2000.

In May 2000, he was appointed by the Government o Malaysia to be the Ambassador / Permanent Representative o Malaysia to the

World Trade Organisation in Geneva, Switzerland and held the posit ion until September 2003. Since his retirement rom public service,

he has been invited to participate as a resource person in workshops and conerences organised by United Nations agencies, regional

and international organisations and oreign governments. He has also been appointed to serve on several national committees o

the Government relating to trade and investment policy issues and negotations. He has been appointed recently a member o the Trade

Advising Council o Malaysia. Currently, he is the Independent Non-Executive Director o Shangri-La Hotels (Malaysia) Berhad and also

the advisor to the Federation o Malaysian Manuacturers on World Trade Organisation and Free Trade Agreement negotiations. Besides

the aoresaid, he also serves as an Adjunct Proessor to the International Islamic University o Malaysia and a Visiting Proessor o Macau

University o Science and Technology (Faculty o Law).

Datuk Supperamaniam has no shareholdings in the Company and its associated company. He also has no amily relationship with any

Director and/or major shareholder o the Company nor any confict o interest with the Company. Datuk Supperamaniam attended all

the Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac

oences, i any.

TAkEO ENDO

Aged 52. Japanese. Mr Endo was appointed the Non-Independent Non-Executive Director o the Company and a member o

Nomination Committee on 1 April 2008. He graduated with a Bachelor o Economics rom Tohoku University, Japan in March 1979.

Mr Endo joined PC, Japan in April 1979 and had since gained wide experience in sales and marketing o Asia, Middle East and Europeanregions. In 1994, he was assigned to Panasonic UK Ltd as General Manager o Planning Department and was promoted to the Director

o Consumer Division in 1998. In 2002, he was appointed as the Chie Operating Ocer o Panasonic Deutschland GmbH and was

posted to the Corporate Marketing Division or Home Appliances o PC, Japan in January 2005. He has 29 years o experience in sales,

marketing and management unctions. He joined the Companys associated company, Panasonic Malaysia Sdn Bhd as the Director o

Consumer Marketing Division in June 2007 and assumed the position o Managing Director o Panasonic Malaysia Sdn Bhd with eect

rom 1 April 2008.

Mr Endo has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director

and/or major shareholder o the Company nor any confict o interest with the Company. Mr Endo attended 3 out o 4 Board Meetings

held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.


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Statement on Corporate Governance

INTRODuCTION

The Board o Directors o the Company (the Board) recognises the importance o Corporate Governance in enhancing stakeholders

values, increasing investors condence and establishing customers trust whilst maintaining the stability and sustainability o the

Companys perormance.

The Board ully supports the implementation o an appropriate ramework to develop high standards o corporate governance throughout

the Company. The Companys governance ramework adheres to the principles and best practices o corporate governance as

prescribed by the Malaysian Code on Corporate Governance (the Code) which was ounded on core values such as accountability,

transparency, integrity and proessionalism.

This Statement on Corporate Governance highlights the application o the principles and best practices prescribed by the Code that

were adopted by the Company.

THE BOARD OF DIRECTORS

Board Composition, Board Sie and Balance

The Board being the decision-making body, leads and controls the Company. There is diversity among the Board, as the Board

comprises o members rom various elds including nance, marketing, legal and other proessions. This well-balanced pool o expertise

contributes towards making the Board eective and competent in discharging their duties and responsibilities.

The current Board comprises o 10 Members, o whom 5 are Non-Execut ive Direc tors (inc luding the Chairman) and 5 are

Executive Directors. The composition o the Board complies with Paragraph 15.02 o the Listing Requirements o Bursa Malaysia

Securities Berhad (Bursa Securities) that requires one-third o the board members to be independent directors as the Board presently

has 4 Independent Non-Executive Directors. The Independent Directors act independently rom Management and do not participate in

any business dealings that may impair their judgement and decision-making to ensure the highest standards o conduct and integrity

were maintained by the Company so as to saeguard the interests o various stakeholders.

The prole o each Director is summarised on pages 11 to 14 o the Annual Report.

Board Responsibilities

The Board has an overall responsibility or the internal control systems which include the nancial, operational, compliance and risk

management. The internal control systems are designed to manage the risk o ailure to achieve business objectives and provide

reasonable assurance against material misstatement or loss. The implementation and maintenance o the internal control systems are

the responsibility o the Executive Directors and the senior management o the Company.

The duties and responsibilities o the Chairman and the Managing Director are distinct and separate to ensure a balance o power and

authority. The Independent Non-Executive Chairman leads the Board to ensure it operates with highest level o integrity and always acts

in the best interest o the Company. The Managing Director is responsible or the ecient and eective management o the business

and ultimately accountable or implementing the policies/decisions in accordance with the corporate objectives and strategies approved

by the Board.

The Chairman o the Board, Tan Sri Datuk Asmat bin Kamaludin, is the Senior Independent Non-Executive Director to whom concerns

relating to the Company may be conveyed by shareholders and other stakeholders.

Directors Code o Ethics

The Board adheres to the Code o Ethics as set out in the Guidel ines on the Code o Conduct or Direc tors issued by the

Companies Commission o Malaysia and the Companys internal Guidelines on the Code o Conduct or Directors, Ocers and

Employees.

The Code o Ethics or Company Directors highlights, amongst others, the ollowing criteria that a director should observe in the

perormance o his duties:

HeshouldatalltimesactwithutmostgoodfaithtowardstheCompanyinanytransactionandtoacthonestlyandresponsiblyintheexercise o his powers in discharging his duties;

Heshouldbeconsciousoftheinterestsofshareholders,employees,creditorsandcustomersoftheCompany;

HeshouldensurethattheactivitiesandtheoperationsoftheCompanydonotharmtheinterestandwell-beingofsocietyatlarge.


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Meetings

The Board met 4 times during the nancial year under review to approve, amongst others, the quarterly and annual nancial results,

business strategies, strategic corporate plans and annual budgets, to review business perormance o the Company and to ensure the

proper internal control systems were in place. Due notice o issues to be discussed and the detailed meeting agenda were provided to

the Directors in a timely manner to ensure there is sucient time or the Board to read and understand the key issues to be deliberated

later. Both quantitative and qualitative inormation covering the nancial results, operations and internal controls o the Company were

provided to the Board to enable the Board to make inormed decisions.

The summary o attendance o the Directors or the Board Meetings held during the nancial year ended 31 March 2009 was as

ollows:

Name o Directors No. o Meeting Attended % o Attendance

Tan Sri Datuk Asmat bin Kamaludin 4/4 100

Naoya Nishiwaki 3/4 75

Raja Dato Seri Abdul Aziz bin Raja Salim 4/4 100Dr. Ramanaidu a/l Semenchalam 4/4 100

Soh Beng Kuan 4/4 100

Chen Ah Huat 4/4 100

Razman Hadz bin Abu Zarim 4/4 100

Hironori Otsuka (Resigned on 29.04.2009) 4/4 100

Nobuyuki Kochi 4/4 100

Datuk Supperamaniam a/l Manickam 4/4 100

Takeo Endo 3/4 75

All proceedings, del ibe rat ions and conclusions o the Board Meetings are clearl y recorded in the minutes o meet ings by the

Company Secretaries, conrmed by the Board and signed as correct record by the Chairman o the Meeting.

The Board also exercises control on routine matters that require the Boards approval through the circulation o Directors resolutions as

allowed under the Companys Articles o Association.

Spply o Inormation

The Board and its Board Committees have direct access to the senior management and has ull and unrestricted access to all inormation

relating to the Companys business aairs in discharging their duties.

In urtherance o their duties, the Directors also have access to the proessional advice and services o the Company Secretaries, who

are responsible or ensuring that the relevant rules and regulations are complied with. Besides, external independent proessional and

legal advisors are also made available to provide their independent views and advice to the Board, whenever necessary. The Directors,

whether as a ull board or their individual capacity, in urtherance o their duties, are empowered to take independent proessional advice

at the Companys expense. The Board will decide as a whole should any o its Directors needs to take advice rom the independent

proessional advisors.

Minutes o each Board Meeting are circulated to all Directors or their perusal prior to conrmation o the minutes at the ollowing Board

Meetings. The Company Secretaries attend all Board and Board Committees Meetings and ensures that accurate and proper records

o the proceedings o meetings and resolutions passed are properly kept at the registered oce.

The appointment and removal o the Company Secretaries is a matter o the Board as a whole.

Re-election

In accordance with the Companys Articles o Association, all Directors appointed by the Board are subject to retirement and re-election

by shareholders at the rst opportunity ater their appointment. The Articles o Association also provides that at least one-third o the

remaining Directors including the Managing Director, are subject to retirement by rotation at each Annual General Meeting (AGM).

All Directors shall retire rom oce at least once in every 3 years and shall be eligible or re-election.


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Messrs Chen Ah Huat, Naoya Nishiwaki and Nobuyuki Kochi who are retiring pursuant to Article 97 o the Companys Articles o

Association and YM Raja Dato Seri Abdul Aziz bin Raja Salim who is retiring pursuant to Section 129 o the Companies Act, 1965 at

the orthcoming AGM scheduled to be held on 20 August 2009, have been recommended by the Nomination Committee and Board or

re-election or re-appointment to the Board.

Directors Training and Development

All Directors have completed the Mandatory Accreditation Programme requirement prescribed by Bursa Securities. During the nancial

year, the Directors have attended training programmes, seminars and briengs relevant to their unctional duties, which are as ollows:

Training Programmes / Seminars / Briefngs Attended Date Attended Dration

Tan Sri Dat Asmat bin kamaldin

ComplianceandEnforcementofBursaSecuritiesListingRequirements:Updates&Case

Studies

29.05.2008 day

ImportanceofStrategyExecution 10.06.2008 day

EffectiveChairmanship 19.06.2008 day

SCOMIGroupBerhadsin-houseDirectorstraining 18-19.07.2008 2 days RiskManagement:ChallengesandOpportunities 10.07.2008 day

DevelopingSustainableFutures 20.08.2008 day

C-Suite2009BudgetTaxPerspectives 09.09.2008 day

FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day

Naoya Nishiwai

AsiaPacicSalesExpansionMeeting&ManufacturingInnovationConferenceinVietnam 07-08.07.2008 2 days

AsiaManagingDirectorQualityManagementSeminar 22-23.08.2008 8 hours

Panasonics90thAnniversaryBasicBusinessPhilosophySeminar 16.10.2008 day


Raja Dato Seri Abdl Ai bin Raja Salim

GeneralOutlookonSoftCommoditiesandtheDistortionofFundsontheFundamentals

o Supply and Demand

16.09.2008 1 hour

ImportanceofITSecurity 16.09.2008 1 hours

LatestDevelopmentonTaxAuditsandTaxInvestigations 16.09.2008 1 hour


Dr. Ramanaid a/l Semenchalam

7thAsiaPacicLegalNetworkEnhancement 16.10.2008 1 day


Soh Beng kan

14thAsia&OceaniaAccountingConference 07.11.2008 1 day

ExecutiveSeminarofManagerialAccounting(ESMA)

[Strategic Management e-learning / Project Presentation (Japan)]

21.07.2008 -

12.12.2008

95 working

days


Chen Ah Hat Eco-RelatedManufacturingDojo2006&2007Workshop7 28-29.07.2008 2 days


Raman Hafd bin Ab zarim

InternationalOperationsBrieng&Update 09.04.2008 1 day

InternationalTradeCredits&Financing 29.06.2008 1 day

MergerofCoreOperationsBrieng 07.08.2008 day

InternationalTradeCurrenciesSeminar 16.08.2008 1 day


Nobyi kochi

BoardRemunerationontheUpswing 22.04.2008 2 hours

14thAsia&OceaniaAccountingConference 07.11.2008 1 day

FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day AccountingConferenceinJapan 13.02.2009 1 day


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Training Programmes / Seminars / Briefngs Attended Date Attended Dration

Dat Spperamaniam a/l Manicam

GeneralOutlookonSoftCommoditiesandtheDistortionofFundsontheFundamentals

o Supply and Demand

16.09.2008 1 hour

ImportanceofITSecurity 16.09.2008 1 hours

LatestDevelopmentonTaxAuditsandTaxInvestigations 16.09.2008 1 hour


Taeo Endo

2008SalesConvention

MandatoryAccreditationProgramforDirectorsofPublicListedCompany

InformationSecurityManagement&CartelPreventionSeminar

PanashopBreak-upSession

2009SalesConvention

02.04.2008

24-25.06.2008

03.03.2009

25.03.2009

26.03.2009

day

1 day

3 hours

day

day

BOARD COMMITTEES

The Board has established several Board Committees whose compositions and terms o reerence are drawn up in accordance with the

best practices prescribed by the Code. The unctions as well as authority delegated to the Board Committees are clearly dened in their

terms o reerence.

The Board Committees o the Company consist o the Audit Committee, Nomination Committee and Remuneration Committee. The

Chairman o the respective Board Committees reports the outcome o the Board Committee Meetings to the Board, and i required, urther

deliberations are made at Board level.

Adit Committee

The Audit Committee provides independent oversight o the Companys nancial reporting and internal control system to ensure compliance

with the statutory and accounting policy disclosures requirements and to maintain a sound system o internal control. A ull Audit Committee

Report enumerating its membership, terms o reerence and summary o activities is set out on pages 22 to 25 o the Annual Report.

Nomination Committee

The Nomination Committee comprises entirely o Non-Executive Directors with the majority being Independent Directors, which are as ollows:

No. Name Designation

1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman) Independent Non-Executive Director

2. Razman Hadz bin Abu Zarim (Member) Independent Non-Executive Director

3. Takeo Endo (Member) Non-Independent Non-Executive Director

Pursuant to the terms o reerence o the Nomination Committee, the main responsibilities o the Nomination Committee include:

reviewingthe Board composition andrecommendingnew nominees to theBoardaswell asBoardCommittees forthe Boards

consideration;

assessingandreviewingtherequiredmixofskills,experienceandother requisitequalities,includingcorecompetencies,whichthe

Non-Executive Directors should bring to the Board; and

assessingtheeffectivenessoftheBoardasawhole,theCommitteesoftheBoardandcontributionofeachDirector,includingthe

Independent Non-Executive Directors on an on-going basis.

On 28 May 2008, the Nomination Committee had reviewed the Boards size, composition, mix o skills, experience and qualities o the

Board and was satised that there is a balance o Executive Directors and Non-Executive Directors and the current Board composition is

eective in leading and controlling the Company. All the assessments and evaluations have been recorded in the minutes.


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Remneration Committee

The current Remuneration Committee comprises o the ollowing members, the majority o whom are Independent Directors:

No. Name Designation

1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman) Independent Non-Executive Director

2. Razman Hadz bin Abu Zarim (Member) Independent Non-Executive Director

3. Nobuyuki Kochi (Member) Executive Director

At a meeting held on 22 May 2008, the Remuneration Committee made recommendation to the Board or an increase o Directors

ees payable to the Independent Non-Executive Directors or the nancial year ended 31 March 2009 to commensurate their level o

responsibilities. The remuneration packages o the Non-Executive Directors including the Non-Executive Chairman were determined by

linking their remuneration to their experience and level o responsibilities undertaken and is a matter o the Board as a whole. A new ee

has also been proposed or the Nomination Committee and Remuneration Committee members to refect the duties and responsibilities

o the aoresaid Committees.

Directors Remneration

The details o the remuneration o the Directors o the Company or the nancial year ended 31 March 2009 were as ollows:

DescriptionsEective Director

RM

Non-Eective Director

RM

Total

RM

Fees - 220,000 220,000

Meeting allowance - 18,000 18,000

Salary and other remuneration 3,427,360 - 3,427,360

Benets-in-kind (B.I.K.) 193,100 - 193,100

Total 3,620,460 238,000 3,858,460

Total (excluding B.I.K.) 3,427,360 238,000 3,665,360

The remuneration o the Directors or the nancial year ended 31 March 2009 in the respective bands o RM50,000 is as ollows:

Range o Remneration Eective Director Non-Eective Director Total

RM0 to RM50,000 - 1 1

RM50,001 to RM100,000 - 4 4

RM400,001 to RM450,000 3 - 3

RM650,001 to RM700,000 1 - 1RM750,001 to RM800,000 1 - 1

RM850,001 to RM900,000 1 - 1

With the increased level o responsibilities and risks involved, the Directors and senior ocers have since 2002 contributed jointly to the

premium o a Directors and Ocers Liability Insurance Policy in respect o their acts committed in their capacity as Directors and ocers

o the Company. However, the said insurance policy does not indemniy a Director or senior ocer or any oence or conviction involving

negligence, raud, dishonesty or breach o duty or trust.


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RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS

The key elements o good corporate governance are transparency and accountability to all stakeholders. Underlying this good

corporate governance is the communication o clear, relevant and comprehensive inormation which is timely and readily accessible by

all stakeholders. This is particularly important to shareholders and investors or inormed investment decision making. The means o

communication with stakeholders are as ollows:

Briefngs and Dialoges

The Executive Directors and Management conduct briengs and dialogues with both existing and potential shareholders, und managers,

institutional investors and investment analysts, upon request, to enable them to gain a better understanding o the Companys strategies,

major development, operational activities and nancial perormance to make inormed investment decisions. Nevertheless, inormation

is disseminated in strict adherence to the corporate disclosure requirements o Bursa Securities.

Annal General Meeting

The AGM o the Company is an important orum or communication and dialogue with shareholders where shareholders are given the

opportunity to seek clarications and raise questions on the agenda items o the meetings. During the Companys 43rd AGM held on

21 August 2008, the Shareholders were presented a corporate video encompassing inormation such as the Companys key nancial

highlights, operational activities, eco ideas activities, human resource development programme, corporate social responsibility activities,

prospects and outlook. Shareholders who are unable to attend are allowed to appoint proxies to attend, speak and vote on their

behal.

The Chairman and Managing Director are delegated with the authority to speak on behal o the Company to members o the Press ater

the adjournment o the AGM.

Pblications and Corporate Annoncements

The Annual Report o the Company is an important channel o communication to shareholders and investors. Eort is channelled to

enhance the contents o the Annual Report in line with best corporate governance practices. Shareholders, investors and members o

public can access to the Companys website at pmma.panasonic.com.my and Bursa Securitiess website at www.bursamalaysia.com

or the corporate, nancial and market inormation on the Company as well as the relevant announcements and releases o annual

reports, circulars to shareholders, quarterly nancial results and any corporate announcements made through Bursa Link.

ACCOuNTABILITY AND AuDIT

Financial Reporting

It is the continued commitment o the Board to provide a balanced, clear and meaningul assessment o the nancial position and uture

prospects o the Company in all quarterly nancial results and annual nancial statements to shareholders, investors and regulatory

authorities. The Board and Audit Committee scrutinise these reports and statements prior to ocial release to regulatory bodies to

ensure that they are accurate and present an objective assessment o the Companys aairs.

The Board is assisted by the Audit Committee to oversee the nancial reporting process and to ensure completeness, accuracy,

adequacy and quality o the nancial reporting.


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Directors Responsibility Statement

The Directors are required by the Companies Act, 1965 to prepare nancial statements or each nancial year which give a true and air

view o the state o aairs o the Company and its associated company (the Combined Entity) at the end o the nancial year and o

their results and cash fow or the nancial year then ended.

In preparing the nancial statements, the Directors have:

consideredtheapplicablestandardsinMalaysiaforEntitiesOtherThanPrivateEntitiesasapprovedby theMalaysianAccounting

Standards Board.

adoptedandconsistentlyappliedappropriateaccountingpolicies.

madejudgmentsandestimatesthatareprudentandreasonable.

The Directors have responsibilities or ensuring that the Combined Entity keep accounting records that refect the accuracy o the

nancial position o the Combined Entity and which enable them to ensure that the nancial statements comply with the Companies Act,

1965, applicable approved accounting standards in Malaysia and the requirements o other relevant authorities.

The Directors have a general responsibility or taking such steps as are reasonably open to them to saeguard the assets o the

Combined Entity and to prevent and detect raud and other irregularities.

Internal Control

The Board, with the assistance o the Audit Committee, continues to review its internal control processes and procedures to ensure

as ar as possible, that it maintains adequate levels o protection over its assets and the shareholders investments. Details o the

Companys internal control system and the processes in place or the review o its eectiveness are set out in the Statement on Internal

Control on pages 26 to 29 o the Annual Report.

Relationship with Aditors

The Board via the Audit Committee has established a transparent relationship with the Companys External and Internal Auditors. The

Audit Committee has explicit authority to communicate directly with the External and Internal Auditors.

The External Auditors have close coordination with Internal Auditors to ensure that both audit groups maximise audit eciency by

enhancing overall audit coverage and avoiding any duplication o audit eorts.

The External Auditors have highlighted to the Audit Committee its ndings in respect o each years annual statutory audit and discussed

on the pertinent issues on the annual audited nancial statements or the nancial year under review. The External Auditors have also

reviewed the Internal Audit Plan and tailored their audit approach accordingly.

The Statement is made in accordance with the resolution o the Board o Directors dated 27 May 2009.


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Audit Committee Report

The Board o Directors o the Company (the Board) is pleased to present the Audit Committee Report or the nancial year ended

31 March 2009.

MEMBERSHIP AND MEETINGS

The composition o the Audit Committee has been revised to comprise only o Independent Non-Executive Directors. The members o

the Audit Committee and records o attendance o each member at Audit Committee meetings held during the nancial year ended

31 March 2009 are as ollows:

No. Name o Adit Committee Member No. o Meetings Attended

1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)

Independent Non-Executive Director

4/4

2. Razman Hadz bin Abu Zarim (Member)


4/4

3. Datuk Supperamaniam a/l Manickam (Member)


4/4

The current Aud it Committee comprises o 3 Independent Non-Execu tive Directors. The Cha irman o the Audi t Commit tee ,

Raja Dato Seri Abdul Aziz and also Encik Razman are Members o the Malaysian Institute o Accountants and hence, the Company

is in compliance with the requirements o Paragraph 15.10(1) o the Bursa Malaysia Securities Berhad (Bursa Securities) Listing

Requirements and Practice Note No. 13/2002, which requires at least 1 Member o the Audit Committee to be a qualied accountant.

The Audit Committee meets regularly on a quarterly basis. There were 4 Audit Committee Meetings held during the nancial year ended

31 March 2009 and the Company Secretaries were present at all the Audit Committee Meetings. The Managing Director, Executive

Directors, Finance General Manager, External Auditors and/or Internal Auditors were invited to attend the Audit Committee Meetings.

The minutes o each meeting was tabled to and noted by the Board . The Chairman o Audit Committee reports on the main

ndings and deliberations o the Audit Committee Meeting to the Board.

TERMS OF REFERENCE

The terms o reerence as revised and approved by the Board on 27 February 2008 are as ollows:

A. Composition o Adit Committee

The Audit Committee shall be appointed by the Board rom among its Members which ulls the ollowing requirements:

1. The Audit Committee must be comprised o not less than 3 Members;

2. All the Audit Committee Members must be Non-Executive Directors, with a majority o them being Independent Directors;

3. At least 1 Member o the Audit Committee:

(a) must be a member o the Malaysian Institute o Accountants (MIA);

(b) i he is not a member o the MIA, he must have at least 3 years working experience and have passed the examinations

specied in Part I o the 1st Schedule o the Accountants Act 1967 or must be a member o one o the associations o

accountants specied in Part II o the 1st Schedule o the Accountant Act 1967;

(c) must have a degree/masters/doctorate in accounting or nance and at least 3 years post qualication experience in

accounting or nance;

(d) must have at least 7 years experience being a Chie Financial Ocer o a corporation or having the unction o being primarily

responsible or the management o the nancial aairs o a corporation; or

(e) must have nancial-related qualications or experience that is approved by Bursa Securities.

4. The Audit Committee shall elect a chairman rom among its Members who shall be an Independent Director.

5. Alternate Director is not allowed to become a Member o the Audit Committee.

In the event o any vacancy in the Audit Committee resulting in non-compliance o Bursa Securities Listing Requirements, the Board

shall ll the vacancy within 3 months rom the date o vacancy.

The Board shall review, at least once every 3 years, the term o oce and perormance o the Audit Committee and each o its

Members to determine whether the Audit Committee and its Members have carried out their duties in accordance with their terms

o reerence.


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B. Qorm

A quorum shall consists o 2 Members present and a majority must be Independent Directors.

C. Meetings

The Audit Committee shall meet not less than 4 times a year. The Chairman o the Audit Committee at his discretion may convene

additional meeting o the Audit Committee i so requested by any Member, Internal Auditors or External Auditors to consider any

matter within the scope and responsibilities o the Audit Committee. Minutes o each Meeting shall be kept and distributed to each

Member o the Audit Committee and also to the Members o the Board. The Chairman o Audit Committee shall report on the

outcome o each Meeting to the Board.

The Directors, executive ocers, representatives o the External Auditors and/or Internal Auditors may attend the meetings upon the

invitation o the Audit Committee. The Audit Committee holds meetings with the External Auditors without Managements presence

at least twice per year to discuss key concerns and obtain eedback on the state o internal controls.

D. Secretary to Adit Committee

The Secretary to the Audit Committee shall be the Company Secretary.

E. Athority

The Audit Committee in discharging its duties shall have explicit authority to investigate any matters within its terms o reerence.

The Audit Committee shall have ull and unrestricted access to relevant inormation, be empowered to obtain such independent

proessional advice and to secure the attendance o persons having special competencies as necessary to assist the Audit Committee

in ullling its responsibilities.

F. Dties and Responsibilities

In ullling its primary objectives, the Audit Committee shall undertake the ollowing duties and responsibilities and report the sameto the Board or approval:

Financial Reporting and Compliance

1. To review the quarterly results and annual audited nancial statements o the Company, prior to the approval o the Board

ocusing particularly on:

(a) changes in or implementation o new accounting policies and practices;

(b) signicant and unusual events;

(c) compliance with applicable approved accounting standards and other legal or regulatory requirements; and

(d) going concern assumption.

2. To review all related party transaction, as submitted by Management and any confict o interest situation that may arise within

the Company, including any transaction, procedure or course o conduct that raises question o management integrity;


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Risk Management and Internal Audit

3. To consider and approve Annual Risk Management Plan and be satised that the methodology employed allows the

identication, analysis, assessment, monitoring and communication o risks in a regular manner that will allow the Company to

minimise losses and maximise opportunities;

4. To consider and approve the Annual Internal Audit Plan and programme and be satised as to the adequacy o coverage and

audit methodologies employed;

5. To ensure that the system o internal control is soundly in place, eectively administered and regularly monitored and to review

the extent o compliance with established internal policies, standards, plans and procedures;

6. To review and approve the reports on internal audit and risk management and to ensure that appropriate actions are taken on

the recommendations o the internal audit and risk management unctions;

7. To recommend to the Board steps to improve the system o internal control derived rom the ndings o the Internal Auditors

and External Auditors and rom the consultations rom the Audit Committee itsel;

8. To review the adequacy o the scope, unctions, competency and resources o the internal audit unctions and that it has the

necessary authority to carry out its work;

9. To review any appraisal or assessment o the perormance and to approve any appointment, resignation or termination o

Internal Auditors and senior members o the internal audit unctions and inorm itsel o any resignations and reasons thereo;

Statutory Audit

10. To review and discuss with the External Auditors, prior to the commencement o audit, the audit plan which states the nature

and scope o the audit;

11. To review any matters concerning the appointment and re-appointment, audit ees and any questions o resignation, dismissalor removal o the External Auditors;

12. To review actors related to the independence and objectivity o External Auditors and their services including non-statutory

audit services;

13. To discuss on ndings, problems and reservations arising rom the interim and nal statutory audits, External Auditors Audit

Committee Report and any matters the External Auditors may wish to discuss as well as to review the extent o cooperation

and assistance given by the employees o the Company to the External Auditors;

Other Matters

14. To review the Statement o Internal Control and to prepare the Audit Committee Report or the Boards approval prior to

inclusion in the Annual Report;

15. To consider such other matters as the Audit Committee considers appropriate or as authorised by the Board.


27/79



INTERNAL AuDIT FuNCTIONS

The internal audit unction is outsourced to a consulting rm whose main role is to undertake independent and systematic review o the

system o internal controls so as to provide independent assurance on the adequacy and eectiveness o risk management, internal

controls and governance process o the Company.

The Internal Auditor has no line o responsibility or authority over any operational or administrative unction and is independent o

the activities it audited. The Internal Auditors had issued and presented 4 internal audit reports and a ollow-up audit report to the

Audit Committee. The proessional ees incurred or the Internal Audit unctions in respect o the nancial year ended 31 March 2009

amounted to RM73,500.00.

SuMMARY OF ACTIVITIES

In line with the terms o reerence o the Audit Committee, the ollowing activities were carried out by the Audit Committee during the

nancial year under review:

1. Review o the unaudited quarterly results and perormance o the Company;

2. Review o the drat Statutory Financial Statements o the Company or the nancial year ended 31 March 2008 and recommended

to the Board or approval;

3. Discussion on disclosure requirements pursuant to the new accounting standards and Bursa Securities Listing Requirements;

4. Discussion on the External Auditors Report to the Audit Committee or the nancial year ended 31 March 2008 and the

Annual Audit Plan or the nancial year ended 31 March 2009;

5. Meetings with the External Auditors without Managements presence twice a year to discuss on key concerns and obtain eedback

on the state o internal controls.

6. Reviewed and recommended to the Board non-audit services provided by the External Auditors and its aliates which included the

training on Financial Reporting Standard 139: Recognition & Measurement, review o Statement on Internal Control and provision

o tax advisory services;

7. Review o the state o internal control o the Company and extent o compliance with the established policies, procedures and

statutory requirements;

8. Assessment o perormance and competency o the internal audit unction;

9. Discussion on the revision to the review procedures or recurrent related party transactions o a revenue or trading nature;

10. Review o the drat circular to shareholders in relation to recurrent related party transactions o a revenue or trading nature;

11. Review o 4 risk management reports and risk management plan or the nancial year ended 31 March 2009 and discussion on the

inherent risk o the relevant business processes/units with highlights on key business risks, their causes and management action

plans as well as the status o implementations;

12. Review o the scope o the Internal Audit Plan 2008/2009 and the corresponding ee charged;

13. Review o 4 Internal Audit Reports with recommendations by the Internal Auditors, Managements response and ollow-up actions

taken by the Management and monitoring the same with the Internal Auditors;

14. Review o the Statement on Internal Control and Audit Committee Report prior to the Boards approval or inclusion in the Companys

Annual Report 2008; and

15. Made recommendations to the Board on the re-appointment o the External Auditors.


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Statement on Internal Control

BOARD RESPONSIBILITIES

The Board o Directors o the Company (Board) recognises the importance o maintaining a sound system o internal control to

saeguard shareholders interests and the Companys assets. The Board arms its overall responsibility or the Companys system o

internal control and risk management, and or reviewing the adequacy and integrity o these systems. This process is regularly reviewed

by the Board and accords with the guidelines or directors on internal control, the Statement on Internal Control: Guidance or Directors

o Public Listed Companies; as required by Paragraph 15.27 o the Bursa Malaysia Securities Berhads (Bursa Securities) Listing

Requirements.

The Board has established an on-going process o identiying, evaluating and managing the signicant risks aced by the Company

which includes reviewing and improving the system o internal controls in line with changes in the operating and business environment.

Due to the limitations inherent in any system o internal control, such systems, however, are designed to manage rather than to eliminate

the risk o ailure to achieve the Companys business objectives and can only provide reasonable but not absolute assurance against

material misstatement or loss.

kEY INTERNAL CONTROL PROCESSES

The key processes that have been established in reviewing the adequacy and integrity o the system o internal control include the

ollowing:

TheExecutiveDirectorsassisttheBoardinensuringthattheCompanysdailyoperationsareperformedinaccordancewiththe

corporate objectives, strategies and the annual budget as well as the policies and business directions that have been approved.

The Executive Directors also ormulate strategies on an on-going basis and address issues arising rom changes in both the external

business environment and internal operating conditions.

The Internal Audit unction in the Company that is outsourced to Les Consulting Sdn Bhd (Ls) provides an independent,

objective assurance and consulting activity, which assists the Company in achieving its objectives. The unction evaluates the

eciency o risk management, the internal control system, and governance process and highlights signiicant indings in

respect o any non-compliance with policies and procedures. Audits are carried out on all major operational and unctional businessunits determined by the risk level o each unit. The Internal Audit unction conducts its audits according to an internal audit plan

approved by the Audit Committee.

Internal audit activities carried out during the nancial year under review included audits on the Companys security management

system, sub-contractors controls, Parts Manuacturing Departments operational process and procedures controls and

Fan Departments inventory control and procurement management. During the year, the Internal Auditors also conducted ollow-

up audits on review o controls over sales and collection unction, inventory audit on raw materials, ater sales support service

parts control and sales o scrap management system to ensure that recommendations or improvement that has been agreed by

management were implemented. The internal audit reports and the annual internal audit plan are reviewed and approved by the

Audit Committee and noted at the quarterly Board Meetings.

The outsourced riskmanagement functionby the independentconsultingrm,Ls,assiststheBoardto oversee the overall

management o principal areas o risk o the Company. The risk management reports and the annual risk management plan are

reviewed and approved by the Audit Committee and noted at quarterly Board Meetings.

The risk management activities undertaken by Ls or the nancial year under review included risk assessment on research and

development unction, market sustainability o growth, outbound logistics management and quality control.


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The Companys risk management ramework (Framework) is in place to ensure a continuous process o identiying, evaluating,

monitoring and managing the signicant risk exposures inherent in the Companys business operations and to gain strategic

competitive advantage rom its risk management capabilities. The ollowing outlines the principal risk management and control

responsibilities:

i) The Board is ultimately responsible or the management o risks. The Board delegates to the Managing Director the responsibility

or ensuring eective implementation and maintenance o risk management ramework assisted by the Risk Management

Working Committee (RMWC).

ii) The RMWC has the overall responsibility to oversee the risk management activities and assists the Managing Director to ensure

the eective implementation o risk management ramework across the Company. During the inancial year under review,

2 meetings were held by the RMWC to reinorce risk management understanding.

iii) The Heads o Departments, being the rst line deense against risk, have the primary responsibility and accountability or the

active management o risks emanating rom the respective business activities and to ensure that corrective actions on reported

weaknesses are undertaken within an appropriate time rame.

The Company conducts annual risk sel-assessment o its various business risks and makes countermeasures or any major risks

identied in line with the continuous process. This assessment is monitored by the regional oce, Panasonic Asia Pacic Pte Ltd (PA).

On 21 May 2009, a brieng by PAs legal representative to the RMWC was conducted to enhance risk awareness and

understanding.

The in-houseCorporateRisk& Audit(CRA)Departmentassists theRMWCto strengthenthemanagementcontrolsystemby

highlighting any inherent weaknesses in the current internal control systems and to make recommendations or improvement. During

the year under review, CRA Department conducted the ollowing audits covering home shower order control system, eectiveness o

sales promotion and advertising expenses system and eectiveness o Vendor Managed Inventory (VMI) system. In the course o audit,

CRA Department has recommended and enhanced the rule or service parts management, purchasing management regulations,

rule or scrap management and rule or VMI system to urther strengthen the Companys management control systems.

CRA Department also acilitated the RMWC to implement Enterprise Risk Management (ERM) since August 2008. During theperiod under review, risk scorecards were established or Human Resource unction, Environmental Management unction, Product

Engineering unction and Product Development and Engineering unction. The implementation o ERM in stages or all operational

units ensures a uniorm application o risk management across the Company through standardised risk management processes and

company-wide exchange o risk inormation.

TheAuditCommitteeassiststheBoardtoreviewtheadequacyandintegrityofthesystemofinternalcontrolandtoensurethat

an appropriate mix o techniques is used to obtain the level o assurance required by the Board. The Audit Committee reviews the

internal control issues identied by the Internal Auditors, the External Auditors, regulatory authorities and management, and evaluate

the adequacy and eectiveness o the risk management and internal control systems. The Audit Committee also reviews the Internal

Audit unctions with particular emphasis on the scope o audits and the competency as well as perormance. The minutes o the

Audit Committee Meetings are circulated and tabled at each Board Meeting on a quarterly basis.

On 31 March 2009, members o the Audit Committee attended the Companys 2009 Annual Policy Announcement to clearly

understand the Companys business direction and key management initiatives. Further details o the activities undertaken by the

Audit Committee are set out in the Audit Committee Report.

Allmajor issues thatrequiredBoardsapprovalwere reviewedby theManagingDirectorandExecutiveDirectorsin theweekly

Directors Meeting. Issues with strategic, nancial, legal and operational implications were discussed in detail beore tabling to the

Audit Committee and subsequently to the Board or deliberation and approval.

Management Committees have also been established with appropriate empowerment to ensure effective management and

supervision o the Companys core areas o business operations. These committees include the RMWC, the Inormation Security

Management (ISM) working committee and Cost Buster committee.


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Operationalandperformance issues foreachproductarereported anddiscussedat theMonthlyOperationMeetings,Factory

Management Review Meetings, Quality Assurance Review Meetings and Cost Innovation Meetings attended by the Top Management

and Senior Management o the Company. Comprehensive management accounts and reports are prepared monthly or eective

monitoring and decision-making. The monitoring o perormance variances are ollowed up and management actions are taken to

rectiy any deviations on a timely and eective manner.

TheCompanysannualbusinessplanswhicharepreparedbyeachbusinessunitandallfunctionaldepartmentsarereviewedand

approved by the Executive Director and Managing Director.

AnOrganisational structurewithclearlydened linesof responsibility, delegationofauthority and accountabilityaligned tothe

business and operations requirements.

TheproperlydocumentedcompanysRulesandRegulationsincorporatedcontrolprocedures,andthesamewillbereviewedand

updated rom time to time. The Companys updated rules, regulations and manuals are maintained in the Companys in-house

database accessible by all authorised and intended users.

TheCompanyhasreinforceditssecuritymeasuresinaccordancewiththePanasonicCorporationsGlobalISMPolicythataimsto protect inormation based on global standards so as to saeguard the condentiality and integrity o the Companys strictly

condential and condential inormation against internal and external threats. During the nancial year under review, various security

enhancement activities were carried out such as installation o CCTV at new strategic locations, implementation o desktop users

le encryption by using sae boot le encryptor, surveys on PC server and clients PC, conducting 2 ISM e-Tests or all e-mail users

and implementation o Web-based Sel-Assessment Checksheet (e-SAC) to promote understanding o ISM technical inormation

protection guidelines in line with regional oce ISM promotion activities.

Properguidelinesforhiringandterminationofemployees,formaltrainingprograms,annualandsemi-annualperformanceappraisals

and other relevant procedures are in place to ensure that employees are competent and adequately trained to carry out their

respective roles and responsibilities.

TheComplianceGuidebookwhichhasbeencustomisedinaccordancewiththeMalaysianlawsandregulationsprovidesguidance

on compliance policies relating to relevant laws and business ethics, ISM, basic contracts principles, intellectual property, internationaltax issues, bribery, customs regulations and export (trade) controls. In November 2008, an employees compliance survey was

conducted to assess the level o employees awareness and compliance with laws, regulations and business ethics at the individual

workplace. Employees were also brieed on the importance o compliance in the Companys 2009 Annual Policy Announcement on

31 March 2009.

Declarationbyallemployeesof theCompanyonnewPanasonicCodeofConduct,LetterofUndertakingsanddeclarationon

confict o interest govern the standard o conduct and prohibit improper behaviours. Breach o the Code o Conduct is actionable

by disciplinary proceedings.

COMPLIANCE WITH THE SARBANES-OxLEY ACT 2002

The ultimate holding company, Panasonic Corporation (PC) as the registrant o the U.S. Securities and Exchange Commission is, on a

group basis, required to comply with the provisions o the Sarbanes-Oxley Act 2002 (SOA), with a signicant ocus on int

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