UPA-AnnualReport2009 (1.25MB)

8/2/2019 UPA-AnnualReport2009 (1.25MB)

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High Quality Diary ProducerS I N C E 1 9 7 3

Lot 27678, Simpang Salak South Industrial Area,Batu 51/2, Jalan Sungai Besi, 57100 Kuala Lumpur.

Tel: 03-7982 3888 Fax: 603-7981 3379

Email: [email protected]

Manufacturer and Exporter

UPA PRESS SDN. BHD.(23768-K)Wholly owned subsidiary of UPA Corporation Bhd (384490-P)

UPA's Product Range:

Diary Showcases Pocket Diaries Management Diaries A4 Diaries

A5 Diaries Desk Diaries

Wire-O Bound Diaries

Case Bound Diaries

Address Books

Guest Books

Autographs

Calendars

Planners

Certificate Number 3403

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Notice of Fourteenth Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Corporate Information Profile of Directors

Chairmans Statement

Audit Committee Report

Statement on Internal Control

Statement on Corporate Governance

Financial Highlights

Reports and Financial Statements

Analysis of Shareholdings

Particulars of Properties

Proxy Form

Contents

2-4

5

67-8

9

10-11

12-13

14-17

18

19-63

64-65

66

67

UPA Annual Report 2009


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NOTICE IS HEREBY GIVEN THAT the Fourteenth Annual General Meeting of the Company will be held at HangTuah Level II, Mines Wellness Hotel, Jalan Dulang, MINES Resort City, 43300 Seri Kembangan, Selangor DarulEhsan on Friday, 25 June, 2010 at 11.30 a.m. for the following purposes:-

ORDINARY BUSINESS

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

2. To approve the payment of a First and Final Dividend of 10% (less 25% Income Tax)in respect of the financial year ended 31 December 2009. Resolution 2

3. To approve the payment of Directors fees of RM167,000.00 for the financial year ended31 December 2009. Resolution 3

4. To re-elect the following Director retiring in accordance with Article 87.1 of theCompanys Articles of Association:(a) Chua Ngeun Seong Resolution 4

5. To consider and if thought fit, pass the following resolution in accordance with Section 129(6)of the Companies Act, 1965:

That Mr Ma Huak Huang retiring in accordance with Section 129(6) of the Companies Act,1965 be and is hereby re-appointed a Director of the Company to hold office untilthe next Annual General Meeting. Resolution 5

6. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the

Directors to fix their remuneration. Resolution 6

SPECIAL BUSINESS

To consider and, if thought fit, pass with or without any modification, the following OrdinaryResolutions :-

7. Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 Resolution 7

That subject always to the Companies Act, 1965 and the approvals of the relevantgovernmental and/or regulatory authorities, the Directors be and are hereby empowered,pursuant to Section 132D of the Companies Act, 1965, to issue shares(other than bonus or rights issues) in the Company from time to time at such price,

upon such terms and conditions and for such purposes and to such person orpersons whomsoever as the Directors may deem fit provided that the aggregatenumber of shares issued in any one financial year of the Company (other than bonus orrights issues) pursuant to this Resolution does not exceed 10% of the issued capital ofthe Company for the time being and that the Directors be and are also empowered toobtain the approval from the Bursa Malaysia Securities Berhad for the listing of and quotationfor the additional shares so issued and that such authority shall continue in force untilthe conclusion of the next Annual General Meeting of the Company.

8. Proposed renewal of Share Buy-Back Authority Resolution 8

THAT subject always to the Companies Act, 1965 (Act), the provisions of the Memorandumand Articles of Association of the Company, the Listing Requirements of Bursa Malaysia

Securities Berhad (Bursa Securities), and the approvals of all relevant governmentaland/or the relevant authorities, the Company be authorized, to buy-back such amount ofordinary shares of RM1.00 each in the Company as may be determined by the Directors ofthe Company from time to time through Bursa Securities upon such terms and conditions asthe Directors may deem fit and expedient in the interest of the Company provided that:-


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(i) The aggregate number of shares bought back does not exceed 10% of the total issuedand paid-up share capital of the Company at any point of time;

(ii) The maximum amount of funds to be allocated for the share buy-back shall not exceedthe aggregate of the retained profits and/or share premium of the Company; and

(iii) The shares purchased are to be treated in either of the following manner:-

a. Cancel the purchased ordinary shares; or

b Retain the purchased ordinary shares as treasury shares held by the Company; or

c Retain part of the purchased ordinary shares as treasury shares and cancel the remainder;

(hereinafter referred to as the Proposed Share Buy-Back).

The treasury shares may be distributed as dividends to the shareholders and/or resold through

Bursa Securities and/or subsequently cancelled;

AND THAT the authority conferred by this resolution shall commence upon the passing ofthis resolution until:-

(i) the conclusion of the next annual general meeting (AGM) of UPA, unless by ordinaryresolution passed at that meeting, the authority is renewed, either unconditionally or subjectto conditions; or

(ii) the expiration of the period within which the next AGM after the date it is required to beheld pursuant to section 143(1) of the Act (but shall not extend to such extension asmay be allowed pursuant to section 143(2) of the Act); or

(iii) revoked or varied by ordinary resolution passed by shareholders of the Company at

a general meeting of the Company,

whichever occurs first;

AND THAT the Directors of the Company be and are hereby authorised to take such steps togive full effect to the Proposed Share Buy-Back with full power to assent to any conditions,modifications, variations and/or amendments as may be imposed by the relevant authoritiesand/or to all acts and things as the Directors may deem fit and expedient in the best interest ofthe Company.

9. To transact any other business of which due notice shall have been given in accordance withthe Companies Act, 1965.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT a first and final dividend of 10% (less 25% income tax) for the financialyear ended 31 December 2009, if approved, will be paid on 28 July 2010 to Depositors whose names appearin the Record of Depositors at the close of business on 8 July 2010. .

A depositor shall qualify for the dividend entitlement only in respect of:

(a) shares transferred into the Depositors Securities Account before 4.00 p.m. on 8 July 2010 in respect ofordinary transfers; or

(b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rulesof the Bursa Malaysia Securities Berhad.

By Order of the Board

Hoh Fong Yin (MAICSA 0809434)Lee Siew Teng (MAICSA 7061761)

Petaling Jaya3 June 2010


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Notes :

1. A member entitled to attend and vote at this Meeting is entitled to appoint a proxy to attend and to vote in hisstead. A proxy may but need not be a member of the Company.

2. The instrument appointing a proxy shall be in writing signed by the appointor or his attorney duly authorisedin writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorneyduly authorised.

3. Where the member of the Company appoints two proxies or more, the appointment shall be invalid unless themember specifies the proportion of his shareholding to be represented by each proxy.

4. Where the member of the Company is an authorised nominee as defined under the Securities Industry (CentralDepositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds.

5. The instrument appointing the proxy and the power of attorney or other authority, if any, under which it issigned or a notarially certified copy thereof must be deposited at the Registered Office of the Company at No.53A, Jalan SS21/1A, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight(48) hours before the time set for holding the meeting or at any adjournment thereof.

EXPLANATORY NOTE ON RESOLUTIONS 7 AND 8

1. Resolution 7

Authority to issue shares pursuant to Section 132D of the Companies Act, 1965

The Ordinary Resolution 7, if passed, will empower the Directors to issue shares in the Company up to an

amount not exceeding 10% of the issued share capital of the Company for the time being for such purpose asthe Directors consider would be in the interests of the Company. (Share Mandate). The Share Mandate will,unless revoked or varied by the Company at a general meeting, expire at the conclusion of the next AnnualGeneral Meeting of the Company. This Share Mandate would avoid any delay and costs in convening a generalmeeting to specifically approve such an issue of shares.

This Share Mandate is a renewal of the mandate obtained from the shareholders of the Company at the AGMheld on 26 June 2009. The Company did not utilize the mandate obtained at the last AGM and thus noproceeds were raised from the previous mandate.

2. Resolution 8

Proposed renewal of Share Buy-Back Authority

The Ordinary Resolution 8, if passed will empower the Company to purchase and/or hold the Companysshares up to ten percent (10%) of the issued and paid-up share capital of the Company by utilizing the fundsallocated which shall not exceed the total retained profits and/or share premium account of the Company.This authority unless renewed, revoked or varied at a general meeting, will expire at the conclusion of thenext Annual General Meeting. Further information on the Proposed Renewal of Share Buy-Back Authority isset out in the Circular to Shareholders dated 3 June 2010 which is despatched together with the Companys2009 Annual Report.



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Statement AccompanyingNotice of Annual General Meeting

RE-ELECTION OF DIRECTORS

The retiring directors who are standing for re-election at the forthcoming Annual General Meeting together withtheir relevant Article of the Companys Articles of Association and provision of Companies Act, 1965 are given asbelow:

1. Chua Ngeun Seong - Article 87.1

2. Ma Huak Huang - Section 129 (6) of Companies Act, 1965

Their profile can be found in pages 7 to 8 and their shareholdings in page 65 of the Annual Report.

BOARD MEETINGS

A total of seven (7) Board Meetings were held during the financial year and the details of attendance by each of the

Directors are given as below:

Name of Directors No of meetings attended

Chua Ah Lak 7/7

Kok Kam Moi 7/7

Chua Ngeun Lok 7/7

Chua Ngeun Seong 7/7

Ma Huak Huang 7/7

Yeo Wee Thow @ Yeo Ngo Tee 7/7

All Directors have complied with the minimum attendance at Board Meeting as stipulated in the Bursa MalaysiaListing Requirements during the financial year.

DATE, TIME AND PLACE OF THE FOURTEENTH ANNUAL GENERAL MEETING

Date : 25 June 2010

Time : 11.30am

Place : Hang Tuah Level II,Mines Wellness Hotel,

Jalan Dulang,MINES Resort City,43300 Seri Kembangan,Selangor Darul Ehsan.


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Corporate Information

BOARD OF DIRECTORS

Chua Ah Lak - Chairman (Independent Non-Executive Director)Kok Kam Moi - Managing DirectorChua Ngeun Lok - Executive DirectorChua Ngeun Seong - Executive DirectorMa Huak Huang - Non-Independent Non-Executive Director

Yeo Wee Thow @ Yeo Ngo Tee - Independent Non-Executive Director

COMPANY SECRETARIES - Hoh Fong Yin (MAICSA 0809434)- Lee Siew Teng (MAICSA 7061761)

AUDITORS - KPMGChartered Accountants

KPMG Tower,8 First Avenue, Bandar Utama,47800 Petaling Jaya,Selangor.

REGISTRAR - Bina Management (M) Sdn Bhd (50164-V)Lot 10, Highway CentreJalan 51/205 Petaling Jaya46050 Selangor Darul EhsanTel : 03-77843922Fax : 03-77841988

REGISTERED OFFICE - No 53-A, Jalan SS21/1ADamansara Utama47400 Petaling JayaSelangor Darul EhsanTel : 03-77288177Fax : 03-77279013

PRINCIPAL BANKERS - Public Bank Berhad- HSBC Bank Malaysia Berhad- United Overseas Bank (M) Bhd

STOCK EXCHANGE - Bursa Malaysia Securities BerhadMain Market


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Profile Of Directors

MR. CHUA AH LAKCHAIRMAN - INDEPENDENT & NON-EXECUTIVE

Mr. Chua Ah Lak, Malaysian, aged 61, was appointed as Independent & Non-Executive Director of UPA CorporationBhd on 3 January 2005. He holds Honours Degree in Chemical Engineering from Adelaide University, Australiaand MBA from University of Malaya, Malaysia. He retired from Nylex Group on 31 October 2004 after serving asChief Executive Officer of Nylex (Malaysia) Berhad and a director of Nylexs Board.

He is the Chairman of the audit committee, nomination committee as well as remuneration committee.

MR. KOK KAM MOIMANAGING DIRECTOR

Mr. Kok Kam Moi, Malaysian, aged 62, was appointed as Managing Director of UPA Corporation Bhd on 6 January

1997. He is the co-founder of the UPA Group with Mr. Chua Ngeun Lok.

Mr Kok has more than 30 years of experience in printing industry. After obtaining his qualification in CommercialArt in 1971, he ventured into general printing before specializing in rebuilding of printing machinery. His vastexperience in printing industry and technical know-how has contributed to the success of the Machinery Division.The Machinery Division deals with rebuilding of Web printing machinery, Sheet fed printing machinery and bookbinding machinery.

Under his guidance in the past 20 years, UPA Machinery Sdn Bhd, a subsidiary of the Group, has grown to be oneof the biggest printing equipment rebuilding factory in South East Asia.

Mr. Kok is involved in the Groups business development and oversees the machinery Division of the Group. He is

a member of Remuneration Committee.

MR. CHUA NGEUN LOKEXECUTIVE DIRECTOR

Mr. Chua Ngeun Lok, Malaysian, aged 59, was appointed as Executive Director of UPA Corporation Bhd on 6January 1997. He is the co-founder of the UPA Group with Mr. Kok Kam Moi.

Mr. Chua has more than 30 years experience in the printing industry. After obtaining his qualifications in CommercialArt in 1972, he ventured into general printing before specializing in paper products and diary manufacturing. Hiscreative skills has contributed to the many innovative products manufactured by UPA.

Under his guidance in the past 30 years, UPA Press Sdn Bhd, a subsidiary of the Group, has grown to be the biggestdiary manufacturer in Malaysia. He had been intensively involved in the development of the Company to becomeone of the leading diary and paper products manufacturers in Asia.

He is currently the Vice President of Selangor and Federal Territory Chinese Printing Presses Association andCouncil Member of K.L. Selangor Chinese Chamber of Commerce.

Mr. Chua is involved in the Groups business development and oversees the financial management of the Group.He is the brother of Mr. Chua Ngeun Seong, the Executive Director of UPA Corporation Berhad. Mr. Chua is amember of the Remuneration Committee.


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Profile Of Directors

IR. CHUA NGEUN SEONGEXECUTIVE DIRECTOR

Ir. Chua Ngeun Seong, Malaysian, aged 62, was appointed to the Board of UPA Corporation Bhd on 6 January1997. Thereafter he was made Executive Director on 1st June 1998. He holds a Diploma in Mechanical Engineeringfrom Council of Engineering Institutions UK and he is also a Registered Professional Engineer in Malaysia. Hehas 38 years working experience in engineering as well as general management encompassing project planning,design, installation, test and commissioning of palm oil mills, palm kernel crushing plant, palm oil refinery plants,cocoa butter substitute speciality fats plant, steam boilers, power generation plants and other related machine andequipment. He also has thirteen years of working experience in plastic sheets extrusion and calendaring.

Ir. Chua sits on the Board of two of UPA Corporation Bhds subsidiaries as well as several other private limitedcompanies. He is the Director of UPA Holdings Sdn Bhd which is the ultimate holding company and substantialshareholder of UPA Corporation Bhd and is also the brother of Mr. Chua Ngeun Lok, the Executive Director ofUPA Corporation Bhd.

MR. MA HUAK HUANGNON-INDEPENDENT & NON-EXECUTIVE

Mr. Ma Huak Huang, Malaysian, aged 71 was appointed to the Board of UPA Corporation Bhd on 6 January1997. He is a self-made entrepreneur with more than 30 years experience in the field of agriculture chemical andfeedstuff.

Mr. Ma is a member of Audit Committee, Remuneration Committee as well as Nomination Committee. He sitson the Board of several of UPA Corporation Bhds subsidiaries as well as other private limited companies. He isalso the Director of UPA Holdings Sdn Bhd, the ultimate holding company and substantial shareholder of UPA

Corporation Bhd.

MR. YEO WEE THOW @ YEO NGO TEEINDEPENDENT & NON-EXECUTIVE

Mr. Yeo Wee Thow, Malaysian, ages 61, was appointed an Independent and Non-Executive Director of UPACorporation Bhd on 29 June 2001. He is a member of Malaysian Institute of Accountants, a fellow member ofthe Association of Chartered Certified Accountants (UK) and an associate member of the Institute of CharteredSecretaries and Administrators (UK). He owns a public accounting firm in Kuala Lumpur which was set up in1979.

Mr. Yeo is a member of Audit Committee, Nomination Committee as well as Remuneration Committee.

SAVE AS DISCLOSED ABOVE, NONE OF THE DIRECTORS HAS :

1) any other family relationship with any Director and/or substantial shareholder of the Company.

2) any other conflict of interest with the Company.

3) any conviction of offences for the past ten years other than traffic offences.

PLEASE REFER TO THE ANALYSIS OF SHAREHOLDINGS ON PAGE 64 AND 65 FOR THE DETAILS OF THEDIRECTORS SHAREHOLDINGS IN THE COMPANY


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Chairmans Statement

To all our valued shareholders, I am pleased to present you the Annual Report and Audited Financial Statementsof UPA Corporation Berhad for the financial year ended 31 December 2009.

FINANCIAL RESULTS

For the financial year ended 31 December 2009, the Group recorded total revenue of RM119.08 million and profitbefore tax of RM18.62 million as compared to RM138.34 million and RM19.14 million recorded in the precedingfinancial year.

The global financial crisis affected many countries in 2009 and Malaysia was not spared from the onslaught of theeconomic woes. The Group went through a volatile period throughout the whole of 2009. The machinery divisionsuffered the most due the reluctance of printing industry to invest in capital expenditure and coupled with thetightening of financing from the finance institutions. The printing division was able to maintain its performancedespite the weaker local demand. However the plastic division emerged with better results, a testimony of ourability to increase our market share in a very competitive environment.

PROSPECTThe new financial year will be one that is full of uncertainties despite early signs of global economic recovery. TheManagement team acknowledges the need to be cautious on various factors internally as well as externally whichcan affect the operational efficiency and profitability.

The printing division will be able to capitalize on the recent accreditation of Forest Stewardship Council (FSC)status. The FSC status is widely regarded as the most important global initiative of the last decade to promoteresponsible forest management and provides a link between responsible production and consumption of forestproducts, enabling consumers to make purchasing decisions that benefit people and the environment at large.The accreditation marked an important milestone for the printing division to penetrate into Europe and USA andincrease our market share there.

The plastic division meanwhile had commenced the production of new product in PET and PVC shrinkable film

for label printing. The Group is one of the earliest producer of such product in ASEAN countries and we expect toenjoy significant market growth as the demand for this product increases.

The economic recovery has a positive effect for the machinery division as the printing industry ventures intocapital expenditure again. The Group had also recently set up an associate company, UPA Machinery Co Ltd inBangkok, Thailand. This is in line with our geographical expansion to our neighbouring countries.

CORPORATE SOCIAL RESPONSIBILITY

The Group will not neglect its corporate social responsibility while carrying out its usual business activities. TheGroup is committed to continually promote and creating awareness among the employees on the occupationalhazard and safety at the work place. Besides that the Group had in 2009 either sponsored the conference andsports activities of certain organizations or contributed donations to charitable groups.

DIVIDEND

The Board is pleased to recommend a first and final dividend of 10% (less income tax) per share for the financialyear ended 31 December 2009 for the approval of the shareholders at the forthcoming annual general meeting.

ACKNOWLEDGEMENT

On behalf of the Board, I would like to take this opportunity to extend my sincere gratitude and appreciation to allour employees, valued shareholders, customers, suppliers and business associates for their dedication, assistanceand support throughout the years.

Last but not least, I would like to thank my fellow members of the Board for their advice, invaluable assistance,support and contribution extended to the Board all these years.

Thank you.

CHUA AH LAKCHAIRMAN


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COMPOSITION

The Audit Committee was established on 7 January 1997. The committee comprises of the following members asat the end of financial year 2009 :

Meetings attended

1. Chua Ah Lak (CHAIRMAN) 4 / 4Independent & Non-Executive Director

2. Yeo Wee Thow @ Yeo Ngo Tee 4 / 4

Independent & Non-Executive Director

3. Ma Huak Huang 4 / 4Non-Independent & Non-Executive Director

Mr. Yeo Wee Thow @ Yeo Ngo Tee is a member of the Malaysian Institute of Accountants (MIA). The compositionof the Audit Committee complies with the Bursa Malaysia Listing Requirements.

TERM OF REFERENCE

Composition

The Committee should be appointed by the Board and the following requirements must be met :

a. members of the Committee should be from among the current Boards membersb. should comprise no fewer than three (3) members

c. Independent Directors must form the majorityd. All members of the committee should be Non-Executive Directorse. Members of the Committee should consist of at least one member who is a member of Malaysian Institute of

Accountantsf. Chairman of the Committee must be an Independent Directorg. Alternate Director is not eligible to be appointed

Meetings

a. A minimum number of four (4) meetings should be held during a financial yearb. Quorum of a meeting should be two (2) members and the majority of members present must be Independent

Directorsc. The internal and external auditors have the right to appear and to be heard at any of the meeting and shall

appear before the Committee when required to do so by the Committeed. The Company Secretary shall be appointed as Secretary to the Committee

Duties and Responsibilities

a. Review on the internal and external auditors scope of works and their audit plansb. Review with the external auditors on the result of their audit and evaluate on the accounting policies and

system of internal accounting control within the Groupc. Review with the internal auditors on the findings of their audit and evaluate on the system of internal control

within the Groupd. Review with the management on the audit reports and management letters issued by the internal and external

auditors and the implementation of their recommendations

e. Evaluate on the performance of the internal and external auditors and to put forward recommendation on theirappointment to the Board

f. Review on the quarterly and year end financial results and recommending for the Boards approval beforereleasing to the relevant authorities


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g. Review on the Groups compliance with the accounting standards set by the Malaysian Accounting StandardsBoard

h. Review on the Groups compliance with the Bursa Malaysia Listing Requirementsi. Review on the Groups status of compliance with the Malaysian Code on Corporate Governance

Authority

The Audit Committee is empowered to :

a. have authorities to investigate any matter within its term of referenceb. have full access to any information in regard of the Groups activitiesc. have direct communication with the internal auditors, external auditors and management staff in order to seek

clarification or any further informationd. have the right to seek meetings with the internal as well as external auditors either with or without the

attendance of any of the Executive Director

e. have the right to obtain advice or other necessary services from independent professionals in regard of matterswithin its term of reference

SUMMARY OF ACTIVITIES

The activities undertaken by the Audit Committee during the financial year are summarized as follow :a. Reviewed the audited financial statement and the unaudited quarterly results of the Group before recommending

them for Boards approvalb. Reviewed the annual audit plan, the scope and the extent of coverage by the external auditorsc. Reviewed the internal audit and enterprise risk management reports with emphasis on the highlighted risks

issues, recommendations and managements response

d. Reviewed the terms of reference and plan of the risk management and internal audit which is to be carried outby the appointed external consultante. Reviewed on any related party transaction and conflict of interest within the Groupf. Monitoring the Groups continuous compliance with the Bursa Malaysia Listing Requirements, the Malaysian

Accounting Standard Board guidelines, the Companies Act 1965 and the Malaysian Code of CorporateGovernance

INTERNAL AUDIT FUNCTION

The principal roles of the appointed external consultant on internal audit are to assist the Audit Committee inassessing risks faced by the Group, recommend possible measures to mitigate the identified risks, review theadequacy of effective system of controls for the operation of the Group.

The major findings of the internal audit reports will be reported directly to the Audit Committee meetings in orderto formulate appropriate corrective measures.


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The Board of Directors is committed to maintaining a sound system of internal control in the Group and is pleasedto provide the following Statement on Internal Control which outlines the nature and scope of internal control ofthe Group during the year pursuant to paragraph 15.26 (b) of the Bursa Malaysia Listing Requirements.

Board responsibility

The Board of Directors is responsible for the Groups system of internal controls covering not only financial controlsbut also operational and compliance controls as well as risk management. The internal control system involveseach business and key management from each business, including the Board, and is designed to meet the Groupsparticular needs and to manage the risks to which it is exposed. This system, by its nature, can only providereasonable but not absolute assurance against material loss or against the Group failing to achieve its objectives.

The Board has established an ongoing process for identifying, evaluating and managing significant risks facedby the Group. This process has been in place throughout the year is reviewed by the Board and accords withthe Statement on Internal Control : Guidance for Directors of Public Listed Companies. For the purposes of this

framework, associates are not dealt with as part of the Group.

Enterprise risk management framework

The Board supports the contents of the Statement of Internal Control : Guidance for Directors of Public ListedCompanies and through the Audit Committee, continually reviews the adequacy and effectiveness of the riskmanagement processes in place within the various operating businesses.

The Board believes that maintaining a sound system of internal control is founded on a clear understanding andappreciation of the following key elements of the Groups enterprise risk management framework :

A risk management structure which outlines the lines of reporting and responsibility at the Board, Audit

Committee, Risk Management Committee and management levels have been established.

A formal risk policy and guidelines have been established and communicated to Risk Management Committeecomprising of management personnel.

Amongst the members of the Risk Management Committee, a member has been appointed as the Risk Officerto coordinate enterprise risk management within the Group.

The Groups management identifies the key risks facing each business, the potential impact and likelihood ofthose risks occurring and effectiveness of the existing controls.

Statement On Internal Control


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Internal audit function

The Group has outsourced the internal audit function to a professional firm of consultants, which provides theBoard with the assurance it requires regarding the adequacy and effectiveness of internal control systems. Internalaudit independently reviews the control processes implemented by the management, and report to the AuditCommittee. Internal audit also reviews the internal controls in the key activities of the Groups businesses onthe basis of an annual internal audit strategy and a detailed annual internal audit plan presented to the AuditCommittee for approval. The internal audit function adopts a risk-based approach and prepares its audit strategyand plan based on the risks facing each of the major business units of the Group.

The Audit Committee considers reports from internal audit and from management, before reporting and makingrecommendations to the Board in strengthening the internal control systems. The Audit Committee presents itsfindings to the Board.

Other Risks and Control Processess

Apart from risk management and internal audit, the Group also has in place an organizational structure withdefined line of responsibility, delegation of authority and a process of hierarchical reporting.

Weakness in internal controls that result in material losses

There were no material losses incurred during the current financial year as a result of weaknesses ininternal control. Management will continue to review and strengthen the internal control systems of the Group.

Statement On Internal Control


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Statement On Corporate Governance

The Board of Directors of UPA recognizes its responsibilities for good corporate governance and is committed toensure that a high standard of corporate governance is practised throughout the Group as a fundamental part ofdischarging its responsibilities.

The Board will undertakes all measures to ensure that the principles and best practices set out in the MalaysianCode of Corporate Governance are observed and practised throughout the Group.

BOARD OF DIRECTORS

The Group is headed by an experienced Board comprising of professionals and entrepreneurs with diverseknowledge and experience in business, financial, management and engineering background. The Board effectivelyleads the Group by providing directions and guidance to the management and staff.

As at the end of financial year 2009, the Board consists of six (6) members of which three (3) are ExecutiveDirectors while the other three (3) are Non-Executive Directors. Out of the three (3) Non-Executive Directors, two(2) are also functioning as Independent Directors. The current composition satisfies the requirement of ListingRequirement and the Board considers its current size as adequate and capable to lead the Group through efficientand effective discussion and decision makings.

The three Executive Directors are individually responsible for the Groups three main division respectively namelymanufacturing of printed and paper related products; reconditioning and refurbishment of printing and printingrelated machinery; and manufacturing of PVC & PET rigid films and PVC & PET shrinkable film. The three Non-Executive Directors do not participate in the day-to-day management of the Group, instead their functions are toprovide independent views, assessment and advice on various management proposals.

A brief profile of each of the Directors is presented on page 7 to 8.

BOARD MEETINGS AND SUPPLY OF INFORMATION

Attendance of all the Directors at the Board Meetings are disclosed in the Statement Accompanying the Notice ofAnnual General Meeting in page 5.

The agenda together with the detailed reports and preliminary proposals to be tabled at the Board meeting arecirculated to all the Directors for their perusal and consideration prior to each Board meeting.

All matters arising, deliberations and conclusions of the Board meetings are accurately recorded in the minutesby the Company Secretary, confirmed by the Board and signed as correct record by the Chairman of the meeting.

Senior Management staff as well as outside advisers or professionals were invited to attend the Board meeting asand when necessary to provide the Board with their views and explanation in relation to the pre-set agenda andalso to furnish clarification on matters that may be raised by the Directors.

DIRECTORS TRAINING

All Directors had attended and completed the Mandatory Accreditation Programme conducted by the ResearchInstitute of Investment Analysts Malaysia (RIAAM). The Directors will continue to participate in relevant trainingprogrammes to further enhance their knowledge on a continuous basis.During the financial year 2009, the Directors attended training programmes and seminars on various areas suchas finance, economy and management. The Directors also attended related trade fairs all over the world to keepabreast with the latest technology and market trend in the printing as well as plastic manufacturing industries.

RE-ELECTION OF DIRECTORS

Article 87.1 of the Companys Articles of Association provides that one-third of the Directors, or if their numbersare not three (3) or a multiple of three (3), then the number nearest to but not exceeding one-third shall retire fromoffice. The Company shall ensure that all Directors shall retire from office once at least in each three (3) years butshall be eligible for re-election.


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BOARD COMMITTEES

The Board had established the following committees and delegated specific tasks and responsibilities to them.

These committees are to report back to the Board the outcomes and recommendations thereon for the Board tomake final decision. The main committees that were set up are :

1. Nomination Committee

The Nomination Committee was set up on 8 May 2002 with the given tasks of monitoring and appointing anynew Director when the need arises. It comprises of the following members :

Chua Ah Lak (Chairman) Independent Non-Executive Director

Yeo Wee Thow @ Yeo Ngo Tee Independent Non-Executive Director

Ma Huak Huang Non-Executive Director

The Nomination Committee would be responsible, inter alia:

to identify and recommend suitable candidates to fill seats on the Board when the need arises; to review the appropriate combination of skills, knowledge and experience among the members of the

Board so as to add effectiveness to its function to ensure numbers of Directors on the Board truly reflect the size of investment by the shareholders to evaluate the effectiveness of the function of various committees of the Board and also the Board itself

2. Remuneration Committee

The Remuneration Committee was established on 8 May 2002. The Committee, inter alia, reviews andrecommends to the Board the appropriate remuneration payable to the Directors.

The committees comprised of the following members:

Chua Ah Lak (Chairman) Independent Non-Executive Director

Yeo Wee Thow @ Yeo Ngo Tee Independent Non-Executive Director

Ma Huak Huang Non-Executive Director

Kok Kam Moi Managing Director

Chua Ngeun Lok Executive Director

3. Audit Committee

The composition, terms of reference and other related report on Audit Committee are presented on page 10 to11.

DIRECTORS REMUNERATION

The details of the Directors remuneration which include benefit-in-kind for the financial year 2009 are as follow:

Executive Directors Non-Executive DirectorsRM RM

Salaries 540,000 -Fees 290,000 167,000Bonus 240,000 -Benefit-in Kind 37,200 -Total 1,107,200 167,000


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The Directors remuneration which include the benefit-in-kind for the financial year 2009 categorised into bandof RM50,000 are as follow :

Range of Remuneration Executive Director Non-Executive DirectorRM

50,000 and below - 250,001 to 100,000 - 1100,001 to 150,000 - -150,001 to 200,000 - -200,001 to 250,000 - -250,001 to 300,000 - -300,001 to 350,000 1 -350,001 to 400,000 2 -400,001 to 450,000 - -

450,001 to 500,000 - -

FINANCIAL REPORTING

The Board is responsible for the preparation of the annual financial statement to the shareholders and has takennecessary effort to present a balanced, accurate and understandable assessment of the Groups financial positionand prospects. The announcement of the quarterly and annual results was made to the public within the stipulatedtime frame based on the recommendation of the audit committee.

INTERNAL CONTROL

The Statement On Internal Control furnished on page 12 to 13 of the annual report provides an overview on the

state of internal control within the Group.

RELATIONSHIP WITH AUDITORS

The role of the Audit Committee in relation to the external auditors is set out on page 10 and 11.

RELATIONSHIP WITH SHAREHOLDERS

A copy of the annual report is sent to all the shareholders and notice of General Meeting is published in majornewspapers at least 21 days in advance of the actual date of meeting as to comply with the Listing Requirements.The annual report will be also made available upon request to those interested parties.

The Board members, the company secretary and the external auditors are present at the Annual General Meeting

in order to provide an opportunity for the shareholders to seek clarification and to have better understanding onthe Groups activities.

OTHER DISCLOSURE REQUIREMENTS

Imposition of sanction/penalties

There were no sanctions/penalties imposed on the Group, Directors or Management by the relevant regulatorybodies during the financial year.

Non-audit fee

An amount of RM5,000 of non-audit fee was paid to the external auditors during the financial year.

Material contract

There were no material contracts on the Group or its subsidiaries entered into during the financial year whichinvolve Directors and major shareholders interests.


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Profit guarantee

The Company is not subject to any requirement for profit guarantee for the whole of the financial year.

Share buy-back

The Company had on 26 June 2009 sought and obtained approval from its shareholders in respect of share buy-back of up to 10% of the issued and paid up share capital of the company.

During the financial year 2009, the company had bought back from the open market 396,000 units of itsissued ordinary share of RM1.00 each listed on the Main Market of Bursa Malaysia Securities Berhad. A monthlybreakdown of the shares bought back during the financial year 2009 is given as below :

No of Consideration Minimum Maximum AverageMonth shares paid (RM)* price paid price paid price paid

(RM) (RM) (RM)

May 104,800 139,480.37 1.46 1.51 1.33 July 69,200 99,190.26 1.44 1.45 1.43September 202,000 294,139.11 1.40 1.43 1.46December 20,000 29,731.96 1.32 1.34 1.49

*including transaction cost

None of these purchased shares were resold or cancelled by the Company as at 6 May 2010

Option, Warrants or convertible Securities

No option, warrant or convertible securities were issued by the Group during the financial year ended 31 December2009.

American Depository Receipt (ADR) or Global Depository Receipt (GDR) programme

The company did not sponsor any ADR or GDR programme during the financial year.

Revaluation of landed properties

The Group revalues its investment properties every year. The Directors estimate the fair value of the Groupsinvestment properties without involvement of independent valuers for 4 years. An external, independent valuationfirm, having appropriate recognized professional qualifications and recent experience in the location and category

of property being valued, values the Groups investment property portfolio on every fifth year. .

Recurrent related party transactions of a revenue nature

There is no recurrent related party transaction of a revenue nature which require shareholders mandate duringthe financial year.

Directors responsibility statement in respect of the audited Financial Statement

The Companys financial statements are prepared in accordance with the requirement of approved accountingstandards in Malaysia and provisions of the Companies Act, 1965. The Directors take responsibility in ensuringthat the annual financial statement and the quarterly announcement of results of the Company are presented to

convey a balanced, accurate and understandable assessment of the Groups financial status and future prospects.


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5 Year Performance Highlights

0

2

6

4

8

10

2009 2008 2007 2006 2005

RM (SEN)

1010 10 10 10(proposed)

aGross Dividend Paid

10 10 10proposed)

0.0

10.0

20.0

30.0

5.0

15.0

25.0

35.0

2009 2008 2007 2006 2005

RM (SEN)28.35

20.5

27.4

23.0

32.130.3

28.8

21.923.3

25.0Earnings per share (Gross)

Earnings per share (Net)

27.4

23.0

32.10.3

.8

21.923.

25.0

Gross &areNet Earnings per share

10

009 008 2007 2006 2005

0.0

60.0

120.0

90.0

150.0

180.0

2009 2008 2007 2006 2005

RM (MILLION) 157.9141.3

129.9

116.0

149.9

unShareholders Fund

20.0

30.0

25.0

35.0RM (SEN)

Earnings per share (Gross)

Earnings per share (Net)

28.35

20.5

28

157.9141.3

129.9

149.9

2009 008 007 2006 005

0.0

5.0

10.0

15.0

20.0

2009 2008 2007 2006 2005

RM (MILLION) 18.6

14.1

18.2

15.4

20.819.019.1

14.4 14.616.2

Profit before tax

Profit after tax

116.0

2009 2008 2007 2006 2005

18.2

15.4

20.819.019.1

14.4 14.616.2

Profit

overTurnover30.0

00.0

60.0

90.0

120.0

150.0

2009 2008 2007 2006 2005

115.9

RM (MILLION)

119.1

139.3138.3133.5

129.2

10.0

15.0

20.0RM (MILLION)

Profit before tax

8.6

14.1

5..

119.1

139.3138.3133.5

129.2


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Directors reportfor the year ended 31 December 2009

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of theCompany for the financial year ended 31 December 2009.

Principal activities

The Company is principally engaged in investment holding and provision of management services, whilst theprincipal activities of the subsidiaries are as stated in Note 30 to the financial statements. There has been nosignificant change in the nature of these activities during the financial year.

Results Group Company

RM000 RM000Profit/(Loss) attributable to:

Equity holders of the company 13,464 (427)Minority interest 697 -

14,161 (427)

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year under review exceptas disclosed in the financial statements.

Dividends

Since the end of the previous financial year, the Company paid a first and final dividend of 10 sen per ordinaryshare less tax at 25% totalling RM4,924,000 (7.5 sen net per ordinary share) in respect of the year ended 31December 2008 on 28 July 2009.

The Directors recommend a first and final dividend of 10 sen per ordinary share less tax at 25% totalling

RM4,893,000 (7.5 sen net per ordinary share) for the financial year ended 31 December 2009.

Directors of the Company

Directors who served since the date of the last report are:

Chua Ah LakChua Ngeun LokKok Kam MoiMa Huak HuangChua Ngeun Seong

Yeo Wee Thow @ Yeo Ngo Tee

Directors interests

The interests and deemed interests in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or childrenof the Directors who themselves are not Directors of the Company) as recorded in the Register of DirectorsShareholdings are as follows:

Number of Ordinary Shares of RM1 eachAt At

Holding company 1.1.2009 Bought Sold 31.12.2009- UPA Holdings Sdn. Bhd.

Kok Kam Moi - direct interest 426,670 - - 426,670- deemed interest 171,199 - - 171,199

Chua Ngeun Lok - direct interest 391,290 - - 391,290- deemed interest 399,666 - - 399,666

Ma Huak Huang - direct interest 171,199 - - 171,199- deemed interest 611,352 - - 611,352

Chua Ngeun Seong - direct interest 399,666 - - 399,666- deemed interest 391,290 - - 391,290


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The Company 1.1.2009 Bought Sold 31.12.2009- UPA Corporation Bhd.

Kok Kam Moi - direct interest 961,310 - - 961,310- deemed interest 34,049,241 - - 34,049,241

Chua Ngeun Lok - direct interest 819,039 - - 819,039- deemed interest 35,060,121 - - 35,060,121

Ma Huak Huang - direct interest 259,446 - - 259,446- deemed interest 35,274,096 20,000 - 35,294,096

Chua Ngeun Seong - direct interest 350,080 - - 350,080- deemed interest 35,329,080 - - 35,329,080

Yeo Wee Thow @ - direct interest 820,750 - - 820,750Yeo Ngo Tee - deemed interest 896,000 - - 896,000

Chua Ah Lak - direct interest 280,600 - - 280,600- deemed interest 93,000 - - 93,000


Subsidiary 1.1.2009 Bought Sold 31.12.2009- Sukiwa Corporation Sdn. Bhd.

Chua Ah Lak - direct interest 300,000 - 300,000 -Kok Kam Moi - deemed interest 3,686,000 767,000 - 4,453,000Chua Ngeun Lok - deemed interest 3,686,000 767,000 - 4,453,000Ma Huak Huang - deemed interest 3,686,000 767,000 - 4,453,000Chua Ngeun Seong - deemed interest 3,686,000 767,000 - 4,453,000

By virtue of their interests in the shares of the Company, Kok Kam Moi, Chua Ngeun Lok, Ma Huak Huang andChua Ngeun Seong are also deemed interested in the shares of the subsidiaries during the financial year to theextent that UPA Corporation Bhd. has an interest.

Directors benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled toreceive any benefit (other than a benefit included in the aggregate amount of emoluments received or due andreceivable by Directors as shown in the financial statements or the fixed salaries of full time employees of relatedcompanies) by reason of a contract made by the Company or a related corporation with the Director or with a firmof which the Director is a member, or with a company in which the Director has a substantial financial interest.

There were no arrangements during and at the end of the financial year which had the object of enabling Directorsof the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or anyother body corporate.

Issue of shares

There were no changes in issued and paid-up capital of the Company during the financial year.

Directors report


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Share buy-back

On 26 June 2009, the shareholders of the Company renewed their approval for the Company to buy-back its ownshares. During the financial year, the Company bought back from the open market, 396,000 of its issued ordinaryshares of RM1.00 each (UPA Shares) listed on the Main Market of Bursa Securities at an average buy-back priceof RM1.42 per ordinary share. The total consideration paid for the share buy-back of UPA Shares by the Companyduring the financial year, including transaction costs, was RM562,542 and was financed by internally generatedfunds. The UPA Shares bought back are held as treasury shares in accordance with Section 67A Sub-section 3(A)(b) of the Companies Act, 1965. None of the treasury shares held were resold or cancelled during the financialyear.

As at 31 December 2009, the Company held 1,089,000 UPA Shares as treasury shares out of its total issuedand paid-up share capital of 66,536,600 UPA Shares. Such treasury shares are held at a carrying amount ofRM1,526,883. Further information is as disclosed in Note 14 to the financial statements.

Other statutory information

Before the balance sheets and income statements of the Group and of the Company were made out, the Directorstook reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in

the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the Group and in the Company financialstatements misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of theGroup and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the

financial statements of the Group and of the Company misleading.

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year andwhich secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financialyear.

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

In the opinion of the Directors, except for the gain in fair value of investment properties as disclosed in Note 19 to

the financial statements, the results of the operations of the Group and of the Company for the financial year ended31 December 2009 have not been substantially affected by any item, transaction or event of a material and unusualnature nor has any such item, transaction or event occurred in the interval between the end of that financial yearand the date of this report.

Directors report


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Significant event during the year

The significant event during the financial year is as disclosed in Note 32 to the financial statements.

Events subsequent to balance sheet date

The events subsequent to balance sheet date are as disclosed in Note 33 to the financial statements.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

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

Chua Ngeun Lok

Kok Kam Moi

Kuala Lumpur,Date: 28 April 2010

Directors report


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Balance sheetsat 31 December 2009

Group CompanyNote 2009 2008 2009 2008

RM000 RM000 RM000 RM000Assets

Property, plant and equipment 3 44,495 46,314 - -Prepaid lease payments 4 20,610 23,780 - -Investments in subsidiaries 5 - - 48,540 46,239Investments in associates 6 8,011 8,483 4,716 5,765Investment properties 7 13,897 9,950 - -Deferred tax assets 8 571 1,371 - -

Total non-current assets 87,584 89,898 53,256 52,004

Other investments 9 934 - 934 -Inventories 10 41,751 36,770 - -

Receivables and deposits 11 42,589 43,593 20,843 24,292Current tax assets 1,712 1,593 143 91Cash and cash equivalents 12 40,508 20,321 3,655 7,087Asset classified as held for sale 13 719 - 490 -

Total current assets 128,213 102,277 26,065 31,470

Total assets 215,797 192,175 79,321 83,474

EquityShare capital 66,537 66,537 66,537 66,537Reserves 2,328 2,933 2,370 2,933

Retained earnings 89,017 80,477 7,611 12,962

Total equity attributable to equityholders of the Company 157,882 149,947 76,518 82,432

Minority interest 263 1,599 - -

Total equity 14 158,145 151,546 76,518 82,432

LiabilitiesBorrowings 15 8,075 11,255 - -Deferred tax liabilities 8 7,543 8,027 - -

Total non-current liabilities 15,618 19,282 - -

Provision 16 168 168 - -Current tax liabilities 2,422 2,767 - -Payables and accruals 17 11,599 8,141 2,803 1,042Borrowings 15 27,845 10,271 - -

Total current liabilities 42,034 21,347 2,803 1,042

Total liabilities 57,652 40,629 2,803 1,042

Total equity and liabilities 215,797 192,175 79,321 83,474

The notes on pages 29 to 60 are an integral part of these financial statements.


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Income statementsfor the year ended 31 December 2009

Group CompanyNote 2009 2008 2009 2008

RM000 RM000 RM000 RM000

Revenue 18 119,075 138,344 508 718

Results from operating activities 18,19 18,928 20,080 (462) 190Interest income 460 425 147 59Interest expense 21 (1,016) (1,605) - -

Operating profit/(loss) 18,372 18,900 (315) 249Share of profit of equity accounted

associates net of tax 247 244 - -

Profit/(Loss) before tax 18,619 19,144 (315) 249

Tax expense 22 (4,458) (4,685) (112) (157)

Profit/(Loss) for the year 14,161 14,459 (427) 92

Attributable to:Equity holders of the Company 13,464 14,466 (427) 92Minority interest 697 (7) - -

Profit/(Loss) for the year 14,161 14,459 (427) 92

Basic earnings per ordinary share (sen) 23 20.50 21.88

The notes on pages 29 to 60 are an integral part of these financial statements.


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Consolidated statement of changes in equityfor the year ended 31 December 2009

Reserves

Non-distributable Distributable

Share Share Translation Treasury Retained Sub- Minoritycapital premium reserve shares profits Total interest Total

Note RM000 RM000 RM000 RM000 RM000 RM000 RM000 RM000

At 1 January 2008 66,537 3,897 - - 70,885 141,319 1,632 142,951Profit for the year - - - - 14,466 14,466 (7) 14,459Dividends to shareholders -2007 final 24 - - - - (4,874) (4,874) - (4,874)

Acquisition of treasury shares - - - (964) - (964) - (964) Acquisition of minority interest 31 - - - - - - (26) (26)

At 31 December 2008 66,537 3,897 - (964) 80,477 149,947 1,599 151,546

At 1 January 2009 66,537 3,897 - (964) 80,477 149,947 1,599 151,546Foreign exchangetranslation differences - - (42) - - (42) - (42)

Net losses recognised directlyin equity - - (42) - - (42) - (42)Profit for the year - - - - 13,464 13,464 697 14,161

Total recognised income andexpense for the year - - (42) - 13,464 13,422 697 14,119Dividends to shareholders -2008 final 24 - - - - (4,924) (4,924) - (4,924)

Acquisition of treasury shares - - - (563) - (563) - (563) Acquisition of minority interest 31 - - - - - - (2,215) (2,215) Acquisition by minority interest - - - - - - 182 182

At 31 December 2009 66,537 3,897 (42) (1,527) 89,017 157,882 263 158,145

Note 14.1 Note 14.3 Note 14.4


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Notes to the financial statements

UPA Corporation Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listedon the Main Market of Bursa Malaysia Securities Berhad. The addresses of its registered office and principal placeof business are as follows:

Registered office53A, Jalan SS21/1A, Damansara Utama47400 Petaling JayaSelangor Darul Ehsan

Principal place of businessLot 8228, 6.5 Miles

Jalan Kuchai Lama58200 Kuala Lumpur

The consolidated financial statements of the Group as at and for the year ended 31 December 2009 comprisethe Company and its subsidiaries (together referred to as the Group) and the Groups interest in associates. Thefinancial statements of the Company as at and for the year ended 31 December 2009 do not include other entities.

The Company is principally engaged in investment holding and provision of management services, whilst theprincipal activities of the subsidiaries are as stated in Note 30 to the financial statements.

The ultimate holding company during the financial year is UPA Holdings Sdn. Bhd., a company incorporated inMalaysia.

The financial statements were approved by the Board of Directors on 28 April 2010.

1. Basis of preparation

(a) Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standards (FRS),

accounting principles generally accepted and the Companies Act, 1965 in Malaysia. These financialstatements also comply with the applicable disclosure provisions of the Listing Requirements of the BursaMalaysia Securities Berhad.

The Group and the Company has not applied the following accounting standards, amendments andinterpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yeteffective for the Group and the Company:

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2009 FRS 8, Operating Segments

FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2010 FRS 4, Insurance Contracts FRS 7, Financial Instruments: Disclosures

FRS 101, Presentation of Financial Statements (revised) FRS 123, Borrowing Costs (revised) FRS 139, Financial Instruments: Recognition and Measurement Amendments to FRS 1, First-time Adoption of Financial Reporting Standards Amendments to FRS 2, Share-based Payment: Vesting Conditions and Cancellations Amendments to FRS 7, Financial Instruments: Disclosures Amendments to FRS 101, Presentation of Financial Statements Puttable Financial Instruments and

Obligations Arising on Liquidation Amendments to FRS 127, Consolidated and Separate Financial Statements: Cost of an Investment in a

Subsidiary, Jointly Controlled Entity or Associate Amendments to FRS 132, Financial Instruments: Presentation

- Puttable Financial Instruments and Obligations Arising on Liquidation- Separation of Compound Instruments

Amendments to FRS 139, Financial Instruments: Recognition and Measurement- Reclassification of Financial Assets- Collective Assessment of Impairment for Banking Institutions

Improvements to FRSs (2009) IC Interpretation 9, Reassessment of Embedded Derivatives IC Interpretation 10, Interim Financial Reporting and Impairment IC Interpretation 11, FRS 2 Group and Treasury Share Transactions


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(ii) Improvements to FRSs (2009)

Improvements to FRSs (2009) contain various amendments that result in accounting changes for

presentation, recognition or measurement and disclosure purposes. Amendment that has materialimpact is:

FRS 117, Leases

The 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 whichin substance is a finance lease will be reclassified to property, plant and equipment. The adoption ofthese amendments will result in a change in accounting policy which will be applied retrospectively inaccordance with the transitional provisions. The Directors are assessing the impact of the amendmentsand expect that this change in accounting policy will result in reclassification of lease of land amountingto RM20,610,000 (2008 - RM23,780,000) as at 31 December 2009 from prepaid lease payments toproperty, plant and equipment.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for investment properties asexplained in its accounting policy note.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functionalcurrency. All financial information presented in RM has been rounded to the nearest thousand, unlessotherwise stated.

(d) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesare recognised in the period in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accountingpolicies that have significant effect on the amounts recognised in the financial statements other than thosedisclosed in Note 7, valuation of investment properties.

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financialstatements, and have been applied consistently by Group entities.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the ability toexercise its power to govern the financial and operating policies of an entity so as to obtain benefitsfrom its activities. In assessing control, potential voting rights that presently are exercisable are takeninto account. Subsidiaries are consolidated using the purchase method of accounting.

Under the purchase method of accounting, the financial statements of subsidiaries are included in theconsolidated financial statements from the date that control commences until the date that controlceases.

Investments in subsidiaries are stated in the Companys balance sheet at cost less any impairment losses.

(ii) Associates

Associates are entities in which the Group has significant influence, but not control, over the financialand operating policies.



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Associates are accounted for in the consolidated financial statements using the equity method. Theconsolidated financial statements include the Groups share of the profit or loss of the equity accountedassociates, after adjustments, if any, to align the accounting policies with those of the Group, from the

date that significant influence commences until the date that significant influence ceases.

When the Groups share of losses exceeds its interest in an equity accounted associate, the carryingamount of that interest (including any long-term investments) is reduced to nil and the recognitionof further losses is discontinued except to the extent that the Group has an obligation or has madepayments on behalf of the investee.

Investments in associates are stated in the Companys balance sheet at cost less any impairment losses.

(iii) Changes in Group composition

Where a subsidiary issues new equity shares to minority interests for cash consideration and the issueprice has been established at fair value, the reduction in the Groups interests in the subsidiary isaccounted for as a disposal of equity interest with the corresponding gain or loss recognised in the

income statements.

When a group purchases a subsidiarys equity shares from minority interests for cash considerationand the purchase price has been established at fair value, the accretion of the Groups interests inthe subsidiary is accounted for as a purchase of equity interest for which the acquisition method ofaccounting is applied.

The Group treats all other changes in group composition as equity transactions between the Group andits minority shareholders. Any difference between the Groups share of net assets before and after thechange, and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Minority interest

Minority interest at the balance sheet date, being the portion of the net identifiable assets of subsidiaries

attributable to equity interests that are not owned by the Company, whether directly or indirectlythrough subsidiaries, are presented in the consolidated balance sheet and statement of changes inequity within equity, separately from equity attributable to the equity holders of the Company. Minorityinterest in the results of the Group are presented on the face of the consolidated income statements asan allocation of the total profit or loss for the year between minority interest and the equity holders ofthe Company.

Where losses applicable to the minority exceed the minoritys interest in the equity of a subsidiary, theexcess, and any further losses applicable to the minority, are charged against the Groups interest exceptto the extent that the minority has a binding obligation to, and is able to, make additional investment tocover the losses. If the subsidiary subsequently reports profits, the Groups interest is allocated with allsuch profits until the minoritys share of losses previously absorbed by the Group has been recovered.

(v) Transactions eliminated on consolidation

Intra-group balances, and any unrealised income and expenses arising from intra-group transactions,are eliminated in preparing the consolidated financial statements. Unrealised gains arising fromtransactions with equity accounted investees are eliminated against the investment to the extent of theGroups interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains,but only to the extent that there is no evidence of impairment.

(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Groupentities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated inforeign currencies at the balance sheet date are retranslated to the functional currency at the exchangerate at that date. Non-monetary assets and liabilities denominated in foreign currencies are translatedat exchange rates at the dates of the transactions except for those that are measured at fair value,which are retranslated to the functional currency at the exchange rate at the date that the fair valuewas determined. Foreign currency differences arising on retranslation are recognised in the incomestatements.



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(c) Derivative financial instruments

The Group holds derivative financial instruments to hedge its foreign currency risk exposures.

Forward foreign exchange contracts are accounted for on an equivalent basis as the underlying assets,liabilities or net positions. Any profit or loss arising is recognised on the same basis as that arising from therelated assets, liabilities or net positions.

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulatedimpairment losses, if any.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any othercosts directly attributable to bringing the asset to the working condition for its intended use, and the

costs of dismantling and removing the items and restoring the site on which they are located. The costof self-constructed assets also includes the cost of materials and direct labour. Purchased software thatis integral to the functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they areaccounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparingthe proceeds from disposal with the carrying amount of property, plant and equipment and are recognisednet within other income or other operating expenses respectively in the income statements.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying

amount of the item if it is probable that the future economic benefits embodied within the part willflow to the Group and its cost can be measured reliably. The carrying amount of the replaced part isderecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised inthe income statements as incurred.

(iii) Depreciation

Depreciation is recognised in the income statements on a straight-line basis over the estimated usefullives of each part of an item of property, plant and equipment. Leased assets are depreciated over theshorter of the lease term and their useful lives. Freehold land is not depreciated. Property, plant andequipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

Buildings 50 years Apartment 50 years Factory buildings 50 years Motor vehicles 5 years Plant and machinery 10 years Renovation, furniture and fittings 20 years Office and factory equipment 10 years

Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.

(e) Leased assets

(i) Finance lease

Leases in terms of which the Group or the Company assume substantially all the risks and rewardsof ownership are classified as finance leases. Upon initial recognition, the leased asset is measured atan amount equal to the lower of its fair value and the present value of the minimum lease payments.Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policyapplicable to that asset.


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Minimum lease payments made under finance leases are apportioned between the finance expenseand the reduction of the outstanding liability. The finance expense is allocated to each period duringthe lease term so as to produce a constant periodic rate of interest on the remaining balance of the

liability. Contingent lease payments are accounted for by revising the minimum lease payments overthe remaining term of the lease when the lease adjustment is confirmed.

(ii) Operating lease

Leases, where the Group does not assume substantially all the risks and rewards of the ownership areclassified as operating leases, and the leased assets are not recognised on the Groups balance sheet.

Leasehold land that normally has an indefinite economic life and title is not expected to pass to thelessee by the end of the lease term is treated as an operating lease. The payment made on entering intoor acquiring a leasehold land is accounted for as prepaid lease payments.

Payments made under operating leases are recognised in the income statements on a straight-line basisover the term of the lease. Lease incentives received are recognised as an integral part of the total lease

expense, over the term of the lease.

(f) Investment properties

(i) Investment properties carried at fair value

Investment properties are properties which are owned to earn rental income or for capital appreciationor for both. These include land held for a currently undetermined future use. Properties that areoccupied by the companies in the Group are accounted for as owner-occupied rather than as investmentproperties.

Investment properties are measured initially at cost and subsequently at fair value with any changetherein recognised in the income statements.

(ii) Reclassification to/from investment property

When an item of property, plant and equipment is transferred to investment property following achange in its use, any difference arising at the date of transfer between the carrying amount of theitem immediately prior to transfer and its fair value is recognised directly in equity as a revaluation ofproperty, plant and equipment. However, if a fair value gain reverses a previous impairment loss, thegain is recognised in profit or loss. Upon disposal of an investment property, any surplus previouslyrecorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.

When the use of a property changes such that it is reclassified as property, plant and equipmentor inventories, its fair value at the date of reclassification becomes its deemed cost for subsequentaccounting.

(iii) Determination of fair value

The Directors estimate the fair values of the Groups investment properties without involvement ofindependent valuers for four years. An external, independent valuation firm, having appropriaterecognised professional qualifications and recent experience in the location and category of propertybeing valued, values the Groups investment property portfolio on every fifth year.

The fair values are based on market values, being the estimated amount for which a property could beexchanged on the date of the valuation between a willing buyer and a willing seller in an arms lengthtransaction after proper marketing wherein the parties had each acted knowledgeably, prudently andwithout compulsion.

In the absence of current prices in an active market, the valuations are prepared by considering theaggregate of the estimated cash flows expected to be received from renting out the property. A yield thatreflects the specific risks inherent in the net cash flows then is applied to the net annual cash flows toarrive at the property valuation.

Valuations reflect the remaining economic life of the property. When rent reviews or lease renewals arepending with anticipated reversionary increases, it is assumed that all notices and where appropriatecounter-notices have been served validly and within the appropriate time.



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(g) Investments in equity securities

Investments in equity securities are recognised initially at fair value plus attributable transaction costs.

Subsequent to initial recognition: investments in non-current equity securities other than investments in subsidiaries and associates are

stated cost less diminution in value. all current investments are carried at the lower of cost and market value, determined on an individual

investment basis by category of investments.

Where in the opinion of the Directors, there is a decline other than temporary in the value of non-currentsecurities other than investments in subsidiaries and associates, the allowance for diminution in value isrecognised as an expense in the financial year in which the decline is identified.

On disposal of an investment, the difference between net disposal proceeds and its carrying amount isrecognised in the income statements.

All investments in equity securities are accounted for using settlement date accounting. Settlement dateaccounting refers to:

a) the recognition of an asset on the day it is received by the entity, andb) the derecognition on an asset and recognition of any gain or loss on disposal on the date it is delivered.

(h) Inventories

Inventories comprise raw materials, work-in-progress, manufactured inventories, printing and othermachines held for trading which are measured at the lower of cost and net realisable value. The cost of rawmaterials, work-in-progress and manufactured inventories is based on the first-in first-out principle andincludes expenditure incurred in acquiring the inventories and bringing them to their existing location andcondition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate shareof production overheads based on normal operating capacity. In the case of printing and other machines

held for trading, cost consists of the actual value paid for each individual inventory and is determined ona specific identification basis. Net realisable value is the estimated selling price in the ordinary course ofbusiness, less the estimated costs of completion and the estimated costs necessary to make the sale.

(i) Receivables

Receivables are initially recognised at their cost when the contractual right to receive cash or anotherfinancial asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(j) Non-current assets held for sale

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recoveredprimarily through sale rather than through continuing use are classified as held for sale. Immediately beforeclassification as held for sale, the assets (or components of a disposal group) are remeasured in accordancewith the Groups accounting policies. Thereafter generally the assets (or disposal group) are measured at thelower of their carrying amount and fair value less cost of sell. Any impairment loss on a disposal group firstis allocated to goodwill, and then to the remaining assets and liabilities on pro rata basis, except that no lossis allocated to inventories, financial assets, deferred tax assets and investment property, which continue tobe measured in accordance with the Groups accounting policies. Impairment losses on initial classificationas held for sale and subsequent gains or losses on remeasurement are recognised in the income statements.Gains are not recognised in excess of any cumulative impairment loss.

(k) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks. For the purpose ofthe cash flow statement, cash and cash equivalents are presented net of bank overdrafts.


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(l) Impairment of assets

The carrying amounts of assets, except for investment properties, inventories, deferred tax assets and financial

assets are reviewed at each reporting date to determine whether there is any indication of impairment. If anysuch indication exists, then the assets recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair valueless costs to sell. In assessing value in use, the estimated future cash flows are discounted to their presentvalue using a pre-tax discount rate that reflects current market assessments of the time value of money andthe risks specific to the asset. For the purpose of impairment testing, assets are grouped together into thesmallest group of assets that generates cash inflows from continuing use that are largely independent of thecash inflows of other assets or groups of assets (the cash-generating unit).

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds itsrecoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss isrecognised directly against any revaluation surplus for the asset to the extent that the impairment loss doesnot exceed the amount in the revaluation surplus for that same asset. Impairment losses are recognised

in the income statements. Impairment losses recognised in respect of cash-generating units are allocatedfirst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carryingamount of the other assets in the unit (groups of units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications thatthe loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in theestimates used to determine the recoverable amount. An impairment loss is reversed only to the extent thatthe assets carrying amount does not exceed the carrying amount that would have been determined, net ofdepreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment lossesare credited to the income statements in the year in which the reversals are recognised, unless it reverses animpairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where animpairment loss on the same revalued asset was previously recognised in the income statements, a reversalof that impairment loss is also recognised in the income statements.

(m) Equity instruments

All equity instruments are stated at cost on initial recognition and are not re-measured subsequently.

(i) Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, includingdirectly attributable costs, is recognised as a deduction from equity and is not re-valued for subsequentchanges in the fair value or market price of shares. Repurchased shares are classified as treasury sharesand are presented as a deduction from total equity.

Where treasury shares are distributed as share dividends, the cost of the treasury shares is applied inthe reduction of the share premium account or distributable reserves, or both.

Where treasury shares are reissued by re-sale in the open market, the difference between the salesconsideration net of directly attributable costs and the carrying amount of the treasury shares isrecognised in equity.

(n) Loans and borrowings

Loans and borrowings are stated at amortised cost with any difference between cost and redemption valuebeing recognised in the income statements over the period of the loans and borrowings using the effectiveinterest method.

(o) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave andsick leave are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a resultof past service provided by the employee and the obligation can be estimated reliably.



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(t) 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 statements using the effective interest method, in theperiod in which they are incurred.

(u) Tax expense

Tax expense comprises current and deferred tax. Tax expense is recognised in the income statements exceptto the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted orsubstantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previousyears.

Deferred tax is recognised using the balance sheet method, providing for temporary differences between

the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxationpurposes. Deferred tax is not re

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