1478455931--1915912212

- Bu i ld ing the C i t y o f Tomor row

Annual Report 2012

w w w . p r e s s m e t a l . c o m

PRESS METAL BERHAD 153208-W

Aluminium is the world's second most

used metal. It is the metal of choice for

designers, architects and engineers

who require a material which is both

functional and cost-effective yet

possesses extraordinary strength and

versatility.

In today's world however, innovative

form is nothing without sustainable

potential.

Aluminium is also one of the world's

greenest metals. At Press Metal, we call

it an 'energy bank' because aluminium

can be recycled infinitely. The metal can

be recycled again and again without

any loss of its inherent properties.

Unlike the 'cradle-to-grave' sequence

of most products, the life cycle of an

aluminium product is a renewable

'cradle-to-cradle' one.

2 PRESS METAL BERHAD 153208 W

From strong yet lightweight shapes

to high-tech electronic components,

aluminium plays an essential part in

our modern lifestyles.

3ANNUAL REPORT 2012

2012 Overview

ContentsPress Metal at a Glance

Chairman’s Statement

Review of Operations by Group CEO

Event Highlights

Corporate Structure

Corporate Information

Profile of Directors

Group Financial Highlights

Corporate Social Responsibilities

Statement

Corporate Governance Statement

Additional Compliance Information

Audit Committee Report

Statement on Risk Management

and Internal Control

Financial Statements

List of Properties

Analysis of Shareholdings

Analysis of RCSLS Holdings

Analysis of Warrant Holdings

Notice of Annual General Meeting

Form of Proxy

04

06

08

10

13

14

15

20

21

23

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34

40

42

145

146

149

152

155


PRESS METAL at aPRESS METAL at aPPPPPPPPRRRRRRREEEEEESSSSSSSSSSS MMMMMMMMEEEEEEETTTTTTAAAAALLLLLLLL aaaaaatttttt aaaaPPPPPRRRREEEESSSSSSS MMMMMEEEEETTTTAAAALLLL aaaatttt aaaPRESS METAL at a

MALAYSIA

Press Metal is the leading aluminium extruder in Malaysia with a 40,000 tonne production

capacity per annum, completes with in-house tool and dies shop offering customers quick

turnaround services. In addition, our plant is also equipped with modern surface finishing

facilities that provide an extensive range of surface finishes – anodize, powder coat or bright

dip.

Backed by our experience and expertise in the aluminium industry of about 30 years, Press

Metal ventured into the upstream activities in 2007 and has subsequently in 2009 successfully

built a new smelter in Mukah, Sarawak – the first-ever aluminium smelting plant in Malaysia.

To continue on this successful expansion path, Press Metal has continued with the development

of Phase 2 of our smelting project in Samalaju Industrial Park, Bintulu, Sarawak.

The Samalaju smelter has a larger production capacity of 300,000 tonne per annum, employing

the latest smelting technology, namely the 400kA technology. The technology will be more

energy efficient, enabling a higher production output with lower energy consumption.

Press Metal strives to put Malaysia at the forefront as a leading primary aluminium producer in

this region, employing the latest and most environmental-friendly technology complying with

the world best standards.

5ANNUAL REPORT 2012

Press Metal Berhad is a Malaysian-based aluminium company with extensive

global presence. From our modest beginning as a private-owned local

aluminium extrusion company in 1986, Press Metal has come a long way to

becoming a globally integrated aluminium player today – with 420,000 tonne

smelting capacity and 190,000 tonne extrusion capacity per annum.

PRESS METAL AT A GLANCE

CHINA

In China, our subsidiary in Foshan, Press Metal International Limited, is one of the biggest

exporters of aluminium products in China, with a production capacity of 120,000 tonne per

annum.

Further, the Group also established an extrusion facility in Hubei, China, with a production

capacity of 30,000 tonne per annum.

GLOBAL NETWORK

The overseas operations of Press Metal have firmly carved a niche in the global market and

continue to expand. From our initial operational base established in the United Kingdom

and Australia, our distribution centres have now extended to include the North America and

the Middle East. Thanks to such solid local presence, we have been able to build strong

relationship with our customers and cater for their needs and requirements with various

solutions instantly.


CHAIRMAN’S STATEMENT

On behalf of the Board of

Directors of Press Metal Berhad

(Press Metal), I am pleased to

present to you the Annual

Report and Audited Financial

Statements of Press Metal and

its Group for the financial year

ended 31 December 2012.

7ANNUAL REPORT 2012 7ANNUAL REPORT 2012

FINANCIAL PERFORMANCE

The year 2012 remained challenging. A global economic

recovery has proved harder to realise than originally expected,

with a number of challenges standing in the recovery path

including sovereign debt crisis in the Eurozone, weaker

recovery in the US economy, declining demand for Chinese

products and economic sensitivity in emerging economies.

The Group registered revenue of RM2.38 billion in the year

2012, a slight increase of 5 per cent compared to RM2.27

billion in year 2011. The increase is mainly contributed by the

higher output from the Mukah smelting operation which had

achieved full operation capacity, as well as the commencement

of operations of the Samalaju smelting plant.

Affected by the softened metal price and higher financing

costs, the Pre-tax profit of the Group had however, declined

by 30 per cent, from RM143.9 million in the year 2011 to

RM100.1 million in 2012.

CORPORATE DEVELOPMENT & PROSPECT

The initial phase of our smelting project in Samalaju Industrial

Park, Bintulu, Sarawak has been successfully commissioned

during the second half of year 2012, running at the initial

capacity of 100,000 MT per annum. We are hopeful that

the Samalaju plant will achieve full production capacity of

300,000 MT per annum by the second half of 2013 and

continue to contribute positively to the Group.

DIVIDENDS

The following interim dividends were declared and paid

during the year 2012:

i) First interim tax-exempt dividend of 1 sen per ordinary

share amounting to RM4,776,000; and

ii) Second interim tax-exempt dividend of 1 sen per

ordinary share amounting to RM5,072,000.

A third interim tax-exempt dividend of 1 sen per ordinary

share amounting to RM5,078,000 were declared and paid

subsequent to the financial year end. In view thereof, the

Board has not recommended a final dividend for the year.

APPRECIATION & ACKNOWLEDGEMENT

On behalf of the Board of Directors, I would like to take

this opportunity to extend our sincere appreciation to our

shareholders, customers, business associates, suppliers,

the financiers, the government agencies and regulatory

authorities for their continued support to our Group.

To the management team and members of staff, thank you

for your dedication and commitment to the Group.

DATO’ (DR.) MEGAT ABDUL RAHMAN

BIN MEGAT AHMAD

Chairman

May 2013


REVIEW OF OPERATIONS BY GROUP CEO

2012 REVIEW

Since 2009 the world is dealing with

one crisis after another crisis

although happened in different

regions, yet all have global impact on

the economies all around the world.

Following the America’s financial

crisis, the world was grabbed by the

Eurozone’s huge debt burden with

the constant debate on Greece’s

European Union membership,

remaining or exiting. After rounds of

high tension negotiation among the

EU member countries, the European

Central Bank finally managed to put

together trillions of dollar of

financing packages for the banking

sector as well as member countries

which faced sovereign debt default.

The cost for such financial aides is very high, not just on the cost of the funding but the austerity measures that the governments have to adopt to tackle their fiscal deficits. As predicted, the consequence of such harsh measure has slowed the economy growth to a halt, with unemployment shooting up in many of these Eurozone countries.

Further to the above, the world’s biggest commodities consumer, namely China also faced a different set of challenges, slowing export sales and high inflation cost. The policy to curb the increase in property prices has also dampened the investment in the property sector, thus lowered commodities consumption.

The consequence of the above factors have brought commodity prices to a much lower level in the second half of the year before recovering some ground towards the end of the year. Aluminium in particular, reached a low of US$1,793 per MT as compared to previous year low of US$1,945 per MT.

2012 GROUP PERFORMANCE

Press Metal’s upstream expansion, aluminium smelting, is on track making major progress after year-long of hard work to complete the initial phase of construction. The Samalaju smelter commenced the initial production in October and first metal was cast in the same month and first commercial quality ingots were subsequently delivered to a regional customer.

The demand in this region remained strong for the year, with premium doubling from the beginning of the year from US$120 per MT to US$240 per MT.

For the year 2012, the Group managed to achieve a turnover of RM2.38 billion as compared to RM2.27 billion the previous year, an increase of 5 per cent. However, with lower aluminium price and higher initial expenses relating to the upstream expansion incurred by Press Metal Bintulu, profit before tax was lower, decreasing from RM144 million in year 2011 to RM100 million. Meanwhile, after tax profit had increased from previous year’s RM123 million to RM222 million, mainly attributable to the recognition of deferred tax asset of RM150 million.

LOOKING FORWARD TO 2013

Some of the challenges faced in year 2012 remain to be the tough issues to be overcome this year. The Eurozone has yet to work out a comprehensive sustainable solution for some of the weaker member countries and the recent Cyprus bailed out is another case proving the complication that the Eurozone is dealing with.

Further, with austerity measures being implemented, different degrees of adoption by different member countries are expecting to yield different results for each country. The obvious result for now is the increase in unemployment and economy is in stagnation mode for the time period. Hopefully this pain will result in longer term gain for the whole Eurozone.

China with its new government in place in March this year is now focusing on getting the country back to its growth path. However, the priority of this new government may be different from the previous government and many economists are predicting that China may not be seeing the old double digit growth but a high single digit.

As such, commodities consumption especially coal and iron ore may also slow down albeit still increasing. This is also reflected in the commodity prices across the spectrum, with crude oil, cooper and other base metals coming off since the beginning of the year.

The use of aluminium however will continue to increase and is expected to be at a healthy rate. The contributing factor is that the use of aluminium per capita will continue to increase for developing countries such as China and India. A good example is the sales of passenger cars in China, the number continues to increase as household income increases and car production will bring about higher aluminium consumption.

To cope with our rapid expansion of operations, the Management has kick-started the implementation of SAP Solutions for our Malaysian downstream operations in 2012. The same system has been implemented by our China downstream operations and has proven to have enhanced our efficiency particularly in resource planning and production lead time. We will continue with the implementation of the system on group-wide basis and are confident that the day-to-day management of our Group operations will be further strengthened and improved.

In view of the above and coupled with the good going in America, we are cautiously optimistic with the current year prospects. We are also looking forward to the completion of our upstream expansion and the contribution thereof.

APPRECIATION

I hereby would like to express my sincere appreciation to the government agencies and regulatory authorities for their support, guidance and assistance. To our customers, financiers and business associates, I would like to thank you for your continuous support over the years.

On behalf of the Management team, I would like to thank our Board of Directors for their guidance and support, which are essential for us to achieve continuous growth amidst this challenging environment. To all our employees, thank you for your dedication and hard work throughout the year.

Let us all continue to strive forward to make Press Metal a well-known brand in the aluminium business.

DATO’ KOON POH KEONGGroup Chief Executive OfficerMay 2013


EVENT HIGHLIGHTS

The extrusion division of Press Metal Malaysia

has kick-started the implementation of SAP

Solutions in 2012. The implementation of the

system is expected to further enhance our

core competitiveness with higher efficiency in

resource planning and production lead time.

Mr. Lim Heng Kam was appointed the Chief Operating

Officer of Press Metal Malaysia’s extrusion operations in

February 2012, in addition to his role as the General

Manager of the Group’s China extrusion operations. Mr.

Lim has vast experience in the extrusion industry and

has played a pivotal role in the rapid growth of our China

extrusion division. His appointment is expected to

further enhance the competitiveness of the Malaysian

operations and in the meantime, bring synergy to both

the Malaysian and China extrusion operations.

The Phase 2 development of Press Metal’s smelting project in Samalaju, Sarawak

has been successfully commissioned during the fourth quarter of 2012, running

at the initial capacity of 100,000mt per annum. The Samalaju smelter which

employs the latest 400kA smelting technology, is expected to contribute

positively to the employment market and economy of the State.

The Phase 2 development of Press Metal’s smelting project in Samalaju

11ANNUAL REPORT 2012

Press Metal sees its employees

as its vital assets. Four annual

gala dinners were held for 2012

to gather our employees at

different parts of the world, also

as an appreciation for their efforts

devoted towards the Group.

As part of its development moving towards

producing more value-added products, Press

Metal International Ltd (PMI) has developed a

30,000m2 production facility comprising

amongst others, the state-of-the-art

heavy-duty robotic arm, multi-head and

auto-feed saw cutting machines, as well as

CNC machines.

The initial operation of these new facilities had

commenced in June 2012 and is expected to

run at its full capacity in June 2013.


At Press Metal, we always encourage our employees to interact with the local

communities to propel better kinship and understanding. Amongst other

activities, our employees in Sarawak visited the long houses and celebrated the

Gawai and Christmas festivals with the local residents.

Press Metal continued its tradition of

supporting and contributing to a broad array

of charities in 2012, with primary focus on

education and aiding the underprivileged.

Press Metal continued its tradition of

supporting and contributing to a broad array

of charities in 2012, with primary focus on

education and aiding the underprivileged.

EVENT HIGHLIGHTScont’d


CORPORATE STRUCTURESCORPORATE S

PRESS METAL BERHADPPRREESSSS MMEETTAALL BBEERRHHAADDTTTTPRESS METAL BERHAD

100% PRESS METAL UK LIMITED

100% ANGKASA JASA SDN. BHD.

100% BI-PMB WASTE MANAGEMENT SDN. BHD.

100% PMB RECYCLING MANAGEMENT SDN. BHD.

100% PMS MARKETING SDN. BHD.

100% PRESS METAL BINTULU SDN. BHD.

100% PRESS METAL NORTH AMERICA LLC.

100% WESAMA SDN. BHD.

100% ACE EXTRUSION SDN. BHD.

100% PMB MARKETING SDN. BHD.

100% PMB MARKETING (H.K.) LTD

80% PRESS METAL SARAWAK SDN. BHD.

100% PMB DEVELOPMENT SDN. BHD.

60% PMB SPECTRUM SDN. BHD.

90% HUBEI PRESS METAL HUASHENG ALUMINIUM & ELECTRIC CO. LTD.

100% PRESS METAL INTERNATIONAL (HUBEI) LTD.

100% PMH ELECTRIC ENGINEERING CO. LTD.

100% PRESS METAL (HK) LIMITED

100% PRESS METAL INTERNATIONAL LIMITED

100% PRESS METAL INTERNATIONAL TRADING LTD

100% PRESS METAL INTERNATIONAL TECHNOLOGY LTD

70% PMIT SOLAR PTY LTD

70% PRESS METAL ALUMINIUM (AUSTRALIA) PTY. LTD.


CORPORATE INFORMATION

BOARD OF DIRECTORS

Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad

Independent Non-Executive Chairman

Koon Poh Ming

Executive Vice Chairman

Dato’ Koon Poh Keong

Group Chief Executive Officer

Dato’ Koon Poh Tat

Executive Director

Koon Poh Weng

Executive Director

Koon Poh Kong

Executive Director

Tuan Haji Mohamad Faiz Bin Abdul Hamid

Independent Non-Executive Director

Loo Lean Hock


Tan Heng Kui


COMPANY SECRETARIES

Tai Yit Chan (MAICSA 7009143)

Tan Ai Ning (MAICSA 7015852)

SHARE REGISTRAR

Tricor Investor Services Sdn. Bhd.

Level 17, The Gardens North Tower

Mid Valley City

Lingkaran Syed Putra

59200 Kuala Lumpur, Malaysia

Tel : +603-2264 3883

Fax : +603-2282 1886

CORPORATE OFFICE

Lot 6464, Batu 5 ¾, Jalan Kapar

Sementa, 42100 Klang

Selangor Darul Ehsan, Malaysia

Tel : +603-3291 3188

Fax : +603-3291 3637

Website : www.pressmetal.com

REGISTERED OFFICE

Lot 6.05, Level 6

KPMG Tower, 8 First Avenue

Bandar Utama, 47800 Petaling Jaya


Tel : +603-7720 1188

Fax : +603-7720 1111

PRINCIPAL BANKERS

Alliance Bank Malaysia Berhad

Malayan Banking Berhad

RHB Bank Berhad

Standard Chartered Bank Malaysia Berhad

AUDITORS

KPMG

Firm No. AF 0758

(Chartered Accountants)

Level 10, KPMG Tower, 8 First Avenue

Bandar Utama, 47800 Petaling Jaya


STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad


PROFILE OF DIRECTORS

Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad, DSDKIndependent Non-Executive Chairman

Malaysian, 74 years of age

Dato’ (Dr.) Megat Abdul Rahman was appointed as the Non-Independent Non-

Executive Director of the Company on 25 May 1995 and elected Chairman on

the same day. On 29 May 2007, he was re-designated as the Independent Non-

Executive Chairman of the Board. He is also the Chairman of the Remuneration

and Nomination Committees and attended all four Board Meetings held during

the financial year.

Dato’ (Dr.) Megat Abdul Rahman graduated with a Bachelor of Commerce

degree from University of Melbourne, Australia. He is a fellow of the Institute

of Chartered Accountants in Australia, a life member and past president of the

Malaysian Institute of Certified Public Accountants, as well as a member of

the Malaysian Institute of Accountants. He had served as Executive Director

in Kumpulan Guthrie Berhad from 1983-1994, and was a Partner/Managing

partner of KPMG Desa Megat & Co from 1973 to 1983. Currently, he is also

a director of Boustead Holdings Berhad, Yayasan Tenaga Nasional and also

serves as member on the Boards of University Kebangsaan Malaysia and Pusat

Perubatan Universiti Kebangsaan Malaysia.

Dato’ (Dr.) Megat Abdul Rahman has no conflict of interest with the Group, and

has no family relationship with any other director and/or substantial shareholder

of the Group. He maintains a clean record with regard to convictions for

offences.

Koon Poh MingExecutive Vice Chairman


Mr. Koon Poh Ming has been a director of the Company since its incorporation

on 13 May 1986. He is also a member of the Remuneration Committee and

attended all four Board Meetings held during the financial year.

After graduating with a degree in Civil Engineering from the University of Wales in

United Kingdom, he started his career with an international consulting engineering

firm based in Kuala Lumpur. He is currently a professional engineer registered

with the Board of Engineers and The Institute of Engineers, Malaysia.

While in Press Metal, Mr. Koon Poh Ming has been actively involved in the

management and business development of the Company. Currently, he also

holds the position of Chief Executive Officer of PMB Technology Berhad.

He is the brother to Dato’ Koon Poh Keong, Koon Poh Kong, Koon Poh Weng

and Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions

for offences.


Dato’ Koon Poh KeongGroup Chief Executive Officer


Dato’ Koon Poh Keong is one of the founding members of the Company and

has been the Group Chief Executive Officer since the Company’s listing on

Bursa Malaysia Securities Berhad in 1993. He attended all four Board meetings

held during the financial year.

Dato’ Koon Poh Keong graduated with a Bachelor of Science degree in Electrical

Engineering from The University of Oklahoma, United States of America, in 1986.

He has more than 20 years of experience in the aluminium industry. Currently, he

is also the Executive Chairman of PMB Technology Berhad.

He is the brother to Koon Poh Ming, Koon Poh Kong, Koon Poh Weng and

Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions for

offences.

Dato’ Koon Poh TatExecutive Director


Dato’ Koon Poh Tat has been appointed as the Executive Director of the

Company since 7 June 1999 and has attended all four Board meetings held

during the financial year.

Dato’ Koon Poh Tat is a co-founder of Press Metal Berhad and has been actively

involved in the Company’s operations including forming up new business outlets

both domestic and overseas to enlarge the Company’s networking and market

share. His hard work and dedication has led the Company to be the pioneer

in the aluminium industry. Currently, he is also an Executive Director of PMB

Technology Berhad.

He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Kong

and Koon Poh Weng. He maintains a clean record with regard to convictions

for offences.

PROFILE OF DIRECTORScont’d


Koon Poh WengExecutive Director


Mr. Koon Poh Weng has been appointed as the Executive Director of the

Company since 13 May 1986 and has attended all four Board meetings held

during the financial year.

Being a key founder of the Company, Mr. Koon Poh Weng continually strives

on the changing and creative ideas to meet today’s complex and advanced

technical skills to all aspects of aluminium and glazing industry.

Mr. Koon Poh Weng has also widely involved himself in the management of

major projects both locally and overseas. He has been responsible for the

design, engineering and development of cost-effective, innovative and versatile

system solutions and in producing satisfactory results on large variety of projects

ranging from commercial buildings, government complexes to prominent hotels.

He is also an Executive Director of PMB Technology Berhad and Managing

Director of Angkasa Jasa Sdn Bhd, a company within the Group involved in

contracting and fabrication of aluminium and glazing works, as well as stainless

steel products.

He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Kong


for offences.

Koon Poh KongExecutive Director


Mr. Koon Poh Kong was appointed as the Executive Director of the Company

on 13 May 1986. He attended all four Board Meetings held during the financial

year.

As a key founder of the Company, his experiences include the management of

major projects throughout the country. He has been responsible for all aspects

of the management and for producing satisfactory results on large variety of

projects ranging from government complexes to prominent hotels. Currently,

he is the Executive Director of Angkasa Jasa Sdn Bhd, a company within the

Group involved in contracting and fabrication of aluminium and stainless steel

products.

He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Weng


for offences.




Tuan Haji Mohamad Faiz Bin Abdul HamidIndependent Non-Executive Director


Tuan Haji Mohamad Faiz was appointed as a director of the Company on 7

May 1993. He is the Chairman of the Audit Committee and a member of the

Remuneration Committee and the Nomination Committee. He attended all four

Board Meetings held during the financial year.

Tuan Haji Mohamad Faiz is a Fellow of the Royal Institution of Chartered

Surveyors England and the Royal Institution of Surveyors Malaysia since 1981.

He was a consultant quantity surveyor since 1968 and was the past President of

the Royal Institution of Surveyors, Malaysia. Currently, he is also an Independent

Director of PMB Technology Berhad.

He has no conflict of interest with the Group and has no family relationship with

any director and/ or substantial shareholder of the Group. He maintains a clean

record with regard to convictions for offences.

Loo Lean HockIndependent Non-Executive Director


Mr. Loo Lean Hock was appointed as an Independent Non-Executive Director of

the Company on 14 September 2001. He is a member of the Audit Committee

and the Nomination Committee and has attended three out of four Board

meetings held during the financial year.

Mr. Loo is a Chartered Accountant of the Malaysian Institute of Accountants,

a practising member of Malaysian Institute of Certified Public Accountants, a

Fellow of CPA Australia and an associate member of Chartered Tax Institute of

Malaysia and Malaysian Institute of Management. He obtained his Master of

Business Administration from University of Bath, United Kingdom in 1992. He

started his professional career in Coopers & Lybrand from 1980 to 1990. He

joined Press Metal Berhad in 1990 as the Financial Controller. Thereafter, he

joined The Crown Princess Kuala Lumpur (a hotel division of Asia Pacific Land

Berhad) as the Financial Controller. He set up his own auditing firm, L.H. Loo &

Co. in July 1993 as the sole practitioner. He is also a Director of LH Loo Taxation

Services Sdn. Bhd., Executive Director of STX Precision Corporation Sdn. Bhd.

and its group of companies, an Independent Non-Executive Director of PMB

Technology Berhad and Ge-Shen Corporation Berhad.






Tan Heng KuiIndependent Non-Executive Director


Mr. Tan Heng Kui has been a director of the Company since 26 December

2001. He is also a member of the Audit Committee. He attended all four Board

meetings held in the financial year.

Mr. Tan obtained his Bachelor of Science Honours in Civil Engineering from The

University of Wales, United Kingdom. He was a Vice President for The Institution

of Engineers, Malaysia from 2000 to 2004, and was a member of the Professional

Practice Committee, Board of Engineers Malaysia. He set up his own consulting

firm, Perunding Pertama Consulting Engineers in 1988. He is also the Executive

Director of Kumpulan IKRAM (Sabah) Sdn. Bhd. since 1997.

He has also been appointed as Non-Independent and Non-Executive Director

of Protasco Berhad on 10 December 2012.





GROUP FINANCIAL HIGHLIGHTS

2,3

84,4

20,

, 2

,384

,420

2,2

68

,75

1 2

,26

8 2

,26

8

1,6

98

,83

9

1,1

60

,71

3

,69

8,8

1,1

60

,71

3

1,6

98

,

,,

1,1

33

,18

1

REVENUE(RM’000)

1211100908

1,2

38,8

52

93

0,9

11

70

1,6

23

1211100908

70

6,9

16

72

2,2

61

NET TANGIBLE ASSETS(RM’000)

6.0

4.0

4.0

3.5

3.5

DIVIDENDS PER SHARE(%)

1211100908

183

,899

10

9,6

02

83

,49

3

10

,47

6

27

,47

6

PROFIT ATTRIBUTABLE TO SHAREHOLDERS(RM’000)

1211100908

1,25

3,07

7

94

4,2

91

71

4,8

10

71

9,6

68

73

5,3

76

SHAREHOLDERS’ FUNDS(RM’000)

1211100908

FYE 31 December

2012 2011 2010 2009 2008

RM‘000 RM‘000* RM‘000* RM‘000 RM‘000

REVENUE 2,384,420 2,268,751 1,698,839 1,133,181 1,160,713

PROFIT BEFORE TAX 100,144 143,947 103,315 40,125 34,745

PROFIT AFTER TAX 221,828 122,855 89,610 28,695 8,537

PROFIT ATTRIBUTABLE TO

SHAREHOLDERS 183,899 109,602 83,493 27,476 10,476

SHAREHOLDERS’ FUNDS 1,253,077 944,291 714,810 735,376 719,668

NET TANGIBLE ASSETS (RM) 1,238,852 930,911 701,623 722,261 706,916

NET EARNINGS PER SHARE (SEN) 40 25 22 8 3

GROSS DIVIDEND (%) 6.0 4.0 4.0 3.5 3.5

* Certain comparatives have been changed due to adoption of MFRS during the year.


CORPORATE SOCIAL RESPONSIBILITIES STATEMENTCORPORATE SOCIAL RESPONSIBILITIES STATEMENT

At Press Metal, the sense of duty to give back to the

society has always been a conscientious commitment

we have kept close to our hearts. Such is the principle of

Press Metal, as we firmly believe that it was these values

that helped us grow from a single press producer to

become a leading integrated aluminium specialist in Asia.

We are always mindful of our responsibilities towards our

employees, the stakeholders, the community, as well as

the environment as we build up our corporate values and

ensure sustainable growth in tandem with society.

WITH OUR COMMUNITIES & SOCIETY

As a global company built on local relationships, we believe that responsible corporate citizen is essential to the vitality of our communities. We encourage volunteer activities and actively create opportunities for interaction with the local communities, emphasizing on continuity to establish our roots firmly with them.

Press Metal has been supporting and will continue to contribute to a broad array of charities, with a primary focus directed in aiding the underprivileged. Besides regular donations, we also encourage our employees to pay visits together with their own families to old folks home, orphanages and local communities, to promote better kinship and social awareness.

By strongly supporting our employees’ involvement in the community, we aim to inculcate such essential values upon them. Hence, we will continue to actively pursue more activities that will match the sentiments of our local communities – because they are our strong foundation that will help propel mutual growth and success.

WITH OUR PEOPLE & WORKPLACE

At Press Metal, our employees are our vital assets. We believe in nurturing the personal growth of our employees, as they are the wheels that drive Press Metal. In keeping with good employment practices, we strive to create a stable and healthy working environment that promotes mutual respect, productivity and diversity. By regularly conducting high-performance trainings for our employees, we ensure that they maximize their potential and deliver exceptional value to our customers.

We also designed various teambuilding activities and awards for our employees to foster their relationships and to boost their morale.

Press Metal also emphasizes in maintaining a safe and healthy working environment for our employees. Having successfully secured the OHSAS 18001 award for our occupational safety and health management system in 2001, our smelting plant in Hubei and extrusion plant in Foshan, China have also successfully passed the similar authentication. We also conduct frequent occupational and safety awareness programmes to educate better awareness, and continuously improve on equipment safety measures.


CORPORATE SOCIAL RESPONSIBILITIES STATEMENTcont’d

WITH OUR MARKET PLACE

Throughout the years, Press Metal has built a reputation

as a manufacturer of quality products. Not only we are

the first aluminium extruder in Malaysia to be awarded

the internationally recognized ISO 9001 certification

in 1993, but both our extrusion plants in Foshan and

Hubei, China as well as our smelting plant in Mukah,

Sarawak, have also been accredited with ISO 9001

respectively.

Quality remained the main emphasis in all our production

and management systems. Stringent control system is

carried out right from the initial raw material stage until

the final stage before the products are delivered – such

is our commitment to providing only the best to our

customers.

WITH OUR GLOBAL ENVIRONMENT

It is our aim to seek to maintain harmony with

nature. We constantly monitor the environmental

impact of every facet in our operations and apply

cost-efficient means of reducing the use of natural

resources.

In 1998, Press Metal was awarded with the

ISO 14001 certification for our environmental

management system, now similarly awarded to

our smelting plant in Hubei, China. In 2010, our

operations in Foshan, China have also achieved the

said certification. On top of the above, Press Metal

was also the first company in Malaysia to acquire

the Swedish technology to use aluminium sludge

(S204), a scheduled waste from anodizing and

wastewater treatment plants, for the manufacturing

of Polyaluminium Chloride (PAC), a water treatment

chemical. We also operate a Common Waste Water

Treatment Plant that provides treatment for a wide

range of electroplating waste at a lower cost.

Today, our campaign continues. While the path to

eco-preservation may be long and arduous, we

will remain steadfast to our commitment to Mother

Nature – simply because we believe in investing in

a greener future.


CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“the Board”) of Press Metal Berhad (“the Company”) is committed to exercise good corporate

governance by supporting and applying the Principles and Recommendations set out in the Malaysian Code on Corporate

Governance 2012 (“the Code”). In addition, the Board follows global developments of internationally recognised best governance

practices, and though complying in many respects already, continually reviews the Company and its subsidiaries’ (“the Group”)

corporate governance processes and makes adjustments as may be appropriate. The key intent is to adopt the substance

behind good governance and not merely the form, with the aim of ensuring Board’s effectiveness in enhancing shareholders’

value. The Board is pleased to provide a statement on how the Group has applied the Principles and Recommendations of the

Code during the financial year ended 31 December 2012.

ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT

1.1 Clear functions of the Board and Management

The Group recognises the important role played by the Board in the stewardship of its direction and operations, and

ultimately, the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall

corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring

the achievement of these goals.

The Board has a formal schedule of matters reserved for decision, which includes the overall Group’s strategy and

direction, acquisition and divestment policy, approval of major capital expenditure projects and significant financial

matters.

Beyond the matters reserved for the Board’s decision, the Board has delegated the authority to achieve the corporate

objective to the Group Chief Executive Officer (“Group CEO”). The Group CEO remains accountable to the Board for the

authority that is delegated to him, and for the performance of the Group.

The Board monitors the decisions and actions of the Group CEO and the performance of the Group to gain assurance

that progress is being made towards the corporate objectives.

1.2 Clear roles and responsibilities

The Board is constantly mindful of safeguarding the interest of the Group’s customers, investors and all other stakeholders

in discharging its stewardships.

To ensure the effective discharge of its function and responsibilities, the Board has established and delegates certain

responsibilities to the Board Committees, as follows:-

Board Committee Key Functions

Audit Committee Explained on pages 34 to 39 of this Annual Report

Remuneration Committee Explained on pages 26 to 27 of this Annual Report

Nomination Committee Explained on pages 25 to 26 of this Annual Report

The Board Committees are entrusted with specific responsibilities to oversee the Company’s affairs, in accordance

with their respective written Terms of References and operating procedures and the Board receives reports of their

proceedings and deliberations. The Chairman of the respective committees will report to the Board the outcome of these

meetings and such reports are incorporated into the Minutes of the Board meetings. These committees were formed

in order to enhance business and operational efficiency as well as efficacy. The Board remains fully responsible for the

direction and control of the Company and the Group.

In line with the recommendations of the Code, the Board will formalise its roles and responsibilities in a Board Charter.


CORPORATE GOVERNANCE STATEMENTcont’d

ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT cont’d

1.3 Formalised ethical standards through Code of Ethics

The Board acknowledges the importance of establishing a corporate culture which engenders ethical conduct that

permeates throughout the Company.

The Board will formalise a Code of Ethics for the Board as well as a Code of Conduct for Directors, and the management

of the Group.

1.4 Strategies promoting sustainability

The Group recognises the importance of sustainability and its increasing impact to the business. The Group is committed

to understanding and implementing sustainable practices and exploring the benefits to the business whilst attempting to

achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders

and economic success.

The Company’s activities on sustainability agenda for the year under review are set out in pages 21 and 22 of the

Corporate Social Responsibility of this Annual Report.

1.5 Access to information and advice

The Board recognises that the decision making process is highly contingent on the strength of information furnished. As

such, Directors have unrestricted access to any information pertaining to the Company.

The Chairman plays a key role in ensuring that all Directors have full and timely access to information with Board papers

circulated at least five (5) working days in advance of Board meetings. This ensures that Directors have sufficient time

to appreciate issues deliberated at the Board meetings and expedites the decision making process. A comprehensive

balance of financial and non-financial information is encapsulated in the papers covering strategic, operational, regulatory,

marketing and human resource issues.

There is also a formal procedure sanctioned by the Board, whether as the Board as a whole or in their individual capacity,

for Directors to obtain independent professional advice at the Company’s expense.

Detailed periodic briefings on the industry outlook and Company performance are also conducted for the Directors to

ensure that the Board is well informed on the latest market and industry trends.

1.6 Qualified and competent Company Secretaries

The Company Secretaries ensure the flow of information to the Board and its Committees. They ensure that Board

procedures are complied with and advise the Board on governance matters.

The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent

on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to

their duties and responsibilities. The Company Secretaries, who oversee adherence with board policies and procedures,

brief the Board on the proposed contents and timing of material announcements to be made to regulators. The Company

Secretaries attend all Board and Audit Committee meetings and ensure that meetings are properly convened, and that

accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly.

The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. Every Director has also

unhindered access to the advice and services of the Company Secretary.

1.7 Board Charter

The Board will formalise a Board Charter and publish it on the Company’s website. The Board will also review the Board

Charter periodically to achieve the objectives of transparency, accountability and effective performance for the Group

and the enhancement of corporate governance standards with the aim of enshrining the concepts of good governance

as promulgated in the Code.



STRENGTHEN COMPOSITION OF THE BOARD

2.1 Nomination Committee

The Nomination Committee comprised the following members during the financial year ended 31 December 2012:

Name of Director Membership Directorship

Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad Chairman Independent Non-Executive Director

Tuan Haji Mohamad Faiz Bin Abdul Hamid Member Independent Non-Executive Director

Loo Lean Hock Member Independent Non-Executive Director

The Nomination Committee consists entirely of Independent Non-Executive Directors. The Nomination Committee is

empowered by the Board and its Terms of Reference to bring to the Board recommendations as to the appointment

of new Directors. The Nomination Committee reviews the required mix of skills, experience and other qualities of the

Director, including core competencies. The Nomination Committee also systematically assesses the effectiveness of the

Board, its Board Committees, the Group CEO and the contribution and performance of each individual Director on an

annual basis.

The Nomination Committee also keeps under review the Board’s structure, size and composition.

The Nomination Committee held one (1) meeting during the financial year ended 31 December 2012 and all the members

registered full attendance.

The Board as a policy will select candidate as a Director who will best serve the Company regardless of gender and

thus do not consider it necessary to set any target nor undertake any specific measures to recruit women candidates

specifically. The Nomination Committee will consider female candidates as new Director of the Company as and when

the opportunity arises.

2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors

Appointment process

The Board through the Nomination Committee’s annual appraisal believes that the current composition of the Board

brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

The Board appoints its members through a formal and transparent selection process, which is consistent with the Articles

of Association of the Company. This process has been reviewed, approved and adopted by the Board. New appointees

will be considered and evaluated by the Nomination Committee. The Nomination Committee will then recommend the

candidates to be approved and appointed by the Board. The Company Secretaries will ensure that all appointments are

properly made, and that legal and regulatory obligations are met.

Re-election of Directors

The Articles of Association of the Company provide that all Directors shall retire at least once in every three (3) years. The

Directors to retire in each year are the Directors who have been longest in office since their appointment or re-election.

A retiring Director is eligible for re-election. This provides an opportunity for shareholders to renew their mandates. The

re-election of each Director is voted on separate resolution during the Annual General Meeting (“AGM”) of the Company.

To assist shareholders in their decision, sufficient information such as personal profile, meeting attendance and the

shareholdings in the Group of each Director standing for re-election are furnished in the Profile on Board of Directors

contained in the annual report.

Also, Directors over seventy (70) years of age are required to retire and offer themselves for re-appointment annually in

accordance with Section 129 (6) of the Companies Act, 1965.



STRENGTHEN COMPOSITION OF THE BOARD cont’d

2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors cont’d

Board Evaluation

The Board regularly evaluates its performance and the governance processes that support the Board’s work with the aim of improving individual contributions, effectiveness of the Board and its committees and the Company’s performance.

During the financial year under review, the Nomination Committee had reviewed and assessed the mix of skills and experience and size of the Board, contribution of each Director and effectiveness of the Board and Board Committees and also reviewed the retirement of Directors by rotation eligible for re-election.

2.3 Remuneration policies and procedures

Remuneration Committee

The Remuneration Committee comprised two (2) Independent Non-Executive Directors and one (1) Executive Director with Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad as the Chairman. The Committee is responsible for recommending the remuneration framework for Directors as well as the remuneration packages of Executive Directors to the Board. None of the Executive Directors participated in any way in determining their individual remuneration.

Non-Executive Directors’ remuneration will be a matter to be decided by the Board as a whole with the Director concerned abstaining from deliberations and voting on decisions in respect of his individual remuneration.

The members of the Remuneration Committee are as follows:-

Name of Director Membership Directorship

Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad Chairman Independent Non-Executive Director

Tuan Haji Mohamad Bin Abdul Hamid Member Independent Non-Executive Director

Koon Poh Ming Member Executive Director

The Remuneration Committee held one (1) meeting during the financial year ended 31 December 2012 and all the members registered full attendance.

Remuneration Package

The aggregate Directors’ remuneration paid or payable or otherwise made available to all Directors of the Company who served during the financial year ended 31 December 2012 are as follows:

Category Fees Salaries

(RM’000) (RM’000)

Executive Directors - 2,837

Non-Executive Directors 187 -

Breakdown of Directors’ remuneration for the financial year ended 31 December 2012, by category and in each successive band of RM50,000, is as follows:-

Executive Non-Executive

RM50,000 and below - 3

RM50,001 – RM100,000 - 1

RM500,001 – RM550,000 3 -

RM550,001 – RM600,000 - -

RM600,001 – RM650,000 2 -

Total 5 4



STRENGTHEN COMPOSITION OF THE BOARD cont’d

2.3 Remuneration policies and procedures cont’d

The Company does not disclose each Director’s remuneration separately as such information is considered highly

sensitive and confidential in nature.

REINFORCE OF INDEPENDENCE

3.1 Annual Assessment of Independence

The Board recognises the importance of independence and objectivity in the decision-making process. The

Independent Directors bring their respective knowledge and experience to the Board. The Board is committed in

ensuring that Independent Directors are capable and willing to make decisions in the best interests of the Company

and the shareholders free from interest or influence and are independent of the Management.

The Independent Directors namely, Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad, Tuan Haji Mohamad Faiz Bin

Abdul Hamid, Mr Tan Heng Kui and Mr Loo Lean Hock fulfilled the criteria of “Independence” as prescribed under the

Listing Requirements. The Board composition complies with the Listing Requirements which requires that at least two

(2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, to be independent Directors.

3.2 Tenure of Independent Directors

In line with the Code, the tenure of an independent Director should not exceed a cumulative term of nine (9) years.

However, an Independent Director may continue to serve on the Board subject to the Director’s re-designation as a

Non-Independent Director. In exceptional cases and subject to assessment by the Nomination Committee, the Board

may recommend for an Independent Non-Executive Director who has served a consecutive or cumulative term of nine

(9) years to remain as an Independent Non-Executive Director subject to shareholders’ approval.

3.3 Separation of positions of the Chairman and Group CEO

The Board recognises the importance of having a clearly accepted division of power and responsibilities. There is a clear

division of responsibilities at the head of the Group to ensure a balance of authority and power. The Board is led by Dato’

(Dr.) Megat Abdul Rahman Bin Megat Ahmad, an Independent Non-Executive Chairman and the executive management

of the Group is led by Dato’ Koon Poh Keong, the Group CEO.

The roles of the Chairman and the Group CEO are clearly defined in their individual position descriptions. The Chairman

is responsible for running the Board and ensures that all Directors receive sufficient relevant information on financial and

non-financial matters to enable them to participate actively in the Board’s decisions. The Group CEO is responsible

for the day-to-day management of the business as well as the implementation of Board’s policies and decisions. Tuan

Haji Mohamad Faiz Bin Abdul Hamid is the Senior Independent Non-Executive Director designated to clarify matters or

enquiries that may be raised by shareholders or investors.

3.4 Board Composition and Balance

As at the date of this Statement, the Board consists of an Independent Non-Executive Chairman, an Executive Vice

Chairman, a Group CEO, three (3) Executive Directors and three (3) Independent Non-Executive Directors. A brief profile

of each Director is presented on pages 15 to 19 of this Annual Report.

The Non-Executive Directors contribute significantly in areas such as policy and strategy, performance monitoring,

allocation of resources as well as improving governance and controls. Together with the Executive Directors who have

in-depth knowledge of the business, the Board constituted of individuals who are committed to business coupled with

integrity and professionalism in all its activities.

The Board is satisfied that the current Board composition fairly reflects the interests of minority shareholders in the

Company.



FOSTER COMMITMENT

4.1 Time Commitment

The Board meets at least four (4) times a year at quarterly intervals with additional meetings convened when urgent and

important decisions need to be taken between the scheduled meetings. During the financial year ended 31 December

2012, the Board met on four (4) occasions, where it deliberated upon and considered a variety of matters including the

financial results, major investments, strategic decisions, the business plan and direction of the Group.

The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. The

Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions

are made. All proceedings from the Board meetings are minuted and signed by the Chairman of the meeting.

Procedures are in place for Directors to seek both independent professional advice at the Company’s expense and have

access to the Company Secretary in order to fulfill their duties and specific responsibilities.

The Board members are required to notify the Board’s Chairman prior to their acceptance of new directorships in other

companies.

Details of Directors’ attendance at Board Meetings held during the financial year ended 31 December 2012 are as follows:

Name of Directors Number of Meetings

Held Attended

Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad

Independent Non-Executive Chairman

4 4

Koon Poh Ming

Executive Vice Chairman

4 4


Group Chief Executive Officer

4 4

Koon Poh Weng

Executive Director

4 4

Koon Poh Kong

Executive Director

4 4


Executive Director

4 4

Tuan Haji Mohamad Faiz Bin Abdul Hamid


4 4

Loo Lean Hock


4 3

Tan Heng Kui


4 4



FOSTER COMMITMENT cont’d

4.2 Directors’ training

The Directors have participated in numerous training programmes, seminars, conferences and briefings to ensure that

they are kept abreast with the latest market development, relevant new laws and regulations, financial reporting and

other issues relevant requirements to the Company. All the Directors have completed the Mandatory Accreditation

Programme (“MAP”) prescribed by Bursa Malaysia Securities Berhad.

Among the training programmes, seminars and briefings attended by the Directors during the financial year are as

follows:-

The Senior Management had also briefed the Directors on general economic, industry and technical developments from

time to time.

The Directors will continue to attend relevant training courses to further enhance their skills and knowledge to enable

them to discharge their responsibilities more effectively.

The Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements from time to time

for the Board’s reference and brief the Board quarterly on these updates at Board meetings. The External Auditors also

briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Group’s

financial statements during the year.

UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

Financial Reporting

The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance

and prospects at the end of the financial year, primarily through the annual financial statements and quarterly results to

shareholders as well as the Chairman’s Statement and review of operations in the Annual Report. The Board is assisted

by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.

Directors’ responsibility statement in respect of the preparation of the audited financial statements

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

affairs of the Group and of the Company as at the end of the accounting period and of their results and cash flows for the

period then ended. In preparing the financial statements, the Directors have ensured that applicable approved Financial

Reporting Standard (“FRS”) in Malaysia and the provisions of the Companies Act, 1965 have been applied with and

reasonable and prudent judgement and estimates have been made.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies

and made reasonable and prudent judgements and estimates.


UPHOLD INTEGRITY IN FINANCIAL REPORTING cont’d

5.1 Compliance with applicable financial reporting standards cont’d

Directors’ responsibility statement in respect of the preparation of the audited financial statements cont’d

The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Board is satisfied that it has met its obligation to present a balanced and understandable assessment of the Company’s position and prospects in the Directors’ Report and the Financial Statements of this annual report.

Related Party Transactions

An internal compliance framework exists to ensure that the Group meets its obligations relating to related party transactions under the Listing Requirements. The Board, through its Audit Committee, reviews all material related party transactions involved. A Director who has an interest in a transaction must abstain from deliberation and voting on the relevant resolution in respect of such transaction at the Board and at any general meeting convened to consider such matters.

Further details of these transactions are set out in the Recurrent Related Party Transactions’ Circular to Shareholders dated 29 May 2013.

5.2 Assessment of sustainability and independence of external auditors

Key features underlying the relationship of the Audit Committee with the External Auditors are included in the Audit Committee’s terms of reference as detailed on pages 34 to 36 of the Annual Report.

A summary of the activities of the Audit Committee during the year, including the evaluation of the independent audit process, are set out in the Audit Committee Report on page 37 of the Annual Report.

The External Auditors provide mainly audit-related services to the Company. Due to the strong knowledge of the Company, the External Auditors also undertake certain non-audit services such as interim reviews, regulatory reviews and reporting, and other services.

The Board upholds the integrity of financial reporting by the Company and as such, the External Auditors have confirmed to the Board their independence in providing both audit and non-audit services up to the date of this statement.

The external auditors attended two (2) out of four (4) of the Audit Committee meetings held to review the Quarterly Results and the financial statements.

RECOGNISE AND MANAGE RISKS

6.1 Sound framework to manage risks

The Board has ultimate responsibility for reviewing the Company’s risks, approving the risk management framework and policy and overseeing the Company’s strategic risk management and internal control framework.

The key features of the Risk Management Framework are set out in the Statement on Risk Management and Internal Control of the Company as set out on page 40 of this Annual Report.

6.2 Internal audit function

The Board has established an internal audit function within the Company, which is led by the Head of Internal Audit who reports directly to the AC. The Statement on Risk Management and Internal Control furnished on pages 40 to 41 of the

Annual Report provides an overview on the state of internal controls within the Group, in an effort to manage risk.



ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure Policy

Information Disclosure

The Board acknowledges the importance to disclose information in a timely manner and will ensure the compliance of

the disclosure requirements under the Listing Requirements and other applicable laws.

7.2 Leverage on information technology for effective dissemination of information

Investor Relations and shareholder’ communication

The Company’s website, www.pressmetal.com provides an avenue for information, such as dedicated sections on

corporate information, including financial information, share price history, announcements and press releases. The

website is continuously updated to ensure that the information contained within is current.

STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

The Board acknowledges the need for the shareholders to be informed of all material business matters affecting the

Company. In addition to various announcements made, the timely release of financial results on a quarterly basis provides

shareholders with an overview of the Group’s performance and operations.

The Annual General Meeting (“AGM”) is the principal forum for dialogue with shareholders. Notice of AGM together with

a copy of the Company’s Annual Report will be sent to shareholders at least twenty-one (21) days before the meeting.

Members of the Board as well as the external auditors will be present to answer questions relevant to the resolution being

proposed, the financial performance, business operations or corporate governance of the Company and other matters

affecting the Company’s shareholders’ interests.

8.2 Effective Communication and Proactive Engagement

In accordance with the Listing Requirements, the Board will conduct poll voting for resolutions relating to related party

transactions or as may be demanded by the shareholders respectively.

The Board is encouraged to put substantive resolution to vote by way of poll at the general meetings. The Chairman

will inform the shareholders of the Company of their right to demand for a poll vote at the commencement of a general

meeting.



ADDITIONAL COMPLIANCE INFORMATION

1. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiaries involving Directors and substantial

shareholders during the financial year ended 31 December 2012.

2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

(i) Employee Share Option Scheme (“ESOS”)

There were no options granted pursuant to ESOS 2007/2012 during the financial year ended 31 December 2012.

The said ESOS has expired in June 2012 and a total of 3,298,000 options had been exercised during the financial

year.

(ii) 8-year 6% Redeemable Convertible Secured Loan Stocks at 100% of its nominal value with free

detachable warrants (“warrants”)

During the financial year, a total of 65,001,000 warrants C were converted into Ordinary Shares of RM0.50 each.

3. SANCTIONS AND/OR PENALTIES IMPOSED

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

the relevant regulatory bodies during the financial year.

4. NON-AUDIT FEES

The non-audits fees paid to the Company’s external auditors, Messrs KPMG during the financial year ended 31 December

2012 amounted to RM130,000.

5. SHARE BUY-BACKS

The Company did not implement any share buy-back scheme.

6. RECURRENT RELATED PARTY TRANSACTIONS (“RRPTs”) OF REVENUE OR TRADING NATURE

The RRPTs of the Group have been entered into in the normal course of business. Further details of the RRPT of a

revenue or trading nature conducted during the financial year are disclosed in Note 31 to the financial statements on

Pages 132 to 133 of the Annual Report.

Please refer to section 2.2 of the Circular to Shareholders dated 29 May 2013 on the name of the related parties and the

Company’s relationship with the related parties.

7. PROFIT GUARANTEE

There were no profit guarantee issued by the Company during the financial year ended 31 December 2012.

8. VARIATION IN RESULTS

There were no variation of 10% or more between the profits announced in the audited and unaudited results of the Group

for the financial year ended 31 December 2012.


ADDITIONAL COMPLIANCE INFORMATIONcont’d

9. DEPOSITORY RECEIPT PROGRAMME

During the financial year, the Group did not sponsor any depository receipt programme.

10. UTILISATION OF PROCEEDS

During the financial year, approximately RM143.0 million raised from the exercise of warrants have been utilised as

working capital of the Group, amongst others, includes the phase 2 expansion of the aluminium smelting operation plant

located at Samalaju Industrial Park, Bintulu, Sarawak.


AUDIT COMMITTEE REPORT

MEMBER OF THE AUDIT COMMITTEE

The Audit Committee comprises three (3) members, all of whom are Independent Non-Executive Directors.

The members of the Audit Committee are as follow:-

Tuan Haji Mohamad Faiz Bin Abdul Hamid (Chairman)Independent Non-Executive Director

Loo Lean Hock Independent Non-Executive Director; Member of the Malaysian Institute of Accountants

Tan Heng KuiIndependent Non-Executive Director

ATTENDANCE OF MEETINGS The details of attendance of each member at the Audit Committee meetings held during the financial year ended 2012 are as follows:-

Name of Audit Committee Members

Number of Audit Committee

Meetings

Held Attended

Tuan Haji Mohamad Faiz Bin Abdul Hamid 4 4

Loo Lean Hock 4 3

Tan Heng Kui 4 4

TERMS OF REFERENCE

i. Composition of the Audit Committee

The Audit Committee shall be appointed by the Board of Directors from among their number (pursuant to a resolution of the Board of Directors), which fulfills the following requirements:-

a) The Audit Committee must be composed of no fewer than 3 members;

b) All members of the Audit Committee must be Non-Executive Directors;

c) A majority of the Audit Committee must be Independent Directors;

d) All members of the Audit Committee should be financially literate and at least one member of the Audit Committee:-

i) must be a member of the Malaysian Institute of Accountants; or

ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-

he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967;

he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967;

iii) fulfills such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad and/or other

relevant authorities from time to time.


AUDIT COMMITTEE REPORTcont’d

TERMS OF REFERENCE cont’d

i. Composition of the Audit Committee cont’d

e) No Alternate Director of the Board shall be appointed as a member of the Committee.

The members of the Audit Committee shall elect a Chairman from among their member who shall be an Independent

Director.

In the event of any vacancy in the Audit Committee resulting in the non-compliance of items (a) to (d) above, the vacancy

must be filled within 3 months of that event.

The Board of Directors must review the term of office and performance of the Audit Committee and each of its members

at least once every 3 years to determine whether the Audit Committee and members have carried out their duties in

accordance with the terms of reference.

ii. Objectives

The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to

accounting and reporting practices of the Company and its subsidiary companies.

In addition, the Audit Committee shall:-

a) Oversee and appraise the quality of the audits conducted both by the Company’s internal and external auditors;

b) Maintain open lines of communication between the Board of Directors, the internal auditors and the external auditors

for the exchange of views and information, as well as to confirm their respective authority and responsibilities;

and

c) Determine the adequacy of the Group’s administrative, operating and accounting controls.

iii. Functions

The functions of the Audit Committee are as follow:-

(a) To review the following and report the same to the Board of Directors:-

i) with the external auditors, the audit plan;

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

iii) with the external auditors, his audit report;

iv) the assistance given by the Company’s employees to the external auditors; and

v) any related party transaction and conflict of interest situation that may arise within the Company or the Group

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

(b) To consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal

and the letter of resignation from the external auditors if applicable;

(c) To discuss with the external auditors before the audit commences, the nature and scope of the audit and to ensure

co-ordination where more than one audit firm are involved;

(d) To review the quarterly and year-end financial statements of the Company, focusing particularly on:-



TERMS OF REFERENCE cont’d

iii. Functions cont’d

(e) To discuss problems and reservations arising from the interim and final audits, and any matter the external auditor

may wish to discuss (in the absence of management where necessary);

(f) To review the external auditors’ management letter and the management’s response;

(g) To do the following, in relation to the internal audit function:-

that it has the necessary authority to carry out its work;

that appropriate actions are taken on the recommendations of the internal audit function;

opportunity to submit his reasons for resigning.

(h) To consider the major findings of internal investigations and the management’s response;

(i) To ensure the internal audit function is independent of the activities it audits and the head of internal audit reports

directly to the Audit Committee. The head of internal audit will be responsible for the regular review and/or appraisal

of the effectiveness of the risk management, internal control, and governance processes within the Company.

(j) To consider other areas as defined by the Board or as may be prescribed by Bursa Malaysia Securities Berhad or

any other relevant authority from time to time.

RIGHTS OF THE AUDIT COMMITTEE

The Audit Committee shall, wherever necessary and reasonable for the Company to perform of its duties, in accordance with

a procedure to be determined by the Board of Directors and at the cost of the Company:-

a) Have authority to investigate any matter within its terms of reference;

b) Have the resources which are required to perform its duties;

c) Have full and unrestricted access to any information pertaining to the Company and Group;

d) Have direct communication channels with the external auditors and person(s) carrying out the internal audit function or

activity;

e) Be able to convene meeting with the external auditors, internal auditors or both excluding the attendance of other

Directors and employee of the Company;

f) Be able to obtain independent professional or other advice;

The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the Chairman,

the Chief Executive Officer, the Finance Director, the head of internal audit and the external auditors in order to be kept

informed of matters affecting the Company.



MEETINGS

The Audit Committee shall meet at least 4 times a year and such additional meetings as the Chairman shall decide in order to

fulfill its duties. However, at least twice a year the Audit Committee shall meet with the external auditors without the presence

of the executive Board members and the Management.

In addition, the Chairman may call a meeting of the Audit Committee at the request of any committee member, the Company’s

Chief Executive Officer, or the internal or external auditors.

The Company Secretary or other appropriate senior official shall act as Secretary of the Audit Committee and shall be

responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory

documentation to committee members prior to each meeting.

The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating them to

committee members and to the other members of the Board of Directors.

A quorum shall consist of a majority of Independent Directors.

By invitation of the Audit Committee, the Company must ensure that other Directors and employees attend any particular Audit

Committee meeting specific to the relevant meeting.

ACTIVITIES OF THE COMMITTEE

There were four (4) Audit Committee meetings held during the financial year ended 31 December 2012.

The activities of the Audit Committee during the financial year were summarised as below:-

(i) Reviewed the unaudited quarterly results/announcements of the Group and made recommendations to the Board of

Directors for approval prior to the release of the results to Bursa Malaysia Securities Berhad;

(ii) Reviewed with the External Auditors:

(a) Scope of work and annual audit plan;

(b) The audited financial statements of the Group and the Company prior to submission to the Board of Directors for

consideration and approval; and

(c) Problems and reservation arising from the interim and final audits.

(iii) Reviewed findings on the internal audit reports which were tabled during the year, the audit recommendations made as

well as the management response’s to these recommendations and the implementation of agreed action plan;

(iv) Reviewed and approved the Internal Audit Plan for year 2012 to ensure adequate scope and comprehensive coverage

over the activities of the Company and the Group;

(v) Reviewed related party transactions and conflict of interest situation that may arise within the Company or the Group,

including any transactions, procedure or course of conduct that raises questions of management integrity;

(vi) Considered and recommended to the Board of Directors on the appointment and annual re-appointment of the external

auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and

the cost effectiveness of their audit;

(vii) Met with the external auditors twice during the financial year without the presence of any executive Board members and

employees of the Group; and

(viii) Reviewed the Audit Committee Report, Corporate Governance Statement and Statement of Internal Control for the

financial year ended 31 December 2012 and recommended the same for adoption to the Board of Directors.



INTERNAL AUDIT FUNCTION

The primary role of the internal audit function is to undertake regular and systematic review of the systems of internal control

so as to provide sufficient assurance that the Group has sound system of internal control and that established policies and

procedures are adhered to.

The Company has been engaging an independent external audit firm (“outsourced Internal Auditors”) to carry out the internal

audit function for the Group and the Company. A summary of the activities of the internal audit function is as follows:

and to make recommendations for improvement where weaknesses exist.

Management.

The outsourced Internal Auditors were present at all Audit Committee meetings to present their Internal Audit reports to the

Audit Committee.

The total cost incurred for the outsourced internal audit function of the Group for the financial year ended 31 December 2012

was RM45,000.00

STATEMENT ON EMPLOYEE SHARE SCHEME BY THE AUDIT COMMITTEE

The Audit Committee has verified that the options granted were made in accordance with the By-Laws of the ESOS.

There is only one (1) share issuance scheme i.e. ESOS 2007-2012 in existence during the financial year ended (“FYE”) 31

December 2012. Details of the ESOS are as follows:-

Since

Commencement

of the ESOS

Scheme (2007)

From FYE

2008-2011

During the

FYE 31

December

2012

As at 31

December

2012

‘000 ‘000 ‘000 ‘000

Total number of options granted 17,892 - - 17,892

Total number of options exercised (28) (11,504) (3,298) (14,830)

Total number of options lapsed - (1,109) (1,953) (3,062)

Total number of options outstanding 17,864 - - -



STATEMENT ON EMPLOYEE SHARE SCHEME BY THE AUDIT COMMITTEE cont’d

Granted to the Directors and Chief Executive

Since

Commencement

of the ESOS

Scheme (2007)

From FYE

2008-2011

During the

FYE 31

December

2012

As at 31

December

2012

‘000 ‘000 ‘000 ‘000

Total number of options granted 7,750 - - 7,750

Total number of options exercised - (6,160) (890) (7,050)

Total number of options lapsed - - (700) (700)

Total number of options outstanding 7,750 - - -

Pursuant to the Company’s ESOS By-Laws, not more than 50% of the options available under the scheme would be allocated,

in aggregate, to Directors and senior management. Since the commencement of the scheme, 43.31% of the options granted

under the scheme have been granted to Directors.

The aforesaid ESOS which was previously approved by the shareholders of the Company at the EGM held on 26 June 2007

had expired in June 2012.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

In accordance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the

Board of Directors of public listed companies are required to include in their annual report a statement about the state of

internal control of the listed issuer as a group. The Malaysian Code on Corporate Governance requires listed companies to

maintain a sound system of internal control to safeguard shareholders’ investments and the group’s assets. Set out below is

the Board’s Statement on Risk Management and Internal Control, which has been prepared in accordance with the “Statement

on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers” (the “Guidelines”).

BOARD RESPONSIBILITY

The Board is committed to maintaining both a sound system of risk management and internal control and the proper

management of risks throughout the operations of the Group in order to safeguard shareholders’ investment and assets of

the Group.The Board acknowledges that it is ultimately responsible for the Group’s system of internal control which main

features include the establishment of an appropriate control environment and framework, including financial, operational and

compliance controls and risk management.

The Board is responsible in identifying, evaluating and managing the significant risks of the Group, as well as reviewing the

adequacy and effectiveness of the risk management and internal control system on an ongoing basis. This process has been

in place for the financial year under review and up to the date of approval of this statement for inclusion in the annual report.

The Board believes the risk management and internal control system in place is adequate and effective to manage the risk of

the Group. Nevertheless, it should be noted that due to the inherent limitations in any system, such systems are designed to

manage rather than eliminate the risk of failure to achieve business objectives. In addition, it should be noted that any system

can provide only reasonable, and not absolute assurance against material misstatement or loss.

INTERNAL AUDIT FUNCTION AND RISK MANAGEMENT FRAMEWORK

The Board delegates the responsibility of monitoring the system of risk management and internal control to the Audit Committee.

The Audit Committee has in turn engaged the services of external consultants to assess the adequacy and effectiveness of

the internal control system. The same external consultants have also been appointed to assist in the development of a risk

management framework and the risk management framework was completed back in 2005. The Audit Committee is kept

informed of the internal audit process, from the annual audit plan up to the audit findings and reporting. The details on the

Internal Audit function are further explained on page 38 of this Annual Report.

During the financial year, the internal audit function conducted internal audits in accordance with the approved internal audit

plan for the purposes of assessing the adequacy and effectiveness of the internal control systems. The results of the audit and

recommendations for improvement co-developed with Management were presented at the Audit Committee Meetings, and

subsequently approved by the Board.

WEAKNESSES

A few internal control weaknesses were identified during the period, all of which have been, or are being addressed. None of

these weaknesses have resulted in any material error and losses, contingencies or uncertainties that would require mention in

the Group’s annual report.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLcont’d

OTHER KEY ELEMENTS OF INTERNAL CONTROL

Apart from risk management and internal audit, the other key elements of the Group’s internal control systems are described

below:

units;

Press Metal Berhad ISO 14001:2004 on Environmental Management System

ISO 9001:2008 on Quality Management System

OHSAS 18001:2007 on Occupational Health & Safety Management

System

Press Metal International Limited ISO 9001:2008 on Quality Management System

Hubei Press Metal Huasheng

Aluminium-Electric Co., Ltd.

ISO 14001:2004 on Environmental Management System

ISO 9001:2008 on Quality Management System

GB/T 28001:2011 on Occupational Health & Safety Management

System

Press Metal International (Hubei) Ltd. ISO 9001:2008 on Quality Management System

Press Metal Sarawak Sdn. Bhd. ISO 9001:2008 on Quality Management System

approval by the Board of Directors;

key performance indicators, such as cash flow performance, product sales analysis and operating cost analysis. These

performance reports are benchmarked against budget;

and

Committee, and Remuneration Committee.

ASSURANCE PROVIDED BY THE GROUP CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

In line with the Guidelines, the Group Chief Executive Officer and Chief Financial Officer have provided assurance to the Board

stating that the Group’s risk management and internal control system has operated adequately and effectively, in all material

aspects, to meet the Group’s objectives during the financial year under review.


FinancialStatementsDirectors’ Report 44

Statements of Financial Position 51

Statements of Profit or Loss

and Other Comprehensive Income 53

Consolidated Statement of Changes in Equity 54

Statement of Changes in Equity 56

Statements of Cash Flows 57

Notes to the Financial Statements 60

Statement by Directors 142

Statutory Declaration 142

Independent Auditors’ Report 143



DIRECTORS’ REPORT for the year ended 31 December 2012

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2012.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the manufacturing and marketing of aluminium products, whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

RESULTS

Group Company

RM’000 RM’000

Profit for the year attributable to:

Owners of the Company 183,899 15,082

Non-controlling interests 37,929 -

221,828 15,082

RESERVES AND PROVISIONS

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

DIVIDENDS

Since the end of the previous financial year, the Company paid:

i) a final tax exempt ordinary dividend of 1 sen per ordinary share totalling RM4,428,000 in respect of the financial year ended 31 December 2011 on 27 July 2012.

ii) a first interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM4,776,000 in respect of the financial year ended 31 December 2012 on 10 October 2012.

iii) a second interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM5,072,000 in respect of the financial year ended 31 December 2012 on 20 December 2012.

Subsequent to the financial year end, the Directors declared a third interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM5,078,000 in respect of the financial year ended 31 December 2012 paid on 10 April 2013. The Directors do not recommend any final dividend to be paid for the financial year under review.

DIRECTORS OF THE COMPANY

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

Dato’ Megat Abdul Rahman bin Megat Ahmad Dato’ Koon Poh KeongDato’ Koon Poh TatKoon Poh MingKoon Poh KongKoon Poh WengTuan Haji Mohamad Faiz bin Abdul Hamid Loo Lean Hock

Tan Heng Kui


DIRECTORS’ REPORT

for the year ended 31 December 2012 cont’d

DIRECTORS’ INTERESTS IN SHARES

The interests and deemed interests in the shares, redeemable convertible secured loan stocks (“RCSLS”) together with free

warrants and options over shares of the Company and of its related corporations (other than wholly-owned subsidiaries)

of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who

themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.50 each

At

1.1.2012 Bought Sold

At

31.12.2012

Interest in the Company:

Dato’ Megat Abdul Rahman bin Megat Ahmad

- own 14,856,692 30,000 (194,700) 14,691,992

- spouse 280,000 - (35,000) 245,000


- own 94,771,906 - - 94,771,906

- spouse 10,229,700 - - 10,229,700


- own 13,327,400 1,200,600 - 14,528,000

- spouse 399,522 - - 399,522

- child - 100,000 - 100,000

Koon Poh Ming

- own 27,333,439 - - 27,333,439

- spouse 11,000,000 - - 11,000,000

Koon Poh Kong

- own 11,281,194 260,000 - 11,541,194

- spouse 3,000 - - 3,000

Koon Poh Weng

- own 12,920,048 3,001,000 - 15,921,048

- spouse 570,600 6,000,000 - 6,570,600

- child 6,000 - - 6,000

Tuan Haji Mohamad Faiz bin Abdul Hamid 142,398 50,000 - 192,398

Loo Lean Hock - 10,000 - 10,000

Tan Heng Kui 109,000 10,000 - 119,000

Deemed interest in the Company:

Dato’ Megat Abdul Rahman bin Megat Ahmad # 542,000 - - 542,000

Dato’ Koon Poh Keong * - 65,000,000 - 65,000,000

Koon Poh Ming * - 65,000,000 - 65,000,000


DIRECTORS’ INTERESTS IN SHARES cont’d

In accordance with Section 134(12)(c) of the Companies Act, 1965, the interest of the spouses and children of the Directors in the shares of the Company shall be treated as the interest of the Directors.

# Deemed interested by virtue of the Director’s interest in JOEM Sdn. Bhd.

* Deemed interested by virtue of the Directors’ interests in Alpha Milestone Sdn. Bhd.

By virtue of their interests in the shares of the Company, Dato’ Koon Poh Keong, Dato’ Koon Poh Tat, Koon Poh Ming, Koon Poh Kong and Koon Poh Weng are also deemed interested in the shares of the subsidiaries during the financial year to the extent that Press Metal Berhad has an interest.

Number of RCSLS together with one free warrant

per one RCSLS of RM2.20 each

At date

1.1.2012 Bought Exercised

At

31.12.2012

RCSLS



- spouse 133,174 - - 133,174

Koon Poh Ming

- spouse 1,000,000 - - 1,000,000

Koon Poh Kong

- spouse 151,000 - - 151,000

Koon Poh Weng

- spouse 190,000 - - 190,000

- child 2,000 - - 2,000

Tuan Haji Mohamad Faiz bin Abdul Hamid 47,466 - - 47,466

Tan Heng Kui 37,000 - - 37,000


Dato’ Koon Poh Keong * 105,319,860 - - 105,319,860

Koon Poh Ming * 105,319,860 - - 105,319,860

Warrants



- spouse 133,174 - - 133,174

Koon Poh Ming

- spouse 1,000,000 - - 1,000,000

Koon Poh Kong

- spouse 151,000 - - 151,000

Koon Poh Weng

- spouse 190,000 - - 190,000

- child 2,000 - - 2,000

DIRECTORS’ REPORT



DIRECTORS’ INTERESTS IN SHARES cont’d

Number of RCSLS together with one free warrant

per one RCSLS of RM2.20 each

At date

1.1.2012 Bought Exercised

At

31.12.2012

Warrants cont’d

Interest in the Company: cont’d

Tuan Haji Mohamad Faiz bin Abdul Hamid 47,466 - - 47,466

Tan Heng Kui 37,000 - - 37,000


Dato’ Koon Poh Keong * 105,319,860 - (65,000,000) 40,319,860

Koon Poh Ming * 105,319,860 - (65,000,000) 40,319,860

* Deemed interested by virtue of the Directors’ interests in Alpha Milestone Sdn. Bhd.

Number of options over ordinary shares of

RM0.50 each

At

1.1.2012 Exercised Lapsed

At

31.12.2012


Dato’ Koon Poh Keong 350,000 - (350,000) -

Koon Poh Ming 350,000 - (350,000) -

Dato’ Koon Poh Tat 260,000 (260,000) - -

Koon Poh Kong 260,000 (260,000) - -

Koon Poh Weng 260,000 (260,000) - -

Tuan Haji Mohamad Faiz bin Abdul Hamid 50,000 (50,000) - -

Dato’ Megat Abdul Rahman bin Megat Ahmad 30,000 (30,000) - -

Loo Lean Hock 10,000 (10,000) - -

Tan Heng Kui 10,000 (10,000) - -

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit

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

in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a

firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than a

Director who has significant financial interests in a company which received rental income from certain companies in the Group

in the ordinary course of business as disclosed in Note 31 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the

Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body

corporate apart from the issue of RCSLS together with free warrants and the Employees’ Share Option Scheme (“ESOS”).

DIRECTORS’ REPORT



ISSUE OF SHARES AND DEBENTURES

There were no changes in the authorised capital of the Company during the financial year.

During the financial year, the Company issued:

a) 3,298,000 new ordinary shares of RM0.50 each for cash arising from the exercise of employees’ share options at an

exercise price of RM1.50 per ordinary share.

b) 65,001,000 new ordinary shares of RM0.50 each for cash arising from the exercise of warrants at an exercise price of

RM2.20 per ordinary share.

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

There were no debentures issued during the financial year.

OPTIONS GRANTED OVER UNISSUED SHARES

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

RCSLS together with free warrants

At the extraordinary general meeting held on 29 June 2011, the Company’s shareholders approved a proposed renounceable

rights issue of up to RM323,735,042 nominal value of 8 year 6% RCSLS at 100% of its nominal value together with up to

147,152,292 free warrants on the basis of one RM2.20 nominal value of RCSLS together with one warrant for every three

existing ordinary shares of RM0.50 each held in the Company.

On 26 August 2011, the Company issued 145,684,940 RCSLS together with 145,684,940 free detachable warrants for cash

of RM320,506,868. The RCSLS are convertible into 145,684,940 ordinary shares of RM0.50 each from the first anniversary

of the issue date of the RCSLS up to 22 August 2019 at the option of the holder, which is at a rate of one ordinary share of

RM0.50 each for every one RCSLS held; unconverted RCSLS will be entitled to receive a coupon of 6% per annum based on

the nominal value of RCSLS held.

The warrants are in registered form and constituted by a deed poll. The registered holders are entitled to subscribe for one

new ordinary share of RM0.50 in the Company at a price of RM2.20 per ordinary share for every warrant held. The conversion

ratio is subject to the aforesaid deed poll and can be exercised at any time during the eight-year subscription period up to 22

August 2019.

As at 31 December 2012, 65,001,000 warrants have been exercised by the registered holders while no RCSLS has been

exercised.

ESOS

At the extraordinary general meeting held on 26 June 2007, the Company’s shareholders approved the establishment of a

new ESOS of not more than 10% of the issued share capital of the Company to eligible Directors and employees of the Group

(“New ESOS”), subsequent to the expiry of the former ESOS on 5 June 2007.

In June 2012, the New ESOS has also expired.

The salient features of the New ESOS are, inter alia, as follows:

(i) any employee of the Group shall be eligible to participate in the New ESOS, if at the date of offer, the employee:-

(a) has attained the age of eighteen (18) years; and

(b) is a Malaysian and employed by any company within the Group (other than a company which is dormant).

DIRECTORS’ REPORT



OPTIONS GRANTED OVER UNISSUED SHARES cont’d

ESOS cont’d

(ii) the option price shall be based on the weighted average market price of the Company’s ordinary shares for the five (5)

market days preceding the date of offer, with a discount of not more than ten per cent (10%), if deemed appropriate

(subject to such adjustments in accordance with rules, terms and conditions of the New ESOS), or the par value of the

Company’s ordinary shares, whichever is higher.

(iii) the New ESOS shall be in force for a period of five (5) years from the date of offer and may be extended to a duration of

ten (10) years or such longer duration as permitted by the relevant authorities.

(iv) the options granted may be exercised according to the following scale based on the discretion of the ESOS

committee:

Percentage of options exercisable

Number of options granted Year 1 Year 2 Year 3 Year 4 Year 5

17,891,754 20% 20% 20% 20% 20%

Options exercisable in a particular year but not exercised could be carried forward to the subsequent years subject to

the time limit of the New ESOS.

The options offered to take up unissued ordinary shares of RM0.50 each and the exercise price are as follows:

Date of offer

Exercise

price

At

1.1.2012 Granted Exercised Lapsed

At

31.12.2012

RM ’000 ’000 ’000 ’000 ’000

26.6.2007 1.50 5,251 - (3,298) (1,953) -

OTHER STATUTORY INFORMATION

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to

ascertain that:

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

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an

amount which they might be expected so to realise.

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

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 financial statements of the Group and of the Company

misleading, or

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

DIRECTORS’ REPORT



OTHER STATUTORY INFORMATION cont’d

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 and which

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 financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable

within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may

substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, except for the realised and unrealised foreign exchange differences as disclosed in Note 21 to

the financial statements and the recognition of deferred tax benefits from the Investment Tax Allowance (“ITA”) obtained by a

subsidiary as disclosed in Note 22 to the financial statements, the financial performance of the Group and of the Company for

the financial year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a material

and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year

and the date of this report.

SIGNIFICANT EVENTS DURING THE YEAR

i) In February 2012, Press Metal International Ltd., a wholly-owned subsidiary of the Company, acquired a new 70%-owned

subsidiary, PMIT Solar Pty. Ltd., a company incorporated in Australia, with an issued and paid-up capital of AUD100 for

a purchase consideration of AUD70.

ii) In May 2012, Press Metal Bintulu Sdn. Bhd., a wholly-owned subsidiary of the Company, obtained a RM350 million

syndicated term loan facility for the construction of a new aluminium smelting plant in Samalaju, Sarawak. As at the end

of the current financial year, Press Metal Bintulu Sdn. Bhd. has fully drawn down the term loan.

iii) In July 2012, the Company acquired a new wholly-owned subsidiary, Press Metal North America LLC., a company

incorporated in the United States of America, with an issued and paid-up capital of USD500 for a purchase consideration

of USD500. Subsequently, the Company subscribed for an additional 949,000 new ordinary shares of USD1.00 each at

par, for a total purchase consideration of USD949,000.

iv) In July 2012, Press Metal Sarawak Sdn. Bhd., an 80%-owned subsidiary of the Company, obtained the approval from

the Malaysian Investment Development Authority (“MIDA”) providing the subsidiary with an ITA of 100% on capital

expenditures incurred towards the production of aluminium products over a period of 5 years from 24 January 2008 to

23 January 2013.

Pursuant to the approval, the subsidiary is qualified to claim ITA of approximately RM600 million, resulting in the recognition

of deferred tax assets of approximately RM150 million by the Group.

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:

DATO’ KOON POH KEONG DATO’ KOON POH TAT

Petaling Jaya, Selangor

25 April 2013

DIRECTORS’ REPORT



STATEMENTS OF FINANCIAL POSITIONas at 31 December 2012

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and

equipment 3 2,788,887 1,873,003 1,333,894 129,015 132,304 134,292

Intangible assets 4 14,225 13,380 13,187 - - -

Investment properties 5 5,351 5,634 5,797 - - -

Investments in

subsidiaries 6 - - - 533,949 531,601 485,751

Investment in an

associate 7 34,466 32,298 28,003 11,812 11,812 11,812

Other investments 8 1,803 6,837 6,477 750 750 750

Deferred tax assets 9 98,424 1,598 1,042 - - -

Trade and other

receivables 10 - - - 62,965 62,841 -

Total non-current assets 2,943,156 1,932,750 1,388,400 738,491 739,308 632,605

Inventories 11 419,007 375,225 327,165 32,576 29,285 21,225

Trade and other

receivables 10 944,149 812,203 704,052 1,221,898 678,780 543,205

Current tax assets 4,256 7,259 2,520 - - -

Cash and cash

equivalents 12 271,770 369,977 201,211 22,995 188,382 67,694

1,639,182 1,564,664 1,234,948 1,277,469 896,447 632,124

Assets classified as held

for sale 13 203,160 - - - - -

Total current assets 1,842,342 1,564,664 1,234,948 1,277,469 896,447 632,124

Total assets 4,785,498 3,497,414 2,623,348 2,015,960 1,635,755 1,264,729


STATEMENTS OF FINANCIAL POSITION

as at 31 December 2012cont’d

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Equity

Share capital 253,890 219,740 215,031 253,890 219,740 215,031

Share premium 166,533 17,110 3,982 166,533 17,110 3,982

Reserves 63,560 108,859 (1,935) 56,762 92,952 5,166

Retained earnings 769,094 598,582 497,732 227,206 225,511 219,245

Total equity attributable

to owners of the

Company 1,253,077 944,291 714,810 704,391 555,313 443,424

Non-controlling interests 151,448 113,896 100,643 - - -

Total equity 14 1,404,525 1,058,187 815,453 704,391 555,313 443,424

Liabilities

Trade and other payables,

including derivatives 15 51,997 120,228 106,049 - - 103,423

Loans and borrowings 16 1,112,632 642,944 396,125 228,440 232,362 69,820

Deferred tax liabilities 9 69,633 117,578 74,639 37,959 43,246 16,996

Total non-current

liabilities 1,234,262 880,750 576,813 266,399 275,608 190,239


including derivatives 15 505,572 303,544 262,394 504,792 293,061 112,392

Loans and borrowings 16 1,479,671 1,248,332 964,938 533,244 508,208 516,834

Current tax payables 12,786 6,601 3,750 7,134 3,565 1,840

1,998,029 1,558,477 1,231,082 1,045,170 804,834 631,066

Liabilities classified as held

for sale 13 148,682 - - - - -

Total current liabilities 2,146,711 1,558,477 1,231,082 1,045,170 804,834 631,066

Total liabilities 3,380,973 2,439,227 1,807,895 1,311,569 1,080,442 821,305

Total equity and liabilities 4,785,498 3,497,414 2,623,348 2,015,960 1,635,755 1,264,729

The notes on pages 60 to 141 are an integral part of these financial statements.



STATEMENTS OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME for the year ended 31 December 2012

Group Company

Note 2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Revenue 18 2,384,420 2,268,751 685,539 788,599

Cost of sales (1,985,358) (1,870,630) (608,890) (696,617)

Gross profit 399,062 398,121 76,649 91,982

Other income 18,837 13,807 9,371 3,844

Distribution expenses (96,979) (79,399) (4,541) (4,217)

Administrative expenses (87,192) (77,381) (10,180) (10,288)

Other expenses (30,648) (36,874) (10,118) (24,887)

Results from operating activities 203,080 218,274 61,181 56,434

Finance income 19 2,658 4,246 19,230 8,907

Finance costs 20 (108,406) (82,868) (58,827) (43,156)

Net finance costs (105,748) (78,622) (39,597) (34,249)

Share of profits of equity-accounted investee, net

of tax 2,812 4,295 - -

Profit before tax 21 100,144 143,947 21,584 22,185

Tax expense 22 121,684 (21,092) (6,502) (7,167)

Profit for the year 221,828 122,855 15,082 15,018

Other comprehensive (expense)/income, net

of tax

Items that may be reclassified subsequently

to profit or loss

Foreign currency translation differences for foreign

operations (9,486) 23,008 - -

Other comprehensive (expense)/income for

the year (9,486) 23,008 15,082 15,018

Total comprehensive income for the year 212,342 145,863 15,082 15,018

Profit attributable to:

Owners of the Company 183,899 109,602 15,082 15,018

Non-controlling interests 37,929 13,253 - -

Profit for the year 221,828 122,855 15,082 15,018

Total comprehensive income attributable to:

Owners of the Company 174,790 132,610 15,082 15,018

Non-controlling interests 37,552 13,253 - -

Total comprehensive income for the year 212,342 145,863 15,082 15,018

Basic earnings per ordinary share (sen) 23 40.29 25.15

Diluted earnings per ordinary share (sen) 23 N/A 24.85


CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2012

Attributable to owners of the Company

Non-distributable Distributable

Group Note

Share

capital

Share

premium

Translation

reserve

Share

option

reserve

RCSLS

reserve

Warrants

reserve

Retained

earnings Total

Non-

controlling

interests

Total

equity

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2011 215,031 3,982 (7,101) 5,166 - - 497,732 714,810 100,643 815,453

Foreign currency

translation

differences for

foreign operations - - 23,008 - - - - 23,008 - 23,008

Total other

comprehensive

income for the year - - 23,008 - - - - 23,008 - 23,008

Profit for the year - - - - - - 109,602 109,602 13,253 122,855

Total

comprehensive

income for the

year - - 23,008 - - - 109,602 132,610 13,253 145,863

Contributions by

and distributions

to owners of the

Company

- Share options

exercised 14 4,709 9,419 - - - - - 14,128 - 14,128

- Issue of RCSLS, net

of tax 16 - - - - 14,408 - - 14,408 - 14,408

- Issue of warrants 16 - - - - - 76,475 - 76,475 - 76,475

- Share-based

payment

transactions 17 - - - 645 - - - 645 - 645

- Dividends to owners

of the Company 24 - - - - - - (8,785) (8,785) - (8,785)

Total transactions

with owners of the

Company 4,709 9,419 - 645 14,408 76,475 (8,785) 96,871 - 96,871

Transfer to retained

earnings for share

options lapsed - - - (33) - - 33 - - -

Transfer to share

premium for share

options exercised - 3,709 - (3,709) - - - - - -

At 31 December

2011 219,740 17,110 15,907 2,069 14,408 76,475 598,582 944,291 113,896 1,058,187


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2012cont’d

Attributable to owners of the Company


Group Note

Share

capital

Share

premium

Translation

reserve

Share

option

reserve

RCSLS

reserve

Warrants

reserve

Retained

earnings Total

Non-

controlling

interests

Total

equity

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 219,740 17,110 15,907 2,069 14,408 76,475 598,582 944,291 113,896 1,058,187

Foreign currency

translation

differences for

foreign operations - - (9,109) - - - - (9,109) (377) (9,486)

Total other

comprehensive

expense for the

year - - (9,109) - - - - (9,109) (377) (9,486)

Profit for the year - - - - - - 183,899 183,899 37,929 221,828

Total

comprehensive

income for the

year - - (9,109) - - - 183,899 174,790 37,552 212,342

Contributions by

and distributions

to owners of the

Company

- Conversion of

warrants 14 32,501 110,502 - - - - - 143,003 - 143,003

- Share options

exercised 14 1,649 3,298 - - - - - 4,947 - 4,947

- Share-based

payment

transactions 17 - - - 322 - - - 322 - 322

- Dividends to

owners of the

Company 24 - - - - - - (14,276) (14,276) - (14,276)

Total transactions

with owners of

the Company 34,150 113,800 - 322 - - (14,276) 133,996 - 133,996

Transfer to retained

earnings for share

options lapsed - - - (889) - - 889 - - -

Transfer to share

premium for share

options exercised - 1,502 - (1,502) - - - - - -

Transfer to

share premium

for warrants

exercised - 34,121 - - - (34,121) - - - -

At 31 December

2012 253,890 166,533 6,798 - 14,408 42,354 769,094 1,253,077 151,448 1,404,525



STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2012


Company Note

Share

capital

Share

premium

Share

option

reserve

RCSLS

reserve

Warrants

reserve

Retained

earnings

Total

equity

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2011 215,031 3,982 5,166 - - 219,245 443,424

Profit and total comprehensive

income for the year - - - - - 15,018 15,018

Contributions by and distributions

to owners of the Company

- Share options exercised 14 4,709 9,419 - - - - 14,128

- Issue of RCSLS, net of tax 16 - - - 14,408 - - 14,408

- Issue of warrants 16 - - - - 76,475 - 76,475

- Share-based payment

transactions 17 - - 645 - - - 645

- Dividends to owners of the

Company 24 - - - - - (8,785) (8,785)

Total transactions with owners

of the Company 4,709 9,419 645 14,408 76,475 (8,785) 96,871

Transfer to retained earnings for

share options lapsed - - (33) - - 33 -

Transfer to share premium for

share options exercised - 3,709 (3,709) - - - -

At 31 December 2011 219,740 17,110 2,069 14,408 76,475 225,511 555,313

1 January 2012 219,740 17,110 2,069 14,408 76,475 225,511 555,313

Profit and total comprehensive

income for the year - - - - - 15,082 15,082

Contributions by and distributions

to owners of the Company

Conversion of warrants 14 32,501 110,502 - - - - 143,003

Share options exercised 14 1,649 3,298 - - - - 4,947

Share-based payment

transactions 17 - - 322 - - - 322

Dividends to owners of the

Company 24 - - - - - (14,276) (14,276)

Total transactions with owners

of the Company 34,150 113,800 322 - - (14,276) 133,996

Transfer to retained earnings for

share options lapsed - - (889) - - 889 -


share options exercised - 1,502 (1,502) - - - -


warrants exercised - 34,121 - - (34,121) - -

At 31 December 2012 253,890 166,533 - 14,408 42,354 227,206 704,391



STATEMENTS OF CASH FLOWSfor the year ended 31 December 2012

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Cash flows from operating activities

Profit before tax 100,144 143,947 21,584 22,185

Adjustments for:

Depreciation of investment properties 121 112 - -

Depreciation of property, plant and equipment 113,396 98,092 15,970 15,608

Derivative loss - 2,994 - 2,994

Deposits written off 1,448 - 1,448 -

Dividend income - - (644) (322)

Equity settled share-based payment transactions 322 645 322 645

Finance costs 108,406 82,868 58,827 43,156

Finance income (2,658) (3,535) (19,230) (8,196)

Gain on disposal on investment properties (1) - - -

(Gain)/Loss on disposal of property, plant and equipment (991) 250 (174) 126

Impairment loss on investments in subsidiaries - - 554 4,200

Impairment loss on investment properties - 51 - -

Impairment loss on property, plant and equipment 45 257 - -

Patents written off 193 - - -

Property, plant and equipment written off 111 3,704 - -

Share of profits of equity-accounted investee, net of tax (2,812) (4,295) - -

Unrealised foreign exchange differences (3,848) 2,847 (2,941) 2,937

Waiver of amount due from a subsidiary - - - 3,503

Operating profit before changes in working capital 313,876 327,937 75,716 86,836

Change in inventories (100,053) (48,060) (3,291) (8,060)

Change in trade and other payables 258,772 3,907 (37,563) 33,689

Change in trade and other receivables (481,594) (430,194) 270,105 (43,468)

Cash (used in)/generated from operations (8,999) (146,410) 304,967 68,997

Tax paid (15,210) (12,951) (8,220) (6,911)

Tax refunded 109 - - -

Net cash (used in)/from operating activities (24,100) (159,361) 296,747 62,086

Cash flows from investing activities

Acquisition of patents - (193) - -

Acquisition of property, plant and equipment (802,675) (236,999) (11,943) (12,660)

Acquisition of subsidiaries, net of cash and cash

equivalents acquired (Note 32) 47 - - -

Dividends received from an associate 644 322 644 322

Increase in investments in subsidiaries - - (2,902) -

Interest received from fixed deposits 2,658 3,535 - 1,294

Proceeds from disposal of investment properties 163 - - -

Proceeds from disposal of property, plant and equipment 10,898 1,682 280 150

Proceeds from government grant obtained - 4,480 - -

Net cash used in investing activities (788,265) (227,173) (13,921) (10,894)


Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Cash flows from financing activities

Dividends paid to owners of the Company (14,276) (8,785) (14,276) (8,785)

Drawdown of bankers’ acceptances 193,600 171,443 38,946 28,843

Drawdown of revolving credits 44,055 93,304 - -

Increase in amounts due from subsidiaries - - (563,697) (173,630)

Increase in amount due to an associate 119 2,107 - 1,948

Interest paid on loans and borrowings (93,007) (78,434) (41,491) (38,222)

Interest received from loan to a subsidiary - - 19,230 6,902

Net proceeds from RCSLS together with free warrants - 313,688 - 313,688

Placement of deposits pledged with licensed banks (7,723) (4,373) - -

Proceeds from issue of shares via ESOS 4,947 14,128 4,947 14,128

Proceeds from issue of shares via warrants conversion 143,003 - 143,003 -

Proceeds from/(Repayment of) term loans 456,368 44,353 (37,713) (82,321)

Repayment of finance lease liabilities (13,211) (7,534) (787) (991)

Net cash from/(used in) financing activities 713,875 539,897 (451,838) 61,560

Net (decrease)/increase in cash and cash

equivalents (98,490) 153,363 (169,012) 112,752

Effect of exchange rate fluctuations on cash held 5,979 2,970 - -

Cash and cash equivalents at 1 January 353,973 197,640 180,446 67,694

Cash and cash equivalents at 31 December 261,462 353,973 11,434 180,446

Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position

amounts:

Group Company

Note 2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Deposits (excluding deposits pledged) 12 86,923 68,410 391 391

Cash and bank balances:

- cash and cash equivalents 12 169,227 293,670 22,604 187,991

- disposal group held for sale 13 17,249 - - -

Bank overdrafts 16 (11,937) (8,107) (11,561) (7,936)

261,462 353,973 11,434 180,446

STATEMENTS OF CASH FLOWS



STATEMENTS OF CASH FLOWS


Acquisition of property, plant and equipment

During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of

RM1,153,899,000 (2011: RM623,583,000) and RM12,787,000 (2011: RM13,896,000) respectively, as follows:

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Satisfied by cash 802,675 236,999 11,943 12,660

By means of finance leases 15,837 21,363 844 1,236

Reclassified from deposits 335,387 322,024 - -

Payable to Sarawak government in future years - 43,197 - -

1,153,899 623,583 12,787 13,896



NOTES TO THE FINANCIAL STATEMENTS

Press Metal Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market

of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company

are as follows:

PRINCIPAL PLACE OF BUSINESS

Lot 6464 Batu 5 ¾

Jalan Kapar, Sementa

42100 Klang

Selangor Darul Ehsan

REGISTERED OFFICE

Lot 6.05, Level 6

KPMG Tower

8 First Avenue, Bandar Utama

47800 Petaling Jaya


The consolidated financial statements of the Company as at and for the financial year ended 31 December 2012 comprise

the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the

Group’s interest in an associate. The financial statements of the Company as at and for the financial year ended 31 December

2012 do not include other entities.

The Company is principally engaged in the manufacturing and marketing of aluminium products, whilst the principal activities

of the subsidiaries are as stated in Note 6.

These financial statements were authorised for issue by the Board of Directors on 25 April 2013.

1. BASIS OF PREPARATION

(a) Statement of compliance

The financial statements of the Group and the Company have been prepared in accordance with Malaysian

Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the Companies Act,

1965 in Malaysia. These are the Group and the Company’s first financial statements prepared in accordance with

MFRSs and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied.

In the previous financial years, the financial statements of the Group and of the Company were prepared in

accordance with Financial Reporting Standards (“FRSs”) in Malaysia. The financial impacts on transition to MFRSs

are disclosed in Note 34.

The Group and the Company have early adopted the amendments to MFRS 101, Presentation of Financial

Statements – Presentation of Items of Other Comprehensive Income which is effective for annual periods

beginning on or after 1 July 2012. The early adoption of the amendments to MFRS 101 has no impact on the

financial statements other than the presentation format of the statement of profit or loss and other comprehensive

income.

The following are accounting standards, amendments and interpretations of the MFRS framework that have been

issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and by

the Company:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January

2013

Consolidated Financial Statements

Joint Arrangements

Disclosure of Interests in Other Entities

Fair Value Measurement


NOTES TO THE FINANCIAL STATEMENTScont’d

1. BASIS OF PREPARATION cont’d

(a) Statement of compliance cont’d


2013 cont’d

Employee Benefits (2011)

Separate Financial Statements (2011)

Investments in Associates and Joint Ventures (2011)

Stripping Costs in the Production Phase of a Surface Mine

Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities

First-time Adoption of Malaysian Financial Reporting Standards – Government Loans

First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements

2009-2011 Cycle)

Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)

Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)

Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)

Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)

Consolidated Financial Statements: Transition Guidance

Joint Arrangements: Transition Guidance

Disclosure of Interests in Other Entities: Transition Guidance


2014

Consolidated Financial Statements: Investment Entities

Disclosure of Interests in Other Entities: Investment Entities

Separate Financial Statements (2011): Investment Entities

Financial Instruments: Presentation – Offsetting Financial Assets and Financial

Liabilities


2015

Financial Instruments (2009)

Financial Instruments (2010)

Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and

Transition Disclosures

The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:

that are effective for annual periods beginning on or after 1 January 2013, except for IC Interpretation 20

which is not applicable to the Group and to the Company.

that are effective for annual periods beginning on or after 1 January 2014.

that are effective for annual periods beginning on or after 1 January 2015.



1. BASIS OF PREPARATION cont’d

(a) Statement of compliance cont’d

Material impact of initial application of a standard, an amendment or an interpretation, which will be applied

retrospectively, is discussed below:

MFRS 10, Consolidated Financial Statements

MFRS 10 introduces a new single control model to determine which investees should be consolidated. MFRS 10

supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation

– Special Purpose Entities. There are three elements to the definition of control in MFRS 10: (i) power by investor

over an investee, (ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii)

investor’s ability to affect those returns through its power over the investee.

The Group is in the process of re-evaluating its involvement with its investee to assess the impact of MFRS 10.

The initial application of other standards, amendments and interpretations is not expected to have any material

financial impacts to the current and prior periods financial statements of the Group and of the Company upon their

first adoption.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.

All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise

stated.

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with MFRSs 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 estimates are

recognised in the period in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that

have significant effect on the amounts recognised in the financial statements other than those disclosed in the

following notes:



2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to the periods presented in these financial

statements, and in preparing the opening MFRS statements of financial position of the Group and of the Company at 1

January 2011 (the transition date to MFRS framework), unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial

statements of subsidiaries are included in the consolidated financial statements from the date that control

commences until the date that control ceases. Control exists when the Company has the ability to exercise

its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In assessing control, potential voting rights that presently are exercisable are taken into account.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any

impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments

includes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is

the date on which control is transferred to the Group.

Acquisitions on or after 1 January 2011

For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date

as:

acquiree; less

assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the

acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the

acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group

incurs in connection with a business combination are expensed as incurred.

Acquisitions before 1 January 2011

As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred

before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1

January 2011 has been carried forward from the previous FRS framework as at the date of transition.

(iii) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but

not control, over the financial and operating policies.



2. SIGNIFICANT ACCOUNTING POLICIES cont’d

(a) Basis of consolidation cont’d

(iii) Associates cont’d

Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, 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 Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of the entire interest in that associate, with a resulting gain or loss being recognised in profit or loss. Any retained interest in the former associate at the date when significant influence is lost is re-measured at fair value and this amount is regarded as the initial carrying amount of a financial asset.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss.

Investment in an associate is measured in the Company’s statement of financial position at cost less any impairment losses. The cost of the investment includes transaction costs.

(iv) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

(v) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investees. 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 Group entities at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are

retranslated to the functional currency at the exchange rate at that date.




(b) Foreign currency cont’d

(i) Foreign currency transactions cont’d

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the

reporting date except for those that are measured at fair value are retranslated to the functional currency at

the exchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising

on the retranslation of available-for-sale equity instruments, which are recognised in other comprehensive

income.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia

The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill

and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the

reporting period, except for goodwill and fair value adjustments arising from business combinations before 1

January 2011 which are treated as assets and liabilities of the Company. The income and expenses of foreign

operations are translated to RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign

currency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly-owned subsidiary,

then the relevant proportionate share of the translation difference is allocated to the non-controlling interests.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the

cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the

profit or loss on disposal.

When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the

relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group

disposes of only part of its investment in an associate or joint venture that includes a foreign operation while

retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified

to profit or loss.

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to

a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses

arising from such a monetary item are considered to form part of a net investment in a foreign operation and

are recognised in other comprehensive income, and are presented in the FCTR in equity.

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only

when, the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair

value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the

financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if,

and only if, it is not closely related to the economic characteristics and risks of the host contract and the host

contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded

derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the

host contract.




(c) Financial instruments cont’d

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Loans and receivables

Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost

using the effective interest method.

(b) Available-for-sale financial assets

Available-for-sale category comprises investment in equity instruments that are not held for trading.

Investments in equity instruments that do not have a quoted market price in an active market and

whose fair value cannot be reliably measured are measured at cost.

All financial assets are subject to review for impairment (see Note 2(k)(i)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value

through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a

derivative that is a financial guarantee contract).

Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair

values cannot be reliably measured are measured at cost.

Other derivatives are subsequently measured at their fair values with the gain or loss recognised in profit or

loss.

(iii) Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse

the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with

the original or modified terms of a debt instrument.

Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a

straight-line method over the contractual period or, when there is no specified contractual period, recognised

in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes

probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is

lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a

provision.

(iv) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms

require delivery of the asset within the time frame established generally by regulation or convention in the

marketplace concerned.




(c) Financial instruments cont’d

(iv) Regular way purchase or sale of financial assets cont’d

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade

date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition

of a receivable from the buyer for payment on the trade date.

(v) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows

from the financial asset expire or the financial asset is transferred to another party without retaining control or

substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between

the carrying amount and the sum of the consideration received (including any new asset obtained less any

new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in

profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract

is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the

carrying amount of the financial liability extinguished or transferred to another party and the consideration

paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

(d) Property, plant and equipment

(i) Recognition and measurement

Freehold land and capital work-in-progress are measured at cost. Other items of property, plant and equipment

are measured at cost less any accumulated depreciation and any accumulated impairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs

directly attributable to bringing the asset to 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 cost of self-constructed assets

also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in

accordance with the accounting policy for borrowing costs.

Purchased software that is integral to the functionality of the related equipment is capitalised as part of that

equipment.

The cost of property, plant and equipment recognised as a result of a business combination is based on

fair value at acquisition date. The fair value of property is the estimated amount for which a property could

be exchanged between knowledgeable willing parties in an arm’s length transaction after proper marketing

wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other

items of plant and equipment is based on the quoted market prices for similar items when available and

replacement cost when appropriate.

When significant parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the

proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net

within “other income” or “other expenses” respectively in profit or loss.




(d) Property, plant and equipment cont’d

(ii) Subsequent costs

The cost of replacing a component 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 component will flow

to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced

component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and

equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is based on the cost of an asset less its residual value. Significant components of individual

assets are assessed, and if a component has a useful life that is different from the remainder of that asset,

then that component is depreciated separately.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each

component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of

the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the

end of the lease term. Freehold land is not depreciated. Property, plant and equipment 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:

Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and

adjusted as appropriate.

(e) Leased assets

(i) Finance lease

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of

ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an

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 policy applicable to that

asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and the

reduction of the outstanding liability. The finance expense is allocated to each period during the 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 over the remaining term of the lease

when the lease adjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment or

investment properties as appropriate.




(e) Leased assets cont’d

(ii) Operating lease Leases, where the Group or the Company does not assume substantially all the risks and rewards of

ownership are classified as operating leases and, the leased assets are not recognised in the statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

(f) Intangible assets

(i) Goodwill

Goodwill arises on business combinations is measured at cost less any accumulated impairment losses.

(ii) Patents

Patents that are acquired by the Group, which have indefinite useful lives, are measured at cost less any accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognised in profit or loss as incurred.

(iv) Amortisation

Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and whenever there is an indication that they may be impaired.

(g) Investment properties

(i) Investment properties carried at cost

Investment properties are properties which are owned to earn rental income or for capital appreciation or for both. These include freehold land, leasehold land and buildings which in substance are finance leases held for a currently undetermined future use or leased to third parties. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. Investment properties initially and subsequently measured at cost are accounted for similarly to property, plant and equipment.

(ii) Determination of fair value

For the purpose of disclosure, the Directors estimate the fair values of the Group’s investment properties without involvement of independent valuers.

The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.

The Directors adopted the comparison method in arriving at the market value. The comparison method entails critical analyses of recent evidences of values of comparable properties in the neighbourhood and making adjustment for differences such as differences in location, size and shape of land, age and condition

of building, tenure, title restrictions if any and other relevant characteristics.




(h) Inventories

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is measured based on first-in-first-out formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.

(i) Disposal group held for sale

Disposal group comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.

Immediately before classification as held for sale, the components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally the components of the disposal group are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

Property, plant and equipment once classified as held for sale are not amortised or depreciated.

(j) Cash and cash equivalents

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

(k) Impairment

(i) Financial assets

All financial assets (except for investments in subsidiaries and investment in an associate) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available

for sale is not reversed through profit or loss.




(k) Impairment cont’d

(ii) Other assets

The carrying amounts of other assets (except for inventories, deferred tax asset and disposal group classified

as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication

of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill,

and intangible assets that have indefinite useful lives, the recoverable amount is estimated each period at the

same time.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that

generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or

cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment

testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which

impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting

purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated

to group of cash-generating units that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value

less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market assessments of the time value of money and

the risks specific to the asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit

exceeds its estimated recoverable amount.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating

units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit

(group of cash-generating units) and then to reduce the carrying amount of the other assets in the cash-

generating unit (groups of cash-generating units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses

recognised in prior periods are assessed at the end of each reporting period for any indications that the loss

has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates

used to determine the recoverable amount since the last impairment loss was recognised. An impairment

loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that

would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are

recognised.

(l) Equity instruments

Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.

(i) Issue expenses

Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from

equity.

(ii) Ordinary shares

Ordinary shares are classified as equity.




(m) Compound financial instrument

A compound financial instrument is a non-derivative financial instrument that contains both a liability and equity

component.

Compound financial instruments issued by the Group comprise RCSLS that can be converted to share capital at

the option of the holder, when the number of shares to be issued does not vary with changes in their fair value.

The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that

does not have an equity conversion option. The equity component is recognised initially at the difference between

the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any

directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial

carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at

amortised cost using the effective interest method. The equity component of a compound financial instrument is

not remeasured subsequent to initial recognition.

Interest and losses and gains relating to the financial liability are recognised in profit or loss. On conversion, the

financial liability is reclassified to equity; no gain or loss is recognised on conversion.

(n) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick

leave are measured on an undiscounted basis and are expensed as the related service is provided.

A liability 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 result of past service

provided by the employee and the obligation can be estimated reliably.

(ii) State plans

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to

which they relate. Once the contributions have been paid, the Group has no further payment obligations.

(iii) Share-based payment transactions

The grant date fair value of share-based payment granted to employees is recognised as an employee

expense, with a corresponding increase in equity, over the period that the employees unconditionally become

entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for

which the related service and non-market vesting conditions are expected to be met, such that the amount

ultimately recognised as an expense is based on the number of awards that meet the related service and

non-market performance conditions at the vesting date.

The fair value of employee share options is measured using a Black Scholes model. Measurement inputs

include share price on measurement date, exercise price of the instrument, expected volatility (based on

weighted average historic volatility adjusted for changes expected due to publicly available information),

weighted average expected life of the instruments (based on historical experience and general option holder

behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and

non-market performance conditions attached to the transactions are not taken into account in determining

fair value.




(o) Revenue and other income

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

(ii) Services

Revenue from services rendered is recognised in profit or loss when the services are provided.

(iii) Rental income

Rental income from property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.

(iv) Government grants

Government grants that compensate the Group for the cost of an asset are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant and are then recognised in profit or loss as other income on a systematic basis over the useful life of the asset.

(v) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

(vi) Interest income

Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.

(p) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.

The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying assets for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on

qualifying assets is deducted from the borrowing costs eligible for capitalisation.




(q) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or

loss except to the extent that it relates to a business combination or items recognised directly in equity or other

comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates

enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect

of previous financial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying

amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not

recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets

or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit

or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences

when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting

period.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and

assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different

tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities

will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against

which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting

period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as

a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the

unutilised tax incentive can be utilised.

(r) Earnings per ordinary share

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

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the

weighted average number of ordinary shares outstanding during the period.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted

average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which

comprise RCSLS, warrants and share options granted to employees.

(s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s

other components. An operating segment’s operating results are reviewed regularly by the chief operating decision

maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be

allocated to the segment and to assess its performance, and for which discrete financial information is available.




(t) Contingencies

Contingent liabilities

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated

reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent

liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence

will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as

contingent liabilities unless the probability of outflow of economic benefits is remote.

3. PROPERTY, PLANT AND EQUIPMENT

Group Land

Buildings

and

renovation

Plant

and

machinery

Office

equipment

Motor

vehicles

Furniture

and

fittings

Moulds

and dies

Capital

work-

in-

progress Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost

At 1 January 2011 286,151 566,723 644,888 34,120 31,384 5,961 139,274 26,761 1,735,262

Additions 65,883 39,295 318,808 3,630 27,354 298 34,178 134,137 623,583

Government grant obtained - - (4,480) - - - - - (4,480)

Disposals - - (1,352) (12) (1,706) - - - (3,070)

Write off - - (8,360) (217) (13) - - - (8,590)

Transfers - 23,933 3,393 - - - - (27,326) -

Effect of movements in

exchange rates 4,900 16,905 13,304 1,197 513 10 5,038 1,806 43,673

At 31 December 2011/1

January 2012 356,934 646,856 966,201 38,718 57,532 6,269 178,490 135,378 2,386,378

Additions 97 21,331 76,885 5,865 12,809 1,384 20,400 1,015,128 1,153,899

Acquisition through business

combinations (Note 32) - - - - - 82 - - 82

Disposals - - (15,801) (232) (1,814) - - - (17,847)

Write off - - (145) (99) - - - - (244)

Transfers - 363,708 340,583 - - - - (704,291) -

Transfer to disposal group

held for sale (Note 13) (1,590) (108,929) (106,471) (4,084) (3,782) - - (19,912) (244,768)


exchange rates (4,712) (5,660) (5,877) (422) (185) - (1,832) (594) (19,282)

At 31 December 2012 350,729 917,306 1,255,375 39,746 64,560 7,735 197,058 425,709 3,258,218



3. PROPERTY, PLANT AND EQUIPMENT cont’d

Group Land

Buildings

and

renovation

Plant

and

machinery

Office

equipment

Motor

vehicles

Furniture

and

fittings

Moulds

and dies

Capital

work-

in-

progress Total


Depreciation and

impairment loss

At 1 January 2011 2,718 43,798 227,656 15,298 10,723 1,991 99,184 - 401,368

Depreciation for the year 4,787 16,635 34,857 2,692 4,689 348 34,084 - 98,092

Impairment loss for the year - 257 - - - - - - 257

Disposals - - (123) (3) (1,012) - - - (1,138)

Write off - - (4,698) (175) (13) - - - (4,886)


exchange rates 190 3,585 11,412 362 230 4 3,899 - 19,682

At 31 December 2011/

1 January 2012 7,695 64,275 269,104 18,174 14,617 2,343 137,167 - 513,375

Depreciation for the year 5,287 19,240 55,780 4,773 5,333 419 22,564 - 113,396

Impairment loss for the year - - - 9 - 36 - - 45

Disposals - - (6,868) (68) (1,004) - - - (7,940)

Write off - - (59) (74) - - - - (133)

Transfer to disposal group

held for sale (Note 13) (147) (31,222) (106,030) (3,664) (1,952) - - - (143,015)


exchange rates (134) (1,070) (3,555) (130) (79) - (1,429) - (6,397)

At 31 December 2012 12,701 51,223 208,372 19,020 16,915 2,798 158,302 - 469,331

Carrying amounts

At 1 January 2011 283,433 522,925 417,232 18,822 20,661 3,970 40,090 26,761 1,333,894

At 31 December 2011/

1 January 2012 349,239 582,581 697,097 20,544 42,915 3,926 41,323 135,378 1,873,003

At 31 December 2012 338,028 866,083 1,047,003 20,726 47,645 4,937 38,756 425,709 2,788,887




Company Land Buildings Renovation

Plant

and

machinery

Office

equipment

Motor

vehicles

Furniture

and

fittings

Moulds

and dies Total


Cost

At 1 January 2011 25,300 31,292 2,502 131,308 10,149 5,345 873 80,520 287,289

Additions - - 1,443 4,531 817 1,362 - 5,743 13,896

Disposals - - - (40) - (345) - - (385)


January 2012 25,300 31,292 3,945 135,799 10,966 6,362 873 86,263 300,800

Additions - 1,620 464 4,111 515 893 585 4,599 12,787

Disposals - - - (4,141) - (403) - - (4,544)

At 31 December 2012 25,300 32,912 4,409 135,769 11,481 6,852 1,458 90,862 309,043

Depreciation

At 1 January 2011 - 5,544 703 75,877 8,360 2,949 494 59,070 152,997

Depreciation for the year - 626 329 7,047 534 449 15 6,608 15,608

Disposals - - - (17) - (92) - - (109)


January 2012 - 6,170 1,032 82,907 8,894 3,306 509 65,678 168,496

Depreciation for the year - 653 417 7,265 566 540 21 6,508 15,970

Disposals - - - (4,119) - (319) - - (4,438)

At 31 December 2012 - 6,823 1,449 86,053 9,460 3,527 530 72,186 180,028

Carrying amounts

At 1 January 2011 25,300 25,748 1,799 55,431 1,789 2,396 379 21,450 134,292


January 2012 25,300 25,122 2,913 52,892 2,072 3,056 364 20,585 132,304

At 31 December 2012 25,300 26,089 2,960 49,716 2,021 3,325 928 18,676 129,015

3.1 Impairment loss

During the financial year, the Group assessed certain assets for impairment and recognised an impairment loss of

RM45,000 (2011: RM257,000) as these assets no longer generate future economic benefits to the Group.

3.2 Leased plant and machinery and motor vehicles

At 31 December 2012, the net carrying amounts of plant and machinery and motor vehicles of the Group and

the Company under lease arrangements amounted to RM46,916,000 (31.12.2011: RM36,027,000; 1.1.2011:

RM18,944,000) and RM2,315,000 (31.12.2011: RM3,230,000; 1.1.2011: RM2,554,000), respectively.




3.3 Borrowing costs

Included in property, plant and equipment under construction of the Group is interest capitalised for the financial

year amounting to RM49,040,000 (31.12.2011: RM16,779,000; 1.1.2011: RM12,389,000) as follows:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Fixed rate of 6.00% - 6.16% per annum 37,963 10,389 -

Floating rate of 1.75% - 2.25% per annum above the

Financiers’ Islamic Cost of Funds 6,026 6,276 12,389

Others 5,051 114 -

49,040 16,779 12,389

3.4 Security

Property, plant and equipment of the Group with a carrying amount of RM2,163,046,000 (31.12.2011:

RM1,148,181,000; 1.1.2011: RM626,431,000) have been pledged as security and as fixed and floating charges

for bank facilities granted to certain subsidiaries (see Note 16).

3.5 Land

Included in the carrying amounts of land are:

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Freehold land 25,300 25,300 25,300 25,300 25,300 25,300

Leasehold land with

unexpired period of

less than 50 years 3,308 3,452 - - -

Leasehold land with

unexpired period of

more than 50years 309,420 320,487 258,133 - - -

338,028 349,239 283,433 25,300 25,300 25,300

3.6 Capital work-in-progress

Included in the carrying amounts of capital work-in-progress are:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Plant and machinery-in-progress 317,944 - -

Building-in-progress 107,765 135,378 26,761

425,709 135,378 26,761




3.7 Leasehold land premium

During the financial year, included in additions of leasehold land of the Group are leasehold land premiums paid/

payable to the state government of Sarawak amounting to Nil (31.12.2011: RM62,384,000; 1.1.2011: Nil).

3.8 Government grant

In 2011, a subsidiary obtained a government grant of RM4,480,000, which had an effect of reducing the depreciation

expense of the Group for 2011 by RM403,000. The subsidiary has complied with all conditions attached to the

government assistance recognised.

4. INTANGIBLE ASSETS

Group Note Goodwill Patents Total

RM’000 RM’000 RM’000

Cost

At 1 January 2011 13,737 - 13,737

Additions - 193 193

At 31 December 2011/1 January 2012 13,737 193 13,930

Acquisition through business combinations 32 1,038 - 1,038

Write off - (193) (193)

At 31 December 2012 14,775 - 14,775

Impairment loss

At 1 January 2011/31 December 2011/1 January 2012/

31 December 2012 550 - 550

Carrying amounts

At 1 January 2011 13,187 - 13,187

At 31 December 2011/1 January 2012 13,187 193 13,380

At 31 December 2012 14,225 - 14,225

4.1 Patents

The patents have indefinite useful lives and are assessed for impairment annually. During the financial year, the

patents have been written off as they no longer generate future economic benefits to the Group.

4.2 Impairment testing for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the Group’s business units acquired, which represent

the lowest level within the Group at which the goodwill is monitored for internal management purposes.



4. INTANGIBLE ASSETS cont’d

4.2 Impairment testing for cash-generating units containing goodwill cont’d

The aggregate carrying amounts of goodwill allocated to each unit are as follows:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Press Metal International Ltd. 9,219 9,219 9,219

Press Metal Aluminium (Australia) Pty. Ltd. 3,968 3,968 3,968

Press Metal North America LLC. 1,038 - -

14,225 13,187 13,187

The recoverable amounts of the business units were based on value in use and were determined by management.

Value in use was determined by discounting the future cash flows expected to be generated from the continuing

use of the units and was based on the following key assumptions:

period were projected using a constant growth rate of 5% (31.12.2011: 5%; 1.1.2011: 5%) per annum.

5%).

1.1.2011: 5%).

amount of the units.

The values assigned to the key assumptions represent management’s assessment of future trends in the business

units’ principal activities and are based on internal sources (historical data).

The above estimates are not sensitive in relation to the carrying amounts of goodwill.

5. INVESTMENT PROPERTIES

Group

RM’000

Cost

At 1 January 2011/31 December 2011/1 January 2012 6,912

Disposal (525)

At 31 December 2012 6,387



5. INVESTMENT PROPERTIES cont’d

Group

RM’000

Depreciation and impairment loss

At 1 January 2011 1,115

Depreciation for the year 112

Impairment loss for the year 51

At 31 December 2011/1 January 2012 1,278

Depreciation for the year 121

Disposal (363)


Carrying amounts

At 1 January 2011 5,797



Fair values

At 1 January 2011 8,329


At 31 December 2012 12,720

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Included in the above are:

Freehold land 812 812 812

Leasehold land with unexpired lease period of more than 50 years 569 575 583

Buildings 3,970 4,247 4,402

5,351 5,634 5,797

Investment properties comprise of freehold land, leasehold land and a number of residential properties and commercial

properties that are leased to third parties or vacant.

The fair values of all investment properties are determined based on market values, being the estimated amount for

which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s

length transaction after proper marketing wherein the parties had each acted knowledgeably.



5. INVESTMENT PROPERTIES cont’d

Impairment loss

In 2011, the Group assessed the investment properties for impairment and recognised an impairment loss of RM51,000

as a result of a significant decline in market value of a building of a subsidiary.

The following are recognised in profit or loss in respect of investment properties:

Group

2012 2011

RM’000 RM’000

Rental income 252 340

Direct operating expenses:

- income generating investment properties (158) (166)

- non-income generating investment properties (13) (13)

6. INVESTMENTS IN SUBSIDIARIES

Company

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Unquoted shares, at cost 541,143 538,241 488,191

Less: Impairment loss (7,194) (6,640) (2,440)

533,949 531,601 485,751

The movements of investments in subsidiaries are as follows:

Company

2012 2011

RM’000 RM’000

At 1 January 531,601 485,751

Subscription of additional shares 2,902 50,050

Impairment loss during the year (554) (4,200)

At 31 December 533,949 531,601

Satisfied by cash 2,902 -

Net settled against balance due to a subsidiary - 50,050

Total consideration paid for subscription of additional shares 2,902 50,050



6. INVESTMENTS IN SUBSIDIARIES cont’d

Details of the subsidiaries are as follows:

Name of subsidiary

Country of

incorporation Principal activities Effective ownership interest

31.12.2012 31.12.2011 1.1.2011

% % %

Angkasa Jasa Sdn. Bhd. Malaysia Contracting and fabrication

of aluminium and stainless

steel products

100 100 100

PMB Recycling Management

Sdn. Bhd.

Malaysia Dormant 100 100 100

PMB Development Sdn. Bhd. Malaysia Investment holding 100 100 100

and its subsidiary,

PMB Spectrum Sdn. Bhd. Malaysia Dormant 60 60 60

Wesama Sdn. Bhd. Malaysia Investment holding 100 100 100

and its subsidiary,

Ace Extrusion Sdn. Bhd. Malaysia Manufacturing and trading of

aluminium products

100 100 100

PMB Marketing Sdn. Bhd. # Malaysia Dormant 100 100 100

and its subsidiary,

PMB Marketing (H.K.)

Limited *

Hong Kong Trading of garments and

accessories

100 100 100

BI-PMB Waste Management

Sdn. Bhd

Malaysia Provision of a common

waste water treatment plant

to treat toxic waste

100 100 100

PMS Marketing Sdn. Bhd. Malaysia Purchasing agent of Press

Metal Sarawak Sdn. Bhd.

and Press Metal Bintulu Sdn.

Bhd.

100 100 100

Press Metal Sarawak Sdn.

Bhd.

Malaysia Manufacturing and trading of

aluminium products

80 80 80

Press Metal Bintulu Sdn.

Bhd. +

Malaysia Manufacturing and trading of

aluminium products

100 100 100




Name of subsidiary

Country of

incorporation Principal activities Effective ownership interest

31.12.2012 31.12.2011 1.1.2011

% % %

Press Metal Aluminium

(Australia) Pty. Ltd. *

Australia Marketing of aluminium

products

70 70 70

Press Metal UK Limited * United

Kingdom

Marketing of aluminium

products

100 100 100

Press Metal Hong Kong

Limited *

Hong Kong Investment holding 100 100 100

and its subsidiary,

Press Metal International

Ltd. ~

China Manufacturing and trading of

aluminium products

100 100 100

and its subsidiary,


Technology Ltd. **, ^

China Dormant 100 100 -


Trading Ltd. **, i

China Purchasing agent of Press

Metal Bintulu Sdn. Bhd.

100 100 -

PMIT Solar Pty. Ltd. **, ii Australia Dormant 70 - -

Hubei Press Metal Huasheng

Aluminium-Electric Co,.

Ltd. *


aluminium products

90 90 90

and its subsidiaries,


(Hubei) Ltd. *


aluminium products

90 90 90

PMH Electric Engineering

Co,. Ltd. *

China Dormant 90 90 90

Press Metal North America

LLC. **, @

United States

of America

Trading of aluminium

products

100 - -

~ Audited by member firms of KPMG International

* Not audited by member firms of KPMG International

** Consolidated based on management accounts

# In June 2011, the Company subscribed for an additional 50,000 new ordinary shares of RM1.00 each at par for a total cash

consideration of RM50,000 in PMB Marketing Sdn. Bhd., a wholly-owned subsidiary of the Company.

+ In June 2011 and August 2011, the Company subscribed for an additional 1,049,998 and 48,950,000 new ordinary shares of

RM1.00 each at par respectively, for a total cash consideration of RM49,999,998 in Press Metal Bintulu Sdn. Bhd., a wholly-

owned subsidiary of the Company.




^ In March 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a new wholly-owned

subsidiary in the People’s Republic of China, Press Metal International Technology Ltd., with an issued and paid-up capital of

RMB20,000,000.

i In June 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a new wholly-owned

subsidiary in the People’s Republic of China, Press Metal International Trading Ltd., with an issued and paid-up capital of

RMB2,000,000.

ii In February 2012, Press Metal International Ltd., a wholly-owned subsidiary of the Company, acquired a new 70%-owned

subsidiary, PMIT Solar Pty. Ltd., a company incorporated in Australia, with an issued and paid-up capital of AUD100 for a

purchase consideration of AUD70.

@ In July 2012, the Company acquired a new wholly-owned subsidiary, Press Metal North America LLC., a company incorporated

in the United States of America, with an issued and paid-up capital of USD500 for a purchase consideration of USD500.

Subsequently, the Company subscribed for an additional 949,000 new ordinary shares of USD1.00 each at par respectively,

for a purchase consideration of USD949,000.

7. INVESTMENT IN AN ASSOCIATE

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Quoted shares in

Malaysia, at cost 11,812 11,812 11,812 11,812 11,812 11,812

Share of post-

acquisition

reserves 22,654 20,486 16,191 - - -

34,466 32,298 28,003 11,812 11,812 11,812

Market value:

Quoted shares in

Malaysia 12,027 10,094 16,751 12,027 10,094 16,751

The summarised financial information of the associate incorporated in Malaysia, not adjusted for the percentage

ownership held by the Group are as follows:

Effective

ownership

interest

Revenue

(100%)

Profit

(100%)

Total

assets

(100%)

Total

liabilities

(100%)

RM’000 RM’000 RM’000 RM’000

31 December 2012

PMB Technology Berhad 28% 284,705 10,145 284,951 165,734

31 December 2011


1 January 2011




8. OTHER INVESTMENTS

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Available-for-sale

financial assets

At cost:

Unquoted shares in

Malaysia 1,803 1,803 1,803 750 750 750

Unquoted shares

outside Malaysia - 5,034 4,674 - - -

1,803 6,837 6,477 750 750 750

9. DEFERRED TAX ASSETS/(LIABILITIES)

Recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property,

plant and

equipment - - - (177,397) (123,832) (92,846) (177,397) (123,832) (92,846)

Provisions 3,038 3,356 591 - - - 3,038 3,356 591

Tax loss

carry-

forwards - 6,817 236 - - - - 6,817 236

Capital

allowance

carry-

forwards 74,992 23,895 18,702 - - - 74,992 23,895 18,702

ITA carry-

forwards 149,992 - - - - - 149,992 - -

Other items 987 987 380 (61) (593) (660) 926 394 (280)

RCSLS - - - (22,760) (26,610) - (22,760) (26,610) -

Tax assets/

(liabilities) 229,009 35,055 19,909 (200,218) (151,035) (93,506) 28,791 (115,980) (73,597)

Set off (130,585) (33,457) (18,867) 130,585 33,457 18,867 - - -

Net tax

assets/

(liabilities) 98,424 1,598 1,042 (69,633) (117,578) (74,639) 28,791 (115,980) (73,597)



9. DEFERRED TAX ASSETS/(LIABILITIES) cont’d

Recognised deferred tax assets/(liabilities) cont’d

Assets Liabilities Net

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property,

plant and

equipment - - - (15,947) (16,636) (16,336) (15,947) (16,636) (16,336)

Other items 748 - - - - (660) 748 - (660)

RCSLS - - - (22,760) (26,610) - (22,760) (26,610) -

748 - - (38,707) (43,246) (16,996) (37,959) (43,246) (16,996)

Movement in temporary differences during the year

At

1.1.2011

Recognised

in profit

or loss

(Note 22)

Recognised

directly in

equity

Effect of

movement

in

exchange

rates

At

31.12.2011

Recognised

in profit

or loss

(Note 22)

Effect of

movement

in

exchange

rates

At

31.12.2012

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property, plant and

equipment (92,846) (26,351) - (4,635) (123,832) (59,197) 5,632 (177,397)

Provisions 591 2,765 - - 3,356 (318) - 3,038

Tax loss carry-forwards 236 6,581 - - 6,817 (6,817) - -

Capital allowance

carry-forwards 18,702 5,193 - - 23,895 51,097 - 74,992

ITA carry-forwards - - - - - 149,992 - 149,992

Other items (280) 674 - - 394 532 - 926

RCSLS - 1,109 (27,719) - (26,610) 3,850 - (22,760)

(73,597) (10,029) (27,719) (4,635) (115,980) 139,139 5,632 28,791

At

1.1.2011

Recognised

in profit

or loss

(Note 22)

Recognised

directly in

equity

At

31.12.2011

Recognised

in profit

or loss

(Note 22)

At

31.12.2012

Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Property, plant and

equipment (16,336) (300) - (16,636) 689 (15,947)

Other items (660) 660 - - 748 748

RCSLS - 1,109 (27,719) (26,610) 3,850 (22,760)

(16,996) 1,469 (27,719) (43,246) 5,287 (37,959)

The deferred tax portion of the RCSLS amounting to Nil (2011: RM27,719,000) was charged to the equity component

of the RCSLS and recognised in equity. Following the accretion of RCSLS, there was a reduction in deferred tax liabilities

amounting to RM3,850,000 (2011: RM1,109,000) recognised in profit or loss.



9. DEFERRED TAX ASSETS/(LIABILITIES) cont’d

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items (stated at gross):

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Other taxable temporary differences (125) (3,151) (3,972)

Tax loss carry-forwards 19,621 18,105 15,325

Capital allowance carry-forwards 32,601 32,654 49,381

52,097 47,608 60,734

Deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which these assets can be utilised. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group entities can utilise the benefits there from.

10. TRADE AND OTHER RECEIVABLES

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Non-current

Non-trade

Amounts due from

subsidiaries 10.1 - - - 62,965 62,841 -

Current

Trade

Trade receivables 351,451 356,449 295,080 42,617 45,679 46,861

Less: Individual

impairment

allowance (6,857) (7,699) (4,711) (325) (325) (411)

344,594 348,750 290,369 42,292 45,354 46,450

Amounts due from

subsidiaries 10.1 - - - 261,252 213,354 173,738

Amount due from an

associate 10.1 12,244 22,718 11,345 11,376 18,169 10,995

356,838 371,468 301,714 314,920 276,877 231,183

Non-trade

Amounts due from

subsidiaries 10.1 - - - 901,689 393,907 298,278

Other receivables 48,884 77,929 14,412 1,008 2,026 1,589

Deposits 10.2 509,968 345,933 337,830 1,936 3,251 10,046

Prepayments 28,459 16,873 50,096 2,345 2,719 2,109

587,311 440,735 402,338 906,978 401,903 312,022

944,149 812,203 704,052 1,221,898 678,780 543,205

944,149 812,203 704,052 1,284,863 741,621 543,205



10. TRADE AND OTHER RECEIVABLES cont’d

10.1 Related party balances

The trade balances due from subsidiaries and an associate are subject to normal trade terms. The non-trade

balances due from subsidiaries are subject to the following terms:

Company

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Non-current

Interest free and repayable in more than a year 62,965 9,500 -

Repayable in more than a year and subject to interest at

6.00% per annum - 53,341 -

62,965 62,841 -

Current

Interest free and repayable on demand 581,182 393,907 298,278

Subject to interest at 6.00% per annum and repayable on

demand 320,507 - -

901,689 393,907 298,278

10.2 Deposits

Included in deposits of the Group are deposits paid to contractors in relation to the construction of aluminium

smelting plants and procurement of plant and machinery for those plants as follows:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Samalaju 502,662 335,387 -

Mukah - - 322,024

502,622 335,387 322,024

10.3 Estimation uncertainty and critical judgements

The Group and the Company make impairment of receivables based on assessment of recoverability. Whilst

management’s judgement is guided by past experiences, judgement is made about the future recovery of debts.



11. INVENTORIES

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Raw materials 200,661 160,501 129,541 14,694 17,668 11,800

Work-in-progress 78,653 77,191 49,468 6,062 5,002 3,518

Finished goods 139,203 136,314 147,838 11,714 6,485 5,613

Consumable parts 490 1,219 318 106 130 294

419,007 375,225 327,165 32,576 29,285 21,225

Carrying amount

of inventories

pledged as

security for bank

borrowings (see

Note 16) 154,214 136,951 94,650 - - -

Recognised in

profit or loss:

Inventories

recognised as

cost of sales 1,911,999 1,791,485 608,890 696,617

Write down to

net realisable

value 1,065 330 - -

The write down is included in cost of sales.

12. CASH AND CASH EQUIVALENTS

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Deposits placed

with licensed

banks 102,543 76,307 5,915 391 391 391

Cash and bank

balances 169,227 293,670 195,296 22,604 187,991 67,303

271,770 369,977 201,211 22,995 188,382 67,694

Included in deposits placed with licensed banks of the Group is RM15,620,000 (31.12.2011: RM7,897,000; 1.1.2011:

RM3,524,000) pledged as security for term loans granted to certain subsidiaries (see Note 16).



13. DISPOSAL GROUP HELD FOR SALE

At 31 December 2012, the assets and liabilities of Hubei Press Metal Huasheng Aluminium-Electric Co., Ltd. (“PMH”) are

presented as a disposal group held for sale following the commitment of the Company to dispose of its entire 90%-equity

interest in PMH. Efforts to sell the disposal group have commenced during the current financial year. At 31 December

2012, the assets and liabilities of the disposal group are as follows:

Group

Note 2012

RM’000

Assets classified as held for sale

Property, plant and equipment a 101,753

Other investments 2,454

Inventories b 56,271

Trade and other receivables c 24,231

Current tax assets 1,202

Cash and bank balances 17,249

203,160

Liabilities classified as held for sale

Trade and other payables 133,958

Loans and borrowings 14,724

148,682

Note a

Property, plant and equipment held for sale comprise the following:

Cost 244,768

Accumulated depreciation (143,015)

101,753

Note b

The inventories held for sale comprise raw materials, work-in-progress and finished goods and are carried at cost.

Note c

Receivables are carried at cost less an impairment loss of RM1,773,000.

The disposal group is not presented as a discontinued operation as PMH does not represent a separate major line of

business or geographical area of operations of the Group and contributed a loss after tax of RM10,241,000 to the Group

for the current financial year.



14. CAPITAL AND RESERVES

Share capital

Group and Company Number Number Number

Amount of shares Amount of shares Amount of shares

31.12.2012 31.12.2012 31.12.2011 31.12.2011 1.1.2011 1.1.2011

RM’000 ’000 RM’000 ’000 RM’000 ’000

Ordinary share of

RM0.50 each:

Authorised 500,000 1,000,000 500,000 1,000,000 500,000 1,000,000

Issued and fully

paid:

At 1 January 219,740 439,479 215,031 430,060

Issued for cash

via conversion

of warrants 32,501 65,001 - -

Issued for cash

under ESOS 1,649 3,298 4,709 9,419

At 31 December 253,890 507,778 219,740 439,479

Ordinary shares

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote

per share at meetings of the Company.

Capital reserve

The Group’s and the Company’s capital reserves consist of RCSLS reserve and warrants reserve, which comprise the

equity portion of RCSLS issued together with free warrants attached (see Note 16).

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements

of foreign operations.

Share option reserve

The share option reserve comprises the cumulative value of employee services received for the issue of share options.

When the option is exercised, the amount from the share option reserve is transferred to share premium. When the share

options expire, the amount from the share option reserve is transferred to retained earnings. The details of the share

option are disclosed in Note 17.

Tax exempt income

Subject to agreement by the Inland Revenue Board, the Company has tax exempt income to frank and distribute

approximately RM156,313,000 (31.12.2011: RM170,589,000; 1.1.2011: RM173,385,000) of its retained earnings at 31

December 2012 if paid out as dividends.



15. TRADE AND OTHER PAYABLES, INCLUDING DERIVATIVES

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Non-current

Trade

Trade payables - - 9,487 - - -

Amount due to an

associate 15.1 - - 6,890 - - 2,955

- - 16,377 - - 2,955

Non-trade

Amount due to a

subsidiary 15.1 - - - - - 100,468

Other payables 15.2 51,997 120,228 89,672 - - -

51,997 120,228 89,672 - - 100,468

51,997 120,228 106,049 - - 103,423

Current

Trade

Trade payables 120,507 134,859 134,101 2,312 2,290 4,680

Amounts due to

subsidiaries 15.1 - - - 249,484 131,815 92,356

Amount due to an

associate 15.1 11,511 12,216 4,248 2,902 3,639 -

132,018 147,075 138,349 254,698 137,744 97,036

Non-trade

Amounts due to

subsidiaries 15.1 - - - 82,004 135,858 -

Amount due to an

associate 15.1 2,249 2,130 23 1,948 1,948 -

Amount due to a

Director 15.1 - 125 - - - -

Other payables 15.2 261,028 56,742 96,080 156,529 3,494 8,513

Accrued expenses 15.3 107,283 94,478 25,819 6,619 11,023 4,720

Financial liabilities at

fair value through

profit or loss:

- Derivatives 2,994 2,994 2,123 2,994 2,994 2,123

373,554 156,469 124,045 250,094 155,317 15,356

505,572 303,544 262,394 504,792 293,061 112,392

557,569 423,772 368,443 504,792 293,061 215,815



15. TRADE AND OTHER PAYABLES, INCLUDING DERIVATIVES cont’d

15.1 Related party balances

The trade balances due to subsidiaries and an associate are subject to normal trade terms, except for amounts

due to an associate of RM6,890,000 and RM2,955,000 of the Group and of the Company, respectively, on 1

January 2011, which were repayable in more than a year.

The non-trade balances due to subsidiaries, an associate and a Director are unsecured, interest free and are

repayable on demand, except for an amount due to a subsidiary amounting to RM100,468,000 on 1 January

2011, which was repayable in more than a year.

15.2 Other payables

Included in other payables of the Group are:-

(i) the remaining 30% purchase consideration payable for the acquisition of PMH amounting to Nil (31.12.2011:

RM67,657,000; 1.1.2011: RM62,819,000).

(ii) amounts payable to contractors in relation to the construction of aluminium smelting plants as follows:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Samalaju 66,162 13,797 -

Mukah - - 17,378

66,162 13,797 17,378

(iii) amount payable to a company with a common Director amounting to RM26,505,000 (31.12.2011:

RM15,721,000; 1.1.2011: Nil) which is unsecured, interest free and is repayable in more than a year.

(iv) leasehold land premium payable to the state government of Sarawak amounting to RM35,983,000

(31.12.2011: RM43,197,000; 1.1.2011: Nil).

Included in other payables of the Group and of the Company at 31 December 2012 are advance payments

received from a customer amounting to RM152,900,000 (31.12.2011: Nil; 1.1.2011: Nil) in relation to forward sale

agreements entered between the customer and the Company.

15.3 Accrued expenses

Included in accrued expenses of the Group are electricity charges accrued amounting to RM48,780,000

(31.12.2011: RM34,773,000; 1.1.2011: RM845,000).



16. LOANS AND BORROWINGS

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Non-current

Bank loans

- unsecured 16.3 12,232 41,561 87,748 12,232 31,728 68,929

Bank loans

- secured 16.3 869,281 386,675 301,331 - - -

Finance lease

liabilities 16.4 16,200 15,188 7,046 1,289 1,114 891

RCSLS 16.5 214,919 199,520 - 214,919 199,520 -

1,112,632 642,944 396,125 228,440 232,362 69,820

Current

Bank loans

- unsecured 16.3 215,516 224,391 209,271 19,294 37,304 82,731

Bank loans

- secured 16.3 106,211 94,372 104,592 - - -

Bankers’

acceptances

- unsecured 16.1 862,757 683,881 512,438 456,902 417,363 388,520

Revolving credits

- unsecured 16.2 234,336 178,243 131,265 45,000 45,000 45,000

Revolving credits

- secured 16.2 37,366 49,404 3,078 - - -

Bank overdrafts

- unsecured 11,937 8,107 47 11,561 7,936 -

Finance lease

liabilities 16.4 11,548 9,934 4,247 487 605 583

1,479,671 1,248,332 964,938 533,244 508,208 516,834

2,592,303 1,891,276 1,361,063 761,684 740,570 586,654

16.1 Bankers’ acceptances

The bankers’ acceptances of the Group amounting to RM137,930,000 (31.12.2011: RM12,000,000; 1.1.2011:

RM11,500,000) are guaranteed by the Company.

16.2 Revolving credits

The revolving credits of the Group amounting to RM37,366,000 (31.12.2011: RM49,404,000; 1.1.2011:

RM3,078,000) are secured by way of irrevocable Standby Letter of Credit issued by a bank and fixed and floating

charges of a subsidiary’s property, plant and equipment while RM162,359,000 (31.12.2011: RM98,875,000;

1.1.2011: Nil) are guaranteed by the Company.



16. LOANS AND BORROWINGS cont’d

16.3 Bank loans

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Loans of the Company:

Loan 1 - unsecured - 12,674 30,855 - 12,674 30,855

Loan 2 - unsecured 11,417 21,783 34,600 11,417 21,783 34,600

Loan 3 - unsecured 1,761 9,227 16,193 1,761 9,227 16,193

Loan 4 - unsecured 18,348 25,348 30,855 18,348 25,348 30,855

Loan 5 - unsecured - - 39,157 - - 39,157

Loans of subsidiaries:

Loan 6 - secured 321 344 351 - - -

Loan 7 - secured 215,000 301,000 387,000 - - -

Loan 8 - unsecured - 6,344 12,340 - - -

Loan 9 - unsecured 3,400 6,977 9,703 - - -

Loan 10 - unsecured 139,325 126,211 69,567 - - -

Loan 11 - unsecured - - 14,020 - - -

Loan 12 - secured 20,186 8,349 18,572 - - -

Loan 13 - unsecured 19,632 15,102 14,022 - - -

Loan 14 - unsecured 19,632 27,687 25,707 - - -

Loan 15 - secured 395,598 171,354 - - - -

Loan 16 - unsecured 9,816 10,068 - - - -

Loan 17 - unsecured 4,417 4,531 - - - -

Loan 18 - secured 344,387 - - - - -

1,203,240 746,999 702,942 31,526 69,032 151,660

Securities and guarantees

Loans 1 and 2 Negative pledge by the Company

Loan 3 Negative pledge and guaranteed by a subsidiary, Press Metal International Ltd.

Loans 4 and 5 No securities nor guarantees

Loan 6 Secured over a building of a subsidiary with a carrying amount of RM912,000 (31.12.2011:

RM937,000; 1.1.2011: RM964,000) and guaranteed by the Company

Loan 7 Secured over a leasehold land of a subsidiary with a carrying amount of RM33,708,000

(31.12.2011: RM34,040,000; 1,1,2011: RM22,202,000), floating charges on other property,

plant and equipment, deposits pledged with a licensed bank of RM5,100,000 (31.12.2011:

RM5,100,000; 1.1.2011: RM3,524,000) and guaranteed by the Company

Loans 8 to 11 Guaranteed by the Company

Loan 12 Secured over the inventories of a subsidiary

Loans 13 and 14 Guaranteed by a subsidiary, PMH

Loans 15 and 18 Secured over a leasehold land of a subsidiary with a carrying amount of RM49,065,000

(31.12.2011: RM49,806,000; 1.1.2011: Nil), floating charges on other property, plant

and equipment, deposits pledged with a licensed bank of RM10,520,000 (31.12.2011:

RM2,797,000; 1.1.2011: Nil) and guaranteed by the Company

Loan 16 Guaranteed by subsidiaries, PMH and Press Metal International Ltd.

Loan 17 Negative pledge by a subsidiary, Press Metal International (Hubei) Ltd.




16.4 Finance lease liabilities

Finance lease liabilities are payable as follows:

Future

minimum

lease

payments

31.12.2012

Interest

31.12.2012

Present

value of

minimum

lease

payments

31.12.2012

Future

minimum

lease

payments

31.12.2011

Interest

31.12.2011

Present

value of

minimum

lease

payments

31.12.2011

Future

minimum

lease

payments

1.1.2011

Interest

1.1.2011

Present

value of

minimum

lease

payments

1.1.2011


Group

Less than one

year 13,040 (1,492) 11,548 11,117 (1,183) 9,934 4,821 (574) 4,247

Between one and

five years 18,177 (2,116) 16,061 17,333 (2,259) 15,074 8,037 (1,028) 7,009

More than five

years 173 (34) 139 139 (25) 114 48 (11) 37

31,390 (3,642) 27,748 28,589 (3,467) 25,122 12,906 (1,613) 11,293

Company

Less than one

year 600 (113) 487 698 (93) 605 668 (85) 583

Between one and

five years 1,483 (198) 1,285 1,257 (191) 1,066 1,019 (128) 891

More than five

years 13 (9) 4 60 (12) 48 - - -

2,096 (320) 1,776 2,015 (296) 1,719 1,687 (213) 1,474

16.5 RCSLS

Group and Company

2012 2011

RM’000 RM’000

Proceeds from issue of 145,684,940 RCSLS and free warrants 320,507 320,507

Transaction costs (6,819) (6,819)

Net proceeds 313,688 313,688

Amount classified as equity:

- RCSLS reserve (see Note 14) (14,408) (14,408)

- Warrants reserve (76,475) (76,475)

Amount classified as deferred tax liabilities (27,719) (27,719)

Accreted interest 19,007 4,216

Amortisation of transaction costs 826 218

Carrying amount at 31 December 214,919 199,520




16.5 RCSLS cont’d

The amounts of the RCSLS classified as equity and the warrants amounting to RM14,408,000 and RM76,475,000 respectively, are net of attributable transaction costs of RM1,956,000.

On 26 August 2011, the Company issued 145,684,940 RCSLS together with 145,684,940 free detachable warrants for cash of RM320,506,868. The RCSLS are convertible into 145,684,940 ordinary shares of RM0.50 each from the first anniversary of the issue date of the RCSLS up to 22 August 2019 at the option of the holder, which is at a rate of one ordinary share of RM0.50 each for every one RCSLS held; unconverted RCSLS will be entitled to receive a coupon of 6% per annum based on the nominal value of RCSLS held.

RCSLS will be redeemed by the Company in accordance to the following redemption schedule:

End of year

% of issue size

redeemed

1 -

2 -

3 10

4 15

5 15

6 20

7 20

8 20

100

16.6 Significant covenants

In connection with the significant term loan facilities of certain subsidiaries, Press Metal Sarawak Sdn. Bhd. (Loan 7), and Press Metal Bintulu Sdn. Bhd. (Loans 15 and 18), the subsidiaries and the Group, have agreed on the following significant covenants with the lenders:

Press Metal Sarawak Sdn. Bhd.

i) Debt-to-Equity ratio of the subsidiary to be maintained below the ratio of 70:30; equity is defined to include all subordinated debts and shareholders advances;

ii) minimum Finance Service Cover Ratio (“FSCR”) of 1.25 times, where FSCR equals to the subsidiary’s net operating cash flows for the year plus opening cash balance divided by total facility payment due for the current year;

iii) no material change in the business plan of the subsidiary and of the Group; and

iv) the Company shall maintain its shareholdings in the subsidiary more than or equivalent to 80% throughout the tenure of the facility.

Press Metal Bintulu Sdn. Bhd.

i) Debt-to-Equity ratio of the subsidiary to be maintained below the ratio of 70:30; equity is defined to include all subordinated debts and shareholders advances;

ii) minimum Debt Service Cover Ratio (“DSCR”) of 1.25 times, where DSCR equals to the subsidiary’s net operating cash flows for the year plus opening cash balance divided by total facility payment due for the current year; and

iii) to provide further security when required by the security agent.




16.6 Significant covenants

Waiver of loan covenants

For the financial year ended 31 December 2012, the lenders for the term loan facilities of Press Metal Bintulu Sdn.

Bhd., have via their letter dated 21 September 2012, waived Press Metal Bintulu Sdn. Bhd. from complying with

the DSCR covenant as at 31 December 2012. Press Metal Bintulu Sdn. Bhd. is only required to comply with the

DSCR covenant from the financial year ending 31 December 2013 onwards.

17. EMPLOYEE BENEFITS

Share-based payments arrangement

Share option programme (equity settled)

At an extraordinary general meeting held on 26 June 2007, the Company’s shareholders approved the establishment of

a new ESOS of not more than 10% of the issued share capital of the Company to eligible Directors and employees of the

Group (“New ESOS”), subsequent to the expiry of the former ESOS on 5 June 2007.

In June 2012, the new ESOS has also expired.

The number and exercise price of share options are as follows:

Exercise

price

2012

Number

of

options

2012

Exercise

price

2011

Number

of

options

2011

RM ’000 RM ’000

Outstanding at 1 January 1.50 5,251 1.50 14,754

Exercised during the year 1.50 (3,298) 1.50 (9,419)

Lapsed during the year 1.50 (1,953) 1.50 (84)

Outstanding at 31 December - - 1.50 5,251

Exercisable at 31 December - - 1.50 5,251

The options outstanding at 31 December 2011 had an exercise price of RM1.50 (1.1.2011: RM1.50) and a weighted

average contractual life of 0.5 years (1.1.2011: 1.5 years).

During the financial year, 3,298,000 (2011: 9,419,000) share options were exercised. The weighted average share price

at the date of exercise for the financial year was RM1.90 (2011: RM2.29).



17. EMPLOYEE BENEFITS cont’d

Share-based payments arrangement cont’d

Share option programme (equity settled) cont’d

The fair value of services received in return of share options granted is based on the fair value of share options granted,

measured using a Black Scholes model, with the following inputs:

Fair value of share options and assumptions

2012 2011

Fair value at grant date RM0.09 RM0.18

Weighted average share price RM1.85 RM2.11

Exercise price RM1.50 RM1.50

Expected volatility (weighted average volatility) 25.97% 37.82%

Option life (expected weighted average life) - 0.5 years

Expected dividends 2% 2%

Risk-free interest rate (based on Malaysian government bonds) 3.21% 3.28%

Value of employee services received for issue of share options

2012 2011

RM’000 RM’000

Expense recognised as share-based payments 322 645

18. REVENUE

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Sale of goods 2,297,688 2,174,994 685,539 788,599

Contracting and fabrication 85,704 92,834 - -

Services 1,028 923 - -

2,384,420 2,268,751 685,539 788,599



19. FINANCE INCOME

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Interest income of financial assets that are not at fair

value through profit or loss:

- loan to a subsidiary - - 19,230 6,902

- fixed deposits 2,658 3,535 - 1,294

- amortisation of savings on finance costs of a term loan - 711 - 711

2,658 4,246 19,230 8,907

20. FINANCE COSTS

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Interest expense of financial liabilities that are not at

fair value through profit or loss:

- bank overdrafts 363 403 321 335

- bank loans 71,775 39,968 863 10,589

- bankers’ acceptances 31,241 24,347 16,034 15,389

- discounting of non-current amounts due from

subsidiaries - - 1,937 500

- finance lease liabilities 1,803 891 99 86

- revolving credits 8,015 16,726 2,345 2,209

- RCSLS:

- accretion of RCSLS 14,791 4,216 14,791 4,216

- amortisation of transaction costs 608 218 608 218

- coupon payment 19,230 6,902 19,230 6,902

147,826 93,671 56,228 40,444

Other finance costs 9,620 5,976 2,599 2,712

157,446 99,647 58,827 43,156

Recognised in profit or loss 108,406 82,868 58,827 43,156

Capitalised on qualifying assets:

- property, plant and equipment 49,040 16,779 - -

157,446 99,647 58,827 43,156



21. PROFIT BEFORE TAX

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Profit before tax is arrived after charging:

Auditors’ remuneration:

- Audit fees

KPMG Malaysia 507 339 220 150

Overseas affiliate of KPMG Malaysia 191 285 - -

Other auditors 426 343 - -

- Non-audit fees

KPMG Malaysia 148 135 130 135

Bad debts written off 2,517 312 - -

Depreciation on investment properties 121 112 - -

Depreciation on property, plant and equipment 113,396 98,092 15,970 15,608

Deposits written off 1,448 - 1,448 -

Derivative loss - 2,994 - 2,994

Impairment loss:

- Investments in subsidiaries - - 554 4,200

- Investment properties - 51 - -

- Property, plant and equipment 45 257 - -

- Trade receivables 1,063 3,917 - -

Inventories written down 1,065 330 - -

Loss on disposal of property, plant and equipment - 250 - 126

Patents written off 193 - - -

Personnel expenses (including key management

personnel):

- Contributions to Employees’ Provident Fund 4,057 3,219 1,738 1,357

- Share-based payments 322 645 322 645

- Wages, salaries and others 121,858 126,335 24,029 18,996

Property, plant and equipment written off 111 3,704 - -

Realised foreign exchange loss 6,043 - - 3,588

Rental expense in respect of:

- Property 7,140 7,638 751 416

- Equipment and machinery 6,127 3,602 354 298

Unrealised foreign exchange loss - 2,847 - 2,937

Waiver of amount due from a subsidiary - - - 3,503



21. PROFIT BEFORE TAX cont’d

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

and after crediting:

Bad debts recovered 5 - - -

Dividend income from an associate - - 644 322

Gain on disposal on investment properties 1 - - -

Gain on disposal of property, plant and equipment 991 - 174 -

Realised foreign exchange gain - 4,855 2,333 -

Rental income from property 252 489 - -

Reversal of impairment loss of trade receivables 10 242 - 86

Unrealised foreign exchange gain 3,848 - 2,941 -

22. TAX EXPENSE

Recognised in profit or loss

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Income tax expense (121,684) 21,092 6,502 7,167

Share of tax of equity-accounted investee 641 403 - -

Total income tax expense (121,043) 21,495 6,502 7,167

Current tax expense

Malaysian - current year 10,551 9,514 10,139 9,102

- prior year 1,920 (610) 1,650 (466)

Overseas - current year 4,379 4,299 - -

- prior year 605 (2,140) - -

Total current tax recognised in profit or loss 17,455 11,063 11,789 8,636

Deferred tax expense

Origination and reversal of temporary differences (134,837) 14,076 (3,543) (2,499)

(Over)/Under provision in prior year (4,302) (4,047) (1,744) 1,030

Total deferred tax recognised in profit or loss (139,139) 10,029 (5,287) (1,469)

Share of tax of equity-accounted investee 641 403 - -

Total income tax expense (121,043) 21,495 6,502 7,167



22. TAX EXPENSE cont’d

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Reconciliation of tax expense

Profit before tax 100,785 144,350 21,584 22,185

Income tax calculated using Malaysian tax rate of

25% 25,196 36,088 5,396 5,546

Effect of tax rates in foreign jurisdictions (272) 133 - -

Non-deductible expenses 8,530 1,296 5,050 2,166

Tax exempt income - (4,834) - -

Tax incentives * (149,992) - - -

Recognition of previously unrecognised deferred tax

assets - (3,282) - -

Effect of deferred tax assets not recognised 1,122 - - -

Effect of accretion of RCSLS (3,850) (1,109) (3,850) (1,109)

(Over)/Under provision in prior years (1,777) (6,797) (94) 564

(121,043) 21,495 6,502 7,167

* In July 2012, Press Metal Sarawak Sdn. Bhd., an 80%-owned subsidiary of the Company, obtained the approval from the MIDA

for an ITA of 100% on capital expenditures incurred towards the production of aluminium products over a period of 5 years from

24 January 2008 to 23 January 2013.

23. EARNINGS PER ORDINARY SHARE

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2012 was based on the profit attributable to

ordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:

Group

2012 2011

RM’000 RM’000

Profit attributable to ordinary shareholders 183,899 109,602



23. EARNINGS PER ORDINARY SHARE cont’d

Basic earnings per ordinary share

Weighted average number of ordinary shares:

Group

2012 2011

RM’000 RM’000

Issued ordinary shares at 1 January 439,479 430,060

Effect of ordinary shares issued during the year 16,976 5,806

Weighted average number of ordinary shares for the year 456,455 435,866

Group

2012 2011

Sen Sen

Basic earnings per ordinary share 40.29 25.15

Diluted earnings per ordinary share

As at 31 December 2012, the share options have expired while the effects of the warrants and RCSLS remain anti-

dilutive. Hence, for the financial year ended 31 December 2012, diluted EPS is not presented as the Group has no shares

or other instruments with potential dilutive effects.

The calculation of diluted earnings per ordinary share for the financial year ended 31 December 2011 was based on profit

attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding after adjustments

for the effects of all dilutive potential ordinary shares, calculated as follows:

Group

2011

RM’000

Profit attributable to ordinary shareholders 109,602

Weighted average number of ordinary shares (diluted):

Group

2011

’000

Weighted average number of ordinary shares (basic) 435,866

Effect of share options on issue 5,251

Weighted average number of ordinary shares (diluted) at 31 December 2011 441,117

The average market value of the Company’s shares for purpose of calculating the dilutive effect of share options was

based on quoted market prices for the period during which the options were outstanding.

The effects of the warrants and RCSLS are anti-dilutive.



23. EARNINGS PER ORDINARY SHARE cont’d

Diluted earnings per ordinary share cont’d

Group

2011

Sen

Diluted earnings per ordinary share 24.85

24. DIVIDENDS

Dividends recognised by the Company:

Sen per

share

(tax exempt)

Total

amount

RM’000

Date of

payment

2012

Final 2011 ordinary 1.00 4,428 27 July 2012

First interim 2012 ordinary 1.00 4,776 10 October 2012

Second interim 2012 ordinary 1.00 5,072 20 December 2012

Total amount 14,276

2011

Final 2010 ordinary 1.00 4,392 28 July 2011

Interim 2011 ordinary 1.00 4,393 28 October 2011

Total amount 8,785

After the reporting period, the following dividend was declared by the Directors and paid on 10 April 2013. This dividend

will be recognised in subsequent financial period. The Directors do not recommend any final dividend to be paid for the

financial year under review.

Sen per

share

(tax exempt)

Total

amount

RM’000

Third interim 2012 ordinary 1.00 5,078

25. OPERATING SEGMENTS

The Group has two reportable segments, as described below, which are the Group’s strategic business units. The

strategic business units offer different products and services, and are managed separately because they require different

technology and marketing strategies. For each of the strategic business units, the Group’s Chief Executive Officer (the

chief operating decision maker) reviews internal management reports at least on a quarterly basis. The following summary

describes the operations in each of the Group’s reportable segments:

Manufacturing and trading. Includes manufacturing and marketing of aluminium products and garments and

accessories.

Contracting and fabrication. Includes contracting and fabrication of aluminium and stainless steel products.



25. OPERATING SEGMENTS cont’d

Other non-reportable segments comprise operations related to property development, waste management, investment

holding and dormant companies.

There are varying levels of integration between reportable segments, the Manufacturing and Trading, and Contracting

and Fabrication reportable segments. This integration includes transfers of raw materials and shared distribution services,

respectively. Inter-segment pricing is determined on negotiated basis.

Performance is measured based on segment profit before tax, interest and depreciation, as included in the internal

management reports that are reviewed by the Group’s Chief Executive Officer (the chief operating decision maker).

Segment profit is used to measure performance as management believes that such information is the most relevant in

evaluating the results of certain segments relative to other entities that operate within these industries.

Segment assets

The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal

management reports that are reviewed by the Group’s Chief Executive Officer. Segment total assets are used to measure

the return on assets of each segment.

Segment liabilities

Segment liabilities information is neither included in the internal management reports nor provided regularly to the Group’s

Chief Executive Officer. Hence, no disclosure is made on segment liabilities.

Segment capital expenditure

Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment,

investment properties, and intangible assets other than goodwill.

Manufacturing

and trading

Construction and

fabrication Total

2012 2011 2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Segment profit 197,152 218,852 1,974 1,986 199,126 220,838

Included in the measure of

segment profit are:

Revenue from external

customers 2,297,444 2,175,463 85,055 92,365 2,382,499 2,267,828

Inter-segment revenue 5,109 3,543 649 469 5,758 4,012

Impairment of property,

plant and equipment 45 257 - - 45 257

Impairment of investment

properties - - - 51 - 51

Depreciation 110,836 96,087 1,775 1,475 112,611 97,562

Segment assets 7,147,064 5,091,739 82,533 77,479 7,229,597 5,169,218




Manufacturing

and trading

Construction and

fabrication Total

2012 2011 2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Included in the measure of

segment assets are:

Investment in an associate 34,466 32,298 - - 34,466 32,298

Additions to non-current

assets other than financial

instruments and deferred

tax assets 1,137,887 618,311 2,600 1,820 1,140,487 620,131

Reconciliation of reportable segment revenues, profit or loss, assets and other material items

2012 2011

RM’000 RM’000

Revenue

Total external revenue for reportable segments 2,382,499 2,267,828

Other non-reportable segments 1,921 923

Consolidated revenue for the year 2,384,420 2,268,751

Profit or loss

Total profit for reportable segments 199,126 220,838

Other non-reportable segments (394) (3,375)

Elimination of inter-segment losses 4,348 1,690

Finance income 2,658 4,246

Finance costs (108,406) (82,868)

Share of profits of an associate not included in reportable segments 2,812 4,295

Tax expense 121,684 (21,971)

Consolidated profit for the year 221,828 122,855

Total assets

Total assets for reportable segments 7,229,597 5,169,218

Other non-reportable segments 291,716 588,139

Elimination of inter-segment balances (2,735,815) (2,259,943)

Consolidated assets for the year 4,785,498 3,497,414




Reconciliation of reportable segment revenues, profit or loss, assets and other material items

2012 2011

RM’000 RM’000

Depreciation

Total depreciation for reportable segments 112,611 97,562

Other non-reportable segments 906 642

Consolidated depreciation for the year 113,517 98,204

Additions to non-current assets

Total additions to non-current assets for reportable segments 1,140,487 620,131

Other non-reportable segments 13,412 3,645

Consolidated additions to non-current assets for the year 1,153,899 623,776

Geographical segments

The Manufacturing and Trading, and Contracting and Fabrication segments are managed on a worldwide basis, but

operate manufacturing facilities and sales offices mainly in Malaysia, Asia region which includes Singapore, Hong Kong

and China, Australia for the Oceania region, United Kingdom for the Europe region and United States of America for the

North America region.

In presenting information on the basis of geographical segments, segment revenue is based on geographical location of

customers. Segment assets are based on the geographical location of the assets.

Geographical information

Revenue Non-current assets

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Malaysia 1,330,315 1,024,179 2,470,647 1,338,745

Asia region 738,911 913,546 456,790 578,697

Oceania region 67,761 78,118 6,512 5,773

Europe region 220,836 243,780 8,878 9,535

North America region 26,597 9,128 329 -

2,384,420 2,268,751 2,943,156 1,932,750

Major customers

The Group does not have any customers contributing to equal or more than 10% of the Group’s total revenue for the

current and previous financial years.



26. FINANCIAL INSTRUMENTS

26.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (“L&R”);

(b) Fair value through profit or loss (“FVTPL”):

- Held for trading (“HFT”);

(c) Available-for-sale financial assets (“AFS”);

(d) Financial liabilities measured at amortised cost (“FL”).

Carrying

amount L&R/(FL) FVTPL- HFT AFS

31 December 2012 RM’000 RM’000 RM’000 RM’000

Financial assets

Group

Other investments 1,803 - - 1,803

Trade and other receivables 944,149 944,149 - -

Cash and cash equivalents 271,770 271,770 - -

1,217,722 1,215,919 - 1,803

Company

Other investments 750 - - 750

Trade and other receivables 1,284,863 1,284,863 - -


1,308,608 1,307,858 - 750


Group

Loans and borrowings (2,592,303) (2,592,303) - -

Trade and other payables, including derivatives (557,569) (554,575) (2,994) -

(3,149,872) (3,146,878) (2,994) -

Company

Loans and borrowings (761,684) (761,684) - -


(1,266,476) (1,263,482) (2,994) -



26. FINANCIAL INSTRUMENTS cont’d

26.1 Categories of financial instruments cont’d

Carrying


31 December 2011 RM’000 RM’000 RM’000 RM’000

Financial assets

Group




1,189,017 1,182,180 - 6,837

Company




930,753 930,003 - 750


Group



(2,315,048) (2,312,054) (2,994) -

Company



(1,033,631) (1,030,637) (2,994) -




26.1 Categories of financial instruments cont’d

Carrying


i January 2011 RM’000 RM’000 RM’000 RM’000

Financial assets

Group




911,740 905,263 - 6,477

Company




611,649 610,899 - 750


Group


Trade and other payables, including derivatives (368,443) (366,320) (2,123)

(1,729,506) (1,727,383) (2,123) -

Company



(802,469) (800,346) (2,123) -

26.2 Net losses arising from financial instruments

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Net gains/(losses) on:

Fair value through profit or loss:

- Held for trading - (2,994) - (2,994)

Loans and receivables (11,490) 272 17,258 4,737

Financial liabilities measured at amortised cost (101,466) (80,873) (53,029) (51,922)

(112,956) (83,595) (35,771) (50,179)




26.3 Financial risk management

The Group and the Company have exposure to the following risks from their use of financial instruments:

26.4 Credit risk

Credit risk is the risk of a financial loss to the Group and the Company if a customer or counterparty to a financial

instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its

receivables from customers and deposits paid to contractors working on the construction of the aluminium smelting

plant of Press Metal Bintulu Sdn. Bhd. in Samalaju, Sarawak and suppliers supplying the plant and machinery of

the plant. The Company’s exposure to credit risk arises principally from its receivables from customers, loans and

advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit

evaluations are performed on customers requiring credit over a certain amount. In relation to deposits paid to

contractors and suppliers, most of these parties have been previously involved in the provision of services for the

construction of the aluminium smelting plant of Press Metal Sarawak Sdn. Bhd.. Hence, management is confident

of their credibility and does not expect any significant credit risk to arise from the deposits paid.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented

by the carrying amounts in the statement of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are

stated at their realisable values. A significant portion of these receivables are regular customers that have been

transacting with the Group and the Company. The Group and the Company use ageing analysis to monitor the

credit quality of the receivables. Any receivables having significant balances past due more than 150 days, which

are deemed to have higher credit risk, are monitored individually.

The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region was:

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Domestic 119,772 125,059 105,625 36,054 26,638 36,337

Asia region 152,029 142,323 106,370 6,238 5,379 8,453

Oceania region 12,533 11,023 19,435 - - -

Europe region 50,447 57,008 57,279 - - -

North America

region 9,813 13,337 1,660 - 13,337 1,660

344,594 348,750 290,369 42,292 45,354 46,450




26.4 Credit risk cont’d

Receivables cont’d

Impairment losses

The Group and the Company maintain an ageing analysis in respect of trade receivables only. The ageing of trade

receivables as at the end of the reporting period was:

Gross

Individual

impairment Net

Group RM’000 RM’000 RM’000

31 December 2012

Not past due 209,036 - 209,036

Past due 1 - 150 days 106,374 (356) 106,018

Past due more than 150 days 36,041 (6,501) 29,540

351,451 (6,857) 344,594

31 December 2011

Not past due 209,362 - 209,362

Past due 1 - 150 days 110,937 (296) 110,641


356,449 (7,699) 348,750

1 January 2011

Not past due 194,662 - 194,662

Past due 1 - 150 days 63,402 (1,283) 62,119


295,080 (4,711) 290,369






Impairment losses cont’d

Gross

Individual

impairment Net

Company RM’000 RM’000 RM’000

31 December 2012

Not past due 25,256 - 25,256

Past due 1 - 150 days 16,601 - 16,601

Past due more than 150 days 760 (325) 435

42,617 (325) 42,292

31 December 2011

Not past due 31,267 - 31,267

Past due 1 - 150 days 13,773 - 13,773

Past due more than 150 days 639 (325) 314

45,679 (325) 45,354

1 January 2011

Not past due 32,651 - 32,651

Past due 1 - 150 days 12,510 - 12,510

Past due more than 150 days 1,700 (411) 1,289

46,861 (411) 46,450

No allowance for impairment losses of trade receivables has been made for the remaining past due receivables as

the Group and the Company monitor the results and repayments of these customers regularly and are confident

of the ability of the customers to repay the balances owing.

The movements in the allowance for impairment losses of trade receivables during the financial year were:

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

At 1 January 7,699 4,711 325 411

Impairment loss recognised 1,063 3,917 - -

Impairment loss reversed (10) (242) - (86)

Impairment loss written off - (792) - -

Effect of movements in exchange rates (122) 105 - -

Transfer to disposal group held for sale (1,773) - - -

At 31 December 6,857 7,699 325 325






Impairment losses cont’d

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group and the Company are satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.

Financial guarantees


The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.


The maximum exposure to credit risk amounts to RM1,398,320,000 (31.12.2011: RM723,105,000; 1.1.2011: RM504,481,000) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period.

As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

The financial guarantees have not been recognised since the fair value on initial recognition was not material.

Inter company loans and advances


The Group and the Company provide unsecured loans and advances to an associate and subsidiaries. The Group and the Company monitor the results of the associate and subsidiaries regularly.


As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.

Impairment losses

As at the end of the reporting period, there was no indication that the loans and advances to the associate and subsidiaries are not recoverable. The Group and the Company do not specifically monitor the ageing of advances to the associate and subsidiaries.

26.5 Liquidity risk

Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises principally from their various payables, loans and borrowings.

The Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by management to ensure, as far as possible, that they will have sufficient liquidity to meet their liabilities when they fall due.

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at

significantly different amounts.




26.5 Liquidity risk cont’d

Maturity analysis

The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting

period based on undiscounted contractual payments:

Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years

Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000

31 December 2012

Non-derivative

financial liabilities

Trade and other

payables,

excluding

derivatives 554,575 - 554,575 502,578 39,448 12,549 -

Bank loans 1,203,240 * 1,446,882 389,421 240,845 458,296 358,320

Revolving credits 271,702 3.36 - 7.28 271,702 271,702 - - -

Bankers’

acceptances 862,757 2.15 - 5.38 862,757 862,757 - - -

Bank overdrafts 11,937 7.10 - 7.85 11,937 11,937 - - -

Finance lease

liabilities 27,748 2.29 - 8.68 31,390 13,040 8,612 9,565 173

RCSLS with

warrants (initial

proceeds) 320,507 6.00 394,543 51,281 65,383 209,932 67,947

3,252,466 3,573,786 2,102,716 354,288 690,342 426,440

Derivative financial

liabilities

Derivatives 2,994 - 2,994 2,994 - - -

3,255,460 3,576,780 2,105,710 354,288 690,342 426,440

* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13, 14, 16, 17 and 18 - Represents lenders’ cost of funds rate plus a fixed rate ranging

from 1.00% - 2.25% per annum.

Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual

cash flows as at 31 December 2012 are estimated based on coupon rate stipulated in the respective agreements.

Loans 11 and 15 - Fixed rate ranging from 6.03% to 6.16% per annum.





Maturity analysis cont’d

Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years


31 December 2011

Non-derivative


Trade and other

payables,

excluding

derivatives 420,778 - 420,778 300,550 90,110 30,118 -

Bank loans 746,999 * 830,284 351,914 133,234 328,405 16,731


Bankers’

acceptances 683,881 1.95 - 5.40 683,881 683,881 - - -

Bank overdrafts 8,107 7.10 - 7.60 8,107 8,107 - - -

Finance lease

liabilities 25,122 2.28 - 11.03 28,588 11,117 8,214 9,118 139

RCSLS with

warrants (initial

proceeds) 320,507 6.00 435,407 19,337 19,337 180,158 216,575

2,433,041 2,634,692 1,602,553 250,895 547,799 233,445


liabilities

Derivatives 2,994 - 2,994 2,994 - - -

2,436,035 2,637,686 1,605,547 250,895 547,799 233,445

* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13, 14, 16 and 17 - Represents lenders’ cost of funds rate plus a fixed rate ranging from

1.00% - 1.84% per annum.



Loans 11 and 15 - Fixed rate ranging from 5.56% to 6.16% per annum.






Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years


1 January 2011

Non-derivative


Trade and other

payables,

excluding

derivatives 366,320 - 366,320 260,271 106,049 - -

Bank loans 702,942 * 763,640 344,306 154,516 264,519 299


Bankers’

acceptances 512,438 1.92 - 5.05 512,438 512,438 - - -

Bank overdrafts 47 - 47 47 - - -

Finance lease

liabilities 11,293 2.28 - 9.67 12,906 4,821 4,014 4,023 48

1,727,383 1,789,694 1,256,226 264,579 268,542 347


liabilities

Derivatives 2,123 - 2,123 2,123 - - -

1,729,506 1,791,817 1,258,349 264,579 268,542 347

* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13 and 14 - Represents lenders’ cost of funds rate plus a fixed rate ranging from 0.50%

- 1.75% per annum.


cash flows as at 1 January 2011 are estimated based on coupon rate stipulated in the respective agreements.

Loan 11 - Fixed rate ranging from 2.54% to 6.10% per annum.






The table below summarises the maturity profile of the Company’s financial liabilities as at the end of the reporting

period based on undiscounted contractual payments:

Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years

Company RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000

31 December 2012

Non-derivative


Trade and other

payables,

excluding

derivatives 501,798 - 501,798 501,798 - - -

Bank loans 31,526 * 33,288 20,321 6,606 6,361 -


Bankers’

acceptances 456,902 2.15 - 5.38 456,902 456,902 - - -

Bank overdrafts 11,561 7.10 - 7.85 11,561 11,561 - - -

Finance lease

liabilities 1,776 2.29 - 4.81 2,096 600 554 929 13

RCSLS 320,507 6.00 394,543 51,281 65,383 209,932 67,947

1,369,070 1,445,188 1,087,463 72,543 217,222 67,960


liabilities

Derivatives 2,994 - 2,994 2,994 - - -

1,372,064 1,448,182 1,090,457 72,543 217,222 67,960

* Loans 1, 2 and 3 - Represents base lending rate plus 1.50% per annum.

Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual cash

flows as at 31 December 2012 are estimated based on coupon rate stipulated in the respective agreements.






Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years


31 December 2011

Non-derivative


Trade and other

payables,

excluding

derivatives 290,067 - 290,067 290,067 - - -

Bank loans 69,032 * 72,404 39,006 19,964 13,434 -


Bankers’

acceptances 417,363 1.95 - 3.98 417,363 417,363 - - -

Bank overdrafts 7,936 7.10 - 7.60 7,936 7,936 - - -

Finance lease

liabilities 1,719 2.29 - 4.81 2,015 698 460 797 60

RCSLS with

warrants (initial

proceeds) 320,507 6.00 435,407 19,337 19,337 180,158 216,575

1,151,624 1,270,192 819,407 39,761 194,389 216,635


liabilities

Derivatives 2,994 - 2,994 2,994 - - -

1,154,618 1,273,186 822,401 39,761 194,389 216,635









Carrying

amount

Contractual

interest rate

Contractual

cash flows

Under 1

year

1 - 2

years

2 - 5

years

More than

5 years


1 January 2011

Non-derivative


Trade and other

payables,

excluding

derivatives 213,692 - 213,692 110,269 103,423 - -

Secured bank loans 151,660 * 162,173 89,916 39,092 33,165 -


Bankers’

acceptances 388,520 1.92 - 4.64 388,520 388,520 - - -

Finance lease

liabilities 1,474 2.29 - 4.81 1,687 668 423 596 -

800,346 811,072 634,373 142,938 33,761 -


liabilities

Derivatives 2,123 - 2,123 2,123 - - -

802,469 813,195 636,496 142,938 33,761 -



cash flows as at 1 January 2011 are estimated based on coupon rate stipulated in the respective agreements.

26.6 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices

that will affect the Group’s and the Company’s financial position or cash flows.

26.6.1 Currency risk

The Group and the Company are exposed to foreign currency risk on sales, purchases, cash and cash

equivalents and borrowings that are denominated in a currency other than the respective functional currencies

of Group entities and the functional currency of the Company. The currencies giving rise to this risk are

primarily Australian Dollar (AUD), Great Britain Pound (GBP), Singapore Dollar (SGD), U.S. Dollar (USD), Euro

(EUR), Renminbi (RMB) and Hong Kong Dollar (HKD).


The Group and the Company actively monitor their exposure to foreign currency risk and use forward

exchange contracts to mitigate the risk when the need arises.




26.6 Market risk

26.6.1 Currency risk

Exposure to foreign currency risk

The Group’s and the Company’s exposure to foreign currency (a currency which is other than the functional

currency of the Group entities and the Company) risk, based on carrying amounts as at the end of the

reporting period was:

Group

Trade and

other

receivables

Cash and

cash

equivalents

Loans

and

borrowings

Trade

and other

payables

Net

exposure

31 December 2012 RM’000 RM’000 RM’000 RM’000 RM’000

Functional

currency

Foreign

currency

RM AUD - 34 - - 34

RM GBP - 1,715 (50,987) - (49,272)

RM SGD 5,386 846 - - 6,232

RM USD 32,429 81,084 (51,668) (19,232) 42,613

RM EUR - 10 - (8) 2

RMB USD 63,276 7,189 (12,957) (6,657) 50,851

RMB EUR 2,699 3 - (113) 2,589

RMB GBP - 3,861 (56,293) (164) (52,596)

GBP USD - 40 - - 40

GBP EUR - 198 - - 198

HKD USD - - (2,298) - (2,298)

31 December 2011

RM AUD - 35 - - 35

RM GBP - 287 (33,790) - (33,503)

RM RMB 281,795 - - (617) 281,178

RM SGD 5,196 1,090 - - 6,286

RM USD 46,038 26,334 (77,381) (334) (5,343)

RM EUR 2,919 14 - (461) 2,472

RMB USD 173,121 9,710 (99,210) (2,155) 81,466

RMB SGD 2 - - - 2

RMB EUR 1,210 9 - - 1,219

RMB JPY - - - (6) (6)

HKD USD - 42 (9,511) - (9,469)




26.6 Market risk cont’d

26.6.1 Currency risk cont’d

Exposure to foreign currency risk cont’d

Group

Trade and

other

receivables

Cash and

cash

equivalents

Loans

and

borrowings

Trade

and other

payables

Net

exposure

1 January 2011 RM’000 RM’000 RM’000 RM’000 RM’000

Functional

currency

Foreign

currency

RM AUD - 34 - - 34

RM GBP - 2,469 (24,593) - (22,124)

RM SGD 7,082 1,378 - (6,096) 2,364

RM USD 31,280 57,217 (170,232) (16,363) (98,098)

RM EUR - 1 - - 1

RMB USD 187,084 - (79,135) (1,773) 106,176

RMB SGD 5 - - - 5

RMB EUR 552 - - - 552

RMB HKD - 23 - - 23

HKD USD - - (12,340) - (12,340)

Company

31 December 2012

RM AUD 40,016 34 - - 40,050

RM GBP 75,952 1,666 (50,987) - 26,631

RM HKD - - - (1,946) (1,946)

RM RMB 238 - - (239,918) (239,680)

RM SGD 5,248 668 - - 5,916

RM USD 13,525 10,512 (31,526) (1) (7,490)

RM EUR 1,586 5 - (26) 1,565

RM JPY - - - (8) (8)






Exposure to foreign currency risk cont’d

Company

Trade and

other

receivables

Cash and

cash

equivalents

Loans

and

borrowings

Trade

and other

payables

Net

exposure

31 December 2011 RM’000 RM’000 RM’000 RM’000 RM’000

Functional

currency

Foreign

currency

RM AUD 39,490 35 - - 39,525

RM GBP 91,039 237 (33,790) - 57,486

RM HKD - - - (1,946) (1,946)

RM RMB - - - (194,832) (194,832)

RM SGD 4,916 410 - - 5,326

RM USD 21,585 10,941 (69,032) (1,045) (37,551)

RM EUR 2,656 7 - - 2,663

1 January 2011

RM AUD 47,962 34 - - 47,996

RM GBP 115,760 2,469 (24,593) - 93,636

RM HKD - - - (1,946) (1,946)

RM RMB 10,600 - - (148,256) (137,656)

RM SGD 6,096 673 - (6,096) 673

RM USD 16,363 57,174 (151,660) (16,363) (94,486)

RM EUR - 1 - - 1

Currency risk sensitivity analysis

Foreign currency risk mainly arises from RMB. The exposure to other currencies is not material and hence,

sensitivity analysis is not presented.

A 10% (2011: 10%) strengthening of RM against RMB at the end of the reporting period would have

increased (decreased) post-tax profit or loss by the amounts shown below. This analysis is based on foreign

currency exchange rate variances that the Group and the Company considered to be reasonably possible

at the end of the reporting period. This analysis assumes that all other variables, in particular interest rates,

remained constant and ignores any impact of forecasted sales and purchases.






Currency risk sensitivity analysis cont’d

Group Company

Profit or loss Profit or loss

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

RMB - (21,088) 17,976 14,612

A 10% (2011: 10%) weakening of RM against RMB at the end of the reporting period would have had

equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other

variables remained constant.

26.6.2 Interest rate risk

The Group’s and the Company’s fixed rate borrowings are exposed to a risk of change in their fair value

due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to

a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short

term receivables and payables are not significantly exposed to interest rate risk.


Interest rate exposure arising from the Group’s and the Company’s borrowings is managed through the use

of fixed and floating rate debts. The Group and the Company will consider entering into derivative financial

instruments where necessary to achieve an appropriate mix of fixed and floating rate exposure within the

Group’s policy.

Exposure to interest rate risk

The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,

based on carrying amounts as at the end of the reporting period were:

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Fixed rate

instruments

Financial assets 102,543 76,307 5,915 320,507 53,341 391

Financial

liabilities (1,772,724) (1,307,524) (741,661) (718,597) (663,602) (434,994)

(1,670,181) (1,231,217) (735,746) (398,090) (610,261) (434,603)





26.6.2 Interest rate risk cont’d

Exposure to interest rate risk cont’d

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Floating rate

instruments

Financial

liabilities (819,579) (583,752) (619,355) (43,087) (76,968) (151,660)

Interest rate risk sensitivity analysis

(a) Fair value sensitivity analysis for fixed rate instruments

The Group and the Company do not account for any fixed rate financial assets and liabilities at fair

value through profit or loss, and the Group and the Company do not designate derivatives as hedging

instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the

end of the reporting period would not affect profit or loss.

(b) Cash flow sensitivity analysis for variable rate instruments

A change of 30 basis points (“bp”) in interest rates at the end of the reporting period would have

increased (decreased) post-tax profit or loss by the amounts shown below. This analysis assumes

that all other variables, in particular foreign currency rates, remained constant.

Profit or loss

30 bp

increase

30 bp

decrease

Group RM’000 RM’000

2012

Floating rate instruments (1,844) 1,844

2011

Floating rate instruments (1,313) 1,313

Company

2012

Floating rate instruments (97) 97

2011

Floating rate instruments (173) 173





26.6.3 Other price risk

Other price risk arises from price fluctuation risk mainly on aluminium related products. The Group and

the Company mitigate their risk to the price volatility through establishing a fixed price level that the Group

and the Company consider acceptable and where deemed prudent, entering into commodity fixed price

contracts.

26.7 Fair value of financial instruments

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings

approximate fair values due to the relatively short term nature of these financial instruments.

It was not practicable to estimate the fair value of the Group’s and the Company’s investment in unquoted shares

due to the lack of comparable quoted market prices and the inability to estimate fair value without incurring

excessive costs.

The fair values of other financial assets and liabilities, together with the carrying amounts shown in the statement

of financial position, are as follows:

31.12.2012 31.12.2011 1.1.2011

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Trade and other

payables

- non-current (51,997) (50,136) (120,228) (118,907) (99,159) (94,748)

Amount due to an

associate

- non-current - - - - (6,890) (6,584)

Forward exchange

contracts:

Liabilities (2,994) (2,994) (2,994) (2,994) (2,123) (2,123)

Bank loans (1,203,240) (1,203,240) (746,999) (747,532) (702,942) (705,261)

Finance lease liabilities (27,748) (27,748) (25,122) (25,122) (11,293) (11,293)

RCSLS - liability

component (214,919) (218,956) (199,520) (204,165) - -




26.7 Fair value of financial instruments cont’d

31.12.2012 31.12.2011 1.1.2011

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Company

Amounts due from

subsidiaries

- non-current 62,965 62,965 62,841 62,841 - -

Amount due to an

associate

- non-current - - - - (2,955) (2,824)

Amounts due to

subsidiaries

- non-current - - - - (100,468) (96,000)

Forward exchange

contracts:

Liabilities (2,994) (2,994) (2,994) (2,994) (2,123) (2,123)

Bank loans (31,526) (31,526) (69,032) (67,907) (151,660) (154,565)

Finance lease liabilities (1,776) (1,776) (1,719) (1,719) (1,474) (1,474)

RCSLS - liability

component (214,919) (218,956) (199,520) (204,165) - -

The following summarises the methods used in determining the fair value of financial instruments reflected in the

above table.

Derivatives

The fair value of forward exchange contracts is determined by reference to statements provided by the respective

financial institutions these contracts were entered into with.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal

and interest cash flows, discounted at the market rate of interest at the end of the reporting period. In respect of

the liability component of RCSLS, the market rate of interest is determined by reference to similar liabilities that do

not have a conversion option. For finance leases, the market rate of interest is determined by reference to similar

lease agreements.




26.7 Fair value of financial instruments cont’d

Interest rates used to determine fair value

The interest rates used to discount estimated cash flows, when applicable, are as follows:

Group Company

31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

Related party balances - - 4.00% 4.00% 4.00% 4.00%

Trade and other

payables

- non-current 6.00% 6.65% 4.00% - - -

Bank loans 5.79% 5.87% 4.60% 3.97% 3.34% 3.44%

Finance leases 3.39% 3.50% 3.78% 3.33% 3.36% 3.31%

RCSLS 6.00% 6.00% - 6.00% 6.00% -

26.7.1 Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels

have been defined as follows:

or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

inputs).

Level 1 Level 2 Level 3

Group and Company RM’000 RM’000 RM’000


31 December 2012

Derivatives - 2,994 -

31 December 2011


1 January 2011




27. CAPITAL MANAGEMENT

The Group’s and the Company’s objectives when managing capital are to maintain a strong capital base and safeguard

their ability to continue as going concerns, so as to maintain investor, creditor and market confidence and to sustain

future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity

ratio that complies with debt covenants and regulatory requirements.

The debt-to-equity ratios at 31 December 2012, 31 December 2011 and 1 January 2011 were as follows:

Group Company

Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Total loans and

borrowings

(including disposal

group) 13,16 2,607,027 1,891,276 1,361,063 761,684 740,570 586,654

Less: Cash and

cash equivalents

(including disposal

group) 12,13 (289,019) (369,977) (201,211) (22,995) (188,382) (67,694)

Net debt 2,318,008 1,521,299 1,159,852 738,689 552,188 518,960

Total equity 1,404,525 1,058,187 815,453 704,391 555,313 443,424

Debt-to-equity ratio 1.7 1.4 1.4 1.0 1.0 1.2

There was no change in the Group’s and the Company’s approach to capital management during the financial year.

The high debt-to-equity ratio is due to significant investments in property, plant and equipment as the Group and the

Company continue to expand their businesses.

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated

shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares)

and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

28. OPERATING LEASES

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Less than one year 2,457 2,055 3,193

Between one and five years 6,335 653 2,568

8,792 2,708 5,761

The Group leases properties under operating leases. The leases typically run for a period of less than 5 years, with an

option to renew the lease after that date. None of the leases includes contingent rentals.



29. CAPITAL COMMITMENTS

Group

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Capital expenditure commitments

Property, plant and equipment

Contracted but not provided for 160,271 548,998 343,185

The capital commitments mainly relate to the construction of the aluminium smelting plants in Samalaju and Mukah.

30. CONTINGENCIES

The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a

future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

Company

31.12.2012 31.12.2011 1.1.2011

RM’000 RM’000 RM’000

Guarantees given to financial institutions for facilities granted to

subsidiaries 1,398,320 723,105 504,481

31. RELATED PARTIES

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the

Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over

the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party

are subject to common control. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility

for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel

include all the Directors of the Group.

The Group has related party relationship with its subsidiaries, associate and key management personnel.

Significant related party transactions

Related party transactions have been entered into in the normal course of business under negotiated terms. The

significant related party transactions of the Group and the Company are shown below. The balances related to the below

transactions are shown in Note 10 and 15.



31. RELATED PARTIES cont’d

Significant related party transactions cont’d

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

A. Subsidiaries

Sale of goods - - 265,874 295,462

Purchase of goods - - (377,515) (469,612)

Interest income on loan - - 19,230 6,902

B. Associate

Sale of goods 125,500 139,177 67,658 106,509

Purchase of goods (15,409) (48,347) (13,585) (47,949)

Dividend income - - 644 322

C. Company with a common Director

Rental expense on properties (720) (690) - -

D. Key management personnel

Directors

- Fees 187 187 187 187

- Remuneration 3,673 3,131 2,813 2,331

Total short-term employee benefits 3,860 3,318 3,000 2,518

Share-based payments 322 645 322 645

4,182 3,963 3,322 3,163

32. BUSINESS COMBINATIONS

2012

32.1 Acquisition of subsidiaries

i) In February 2012, the Group acquired 70% equity interest in PMIT Solar Pty. Ltd. (“PMIT”) for AUD70 satisfied

in cash. The company is currently dormant. The acquisition of PMIT is intended to further expand the Group’s

operation into Australia. In the 11 months to 31 December 2012, the subsidiary did not contribute any

revenue as it was still dormant and contributed a loss of RM463,000.

ii) In July 2012, the Group acquired all the shares of Press Metal North America LLC. (“PMNA”) for USD500

satisfied in cash. The company is involved in the trading of aluminium products. The acquisition of PMNA

has further expanded the Group’s operation into North America. In the 6 months to 31 December 2012,

the subsidiary contributed revenue of RM26,597,000 and profit of RM530,000. Based on management

accounts, if the acquisition had occurred on 1 January 2012, consolidated revenue would have been higher

by RM25,219,000 and consolidated profit for the year would have been higher by RM792,000.



32. BUSINESS COMBINATIONS

2012 cont’d

32.1 Acquisition of subsidiaries cont’d

The following summarises the major classes of consideration transferred, and the recognised amounts of assets

acquired and liabilities assumed at the acquisition date:

Group

2012

RM’000

Fair value of consideration transferred

Cash and cash equivalents 2

Identifiable assets acquired and liabilities assumed

Property, plant and equipment 82

Trade and other receivables 11,848

Cash and cash equivalents 49

Trade and other payables (13,015)

Total identifiable net liabilities (1,036)

Net cash inflow arising from acquisition of subsidiaries

Purchase consideration settled in cash and cash equivalents (2)

Cash and cash equivalents acquired 49

47

Goodwill

Goodwill was recognised as a result of the acquisitions as follows:

Total consideration transferred 2

Fair value of identifiable net liabilities 1,036

Goodwill 1,038

2011

32.2 Incorporation of new subsidiaries

i) In March 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a

new wholly-owned subsidiary in the People’s Republic of China, Press Metal International Technology Ltd.,

with an issued and paid-up capital of RMB20,000,000. In the 9 months ended 31 December 2011, the

subsidiary did not contribute any profit to the Group.

ii) In June 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a

new wholly-owned subsidiary in the People’s Republic of China, Press Metal International Trading Ltd., with

an issued and paid-up capital of RMB2,000,000. In the 7 months ended 31 December 2011, the subsidiary

contributed a profit of RM507,000 to the Group.



33. SUBSEQUENT EVENT

In April 2013, the Company entered into a Memorandum of Understanding (“MOU”) with a third party with a view to

dispose of 20% of its equity interest in its wholly-owned subsidiary, Press Metal Bintulu Sdn. Bhd.. The MOU is valid for

a period of 6 months.

34. EXPLANATION OF TRANSITION TO MFRSs

As stated in Note 1(a), these are the first financial statements of the Group and of the Company prepared in accordance

with MFRSs.

The accounting policies set out in Note 2 have been applied in preparing the financial statements of the Group and of

the Company for the financial year ended 31 December 2012, the comparative information presented in these financial

statements for the financial year ended 31 December 2011 and in the preparation of the opening MFRS statement of

financial position at 1 January 2011 (the Group’s date of transition to MFRSs).

In preparing the opening consolidated statement of financial position at 1 January 2011, the Group and the Company

have adjusted amounts reported previously in financial statements prepared in accordance with previous FRSs. An

explanation of how the transition from previous FRSs to MFRSs has affected the Group’s and the Company’s financial

position, financial performance and cash flows is set out as follows:

34.1 Reconciliation of financial position

Group 1.1.2011 31.12.2011

Note FRSs

Effect of

transition

to MFRSs MFRSs FRSs

Effect of

transition

to MFRSs MFRSs

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and

equipment a 1,476,086 (142,192) 1,333,894 2,020,204 (147,201) 1,873,003

Intangible assets b 13,187 - 13,187 13,549 (169) 13,380

Investment properties 5,797 - 5,797 5,634 - 5,634

Investment in an

associate 28,003 - 28,003 32,298 - 32,298

Other investments 6,477 - 6,477 6,837 - 6,837

Deferred tax assets 1,042 - 1,042 1,598 - 1,598

Total non-current

assets 1,530,592 (142,192) 1,388,400 2,080,120 (147,370) 1,932,750

Inventories 327,165 - 327,165 375,225 - 375,225

Trade and other

receivables 704,052 - 704,052 812,203 - 812,203

Current tax assets 2,520 - 2,520 7,259 - 7,259

Cash and cash

equivalents 201,211 - 201,211 369,977 - 369,977

Total current assets 1,234,948 - 1,234,948 1,564,664 - 1,564,664

Total assets 2,765,540 (142,192) 2,623,348 3,644,784 (147,370) 3,497,414



34. EXPLANATION OF TRANSITION TO MFRSs cont’d

34.1 Reconciliation of financial position cont’d

Group 1.1.2011 31.12.2011

Note FRSs

Effect of

transition

to MFRSs MFRSs FRSs

Effect of

transition

to MFRSs MFRSs

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Equity

Share capital 215,031 - 215,031 219,740 - 219,740

Share premium 3,982 - 3,982 17,110 - 17,110

Reserves (1,935) - (1,935) 134,907 (26,048) 108,859

Retained earnings d 584,286 (86,554) 497,732 665,825 (67,243) 598,582

Total equity

attributable to

owners of the

Company 801,364 (86,554) 714,810 1,037,582 (93,291) 944,291

Non-controlling interests 126,210 (25,567) 100,643 137,025 (23,129) 113,896

Total equity 927,574 (112,121) 815,453 1,174,607 (116,420) 1,058,187

Liabilities

Trade and other

payables, including

derivatives 106,049 - 106,049 120,228 - 120,228

Loans and borrowings 396,125 - 396,125 642,944 - 642,944

Deferred tax liabilities a 104,710 (30,071) 74,639 148,528 (30,950) 117,578

Total non-current

liabilities 606,884 (30,071) 576,813 911,700 (30,950) 880,750

Trade and other

payables, including

derivatives 262,394 - 262,394 303,544 - 303,544

Loans and borrowings 964,938 - 964,938 1,248,332 - 1,248,332

Current tax payables 3,750 - 3,750 6,601 - 6,601

Total current

liabilities 1,231,082 - 1,231,082 1,558,477 - 1,558,477

Total liabilities 1,837,966 (30,071) 1,807,895 2,470,177 (30,950) 2,439,227

Total equity and

liabilities 2,765,540 (142,192) 2,623,348 3,644,784 (147,370) 3,497,414




34.1 Reconciliation of financial position cont’d

Company 1.1.2011 31.12.2011

Note FRSs

Effect of

transition

to MFRSs MFRSs FRSs

Effect of

transition

to MFRSs MFRSs

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Assets

Property, plant and

equipment a 114,902 19,390 134,292 112,914 19,390 132,304

Investments in subsidiaries 485,751 - 485,751 531,601 - 531,601

Investment in an associate 11,812 - 11,812 11,812 - 11,812

Other investments 750 - 750 750 - 750

Trade and other receivables - - - 62,841 - 62,841

Total non-current assets 613,215 19,390 632,605 719,918 19,390 739,308

Inventories 21,225 - 21,225 29,285 - 29,285

Trade and other receivables 543,205 - 543,205 678,780 - 678,780

Cash and cash equivalents 67,694 - 67,694 188,382 - 188,382

Total current assets 632,124 - 632,124 896,447 - 896,447

Total assets 1,245,339 19,390 1,264,729 1,616,365 19,390 1,635,755

Equity

Share capital 215,031 - 215,031 219,740 - 219,740

Share premium 3,982 - 3,982 17,110 - 17,110

Reserves 5,166 - 5,166 92,952 - 92,952

Retained earnings d 199,855 19,390 219,245 206,121 19,390 225,511

Total equity 424,034 19,390 443,424 535,923 19,390 555,313

Liabilities


including derivatives 103,423 - 103,423 - - -


Deferred tax liabilities a 16,996 - 16,996 43,246 - 43,246

Total non-current

liabilities 190,239 - 190,239 275,608 - 275,608


including derivatives 112,392 - 112,392 293,061 - 293,061


Current tax payables 1,840 - 1,840 3,565 - 3,565

Total current liabilities 631,066 - 631,066 804,834 - 804,834

Total liabilities 821,305 - 821,305 1,080,442 - 1,080,442

Total equity and

liabilities 1,245,339 19,390 1,264,729 1,616,365 19,390 1,635,755




34.2 Reconciliation of profit or loss and other comprehensive income for the year ended 31 December 2011

Group Note FRSs

Effect of

transition to

MFRSs MFRSs

RM’000 RM’000 RM’000

Revenue 2,268,751 - 2,268,751

Cost of sales a (1,895,015) 24,385 (1,870,630)

Gross profit 373,736 24,385 398,121

Other income 13,807 - 13,807

Distribution expenses (79,399) - (79,399)

Administrative expenses (77,381) - (77,381)

Other expenses a (33,359) (3,515) (36,874)

Results from operating activities 197,404 20,870 218,274

Finance income 4,246 - 4,246

Finance costs (82,868) - (82,868)

Net finance costs (78,622) - (78,622)

Share of profits of equity-accounted investee, net of tax 4,295 - 4,295

Profit before tax 123,077 20,870 143,947

Tax expense a,c (21,971) 879 (21,092)

Profit for the year 101,106 21,749 122,855

Other comprehensive income, net of tax

Items that may be reclassified subsequently to

profit or loss

Foreign currency translation differences for foreign

operations 49,056 (26,048) 23,008

Other comprehensive income for the year 49,056 (26,048) 23,008

Total comprehensive income for the year 150,162 (4,299) 145,863

There is no impact to the profit or loss and other comprehensive income of the Company for the financial year

ended 31 December 2011.

34.3 Material adjustments to the statements of cash flows for 2011

There are no material differences between the statement of cash flows presented under MFRSs and the statement

of cash flows presented under FRSs.




34.4 Notes to reconciliations

(a) Property, plant and equipment – Deemed cost exemption – fair value

The Group and the Company elected to apply the optional exemption to measure certain property, plant and equipment at fair value at the date of transition to MFRSs and use that fair value as deemed cost under MFRSs.

The aggregate fair value of these property, plant and equipment of the Group and of the Company at 1 January 2011 was determined to be RM277,373,000 and RM25,300,000, respectively compared to the then carrying amount of RM419,565,000 and RM5,910,000 respectively under FRSs.

The impact arising from the change is summarised as follows:

Group Company

2011 2011

RM’000 RM’000

Consolidated statement of profit or loss and other

comprehensive income

Cost of sales - depreciation 24,385 -

Other expenses - depreciation (3,515) -

Adjustment before tax 20,870 -

Group Company

1.1.2011 31.12.2011 1.1.2011 31.12.2011

RM’000 RM’000 RM’000 RM’000

Consolidated statement of financial

position

Property, plant and equipment (142,192) (147,201) 19,390 19,390

Related tax effect 30,071 30,950 - -

Adjustment to equity (112,121) (116,251) 19,390 19,390

(b) Business combinations – foreign exchange on fair value adjustments and goodwill

Under FRSs, assets and liabilities of foreign operations were translated to Ringgit Malaysia at closing rate at the end of reporting period, except for goodwill and fair value adjustments arising from business combinations occurred before 1 January 2006 which were reported using the historical rate at the date of acquisition.

Upon transition to MFRSs, the Group has not applied MFRS 121, The Effect of Changes in Foreign Exchange Rates retrospectively to fair value adjustments and goodwill from business combinations that occurred before 1 January 2011. Such fair value adjustments and goodwill are treated as assets and liabilities of the Company rather than as assets and liabilities of the acquiree, and are reported using the exchange rate applied immediately prior to the date of transition.

Group

31.12.2011

RM’000

Consolidated statement of financial position

Goodwill (169)

Adjustment to foreign currency translation reserve 169




34.4 Notes to reconciliations cont’d

(c) Income tax

The changes that affected the deferred tax liabilities are as follows:

Group

Note 1.1.2011 31.12.2011

RM’000 RM’000

Property, plant and equipment a (30,071) (30,950)

Decrease in deferred tax liabilities (30,071) (30,950)

The effect on the statement of profit or loss and other comprehensive income for the financial year ended 31

December 2011 was to decrease the previously reported tax charge of the Group for the financial year by

RM879,000.

(d) Retained earnings

The changes that affected the retained earnings are as follows:

Group Company

Note 1.1.2011 31.12.2011 1.1.2011 31.12.2011

RM’000 RM’000 RM’000 RM’000

Property, plant and equipment a (86,554) (67,243) 19,390 19,390

(Decrease)/Increase in

retained earnings (86,554) (67,243) 19,390 19,390



35. SUPPLEMENTARY FINANCIAL INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED

PROFITS AND LOSSES

The breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised and

unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as

follows:

Group Company

2012 2011 2012 2011

RM’000 RM’000 RM’000 RM’000

Total retained earnings of the Company and its

subsidiaries

- realised 677,811 646,047 239,464 245,084

- unrealised 55,399 (92,217) (12,258) (19,573)

733,210 553,830 227,206 225,511

Total share of retained earnings of an associate

- realised 22,654 20,486 - -

755,864 574,316 227,206 225,511

Less: Consolidation adjustments 13,230 24,266 - -

Total retained earnings 769,094 598,582 227,206 225,511

The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination of

Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad

Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.


STATEMENT BY DIRECTORS pursuant to Section 169(15) of the Companies Act, 1965

STATUTORY DECLARATION pursuant to Section 169(16) of the Companies Act, 1965

In the opinion of the Directors, the financial statements set out on pages 51 to 140 are drawn up in accordance with Malaysian

Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965

in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2012

and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out in Note 35 on page 141 to the financial statements has been compiled

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

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

of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

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

DATO’ KOON POH KEONG DATO’ KOON POH TAT


25 April 2013

I, Loo Tai Choong, the officer primarily responsible for the financial management of Press Metal Berhad, do solemnly and

sincerely declare that the financial statements set out on pages 51 to 141 are, to the best of my knowledge and belief, correct

and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the

Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named in Kuala Lumpur in the Federal Territory on 25 April 2013.

LOO TAI CHOONG

Before me:

LEE CHIN HIN W493

Commissioner for Oaths

Kuala Lumpur


REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Press Metal Berhad, which comprise the statements of financial position as at

31 December 2012 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,

changes in equity and cash flows of the Group and of the Company for the financial year then ended, and a summary of

significant accounting policies and other explanatory information, as set out on pages 51 to 140.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in

accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and

the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the

Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditors’ Responsibility

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

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

and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material

misstatement.

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

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

statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s

preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates

made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as

of 31 December 2012 and of their financial performance and cash flows for the financial year then ended in accordance with

MFRS, IFRS and the requirements of the Companies Act, 1965 in Malaysia.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

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

(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors,

which are indicated in Note 6 to the financial statements.

(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements

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

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

(d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made

under Section 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORT to the members of Press Metal Berhad

(Company No. 153208 W) (Incorporated in Malaysia)


OTHER REPORTING RESPONSIBILITIES

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set

out in Note 35 on page 141 to the financial statements has been compiled by the Company as required by the Bursa Malaysia

Securities Berhad Listing Requirements and is not required by the MFRS or IFRS. We have extended our audit procedures

to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all

material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits

or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the

Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

OTHER MATTERS

As stated in Note 1(a) to the financial statements, Press Metal Berhad adopted MFRS and IFRS on 1 January 2012 with a

transition date of 1 January 2011. These standards were applied retrospectively by the Directors to the comparative information

in these financial statements, including the statements of financial position as at 31 December 2011 and 1 January 2011, and

the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the financial year ended

31 December 2011 and related disclosures. We were not engaged to report on the comparative information that is prepared in

accordance with MFRS and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the financial statements

of the Group and of the Company for the financial year ended 31 December 2012 have, in these circumstances, included

obtaining sufficient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements

that materially affect the financial position as of 31 December 2012 and financial performance and cash flows for the financial

year then ended.

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

Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this

report.

KPMG FOONG MUN KONG

Firm Number: AF 0758 Approval Number: 2613/12/14(J)

Chartered Accountants Chartered Accountant


25 April 2013

INDEPENDENT AUDITORS’ REPORT

to the members of Press Metal Berhad (Company No. 153208 W) (Incorporated in Malaysia)

cont’d


LIST OF PROPERTIESheld by the Group as at 31 December 2012

Proprietor Location

Description/

Age (Year)

Existing

Use Tenure

Area

(Square

feet)

Net Book

Value as at

31/12/2012

RM‘000

Press Metal

Sarawak Sdn

Bhd

Lot 211 & 212

Block 293

Mukah Land District

Mukah, Sarawak

Leasehold

land and

buildings

5 years

Factory cum

office

Leasehold

for 99

years

44,913,337 390,460

Press Metal

Bintulu Sdn

Bhd

Lot 36, Block 1

Kemena Land District

Samalaju Industrial Park

Bintulu, Sarawak

Leasehold

land and

buildings

2 years

Factory cum

office (under

construction)

Leasehold

for 60

years

20,946,570 404,107

Press Metal

International

Limited

Area C

Sanshui Industrial Park

Sanshui District

Foshan City, Guangdong

Province, China

Leasehold

land and

buildings

7 years

Factory cum

office

Leasehold

for 50

years

5,092,976 228,811

Press Metal

Berhad

Lot 6486, Mukim Kapar

Daerah Klang


Freehold

land and

buildings

19 years

Factory cum

office

Freehold 417,348 31,835

Press Metal

Berhad

Lot 6464, Mukim Kapar

Daerah Klang


Freehold

land and

buildings

19 years

Factory cum

office

Freehold 217,000 16,552

Angkasa Jasa

Sdn Bhd

Pt 7649, Cheras Jaya

Mukim Cheras

Daerah Ulu Langat


Leasehold

land and

building

24 years

Factory cum

office

Leasehold

for 99

years

expiring 14

May 2088

44,584 3,477

Angkasa Jasa

Sdn Bhd

Pantai Plaza, APH 20

Menara Atlas

Kuala Lumpur

Commercial

office suite

13 years

Tenanted

Freehold 5,339 2,545

Press Metal

Berhad

HS (D) 85856, PTD 48284

Mukim Plentong

Daerah Johor Bahru

Johor Darul Takzim

Factory land

and building

1 year

Warehouse

Freehold

849 1,593

Angkasa Jasa

Sdn Bhd

Pantai Plaza, Tower 5

Suite No. 1002

Kuala Lumpur

Commercial

office suite

14 years

Vacant

Freehold 1,392 870

Angkasa Jasa

Sdn Bhd

Lot 73803, Mukim Klang


Factory land

and building

7 years

Tenanted

Freehold 6,628 669


ANALYSIS OF SHAREHOLDINGSas at 29 April 2013

Authorised Share Capital : RM500,000,000

Issued and Paid-Up Share Capital : RM253,889,438.50

Class of Shares : Ordinary Shares of RM0.50 each

Voting Rights : One vote per share

Size of Holdings

No. of

Shareholders/

Depositors

% of

Shareholders/

Depositors

No. of Shares

Held

% of Issued

Capital

Less than 100 37 0.96 1,178 0.00

100 to 1,000 345 8.97 295,857 0.06

1,001 to 10,000 2,219 57.68 11,395,859 2.24

10,001 to 100,000 1,005 26.13 30,300,791 5.97

100,001 to less than 5% of issued shares 237 6.16 339,242,047 66.81

5% and above of issued shares 4 0.10 126,543,145 24.92

Total 3,847 100.00 507,778,877 100.00

DIRECTORS’ SHAREHOLDINGS

as at 29 April 2013

Direct Indirect

Name

No. of Shares

Held

% of Issued

Capital

No. of Shares

Held

% of Issued

Capital

Dato’ (Dr.) Megat Abdul Rahman

Bin Megat Ahmad 14,691,992 2.89 787,000 ^^ 0.15

Koon Poh Ming 27,333,439 5.38 76,000,000 * 14.97

Dato’ Koon Poh Keong 104,771,906 20.63 75,229,700 # 14.82

Tuan Haji Mohamad Faiz Bin Abdul Hamid 192,398 0.04 0 0.00

Koon Poh Weng 15,921,048 3.13 6,576,600 ^ 1.30

Koon Poh Kong 11,541,194 2.27 3,000 + 0.00

Dato’ Koon Poh Tat 14,038,000 2.76 499,522 ** 0.10

Loo Lean Hock 10,000 0.00 0 0.00

Tan Heng Kui 119,000 0.02 0 0.00

^^ Deemed interested in the shares by virtue of his interest in JOEM Sendirian Berhad and shares held by his spouse, Datin Johariah

Binti Abdullah Khalid

* Deemed interested in the shares held by his spouse, Ong Soo Fan and his direct interest in Alpha Milestone Sdn Bhd pursuant to

Section 6A of the Companies Act, 1965# Deemed interested in the shares held by his spouse, Datin Khoo Ee Pheng and his direct interest in Alpha Milestone Sdn Bhd

pursuant to Section 6A of the Companies Act, 1965^ Deemed interested in the shares held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee+ Deemed interested in the shares held by his spouse, Lee Sook Ching

** Deemed interested in the shares held by his spouse, Datin Chan Hean Heoh and son, Koon Pak Soon


ANALYSIS OF SHAREHOLDINGS

as at 29 April 2013cont’d

SUBSTANTIAL SHAREHOLDERS

as per Register of Substantial Shareholders as at 29 April 2013

Direct Indirect

Name

No. of Shares

Held

% of Issued

Capital

No. of Shares

Held

% of Issued

Capital

Dato’ Koon Poh Keong 104,771,906 20.63 75,229,700 # 14.82

Koon Poh Ming 27,333,439 5.38 76,000,000 * 14.97

Datin Khoo Ee Pheng 10,229,700 2.01 104,771,906 @ 20.63

Ong Soo Fan 11,000,000 2.17 27,333,439 + 5.38

Alpha Milestone Sdn Bhd 65,000,000 12.80 0 0.00

# Deemed interested in the shares held by his spouse, Datin Khoo Ee Pheng and his direct interest in Alpha Milestone Sdn Bhd

pursuant to Section 6A of the Companies Act, 1965

* Deemed interested in the shares held by his spouse, Ong Soo Fan and his direct interest in Alpha Milestone Sdn Bhd pursuant to

Section 6A of the Companies Act, 1965@ Deemed interested in the shares held by her spouse, Dato’ Koon Poh Keong+ Deemed interested in the shares held by her spouse, Koon Poh Ming

THIRTY LARGEST SHAREHOLDERS

as at 29 April 2013

No. Name of Shareholders

No. of Shares

Held

% of Issued

Capital

1 MAYBANK NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Dato’ Koon Poh Keong

37,500,000 7.39

2 RHB NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Alpha Milestone Sdn Bhd

36,181,818 7.13

3 KENANGA NOMINEES (TEMPATAN) SDN BHD


26,811,327 5.28



26,050,000 5.13

5 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD


19,500,000 3.84


Pledged Securities Account for Koon Yun Hong @ Koon Pow Shyang

16,000,000 3.15

7 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Loh Kwi Yong

15,225,150 3.00

8 DATO’ (DR.) MEGAT ABDUL RAHMAN BIN MEGAT AHMAD 14,691,992 2.89

9 AMSEC NOMINEES (TEMPATAN) SDN BHD


11,173,926 2.20

10 KOON POH MING 10,000,000 1.97


Pledged Securities Account for Datin Khoo Ee Pheng

10,000,000 1.97

12 ONG SOO FAN 9,000,000 1.77


Pledged Securities Account for Koon Pui Lan

7,924,324 1.56


ANALYSIS OF SHAREHOLDINGS


THIRTY LARGEST SHAREHOLDERS

as at 29 April 2013 cont’d

No. Name of Shareholders

No. of Shares

Held

% of Issued

Capital

14 KOON POH WENG 7,900,000 1.56

15 KOON POH MING 7,444,590 1.47

16 CHAN POH CHOO 6,531,000 1.29

17 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Koon Poh Weng

6,400,000 1.26


Pledged Securities Account for Dato’ Koon Poh Tat

6,001,800 1.18

19 DOITBEST HOLDINGS SDN. BHD. 5,355,610 1.05


Pledged Securities Account for Loo Seow Hwai

5,315,100 1.05

21 HLB NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Dato’ Tan Ting Wong

5,292,000 1.04

22 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD

Pledged Securities Account for Koon Poh Kong

5,170,398 1.02

23 KOON POH MING 5,144,000 1.01

24 TAN MEW LAN 4,753,460 0.94


Pledged Securities Account for Dato’ Koon Poh Tat

4,700,200 0.93

26 CHAN POH LENG 4,569,600 0.90

27 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD


4,500,000 0.88

28 ECML NOMINEES (ASING) SDN. BHD.

United Forest Limited

4,500,000 0.88

29 CHAN YAT WAI 4,484,800 0.88

30 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Koon Yun Hong @ Koon Pow Shyang

4,220,950 0.83

TOTAL 332,342,045 65.45


ANALYSIS OF REDEEMABLE CONVERTIBLE

SECURED LOAN STOCKS (“RCSLS”) HOLDINGSas at 29 April 2013

Total number of RCSLS issued : 145,684,940

Total number of Outstanding RCSLS : 145,684,940

Issued Price of RCSLS : RM2.20

Size of RCSLS Holdings

No. of RCSLS

Holders/

Depositors

% of RCSLS

Holders/

Depositors

No. of

RCSLS Held

% of Issued

RCSLS

Less than 100 21 2.23 794 0.00

100 to 1,000 160 17.02 126,402 0.09

1,001 to 10,000 457 48.62 1,991,650 1.37

10,001 to 100,000 223 23.72 7,963,719 5.46

100,001 to less than 5% of issued RCSLS 75 7.98 30,282,515 20.79

5% and above of issued RCSLS 4 0.43 105,319,860 72.29

Total 940 100.00 145,684,940 100.00

DIRECTORS’ RCSLS HOLDINGS

as per Register of Directors’ RSCLS Holdings as at 29 April 2013

Direct Indirect

Name

No. of

RCSLS Held

% of Issued

RCSLS

No. of

RCSLS Held

% of Issued

RCSLS

Dato’ (Dr.) Megat Abdul Rahman Bin

Megat Ahmad 0 0.00 0 0.00

Koon Poh Ming 0 0.00 106,319,860 * 72.98

Dato’ Koon Poh Keong 0 0.00 105,319,890 # 72.29


Koon Poh Weng 0 0.00 192,000 ^ 0.13

Koon Poh Kong 0 0.00 151,000 + 0.10

Dato’ Koon Poh Tat 0 0.00 133,174 ** 0.09

Loo Lean Hock 0 0.00 0 0.00

Tan Heng Kui 37,000 0.02 0 0.00

* Deemed interested in the RCSLS held by his spouse, Ong Soo Fan and by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965

# Deemed interested in the RCSLS by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965

^ Deemed interested in the RCSLS held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee + Deemed interested in the RCSLS held by his spouse, Lee Sook Ching

** Deemed interested in the RCSLS held by his spouse, Datin Chan Hean Heoh



SECURED LOAN STOCKS (“RCSLS”) HOLDINGS


THIRTY LARGEST RCSLS HOLDERS

as at 29 April 2013

No. Name of RCSLS Holders

No. of RCSLS

Held

% of Issued

RCSLS



52,659,929 36.15


Pledged Securities Account for Alpha Milestone Sdn. Bhd.

21,545,622 14.79



18,181,818 12.48


Pledged Securities Account For Alpha Milestone Sdn. Bhd.

12,932,491 8.88



2,171,000 1.49

6 TOH EAN HAI 2,095,100 1.44



1,335,000 0.92

8 TAN MEW LAN 1,200,000 0.82

9 ECML NOMINEES (TEMPATAN) SDN. BHD


1,067,000 0.73


Pledged Securities Account for Tan Lam Kiew

1,000,000 0.69

11 ONG SOO FAN 1,000,000 0.69

12 CASATECHNIC SDN BHD 841,000 0.58

13 ONN PING LAN 787,300 0.54

14 ONG SOW YONG 738,400 0.51

15 CHAN YAT WAI 724,000 0.50

16 AMBANK (M) BERHAD

Pledged Securities Account for Tee Keng Kok

710,000 0.49

17 AIBB NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Tan Mew Lan

700,000 0.48

18 CIMSEC NOMINEES (TEMPATAN) SDN BHD

CIMB Bank For Khoo Chai Pek

689,700 0.47

19 DATO’ TAN TING WONG 685,000 0.47

20 CHUA SENG SAM 640,000 0.44

21 EOM SYSTEMS SDN. BHD. 633,000 0.43


Pledged Securities Account for Ravindra A/L Panchalingam

610,000 0.42

23 PUBLIC NOMINEES (TEMPATAN) SDN BHD


552,000 0.38

24 EU MUI @ EE SOO MEI 551,000 0.38

25 LUCKY STAR PTE.LTD. 458,200 0.31



SECURED LOAN STOCKS (“RCSLS”) HOLDINGS


THIRTY LARGEST RCSLS HOLDERS


No. Name of RCSLS Holders

No. of RCSLS

Held

% of Issued

RCSLS

26 KOON FHO YIN 424,000 0.29

27 LUCKY STAR PTE.LTD. 423,200 0.29


Pledged Securities Account for Tan Boon Seng

417,566 0.28

29 GINA GAN 412,300 0.28

30 CHAN YUE LENG 359,000 0.24

TOTAL 126,543,626 86.86


ANALYSIS OF WARRANT HOLDINGSas at 29 April 2013

Total number of Warrants C issued : 145,684,940

Total number of Outstanding Warrants C : 80,683,940

Exercise Price of Warrants C : RM2.20

Size of Warrant Holdings

No. of Warrant

Holders/

Depositors

% of Warrant

Holders/

Depositors

No. of

Warrants Held

% of Issued

Warrants

Less than 100 25 3.05 1,148 0.00

100 to 1,000 145 17.66 116,920 0.14

1,001 to 10,000 396 48.23 1,747,086 2.17

10,001 to 100,000 184 22.41 7,546,305 9.35

100,001 to less than 5% of issued warrants 66 8.04 25,662,021 31.81

5% and above of issued warrants 5 0.61 45,610,460 56.53

Total 821 100.00 80,683,940 100.00

DIRECTORS’ WARRANT HOLDINGS

as per Register of Directors’ Warrants Holdings as at 29 April 2013

Direct Indirect

Name

No. of

Warrants Held

% of Issued

Warrants

No. of

Warrants Held

% of Issued

Warrants

Dato' (Dr.) Megat Abdul Rahman

Bin Megat Ahmad 0 0.00 0 0.00

Koon Poh Ming 0 0.00 41,319,860 * 51.21

Dato' Koon Poh Keong 0 0.00 40,319,860 # 49.98


Koon Poh Weng 0 0.00 192,000 ^ 0.24

Koon Poh Kong 0 0.00 151,000 + 0.18

Dato' Koon Poh Tat 0 0.00 133,174 ** 0.17

Loo Lean Hock 0 0.00 0 0.00

Tan Heng Kui 37,000 0.05 0 0.00

* Deemed interested in the warrants held by his spouse, Ong Soo Fan and by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965

# Deemed interested in the warrants by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965

^ Deemed interested in the warrants held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee + Deemed interested in the warrants held by his spouse, Lee Sook Ching ** Deemed interested in the warrants held by his spouse, Datin Chan Hean Heoh


ANALYSIS OF WARRANT HOLDINGS


THIRTY LARGEST WARRANT HOLDERS

as at 29 April 2013

No. Name of Warrant Holders

No. of Warrant

Held

% of Issued

Warrant



12,659,929 15.69



10,907,815 13.52



9,204,835 11.41



6,547,281 8.11



6,290,600 7.80


Maybank Trustees Berhad for CIMB-Principal Strategic Bond Fund

1,579,400 1.96


Pledged Securities Account for Tan Boon Seng

1,110,000 1.38

8 ECML NOMINEES (TEMPATAN) SDN. BHD


1,067,000 1.32



1,044,000 1.29

10 CASATECHNIC SDN BHD 1,038,100 1.29


Pledged Securities Account for Tan Lam Kiew

1,000,000 1.24

12 ONG SOO FAN 1,000,000 1.24

13 ALPHA MILESTONE SDN BHD 931,818 1.15

14 LAU SIE KUONG 888,800 1.10

15 TAN MEW LAN 830,200 1.03

16 AIBB NOMINEES (TEMPATAN) SDN BHD

Pledged Securities Account for Tan Mew Lan

700,000 0.87

17 DATO’ TAN TING WONG 685,000 0.85

18 KHOE BOON HUAT 650,000 0.81


Pledged Securities Account for Koon Fho Yin

639,000 0.79

20 EOM SYSTEMS SDN. BHD. 633,000 0.78


Pledged Securities Account for Ng Chee Teong

628,700 0.78

22 NG TEA HOO @ HWANG CHOW HERK 600,700 0.74

23 PUBLIC NOMINEES (TEMPATAN) SDN BHD


552,000 0.68


ANALYSIS OF WARRANT HOLDINGS


THIRTY LARGEST WARRANT HOLDERS


No. Name of Warrant Holders

No. of Warrant

Held

% of Issued

Warrant

24 CIMSEC NOMINEES (TEMPATAN) SDN BHD

CIMB Bank for Ng Swee Sing @ Eng Swee Sing

540,000 0.67

25 BERNADETTE MARGARET LAU 522,000 0.65

26 LYE THAI SANG 496,900 0.62

27 CHAN YUE LENG 473,000 0.59

28 HLIB NOMINEES (TEMPATAN) SDN BHD

Hong Leong Bank Bhd for Lau Sie Kuong

368,000 0.46

29 LEE TEK MOOK @ LEE TEH MOH 333,333 0.41

30 TEO YONG FONG 301,000 0.37

TOTAL 64,222,411 79.60


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Twenty-Seventh Annual General Meeting of Press Metal Berhad will be held at Room 8, Level 6, Best Western Premier Dua Sentral, 8, Jalan Tun Sambanthan, 50470 Kuala Lumpur on Thursday, 20 June 2013 at 10:30 a.m.

AGENDA

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 December 2012 together with the Reports of the Directors and Auditors thereon.

2. To approve the payment of Directors’ Fees for the financial year ended 31 December 2012.

3. To re-elect the following Directors retiring pursuant to Article 92 of the Articles of Association of the Company:

(i) Koon Poh Ming

(ii) Koon Poh Kong

4. To consider and, if thought fit, to pass the following resolution pursuant to Section 129(6) of the Companies Act, 1965:

“That pursuant to Section 129(6) of the Companies Act, 1965, Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad be re-appointed as Director to hold office until the conclusion of the next Annual General Meeting of the Company.”

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

“That pursuant to Section 129(6) of the Companies Act, 1965, Tuan Haji Mohamad Faiz Bin Abdul Hamid be re-appointed as Director to hold office until the conclusion of the next Annual General Meeting of the Company.”

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

As Special Business

To consider and, if thought fit, to pass the following resolutions:

7. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such allotment and issue.”

8. Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director

“THAT authority be and is hereby given to Tuan Haji Mohamad Faiz Bin Abdul Hamid who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the

Malaysian Code of Corporate Governance 2012.”

Ordinary Resolution 1









NOTICE OF ANNUAL GENERAL MEETINGcont’d

9. Authority for Loo Lean Hock to continue in office as Independent Non-Executive

Director

“THAT authority be and is hereby given to Loo Lean Hock who has served as an Independent

Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to

continue to act as an Independent Non-Executive Director of the Company until the conclusion

of the next Annual General Meeting in accordance with the Malaysian Code of Corporate

Governance 2012.”

10. Authority for Tan Heng Kui to continue in office as Independent Non-Executive

Director

“THAT authority be and is hereby given to Tan Heng Kui who has served as an Independent

Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to

continue to act as an Independent Non-Executive Director of the Company until the conclusion

of the next Annual General Meeting in accordance with the Malaysian Code of Corporate

Governance 2012.”

11. Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’

Mandate for Press Metal Berhad and its subsidiaries to enter into Recurrent Related

Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’

Mandate”)

“THAT approval be and is hereby given to the Company and its subsidiaries (“PMB Group”)

to enter into recurrent related party transactions of a revenue or trading nature as set out

in Section 2.3 (i) of the Circular to Shareholders dated 29 May 2013 (“Circular”) which are

necessary for the PMB Group’s day-to-day operations subject to the following:-

a) the transactions are in the ordinary course of business and on normal commercial terms

which are not more favourable to the related parties than those generally available to the

public and are not to the detriment of the minority shareholders of the Company; and

b) the disclosure will be made in the Annual Report of the breakdown of the aggregate

value of the recurrent related party transactions conducted pursuant to the Proposed

Shareholders’ Mandate during the financial year on the type of recurrent related party

transactions made, the names of the related parties involved in each type of recurrent

related party transactions and their relationships with the Company.

THAT the authority conferred shall continue to be in force until:-

i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following

the forthcoming AGM at which the Proposed Shareholders’ Mandate is approved, at

which time it will lapse, unless by a resolution passed at the AGM, the mandate is again

renewed;

ii) the expiration of the period within which the next AGM of the Company is required to be

held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend

to such extension as may be allowed pursuant to Section 143(2) of the Act); or

iii) revoked or varied by resolution passed by the shareholders in general meeting,

whichever is the earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and

do all such acts and things (including executing all such documents as may be required)

as they may consider expedient or necessary to give effect to the Proposed Shareholders’

Mandate.”






BY ORDER OF THE BOARD

TAI YIT CHAN (MAICSA 7009143)

TAN AI NING (MAICSA 7015852)

Company Secretaries


29 May 2013

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.

5. The instrument appointing a proxy or proxies and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority, must be deposited at the Share Registrar’s office of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.

6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 10 June 2013 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

EXPLANATORY NOTES ON SPECIAL BUSINESS

Ordinary Resolution 7- Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares

The Company had, during its Twenty-Sixth Annual General Meeting held on 28 June 2012, obtained its shareholders’ approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 (“the Act”). The Company did not issue any shares pursuant to this mandate obtained.

The Ordinary Resolution 7 proposed under item 7 of the Agenda is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue new shares speedily in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for purpose of funding the working capital or strategic development of the Group. This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM.

At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is sought, the Company will make an announcement in respect thereof.

Ordinary Resolution 8 - Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director

The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Tuan Haji Mohamad Faiz Bin Abdul Hamid who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended him to continue to act as Independent Non-Executive Director of the Company. Tuan Haji Mohamad Faiz Bin Abdul Hamid fullfilled the criteria under the definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Tuan Haji Mohamad Faiz Bin Abdul Hamid has been with the Company for more than nine years, he therefore understands the Company’s business operations which enable him to participate actively and contribute during deliberations and discussions at Audit Committee, Remuneration Committee, Nomination Committee and Board meetings without compromising his independent and

objective judgement.



- Authority for Loo Lean Hock to continue in office as Independent Non-Executive Director

The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Loo Lean

Hock who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and

recommended him to continue to act as Independent Non-Executive Director of the Company. Loo Lean Hock fullfilled the criteria under the

definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. His experience

in the audit and accounting indutries enables him to provide the Board with a diverse set of experience, expertise, skills and competence. As

he has been with the Company for more than nine years, he therefore understands the Company’s business operations which enable him

to participate actively and contribute during deliberations and discussions at Audit Committee, Nomination Committee and Board meetings

without compromising his independent and objective judgement.


- Authority for Tan Heng Kui to continue in office as Independent Non-Executive Director

The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Tan Heng Kui who

has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended

him to continue to act as Independent Non-Executive Director of the Company. Tan Heng Kui fullfilled the criteria under the definition on

Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Tan Heng Kui has been with

the Company for more than nine years, he therefore understands the Company’s business operations which enable him to participate actively

and contribute during deliberations and discussions at Audit Committee and Board meetings without compromising his independent and

objective judgement.


- Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’ Mandate for Press Metal Berhad and its

subsidiaries to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’

Mandate”)

For further information on Ordinary Resolution 11, please refer to the Circular to Shareholders dated 29 May 2013 accompanying the Annual

Report of the Company for the financial year ended 31 December 2012.


PROXY FORM

PRESS METAL BERHAD(Company No. 153208-W)

(Incorporated in Malaysia)

I/We (name of shareholder as per NRIC, in capital letters)

IC No./ID No./Company No. (new) (old)

of (full address)

being a member of PRESS METAL BERHAD, hereby appoint

(name of proxy as per NRIC, in capital letters) IC No. (new) (old)

of (full address)

or failing him/her, (name of proxy as per NRIC, in capital letters)

IC No. (new) (old) of

(full address)

or failing him/her, the *Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Twenty-Seventh

Annual General Meeting of the Company to be held at Room 8, Level 6, Best Western Premier Dua Sentral, 8, Jalan Tun

Sambanthan, 50470 Kuala Lumpur on Thursday, 20 June 2013 at 10:30 a.m. or at any adjournment thereof.

My/our proxy is to vote as indicated below.

RESOLUTIONS FOR AGAINST

1. Approval of Directors’ Fees Ordinary Resolution 1

2. Re-election of Koon Poh Ming as Director Ordinary Resolution 2

3. Re-election of Koon Poh Kong as Director Ordinary Resolution 3

4. Re-appointment of Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad as Director


5. Re-appointment of Tuan Haji Mohamad Faiz Bin Abdul Hamid as Director Ordinary Resolution 5

6. Re-appointment of Messrs KPMG as Auditors of the Company Ordinary Resolution 6

7. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares


8. Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director


9. Authority for Loo Lean Hock to continue in office as Independent Non-Executive Director


10. Authority for Tan Heng Kui to continue in office as Independent Non-Executive Director


11. Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature


(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain

from voting at his/her discretion.)

Signature/Common Seal

Number of shares held :

Date :

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.

2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.

3. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.

5. The instrument appointing a proxy or proxies and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority, must be deposited at the Share Registrar’s office of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.

6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 10 June 2013 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

For appointment of two proxies, percentage of shareholdings to be represented by the proxies:

No. of Shares Percentage

Proxy 1 %

Proxy 2 %

Total 100%

CDS account number of holder

Affix

Stamp

1st Fold Here

Fold This Flap For Sealing

Then Fold Here

The Share Registrar

PRESS METAL BERHAD (Company No. 153208-W)

Level 17, The Gardens North Tower

Mid Valley City, Lingkaran Syed Putra

59200 Kuala Lumpur

Malaysia

Press MetalGroup Directory

PRESS METAL BERHAD(Company No. 153208-W)

Lot 6464, Batu 5 ¾, Jalan Kapar, Sementa, 42100 Klang, Selangor Darul Ehsan, Malaysia

Tel: +603 3291 3188 Fax: +603 3291 3637

Website: www.pressmetal.com

MALAYSIA

ANGKASA JASA SDN BHD(Company No. 110854-M)

27, Jalan 3A, Kawasan MIEL Balakong

Taman Cheras Jaya, 42200 Cheras


Tel : +603 9075 2136

Fax : +603 9075 2139

E-mail : [email protected]

PMS MARKETING SDN BHD (Company No. 204138-X)

Lot 6464, Batu 5 ¾, Jalan Kapar

Sementa, 42100 Klang


Tel : +603 3291 3188

Fax : +603 3291 3785

PRESS METAL BINTULU SDN BHD(Company No. 918822-X)

Lot 36, Block 1

Samalaju Industrial Park

Kemena Land District

97000 Samalaju, Sarawak, Malaysia

Tel : +6086 253 119

Fax : +6086 253 219

PRESS METAL SARAWAK

SDN BHD(Company No.767704-M)

Lot 211 & 212, Block 293

Mukah Land District

KM38, Jalan Mukah-Balingian

96400 Mukah, Sarawak, Malaysia

Tel : +6086 855 199

Fax : +6086 855 050

WESAMA SDN BHD(Company No. 196057-W)

Lot 1797, Jalan Balakong

Bukit Belimbing, 43300

Seri Kembangan


Tel : +603 8961 8355

Fax : +603 8961 8357


CHINA

PRESS METAL INTERNATIONAL

LIMITED

Area C, Sanshui Industrial Park

Sanshui District

Foshan City

Guangdong Province, 528137 China

Tel : +86 757 8736 3333

Fax : +86 757-8736 3980

Website : www.pressmetal.com.cn


PRESS METAL INTERNATIONAL

(HUBEI) LTD

No.1, Qili Road

Zhangjin Town, Qianjiang City

Hubei Province, 433140 China

Tel : +86 728 664 1446

Fax : +86 728 664 4228

Website : www.pressmetal.com.cn

Email : [email protected]

AUSTRALIA

PRESS METAL ALUMINIUM

(AUSTRALIA) PTY. LTD. (ACN 085 370 010)

Website : www.pmaa.net.au

1012-1016 Canley Vale Road

Wetherill Park

New South Wales, 2164 Australia

Tel : +612 9756 5555

Fax : +612 9756 5499


2/22 Eastern Service Road

Stapylton

Queensland, 4207 Australia

Tel : +617 3382 6640

Fax : +617 3382 6244


37-39, Gaine Rd, Dandenong

South Victoria, 3175 Australia

Tel : +613 9793 7911

Fax : +613 9793 9077


NORTH AMERICA

PRESS METAL NORTH AMERICA LLC

2450 Atlanta Hwy Ste 1803

Cumming, Georgia 30040

United States of America

Tel : +678 4568 618

Fax : +866 5397 197


UNITED KINGDOM

PRESS METAL UK LIMITED(Company No. 3653082)

Beldray Road, Bilston

West Midlands, WV14 7NH

United Kingdom

Tel : +44 1902 498867

Fax : +44 1902 495567


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