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JOHN MASTER INDUSTRIES BERHAD (114842-H)

No.1, Jalan Industri PBP 13,Taman Industri Pusat Bandar Puchong,47100 Puchong, Selangor Darul Ehsan, Malaysia.

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annualreportThe Twenty-FifthAnnual General Meetingof John MasterIndustries Berhad- 17 September 2009

2009Chairman’sStatementpg 9

To be the leading company that enhance the lifestyles of consumers

Implementing brand strategies with broad market penetration

Delivering superior customer service and quality products

Empowering employees and human capital development to deliver values

Building resilience through professionalism and effective systems

COnTEnTsGroup corporate structure 3

Corporate information 4

Profi le of the board of directors 5

Chairman’s statement 9

Corporate governance statement 16

Audit committee report 24

Statement on internal control 27

Directors’ report 30-33

Balance sheets 34-35

Income statements 36

Statement on changes in equity 37

Cash fl ow statements 38-39

Notes to the fi nancial statements 40-75

Statement by directors 76

Statutory declaration 76

Auditors’ report 77-78

Analysis of shareholdings 79-80

List of properties 81

Notice of annual general meeting 82-83

Statement accompanying notice 84of annual general meeting

Notice of Nomination of Auditors

Proxy form

2

Attitude

The corner stoneof success.

3JOHN MASTER INDUSTRIES BERHAD(114842-H)ANNUAL REPORT 2009

GROUP CORPORATE STRUCTURE

APPARELDIVISION

DORMANT PROPERTY DEVELOPMENT &CONSTRUCTION DIVISION

100%JOHN MASTER (M)

SDN BHD

97%SCHWARZENBACH (M)

SDN BHD

100%JOHN MASTER

PROPERTIESSDN BHD

100%WINTER FAME

SDN BHD

100%JM BUILDER

SDN BHD

100%JM LANDSDN BHD

100%JM PROPERTY

MANAGEMENTSDN BHD

100%STANDPOINT

VENTURESSDN BHD

100%KENYAL

SDN BHD

100%INFOSEARCH

SDN BHD

4

CORPORATE INFORmATION

Board of Directors

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad(Chairman)

Mr Wong Cham Mew

Mr Ng Bee Ken

Mr Chan Foong Peng

Mr Ho Yeong Fan

Mr Ong Cheng Heang @ Ong Cheng Hean

Ms Ho Wei Choon

Ms Ho Wei Ching

Mr Chan Weng Kwong

Secretaries

Ms Chen Siew Fong

Ms Koh Mei Ling

Principal Bankers

EON Bank Berhad

Malayan BankingBerhad

Stock Exchange Listing

Main Market of the Bursa Malaysia Securities Berhad

Nomination Committee

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad(Chairman)

Mr Wong Cham Mew

Mr Ng Bee Ken

Auditors

Messrs. Azman, Wong, Salleh & Co.Chartered Accountants12th Floor, Wisma Tun Sambanthan, No. 2,Jalan Sultan Sulaiman,P. O. Box 12019,50764 Kuala Lumpur

Audit Committee

Mr Ng Bee Ken(Chairman)

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad

Mr Wong Cham Mew

Ms Ho Wei Choon

Remuneration Committee

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad(Chairman)

Mr Wong Cham Mew

Mr Ng Bee Ken

Registered Offi ce

No. 1, Jalan Industri PBP 13, Taman Industri Pusat Bandar Puchong, 47100 Puchong, Selangor Darul EhsanTel No : 03-8068 8888Fax No : 03-8068 8880

Registrar

Bina Management (M) Sdn. Bhd.Lot 10, The Highway Centre,Jalan 51/205,46050 Petaling JayaTel No : 03-7784 3922Fax No : 03-7784 1988

5JOHN MASTER INDUSTRIES BERHAD(114842-H)ANNUAL REPORT 2009

PROFILE OF THE BOARD OF DIRECTORS

TAN SRI DATUK SERI PANGLIMA DR. ABDUL RAHMAN ARSHADPSM, SPDK, DCSM, DKSJ, DSAP, DMPN, JMN, JSM, BSKChairman, Independent Non-Executive Director

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad, a Malaysian aged 72, was appointed to the Board on 11 December 1991.

He is a graduate with a Bachelor of Arts (Honours) degree from Universiti Malaya, Diploma in Education from the University of Singapore and Diploma in Educational Administration from University of Reading, United Kingdom and Ph. D. from University of East London. He also attended the Executive Programme at Administrative Staff College, New Zealand and Advanced Management Program (“AMP”) at Harvard Graduate School of Business. He was conferred the Hon. LLD by University of Saskatchewan, Canada; Hon. D. Litt by Heriot-Watt University, Scotland; Hon. D. Litt by Universiti Putra Malaysia; Hon. D. Ed. and Ph. D. by University of East London, England and Hon. D. Educational Management by Universiti Teknologi MARA, Malaysia and Hon. D. Ed. by UCSI, Hon. D. Ed. by University of Malaya and Hon. D. Ed. from Universiti Pendidikan Sultan Idris.

He ended his distinguished civil service career in November 1991 as Director General of Education, Malaysia. He was active in a number of international organisations and was an Education Consultant to the World Bank. He currently is the Chairman of Kolej Dika, Pro Chancellor of Universiti Teknologi MARA, Pro Chancellor of Universiti Pendidikan Sultan Idris and Chancellor of UCSI University.

CHAN FOONG PENGExecutive Director – Apparel Division

Mr Chan Foong Peng, a Malaysian aged 65, was appointed to the Board on 27 May 1992.

Mr Chan is one of the pioneer staff of the Group having been with John Master (M) Sdn Bhd (“JMSB”) since the Company commenced operations in 1987. Prior to joining JMSB, he had over twenty (20) years of experience in both the textile and garment industry. Due to his vast experience, he is instrumental in establishing a strong marketing and distribution network throughout the country for the garments sector. He is presently responsible in overseeing the operations of the garment sector of the Group.

HO YEONG FAN Executive Director – Corporate & Legal

Mr Ho Yeong Fan, a Malaysian aged 42, was appointed to the Board on 27 January 2006.

Mr Ho is a graduate with a Bachelor of Science in Computerised Accountancy from the University of East Anglia, England. He is also an Associate Member of the Institute of Chartered Accountants of England and Wales. Mr Ho started his professional career with an international accounting firm in London, England. After returning to Malaysia, he joined a big-eight accounting firm before moving on to the Corporate Finance Department of a Merchant Bank. He subsequently joined the Company as the Corporate Manager in 1994. Mr Ho is currently in charge of the Group’s Corporate and Legal matters.

He is the brother of Ms Ho Wei Choon and Ms Ho Wei Ching and brother in law of Mr Ong Cheng Heang @ Ong Cheng Hean. He is also the son of Mr Ho Chin Hou, a substantial shareholder of the Company.

6

ONG CHENG HEANG @ ONG CHENG HEAN Executive Director – Property Division

Mr Ong Cheng Heang @ Ong Cheng Hean, a Malaysian aged 43, was appointed to the Board on 27 January 2006.

Mr Ong graduated with a Bachelor of Business from Curtin University of Technology, Perth, Australia. After his graduation he worked for a number of years in the banking industry. He was the Vice President, Corporate Banking Department of a foreign bank before he left to join a property development company as General Manager in year 2000. He later set up his own property development and construction companies to undertake development projects and construction work tendering contracts mainly from government sectors. Mr Ong joined JM Land Sdn Bhd, a subsidiary of the Company in 2004 and is now heading the Property Division.

He is the spouse of Ms Ho Wei Ching and the brother in law of Mr Ho Yeong Fan and Ms Ho Wei Choon. He is also the son in law of Mr Ho Chin Hou, a substantial shareholder of the Company.

HO WEI CHINGExecutive Director – Operations

Ms Ho Wei Ching, a Malaysian aged 39, was appointed to the Board on 17 November 2008.

Ms Ho is a graduate with a Bachelor of Business Degree. She is a member of the Malaysian Institute of Accountants and the Australian Society of Certified Practicing Accountants. She started her career as an Auditor in a Big Four accounting firm and subsequently obtained her Registered Accountant status before moving on to the commercial sector. Ms Ho joined the Group in 2004 and currently oversees the operations of the consumer division. She plays an active role in strategizing the future direction of the consumer division including brand direction, extension of product range and procurement of new retail related businesses.

She is the spouse of Mr Ong Cheng Heang @ Ong Cheng Hean and the sister of Ms Ho Wei Choon and Mr Ho Yeong Fan. She is also the daughter of Mr Ho Chin Hou, a substantial shareholder of the Company.

WONG CHAM MEWIndependent Non-Executive Director

Mr Wong Cham Mew, a Malaysian aged 61, was appointed to the Board on 29 March 2002.

He holds a Bachelor of Commerce Degree from University of Otago, New Zealand. He is a member of the Malaysian Institute of Accountants and is also an Approved Co-operative Society Auditor, Approved Company Auditor and Approved Company Liquidator.

Mr Wong began his career in the public sector in the Income Tax Department. Later, he served as a Group Accountant and Company Secretary in the commercial sector. At present, he is a senior partner of a firm of Chartered Accountants.

PROFILE OF THE BOARD OF DIRECTORS

7JOHN MASTER INDUSTRIES BERHAD(114842-H)ANNUAL REPORT 2009

PROFILE OF THE BOARD OF DIRECTORS

NG BEE KENIndependent Non-Executive Director

Mr Ng Bee Ken, a Malaysian aged 54, was appointed to the Board on 27 January 2006.

He holds a Bachelor of Law (Honours) from University of Wales, Cardiff, Wales and a Master of Laws from King’s College, University of London. Mr Ng is also a Barrister-at-Law of Lincoln’s Inn, London and an Advocate & Solicitor of the High Court of Malaya. He has been practising as a lawyer since 1986 and is presently a senior partner of a law firm.

Mr Ng also holds a Master of Science (Corporate Communication) from Universiti Putra Malaysia and is an Associate of the Association of Costs and Executive Accountants, England.

Mr Ng also sits on the Board of Widetech (Malaysia) Berhad.

HO WEI CHOON Non Independent Non-Executive Director

Ms Ho Wei Choon, a Malaysian aged 35, was appointed to the Board on 27 January 2006.

Ms Ho graduated from Curtin University of Technology, Perth, Western Australia with a Double Major in Finance and Marketing. After her graduation, she joined the Group as a Sales and Marketing Executive in 1996. She then worked her way up to the position of Executive Director. Ms Ho left the Group’s employ in March 2007 and was redesignated as a Non Independent Non-Executive Director.

She is the sister of Mr Ho Yeong Fan and Ms Ho Wei Ching and sister in law of Mr Ong Cheng Heang @ Ong Cheng Hean. She is also the daughter of Mr Ho Chin Hou, a substantial shareholder of the Company.

CHAN WENG KWONGNon Independent Non-Executive Director

Mr Chan Weng Kwong, a Malaysian aged 50, was appointed to the Board on 17 November 2008.

Mr Chan has a certified Diploma in Accounting and Finance and a MBA (Finance) from University of Hull, United Kingdom. He is a member of the Chartered Institute of Bankers, UK, The Institute of Chartered Financial Analysts, USA, The American Association of Financial Engineers, USA, The International Who’s Who of Professionals Historical Society, USA and The Chartered Hedge Funds Associate, USA.

Mr Chan has a background in corporate finance, banking and property development. He had helped corporations to turnaround through debt restructuring. Presently, he is an independent financial adviser. He was active in a number of privates companies in Malaysia and internationally.

Mr Chan is a director and shareholder of Strata Field Sdn Bhd, a substantial shareholder of the Company.

8

GENERAL INFORMATIONDetails of membership in Board Committees

Directors Audit Remuneration Nomination Committee Committee Committee

Tan Sri Datuk Seri Panglima Member Chairman Chairman Dr. Abdul Rahman Arshad

Mr Wong Cham Mew Member Member Member

Ms Ho Wei Choon Member N/A N/A

Mr Ng Bee Ken Chairman Member Member

• Saveasdisclosedabove,allotherDirectorsarenotmembersoftheBoardCommittees.• NoneoftheDirectorshavehadconvictionsforanyoffencesotherthantrafficoffenceswithinthepast10years.• Saveasdisclosedabove,noneoftheDirectorshaveanyfamilyrelationshipwithanyDirectorand/orsubstantial

shareholder of the Company. • SaveforMrHoYeongFanandMrOngChengHeang@OngChengHean(“theAffectedDirectors”),noneof

the Directors have any confl ict of interest with the Company. The Affected Directors are also directors and shareholders of another company which is engaged in a similar business with JM Land Sdn Bhd (“JML”) and JM Builder Sdn Bhd (“JMB”), wholly owned subsidiaries of the Company and therefore deemed to be in contravention of Section 132(2)(e) of the Companies Act. The shareholders of JML and JMB have however ratifi ed the said contravention in their general meetings as allowed for under Section 132(2).

• Saveasdisclosedabove,noneoftheDirectorssitontheBoardofanyotherpubliclistedcompanies.

PROFILE OF THE BOARD OF DIRECTORS

9JOHN MASTER INDUSTRIES BERHAD(114842-H)ANNUAL REPORT 2009

ChAIRmAn’s STATEmENT

On behalf of the Board of Directors,

I present to you the Annual Report

and Audited Financial Statements

of John Master Industries Berhad

(“JMI” or “the Company”) and its

subsidiaries (“the Group”) for the

financial year ended 31 March 2009.

Tan Sri Datuk Seri Panglima Dr. Abdul Rahman Arshad

Chairman

10

ChAIRmAn’s STATEmENT

2008 turned out to be an eventful year for the business community and for the general public. The fi nancial year started with the fuel price hike that saw crude oil price shooting to US$147 per barrel. Then the US banking crisis precipate a world fi nancial crisis that led to the crumbling of commodity prices and multiple nations’ economies. The fi nancial tsunami that swept the world had shaken banking systems and people’s welfare. Malaysia being largely dependent on the export market was also not spared. There was signifi cant slow down in the economy and our economy recorded 2 quarters of consecutive contraction, technically classifying it to be in recession. Thankfully the fundamentals of the country remain sound and the fi nancing structure intact. The government has also implemented fi scal and monetary policy that seek to pump prime the economy out of recession. Nevertheless, the days of accelerating growth will be a long way to come.

The Company’s two core businesses being in retail of apparel products and property development has been deeply impacted by the events that unfolded in the country and worldwide. Such a scenario has exacerbated the Company’s inability to distribute dividends. Even if the economies locally and internationally recover, the returns from the current businesses of the Group will be miniscule compared with the large capital base of the Company.

FINANCIAL OVERVIEW

Notwithstanding the challenging economic climate, the Group recorded a turnover of RM65.5 million for the fi nancial year ended 31 March 2009, an increase of RM2.8 million over the last fi nancial year. The increase in revenue was primarily from the property division which had launched its Jade Terraces homes during the year. The turnover for the apparel segment is about the same as the previous year’s level.

11JOHN MASTER INDUSTRIES BERHAD(114842-H)ANNUAL REPORT 2009

ChAIRmAn’s STATEmENT

The Group reported an after tax loss of RM2.3 million for the fi nancial year ended 31 March 2009. The losses suffered during the year was mainly due to the reversal of a freehold land measuring approximately 27.53 acres which was formerly included in the disposal of 366 acres of freehold land by a subsidiary company to Jade Homes Sdn Bhd recognized in the fi nancial statements during the fi nancial year ended 31 March 2007 (“Reversal of Lot 5727”), further details of which are provided under Note 37 of the fi nancial statements. The Reversal of Lot 5727 resulted in a loss of RM6.9 million to the Group for the current fi nancial year.

BUSINESS OPERATIONS REVIEW

Apparel Segment

The apparel sector was turning in healthy numbers right up to end 2008, after which the effects of the sub prime crisis in the US started fi ltering in to the domestic economy. The eroding consumer confi dence was refl ected in our dwindling sales fi gures for the fourth quarter of our fi nancial year ended 31 March 2009.

With the many pre-emptive measures taken by the Group, we had managed to maintain our apparel sales at about last year’s level. EBIT for the apparel segment had however improved from RM4.6 million last year to RM5.4 million this year, refl ecting the fruits of our cost cutting and profi t enhancement strategies which were implemented since 2008.

Property Development and Construction Segment

During the fi nancial year under review, the 220 units at Kajang was fully completed with CF.

Revenue from the property development and construction segment recorded an increase in revenue from RM1.25 million in the previous year to RM3.8 million in the current year. The increase in revenue was attributable to the offi cial launch of the Jade Terraces homes during the third quarter of the fi nancial year.

Due to the softening property market sentiments, sales of the Jade Terraces homes was not as robust as we had hoped. There remain sizeable quantity of completed stocks houses for sale. The property development and construction segment registered a loss, mainly due to the Reversal of Lot 5727.