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Panasonic Manuacturing Malaysia Berhad (6100-K)
2009ANNUAL REPORT
or the fnancial year ended 31 March
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Cover rationale
The cover symbolises how we, the Panasonic Group
o Companies lead the way with eco ideas. As a
responsible corporate citizen, Panasonic greatly value
the conservation o our environment and is committed
to conducting business activities with minimal adverse
impact on the environment. We pledge to produce
energy-efcient products and strive or reduction o
CO2 emissions at our manuacturing sites. We also
encourage the spread o environmental conservation
activities throughout the world.
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Contents
2 Corporate Inormation
3 Chairmans Statement
7 Financial Highlights
7 Financial Calendar
8 Five-Year Trend
9 Five-Year Financial Smmary
10 Share Perormance
11 Board o Directors Profle
15 Statement on Corporate Governance
22 Adit Committee Report
26 Statement on Internal Control
30 Additional Compliance Inormation
31 Directors Report
35 Income Statements
36 Balance Sheets
37 Combined Entity Statement o Changes in Eqity
38 Company Statement o Changes in Eqity
39 Cash Flow Statements
41 Smmary o Signifcant Acconting Policies
49 Notes to the Combined Entity Financial Statements
68 Statement by Directors
68 Stattory Declaration
69 Independent Aditors Report
70 Statistics on Shareholdings
72 List o Properties Owned by the Company
73 Notice o 44th Annal General Meeting
74 Notice o Dividend Entitlement
Form o Proy
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Panasonic Manufacturing Malaysia Berhad (6100-K) 2
Corporate Inormation
BOARD OF DIRECTORS
Tan Sri Datuk Asmat bin Kamaludin (Chairman)
Naoya Nishiwaki (Managing Director)
Raja Dato Seri Abdul Aziz bin Raja Salim
Ramanaidu a/l Semenchalam
Soh Beng Kuan
Chen Ah Huat
Razman Hadz bin Abu Zarim
Nobuyuki Kochi
Datuk Supperamaniam a/l Manickam
Takeo Endo
AuDIT COMMITTEE
Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)(Independent Non-Executive Director)
Razman Hadz bin Abu Zarim
(Independent Non-Executive Director)
Datuk Supperamaniam a/l Manickam
(Independent Non-Executive Director)
REMuNERATION COMMITTEE
Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)(Independent Non-Executive Director)
Razman Hadz bin Abu Zarim
(Independent Non-Executive Director)
Nobuyuki Kochi
(Executive Director)
NOMINATION COMMITTEE
Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)
(Independent Non-Executive Director)
Razman Hadz bin Abu Zarim
(Independent Non-Executive Director)
Takeo Endo
(Non-Independent Non-Executive Director)
COMPANY SECRETARIES
Leong Oi Wah (MAICSA 7023802)
Pang Chia Tyng (MAICSA 7034545)
SOLICITORS
Shook Lin & Bok
Ramadass & Associates
REGISTRAR
Symphony Share Registrars Sdn Bhd
Level 26 Menara Multi-Purpose
Capital SquareNo. 8 Jalan Munshi Abdullah
50100 Kuala Lumpur
Tel : +603 - 2721 2222
Fax : +603 - 2721 2530 / 2721 2531
PRINCIPAL BANkERS
Bank o Tokyo-Mitsubishi UFJ (Malaysia) Berhad
Malayan Banking Berhad
AuDITORS
Jaar Hussein & Co.
Chartered Accountants
Kuala Lumpur
REGISTERED OFFICE
No. 3 Jalan Sesiku 15/2
Section 15
Shah Alam Industrial Site
40200 Shah Alam
Selangor Darul Ehsan
Tel : +603 - 5891 5000
Fax : +603 - 5891 5102
STOCk ExCHANGE
Main Board o Bursa Malaysia Securities Berhad
Sector : Consumer Products
Stock Code : PANAMY 3719
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Annual Report 20093
Dear Shareholders
On behal o the Board o Directors, I am pleased to
present the Annual Report and Annual Audited Financial
Statements o the Company or the nancial year ended
31 March 2009.Tan Sri Datuk Asmat bin Kamaludin
(Chairman)
Chairmans Statement
OVERVIEW
In 2008, the world suered rom the global nancial crisis and severe economic recession. This was a major setback or the
electrical and electronic industries which experienced a downturn in global demand. Amid this adverse condition o the operating
environment, the Company delivered a commendable perormance with sales growth or most o its products or the nancial year
ended 31 March 2009. The Company ocused its eort in strengthening and expanding the Companys businesses through cost
reductions initiatives and structural reorms in order to secure stable earnings and to sustain strong shareholders returns.
FINANCIAL REVIEW
For the nancial year ended 31 March 2009, the Companys revenue o RM600.9 million increased by RM38.4 million or 6.8% comparedwith RM562.5 million recorded in the previous nancial year.
The combined entitys prot beore taxation or the nancial year was recorded at RM60.8 million. This was however, RM4.1 million
or 6.3% lower than the previous nancial years combined entitys prot beore taxation o RM64.9 million mainly due to the gain rom
disposal o property amounting to RM3.5 million recognised in the previous nancial year.
With the prudent and steady cash fow management, the Company was able to maintain a solid cash position and strong Balance Sheet
against the market turmoil. The Company continues to develop strong returns or its stakeholders, in particular, maximising shareholders
wealth via dividend distribution.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 4
Chairmans Statement
ASSOCIATED COMPANY
Panasonic Malaysia Sdn Bhd recorded its consolidated revenue o RM1.4 billion or the nancial year ended 31 March 2009; an
improvement o 7.7% or RM0.1 billion over the previous nancial years consolidated revenue o RM1.3 billion. The pre-tax and post-tax
prots rom its group operations were RM29.1 million (2008: RM23.1 million) and RM22.3 million (2008: RM16.2 million) respectively. The
Companys share o its associated companys post-tax prot was RM8.9 million (2008: RM6.5 million).
DIVIDENDS
In respect o the nancial year ended 31 March 2009, the Board o Directors is pleased to recommend a nal dividend o 35 sen per
ordinary share and a special dividend o 55 sen per ordinary share less 25% income tax, payable on 18 September 2009. Together with
an interim dividend o 15 sen per ordinary share which was paid on 20 January 2009, this brings to total gross dividends o 105 sen per
ordinary share or the nancial year ended 31 March 2009.
OPERATIONS REVIEW
During nancial year under review, the Company made notable progress in its manuacturing activities, amongst others, strengthened
quality management, attained manuacturing innovation through various implementation on the production foor, continuous application
o cost reduction activities, enhancement o product development capability and realised eorts to reduce CO2 in manuacturing and
other acilities.
Product saety and quality underline the Companys determination to deliver a sense o security and satisaction in its products to all
Panasonics customers around the world. The Companys improved quality o products was through enhancement in Product Evaluation
System encompassing product development, design and manuacturing, implemented visualisation by alarm system and strengthened
suppliers quality control, aimed to promote prompt and transparent quality administration. At the same time, the Company also ensures
product saety by enhancing product designs, adhering strictly to Panasonics Saety Design Standard, regulatory requirements and
Restriction o Hazardous Substances (RoHS) compliance, and leveling-up its manuacturing abilities.
During the rst hal o nancial year, the Company aced steep price increase in raw materials. However, the Company was able to
cushion it with cost reduction initiatives by applying the Itakona concept especially during the early stage o product development.
Throughout the year, the Company had continuous price-down negotiations with suppliers and localisation o imported material parts in
order to achieve cost reduction targets. In addition, the Company implemented several in-house production projects this year to achieve
greater cost eciency and to improve quality o products. Signicant cost reduction has also been achieved through this exercise.
In urtherance o successul completion o the conveyorless and one piece fow production systems, the Company reconstructed its
assembly lines rom U and L shapes to a straight line concept in order to standardise the material supply fow and simpliy the product
model changing process. This new concept makes available space or installation o new assembly lines. The Company is working
relentlessly to bolster production lines geared towards achieving better production eciency.
In the enhancement o development capability, the Company concentrated on increasing manpower or the development unction,
urther upgrading o technical skills and knowledge o engineers through introduction o the Quality Stability Design Scientic Method
which is geared towards eciency at designing stage. The Company also relocated its prototyping and test acilities next to the Product
Development & Engineering Department to improve engineers productivity.
New evolutionary designs were developed in-house; such as the slim body and anti bacteria shower head or home showers, saety
cover eatures or blenders, remote control eatures or ceiling ans and tank type models or vacuum cleaners.
The production activities are strongly supported by aggressive marketing activities. The Company will continue to develop and produce
equatorial region oriented products with emphasis on sales especially to the Asian region. Collaboration activities with marketing arms
in Malaysia, Singapore and Hong Kong to capture a wider consumer market in the Asian region have proven to be successul. Besides
this, the Company also organised various sales promotional, marketing and advertising activities this year including sales conventions,
road shows and dealers workshops.
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Annual Report 20095
Chairmans Statement
The Company has through its eco ideas activities contributed to the prevention o global warming by implementing projects that help to
reduce CO2 emissions. Several awareness campaigns on energy eciency and recycling projects were initiated. The internal operations
have also been reviewed to improve energy eciency by reducing energy, uel and diesel consumptions in our daily operations which
have a direct impact on CO2 emissions. Concrete eorts taken included installation o inverters, reactive power energy savers and eco
power meters to heavy energy consuming machines, improvement o machine cycle time, replacement o high bay lamps with high
requency lamps and removal o unnecessary fuorescent tubes.
The Company also reormed its physical oce layout with the implementation o One Oce where all departments are relocated to be
adjacent to each other. This is to create a conducive oce environment under 6C Concept i.e. Communication, Cleaning, Convenient,
CO2 reduction, Comortable and Cost-saving.
As a responsible corporate citizen, the Company is committed to adopting best practices in all aspects o its business as guided by
Panasonic Code o Conduct issued on 1 October 2008. The Code refects the basic ideas o airness, honesty and a general concern
or people that determines all our actions in the course o enhancing shareholders value and customers satisaction. The Companys
emphasis is on transparency and good governance practices, as well as prudent nancial and operational decisions.
The Company will continue to strengthen employer-employee relationship by providing a conducive working environment and oering a
competitive compensation package through Perormance Linked Wage System and career development opportunities. In line with the
Companys strategy to create a bigger pool o potential leaders, the employees were provided with managerial and leadership programs
to keep their skills abreast with the Companys aspirations. The Company also nurtured its talented employees or uture leadership
positions under the newly enhanced Succession Planning Program. Under this program, the selected employees will be given the
opportunity to learn the Japanese Language in order to improve the communication with the headquarter and other divisional oces.
COMMITMENT TO CORPORATE RESPONSIBILITY
The Company continuously embeds corporate responsibility in every aspect o its business, making it an integral part o the Companys
DNA. It is essential to closely align the corporate responsibility agenda to the Company values, culture and strategy.
In collaboration with the Klang City Council, the Company was involved in engaging the community in Klang Town Clean-up Campaign
to cultivate greater awareness on the cleanliness and protection o our environment. Over 500 sta rom Panasonic Group o Companies
in Malaysia and Klang communities participated in this program.
At the same time, the Company continues to support its aliate companies in various corporate responsibility activities during the
nancial year such as Panasonic Eco Exhibition, Panasonic Scholarship, Marine Conservation Project at Marine Park at Redang Island,
adoption o an area in Perhentian Island and Kids Witness News education program or children.
ACHIEVEMENTS AND ACCOMPLISHMENTS
We are proud to announce that the Company was named as The Most Competitive Employer o the Year by the Ministry o Human
Resource. Our winning points were having manuactured a competitive range o electrical home appliance products and channelled
our sales worldwide, strengthening operational eciency through various innovation activities, good human resource development and
corporate responsibility practices. The award was presented by the Honourable Prime Minister, YAB Datuk Seri Najib Tun Abdul Razak
during National Labour Day Celebration at Putra Stadium, Bukit Jalil on 2 May 2009.
On 5 September 2008, a stylish celebration was held in conjunction with the 10 million sets production achievement o the Vacuum
Cleaner. This marked another milestone or the Company to progress urther and achieve the world class production excellence. We are
united in team spirit and ready to rise to the challenge.
On 23 June 2008, through continued eorts to reduce the environmental impact on its operations, the Company had been awarded
the Clean Factory Award 2008 by Panasonic Corporation, Japan Head Oce. On 2 December 2008, the Company received Innovation
Activity Highest Award rom Panasonic Ecology Systems Co. Ltd., Japan in recognition or its eort or cost reduction and quality
achievements o Fan Products o the Company.
We are also very pleased to inorm that or the 12th consecutive year, the Company had been awarded the prestigious Malaysia Good
Design Mark by Malaysia Design Council or various product categories. This year, another 4 home shower models and 2 ceiling an
models were accredited with Good Design Mark.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 6
Chairmans Statement
INDuSTRY OuTLOOk AND PROSPECTS FOR 2009
The current weak global and domestic economic condition and consumer demand is likely to prevail in 2009 and thus, we expect a
challenging year ahead or the Company. To overcome these main challenges, the Company will urther enhance its cost eectiveness,
improve business agility to steer the Company to the next level o operational eciency and ensure innovations in the manuacturing
process to meet the fexibility in demand and supply chain.
We are perceptive to the constant changes in the current market environment and will respond prudently and constantly to the voice o
customers in order to win, develop and retain our committed and loyal Panasonics customers. With this in mind, we aim or improving
our business perormance through customer communication and accelerating protable growth to enhance values or our shareholders,
customers and employees. We are condent that the steps that we are taking will place the Company in a stronger market leadership
position.
DIRECTORATE
The Board bade arewell to our ormer Director, Mr Hironori Otsuka who resigned on 29 April 2009 and recorded our sincere thanks and
appreciation to him or his invaluable guidance and contributions to the Company.
ACkNOWLEDGEMENT
On behal o the Management, I would like to express my proound gratitude to our stakeholders the Malaysian Government, our
shareholders, employees, regulators, business associates, customers and the media or the strong trust and consistent support
extended to the Company. My sincere appreciation also goes to our Board o Directors or their commitment and skills embedded in
the Companys perormance.
As we continue to grow and expand, we look orward to sharing our success in the years ahead with all our stakeholders.
Tan Sri Dat Asmat bin kamaldin
Chairman
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Annual Report 20097
Financial Highlights
Financial Data (Combined Basis)Year Ended
31 March 2009
Year Ended
31 March 2008
Turnover RM000 600,868 562,490
Prot beore taxation RM000 60,818 64,923
Prot ater taxation RM000 49,776 52,630
Percentage o turnover % 8.3 9.4
Return on shareholders unds % 8.3 8.7
Earnings per share sen 82 87
Dividend rate % 105 115
Dividend cover times 1.0 1.0
Shareholders unds RM000 602,315 604,932
Net assets per share RM 9.92 9.96
Total assets RM000 697,961 702,299
Capital expenditure RM000 18,098 17,900
Financial Year Ended 31 March 2009
Annoncement o Reslts
- First Quarter 21 August 2008
- Second Quarter 10 November 2008
- Third Quarter 19 February 2009
- Fourth Quarter / Annual 27 May 2009
Isse o 2009 Annal Report and Financial Statements 29 July 2009
44th Annal General Meeting 20 August 2009
Interim Dividend
- Notice o Dividend Entitlement 10 November 2008
- Entitlement Date 31 December 2008
- Payment Date 20 January 2009
Proposed Final and Special Dividends
- Notice o Dividend Entitlement 29 July 2009
- Entitlement Date 26 August 2009
- Payment Date 18 September 2009
Financial Calendar
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Panasonic Manufacturing Malaysia Berhad (6100-K) 8
Five-Year Trend
2005
702
Turnover / Export
(RM Million)
Earnings per share
(Sen)
Total Assets / Shareholders Funds
(RM Million)
Net assets per share
(RM)
Combined Entitys Profit/(Loss) After Taxation /
Net Dividends Paid/Proposed
(RM Million)
Employment
(Number of persons)
359
Turnover Export
322274 278 292
645
541562
601
847
697645
622 605 602
775736
702 698
-3
87
55
-5
59
77
8782
11.48
10.63 10.24 9.96 9.92
1,482
1,107 1,070
986960
2006 2007 2008 2009
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
2005 2006 2007 2008 2009
Earnings per share
Total assets Shareholders funds Net assets per share
Combined entitysprofit/(loss) after taxation
Net dividends Employment
53
6770
3647
4850
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Annual Report 20099
Five-Year Financial Summary
Financial Data (Combined Basis) 2005 2006 2007 2008 2009
INCOME STATEMENTS
Turnover RM000 702,208 644,872 541,115 562,490 600,868
Prot/(Loss) beore taxation * RM000 (41,431) 48,590 57,556 64,923 60,818
Prot/(Loss) ater taxation * RM000 (2,756) 35,554 46,589 52,630 49,776
Net dividends paid / proposed RM000 87,473 67,306 69,858 54,671 47,837
BALANCE SHEETS
Total assets * RM000 847,033 774,885 736,285 702,299 697,961
Share capital RM000 60,746 60,746 60,746 60,746 60,746
Shareholders unds * RM000 697,347 645,429 622,160 604,932 602,315
FINANCIAL RATIOS
Return on shareholders unds % (0.4) 5.5 7.5 8.7 8.3
Earnings per share sen (5) 59 77 87 82
Net assets per share RM 11.48 10.63 10.24 9.96 9.92
Dividend rate % 200 115 115 115 105
Dividend cover times 0.0 0.5 0.7 1.0 1.0
Note:
* In accordance with FRS 128 Investment in Associates, associates are accounted for using the equity method, which has
been applied retrospectively.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 10
Share Perormance
2008 2009
Apr May Jn Jl Ag Sep Oct Nov Dec Jan Feb Mar
High (RM) 11.80 12.00 11.90 11.70 11.80 11.90 10.70 10.60 10.50 10.50 10.60 10.50
Low (RM) 10.70 11.50 11.50 11.20 11.50 10.30 10.00 10.30 10.20 10.20 10.20 10.20
Closing Share Price (RM) 11.80 11.70 11.60 11.60 11.70 10.60 10.10 10.30 10.40 10.30 10.50 10.30
Lots Traded (100 shares) 2,412 3,308 2,553 4,486 3,510 8,572 12,413 2,217 2,578 3,715 3,787 3,510
6
7
Apr
Closing Share Price (RM)
May Jun Jul Aug
2008 2009
Sep Oct Nov Dec Jan Feb Mar
8
10
12
13
11
9
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Annual Report 200911
Board o Directors Profle
TAN SRI DATuk ASMAT BIN kAMALuDIN
Aged 65 . Ma laysian. Tan Sri Datuk Asmat is the Senior Independent Non-Execut ive Director and Chairman o the Board since
29 August 2001. Tan Sri Datuk Asmat obtained a Bachelor o Arts (Hons) Degree in Economics rom the University o Malaya in 1966 and
subsequently obtained a Diploma in European Economic Integration rom the University o Amsterdam in 1970. He had a distinguishedcareer with the Ministry o International Trade and Industry, Malaysia (MITI) or 35 years until his retirement as Secretary-General in
January 2001. Tan Sri Datuk Asmat also had wide exposure in both domestic and international trade sectors whilst at MITI. He served as
Economic Counsellor or Malaysia in Brussels and worked with international bodies such as ASEAN, WTO and APEC and was actively
involved in national organisations such as Johor Corporation, SMIDEC and MATRADE.
Currently, Tan Sri Datuk Asmat is the Group Chairman o UMW Holdings Berhad, Scomi Group Berhad, Symphony House Berhad,
Trans-Asi a Sh ippi ng Co rporat ion Be rh ad and Compugates Ho ld ings Be rh ad and is a Non-Execut ive Vi ce-Cha irman o
YTL Cement Berhad. He also s its on the Board o Malays ian Pac ii c Industr ies Berhad, Lion Indust ries Corporation Berhad,
Permodalan Nasional Berhad, The Royal Bank o Scotland Berhad and JACTIM Foundation. In 2008, he was appointed by MITI to
represent Malaysia as Governor on the Governing Board o The Economic Research Institute or ASEAN and East Asia.
Tan Sri Datuk Asmat has no shareholdings in the Company and its associated company. He also has no amily relationship with any
Director and/or major shareholder o the Company nor any confict o interest with the Company. He attended all the Board Meetingsheld during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.
NAOYA NISHIWAkI
Aged 50. Japanese. Mr Nishiwaki was appointed the Managing Director o the Company on 11 May 2007. Mr Nishiwaki graduated
with a Bachelor Degree in Industrial Engineering rom Osaka Preectural University in March 1981.
Mr Nishiwaki joined Panasonic Corporation (ormerly known as Matsushita Electric Industrial Co., Ltd.) (PC) in April 1981. He has
more than 28 years experience through various positions held in the production engineering, production control, procurement,
assembly, parts manuacturing and planning sections o the Vacuum Cleaner Division o Panasonic, Japan and USA between the
years rom 1981 to 2007.
Amongst the overseas job assignments, Mr Nishiwaki was the Manager o Panasonic Floor Care Company in USA rom 1990 to 1996
and the President o PCs Mexican subsidiary, Panasonic Home Appliances de Mexico, S.A. de C.V. Prior to joining the Company in
May 2007, Mr Nishiwaki was the President and Chie Operating Ocer o Panasonic Home Appliances Company o America. He was
recently appointed the Director o JACTIM Foundation.
Mr Nishiwaki has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director and/or
major shareholder o the Company nor any confict o interest with the Company. Mr Nishiwaki attended 3 out o 4 Board Meetings held
during the nancial year and he has no convictions or any oences within the past 10 years other than trac oences, i any.
RAJA DATO SERI ABDuL AzIz BIN RAJA SALIM
Aged 70. Malays ian. Raja Dato Ser i Abdul Aziz was appointed the Independent Non-Executive D irector o the Company on
1 April 2002. He is also the Chairman o the Audit Committee, Nomination Committee and Remuneration Committee o the Company.Raja Dato Seri Abdul Aziz is a Chartered Accountant and also an Honorary Fellow Member o the Chartered Tax Institute o Malaysia
(ormerly known as Malaysian Institute o Taxation), the Chartered Association o Certied Accountants UK, the Chartered Institute o
Management Accountants UK and Member o the Malaysian Institute o Accountants.
Raja Dato Seri Abdul Aziz began his service with the Malaysian Government as an accountant in 1965. He was appointed the
Deputy Accountant-General o Malaysia rom 1974 to 1979 and subsequently served as Director-General o Inland Revenue Board o Malaysia
or a period o over 10 years. Raja Dato Seri then held the position o Accountant-General o Malaysia rom 1990 and retired rom service
in 1994.
Raja Dato Seri Abdul Aziz currently holds directorships in Jerneh Asia Berhad, K & N Kenanga Holdings Berhad, Gamuda Berhad,
PPB Group Berhad, Southern Steel Berhad, Hong Leong Industries Berhad, Amanah Saham Mara Berhad, Jerneh Insurance Berhad,
Kenanga Fund Management Berhad (ormerly known as Kenanga Unit Trust Berhad) and Kenanga Investment Bank Berhad.
Raja Dato Seri Abdul Aziz has no shareholdings in the Company and its associated company. He also has no amily relationship with any
Director and/or major shareholder o the Company nor any confict o interest with the Company. Raja Dato Seri attended all the
Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences,
i any.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 12
Board o Directors Profle
DR. RAMANAIDu A/L SEMENCHALAM
Aged 58. Malaysian. Dr. Ramanaidu was appointed the Executive Director o the Company on 5 April 2004. He obtained his
Bachelor o Laws (LLB) in 1994 and Doctorate in Business Administration, majoring in Organisational Development in 2007. He joined
the Company in 1973 and has 36 years experience in the Human Resource and Industrial Relations unctions o the Company.Dr. Ramanaidu is a Council Member o Selangor Human Resource Development Centre (SHRDC), Federation o Malaysian Manuacturers (FMM),
Electrical Industry Employers Group (EIEG) and the Chairman o Panasonic Human Resource Managers Group in Malaysia.
Currently, he is responsible or the Human Resource and Corporate Aairs unctions o the Company. He also oversees the
Risk Management and Inormation Security Management unctions o the Company.
Dr. Ramanaidu has no shareholdings in the Company and its associated company. He has no amily relationship with any Director and/or
major shareholder o the Company nor any confict o interest with the Company. He attended all the Board Meetings held during the
nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.
SOH BENG kuAN
Aged 51. Malaysian. Ms Soh was appointed the Executive Director o the Company on 5 April 2004. She is an Associate Member o theMalaysian Institute o Chartered Secretaries and Administrators since 1994 and an Associate Member o the Institute o Internal Auditors
Malaysia since 2008. She is also a Certied Member o the Financial Planning Association o Malaysia. Ms Soh joined the Company in
February 1978 and has 30 years experience in nance and accounting unctions o the Company. She was also the Joint Company
Secretary o the Company rom 2004 to 2007. Currently, she is responsible or acilitating the risk management and management audit
unctions o the Company since October 2007.
Ms Soh has direct interest in 504 shares o the Company but has no shareholdings in the associated company. She has no amily
relationship with any Director and/or major shareholder o the Company nor any confict o interest with the Company. Ms Soh attended
all the Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac
oences, i any.
CHEN AH HuAT
Aged 49. Malaysian. Mr Chen was appointed the Executive Director o the Company on 5 April 2004. Mr Chen holds a Certicate
in Mechanical Engineering rom Polytechnic Kuantan in 1981. He joined the Company in 1981 and has 28 years experience in the
manuacturing operations o various home appliances products. Currently, he is responsible or the actory operation management and
procurement unctions o the Companys Home Appliances and Dry Battery Divisions. Mr Chen also oversees the Internal Audit unctions
o the Company.
Mr Chen has indirect interest in the shares o the Company by virtue o his spouses interest in 2,000 shares in the Company but has no
shareholdings in the associated company. He has no amily relationship with any Director and/or major shareholder o the Company nor
any confict o interest with the Company. Mr Chen attended all the Board Meetings held during the nancial year and has no convictions
or any oences within the past 10 years other than trac oences, i any.
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Annual Report 200913
Board o Directors Profle
RAzMAN HAFIDz BIN ABu zARIM
Aged 54. Malaysian. Encik Razman was appointed the Independent Non-Executive Director o the Company on 21 June 2004. He
is also a member o the Audit Committee, Nomination Committee and Remuneration Committee o the Company. Encik Razman
graduated with a Joint-Honours Degree in Economics and Accounting, BSc (Econ) rom University College, Cardi, University o Wales.He is a Chartered Accountant and is a Fellow Member o the Institute o Chartered Accountants in England and Wales and a Member
o the Malaysian Institute o Accountants.
Encik Razman has more than 31 years experience in the elds o auditing, mergers and acquisitions, corporate nance and management
consulting. He has worked with chartered accountancy rms in UK and Malaysia and was the Partner-in-charge o the Management
Consulting Practice o Price Waterhouse, Malaysia (now known as PricewaterhouseCoopers). In 1994, he established Norush Sdn Bhd,
an investment holding and business advisory rm where he is the Chairman. He is currently the Managing Director/Chie Executive
Oicer o Mithril Berhad and holds independent directorships in several public companies, namely Malaysian Oxygen Berhad,
eBworx Berhad, Yeo Hiap Seng (Malaysia) Berhad and J.P. Morgan Chase Bank Berhad.
Encik Razman has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director
and/or major shareholder o the Company nor any confict o interest with the Company. Encik Razman attended all the Board Meetings
held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.
NOBuYukI kOCHI
Aged 45. Japanese. Mr Kochi was appointed the Executive Director o the Company and a member o the Remuneration Committee on
28 June 2007. Mr Kochi graduated with a Bachelor Degree in Business Administration rom Kobe University in March 1986. He joined
PC, Japan in April 1986 and has held various positions in the Accounting Department o the Electronic Equipment Division,
Matsushita Industrial Equipment Co. Ltd. (MIECO) which was a subsidiary o PC rom November 1991 to February 1995.
Mr Kochi was posted to PCs subsidiary in UK, Matsushita Industrial Equipment Co. (U.K.) Ltd. as the Accounting General Manager in
February 1995 and also the Administration General Manager in April 1999. In April 2002, he was assigned as Assistant Councilor o
Headquarter Accounting Department in MIECO/PC. In February 2004, Mr Kochi joined the Human Resources Development Team o
Corporate Accounting Group, PC and was promoted to Councilor prior to joining the Company in June 2007. Mr Kochi has 23 yearsexperience in the accounting, administration and human resources unctions. Currently, he is responsible or the Finance, Inormation
Systems, Administration, Risk Management and Internal Audit unctions o the Company.
Mr Kochi has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director and/or
major shareholder o the Company nor any confict o interest with the Company. Mr Kochi attended all the Board Meetings held during
the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 14
Board o Directors Profle
DATuk SuPPERAMANIAM A/L MANICkAM
Aged 64. Malaysian. Datuk Supperamaniam was appointed the Independent Non-Executive Director o the Company and a member
o Audit Committee on 1 January 2008. Datuk Supperamaniam graduated with a Bachelor o Arts (Hons) Degree in Economics rom
University o Malaya in 1970. He joined the Malaysian Administrative and Diplomatic Service in October 1970 and was posted to theMinistry o International Trade and Industry, Malaysia (MITI) as Assistant Director. He served in the civil service or 33 years in various
capacities and held position as Deputy Secretary-General o MITI rom 1997 until his ocial retirement in March 2000.
In May 2000, he was appointed by the Government o Malaysia to be the Ambassador / Permanent Representative o Malaysia to the
World Trade Organisation in Geneva, Switzerland and held the posit ion until September 2003. Since his retirement rom public service,
he has been invited to participate as a resource person in workshops and conerences organised by United Nations agencies, regional
and international organisations and oreign governments. He has also been appointed to serve on several national committees o
the Government relating to trade and investment policy issues and negotations. He has been appointed recently a member o the Trade
Advising Council o Malaysia. Currently, he is the Independent Non-Executive Director o Shangri-La Hotels (Malaysia) Berhad and also
the advisor to the Federation o Malaysian Manuacturers on World Trade Organisation and Free Trade Agreement negotiations. Besides
the aoresaid, he also serves as an Adjunct Proessor to the International Islamic University o Malaysia and a Visiting Proessor o Macau
University o Science and Technology (Faculty o Law).
Datuk Supperamaniam has no shareholdings in the Company and its associated company. He also has no amily relationship with any
Director and/or major shareholder o the Company nor any confict o interest with the Company. Datuk Supperamaniam attended all
the Board Meetings held during the nancial year and has no convictions or any oences within the past 10 years other than trac
oences, i any.
TAkEO ENDO
Aged 52. Japanese. Mr Endo was appointed the Non-Independent Non-Executive Director o the Company and a member o
Nomination Committee on 1 April 2008. He graduated with a Bachelor o Economics rom Tohoku University, Japan in March 1979.
Mr Endo joined PC, Japan in April 1979 and had since gained wide experience in sales and marketing o Asia, Middle East and Europeanregions. In 1994, he was assigned to Panasonic UK Ltd as General Manager o Planning Department and was promoted to the Director
o Consumer Division in 1998. In 2002, he was appointed as the Chie Operating Ocer o Panasonic Deutschland GmbH and was
posted to the Corporate Marketing Division or Home Appliances o PC, Japan in January 2005. He has 29 years o experience in sales,
marketing and management unctions. He joined the Companys associated company, Panasonic Malaysia Sdn Bhd as the Director o
Consumer Marketing Division in June 2007 and assumed the position o Managing Director o Panasonic Malaysia Sdn Bhd with eect
rom 1 April 2008.
Mr Endo has no shareholdings in the Company and its associated company. He also has no amily relationship with any Director
and/or major shareholder o the Company nor any confict o interest with the Company. Mr Endo attended 3 out o 4 Board Meetings
held during the nancial year and has no convictions or any oences within the past 10 years other than trac oences, i any.
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Annual Report 200915
Statement on Corporate Governance
INTRODuCTION
The Board o Directors o the Company (the Board) recognises the importance o Corporate Governance in enhancing stakeholders
values, increasing investors condence and establishing customers trust whilst maintaining the stability and sustainability o the
Companys perormance.
The Board ully supports the implementation o an appropriate ramework to develop high standards o corporate governance throughout
the Company. The Companys governance ramework adheres to the principles and best practices o corporate governance as
prescribed by the Malaysian Code on Corporate Governance (the Code) which was ounded on core values such as accountability,
transparency, integrity and proessionalism.
This Statement on Corporate Governance highlights the application o the principles and best practices prescribed by the Code that
were adopted by the Company.
THE BOARD OF DIRECTORS
Board Composition, Board Sie and Balance
The Board being the decision-making body, leads and controls the Company. There is diversity among the Board, as the Board
comprises o members rom various elds including nance, marketing, legal and other proessions. This well-balanced pool o expertise
contributes towards making the Board eective and competent in discharging their duties and responsibilities.
The current Board comprises o 10 Members, o whom 5 are Non-Execut ive Direc tors (inc luding the Chairman) and 5 are
Executive Directors. The composition o the Board complies with Paragraph 15.02 o the Listing Requirements o Bursa Malaysia
Securities Berhad (Bursa Securities) that requires one-third o the board members to be independent directors as the Board presently
has 4 Independent Non-Executive Directors. The Independent Directors act independently rom Management and do not participate in
any business dealings that may impair their judgement and decision-making to ensure the highest standards o conduct and integrity
were maintained by the Company so as to saeguard the interests o various stakeholders.
The prole o each Director is summarised on pages 11 to 14 o the Annual Report.
Board Responsibilities
The Board has an overall responsibility or the internal control systems which include the nancial, operational, compliance and risk
management. The internal control systems are designed to manage the risk o ailure to achieve business objectives and provide
reasonable assurance against material misstatement or loss. The implementation and maintenance o the internal control systems are
the responsibility o the Executive Directors and the senior management o the Company.
The duties and responsibilities o the Chairman and the Managing Director are distinct and separate to ensure a balance o power and
authority. The Independent Non-Executive Chairman leads the Board to ensure it operates with highest level o integrity and always acts
in the best interest o the Company. The Managing Director is responsible or the ecient and eective management o the business
and ultimately accountable or implementing the policies/decisions in accordance with the corporate objectives and strategies approved
by the Board.
The Chairman o the Board, Tan Sri Datuk Asmat bin Kamaludin, is the Senior Independent Non-Executive Director to whom concerns
relating to the Company may be conveyed by shareholders and other stakeholders.
Directors Code o Ethics
The Board adheres to the Code o Ethics as set out in the Guidel ines on the Code o Conduct or Direc tors issued by the
Companies Commission o Malaysia and the Companys internal Guidelines on the Code o Conduct or Directors, Ocers and
Employees.
The Code o Ethics or Company Directors highlights, amongst others, the ollowing criteria that a director should observe in the
perormance o his duties:
HeshouldatalltimesactwithutmostgoodfaithtowardstheCompanyinanytransactionandtoacthonestlyandresponsiblyintheexercise o his powers in discharging his duties;
Heshouldbeconsciousoftheinterestsofshareholders,employees,creditorsandcustomersoftheCompany;
HeshouldensurethattheactivitiesandtheoperationsoftheCompanydonotharmtheinterestandwell-beingofsocietyatlarge.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 16
Statement on Corporate Governance
Meetings
The Board met 4 times during the nancial year under review to approve, amongst others, the quarterly and annual nancial results,
business strategies, strategic corporate plans and annual budgets, to review business perormance o the Company and to ensure the
proper internal control systems were in place. Due notice o issues to be discussed and the detailed meeting agenda were provided to
the Directors in a timely manner to ensure there is sucient time or the Board to read and understand the key issues to be deliberated
later. Both quantitative and qualitative inormation covering the nancial results, operations and internal controls o the Company were
provided to the Board to enable the Board to make inormed decisions.
The summary o attendance o the Directors or the Board Meetings held during the nancial year ended 31 March 2009 was as
ollows:
Name o Directors No. o Meeting Attended % o Attendance
Tan Sri Datuk Asmat bin Kamaludin 4/4 100
Naoya Nishiwaki 3/4 75
Raja Dato Seri Abdul Aziz bin Raja Salim 4/4 100Dr. Ramanaidu a/l Semenchalam 4/4 100
Soh Beng Kuan 4/4 100
Chen Ah Huat 4/4 100
Razman Hadz bin Abu Zarim 4/4 100
Hironori Otsuka (Resigned on 29.04.2009) 4/4 100
Nobuyuki Kochi 4/4 100
Datuk Supperamaniam a/l Manickam 4/4 100
Takeo Endo 3/4 75
All proceedings, del ibe rat ions and conclusions o the Board Meetings are clearl y recorded in the minutes o meet ings by the
Company Secretaries, conrmed by the Board and signed as correct record by the Chairman o the Meeting.
The Board also exercises control on routine matters that require the Boards approval through the circulation o Directors resolutions as
allowed under the Companys Articles o Association.
Spply o Inormation
The Board and its Board Committees have direct access to the senior management and has ull and unrestricted access to all inormation
relating to the Companys business aairs in discharging their duties.
In urtherance o their duties, the Directors also have access to the proessional advice and services o the Company Secretaries, who
are responsible or ensuring that the relevant rules and regulations are complied with. Besides, external independent proessional and
legal advisors are also made available to provide their independent views and advice to the Board, whenever necessary. The Directors,
whether as a ull board or their individual capacity, in urtherance o their duties, are empowered to take independent proessional advice
at the Companys expense. The Board will decide as a whole should any o its Directors needs to take advice rom the independent
proessional advisors.
Minutes o each Board Meeting are circulated to all Directors or their perusal prior to conrmation o the minutes at the ollowing Board
Meetings. The Company Secretaries attend all Board and Board Committees Meetings and ensures that accurate and proper records
o the proceedings o meetings and resolutions passed are properly kept at the registered oce.
The appointment and removal o the Company Secretaries is a matter o the Board as a whole.
Re-election
In accordance with the Companys Articles o Association, all Directors appointed by the Board are subject to retirement and re-election
by shareholders at the rst opportunity ater their appointment. The Articles o Association also provides that at least one-third o the
remaining Directors including the Managing Director, are subject to retirement by rotation at each Annual General Meeting (AGM).
All Directors shall retire rom oce at least once in every 3 years and shall be eligible or re-election.
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Annual Report 200917
Statement on Corporate Governance
Messrs Chen Ah Huat, Naoya Nishiwaki and Nobuyuki Kochi who are retiring pursuant to Article 97 o the Companys Articles o
Association and YM Raja Dato Seri Abdul Aziz bin Raja Salim who is retiring pursuant to Section 129 o the Companies Act, 1965 at
the orthcoming AGM scheduled to be held on 20 August 2009, have been recommended by the Nomination Committee and Board or
re-election or re-appointment to the Board.
Directors Training and Development
All Directors have completed the Mandatory Accreditation Programme requirement prescribed by Bursa Securities. During the nancial
year, the Directors have attended training programmes, seminars and briengs relevant to their unctional duties, which are as ollows:
Training Programmes / Seminars / Briefngs Attended Date Attended Dration
Tan Sri Dat Asmat bin kamaldin
ComplianceandEnforcementofBursaSecuritiesListingRequirements:Updates&Case
Studies
29.05.2008 day
ImportanceofStrategyExecution 10.06.2008 day
EffectiveChairmanship 19.06.2008 day
SCOMIGroupBerhadsin-houseDirectorstraining 18-19.07.2008 2 days RiskManagement:ChallengesandOpportunities 10.07.2008 day
DevelopingSustainableFutures 20.08.2008 day
C-Suite2009BudgetTaxPerspectives 09.09.2008 day
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Naoya Nishiwai
AsiaPacicSalesExpansionMeeting&ManufacturingInnovationConferenceinVietnam 07-08.07.2008 2 days
AsiaManagingDirectorQualityManagementSeminar 22-23.08.2008 8 hours
Panasonics90thAnniversaryBasicBusinessPhilosophySeminar 16.10.2008 day
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Raja Dato Seri Abdl Ai bin Raja Salim
GeneralOutlookonSoftCommoditiesandtheDistortionofFundsontheFundamentals
o Supply and Demand
16.09.2008 1 hour
ImportanceofITSecurity 16.09.2008 1 hours
LatestDevelopmentonTaxAuditsandTaxInvestigations 16.09.2008 1 hour
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Dr. Ramanaid a/l Semenchalam
7thAsiaPacicLegalNetworkEnhancement 16.10.2008 1 day
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Soh Beng kan
14thAsia&OceaniaAccountingConference 07.11.2008 1 day
ExecutiveSeminarofManagerialAccounting(ESMA)
[Strategic Management e-learning / Project Presentation (Japan)]
21.07.2008 -
12.12.2008
95 working
days
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Chen Ah Hat Eco-RelatedManufacturingDojo2006&2007Workshop7 28-29.07.2008 2 days
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Raman Hafd bin Ab zarim
InternationalOperationsBrieng&Update 09.04.2008 1 day
InternationalTradeCredits&Financing 29.06.2008 1 day
MergerofCoreOperationsBrieng 07.08.2008 day
InternationalTradeCurrenciesSeminar 16.08.2008 1 day
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Nobyi kochi
BoardRemunerationontheUpswing 22.04.2008 2 hours
14thAsia&OceaniaAccountingConference 07.11.2008 1 day
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day AccountingConferenceinJapan 13.02.2009 1 day
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Panasonic Manufacturing Malaysia Berhad (6100-K) 18
Statement on Corporate Governance
Training Programmes / Seminars / Briefngs Attended Date Attended Dration
Dat Spperamaniam a/l Manicam
GeneralOutlookonSoftCommoditiesandtheDistortionofFundsontheFundamentals
o Supply and Demand
16.09.2008 1 hour
ImportanceofITSecurity 16.09.2008 1 hours
LatestDevelopmentonTaxAuditsandTaxInvestigations 16.09.2008 1 hour
FinancialReportingStandard139:RecognitionandMeasurement 10.02.2009 day
Taeo Endo
2008SalesConvention
MandatoryAccreditationProgramforDirectorsofPublicListedCompany
InformationSecurityManagement&CartelPreventionSeminar
PanashopBreak-upSession
2009SalesConvention
02.04.2008
24-25.06.2008
03.03.2009
25.03.2009
26.03.2009
day
1 day
3 hours
day
day
BOARD COMMITTEES
The Board has established several Board Committees whose compositions and terms o reerence are drawn up in accordance with the
best practices prescribed by the Code. The unctions as well as authority delegated to the Board Committees are clearly dened in their
terms o reerence.
The Board Committees o the Company consist o the Audit Committee, Nomination Committee and Remuneration Committee. The
Chairman o the respective Board Committees reports the outcome o the Board Committee Meetings to the Board, and i required, urther
deliberations are made at Board level.
Adit Committee
The Audit Committee provides independent oversight o the Companys nancial reporting and internal control system to ensure compliance
with the statutory and accounting policy disclosures requirements and to maintain a sound system o internal control. A ull Audit Committee
Report enumerating its membership, terms o reerence and summary o activities is set out on pages 22 to 25 o the Annual Report.
Nomination Committee
The Nomination Committee comprises entirely o Non-Executive Directors with the majority being Independent Directors, which are as ollows:
No. Name Designation
1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman) Independent Non-Executive Director
2. Razman Hadz bin Abu Zarim (Member) Independent Non-Executive Director
3. Takeo Endo (Member) Non-Independent Non-Executive Director
Pursuant to the terms o reerence o the Nomination Committee, the main responsibilities o the Nomination Committee include:
reviewingthe Board composition andrecommendingnew nominees to theBoardaswell asBoardCommittees forthe Boards
consideration;
assessingandreviewingtherequiredmixofskills,experienceandother requisitequalities,includingcorecompetencies,whichthe
Non-Executive Directors should bring to the Board; and
assessingtheeffectivenessoftheBoardasawhole,theCommitteesoftheBoardandcontributionofeachDirector,includingthe
Independent Non-Executive Directors on an on-going basis.
On 28 May 2008, the Nomination Committee had reviewed the Boards size, composition, mix o skills, experience and qualities o the
Board and was satised that there is a balance o Executive Directors and Non-Executive Directors and the current Board composition is
eective in leading and controlling the Company. All the assessments and evaluations have been recorded in the minutes.
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Annual Report 200919
Statement on Corporate Governance
Remneration Committee
The current Remuneration Committee comprises o the ollowing members, the majority o whom are Independent Directors:
No. Name Designation
1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman) Independent Non-Executive Director
2. Razman Hadz bin Abu Zarim (Member) Independent Non-Executive Director
3. Nobuyuki Kochi (Member) Executive Director
At a meeting held on 22 May 2008, the Remuneration Committee made recommendation to the Board or an increase o Directors
ees payable to the Independent Non-Executive Directors or the nancial year ended 31 March 2009 to commensurate their level o
responsibilities. The remuneration packages o the Non-Executive Directors including the Non-Executive Chairman were determined by
linking their remuneration to their experience and level o responsibilities undertaken and is a matter o the Board as a whole. A new ee
has also been proposed or the Nomination Committee and Remuneration Committee members to refect the duties and responsibilities
o the aoresaid Committees.
Directors Remneration
The details o the remuneration o the Directors o the Company or the nancial year ended 31 March 2009 were as ollows:
DescriptionsEective Director
RM
Non-Eective Director
RM
Total
RM
Fees - 220,000 220,000
Meeting allowance - 18,000 18,000
Salary and other remuneration 3,427,360 - 3,427,360
Benets-in-kind (B.I.K.) 193,100 - 193,100
Total 3,620,460 238,000 3,858,460
Total (excluding B.I.K.) 3,427,360 238,000 3,665,360
The remuneration o the Directors or the nancial year ended 31 March 2009 in the respective bands o RM50,000 is as ollows:
Range o Remneration Eective Director Non-Eective Director Total
RM0 to RM50,000 - 1 1
RM50,001 to RM100,000 - 4 4
RM400,001 to RM450,000 3 - 3
RM650,001 to RM700,000 1 - 1RM750,001 to RM800,000 1 - 1
RM850,001 to RM900,000 1 - 1
With the increased level o responsibilities and risks involved, the Directors and senior ocers have since 2002 contributed jointly to the
premium o a Directors and Ocers Liability Insurance Policy in respect o their acts committed in their capacity as Directors and ocers
o the Company. However, the said insurance policy does not indemniy a Director or senior ocer or any oence or conviction involving
negligence, raud, dishonesty or breach o duty or trust.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 20
Statement on Corporate Governance
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
The key elements o good corporate governance are transparency and accountability to all stakeholders. Underlying this good
corporate governance is the communication o clear, relevant and comprehensive inormation which is timely and readily accessible by
all stakeholders. This is particularly important to shareholders and investors or inormed investment decision making. The means o
communication with stakeholders are as ollows:
Briefngs and Dialoges
The Executive Directors and Management conduct briengs and dialogues with both existing and potential shareholders, und managers,
institutional investors and investment analysts, upon request, to enable them to gain a better understanding o the Companys strategies,
major development, operational activities and nancial perormance to make inormed investment decisions. Nevertheless, inormation
is disseminated in strict adherence to the corporate disclosure requirements o Bursa Securities.
Annal General Meeting
The AGM o the Company is an important orum or communication and dialogue with shareholders where shareholders are given the
opportunity to seek clarications and raise questions on the agenda items o the meetings. During the Companys 43rd AGM held on
21 August 2008, the Shareholders were presented a corporate video encompassing inormation such as the Companys key nancial
highlights, operational activities, eco ideas activities, human resource development programme, corporate social responsibility activities,
prospects and outlook. Shareholders who are unable to attend are allowed to appoint proxies to attend, speak and vote on their
behal.
The Chairman and Managing Director are delegated with the authority to speak on behal o the Company to members o the Press ater
the adjournment o the AGM.
Pblications and Corporate Annoncements
The Annual Report o the Company is an important channel o communication to shareholders and investors. Eort is channelled to
enhance the contents o the Annual Report in line with best corporate governance practices. Shareholders, investors and members o
public can access to the Companys website at pmma.panasonic.com.my and Bursa Securitiess website at www.bursamalaysia.com
or the corporate, nancial and market inormation on the Company as well as the relevant announcements and releases o annual
reports, circulars to shareholders, quarterly nancial results and any corporate announcements made through Bursa Link.
ACCOuNTABILITY AND AuDIT
Financial Reporting
It is the continued commitment o the Board to provide a balanced, clear and meaningul assessment o the nancial position and uture
prospects o the Company in all quarterly nancial results and annual nancial statements to shareholders, investors and regulatory
authorities. The Board and Audit Committee scrutinise these reports and statements prior to ocial release to regulatory bodies to
ensure that they are accurate and present an objective assessment o the Companys aairs.
The Board is assisted by the Audit Committee to oversee the nancial reporting process and to ensure completeness, accuracy,
adequacy and quality o the nancial reporting.
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Annual Report 200921
Statement on Corporate Governance
Directors Responsibility Statement
The Directors are required by the Companies Act, 1965 to prepare nancial statements or each nancial year which give a true and air
view o the state o aairs o the Company and its associated company (the Combined Entity) at the end o the nancial year and o
their results and cash fow or the nancial year then ended.
In preparing the nancial statements, the Directors have:
consideredtheapplicablestandardsinMalaysiaforEntitiesOtherThanPrivateEntitiesasapprovedby theMalaysianAccounting
Standards Board.
adoptedandconsistentlyappliedappropriateaccountingpolicies.
madejudgmentsandestimatesthatareprudentandreasonable.
The Directors have responsibilities or ensuring that the Combined Entity keep accounting records that refect the accuracy o the
nancial position o the Combined Entity and which enable them to ensure that the nancial statements comply with the Companies Act,
1965, applicable approved accounting standards in Malaysia and the requirements o other relevant authorities.
The Directors have a general responsibility or taking such steps as are reasonably open to them to saeguard the assets o the
Combined Entity and to prevent and detect raud and other irregularities.
Internal Control
The Board, with the assistance o the Audit Committee, continues to review its internal control processes and procedures to ensure
as ar as possible, that it maintains adequate levels o protection over its assets and the shareholders investments. Details o the
Companys internal control system and the processes in place or the review o its eectiveness are set out in the Statement on Internal
Control on pages 26 to 29 o the Annual Report.
Relationship with Aditors
The Board via the Audit Committee has established a transparent relationship with the Companys External and Internal Auditors. The
Audit Committee has explicit authority to communicate directly with the External and Internal Auditors.
The External Auditors have close coordination with Internal Auditors to ensure that both audit groups maximise audit eciency by
enhancing overall audit coverage and avoiding any duplication o audit eorts.
The External Auditors have highlighted to the Audit Committee its ndings in respect o each years annual statutory audit and discussed
on the pertinent issues on the annual audited nancial statements or the nancial year under review. The External Auditors have also
reviewed the Internal Audit Plan and tailored their audit approach accordingly.
The Statement is made in accordance with the resolution o the Board o Directors dated 27 May 2009.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 22
Audit Committee Report
The Board o Directors o the Company (the Board) is pleased to present the Audit Committee Report or the nancial year ended
31 March 2009.
MEMBERSHIP AND MEETINGS
The composition o the Audit Committee has been revised to comprise only o Independent Non-Executive Directors. The members o
the Audit Committee and records o attendance o each member at Audit Committee meetings held during the nancial year ended
31 March 2009 are as ollows:
No. Name o Adit Committee Member No. o Meetings Attended
1. Raja Dato Seri Abdul Aziz bin Raja Salim (Chairman)
Independent Non-Executive Director
4/4
2. Razman Hadz bin Abu Zarim (Member)
Independent Non-Executive Director
4/4
3. Datuk Supperamaniam a/l Manickam (Member)
Independent Non-Executive Director
4/4
The current Aud it Committee comprises o 3 Independent Non-Execu tive Directors. The Cha irman o the Audi t Commit tee ,
Raja Dato Seri Abdul Aziz and also Encik Razman are Members o the Malaysian Institute o Accountants and hence, the Company
is in compliance with the requirements o Paragraph 15.10(1) o the Bursa Malaysia Securities Berhad (Bursa Securities) Listing
Requirements and Practice Note No. 13/2002, which requires at least 1 Member o the Audit Committee to be a qualied accountant.
The Audit Committee meets regularly on a quarterly basis. There were 4 Audit Committee Meetings held during the nancial year ended
31 March 2009 and the Company Secretaries were present at all the Audit Committee Meetings. The Managing Director, Executive
Directors, Finance General Manager, External Auditors and/or Internal Auditors were invited to attend the Audit Committee Meetings.
The minutes o each meeting was tabled to and noted by the Board . The Chairman o Audit Committee reports on the main
ndings and deliberations o the Audit Committee Meeting to the Board.
TERMS OF REFERENCE
The terms o reerence as revised and approved by the Board on 27 February 2008 are as ollows:
A. Composition o Adit Committee
The Audit Committee shall be appointed by the Board rom among its Members which ulls the ollowing requirements:
1. The Audit Committee must be comprised o not less than 3 Members;
2. All the Audit Committee Members must be Non-Executive Directors, with a majority o them being Independent Directors;
3. At least 1 Member o the Audit Committee:
(a) must be a member o the Malaysian Institute o Accountants (MIA);
(b) i he is not a member o the MIA, he must have at least 3 years working experience and have passed the examinations
specied in Part I o the 1st Schedule o the Accountants Act 1967 or must be a member o one o the associations o
accountants specied in Part II o the 1st Schedule o the Accountant Act 1967;
(c) must have a degree/masters/doctorate in accounting or nance and at least 3 years post qualication experience in
accounting or nance;
(d) must have at least 7 years experience being a Chie Financial Ocer o a corporation or having the unction o being primarily
responsible or the management o the nancial aairs o a corporation; or
(e) must have nancial-related qualications or experience that is approved by Bursa Securities.
4. The Audit Committee shall elect a chairman rom among its Members who shall be an Independent Director.
5. Alternate Director is not allowed to become a Member o the Audit Committee.
In the event o any vacancy in the Audit Committee resulting in non-compliance o Bursa Securities Listing Requirements, the Board
shall ll the vacancy within 3 months rom the date o vacancy.
The Board shall review, at least once every 3 years, the term o oce and perormance o the Audit Committee and each o its
Members to determine whether the Audit Committee and its Members have carried out their duties in accordance with their terms
o reerence.
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Annual Report 200923
Audit Committee Report
B. Qorm
A quorum shall consists o 2 Members present and a majority must be Independent Directors.
C. Meetings
The Audit Committee shall meet not less than 4 times a year. The Chairman o the Audit Committee at his discretion may convene
additional meeting o the Audit Committee i so requested by any Member, Internal Auditors or External Auditors to consider any
matter within the scope and responsibilities o the Audit Committee. Minutes o each Meeting shall be kept and distributed to each
Member o the Audit Committee and also to the Members o the Board. The Chairman o Audit Committee shall report on the
outcome o each Meeting to the Board.
The Directors, executive ocers, representatives o the External Auditors and/or Internal Auditors may attend the meetings upon the
invitation o the Audit Committee. The Audit Committee holds meetings with the External Auditors without Managements presence
at least twice per year to discuss key concerns and obtain eedback on the state o internal controls.
D. Secretary to Adit Committee
The Secretary to the Audit Committee shall be the Company Secretary.
E. Athority
The Audit Committee in discharging its duties shall have explicit authority to investigate any matters within its terms o reerence.
The Audit Committee shall have ull and unrestricted access to relevant inormation, be empowered to obtain such independent
proessional advice and to secure the attendance o persons having special competencies as necessary to assist the Audit Committee
in ullling its responsibilities.
F. Dties and Responsibilities
In ullling its primary objectives, the Audit Committee shall undertake the ollowing duties and responsibilities and report the sameto the Board or approval:
Financial Reporting and Compliance
1. To review the quarterly results and annual audited nancial statements o the Company, prior to the approval o the Board
ocusing particularly on:
(a) changes in or implementation o new accounting policies and practices;
(b) signicant and unusual events;
(c) compliance with applicable approved accounting standards and other legal or regulatory requirements; and
(d) going concern assumption.
2. To review all related party transaction, as submitted by Management and any confict o interest situation that may arise within
the Company, including any transaction, procedure or course o conduct that raises question o management integrity;
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Panasonic Manufacturing Malaysia Berhad (6100-K) 24
Audit Committee Report
Risk Management and Internal Audit
3. To consider and approve Annual Risk Management Plan and be satised that the methodology employed allows the
identication, analysis, assessment, monitoring and communication o risks in a regular manner that will allow the Company to
minimise losses and maximise opportunities;
4. To consider and approve the Annual Internal Audit Plan and programme and be satised as to the adequacy o coverage and
audit methodologies employed;
5. To ensure that the system o internal control is soundly in place, eectively administered and regularly monitored and to review
the extent o compliance with established internal policies, standards, plans and procedures;
6. To review and approve the reports on internal audit and risk management and to ensure that appropriate actions are taken on
the recommendations o the internal audit and risk management unctions;
7. To recommend to the Board steps to improve the system o internal control derived rom the ndings o the Internal Auditors
and External Auditors and rom the consultations rom the Audit Committee itsel;
8. To review the adequacy o the scope, unctions, competency and resources o the internal audit unctions and that it has the
necessary authority to carry out its work;
9. To review any appraisal or assessment o the perormance and to approve any appointment, resignation or termination o
Internal Auditors and senior members o the internal audit unctions and inorm itsel o any resignations and reasons thereo;
Statutory Audit
10. To review and discuss with the External Auditors, prior to the commencement o audit, the audit plan which states the nature
and scope o the audit;
11. To review any matters concerning the appointment and re-appointment, audit ees and any questions o resignation, dismissalor removal o the External Auditors;
12. To review actors related to the independence and objectivity o External Auditors and their services including non-statutory
audit services;
13. To discuss on ndings, problems and reservations arising rom the interim and nal statutory audits, External Auditors Audit
Committee Report and any matters the External Auditors may wish to discuss as well as to review the extent o cooperation
and assistance given by the employees o the Company to the External Auditors;
Other Matters
14. To review the Statement o Internal Control and to prepare the Audit Committee Report or the Boards approval prior to
inclusion in the Annual Report;
15. To consider such other matters as the Audit Committee considers appropriate or as authorised by the Board.
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Annual Report 200925
Audit Committee Report
INTERNAL AuDIT FuNCTIONS
The internal audit unction is outsourced to a consulting rm whose main role is to undertake independent and systematic review o the
system o internal controls so as to provide independent assurance on the adequacy and eectiveness o risk management, internal
controls and governance process o the Company.
The Internal Auditor has no line o responsibility or authority over any operational or administrative unction and is independent o
the activities it audited. The Internal Auditors had issued and presented 4 internal audit reports and a ollow-up audit report to the
Audit Committee. The proessional ees incurred or the Internal Audit unctions in respect o the nancial year ended 31 March 2009
amounted to RM73,500.00.
SuMMARY OF ACTIVITIES
In line with the terms o reerence o the Audit Committee, the ollowing activities were carried out by the Audit Committee during the
nancial year under review:
1. Review o the unaudited quarterly results and perormance o the Company;
2. Review o the drat Statutory Financial Statements o the Company or the nancial year ended 31 March 2008 and recommended
to the Board or approval;
3. Discussion on disclosure requirements pursuant to the new accounting standards and Bursa Securities Listing Requirements;
4. Discussion on the External Auditors Report to the Audit Committee or the nancial year ended 31 March 2008 and the
Annual Audit Plan or the nancial year ended 31 March 2009;
5. Meetings with the External Auditors without Managements presence twice a year to discuss on key concerns and obtain eedback
on the state o internal controls.
6. Reviewed and recommended to the Board non-audit services provided by the External Auditors and its aliates which included the
training on Financial Reporting Standard 139: Recognition & Measurement, review o Statement on Internal Control and provision
o tax advisory services;
7. Review o the state o internal control o the Company and extent o compliance with the established policies, procedures and
statutory requirements;
8. Assessment o perormance and competency o the internal audit unction;
9. Discussion on the revision to the review procedures or recurrent related party transactions o a revenue or trading nature;
10. Review o the drat circular to shareholders in relation to recurrent related party transactions o a revenue or trading nature;
11. Review o 4 risk management reports and risk management plan or the nancial year ended 31 March 2009 and discussion on the
inherent risk o the relevant business processes/units with highlights on key business risks, their causes and management action
plans as well as the status o implementations;
12. Review o the scope o the Internal Audit Plan 2008/2009 and the corresponding ee charged;
13. Review o 4 Internal Audit Reports with recommendations by the Internal Auditors, Managements response and ollow-up actions
taken by the Management and monitoring the same with the Internal Auditors;
14. Review o the Statement on Internal Control and Audit Committee Report prior to the Boards approval or inclusion in the Companys
Annual Report 2008; and
15. Made recommendations to the Board on the re-appointment o the External Auditors.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 26
Statement on Internal Control
BOARD RESPONSIBILITIES
The Board o Directors o the Company (Board) recognises the importance o maintaining a sound system o internal control to
saeguard shareholders interests and the Companys assets. The Board arms its overall responsibility or the Companys system o
internal control and risk management, and or reviewing the adequacy and integrity o these systems. This process is regularly reviewed
by the Board and accords with the guidelines or directors on internal control, the Statement on Internal Control: Guidance or Directors
o Public Listed Companies; as required by Paragraph 15.27 o the Bursa Malaysia Securities Berhads (Bursa Securities) Listing
Requirements.
The Board has established an on-going process o identiying, evaluating and managing the signicant risks aced by the Company
which includes reviewing and improving the system o internal controls in line with changes in the operating and business environment.
Due to the limitations inherent in any system o internal control, such systems, however, are designed to manage rather than to eliminate
the risk o ailure to achieve the Companys business objectives and can only provide reasonable but not absolute assurance against
material misstatement or loss.
kEY INTERNAL CONTROL PROCESSES
The key processes that have been established in reviewing the adequacy and integrity o the system o internal control include the
ollowing:
TheExecutiveDirectorsassisttheBoardinensuringthattheCompanysdailyoperationsareperformedinaccordancewiththe
corporate objectives, strategies and the annual budget as well as the policies and business directions that have been approved.
The Executive Directors also ormulate strategies on an on-going basis and address issues arising rom changes in both the external
business environment and internal operating conditions.
The Internal Audit unction in the Company that is outsourced to Les Consulting Sdn Bhd (Ls) provides an independent,
objective assurance and consulting activity, which assists the Company in achieving its objectives. The unction evaluates the
eciency o risk management, the internal control system, and governance process and highlights signiicant indings in
respect o any non-compliance with policies and procedures. Audits are carried out on all major operational and unctional businessunits determined by the risk level o each unit. The Internal Audit unction conducts its audits according to an internal audit plan
approved by the Audit Committee.
Internal audit activities carried out during the nancial year under review included audits on the Companys security management
system, sub-contractors controls, Parts Manuacturing Departments operational process and procedures controls and
Fan Departments inventory control and procurement management. During the year, the Internal Auditors also conducted ollow-
up audits on review o controls over sales and collection unction, inventory audit on raw materials, ater sales support service
parts control and sales o scrap management system to ensure that recommendations or improvement that has been agreed by
management were implemented. The internal audit reports and the annual internal audit plan are reviewed and approved by the
Audit Committee and noted at the quarterly Board Meetings.
The outsourced riskmanagement functionby the independentconsultingrm,Ls,assiststheBoardto oversee the overall
management o principal areas o risk o the Company. The risk management reports and the annual risk management plan are
reviewed and approved by the Audit Committee and noted at quarterly Board Meetings.
The risk management activities undertaken by Ls or the nancial year under review included risk assessment on research and
development unction, market sustainability o growth, outbound logistics management and quality control.
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Annual Report 200927
Statement on Internal Control
The Companys risk management ramework (Framework) is in place to ensure a continuous process o identiying, evaluating,
monitoring and managing the signicant risk exposures inherent in the Companys business operations and to gain strategic
competitive advantage rom its risk management capabilities. The ollowing outlines the principal risk management and control
responsibilities:
i) The Board is ultimately responsible or the management o risks. The Board delegates to the Managing Director the responsibility
or ensuring eective implementation and maintenance o risk management ramework assisted by the Risk Management
Working Committee (RMWC).
ii) The RMWC has the overall responsibility to oversee the risk management activities and assists the Managing Director to ensure
the eective implementation o risk management ramework across the Company. During the inancial year under review,
2 meetings were held by the RMWC to reinorce risk management understanding.
iii) The Heads o Departments, being the rst line deense against risk, have the primary responsibility and accountability or the
active management o risks emanating rom the respective business activities and to ensure that corrective actions on reported
weaknesses are undertaken within an appropriate time rame.
The Company conducts annual risk sel-assessment o its various business risks and makes countermeasures or any major risks
identied in line with the continuous process. This assessment is monitored by the regional oce, Panasonic Asia Pacic Pte Ltd (PA).
On 21 May 2009, a brieng by PAs legal representative to the RMWC was conducted to enhance risk awareness and
understanding.
The in-houseCorporateRisk& Audit(CRA)Departmentassists theRMWCto strengthenthemanagementcontrolsystemby
highlighting any inherent weaknesses in the current internal control systems and to make recommendations or improvement. During
the year under review, CRA Department conducted the ollowing audits covering home shower order control system, eectiveness o
sales promotion and advertising expenses system and eectiveness o Vendor Managed Inventory (VMI) system. In the course o audit,
CRA Department has recommended and enhanced the rule or service parts management, purchasing management regulations,
rule or scrap management and rule or VMI system to urther strengthen the Companys management control systems.
CRA Department also acilitated the RMWC to implement Enterprise Risk Management (ERM) since August 2008. During theperiod under review, risk scorecards were established or Human Resource unction, Environmental Management unction, Product
Engineering unction and Product Development and Engineering unction. The implementation o ERM in stages or all operational
units ensures a uniorm application o risk management across the Company through standardised risk management processes and
company-wide exchange o risk inormation.
TheAuditCommitteeassiststheBoardtoreviewtheadequacyandintegrityofthesystemofinternalcontrolandtoensurethat
an appropriate mix o techniques is used to obtain the level o assurance required by the Board. The Audit Committee reviews the
internal control issues identied by the Internal Auditors, the External Auditors, regulatory authorities and management, and evaluate
the adequacy and eectiveness o the risk management and internal control systems. The Audit Committee also reviews the Internal
Audit unctions with particular emphasis on the scope o audits and the competency as well as perormance. The minutes o the
Audit Committee Meetings are circulated and tabled at each Board Meeting on a quarterly basis.
On 31 March 2009, members o the Audit Committee attended the Companys 2009 Annual Policy Announcement to clearly
understand the Companys business direction and key management initiatives. Further details o the activities undertaken by the
Audit Committee are set out in the Audit Committee Report.
Allmajor issues thatrequiredBoardsapprovalwere reviewedby theManagingDirectorandExecutiveDirectorsin theweekly
Directors Meeting. Issues with strategic, nancial, legal and operational implications were discussed in detail beore tabling to the
Audit Committee and subsequently to the Board or deliberation and approval.
Management Committees have also been established with appropriate empowerment to ensure effective management and
supervision o the Companys core areas o business operations. These committees include the RMWC, the Inormation Security
Management (ISM) working committee and Cost Buster committee.
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Panasonic Manufacturing Malaysia Berhad (6100-K) 28
Statement on Internal Control
Operationalandperformance issues foreachproductarereported anddiscussedat theMonthlyOperationMeetings,Factory
Management Review Meetings, Quality Assurance Review Meetings and Cost Innovation Meetings attended by the Top Management
and Senior Management o the Company. Comprehensive management accounts and reports are prepared monthly or eective
monitoring and decision-making. The monitoring o perormance variances are ollowed up and management actions are taken to
rectiy any deviations on a timely and eective manner.
TheCompanysannualbusinessplanswhicharepreparedbyeachbusinessunitandallfunctionaldepartmentsarereviewedand
approved by the Executive Director and Managing Director.
AnOrganisational structurewithclearlydened linesof responsibility, delegationofauthority and accountabilityaligned tothe
business and operations requirements.
TheproperlydocumentedcompanysRulesandRegulationsincorporatedcontrolprocedures,andthesamewillbereviewedand
updated rom time to time. The Companys updated rules, regulations and manuals are maintained in the Companys in-house
database accessible by all authorised and intended users.
TheCompanyhasreinforceditssecuritymeasuresinaccordancewiththePanasonicCorporationsGlobalISMPolicythataimsto protect inormation based on global standards so as to saeguard the condentiality and integrity o the Companys strictly
condential and condential inormation against internal and external threats. During the nancial year under review, various security
enhancement activities were carried out such as installation o CCTV at new strategic locations, implementation o desktop users
le encryption by using sae boot le encryptor, surveys on PC server and clients PC, conducting 2 ISM e-Tests or all e-mail users
and implementation o Web-based Sel-Assessment Checksheet (e-SAC) to promote understanding o ISM technical inormation
protection guidelines in line with regional oce ISM promotion activities.
Properguidelinesforhiringandterminationofemployees,formaltrainingprograms,annualandsemi-annualperformanceappraisals
and other relevant procedures are in place to ensure that employees are competent and adequately trained to carry out their
respective roles and responsibilities.
TheComplianceGuidebookwhichhasbeencustomisedinaccordancewiththeMalaysianlawsandregulationsprovidesguidance
on compliance policies relating to relevant laws and business ethics, ISM, basic contracts principles, intellectual property, internationaltax issues, bribery, customs regulations and export (trade) controls. In November 2008, an employees compliance survey was
conducted to assess the level o employees awareness and compliance with laws, regulations and business ethics at the individual
workplace. Employees were also brieed on the importance o compliance in the Companys 2009 Annual Policy Announcement on
31 March 2009.
Declarationbyallemployeesof theCompanyonnewPanasonicCodeofConduct,LetterofUndertakingsanddeclarationon
confict o interest govern the standard o conduct and prohibit improper behaviours. Breach o the Code o Conduct is actionable
by disciplinary proceedings.
COMPLIANCE WITH THE SARBANES-OxLEY ACT 2002
The ultimate holding company, Panasonic Corporation (PC) as the registrant o the U.S. Securities and Exchange Commission is, on a
group basis, required to comply with the provisions o the Sarbanes-Oxley Act 2002 (SOA), with a signicant ocus on int