LUSTER INDUSTRIES BHD - Announcements - Bursa Malaysia

LUSTER INDUSTRIES BHD
156148-P
ANNUAL REPORT 2004

Contents
2
3
4
7
12
13
17
19
20
22
23
28
29
30
31
32
33
35
36
37
38
40
65
67
69
71
73
Corporate Information
Group Structure
Chairman’s Statement
Directors’ Profile
Financial Highlights
Statement On Corporate Governance
Statement On Internal Control
Audit Committee Report
Terms Of Reference
Other Information
Directors’ Report
Statement By Directors And Statutory Declaration
Report Of The Auditors To The Member
Consolidated Balance Sheet
Consolidated Income Statement
Consolidated Statement Of Changes In Equity
Consolidated Cash Flow Statement
Balance Sheet
Income Statement
Statement Of Changes In Equity
Cash Flow Statement
Notes To The Financial Statements
List Of Properties
Analysis Of Shareholdings
Notice of Annual General Meeting
Statement Accompanying Notice of Annual General Meeting
Proxy Form

02
BOARD OF DIRECTORS
CORPORATE INFORMATION
Encik Abdul Gafoor @ Abdul Gafoor Khan Executive Chairman
Mr. Lim See Chea Managing Director
Mr. Lim See Hua Deputy Managing Director
Mr. Chiang Chong Kooi Executive Director
Mr. Hang Kok Long Executive Director
Mr. Fong Swee Hin Executive Director
Tunku Dato' Dr Ismail Bin Tunku Mohammad Jewa Independent Non-Executive Director
Tengku Sepachendra Tengku Abdul Rashid Independent Non-Executive Director
Mr. Chatar Singh A/L Santa Singh Independent Non-Executive Director
AUDIT COMMITTEE
Tengku Sepachendra Tengku Abdul Rashid Chairman
Tunku Dato' Dr Ismail Bin Tunku Mohammad Jewa Member
Mr. Chatar Singh A/L Santa Singh Member
Mr. Fong Swee Hin Member
COMPANY SECRETARY
Lam Voon Kean (MIA 4793)
BUSINESS OFFICE
Lot 58 & 59, Bakar Arang Industrial Estate
08000 Sungai Petani,
KEDAH
REGISTERED OFFICE
Suite 2-01, 2 nd Floor
Menara Penang Garden
42A, Jln Sultan Ahmad Shah
10050 PENANG
Tel : 04-229 4390
Fax : 04-226 5860
SHARE REGISTRAR
AGRITEUM Share Registration Services Sdn Bhd
(578473-T)
2nd Floor, Wisma Penang Garden
42, Jalan Sultan Ahmad Shah
10050 PENANG
Tel : 04-228 2321
Fax : 04-227 2391
AUDITORS
KPMG (Firm No. AF 0758)
Chartered Accountants
1 st Floor, Wisma Penang Garden
42, Jalan Sultan Ahmad Shah
10050 PENANG
PRINCIPAL BANKERS
Public Bank Berhad (6463-H)
Bumiputra-Commerce Bank Bhd (134941-P)
United Overseas Bank (Malaysia) Bhd (271809-K)
RHB Bank Berhad (6171-M)
Malayan Banking Berhad (3813-K)
STOCK EXCHANGE
Bursa Malaysia Securities Berhad (30632-P)
Main Board

LUSTER
INDUSTRIES
BERHAD
(156148-P)
100%
100%
100%
51%
100%
100%
51%
51%
100%
80%
LUSTER
MANUFACTURING
SDN BHD
(185405-D)
LUSTER PRECISION
ENGINEERING SDN BHD
(243754-V)
LUSTER
PLASTIC INDUSTRIES
SDN BHD
(245695-U)
LUSTER
CHI WO SDN BHD
(401840-P)
DEMAND
PORTFOLIO SDN BHD
(446311-P)
LUSTER
ELECTRONICS (M)
SDN BHD
(520661-U)
PT LUSTER
INDONESIA
49%
LUSTER
NAKAZAWA R&D
SDN BHD
(476771-X)
MATURE STEP
INTERNATIONAL LIMITED
(610400)
MCTRONIC
INDUSTRIES SDN BHD
(510557-M)
100%
70%
100%
100%
GROUP STRUCTURE
MILLENNIUM
ENVIRONMENT
(ASIA PACIFIC) PTE LTD
(200501655W)
LUSTER SEWEON
SDN BHD
(628869-X)
LINPOWER RESOURCES
SDN BHD
(273055-K)
MCTRONIC PLASTIC
SDN BHD
(678388-P)
100%
03
MEA ENVIRONMENT
(ASIA PACIFIC)
PTE LTD
(200502269M)

04
Financial Review
CHAIRMAN’S STATEMENT
In year 2004, the Group recorded a profit after tax and
minority interest of RM1.07 million on a revenue of
RM130.992 million compared to RM12.17 million on a
revenue of RM145.19 million in year 2003. There were
three factors that contributed to the lower profit after tax
and minority interest:
Steep petrol price hike in 2004 affected the cost structure
of the audio-visual products. Audio-visual customers
resorted to lowering the value add of audio-visual
products to commensurate with the generation of sales
to their world wide market.
Within the context of the Group diversification exercise,
Luster has re-structured its operation to reserve its
capacity and resources for the new ventures and projects
which are expected generate revenue in 2005. Operating
expenses incurred during the year for these new ventures
and projects were consolidated into the financial
performance under review.
Dear Shareholders,
On behalf of the Board of Directors
of Luster Industries Berhad ("LIB"),
I have pleasure in presenting to
you the Annual Report and the
Audited Financial Statements of
the Company and of its group of
companies for the year ended 31
December 2004.
The foreign exchange loss of approximately RM1.33
million resulting from the translation of accounts in PT.
Luster Indonesia has also contributed to the decrease
in the financial performance for the year.
With its innovative and sound operational management,
the Group is able to maintain its leadership position as
a one-stop manufacturing solution in the market. The
Group has also put in place strategies to move forward
with its new ventures and projects which will generate
new flow of income and profitability.
Dividend
The board of directors put forth a final dividend of 1%
less 28% tax for the financial year ended 31 December
2004.

Corporate Events Review
Joint Venture with Seweon Elec Mach Ind Co. Ltd
(Korea)
On 12 March 2004, Luster Precision Engineering Sdn
Bhd, a wholly owned subsidiary of LIB, entered into a
joint venture agreement with Seweon Elec Mach Ind Co
Ltd to incorporate a joint venture company, Luster Seweon
Sdn Bhd ("LSSB"). The principal activity of LSSB is
designing, developing, and manufacturing of mechanical
timers, select switches and synchronous motors for
household electrical appliances. It is part of the Group's
strategy to become an Original Design Manufacturer
(ODM).
High Tonnage Injection Moulding Machines
Investment
During the year ended 2004, Luster Plastic Industries
Sdn Bhd ("LPI"), a wholly owned subsidiary of LIB, has
invested approximately RM15 million into high tonnage
injection moulding machines, land and buildings. The
purpose of the investment is for the Group to penetrate
into the automotive and waste management industry.
The Board Of Director expects the investment to generate
high value added activity and contribute positively to the
Group's result in second half of year 2005.
Set Up Subsidiaries In Singapore
In February 2005, Luster Manufacturing Sdn Bhd, a
wholly owned subsidiary of LIB, incorporated 2
subsidiaries in Singapore, Millennium Environment (Asia
Pacific) Pte Ltd ("MEPL") and MEA Environment (Asia
Pacific) Pte Ltd ("MEA"). MEA is the 100% subsidiary
of MEPL. The principal activity of MEPL is investment
holding whereas the core business of MEA is environment
solution provider which focuses on manufacture and
distribution of mobile garbage bins, medical sharp boxes,
waste equipment and design of environment infrastructure
facilities. MEA has successfully penetrated into the
market of Kuwait, Australia and the Asia Pacific Region.
CHAIRMAN’S STATEMENT (Cont’d)
Acquisition of Mctronic Industries Sdn Bhd. and
Mctronic Plastic Sdn Bhd (Johore)
On 27 January 2005, LIB had acquired an 80% owned
subsidiary, Mctronic Industries Sdn Bhd ("MISB"), a
company based in Johore, Malaysia. The principal activity
of MISB is dealing in electronic products assembly. On
6 April 2005, MISB acquired a wholly owned subsidiary
Mctronic Plastic Sdn Bhd ("MPSB"). The intended
principal activity of MPSB is manufacturing and dealing
in plastic products. The above acquisitions are for LIB
future expansion into manufacturing and dealing in plastic
products in the Southern Region of Peninsular Malaysia.
Future Development and Challenges
The Board of Directors adopted an aggressive approach
towards the future of the Group in 2005. The Group
remains focused on its core competencies but has timed
and implemented steps to extend its reach to new markets
to enhance its profitability. Despite the high petrol and
material price, the Group maintains the ability to ally to
new markets. The Board has made inroads to the
following markets:
Waste Industry
LPI signed an agreement with Otto Waste Pte Ltd (wholly
owned subsidiary of Otto Germany) on 15 Oct 2004 as
the sole manufacturer for the mobile garbage bins for a
period of 5 years with an option to extend for a further
5 years. Otto guarantees a minimum revenue of RM10
million per annum for the period of the agreement. The
market covers the entire Asia Pacific region. The
investment in high tonnage machines was made in view
of this agreement. This investment provided the Group
with a platform to penetrate into the automobile market
as well as washing machine market in the Northern
Region. The Board extended the business scope in the
waste industry by incorporating MEPL and MEA in
February 2005 to have distribution rights for mobile
garbage bins, medical sharp boxes, waste equipments
and to provide consultancy for the construction of
environment infrastructure facilities.
The waste industry is an infant market in Asia Pacific
compared to Europe and the United States. The business
arrangement with Otto allows the Group to tap into an
established networking system in the Middle East,
Australia and elsewhere to penetrate into the waste
market in the shortest possible time. The Group expects
the investment in LPI to contribute positively in 2005.
05

06
CHAIRMAN’S STATEMENT (Cont’d)
Household and Office Equipment Products
The joint venture company, LSSB, is the sole supplier
of mechanical timers, for Daewoo Korea. The entire
Research and Development technology of Seweon Elec
Mach Ind Co Ltd has relocated to Sungai Petani under
LSSB. LSSB will be supplying to Daewoo Korea and
Daewoo Sungai Petani in 2005. LSSB intends to expand
its market to Thailand to other renowned Multinational
Companies. The Group expects LSSB to generate
revenue in 2005.
Following the acquisition of MISB, the Group has
expanded the principal activities to include the
manufacturing of plastic products through MPSB. The
strategy is to create a one-stop solution provider for
customers in Southern Region of Malaysia. The Group
expects MPSB to commence full operation by the second
half of 2005.
Automotive Industry
The establishment of Naza (an automobile manufacturer)
in Gurun has made automotive industry a strategic
market for the Group. The Group is qualified as the 1st
tier supplier for Naza and is in a position to capture the
growing demand for automotive parts in the Northern
region. The investment in high tonnage plastic injection
moulding machine provides the Group a competitive
advantage over other manufacturers in the North. The
automotive business is expected to generate revenue
for the Group in 2005.
Other activities
The Group is planning and conducting feasibility studies
to expand its contract manufacturing customers and new
products for 2005 onwards. These measures are part
of the Board strategies to diversify the revenue streams
of the Group
In Recognition
On behalf of the Board of Directors, I express my sincere
gratitude to each and every employee of Luster Group
for their unwavering commitment and support. To all
shareholders, I am sincerely grateful for your confidence
in LIB. I also extend my appreciation to our valued
customers, business associates, suppliers and regulatory
bodies. And to my fellow board members for their efforts
in helping to guide the Group through another challenging
year - Thank you
Abdul Gafoor Khan
Executive Chairman.

DIRECTORS’ PROFILE
Encik Abdul Gafoor Khan, aged 66, was
appointed to the Board of Luster Industries Berhad
(“LIB”) as Executive Chairman on 23 April 2003. He is
the Organisation Development Executive Committee
Member of LIB where he is responsible for Organisation
Development.
Encik Abdul Gafoor graduated with Bachelor of Arts
degree from University of Singapore and obtained
Certificate of Education from University of Birmingham,
United Kingdom. His past working experience include
15 years of involvement in the areas of organisation
development and human resource management. He
began his career as school teacher in 1960 and left
teaching profession to join the Armed Forces as Captain
in 1970. In 1973 he joined ESSO Sdn. Bhd. as
Coordinator/Operation Analyst. In 1978, he left ESSO
Sdn. Bhd. to join Beecham Sdn. Bhd. as Human
Resource Manager until 1984. He was Human Resource
Manager with Bank Rakyat from 1984 until 1987 where
he joined R. J. Reynolds as Human Resource Manager
and subsequently promoted to Human Resource Director
in 1989. In 1992, he left R. J. Reynolds to join Titan
group as Human Resource Director until 1994. Since
1994, he was involved in consultancy jobs and at the
same time holding the position as General Manager with
Islamic University responsible to set-up the Management
Centre. He was also the Human Resource Consultant
with Habib Jewels in 1997. His involvement in plastic
injection moulding industry began in 1999 when he
joined Luster Group as Organisation Development
Consultant.
He does not have any family relationship with any other
directors and/or major shareholders of the Company
and has no conflict of interest with the Company . He
has not been convicted of any offence in the past ten
(10) years other than traffic offence, if any.
07

08
DIRECTORS’ PROFILE (Cont’d)
Mr. Lim See Chea, aged 49 is the founder and
Managing Director of Luster. He completed his secondary
education in 1974. He was appointed to the Board of
Luster on 19 September 1986. Subsequently, he was
appointed as the Managing Director on 18 October 2002.
His involvement in the plastic injection moulding industry
began in 1979 when he joined Sonico Industries as a
Supervisor. In 1984, he went into a partnership to establish
Unicorn Industries. He left the partnership in 1985 to form
Malathaico Sdn. Bhd. where he was appointed as
Operations Director. In 1986, he left Malathaico to establish
Luster until now. As the founder, he has been the driving
force behind the development, growth and expansion of
the Luster Group. His extensive experience in the plastic
injection moulding industry as a result of more than 20
years of experience in the industry has been instrumental
in the success of Luster Group.
He is currently responsible for the overall strategic direction
and management of Luster Group.
Mr Lim See Chea is the brother of Mr Lim See Hua. He
has no conflict of interest with the Company . He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.
Mr. Lim See Hua, aged 56, was appointed to the
Board of Luster as an Executive Director on 15 May 1996,
and subsequently appointed as Deputy Managing Director
on 31 May 2004.
He graduated from the Technical Teachers Training
College, KL in 1970. He was a teacher in Sekolah Sri
Perhentian in Johor before he joined Luster to take up
the position of Factory Manager in 1992 and subsequently
assumed the role of a Director.
Mr. Lim is a member of ESOS Committee.
Mr Lim See Hua is the brother of Mr Lim See Chea. He
does not have any family relationship with any other
directors and/or major shareholders of the Company and
has no conflict of interest with the Company . He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.

Mr. Chiang Chong Kooi, aged 50, is the cofounder
of Luster Group. He completed his secondary
education in 1973. He was appointed to the Board of
Luster as an Executive Director on 19 September 1986.
In 1986, he joined Mr. Lim See Chea, the managing
director to set up Luster Industries Sdn Bhd. As the cofounder,
he has been instrumental in ensuring that the
technical aspects of the operations of Luster Group run
efficiently and effectively.
Mr. Chiang is the Chairman of ESOS Committee.
He does not have any family relationship with any other
directors and/or major shareholders of the Company and
has no conflict of interest with the Company . He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.
DIRECTORS’ PROFILE (Cont’d)
09
Mr. Hang Kok Long, aged 46, was appointed to
the Board of Luster as an Executive Director on 15 May
1996.
He was a finalist of Chartered Institute of Management
Accountant, UK in 1982. His involvement in plastic injection
moulding began when he joined Man Yau in 1986. In
1988, he left and joined Cherry Sweet Sdn. Bhd. as
Finance and Administration Manager. Subsequently, in
1989, he took up the position of Accountant with Luster.
He was later promoted to General Manager in 1992 and
was appointed as Director of Luster in 1996.
Mr. Hang is a member of ESOS Committee.
He does not have any family relationship with any other
directors and/or major shareholders of the Company and
has no conflict of interest with the Company . He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.

10
DIRECTORS’ PROFILE (Cont’d)
Mr. Fong Swee Hin, aged 39, was appointed to the
Board of Luster as an Executive Director on 27 January
2003.
Prior to his appointment as an Executive Director, he was
the Corporate Planner of Luster. He obtained his Bachelor
of Commerce degree majoring in Accounting from Newcastle
University in Australia in 1988. In 1989, he went on further
to obtain a postgraduate Diploma in Taxation from Monash
University in Australia. He brings with him a diverse range
of experiences in the field of finance, accounting, taxation,
corporate finance and corporate planning.
Upon graduation, he began his career in 1989 as Tax Officer
in Australia Taxation Office. In 1991, he joined
Pricewaterhouse (currently known as Pricewaterhouse
Cooper) in the capacity of Associate Consultant. He left in
1994 to join Perdana Merchant Bank Berhad in Corporate
Finance Division as Assistant Vice President. Subsequently
in 1996, he joined Man Yau Holdings Bhd and assumed the
role of Corporate Planning Manager before assuming his
current position with Luster Industries Bhd.
He is a member of ASCPA (Australian Society of Certified
Practicing Accountants). He is a member of ESOS Committee
and Audit Committee.
He does not have any family relationship with any other
directors and/or major shareholders of the Company and
has no conflict of interest with the Company. He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.
Tunku Dato’ Dr. Ismail Bin Tunku
Mohammad Jewa, aged 67, was appointed to the
Board of Luster as an Independent Non-Executive Director
on 23 April 2003. He obtained his Doctoral Degree from
the University of Malaya in 1979 and was a Post-Doctoral
Special Auditor at Harvard University in 1984.
He was trained as a teacher at Brinsford Lodge,
Wolverhamton, England and on graduation in 1961 he
worked as a teacher in Kedah and later as Senior Assistant
and Principal of Sekolah Abdullah Munshi in Penang. In
1973, he joined University Sains Malaysia as a lecturer
and subsequently was appointed Dean and Professor of
education until 1995 when he resigned to join the private
sector. In 1997 he was appointed Chairman of P.I.E
Industrial Berhad and currently he is also an Independent
Non-Executive Director of Oriental Holdings Berhad and
CAB Cakaran Corporation Berhad.
Tunku Dato' Dr. Ismail is a member of the Audit Committee.
He does not have any family relationship with any other
directors and/ or major shareholders of the company and
has no conflict of interest with the Company. He has not
been convicted of any offence in the past ten (10) years
other than traffic offence, if any.

Tengku Sepachendra Tengku Abdul
Rashid, aged 36, was appointed as an Independent
Non Executive Director of Luster on 23 April 2003.
She graduated with B.Sc (Hons) in Accounting and Master
of Business Administration (Financial Management) from
University of Hull, United Kingdom in 1992 and 1993
respectively.
Upon graduation, she began her career as an Officer in
Corporate Finance Department of AmMerchant Bank
Berhad and was subsequently promoted to Assistant
Manager. In 1996, she left AmMerchant Bank Berhad to
join Permodalan RISDA Berhad as the Corporate Planning
Manager. From 1998 to 2002, she was the advisor to the
Directors and management of Berkat Indah Sdn. Bhd.
and its group companies.
Tengku Sepachendra is the chairman of Audit Committee.
She does not have any family relationship with any other
directors and/or major shareholders of the Company and
has no conflict of interest with the Company. She has
not been convicted of any offence in the past ten (10)
years other than traffic offence, if any.
DIRECTORS’ PROFILE (Cont’d)
11
Chatar Singh, aged 53, was appointed as an Independent
Non Executive Director of Luster on 23 April 2003.
He graduated with B.Sc (Hons) degree majoring in Physics
and Chemistry from Universiti Sains Malaysia, Penang in
1976 and has more than 25 years of experience in the
electronics manufacturing industry.
He started his career in Sharp-Roxy Corporation (M) Sdn.
Bhd. in Sungai Petani, Kedah and was with the company for
7 years before leaving for LH Research, an American switching
power supply company based in Prai, Penang. He was with
LH Research for a total of 9 years and was responsible for
managing the factories in the Caribbean (Puerto Rico and
Doninican Republic) for approximately 3 years. In 1992, he
joined Dai-Ichi Industries Berhad (“Dai-Ichi”) as General
Manager and was later appointed as a Director when the
company was listed on the Second Board of KLSE. He
resigned from the Board of Dai-Ichi in 1999. In 1994, he was
the Managing Director of SMT Technologies Sdn. Bhd., a
company involved in the electronics contract manufacturing
using surface mount technology. He left SMT Technologies
Sdn Bhd in 1999. Thereafter, he was with PCA Mahlin
Technology, a company involved in making actuators for the
hard drive industry from 2000 to 2002 as the Managing
Director. In 2001, he was also appointed as the Managing
Director of QB Technology Sdn. Bhd, a company involved in
making precision coil windings for the electronics industry.
On 26 November 2004,Mr. Chatar Singh was appointed
Executive Chairman of MQ Technology Berhad, an investment
holding company with subsidiaries involved in the precision
engineering and precision coil manufacturing business for
the hard disk drive and semiconductor industries. MQ
Technology Berhad was listed on MESDAQ on 26 January
2005.
Mr. Chatar Singh is a member of Audit Committee.
He does not have any family relationship with any other
directors and/or major shareholders of the Company and has
no conflict of interest with the Company . He has not been
convicted of any offence in the past ten (10) years other than
traffic offence, if any.

12
Five Year's Financial Highlights
FINANCIAL HIGHLIGHTS
Turnover
Profit Before Tax
Profit After Tax
Minority Interests
Profit After Tax and Minority Interests
No. of Shares in Issue at Year End
Basic Earnings Per Share (RM)
RM’000
RM’000
RM
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
0.25
0.20
0.15
0.10
0.05
-
Proforma*
Proforma*
Proforma*
2000 2001 2002
RM'000 RM'000 RM'000
169,858 170,880 130,619
12,076 13,535 12,505
8,914 9,066 9,919
21
235
160
8,935 9,301 10,079
@ 60,000 @ 60,000 @60,000
0.15
0.16
0.17
169,858
2000 2001 2002
Turnover
2003 2004
8,935
0.15
170,880
9,301
0.16
130,619
10,079
0.17
145,189
12,174
0.23
130,992
1,067
2000 2001 2002 2003 2004
Profit After Tax and Minority Interests
2000 2001 2002 2003
0.02
2004
Basic Earning Per Share (RM)
2003
RM'000
145,189
13,857
12,075
99
12,174
60,627
0.23
2004
RM'000
130,992
381
883
184
1,067
61,023
0.02
* Group result was prepared on proforma basis, assuming that Luster had been in existence throughout the years/ period under review.
@
The number of shares in issue was based on proforma basis, assuming that the issued and paid-up share capital of Luster of 60,000,000
ordinary shares of RM1 each (after acquisitions, bonus issue and public issue/ private placement) has been in issue throughout the years under review.
The net EPS is calculated based on the PAT after MI and on the proforma number of shares in issue as at year-end.
The net EPS is calculated based on the PAT after MI and on weighted average number of shares outstanding during the year.

The Board of Directors (the "Board") is pleased to provide the following statements, which outline the main corporate
governance practices that were in place for the financial year ended 31 December 2004. As the Board fully appreciates
the importance of adopting high standards of corporate governance within the Group, it views corporate governance
as synonymous with three key concepts, namely transparency, accountability and corporate performance. As such,
the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form. The
Board is thus committed to maintain high standards of corporate governance by supporting and implementing the
prescriptions of the Principles and Best Practices set out in Parts 1 and 2 of the Malaysian Code on Corporate
Governance (the "Code") respectively.
PRINCIPLES STATEMENT
The following statement sets out how the Company has applied the Principles in Part 1 of the Code. The Principles
are dealt with under the headings of Board of Directors, Directors' remuneration, Shareholders and Accountability and
audit.
A. Board of Directors
Board duties and responsibilities
The Group acknowledges the pivotal role played by the Board in the stewardship of its direction and operations, and
ultimately the enhancement of long-term shareholder value. To fulfill this role, the Board is responsible for the overall
corporate governance of the Group, including its strategic direction, establishing goals for Management and monitoring
the achievement of these goals.
The Board delegates the overall operations of the Group to the Executive Directors, who have vast experience in the
business of the Group.
Meetings
The Board is scheduled to meet at least four (4) times a year with additional meetings convened when urgent and
important decisions need to be taken in between scheduled meetings. During the financial year, the Board met four
(4) times, where it deliberated upon and considered a variety of matters including the Group's financial results and
risk management. Going forward, the Board will deliberate on major investments and strategic issues concerning the
Group.
The Directors are provided with an agenda on matters requiring their consideration, issued before each meeting.
During the meetings, the Board is briefed by the relevant Executive Directors and, where appropriate, board papers,
which cover mainly financial information, are made available to Directors. This enables the Directors to obtain further
explanations where necessary. All proceedings of Board meetings are recorded by way of minutes, which are signed
by the Chairman of the meeting.
Details of the Directors' meeting attendances during the financial year are tabulated below:
Director
En. Abdul Gafoor @ Abdul Gafoor Khan
Mr Lim See Chea
Mr Lim See Hua
Mr Chiang Chong Kooi
Mr Hang Kok Long
Mr Fong Swee Hin
Tunku Dato' Dr Ismail Bin Tunku Mohammad Jewa
Tengku Sepachendra Tengku Abdul Rashid
Mr Chatar Singh A/L Santa Singh
Board Committee
STATEMENT ON CORPORATE GOVERNANCE
Attendance
4/4
4/4
4/4
3/4
4/4
4/4
4/4
4/4
4/4
The Board delegates certain responsibilities to the Audit Committee in order to enhance business and operational
efficiency as well as efficacy. The Chairman of the Audit Committee reports to the Board the outcome of the Committee
meetings and a copy of the minutes of meeting is distributed to all Directors.
The Audit Committee consists of four (4) Directors, three (3) of whom are Independent Non-Executive Directors. The
terms of reference of the Audit Committee, which stipulate its duties and responsibilities, are in written form and are
presented under Audit Committee Report on pages 20 to 21 of this Annual Report.
13

14
Board Balance
At the date of this statement, the Board consists of nine (9) members, comprising three (3) Independent Non-Executive
Directors within the meaning of Chapter 1.01 of the Bursa Malaysia Securities Bhd (”Bursa Securities”) Listing
Requirements whilst the balance are Executive Directors.
The Board has within it, professionals drawn from varied backgrounds who bring with them in-depth and diversity in
experience and expertise to the Group's operations. Together with Executive Directors who have intimate knowledge
of the business, the Board is constituted of individuals who are committed to business integrity and professionalism
in all its activities. A brief profile of each Director is presented on pages 7 to 11 of this Annual Report.
There is a clear division of responsibilities between the Chairman and the Managing Director to ensure a balance of
power and authority. The Chairman is responsible for ensuring Board's effectiveness and conduct whilst the Managing
Director has overall responsibilities over the operating units, organizational effectiveness and implementation of
Board's policies and decisions.
The Board is satisfied that the current Board composition fairly reflects the investment of all shareholders in the
Company.
Supply of information
The Chairman ensures that all Directors have full and timely access to information with an agenda on matters requiring
Board's consideration issued with appropriate notice and in advance of each meeting to enable Directors to obtain
further explanations during the meeting, where necessary.
Every Director has unhindered access to the advice and services of the Company Secretary. The Board believes that
the current Company Secretary is capable of carrying out her duties to ensure the effective functioning of the Board.
The Articles of Association specify that the removal of the Company Secretary is a matter for the Board as a whole.
The Directors review and approve all corporate announcements, including the announcement of the quarterly financial
reports, before releasing them to Bursa Malaysia Securities Berhad.
From time to time, the Board as a whole determines, whether as a full Board or in their individual capacity, to take
independent professional advice, where necessary and in appropriate circumstances, in furtherance of their duties,
at the Group's expense.
Directors' training
STATEMENT ON CORPORATE GOVERNANCE (Cont’d)
As there is no formal training programme in place for Directors, the Board recruits only individuals of sufficient calibre,
knowledge and experience to fulfill the duties of a Director appropriately. However, all the Directors have attended
and successfully completed the Mandatory Accreditation Programme conducted by the Research Institute of Investment
Analysts Malaysia.
Appointment and re-election of Directors
As a Nominating Committee has not been established, appointment of new Directors comes under the purview of the
Board as a whole.
The Articles of Association provide that at least one-third of the Directors for the time being, including the Managing
Director, are subject to retirement by rotation at each Annual General Meeting ("AGM"). The Directors to retire in each
year are the Directors who have been longest in office since their appointment or re-appointment. New Directors
appointed to the Board shall also retire at the Annual General Meeting following the appointment. In any of the
circumstances, the Directors are eligible for re-election. These provide an opportunity for shareholders to renew their
mandate. The election of each Director is voted on separately. To assist shareholders in their decision, sufficient
information such as personal profile, meeting attendance and the shareholdings in the Group of each Director standing
for election are furnished in the Annual Report accompanying the Notice of AGM. Directors over seventy (70) years
of age are required to submit themselves for re-appointment annually in accordance with Section 129 (6) of the
Companies Act 1965.
The Company Secretary ensures that for appointment of Directors, all the necessary information is obtained and that
all legal and regulatory obligations are met.

B. Director's remuneration
STATEMENT ON CORPORATE GOVERNANCE (Cont’d)
The Company pays its Directors annual fees that are approved annually by shareholders at AGM. The Board, as a
whole, determines the remuneration of Directors with individual Directors abstaining from decisions in respect of their
individual remuneration. The remuneration of Executive Directors is structured based on their responsibilities and
contribution to the Group.
Details of remuneration of Directors of the Company for the financial year ended 31 December 2004 are as follows:
Executive Directors
Non-Executive Directors
Fees
RM
72,000
108,000
Salaries and
bonuses
RM
913,200
-
Other
emoluments
RM
464,000
-
15
Total
RM
1,449,200
108,000
The number of Directors of the Company whose total remuneration falls within the following bands for the financial
year ended 31 December 2004 is tabulated below:
Range of remuneration
Below RM50,000
RM50,001 to RM100,000
RM100,001 to RM150,000
RM150,001 to RM200,000
RM200,001 to RM250,000
RM250,001 to RM300,000
RM300,001 to RM350,000
C. Shareholders
Executive Directors
1
3
1
1
Number of Directors
Non-Executive Directors
The Board acknowledges that shareholders should be informed of all material business matters, which influence the
Group. Timely release of quarterly financial results to Bursa Malaysia Securities Berhad and other information and
corporate actions taken by the Group that warrant an announcement to Bursa Malaysia Securities Berhad under the
Listing Requirements provide shareholder with an up to date overview of the performance and strategies of the Group.
Whilst the Annual Report gives shareholders a quick run through of the financial and operational performance of the
Group, the AGM and Extraordinary General Meeting provide a platform to shareholders to seek more information on
the audited financial statements and operational matters. The Company also maintains an official web site at
www.lustergroup.com that provides background information of the Group and Company to the public.
On an ongoing basis, the Directors are cautious not to provide undisclosed material information about the Group and
frequently stress the importance of timely and equal dissemination of information to shareholders and stakeholders.
3

16
D. Accountability and audit
Financial reporting
STATEMENT ON CORPORATE GOVERNANCE (Cont’d)
The Board aims to provide and present a balanced and meaningful assessment of the Group's financial performance
and prospects at the end of the financial year, primarily through the annual financial statements and quarterly
announcement of results to shareholders as well as the Chairman's statement in the Annual Report. The Board is
assisted by the Audit Committee to oversee the Group's financial reporting processes and the quality of its financial
reporting.
Directors' responsibility statement in respect of the preparation of audited financial statements
The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state
of affairs of the Group and of the Company as at the end of the financial year and of their profit or loss and cash flows
for the year then ended. In preparing the financial statements, the Directors have ensured that applicable approved
accounting standards in Malaysia and the provisions of the Companies Act, 1965 have been applied.
In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies
and made reasonable and prudent judgments and estimates. The Directors also have a general responsibility for
taking such steps that are reasonably open to them to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities.
Internal Control
The Statement on Internal Control furnished on pages 17 to 18 of this Annual Report provides an overview of the
state of internal controls within the Group during the financial year under review.
Relationship with the Auditors
Key features underlying the relationship of the Audit Committee with the external and internal auditors are included
in the Audit Committee's terms of reference presented under Audit Committee Report on pages 20 to 21 of this Annual
Report. A summary of the activities of the Audit Committee during the financial year, including the evaluation of the
independent audit process, are set out in the Audit Committee Report on page 19 of this Annual Report.
MATERIAL CONTRACTS
There were no material contracts entered into by the Company and its subsidiaries involving Directors and major
shareholders of Luster Industries Bhd.
COMPLIANCE STATEMENT
Except as disclosed below, the Company has substantially complied with the Best Practices set out in Part 2 of the
Code since its listing and up to end of the financial year under review:
Appointment of a Senior Independent Non-Executive Director to whom concerns may be conveyed has not been
made. The Board will review the need to fulfill this requirement in due course;
A Nominating Committee has not been formed, as the Board believes that the present number of Directors is
deemed optimal considering the size of the Group and the nature of its operations. There was no review done
on the present members of the Board, as the mix of experience and expertise of the current number of Directors
are, in the Board's view, considered sufficient and optimum in addressing the issues affecting the Group;
Pursuant to Best Practice Provision AA XIII of the Code on training for new recruits to the Board, the Company
does not have a formal training programme for new Directors since it is the Board's policy to recruit only individuals
of sufficient calibre and experience to carry out the necessary duties of a Director. Moreover, all the Directors are
required to undergo training under the Continuing Education Programme as provided under the Bursa
Securities Listing Requirements;
Establishment of Remuneration Committee has not been undertaken as the Board is of the view that remuneration
of Directors is currently being expeditiously handled by the Board as a whole, with individual Directors abstaining
in the decision of their own remuneration.

STATEMENT ON INTERNAL CONTROL
The Board of Directors (the "Board") is committed to maintaining a sound system of internal control in the Group and
is pleased to provide the following statement, which outlines the nature and scope of internal control of the Group
during the financial year ended 31 December 2004.
Board responsibility
The Board affirms that it is ultimately responsible for the adequacy and integrity of the Group's system of internal
control, which includes the establishment of an appropriate control environment and reporting framework. Since there
are limitations, which are inherent in any system of internal control, this system is designed to manage, rather than
eliminate, the risk of failure to achieve corporate objectives. Accordingly, the system can only provide reasonable,
but not absolute, assurance against material misstatement or loss. The system of internal control encompasses
financial, organizational, operational and compliance controls and risk management.
The Board confirms that there is an ongoing process for identifying, evaluating and managing significant risks faced
by the Company. This process is reviewed by the Board and accords with the guidelines promulgated by the "Statement
on Internal Control - A Guidance to Directors of Public Listed Companies" (the "Internal Control Guidance"), a publication
of the industry task force on internal control.
Enterprise risk management framework
Senior Management has continued the initiative to formalise the risk management framework established during the
last reporting period, with the following objectives:
To systemize a continuous process for identifying, evaluating and managing the significant risks faced by the
company,
To provide a platform for communication, of risk and control profiles and the management action plans to manage
the risks, between Senior Management and the Board,
To nominate key management personnel to prepare action plans, with implementation time-scales to address any
risk and control issues,
To inculcate an organization-wide culture of risk awareness and management and embed internal control and risk
management further into the operations of the Company's business,
To establish a documented process of control monitoring and improvement plans.
Board recognized that risk management can become a strategic competitive advantage if it is used to identify specific
actions that enhance performance and optimize risk. It can also influence business strategy by identifying potential
adjustments related to previously unidentified opportunities and risks. As much as risks give rise to the need for
controls, we consciously look out for opportunities arising from risks and uncertainties. Risk management has been
adopted also as a strategic tool in strategy formulation, investment and resource allocation, and as catalyst for
innovation.
17

18
Internal audit function
STATEMENT ON INTERNAL CONTROL (Cont’d)
During the financial year, the internal audit function provided the Board through the Audit Committee with assurance
regarding the internal control system.
The internal audit function independently reviews the risk identification procedures and control processes implemented
by Management, and reports to the Audit Committee on a periodic basis, following the establishment of the Enterprise
Risk Management ("ERM") framework. The internal audit also reviews the internal controls in the key activities based
on a 3-year internal audit strategy and a detailed annual internal audit plan presented to the Audit Committee for
approval. The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based
on the risk profile of the Company.
The Audit Committee considers reports from internal audit and from Management, before reporting and making
recommendations to the Board in strengthening the internal control and governance systems.
Other risk and control processes
Apart from risk management and internal audit, the Board has put in place an organizational structure with formally
defined lines of responsibility and delegation of authority. A hierarchical reporting has been established, which provides
for a documented and auditable trail of accountability. The procedures include the establishment of limits of authority
and are relevant across the Group's operations and provide for continuous assurance to be given at increasingly
higher levels of management and, finally to the Board. The process is now facilitated by internal audit, which also
provides a degree of assurance as to validity of the systems of internal control. Planned corrective actions are
independently monitored for timely completion.
The Managing Director reports to the Board on significant changes in the business and the external environment, if
any. The Group Financial Controller provides the Board with quarterly financial information. This includes, among
others, the monitoring of results against budget, with variances being followed up and management action taken,
where necessary. Where areas of improvement in the system are identified, the Board considers the recommendation
made by the Audit Committee and the Management.
Weaknesses in internal controls that result in material losses
There were no material losses incurred during the financial year under review as a result of weaknesses in internal
control. The Board and Management continue to take measures to strengthen the control environment as appropriate.
The statement is issued in accordance with a resolution of the Board of Directors dated 21 May 2005.

Membership
AUDIT COMMITTEE REPORT
The Directors who have served as members of the Audit Committee (the "Committee") during the financial year under
review and as at the date of this report are:
Tengku Sepachendra Tengku Abdul Rashid
Tunku Dato' Dr. Ismail Bin Tunku Mohammad Jewa
Mr Chatar Singh A/L Santa Singh
Mr Fong Swee Hin
Meetings
Chairman, Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Executive Director
The Committee convened four (4) meeting during the financial year ended 31st December 2004. The details of
attendance of the Audit Committee member are as follows:
Director
Tengku Sepachendra Tengku Abdul Rashid
Tunku Dato' Dr Ismail Bin Tunku Mohammad Jewa
Mr Chatar Singh A/L Santa Singh
Mr Fong Swee Hin
Attendance
The meeting was appropriately structured by the use of agenda, which was distributed to all members with sufficient
notification. The Company Secretary was present by invitation at the meeting. Representatives of the external auditors,
internal auditors and the Group Financial Controller attended the meeting upon invitation.
Summary of activities of the Committee during the financial year
The Committee carried out its duties in accordance with its terms of reference during the financial year, with the
following main activities undertaken:
Reviewed and adopted its terms of reference;
Reviewed with the external auditors of the Group their scope of work and audit plan;
Reviewed with the internal auditors the risk areas to be covered and internal audit plan, the major findings of
internal audit and actions and steps taken by management in response to audit findings; and
Reviewed with the Group Financial Controller the unaudited quarterly financial statements, including reasons for
fluctuation in financial performance of the Group, before submission to the Board for consideration and approval
for release to the Bursa Malaysia Securities Berhad.
Internal audit function
The internal audit function is independent of the activities or operations it audits. The principal role of the internal audit
is to undertake regular and systematic reviews of the systems of internal control in order to provide reasonable
assurance that such systems continue to operate satisfactorily and effectively. It is ultimately the responsibility of the
internal audit function to provide the Audit Committee with independent and objective reports on the state of internal
control of the various operating units within the Group and the extent of compliance of the units with the Group's
established policies and procedures as well as relevant statutory requirements.
Further details of the activities of the internal audit function are set out in the Statement on Internal Control on pages
17 to 18 of this Annual Report.
4/4
4/4
4/4
4/4
19

20
TERMS OF REFERENCE
OF AUDIT COMMITTEE ADOPTED BY THE BOARD OF DIRECTORS ON 1ST DAY OF JULY 2004
The Committee is governed by the following terms of reference:
Composition of the Audit Committee
An Audit Committee shall be appointed by the Board from among their numbers (pursuant to a resolution of the Board
of Directors) and shall fulfil the following requirements: -
(a) the Audit Committee must be composed of not less than three (3) members;
(b) a majority of the Audit Committee must be independent Directors; and
(c) at least one (1) member of the Audit Committee:-
(i) must be a member of the Malaysian Institute of Accountants; or
(ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years'
working experience and:-
(aa) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants
Act 1967; or
(bb) he must be a member of one of the association of accountants specified in Part II of the 1st Schedule
of the Accountants Act 1967; or
(cc) a degree/masters/doctorate in accounting or finance and at least 3 years' post qualification experience
in accounting or finance; or
(dd) at least 7 years' experience being a chief financial officer of a corporation or having the function of
being primarily responsible for the management of the financial affairs of a corporation
(d) Alternate Director is not allowed to become a member of the Audit Committee.
The Committee shall elect a chairman from among its members who shall be an independent Director.
In the event of any vacancy in the Audit Committee resulting in the non-compliance of (a), (b) & (c) above, the Board
must fill the vacancy within three (3) months.
The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board
at least once every three years to determine whether the Audit Committee and its members have carried out their
duties in accordance with their terms of reference.
Meetings
The Audit Committee shall hold at least four regular meetings per year and such additional meetings as the Chairman
of the Audit Committee shall decide in order to fulfil its duties. In addition, the Chairman of the Audit Committee may
call for a meeting of the Audit Committee if a request is made by any member of the Audit Committee or the Board,
or the internal or external auditors.
The quorum for a meeting of the Committee shall be two members, majority of whom must be independent Directors.
The Company Secretary shall be the secretary of the Audit Committee.
The Company shall ensure that the attendance of the other Directors and employees of the Company at any particular
Audit Committee meeting is only at the Audit Committee's invitation and is specific to the relevant meeting.
The Audit Committee shall regulate its own procedure, in particular, the calling of meetings, the notice and agenda
to be given of such meetings, the voting and proceeding of such meetings, the keeping of minutes and the custody,
production and inspection of such minutes.
The Company Secretary who acts as Secretary of the Committee shall circulate the minutes of each meeting to all
members of the Board.

Duties and Responsibilities
a) To review the following and to report the same to the Board:-
TERMS OF REFERENCE
i) To review the quarterly announcements to Bursa Malaysia Securities Berhad and year end annual financial
statements prior to the approval by the Board, focusing on:-
- changes in or implementation of major accounting policy changes;
- significant and unusual events or adjustments;
- going concern assumption;
- compliance with accounting standards and other legal requirements
ii) To review with the External Auditors the following:-
- the audit plan;
- the evaluation of the system of internal controls;
- auditor's management letter and management response;
- problems and reservation arising from the interim and final audit.
iii) To review the internal audit functions on the following :-
- adequacy of the scope, function and resources of the internal audit functions and that it has the necessary
authority to carry out its work;
- the internal audit programme, processes, the results of the internal audit programme, processes or
investigation undertaken and whether or not appropriate action is taken on the recommendations of the
internal audit function;
- internal audit plan, consider the major findings of internal audit, fraud investigations and actions and steps
taken by management in response to audit findings;
- adequacy of risk management system to safeguard the company's assets;
- assessment of the performance of the outsourced internal audit team.
iv) To review:-
- any letter of resignation from the External Auditors of the Company or Group; and
- whether there is reason (support by grounds) to believe that the Company or Group's External Auditor
is not suitable for re-appointment;
- the assistance given by the employees of the Company or Group to the External Auditors; and
- any related party transactions and conflict of interest situation that may arise within the Company or Group
including any transaction, procedure or course of conduct that raises questions of management integrity.
b) To recommend the nomination of a person or persons as External Auditors and the audit fees.
c) To act upon the Board of Director's request to investigate and report on any issues or concerns in regards to the
management of the Company.
d) To promptly report Bursa Malaysia Securities Berhad on matters reported by the Audit Committee to the Board
of Directors of the Company which has not been satisfactorily resolved resulting in breach of the Bursa Securities
Listing Requirement.
e) To undertake such other responsibilities as may be agreed by the Committee and the Board.
f) To verify the allocation of option granted pursuant to the Employee Share Option Scheme.
Authority
The Audit Committee shall, wherever necessary and reasonable for the performance of its duties, in accordance with
a procedure to be determined by the Board of Directors and at the cost of the Company:-
(a) have authority to investigate any matter within its term of reference;
(b) have the resources which are required to perform its duties;
(c) have full and unrestricted access to any information pertaining to the Company;
(d) have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
(e) be able to obtain independent professional or other advice; and
(f) be able to convene meetings with external auditors, excluding the attendance of the executive members of the
Audit Committee, whenever deemed necessary.
21

22
OTHER INFORMATION
1) Utilization Of Share Proceeds
The Company has fully utilized share proceeds from the IPO for the specific purposes as disclosed in the prospectus.
Description
Repayment of bank borrowings
Capital expenditure
Acquisition of subsidiaries
Estimated listing expenses
Total
2) Non-Audit Fees
Amount disclosed
in prospectus
(RM'000)
4,047
6,027
2,114
1,700
13,888
Amount utilized
(RM'000)
4,047
6,027
2,114
1,700
13,888
Balance
(RM'000)
Non-audit fees paid by the Company and its subsidiaries to the external auditors, Messrs KPMG and its affiliated
companies for the financial year ended 31 December 2004 amounted to RM118,650.
3) Deviation of 10% Or More Between The Profit After Tax And Minority Interest Stated In The Announced
Unaudited Accounts And The Audited Accounts
The deviations between the Group Profit After Tax and Minority Interest as announced in the fourth quarterly
report ended 31 December 2004 and the audited accounts for the year ended 31 December 2004 which were
due to the following:
Item
Profit before tax
Tax expense
Profit after tax
Minority interest
Profit after tax and minority interest
Note:
4th Quarterly result
announced on
28 February 2005
RM'000
825
1,036
1,861
179
2,040
Audited financial
statements for
the year ended
31 December 2004
RM'000
382
501
883
184
1,067
Deviation
RM'000
1. The deviation in profit before tax of RM443,000 is mainly due to audit adjustment on the over valuation of
inventories.
2. The differences in tax expense are due to:
a) Audit adjustment on current year taxation of RM182,000.
b) Audit adjustment on deferred taxation of RM353,000.
443
535
978
-5
973
Note
1
2
-
-
-
-
-

DIRECTORS’ REPORT
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the
Company for the year ended 31 December 2004.
Principal activities
The principal activities of the Company are as follows :
i) manufacture of precision plastic parts and components, PCBA, sub-assembly and full assembly of plastic parts
and products; and
ii) investment holding and provision of management services to its subsidiaries.
The principal activities of the subsidiaries are set out in Note 3 to the financial statements.
There has been no significant change in the nature of these activities during the financial year.
Results
Net profit for the year
Reserves and provisions
for the year ended 31 December 2004
Group
RM
1,067,161
23
Company
RM
1,642,426
There were no material transfers to or from reserves and provisions during the year under review except as disclosed
in the financial statements.
Dividend
Since the end of the previous financial year, the Company paid a final dividend of 5% less 28% tax totalling RM2,193,624
in respect of the year ended 31 December 2003 on 6 September 2004.
The Directors recommended a first and final dividend of 1% less 28% tax totalling RM439,366 in respect of the year
ended 31 December 2004 which is subject to the approval of members at the forthcoming Annual General Meeting
of the Company.
Directors of the Company
Directors who served since the date of the last report are :
Abdul Gafoor @ Abdul Gafoor Khan - Executive Chairman
Lim See Chea - Managing Director
Chiang Chong Kooi
Lim See Hua
Hang Kok Long
Fong Swee Hin
Chatar Singh a/l Santa Singh
Tengku Sepachendra Tengku Abdul Rashid
Tunku Dato' Dr. Ismail Bin Tunku Mohammad Jewa

24
Directors' interests in shares
DIRECTORS’ REPORT (Cont’d)
for the year ended 31 December 2004
The holdings and deemed holdings in the ordinary shares of the Company and of its related corporations (other than
wholly-owned subsidiaries) of those who were Directors at year end as recorded in the Register of Directors'
Shareholdings are as follows :
Shareholdings in which directors
have direct interest
The Company
Abdul Gafoor @ Abdul Gafoor Khan
Lim See Chea
Chiang Chong Kooi
Lim See Hua
Hang Kok Long
Fong Swee Hin
Tengku Sepachendra Tengku Abdul Rashid
Tunku Dato' Dr. Ismail Bin Tunku Mohammad Jewa
Shareholdings in which Directors
have deemed interests
Lim See Chea
The Company
Subsidiaries
- Luster Chi Wo Sdn. Bhd.
- Luster Nakazawa R&D Sdn. Bhd.
- Luster Seweon Sdn. Bhd.
The Company
The Company
Abdul Gafoor @ Abdul Gafoor Khan
Lim See Chea
Chiang Chong Kooi
Lim See Hua
Hang Kok Long
Fong Swee Hin
Directors' benefits
Balance at
1.1.2004
40,000
71,000
40,000
688,536
51,000
10,000
9,000
9,000
28,020,000
1,100,000
204,000
-
Ordinary shares of RM1 each
Allotted Bought (Sold)
Balance at
31.12.2004
-
-
-
-
-
-
-
-
-
-
-
7,000
Balance at
1.1.2004
160,000
240,000
160,000
160,000
160,000
160,000
-
-
-
-
-
-
-
-
-
-
-
-
(30,000)
-
(5,000)
-
-
-
-
-
-
-
-
-
Number of Options for
Ordinary Shares of RM1 each
Granted Exercised
-
-
-
-
-
-
-
-
-
-
-
-
10,000
71,000
35,000
688,536
51,000
10,000
9,000
9,000
28,020,000
1,100,000
204,000
7,000
Balance at
31.12.2004
160,000
240,000
160,000
160,000
160,000
160,000
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by
Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation
with the Director or with a firm of which the Director is a member, or with a company in which the Director has a
substantial financial interest other than certain Directors who may be deemed to derive a benefit by virtue of those
transactions entered in the ordinary course of business between the Company and companies in which the Directors
have substantial financial interests.

Directors' benefits (cont’d)
DIRECTORS’ REPORT (Cont’d)
for the year ended 31 December 2004
There were no arrangements during and at the end of the financial year which had the object of enabling Directors
of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any
other body corporate apart from the Employees' Share Option Scheme ("ESOS") of the Company.
Issue of shares and debentures
During the financial year, the issued and paid-up share capital of the Company was increased from RM60,627,000
to RM61,023,000 by way of ESOS as follows :
No. of
ordinary shares
383,000
10,000
3,000
396,000
Par value
RM
1.00
1.00
1.00
Option price
RM1.40 per ordinary share
RM1.65 per ordinary share
RM1.55 per ordinary share
There were no other changes in the issued and paid-up share capital of the Company during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year apart
from the issue of options pursuant to the ESOS.
The options offered to take up unissued ordinary shares of RM1.00 each and the option prices are as follows :
Date of offer
10.9.2003
2.1.2004
1.7.2004
Option price
RM
1.40
1.65
1.55
Balance at
1.1.2004
4,663,000
-
-
Number of options over ordinary shares of RM1 each
Granted
-
170,000
295,000
Exercised
(383,000)
(10,000)
(3,000)
The external auditors have verified the allocation of options granted during the financial year.
Lapsed due to
resignation
(361,000)
(38,000)
(30,000)
25
Balance at
31.12.2004
3,919,000
122,000
262,000
The details of the ESOS granted to the eligible employees on 2 January and 1 July 2004 respectively are as follows :
Granted on 2 January 2004
Ch'ng Ngee Pang
Ramesh A/L Perumal
Chan Huan Choon
Lee Chee Hong
Khoo Kheng Aik
Number of options over ordinary
shares of RM1 each
20,000
20,000
40,000
40,000
50,000
170,000

26
DIRECTORS’ REPORT (Cont’d)
for the year ended 31 December 2004
Options granted over unissued shares (cont’d)
Granted on 1 July 2004
Lau Kooi Han
Teoh Ee Ken
Hooi Chew Yoon
Khairul Nizam Bin Mustafa
Tan Chun Hoe
Lee Mooi Kee
Azizah Binti Ahmad
Abd Rahim Bin Mt Isa
Magendran A/L Govindasamy
Chew Moon Wui
Corine Ng Leen Leen
Jefrey Bin Mia
Ooi Chai Liang
Chang Bee Hoon
Law Siew Chen
Ahmad Zakey Bin Mohamad Daud
Kumar A/L Thangaveloo
Abdul Ghani Bin Zakaria
Ng Hock Cheng
Morad Bin Wahab
Tan Lee Hsy
Khalidass A/L Supramaniam
Ooi Kean Siang
The salient features of the scheme are as follows :
Number of options over
ordinary shares of RM1 each
40,000
20,000
20,000
15,000
15,000
15,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
10,000
295,000
i) Eligible employees are those who have been confirmed in writing as employees of the Group on the date of offer
and have been employed for a continuous period of at least six (6) months prior to the date of offer;
ii) The option is personal to the grantee and is non-assignable;
iii) The option price shall be determined by the average of the middle market quotation of the Company's ordinary
shares as shown in the daily official list issued by the Bursa Malaysia Securities Berhad for the five trading days
preceding the respective dates of the offer in writing to the grantee or at the par value of the ordinary shares of
the Company, whichever is higher;
iv) The options granted may be exercised at any time within a period of five years from the date of offer of the option
or such shorter period as may be specifically stated in the offer upon giving notice in writing; and
v) The options granted may be exercised in full or in lesser number of ordinary shares provided that the number
shall be in multiples of 100 shares.
The persons to whom the options have been granted have no right to participate by virtue of the options in any share
issue of any other company.
Significant events during the financial year
The details of such events are disclosed in Note 26 to the financial statements.

Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps
to ascertain that :
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) all current assets have been stated at the lower of cost and net realisable value.
At the date of this report, the Directors are not aware of any circumstances :
i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the
Group and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the Group and in the Company financial statements
misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group
and of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the
financial statements of the Group and of the Company misleading.
At the date of this report, there does not exist :
i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and
which secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial
year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors,
will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they
fall due.
In the opinion of the Directors, the results of the operations of the Group and of the Company for the financial year
ended 31 December 2004 have not been substantially affected by any item, transaction or event of a material and
unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial
year and the date of this report.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed in accordance with a resolution of the Directors :
Lim See Hua
Chiang Chong Kooi
Penang,
Date : 28 April 2005
DIRECTORS’ REPORT (Cont’d)
for the year ended 31 December 2004
27

Statement by Directors pursuant to
Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements of the Group and of the Company set out on pages 30 to 64
are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved accounting
standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31
December 2004 and of the results of their operations and cash flows for the year ended on that date.
Signed in accordance with a resolution of the Directors :
Lim See Hua
Chiang Chong Kooi
Penang,
28
Date : 28 April 2005
STATEMENT BY DIRECTORS AND STATUTORY DECLARATION
Statutory declaration pursuant to
Section 169(16) of the Companies Act, 1965
I, Fong Swee Hin, the Director primarily responsible for the financial management of Luster Industries Bhd., do solemnly
and sincerely declare that the financial statements set out on pages 30 to 64 are, to the best of my knowledge and
belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the
provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed at Georgetown in the State of Penang on 28 April 2005.
Before me :
Chai Choon Kiat, PJM (P.073)
Commissioner for Oaths
Penang
Fong Swee Hin

We have audited the financial statements set out on pages 30 to 64. The preparation of the financial statements is
the responsibility of the Company's Directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report
our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose.
We do not assume responsibility to any other person for the content of this report.
We conducted our audit in accordance with approved Standards on Auditing in Malaysia. These standards require
that we plan and perform the audit to obtain all the information and explanations which we consider necessary to
provide us with evidence to give reasonable assurance that the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial
statements. An audit also includes an assessment of the accounting principles used and significant estimates made
by the Directors as well as evaluating the overall adequacy of the presentation of information in the financial statements.
We believe our audit provides a reasonable basis for our opinion.
In our opinion :
(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965
and applicable approved accounting standards in Malaysia so as to give a true and fair view of :
and
REPORT OF THE AUDITORS TO THE MEMBER
i) the state of affairs of the Group and of the Company at 31 December 2004 and the results of their operations
and cash flows for the year ended on that date; and
ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements
of the Group and of the Company;
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the
Company and the subsidiary of which we acted as auditors have been properly kept in accordance with the
provisions of the said Act.
The subsidiaries in respect of which we have not acted as auditors are identified in Note 3 to the financial statements
and we have considered their financial statements and the auditors' reports thereon.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
consolidated financial statements and we have received satisfactory information and explanations required by us for
those purposes.
The audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not
include any comment made under subsection (3) of Section 174 of the Act.
Penang,
Date : 28 April 2005
of Luster Industries Bhd.
29
KPMG
Firm Number : AF 0758
Chartered Accountants
Ng Swee Weng
Partner
Approval Number : 1414/03/06 (J/PH)

Property, plant and equipment
Intangible asset
Current assets
Inventories
Trade and other receivables
Tax refundable
Cash and cash equivalents
Current liabilities
Trade and other payables
Borrowings
Taxation
Net current assets
Financed by :
Capital and reserves
Share capital
Reserves
30
Shareholders' funds
Minority interests
Long term and deferred liabilities
Borrowings
Deferred tax liabilities
CONSOLIDATED BALANCE SHEET
at 31 December 2004
Note
2
4
5
6
7
8
9
10
11
12
9
13
2004
RM
82,973,995
295,380
19,444,972
37,068,643
1,517,140
8,926,899
66,957,654
18,977,289
32,038,695
289,910
51,305,894
15,651,760
98,921,135
61,023,000
18,169,978
79,192,978
605,309
16,066,476
3,056,372
98,921,135
The financial statements were approved and authorised for issue by the Board of Directors on 28 April 2005.
2003
RM
71,205,667
-
14,763,124
38,565,183
915,306
10,917,784
65,161,397
24,443,113
16,563,737
362,641
41,369,491
23,791,906
94,997,573
60,627,000
19,439,439
80,066,439
786,636
10,261,912
3,882,586
94,997,573
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating expense
Other operating income
Operating profit
Finance costs
Profit before tax
Tax expense
Profit after tax
Minority interests
Net profit for the year
Basic earnings per ordinary share (sen)
Diluted earnings per ordinary share (sen)
Dividends per ordinary share (sen) - net
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2004
Note
14
15
17
18
19
19
20
2004
RM
130,992,340
(117,007,486)
13,984,854
(1,601,640)
(10,358,481)
(573,900)
675,704
2,126,537
(1,745,064)
381,473
501,361
882,834
184,327
1,067,161
1.75
1.73
0.72
31
2003
RM
145,189,167
(122,991,274)
22,197,893
(1,878,368)
(9,514,456)
(151,731)
5,107,849
15,761,187
(1,904,054)
13,857,133
(1,782,003)
12,075,130
98,766
12,173,896
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.
22.94
21.51
3.60

32
At 1 January 2003
Issue of shares (Note 10)
- Acquisition of subsidiaries
- Bonus issue
- Public issue
- ESOS
Net profit for the year
Net gain/(loss) not recognised in the
consolidated income statement
- Exchange differences on
translation of the financial
statements of foreign entity
- Share issue expenses
At 31 December 2003
Net profit for the year
Issue of shares - ESOS (Note 10)
Net loss not recognised in the
consolidated income statement
- Exchange differences on
translation of the financial
statements of foreign entity
Dividend (Note 20)
At 31 December 2004
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year 31 December 2004
Share
Capital
RM
4,000,000
785,024
45,294,976
9,920,000
627,000
56,627,000
-
-
-
-
60,627,000
-
396,000
-
-
61,023,000
Share
Premium
RM
-
7,968,005
(7,968,005)
3,968,000
250,800
4,218,800
-
-
(2,106,609)
(2,106,609)
2,112,191
-
161,350
-
-
2,273,541
Non-Distributable
Exchange
Fluctuation
Reserve
RM
(135,186)
-
-
-
-
-
-
485,101
-
485,101
349,915
-
-
(304,348)
-
45,567
Distributable
Retained
Profits
RM
42,130,408
-
(37,326,971)
-
-
(37,326,971)
12,173,896
-
-
-
16,977,333
1,067,161
-
-
(2,193,624)
15,850,870
Total
RM
45,995,222
8,753,029
-
13,888,000
877,800
23,518,829
12,173,896
485,101
(2,106,609)
(1,621,508)
80,066,439
1,067,161
557,350
(304,348)
(2,193,624)
79,192,978
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

Cash flows from operating activities
Profit before tax
Adjustments for :
Depreciation
Plant and equipment written off
Interest expense
Interest income
Gain on disposal of property, plant and equipment
Gain on disposal of a subsidiary
Negative goodwill recognised
Amortisation of intangible asset
Operating profit before working capital changes
(Increase)/Decrease in :
Inventories
Trade and other receivables
(Decrease)/Increase in :
Trade and other payables
Cash generated from operations
Income tax paid
Interest paid
Net cash (used in)/generated from operating activities
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2004
2004
RM
381,473
7,436,736
966
1,745,064
(16,803)
(458,005)
-
-
32,820
9,122,251
(4,681,848)
1,496,540
(4,363,744)
1,573,199
(999,418)
(1,745,064)
(1,171,283)
33
2003
RM
13,857,133
9,256,931
791
1,904,054
(104,970)
(279,758)
(8,312)
(1,572,389)
-
23,053,480
(3,156,731)
(14,559,026)
7,666,990
13,004,713
(1,931,383)
(1,904,054)
9,169,276

34
CONSOLIDATED CASH FLOW STATEMENT (Cont’d)
for the year ended 31 December 2004
Cash flows from investing activities
Disposal of a subsidiary, net of cash (Note 3)
Interest received
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Purchase of intangible asset
Increase in equity interest in existing subsidiaries
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue expenses
Repayment of lease and hire purchase obligations
Dividend paid to shareholders of the Company
Draw down of term loans
Repayment of term loans
Withdrawal of deposits with licensed banks
Shares issued to minority shareholders
Drawdown in bank borrowings, net
Net cash generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Foreign exchange differences on cash and cash equivalents
Cash and cash equivalents at end of year
NOTE
Cash and cash equivalents
2004
RM
-
16,803
(22,789,663)
2,708,461
(328,200)
-
(20,392,599)
557,350
-
(91,992)
(2,193,624)
18,561,271
(12,031,308)
918,191
3,000
14,603,000
20,325,888
(1,237,994)
4,504,334
(73,251)
3,193,089
2003
RM
(431,799)
104,970
(5,498,565)
816,586
-
(966,780)
(5,975,588)
14,765,800
(2,106,609)
(637,587)
(7,500,000)
1,000,000
(5,345,382)
-
-
919,228
1,095,450
4,289,138
78,793
136,403
4,504,334
Cash and cash equivalents included in the consolidated cash flow statement comprise the following consolidated
balance sheet amounts :
Deposits with licensed banks (excluding deposits pledged)
Cash and bank balances
Bank overdrafts
2004
RM
-
8,845,090
(5,652,001)
3,193,089
2003
RM
6,328,283
3,589,501
(5,413,450)
4,504,334
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

Property, plant and equipment
Investment in subsidiaries
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Borrowings
Taxation
Net current assets
Financed by :
Capital and reserves
Share capital
Reserves
Shareholders' funds
Long term and deferred liabilities
Borrowings
Deferred tax liabilities
BALANCE SHEET
Note
2
3
5
6
7
8
9
10
11
9
13
at 31 December 2004
2004
RM
33,260,117
34,962,455
9,798,115
41,416,248
7,192,216
58,406,579
19,184,202
22,291,231
206,627
41,682,060
16,724,519
84,947,091
61,023,000
9,387,381
70,410,381
13,090,206
1,446,504
84,947,091
35
2003
RM
32,812,326
34,962,455
7,105,077
33,261,889
3,961,331
44,328,297
20,468,472
9,522,649
356,889
30,348,010
13,980,287
81,755,068
60,627,000
9,777,229
70,404,229
9,079,635
2,271,204
81,755,068
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

Revenue
Cost of sales
Gross profit
36
Distribution costs
Administrative expenses
Other operating expense
Other operating income
Operating profit
Finance costs
Profit before tax
Tax expense
Net profit for the year
INCOME STATEMENT
for the year ended 31 December 2004
Dividends per ordinary share (sen) - net
Note
14
15
17
18
20
2004
RM
72,030,594
(64,377,542)
7,653,052
(641,065)
(5,485,129)
(350,895)
958,579
2,134,542
(1,325,373)
809,169
833,257
1,642,426
0.72
2003
RM
87,352,063
(76,272,971)
11,079,092
(869,222)
(4,443,370)
(71,000)
2,051,347
7,746,847
(1,337,563)
6,409,284
(455,818)
5,953,466
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.
3.60

At 1 January 2003
Issue of shares (Note 10)
- Acquisition of subsidiaries
- Bonus issue
- Public issue
- ESOS
Net loss not recognised in the
income statement
- Share issue expenses
Net profit for the year
At 31 December 2003
Issue of shares (Note 10)
- ESOS
Net profit for the year
Dividend (Note 20)
At 31 December 2004
STATEMENT OF CHANGES IN EQUITY
Share
Capital
RM
4,000,000
785,024
45,294,976
9,920,000
627,000
56,627,000
-
-
60,627,000
396,000
-
-
61,023,000
for the year ended 31 December 2004
Non-Distributable
Share
Premium
RM
-
7,968,005
(7,968,005)
3,968,000
250,800
4,218,800
(2,106,609)
-
2,112,191
161,350
-
-
2,273,541
Revaluation
Reserve
RM
9,771,185
-
(9,771,185)
-
-
(9,771,185)
-
-
-
-
-
-
-
Distributable
37
Retained
Profits
RM
29,267,358
-
(27,555,786)
-
-
(27,555,786)
-
5,953,466
7,665,038
-
1,642,426
(2,193,624)
7,113,840
Total
RM
43,038,543
8,753,029
-
13,888,000
877,800
23,518,829
(2,106,609)
5,953,466
70,404,229
557,350
1,642,426
(2,193,624)
70,410,381
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

38
CASH FLOW STATEMENT
for the year ended 31 December 2004
Cash flows from operating activities
Profit before tax
Adjustments for :
Depreciation
Dividend income
Interest expense
Interest income
Gain on disposal of property, plant and equipment
Plant and equipment written off
Loss on disposal of a subsidiary
Operating profit before working capital changes
Increase in :
Inventories
Trade and other receivables
Decrease in :
Trade and other payables
Cash used in operations
Income tax paid
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Dividend received
Interest received
Proceeds from disposal of property, plant and equipment
Increase in equity interest in existing subsidiaries
Proceeds from disposal of a subsidiary
Net cash used in investing activities
2004
RM
809,169
3,749,734
-
1,325,373
(5,153)
(359,599)
-
-
5,519,524
(2,693,038)
(8,154,359)
(1,284,270)
(6,612,143)
(141,705)
(1,325,373)
(8,079,221)
(4,837,926)
-
5,153
1,000,000
-
-
(3,832,773)
2003
RM
6,409,284
3,748,028
(1,000,000)
1,337,563
(77,548)
(135,798)
161
428
10,282,118
(960,350)
(7,739,936)
(2,030,375)
(448,543)
(159,901)
(1,337,563)
(1,946,007)
(3,421,697)
720,000
77,548
135,800
(2,114,271)
87,773
(4,514,847)

Cash flows from financing activities
Repayment of lease and hire purchase obligations
Repayment of term loans
Drawdown of term loans
Drawdown/(Repayment) of bankers' acceptances, net
Dividend paid
Share issue expenses
Proceeds from issue of shares
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
NOTE
Cash and cash equivalents
CASH FLOW STATEMENT (Cont’d)
for the year ended 31 December 2004
2004
RM
(91,992)
(10,856,177)
15,677,408
12,464,000
(2,193,624)
-
557,350
15,556,965
3,644,971
381,703
4,026,674
Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts :
Deposits with licensed bank
Cash and bank balances
Bank overdrafts
2004
RM
-
7,192,216
(3,165,542)
4,026,674
39
2003
RM
(146,042)
(3,964,958)
1,000,000
(1,000,000)
-
(2,106,609)
14,765,800
8,548,191
2,087,337
(1,705,634)
381,703
2003
RM
3,000,000
961,331
(3,579,628)
381,703
The notes set out on pages 40 to 64 form an integral part of, and should be read in conjunction with, these financial
statements.

40
NOTES TO THE FINANCIAL STATEMENTS
31 December 2004
1. Summary of significant accounting policies
The following accounting policies are adopted by the Group and by the Company and are consistent with those
adopted in previous years.
(a) Basis of accounting
The financial statements of the Group and of the Company are prepared on the historical cost basis except
as disclosed in the notes to the financial statements and in compliance with the provisions of the Companies
Act, 1965 and applicable approved accounting standards in Malaysia.
(b) Basis of consolidation
Subsidiaries are those enterprises controlled by the Company. Control exists when the Company has the
power, directly or indirectly to govern the financial and operating policies of an enterprise so as to obtain
benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control effectively commences until the date that control effectively ceases.
Subsidiaries are consolidated using the acquisition method of accounting.
A subsidiary is excluded from consolidation when control is intended to be temporary as the subsidiary is
acquired and held exclusively with a view of its subsequent disposal in the near future and it has not previously
been consolidated or it operates under severe long term restrictions which significantly impair its ability to
transfer funds to the Company. Subsidiaries excluded on these grounds are accounted for as investments.
Under the acquisition method of accounting, the results of subsidiaries acquired or disposed during the year
are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair
values of the subsidiaries' net assets are determined and these values are reflected in the Group financial
statements. The difference between the acquisition cost and the fair values of the subsidiaries' net assets
is reflected as goodwill or negative goodwill as appropriate.
Intragroup transactions and balances and the resulting unrealised profits are eliminated on consolidation.
Unrealised losses resulting from intragroup transactions are also eliminated unless cost cannot be recovered.
(c) Goodwill
Goodwill represents the excess of the cost of acquisition on consolidation and is stated at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is written off to income statement in the year of
acquisition.
Negative goodwill represents the excess of the fair value of the net identifiable assets acquired over the cost
of acquisition. Negative goodwill is recognised as income in the year of acquisition.
(d) Investments
Long term investments other than in subsidiaries, are stated at cost in the Company. An allowance is made
when the Directors are of the view that there is a diminution in their value which is other than temporary.
Long term investments in subsidiaries are stated at valuation/at cost in the Company, less impairment loss
where applicable.
The Company revalues its long term investment in subsidiaries every five years and at shorter intervals
whenever the fair value of the revalued investments is expected to differ materially from their carrying value.
Any surplus arising from revaluation is dealt with in the revaluation reserve. Any deficit arising is offset against
the revaluation reserve to the extent of a previous increase from the same investment. In all other cases, a
decrease in the carrying amount is charged to the income statement.
On the sale of a revalued investment, the portion of revaluation surplus pertaining to that investment will be
realised and transferred to revenue reserve.

(e) Property, plant and equipment
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment
losses.
Property, plant and equipment retired from active use and held for disposal are stated at the carrying amount
at the date when the asset is retired from active use, less impairment losses, if any.
Depreciation
Leasehold land is amortised over the respective lease periods ranging from 42 to 94 years.
On other property, plant and equipment, depreciation is calculated to write-off their costs on a straight line
basis over the expected useful lives of the assets concerned at the following annual rates :
Buildings2 - 5%
Plant and machinery 8 - 25%
Furniture, fittings and office equipment 10 - 25%
Motor vehicles10 - 20%
Electrical installations 10 - 12.5%
Moulds10 - 50%
(f) Inventories
Inventories are stated at the lower of cost and net realisable value. For work-in-progress and manufactured
inventories, cost consists of materials, direct labour and an appropriate proportion of fixed and variable
production overheads and is determined on a weighted average basis. The cost of raw materials and trading
inventories is determined on the first-in, first-out basis.
(g) Trade and other receivables
Trade and other receivables are stated at cost less allowance for doubtful debts.
(h) Liabilities
Borrowings and trade and other payables are stated at cost.
(i) Provisions
A provision is recognised when it is probable that an outflow of resources embodying economic benefits will
be required to settle a present obligation (legal or constructive) as a result of a past event and a reliable
estimate can be made of the amount.
(j) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid
investments which have an insignificant risk of changes in value. For the purpose of the cash flow statements,
cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
(k) Income tax
Tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the
income statement except to the extent that it relates to items recognised directly in equity, in which case it
is recognised in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
41

42
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
(k) Income tax (cont’d)
Deferred tax is provided, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are
not recognised for goodwill not deductible for tax purposes and the initial recognition of assets or liabilities
that at the time of the transaction affects neither accounting nor taxable profit. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised.
(l) Foreign currency
i) Foreign currency transactions
Transactions in foreign currencies are translated to Ringgit Malaysia at rates of exchange ruling at the
date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance
sheet date are translated to Ringgit Malaysia at the foreign exchange rates ruling at that date. Foreign
exchange differences arising on translation are recognised in the income statement. Non-monetary
assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated
into Ringgit Malaysia at the foreign exchange rates ruling at the date of the transactions.
ii) Financial statements of foreign operations
The Group's foreign operations are not considered an integral part of the Company's operations.
Accordingly, the assets and liabilities of foreign operations, including goodwill and fair value adjustments
arising on consolidation, are translated to Ringgit Malaysia at exchange rates ruling at the balance
sheet date. The revenues and expenses of foreign operations are translated to Ringgit Malaysia at
average exchange rates applicable throughout the year. Foreign exchange differences arising from
retranslating the opening net investments in the foreign subsidiaries at the closing exchange rate are
recognised directly to the Exchange Fluctuation Reserve.
The closing rates used in the translation of foreign currency monetary assets and liabilities and the
financial statements of foreign operations are as follows :
1 USD
1 SGD
1000 Indonesian Rupiah
(m) Income recognition
i) Goods sold and services rendered
2004
RM
3.80
2.35
0.40
2003
RM
Revenue from sale of goods is measured at the fair value of the consideration receivable and is
recognised in the income statement when the significant risks and rewards of ownership have been
transferred to the buyer.
Revenue from services rendered is recognised in the income statement when services are performed.
ii) Dividend income
Dividend income is recognised when the right to receive payment is established.
iii) Interest income
Interest income is recognised in the income statement as it accrues, taking into account the effective
yield on the asset.
3.80
2.25
0.44

(n) Accounting for lease/hire purchase
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
The assets and obligations arising from finance leases and hire purchase plans are recorded at the fair value
of the assets at the beginning of the duration of the leases and hire purchase. The amount of the assets
are depreciated over their expected useful lives consistent with the depreciation rates the Group adopts for
depreciable assets that are owned.
The difference between the total minimum lease payments and hire purchase obligations over the duration
of the lease/hire purchase and the initial recorded liability which represents interest cost, is expensed off
over the accounting periods covered by the duration of the borrowing using the "sum-of-digits" method.
(o) Impairment
The carrying amount of assets, other than inventories and financial assets (other than investment in
subsidiaries), are reviewed at each balance sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable amount is estimated. An impairment loss
is recognised whenever the carrying amount of an asset or the cash-generating unit to which it belongs
exceeds its recoverable amount. Impairment losses are recognised in the income statement.
The recoverable amount is the greater of the asset's net selling price and its value in use. In assessing value
in use, estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For an
asset that does not generate largely independent cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific external
event of an exceptional nature that is not expected to recur and subsequent external events have occurred
that reverse the effect of that event.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss
had been recognised. The reversal is recognised in the income statement.
(p) Finance costs
All interest and other costs incurred in connection with borrowings are expensed as incurred. The interest
component of lease/hire purchase payments is recognised in income statement so as to give a constant
periodic rate of interest on the outstanding liability at the end of each accounting period.
(q) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in the income statement as an expenses as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the
production of new or substantially improved products and processes, is capitalised if the product or process
is technically and commercially feasible and the Group has sufficient resources to complete development.
The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of
overheads. Other development expenditure is expensed in the income statement as incurred. Capitalised
development expenditure is stated at cost less accumulated amortisation and impairment losses.
43

44
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
(r) Employee benefits
i) Short term employee benefits
Wages, salaries and bonuses are recognised as expenses in the year in which the associated services
are rendered by employees of the Group. Short term accumulating compensated absences such as
paid annual leave are recognised when services are rendered by employees that increase their
entitlement to future compensated absences, and short term non-accumulating compensated absences
such as sick leave are recognised when absences occur.
ii) Defined contribution plans
Obligations for contributions to defined contribution plan are recognised as an expense in the income
statement as incurred.
iii) Equity and equity-related compensation benefits
The share option programme allows Group employees to acquire shares of the Company. When the
options are exercised, equity is increased by the amount of the proceeds received.
(s) Intangible asset
Intangible asset is stated at cost less accumulated amortisation and accumulated impairment losses, if any.
Intangible asset represents payments made to acquire the technology to manufacture mechanical timers,
select switches and synchronous motor for washing machines. Intangible asset is amortised over a period
of 10 years.
2. Property, plant and equipment
Group
Cost
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and office
equipment
Motor vehicles
Electrical installations
Moulds
Capital work-in-progress
Accumulated depreciation
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and office
equipment
Motor vehicles
Electrical installations
Moulds
Balance at
1.1.2004
RM
6,750,489
420,224
27,103,166
85,264,326
6,365,879
3,714,806
3,434,519
438,517
-
133,491,926
Balance at
1.1.2004
RM
577,943
28,016
3,842,939
49,040,361
3,998,871
2,784,386
1,694,330
319,413
62,286,259
Additions
RM
-
160,488
1,237,715
10,835,899
748,002
-
133,858
2,693,643
6,980,058
22,789,663
Charge for
the year
RM
59,530
27,064
700,804
5,412,659
604,368
278,512
327,212
26,587
7,436,736
Disposals/
Write off
RM
(172,658)
-
(622,005)
(3,392,956)
(34,696)
(699,698)
-
-
-
(4,922,013)
Disposals/
Write off
RM
(22,606)
-
(131,658)
(1,798,667)
(24,350)
(693,310)
-
-
(2,670,591)
Transfers
RM
(5,596,318)
5,596,318
-
-
-
-
-
-
-
-
Transfers
RM
(542,570)
542,570
-
-
-
-
-
-
-
Foreign
exchange
difference
RM
(181,513)
-
(290,623)
(1,235,874)
(21,150)
(18,769)
(58,442)
-
-
(1,806,371)
Foreign
exchange
difference
RM
-
-
(38,948)
(399,526)
(9,381)
(6,975)
(18,364)
-
(473,194)
Balance at
31.12.2004
RM
800,000
6,177,030
27,428,253
91,471,395
7,058,035
2,996,339
3,509,935
3,132,160
6,980,058
149,553,205
Balance at
31.12.2004
RM
72,297
597,650
4,373,137
52,254,827
4,569,508
2,362,613
2,003,178
346,000
66,579,210

2. Property, plant and equipment (cont’d)
Net book value
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and office equipment
Motor vehicles
Electrical installations
Moulds
Capital work-in-progress
Company
Cost
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and
office equipment
Motor vehicles
Electrical installations
Moulds
Accumulated depreciation
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and
office equipment
Motor vehicles
Electrical installations
Moulds
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
Balance at
1.1.2004
RM
2,569,187
-
11,170,879
39,482,666
2,867,136
2,113,546
1,914,926
280,000
60,398,340
Balance at
1.1.2004
RM
272,324
-
1,518,790
21,259,558
1,624,473
1,763,015
867,855
279,999
27,586,014
31.12.2004
RM
727,703
5,579,380
23,055,116
39,216,568
2,488,527
633,726
1,506,757
2,786,160
6,980,058
82,973,995
Additions
RM
-
-
986,742
3,354,266
477,418
-
19,500
-
4,837,926
Charge for
the year
RM
41,141
-
228,606
2,834,748
338,887
155,562
150,790
-
3,749,734
31 December 2004
31.12.2003
RM
6,172,546
392,208
23,260,227
36,223,965
2,367,008
930,420
1,740,189
119,104
-
71,205,667
Disposals
RM
(172,658)
-
(622,005)
-
(7,418)
(644,979)
-
-
(1,447,060)
Disposals
RM
(22,606)
-
(131,658)
-
(7,418)
(644,977)
-
-
(806,659)
Transfers
RM
(1,596,529)
1,596,529
-
-
-
-
-
-
-
Transfers
RM
(218,562)
218,562
-
-
-
-
-
-
-
45
Depreciation
Charge
For The
Year Ended
31.12.2003
RM
79,306
7,004
728,699
7,012,643
722,010
289,949
315,987
101,333
-
9,256,931
Balance at
31.12.2004
RM
800,000
1,596,529
11,535,616
42,836,932
3,337,136
1,468,567
1,934,426
280,000
63,789,206
Balance at
31.12.2004
RM
72,297
218,562
1,615,738
24,094,306
1,955,942
1,273,600
1,018,645
279,999
30,529,089

46
Net book value
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
2. Property, plant and equipment (cont’d)
Long term leasehold land
Short term leasehold land
Buildings
Plant and machinery
Furniture, fittings and office equipment
Motor vehicles
Electrical installations
Moulds
31.12.2004
RM
727,703
1,377,967
9,919,878
18,742,626
1,381,194
194,967
915,781
1
33,260,117
31.12.2003
RM
2,296,863
-
9,652,089
18,223,108
1,242,663
350,531
1,047,071
1
32,812,326
Depreciation
Charge
For The
Year Ended
31.12.2003
RM
40,026
-
224,840
2,768,877
305,942
162,977
163,700
81,666
3,748,028
The title deed to the short term leasehold land of the Group amounting to RM329,358 (2003 : RM335,945) has
yet to be issued by the relevant government authority.
Assets under lease and hire purchase
Included in the carrying amount of property, plant and equipment of the Group and of the Company are assets
acquired under lease and hire purchase instalment plans amounting to RM167,780 (2003 : RM401,051).
Security
Certain property, plant and equipment of the Group and of the Company with net book value of RM43,259,020
and RM23,771,514 (2003 : RM45,462,450 and RM32,812,326) respectively are charged to banks for facilities
granted to the Company and certain subsidiaries (see Note 9).
3. Investment in subsidiaries - Company
Unquoted shares
- at Directors' valuation
- at cost
2004
RM
24,183,356
10,779,099
34,962,455
2003
RM
24,183,356
10,779,099
34,962,455

3. Investment in subsidiaries - Company (cont’d)
Luster Manufacturing Sdn. Bhd. ("LMSB")
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
Luster Precision Engineering Sdn. Bhd. ("LPE")
Luster Plastic Industries Sdn. Bhd. ("LPI")
Demand Portfolio Sdn. Bhd. ("DP")
Luster Nakazawa R&D Sdn. Bhd. ("LNSB")
P.T. Luster Indonesia
Luster Electronics (M) Sdn. Bhd. ("LE")
Luster Chi Wo Sdn. Bhd. ("LCW")
Subsidiary of LPI
- Linpower Resources Sdn. Bhd.
Subsidiary of LPE
- Luster Seweon Sdn. Bhd.
Subsidiary of LE
- P.T. Luster Indonesia
31 December 2004
Long term investments in subsidiaries are shown at Directors' valuation based on the net tangible assets value
of the investments in 2001.
Details of the subsidiaries, which are all incorporated in Malaysia except for P.T. Luster Indonesia which was
incorporated in Indonesia, are as follows :
Effective
Name of Subsidiaries
equity held Principal Activities
2004 2003
100%
100%
100%
100%
51%
51%
100%
51%
100%
70%
49%
100%
100%
100%
100%
51%
51%
100%
51%
100%
-
49%
All the above subsidiaries except for LCW are not audited by KPMG.
47
Manufacture of precision plastic parts
and components and sub-assembly of
plastic parts and products
Manufacture of high precision parts and
components and sub-assembly of plastic
parts and products
Manufacture of precision plastic parts
and components
Trading in plastic resins and materials
for the production of plastic products
Research and development, design and
manufacture of moulds. The Company
ceased its operations during the financial
year
Printed circuit board assembly and full
assembly of complete products
Investment holding
Design and fabrication of moulds, tools
and dies, including precision moulds
Property investment holding
Design and manufacturing of mechanical
timer, select switches and synchronous
motor
Printed circuit board assembly and full
assembly of complete products

48
3.1 Acquisitions
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
3.1.1 On 12 March 2004, LPE entered into a joint venture agreement with Seweon Elec Mach Ind. Co. Ltd
("SEMICL") for the purpose of designing, developing and manufacturing of mechanical timber, select
switches and synchronous motor for household electrical appliances. Luster Seweon Sdn Bhd was
formed for the purpose of the above joint venture with an initial issued and paid-up share capital of
RM10,000 as at 31 December 2004.
3.1.2 During the financial year ended 31 December 2003, the Company acquired the following subsidiaries :
3.2 Disposal
i) 41.25% of the total issued and paid-up share capital of LPE for a total consideration of RM4,733,400
satisfied by cash payment of RM1,147,491 and issuance of 321,606 new ordinary shares of RM1
each;
ii) 43.07% of the total issued and paid-up share capital of LPI for a total consideration of RM3,179,560
satisfied by the issuance of 285,162 new ordinary shares of RM1 each;
iii) 33.33% of the total issued and paid-up share capital of DP for a total consideration of RM299,558
satisfied by the issuance of 26,866 new ordinary shares of RM1 each;
iv) 100% of the total issued and paid-up share capital of LE for a total consideration of RM1,688,002
satisfied by the issuance of 151,390 new ordinary shares of RM1 each; and
v) 51% of the total issued and paid-up share capital of LCW for a cash consideration of RM966,780.
The above acquisitions were accounted for using the acquisition method of accounting. The acquisition
of the above subsidiaries contributed a loss of RM116,681 to the consolidated results for the financial
year ended 31 December 2003.
During the financial year ended 31 December 2003, the Group disposed of LMould for RM87,773. The
subsidiary contributed a loss of RM1,169 to the consolidated results for the financial year ended 31 December
2003.
The disposal had the following effect on the Group's assets and liabilities at the date of disposal as follows :
Current assets
Current liabilities
Net assets
Gain on disposal
Consideration received
Less: Cash and cash equivalents
Cash flow on disposal, net of cash and cash equivalents disposed
4. Intangible asset - Group
At cost
Less : Amortisation
2004
RM
328,200
(32,820)
295,380
RM
1,369,770
(1,290,309)
79,461
8,312
87,773
(519,572)
(431,799)
2003
RM
-
-
-

5. Inventories, at cost
Raw materials
Work-in-progress
Manufactured inventories
Trading inventories
6. Trade and other receivables
Trade receivables
- Subsidiaries
- Others
Other receivables, deposits
and prepayments
Amount due from subsidiaries
7. Cash and cash equivalents
Deposits with licensed banks
Cash and bank balances
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
2004
RM
12,739,517
2,118,948
4,528,762
57,745
19,444,972
2004
RM
-
23,801,686
23,801,686
13,266,957
-
37,068,643
2004
RM
81,809
8,845,090
8,926,899
Group
31 December 2004
2003
RM
8,710,889
2,395,482
3,602,384
54,369
14,763,124
Group
2003
RM
-
34,527,456
34,527,456
4,037,727
-
38,565,183
Group
2003
RM
7,328,283
3,589,501
10,917,784
49
Company
2004
RM
7,562,400
665,574
1,570,141
-
9,798,115
Company
2004
RM
2,894,333
8,488,037
11,382,370
9,387,098
20,646,780
41,416,248
2003
RM
4,367,312
1,507,529
1,230,236
-
7,105,077
2003
RM
1,648,657
15,145,384
16,794,041
2,777,293
13,690,555
33,261,889
The amount due from subsidiaries is unsecured, has no fixed terms of repayment and is interest-free except for
an amount of RM Nil (2003 : RM1,202,241) bears interest at Nil (2003 : 4.00%) per annum.
Group
Company
2004
RM
-
7,192,216
7,192,216
2003
RM
3,000,000
961,331
3,961,331
Included in the deposits with licensed banks is an amount of RM81,809 (2003 : RM1,000,000) pledged as collateral
for bank facilities granted to certain subsidiaries.

50
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
8. Trade and other payables
Trade payables
- Amount due to subsidiaries
- Others
Other payables
- Amount due to subsidiaries
- Other payables and accruals
Company
2004
RM
-
13,635,436
13,635,436
-
5,341,853
18,977,289
Group
2003
RM
-
15,574,875
15,574,875
-
8,868,238
24,443,113
Company
2004
RM
445,166
7,157,563
7,602,729
8,932,382
2,649,091
19,184,202
The non-trade amount due to subsidiaries is unsecured, interest-free and has no fixed terms of repayment.
9. Borrowings
Current
Bank overdrafts- unsecured
- secured
Bankers' acceptances
- unsecured
- secured
Term loans - secured
Lease/Hire purchase obligations
Non-Current
Term loans - secured
Lease/Hire purchase obligations
2004
RM
183,556
5,468,445
1,298,000
19,389,000
5,616,296
83,398
32,038,695
15,979,194
87,282
16,066,476
Group
2003
RM
-
5,413,450
-
6,084,000
4,973,183
93,104
16,563,737
10,092,344
169,568
10,261,912
Company
2004
RM
-
3,165,542
-
14,464,000
4,578,291
83,398
22,291,231
13,002,924
87,282
13,090,206
2003
RM
17,086
5,800,190
5,817,276
9,694,721
4,956,475
20,468,472
2003
RM
-
3,579,628
-
2,000,000
3,849,917
93,104
9,522,649
8,910,067
169,568
9,079,635
The secured borrowings are secured by fixed and floating charges over the certain assets of the Company and
certain subsidiaries.
Interest on lease/hire purchase obligations is charged at flat rates varying between 4.70% to 6.25% (2003 : 4.70%
to 6.25%) per annum based on the principal sums financed over the periods of the obligations of up to 60 months.
Interest on other borrowings is charged at rates ranging from 1.25% to 2.50% (2003 : 1.25% to 2.50%) per annum
above the respective bankers' prevailing base lending rates or cost of funds as the case may be.

9. Borrowings (cont’d)
Secured term loans are payable as follows :
Analysis of repayments
Within 1 year
From 1 to 2 years
From 2 to 5 years
After 5 years
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
2004
RM
5,616,296
4,588,892
11,390,302
-
21,595,490
Lease/Hire purchase obligations are payable as follows :
Gross amount payable
Less : Interest-in-suspense
Less : Amount payable within 12 months
10. Share capital
Ordinary shares of RM1 each
Authorised :
Balance at beginning of year
Increase during the year
Balance at end of year
Issued and fully paid :
Balance at beginning of year
Acquisition of subsidiaries
Bonus issue
Public issue
ESOS
Balance at end of year
2004
RM
215,816
(45,136)
170,680
(83,398)
87,282
Group
31 December 2004
2003
RM
4,973,183
5,103,521
4,147,887
840,936
15,065,527
Group
2003
RM
330,757
(68,085)
262,672
(93,104)
169,568
51
Company
2004
RM
4,578,291
3,596,479
9,406,445
-
17,581,215
2003
RM
3,849,917
4,137,081
3,932,050
840,936
12,759,984
Company
2004
RM
215,816
(45,136)
170,680
(83,398)
87,282
2004
RM
100,000,000
-
100,000,000
60,627,000
-
-
-
396,000
396,000
61,023,000
2003
RM
330,757
(68,085)
262,672
(93,104)
169,568
2003
RM
5,000,000
95,000,000
100,000,000
4,000,000
785,024
45,294,976
9,920,000
627,000
56,627,000
60,627,000

52
10. Share capital (cont’d)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
The details of options granted to subscribe for shares which were outstanding as at 31 December 2004 are as
follows:
Option expiry date
The consideration is payable in full on application.
Equity compensation benefits
Share option plan
11.9.2008
11.9.2008
11.9.2008
Exercise price
RM1.40
RM1.65
RM1.55
Number of ordinary shares
3,919,000
122,000
262,000
The Group offers vested share options over ordinary shares to Directors and eligible employees with more than
six months service. Movements in the number of share options held by employees are as follows :
Option price at RM1.40 per ordinary share
Outstanding at 1 January
Granted
Exercised
Lapsed due to resignation
Outstanding at 31 December
Option price at RM1.65 per ordinary share
Outstanding at 1 January
Granted
Exercised
Lapsed due to resignation
Outstanding at 31 December
Option price at RM1.55 per ordinary share
Outstanding at 1 January
Granted
Exercised
Lapsed due to resignation
Outstanding at 31 December
Group and Company
2004
RM
4,663,000
-
(383,000)
(361,000)
3,919,000
-
170,000
(10,000)
(38,000)
122,000
-
295,000
(3,000)
(30,000)
262,000
2003
RM
-
5,290,000
(627,000)
-
4,663,000
-
-
-
-
-
-
-
-
-
-

10. Share capital (cont’d)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
Details of share options granted during the year :
Expiry date
Exercise price per ordinary share (RM)
Aggregate proceeds if shares are issued (RM'000)
Expiry date
Exercise price per ordinary share (RM)
Aggregate proceeds if shares are issued (RM'000)
Expiry date
Exercise price per ordinary share (RM)
Aggregate proceeds if shares are issued (RM'000)
Details of share options exercised during the year :
Expiry date
Exercise price per ordinary share (RM)
Aggregate issue proceeds (RM'000)
Fair value at date of issue
Expiry date
Exercise price per ordinary share (RM)
Aggregate issue proceeds (RM'000)
Fair value at date of issue
Expiry date
Exercise price per ordinary share (RM)
Aggregate issue proceeds (RM'000)
Fair value at date of issue
31 December 2004
53
Group and Company
2004
RM
-
-
-
11.9.2008
1.65
281
11.9.2008
1.55
457
2003
RM
11.9.2008
1.40
7,406
Group and Company
2004
RM
11.9.2008
1.40
536
700
11.9.2008
1.65
17
19
11.9.2008
1.55
5
5
-
-
-
-
-
-
2003
RM
11.9.2008
1.40
878
1,096
The Group received proceeds of RM557,350 (2003 : RM877,800) in respect of the 396,000 (2003 : 627,000)
options exercised during the year. RM396,000 (2003 : RM627,000) was credited to share capital and RM161,350
(2003 : RM250,800) was credited to share premium (refer Note 11).
-
-
-
-
-
-
-
-

11. Reserves
54
Distributable
Retained profits
Non-Distributable
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
Share premium
Exchange fluctuation reserve
2004
RM
15,850,870
2,273,541
45,567
18,169,978
Group
2003
RM
16,977,333
2,112,191
349,915
19,439,439
Company
2004
RM
7,113,840
2,273,541
-
9,387,381
The non-distributable revaluation reserve represents surplus on revaluation of investments in subsidiaries.
2003
RM
7,665,038
2,112,191
-
9,777,229
The share premium account arose from the public issue, issue of shares to acquire certain subsidiaries net of
share issue expenses and ESOS exercised.
12. Minority interests
This consists of minority shareholders' proportion of share capital and reserves of subsidiaries, net of their share
of subsidiaries' goodwill.
13. Deferred tax
The recognised deferred tax liabilities are as follows :
Property, plant and equipment
2004
RM
3,056,372
No deferred tax has been recognised for the following items :
Taxable temporary differences
Unabsorbed capital allowances
Unutilised tax losses
Group
2003
RM
3,882,586
Company
2004
RM
1,446,504
2004
RM
1,918,000
(1,671,000)
(422,000)
(175,000)
Group
2003
RM
2,271,204
2003
RM
911,000
(1,664,000)
(415,000)
(1,168,000)
The unutilised tax losses, unabsorbed capital allowances and temporary differences do not expire under current
tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable
that future taxable profit will be available against which the Group can utilise the benefits.

14. Revenue
Revenue comprises the following :
Group
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
Invoiced value of goods sold less returns and discounts allowed.
Company
31 December 2004
Invoiced value of goods sold less returns and discounts allowed, management fee and dividend income.
15. Operating profit
Operating profit is arrived at :
After charging:
Auditors' remuneration
Allowance for doubtful debts
Amortisation of intangible asset
Directors' remunerations
- Directors of the Company
- fees
- others
- Other Directors
- fees
- others
Depreciation (Note 2)
Rental of premises
Rental of machinery
Plant and equipment written off
Preliminary expenses written off
Pre-operating expenses written off
Research and development expenditure
Loss on disposal of a subsidiary
Loss on foreign exchange
- realised
- unrealised
and crediting :
Bad debts recovered
Realised gain on foreign exchange
Rental income
Dividend income
- subsidiaries
Interest income
- subsidiaries
- others
Gain on disposal of property,
plant and equipment
Management fee
Gain on disposal of a subsidiary
Exceptional item
- Negative goodwill recognised
2004
RM
84,200
4,550
32,820
180,000
1,377,200
-
270,918
7,436,736
504,323
51,650
966
2,500
92,980
-
-
7,902
860,638
-
-
76,000
-
-
16,803
458,005
18,000
-
-
Group
2003
RM
87,950
-
-
141,000
1,370,600
120,000
297,402
9,256,931
755,681
42,600
791
-
-
-
-
-
-
459,631
111,388
96,000
-
-
104,970
279,758
-
8,312
1,572,389
55
Company
2004
RM
23,000
-
-
180,000
1,037,200
-
-
3,749,734
277,198
27,550
-
-
-
156,000
-
-
-
-
16,608
-
-
-
5,153
359,599
315,000
-
-
2003
RM
23,000
-
-
105,000
998,600
-
-
3,748,028
281,589
42,600
161
-
-
312,000
428
-
-
459,631
95,637
-
1,000,000
45,555
31,993
135,798
276,000
-
-

56
16. Employee information
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
Staff costs (including executive Directors)
2004
RM
27,289,915
Group
2003
RM
29,101,027
14,677,607
Company
2004
RM
2003
RM
16,004,310
The number of employees of the Group and of the Company (including executive Directors) at the end of the year
was 2,346 (2003 : 2,468) and 1,339 (2003 : 1,417) respectively.
Staff costs of the Group and of the Company include contributions to the Employees' Provident Fund of RM1,662,985
(2003 : RM1,675,821) and RM1,080,618 (2003 : RM1,039,013) respectively.
17. Finance costs
Interest paid and payable :
- Bank overdrafts
- Bankers' acceptances
- Term loans
- Lease/Hire purchase
- Others
18. Tax expense
Current tax expense
- based on results for the year
- prior years
Deferred tax expense
- origination and reversal of
temporary differences
- prior years
2004
RM
148,016
590,034
981,732
22,949
2,333
1,745,064
2004
RM
529,547
(204,694)
324,853
143,701
(969,915)
(826,214)
(501,361)
Group
2003
RM
74,703
398,101
1,300,224
108,431
22,595
Group
1,904,054
2003
RM
2,047,614
111,788
2,159,402
1,063,347
(1,440,746)
(377,399)
1,782,003
Company
2004
RM
83,504
425,152
793,768
22,949
-
1,325,373
Company
2004
RM
216,621
(225,178)
(8,557)
145,351
(970,051)
(824,700)
(833,257)
2003
RM
30,446
200,030
1,075,076
31,854
157
1,337,563
2003
RM
780,614
-
780,614
1,021,488
(1,346,284)
(324,796)
455,818

18. Tax expense (cont’d)
Reconciliation of effective tax expense
Profit before tax
Income tax using Malaysian tax rate
Non-deductible expense
Effect of tax incentives
Deferred tax assets not recognised
Tax exempt income
Others
Over provision in prior years
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
2004
RM
381,473
65,643
604,846
(556,913)
668,286
(141,502)
32,888
673,248
(1,174,609)
(501,361)
Group
31 December 2004
2003
RM
13,857,133
3,572,134
372,265
(444,355)
16,248
(405,331)
-
3,110,961
(1,328,958)
1,782,003
Subject to agreement with the Inland Revenue Board, the Company has sufficient :
i) Section 108 tax credit to frank its entire retained profits; and
ii) exempt income to distribute approximately RM5.0 million of its retained profits;
at balance sheet date if paid out as dividends.
19. Earnings per share - Group
Basic earning per share
57
Company
2004
RM
809,169
226,567
686,766
(502,083)
-
(63,595)
14,317
361,972
(1,195,229)
(833,257)
2003
RM
6,409,284
1,794,600
108,535
(101,033)
-
-
-
1,802,102
(1,346,284)
455,818
The calculation of basic earnings per ordinary share is based on the net profit attributable to ordinary shareholders
of RM1,067,161 (2003 : RM12,173,896) and on the weighted average number of ordinary shares outstanding
during the year of 60,880,093 (2003 : 53,075,309) calculated as follows :
Weighed average number of ordinary shares
Issued ordinary shares at beginning of year
Effect of shares issued for acquisition of subsidiaries
Effect of bonus issue
Effect of public issue
Effect of share options
Weighted average number of ordinary shares
2004
60,627,000
-
-
-
253,093
60,880,093
2003
4,000,000
591,456
45,294,976
3,043,945
144,932
53,075,309

58
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
19. Earnings per share - Group (cont’d)
Diluted earnings per share
The calculation of diluted earnings per ordinary share is based on the net profit attributable to ordinary shareholders
of RM1,067,161 (2003 : RM12,173,896) and on the weighted average number of ordinary shares outstanding
during the year of 61,668,064 (2003 : 56,589,813) calculated as follows :
Weighed average number of ordinary shares
Weighed average number of ordinary shares as above
Effect of share options
Weighted average number of ordinary shares (diluted)
20. Dividend
Dividend paid :
2004
60,880,093
787,971
61,668,064
2004
RM
2003
53,075,309
3,514,504
56,589,813
Group/Company
Final dividend of 5% less 28% tax in respect of
year ended 31 December 2003 2,193,624 -
The proposed final dividend of 1% less 28% tax in respect of the year ended 31 December 2004 has not been
accounted for in the financial statements.
21. Related parties - Group/Company
21.1 Related party relationships
i) Companies controlled by the Company as disclosed in Note 3.
ii) Companies in which Mr Lim See Chea and Mr Lim See Hua are deemed to have substantial financial
interests:
- Durachem (Penang) Sdn Bhd ("DSB")
- Exzone Plastic Manufacturers Sdn Bhd ("Exzone")
- KK Evergreen Sdn Bhd ("KK Evergreen")
iii) Key management personnel of the Group
- Abdul Gafoor @ Abdul Gafoor Khan
- Lim See Chea
- Lim See Hua
- Chiang Chong Kooi
- Hang Kok Long
- Fong Swee Hin
2003
RM

21. Related parties - Group/Company (cont’d)
21.2 Related party transactions
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
21.2.1 There were no transactions with the Directors and key management personnel other than the
following:
i) Remuneration package paid to them in accordance with the terms and conditions of their
appointment.
ii) Share options granted to key management personnel
The share options given to key management personnel under the same terms and conditions
as those offered to other employees of the Group pursuant to the ESOS.
21.2.2 Transactions with subsidiaries:
Company
Sales
Purchases
Management fee receivable
Dividend income (net)
Mould modification expense
Research and development expenditure
2004
RM
4,109,520
3,761,767
297,000
-
-
156,000
59
2003
RM
5,674,673
5,374,021
276,000
720,000
904,389
312,000
21.2.3 The Group's transactions with companies in which certain Directors have substantial financial
interests:
Purchases :
DSB
Exzone
KK Evergreen
Sales :
Exzone
KK Evergreen
2004
RM
1,682,752
-
1,739,539
197,518
1,198,121
2003
RM
3,303,322
140,221
601,952
The Directors of the Company are of the opinion that the above transactions were entered into
the normal course of business and the terms of which have been established on a negotiated
basis.
21.2.4 The non-trade balances with subsidiaries are disclosed in Notes 6 and 8 respectively.
-
-

60
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
22. Contingent liability, unsecured - Company
Corporate guarantees issued for hire purchase/leasing and credit facilities
granted to certain subsidiaries
Amount of hire purchase/leasing and credit facilities draw down by the
subsidiaries concerned and outstanding at end of year
23. Commitments
Property, plant and equipment
Approved but not contracted for in
the financial statements
Investment commitment
Contracted but not provided for
24. Segment information - Group
2004
RM’000
3,811
13,673
Group
2003
RM’000
-
-
2004
RM’000
45,916
14,347
2004
RM’000
Company
-
10,450
2003
RM’000
18,089
5,739
2003
RM’000
Segmental information is presented in respect of the Group's business and geographical segments. The primary
format, business segments, is based on the Group's management and internal reporting structure.
Segmental results, assets and liabilities include items directly attributable to a segment as well as those can be
allocated on a reasonable basis.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are
expected to be used for more than one period.
Business segments
The Group's business segment comprise mainly the manufacture, assembly and sale of printed circuit boards,
plastic component parts and electronic parts for the semiconductor and electronics industries.
Business segmental information has not been prepared as all the Group's revenue, operating profit, assets
employed, liabilities, capital expenditure, depreciation and amortisation and non cash expenses are mainly
confined to one business segment.
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are also based on the geographical location of the assets.
-
-

24. Segment information - Group (cont’d)
2004
Revenue from external customers by
location of customers
Segment assets by location of assets
Capital expenditure by location of assets
2003
Revenue from external customers by
location of customers
Segment assets by location of assets
Capital expenditure by location of assets
25. Financial instruments
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
Financial risk management objectives and policies
Malaysia
RM
126,762,000
131,439,502
18,355,396
142,365,692
119,737,068
3,780,541
Indonesia
RM
4,230,340
17,270,387
4,434,267
2,823,475
15,714,690
1,718,024
31 December 2004
Eliminations
RM
-
-
-
-
-
-
61
Consolidated
RM
130,992,340
148,709,889
22,789,663
145,189,167
135,451,758
5,498,565
Exposure to credit, interest rate, foreign currency and liquidity risk arises in the normal course of the Group's
and Company's business.
Credit risk
Exposure to credit risk is monitored on an ongoing basis.
At balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit
risk of the Group and the Company are represented by the carrying amount of each financial asset.
Interest rate risk
The Group and the Company managed the interest rate risk by having a combination of fixed and floating rates
of their borrowings. The objectives for the mix between fixed and floating rate borrowings are set to reduce the
impact of an upward change in interest rates while enabling benefits to be enjoyed if interest rates fall.
Foreign currency risk
The Group and the Company incur foreign currency risk on sales, purchases and borrowings that are denominated
in a currency other than Ringgit Malaysia. The currency giving rise to this risk is primarily the US dollars.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to
finance the Group's operations and to mitigate the effects of fluctuations in cash flows.
Effective interest rates and repricing analysis
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates
their effective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever
is earlier.

62
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
25. Financial instruments (cont’d)
Group
2004
Financial asset
Deposits with licensed banks
Group
Financial liabilities
Bank overdrafts
Bankers' acceptances
Term loans
2003
Financial assets
Deposits with licensed banks
Financial liabilities
Bank overdrafts
Bankers' acceptances
Term loans
Company
2004
Financial liabilities
Bank overdrafts
Bankers' acceptances
Term loans
2003
Financial assets
Deposit with licensed banks
Amount due from subsidiaries
Financial liabilities
Bank overdrafts
Bankers' acceptances
Term loans
Effective
interest rates
per annum
%
3.50
7.38
3.40
4.37
3.00
7.70
3.82
6.85
7.38
3.60
3.74
2.33
4.00
7.63
3.75
7.25
Total
RM
81,809
5,652,001
20,687,000
21,595,490
7,328,283
5,413,450
6,084,000
15,065,527
3,165,542
14,464,000
17,581,215
3,000,000
1,202,241
3,579,628
2,000,000
12,759,984
Within
1 year
RM
81,809
5,652,001
20,687,000
21,489,008
7,328,283
5,413,450
6,084,000
15,065,527
3,165,542
14,464,000
17,474,733
3,000,000
1,202,241
3,579,628
2,000,000
12,759,984
1 - 5
years
RM
-
-
-
106,482
-
-
-
-
-
-
106,482
-
-
-
-
-

25. Financial instruments (cont’d)
Fair values
Recognised financial instruments
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
In respect of cash and cash equivalents, trade and other receivables, trade and other payables and short term
borrowings, the carrying amounts approximate fair value due to the relatively short term nature of these financial
instruments.
It is not practicable to estimate the fair value of the term loans due to the lack of information on discount rate
and the inability to estimate the fair value without incurring excessive costs. However, the Directors believe that
there is no significant difference between the fair value and the book value of the term loans.
26. Significant events during the financial year
During the financial year, the Company completed the following events:
i) On 12 March 2004, Luster Precision Engineering Sdn. Bhd. ("LPE"), a subsidiary of the Company entered
into a joint venture agreement with Seweon Elec Mach Ind. Co. Ltd ("SEMICL") for the setting up of a jointventure
company, Luster Seweon Sdn. Bhd. ("LSSB") for the purposes of designing, developing and
manufacturing of mechanical timber, select switches and synchronous motor for household electrical
appliances with the shareholding of the joint-venture company held by LPE and SEMICL in the percentage
of 70% and 30% respectively.
The authorised share capital of LSSB is RM5,000,000 and the proposed initial issued and paid-up capital
for the first year of its operation is RM4,623,000 comprising 4,623,000 ordinary shares to be subscribed in
cash and non-cash consideration. As at 31 December 2004, the issued and paid-up share capital of LSSB
is RM10,000.
ii) On 2 January 2004, a second offer of the ESOS amounting to 170,000 shares at RM1.65 per share was
granted to the eligible Directors and employees of the Group.
iii) On 1 July 2004, a third offer of the ESOS amounting to 295,000 shares at RM1.55 per share was granted
to the eligible Directors and employees of the Group.
iv) Luster Industries Bhd. ("LIB") had on 10 September 2004 entered into a Conditional Share Sale Agreement
("SSA") with the shareholders of Mctronic Industries Sdn. Bhd. ("MISB") to acquire 480,000 ordinary shares
of RM1 each representing 80% of the issued and paid-up share capital of MISB for a total cash consideration
of RM11,000,000.
The acquisition was completed on 27 January 2005.
63

64
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
31 December 2004
27. Events subsequent to balance sheet date
i). On 3 February 2005, Luster Manufacturing Sdn. Bhd., a wholly-owned subsidiary of the Company, incorporated
a wholly-owned subsidiary in Singapore under a registered name of Millennium Environment (Asia Pacific)
Pte. Ltd. ("MEAP"). MEAP's principal activities are engineering, manufacturing, facility designing, construction
management and distribution of waste disposal equipment. The authorised capital of MEAP is SGD2,000,000
divided into 2,000,000 ordinary shares of SGD1.00 each. MEAP's issued and paid-up capital is SGD2.00
divided into 2 ordinary shares of SGD1.00 each.
ii) Millennium Environment (Asia Pacific) Pte. Ltd., a wholly-owned subsidiary of Luster Manufacturing Sdn.
Bhd. ("LMSB"), had on 21 February 2005 incorporated a wholly-owned subsidiary in Singapore under the
registered name of MEA Environment (Asia Pacific) Pte. Ltd. ("MEA"). LMSB is a wholly-owned subsidiary
of LIB. MEA's principal activities are engineering, manufacturing, facility designing, construction management
and distribution of waste disposal equipment. The authorised capital of MEA is SGD2,000,000 divided into
2,000,000 ordinary shares of SGD1 each. MEA's issued and paid-up capital is SGD2.00 divided into 2
ordinary shares of SGD1.00 each.
iii) On 1 April 2005, LIB announced that it desirous to purchase a shelf-company in British Virgin Island named
Mature Step International Ltd. and will change its name to Luster International Pte. Ltd. ("LIPL") subsequently.
The intended principal activity of LIPL is investment holding and the proposed authorised capital is USD50,000
divided into 50,000 ordinary shares at USD1.00 each. The initial proposed issued and paid-up capital of
LIPL is USD2.00 divided into 2 ordinary shares at USD1.00 each.
iv) Mctronic Industries Sdn. Bhd. ("MISB"), a 80% owned subsidiary of the Company had on 6 April 2005
acquired a wholly-owned subsidiary in Malaysia under the registered name of Mctronic Plastic Sdn. Bhd.
("MPSB"). MPSB is dormant and its intended principal activities are manufacturing and dealer in plastic
products. The authorised capital of MPSB is RM100,000 divided into 100,000 ordinary shares of RM1.00
each. MPSB's issued and paid-up capital is RM2.00 divided into 2 ordinary shares of RM1.00 each.
v) On 1 April 2005, LIB provided a Corporate Guarantee of RM8.81 million in favour of RHB Bank Berhad in
respect of banking facilities granted to a subsidiary of the Company, MISB for its expansion and working
capital.

Luster Industries Bhd
Lot 58, Bakar Arang Industrial Estate
08000 Sungai Petani,
KEDAH
Lot 59, Bakar Arang Industrial Estate
08000 Sungai Petani,
KEDAH
Lot 49, Bakar Arang Industrial Estate
08000 Sungai Petani,
KEDAH
Lot 50, Bakar Arang Industrial Estate
08000 Sungai Petani,
KEDAH
Luster Precision Engineering S/B
Plot 36, Jalan PKNK Utama
Kawasan Perusahaan Sungai Petani
08000 Sungai Petani
KEDAH
Plot 37, Jalan PKNK Utama
Kawasan Perusahaan Sungai Petani
08000 Sungai Petani
KEDAH
Lot 38, Phase I
Bakar Arang Industrial Estate
08000 Sungai Petani
KEDAH
Luster Manufacturing S/B
Plot 226, Jalan PKNK Utama
Kawasan Perusahaan Sungai Petani
08000 Sungai Petani
KEDAH
Luster Seweon S/B
Plot 65, Jalan PKNK 1/6
Kawasan Perusahaan Sungai Petani
08000 Sungai Petani
KEDAH
Plot 66, Jalan PKNK 1/6
Kaw Perusahaan Sg Petani
08000 Sungai Petani
KEDAH
Description
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Land
Area (M 2 )
10,522
13,355
12,140
9,308
7,426
6,475
693
7,854
1,870
1,947
LIST OF PROPERTIES
Built-up
Area (M 2 ) Tenure
6,386
4,413
3,403
7,591
4,121
2,543
216
4,050
802
802
Leasehold period
for 60 years
expire on 2049
Leasehold period
for 60 years
expire on 2055
Leasehold period
for 60 years
expire on 2042
Leasehold period
for 60 years
expire on 2042
Leasehold period
for 60 years
expire on 2052
Leasehold period
for 60 years
expire on 2052
Leasehold period
for 60 years
expire on 2043
Leasehold period
for 60 years
expire on 2052
Leasehold period
for 60 years
expire on 2052
Leasehold period
for 60 years
expire on 2052
65
Date of
Acquisition/
Revaluation*
(Age of
Building)
1991
13
2000*
9
1994*
11
2001*
22
2000*
9
2000*
9
1992
21
2000*
12
1997*
7
1997*
7
NBV@
31.12.2004
RM
1,940,576
3,379,742
1,565,074
5,140,156
2,135,606
3,545,767
369,975
2,526,539
764,889
764,889

66
Linpower Resources S/B
Lot 5&6, Fasa 4
Kawasan Perusahaan Sungai Petani
08000 Sungai Petani,
KEDAH
Luster Chi Wo S/B
Lot 7, Kawasan MIEL, Phase V
Bakar Arang Industrial Estate,
08000 Sungai Petani,
KEDAH
Lot 8, Kawasan MIEL, Phase V
Bakar Arang Industrial Estate,
08000 Sungai Petani,
KEDAH
PT Luster Indonesia
Komp. Industri Sarana Terpadu,
Jalan Industri Km2,
Desa Pasir Gombang,
Kec. Lemah Abang,
Cikarang - Bekasi 17530,
Indonesia
LIST OF PROPERTIES (Cont’d)
Description
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Leasehold land
Factory Building
Land
Area (M 2 )
5,980
1,470
1,319
29,245
Built-up
Area (M 2 ) Tenure
3,965
637
637
3,168
Leasehold period
for 60 years
expire on 2053
Leasehold period
for 60 years
expire on 2046
Leasehold period
for 60 years
expire on 2046
Leasehold perod
for 20 years
expire on 2014
Date of
Acquisition/
Revaluation*
(Age of
Building)
1997*
8
1999
8
1999
8
2000
4
NBV@
31.12.2004
RM
2,002,953
618,157
618,157
3,910,308

Authorised share capital
Issued and fully paid-up capital
Class of share
Voting rights
Size of
Holdings
Less than 100
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 3,059,149
3,059,150 - 61,183,000
TOTAL
ANALYSIS OF SHAREHOLDINGS
as at 6 May 2005
: RM100,000,000
: RM61,183,000
: Ordinary shares of RM1 each
: On a show of hands - one vote for every shareholder
: On a poll - one vote for every ordinary share held
STATEMENT OF DIRECTORS' SHAREHOLDINGS As at 6 May 2005
The Company
1 Lim See Chea
2 Lim See Hua
3 Chatar Singh A/L Santa Singh
4 Fong Swee Hin
5 Hang Kok Long
6 Chiang Chong Kooi
7 Abdul Gafoor @ Gafoor Khan
8 Tengku Sepachendra Tengku Abdul Rashid
9 Tunku Dato' Dr. Ismail Bin Tunku Mohammad Jewa
Direct
Interest
131,000
728,536
-
10,000
51,000
75,000
10,000
9,000
9,000
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS As at 6 May 2005
Name
1 Luster Holdings Sdn. Bhd.
2 Allianz Life Insurance Malaysia Berhad
3 Allianz General Insurance Malaysia Berhad
4 Allianz Aktiengesellschaft
5 Lim See Chea
6 Gey Ah Sang @ Lee Ah Sim
Direct
Interest
28,020,000
7,332,450
3,029,350
-
131,000
8,000
No of
Depositors
Note : * Deemed interest by virtue of holding more than 15% in the shares of Luster Holdings Sdn Bhd.
** Deemed interest by virtue of holding more than 15% in the shares of Allianz Life Insurance Malaysia Berhad
*** Deemed interest by virtue of holding more than 15% in the shares of Allianz Life Insurance Malaysia Berhad
and also holding more than 15% in the shares of Allianz General Insurance Malaysia Bhd
%
0.21
1.19
-
0.02
0.08
0.12
0.02
0.01
0.01
% of Issued
Capital
45.80
11.98
4.95
-
0.21
0.01
67
Indirect
Interest
28,020,000 *
-
-
-
-
-
-
-
-
Note : By virtue of his interest of more than 15% in the Ordinary Shares of the Company, Lim See Chea is also deemed
to have interest in the Ordinary Shares of all the subsidiaries to the extent that the Company has an interest.
* Deemed interest by virtue of holding more than 15% in the shares of Luster Holdings Sdn. Bhd.
8
342
369
76
37
2
834
No of
Shares
Held
373
324,469
1,589,800
2,470,568
21,453,540
35,344,250
61,183,000
Indirect
Interest
-
-
7,332,450 **
10,353,300 ***
28,020,000 *
28,020,000 *
% of
Issued
Capital
0.0006
0.5303
2.5984
4.038
35.0645
57.7681
100
%
45.80
-
-
-
-
-
-
-
-
% of Issued
Capital
-
-
11.98
16.92
45.80
45.80

68
ANALYSIS OF SHAREHOLDINGS (Cont’d)
as at 6 May 2005
LIST OF TOP 30 DEPOSITORS AS AT 06 MAY 2005
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
NAME
LUSTER HOLDINGS SDN BHD
ALLIANZ LIFE INSURANCE MALAYSIA BERHAD
ALLIANZ GENERAL INSURANCE MALAYSIA BERHAD
CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB FOR ONG ENG DEE (PB RETAIL BANKING)
HSBC NOMINEES (TEMPATAN) SDN BHD
HSBC (M) TRUSTEE BHD FOR AMCUMULATIVE GROWTH (3639)
AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD
AMANAH SAHAM BANK SIMPANAN NASIONAL
AM NOMINEES (TEMPATAN) SDN BHD
EMPLOYEES PROVIDENT FUND BOARD (A/C1)
AM NOMINEES (TEMPATAN) SDN BHD
AMFINANCE BERHAD
PERBADANAN NASIONAL BERHAD
GOOI TZE LING
AM NOMINEES (TEMPATAN) SDN BHD
AMMERCHANT BANK BERHAD
LIM SEE HUA
AMANAH RAYA BERHAD
AMITTIKAL
KOEK TIANG KUNG
KOH YOKE CHAI
WONG YOKE FONG @ WONG NYOK FING
OOI PEY WONG
CHOW SWEE CHENG
GOH HOWA MING
AM NOMINEES (TEMPATAN) SDN BHD
AMBANK BERHAD
HEW SIEW PIN
CHAN MOON THIAM
MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD
MALAYSIAN TRUSTEES BERHAD FOR ALLIANCE VISION FUND
GAN BENG LUAN
MALAYSIAN TRUSTEES BERHAD
PACIFICMAS ASSET MANAGEMENT SDN BHD FOR
PACIFICMAS FIDELITY SDN BHD
MALAYSIAN TRUSTEES BERHAD
PACIFICMAS ASSET MANAGEMENT SDN BHD FOR PACIFICMAS BERHAD
AM NOMINEES (TEMPATAN) SDN BHD
YAYASAN PAHANG
AM NOMINEES (TEMPATAN) SDN BHD
KUMPULAN WANG SIMPANAN GURU-GURU
LIM LAY KHIM
LIM SEE CHEA
Normal
Holdings
28,020,000
7,324,250
3,029,350
2,916,654
2,431,800
1,273,100
998,000
978,500
947,400
848,800
776,900
728,536
631,000
618,400
600,000
582,000
315,000
300,000
299,400
274,700
248,000
227,000
215,000
205,000
200,000
176,000
161,800
153,000
150,000
131,000
55,760,590
Holdings
%
45.797
11.971
4.9513
4.7671
3.9746
2.0808
1.6312
1.5993
1.5485
1.3873
1.2698
1.1907
1.0313
1.0107
0.9807
0.9512
0.5148
0.4903
0.4894
0.449
0.4053
0.371
0.3514
0.3351
0.3269
0.2877
0.2644
0.2501
0.2452
0.2141
91.1374

NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of the Company will be held at Saujana
Lounge, Penang Golf Resort, 1687 Jalan Bertam, 13200 Kepala Batas, Pulau Pinang on Thursday, 30 June 2005 at
9.30 a.m. to transact the following business:
1.
2.
3.
4.
5.
6.
7.
To receive and adopt the Financial Statements for the year ended 31 December 2004
and the Reports of Directors and Auditors thereon.
To re-elect the following directors who retire pursuant to Article 133 of the Company's
Articles of Association :-
i) Fong Swee Hin
ii) Abdul Gafoor @ Abdul Gafoor Khan
iii) Chatar Singh A/L Santa Singh
To approve and ratify the payment of a sum of RM180,000/= as directors' fees in respect
of the year ended 31 December 2004.
To approve a first and final dividend of 1% less 28% tax totalling RM439,366/= in respect
of the financial year ended 31 December 2004.
To re-appoint Messrs KPMG as auditors of the Company and to authorise the directors
to fix their remuneration.
As Special Business
To consider and if thought fit, to pass the following Ordinary Resolution:
"That pursuant to Section 132D of the Companies Act, 1965 and subject to the approval
of the relevant authorities, the directors be and are hereby empowered to issue shares
in the Company from time to time and upon such terms and conditions and for such
purposes as the directors may deem fit provided that the aggregate number of shares
issued pursuant to this resolution does not exceed 10% of the total issued share capital
of the Company for the time being and that the directors be and are also empowered to
obtain the approval for the listing of and quotation for the additional shares so issued on
the Bursa Malaysia Securities Berhad and that such authority shall continue in force until
the conclusion of the next Annual General Meeting or the expiration of the period within
which the next Annual General Meeting is required by law to be held or revoked/varied
by resolution passed by the shareholders in general meeting whichever is the earlier."
Proposed Shareholders' Mandate for Recurrent Related Party Transactions of a Revenue
or Trading Nature ("Proposed Shareholders' Mandate")
"THAT pursuant to Chapter 10.09 of the Listing Requirements of Bursa Malaysia Securities
Berhad, a general mandate of the Shareholders be and are hereby granted to approve
the recurrent transactions of a revenue or trading nature entered into and/or to be entered
into between the Company and/or its subsidiaries as set out in Section 2.5 of the Company's
Circular to Shareholders dated 8 June 2005 ("the Circular") with the related parties as
described in the Circular as follows, provided that such transactions are undertaken in
the ordinary course of business, on an arm's length basis, on normal commercial terms,
on terms not more favourable to the Related Party than those generally available to the
public and are not, in the Company's opinion, detrimental to the minority shareholders;
and that disclosure will be made in the annual report of the aggregate value of transactions
conducted during the financial year; and that such approval, unless revoked or varied by
the Company in general meeting, shall continue to be in force until the conclusion of the
next Annual General Meeting of the Company: -
a) Recurrent Related Party Transactions of a revenue or trading nature involving the
Company and its subsidiaries with Durachem (Penang) Sdn. Bhd.;
b) Recurrent Related Party Transactions of a revenue or trading nature involving the
Company and its subsidiaries with Exzone Plastic Manufacturers Sdn. Bhd.;
69
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
Ordinary Resolution 10

8.
70
NOTICE OF ANNUAL GENERAL MEETING (Cont’d)
c) Recurrent Related Party Transactions of a revenue or trading nature involving the
Company and its subsidiaries with KK Evergreen Sdn. Bhd.
d) Recurrent Related Party Transactions of a revenue or trading nature involving the
Company and its subsidiaries with Seweon Elec. Mach. Ind. Co. Ltd.
To transact any other business of which due notice shall have been given.
DIVIDEND ANNOUNCEMENT
Ordinary Resolution 11
Ordinary Resolution 12
NOTICE IS ALSO HEREBY GIVEN that a depositor shall qualify for entitlement to the dividend only in respect of: -
a. Shares transferred into the depositor's securities account before 4 p.m. on 18 August 2005 in respect of ordinary
transfers; and
b. Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of
the Bursa Malaysia Securities Berhad.
The dividend, if approved will be paid on 6 September 2005 to depositors registered in the Record of Depositors at
the close of business on 18 August 2005.
By Order of the Board
Lam Voon Kean (MIA 4793)
Company Secretary
Penang, 8 June 2005
Notes: -
1. A member may appoint up to 2 proxies to attend on the same occasion. A proxy may but need not be a Member and the
provisions of Section 149(1)(b) of the Act shall not apply to the Company. If a Member appoints 2 proxies, the appointments
shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories)
Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company
standing to the credit of the said securities account.
3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing
or, if the appointor is a corporation, either under the corporation's seal or under the hand of an officer or attorney duly authorised.
4. To be valid, the proxy form must be deposited at the Company's Registered Office at Suite 2-1, 2nd Floor, Menara Penang
Garden, 42A Jalan Sultan Ahmad Shah, 10050 Penang, at least forty eight (48) hours before the time appointed for holding
the meeting or any adjournments thereof.
Explanatory Notes on Special Business: -
5. The proposed Ordinary Resolution 8, if passed, will give authority to the Board of Directors to issue and allot ordinary shares
from the unissued capital of the Company at any time in their absolute discretion and that such authority, unless revoked or
varied at a general meeting, will expire at the next Annual General Meeting of the Company or the expiration of the period
within which the next Annual General Meeting is required by law to be held or revoked/varied by resolution passed by the
shareholders in general meeting whichever is the earlier.
6. The proposed resolutions 9 to 12, if passed will approve the Proposed Shareholders' Mandate on Recurrent Related Party
Transactions and allow the Company and its subsidiaries to enter into Recurrent related Party Transactions as set out in Section
2.5 of the Circular. This approval shall continue to be in force until the conclusion of the next Annual General Meeting or the
expiration of the period within which the next Annual General Meeting is required by the law to be held or revoked/varied by
resolution passed by the shareholders in general meeting whichever is the earlier.

1. Names of Directors standing for re-election
i) Fong Swee Hin
ii) Abdul Gafoor @ Abdul Gafoor Khan
iii) Chatar Singh A/L Santa Singh
2. Details of attendance
STATEMENT ACCOMPANYING
NOTICE OF ANNUAL GENERAL MEETING
Details of attendance of Directors at the Board Meetings are stated on page 13 of this Annual Report.
3. The place, date and hour of the meeting
Details of the meeting are stated on page 69 of this Annual Report.
4. Details of Directors standing for re-election
The shareholdings of the Directors standing for re-election in the Company based on the Register of Directors'
Shareholding as at 6 May 2005 are as follows: -
Director
(Pursuant to paragraph 8.28(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad)
Fong Swee Hin
Abdul Gafoor
@ Abdul Gafoor Khan
Chatar Singh A/L Santa Singh
No. of ordinary
shares of RM1.00
each held
10,000
10,000
-
71
Direct Indirect
% of issued
share
Capital
0.2
0.2
-
No. of ordinary
shares of RM1.00
each held
-
-
-
% of issued
share
capital
The other details of the Directors standing for re-election are disclosed in the Directors' profiles on page 7 to 11
of this Annual Report.
The Directors standing for re-election do not hold any shares in the subsidiaries of the Company, do not have
any conflict of interest with the Company and have not been convicted of any offence within the past ten (10)
years other than traffic offences. They also do not have any family relationship with any Director and/or substantial
shareholder of the Company.
-
-
-

This page is intentionally left blank.

I/We
of
being a member/members of Luster Industries Bhd. hereby appoint
of
of
or failing him,
as my/our proxy, to vote for me/us and on my/our behalf at the Eighteenth Annual General Meeting of the Company
to be held at Saujana Lounge, Penang Golf Resort, 1687 Jalan Bertam, 13200 Kepala Batas, Pulau Pinang on
Thursday, 30 June 2005 at 9.30 a.m. and at any adjournments thereof.
RESOLUTION
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
Ordinary Resolution 10
Ordinary Resolution 11
Ordinary Resolution 12
FOR AGAINST
(Please indicate with "X" how you wish your vote to be cast. If no specific direction as to voting is given, the proxy
will vote or abstain at his discretion).
Signed this day of 2005.
Signature of Shareholder
NOTES :
LUSTER INDUSTRIES BHD
156148-P
No. of Shares Held
1. A member may appoint up to 2 proxies to attend on the same occasion. A proxy may but need not be a Member and the provisions
of Section 149(1)(b) of the Act shall not apply to the Company. If a Member appoints 2 proxies, the appointments shall be invalid
unless he specifies the proportions of his holdings to be represented by each proxy.
2. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act,
1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing
to the credit of the said securities account.
3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing
or, if the appointor is a corporation, either under the corporation's seal or under the hand of an officer or attorney duly authorised.
4. To be valid, the proxy form must be deposited at the Company's Registered Office at Suite 2-1, 2nd Floor, Menara Penang Garden,
42A Jalan Sultan Ahmad Shah, 10050 Penang, at least forty eight (48) hours before the time appointed for holding the meeting or
any adjournments thereof.

Please fold here to seal
Please fold here to seal
The Company Secretary
LUSTER INDUSTRIES BHD (156148-P)
Suite 2-1, 2 nd Floor, Menara Penang Garden
42A, Jalan Sultan Ahmad Shah, 10050 Penang
Stamp

Luster Industries Bhd (156148-P)
Lot 58 & 59,
Bakar Arang Industrial Estate,
08000 Sungai Petani,
Kedah Darul Aman.
Tel : 604-421 3481, 604-421 1000
Fax : 604-423 3189
Website : www.lustergroup.com