Chin Well. Achieving Global Recognition HOLDINGS BERHAD T

Transcription

1 Chin Well HOLDINGS BERHAD T Achieving Global Recognition Annual Report

2 Contents Notice of Annual General Meeting 2-4 Corporate Information 5 Corporate Structure of the Group 6 Chairman s Statements 7-8 Directors Profile 9-10 Corporate Governance Statement Additional Compliance Information 17 Directors Responsibility Statement 18 Corporate Social Responsibility Statement 18 Statement on Risk Management and Internal Control Audit Committee Report Directors Report Directors Statement 27 Statutory Declaration 27 Achieving Global Recognition The seeds of Chin Well were planted years ago in Today, the company has passed the requirements as being a committed business entity with the highest of standards with exports covering as far as Europe, USA, and South East Asia. As it continues to grow with its strongly focused and dedicated management team and experienced staff, their excellent advancement can be seen demonstrated all around the globe. Achieving global recognition has been a long time dream for Chin Well but today, they stand proud for their outstanding achievements and will stop at nothing to achieving greater success and to becoming an international top market leader. Independent Auditors Report to the Members Statement of Financial Position 30 Statements of Comprehensive Income Consolidated Statement of Changes in Equity 33 Statement of Changes in Equity 34 Statements of Cash Flows Notes to the Financial Statements Supplementary Information 82 Properties of the Group 83 Analysis of Shareholdings Proxy Form 87 1 ANNUAL REPORT

3 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of the Company will be held at the Conference Room of Chin Well Holdings Berhad at No. 1586, MK. 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang on Monday, 22 December at a.m., for the following purposes:- AGENDA As Ordinary Business : 1. To receive the Audited Financial Statements for the financial year ended 30 June together with the Reports of the Directors and Auditors thereon. Please refer to Note 7 2. To re-elect the following Directors who retire by rotation in accordance with Article 102(1) of the Company s Articles of Association and who, being eligible, offer themselves for re-election:- i) Mr. Ung Peng Joo Resolution 1 ii) Ms. Tsai Chia Ling Resolution 2 3. To re-elect Cik Sharmin Fazlina Binti Mohd Shukor, who retires in accordance with Article 109 of the Resolution 3 Company s Articles of Association and who, being eligible, offer herself for re-election. 4. To approve the payment of Directors Fees for the financial year ended 30 June. Resolution 4 5. To re-appoint Messrs. Grant Thornton as auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. Resolution 5 As Special Business : 6. To consider and if thought fit, to pass with or without modifications, the following resolutions as ordinary resolutions:- CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS i) That, authority be and is hereby given to Mr. Lim Chien Ch eng who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company. Resolution 6 ii) iii) That, authority be and is hereby given to Mr. Ong Eng Choon who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company. Resolution 7 That, authority be and is hereby given to Mr. Ung Peng Joo who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company. Resolution 8 7. To consider and if thought fit, to pass with or without modifications, the following resolution as an ordinary resolution:- AUTHORITY UNDER SECTION 132D OF THE COMPANIES ACT, 1965 FOR THE DIRECTORS TO ISSUE SHARES That, subject always to the Companies Act, 1965, the Articles of Association of the Company and the approvals of the relevant government/regulatory authorities, the Directors be and are hereby authorised, pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deemed fit, provided that the aggregate number of shares to be issued does not exceed 10% of the total issued share capital of the Company for the time being and that the Directors are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing and quotation for the additional shares to be issued. Resolution 9 2 ANNUAL REPORT

4 NOTICE OF ANNUAL GENERAL MEETING (Cont d) 8. To consider and if thought fit, to pass with or without modifications, the following resolution as an ordinary resolution:- PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE ( PROPOSED MANDATE ) That, subject always to the provisions of the Companies Act, 1965 ( the Act ), the Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) and/or any other regulatory authorities, approval be and is hereby given for the Company s subsidiaries to enter into recurrent related party transactions of a revenue or trading nature in the ordinary course of business which are necessary for the day-to-day operations of the Company s subsidiaries as specified in Section 2.2 of the Company s Circular to Shareholders dated 28 November ( Circular ) on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders and that such authority shall continue to be in force until:- (a) (b) (c) the conclusion of the next Annual General Meeting ( AGM ) of the Company following the AGM at which the Proposed Mandate was passed, at which time it will lapse, unless by an ordinary resolution passed at that AGM, the authority is renewed; the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by an ordinary resolution passed by the shareholders in a general meeting, whichever is the earlier; And that, authority be and is hereby given to the Directors of the Company and its subsidiaries to complete and do all such acts and things (including executing such documents as may be required) to give effect to such transactions as authorised by this ordinary resolution. And that, the estimates given on the recurrent related party transactions specified in Section 2.2 of the Circular being provisional in nature, the Directors and/or any of them be hereby authorised to agree to the actual amount or amounts thereof, provided always that such amount or amounts comply with the review procedures set out in Section 2.3 of the Circular. Resolution To transact any other business of which due notice shall have been given in accordance with the Company s Articles of Association and the Companies Act, FURTHER NOTICE IS HEREBY GIVEN THAT only a depositor whose name appears on the Record of Depositors as at 15 December shall be entitled to attend the forthcoming Eighteenth Annual General Meeting or appoint proxies to attend and/vote on his/her behalf. By Order of the Board, LEE PENG LOON (MACS 01258) P NG CHIEW KEEM (MAICSA ) Company Secretaries Penang Date : 28 November 3 ANNUAL REPORT

5 NOTICE OF ANNUAL GENERAL MEETING NOTES ON APPOINTMENT OF PROXY 1. A proxy may but need not be a member of the Company. 2. For a proxy to be valid, the Proxy Form duly completed, must be deposited at the registered office of the Company, A Menara BHL Bank, Jalan Sultan Ahmad Shah, Penang not less than forty-eight (48) hours before the time appointed for holding the meeting. 3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. 4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy. 5. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ) there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. 6. If the appointer is a corporation, the Proxy Form must be executed under the corporation s Common Seal or under the hand of an officer or attorney duly authorised. EXPLANATORY NOTE ON ORDINARY BUSINESS 7. The Agenda 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of shareholders of the Company and hence, the Agenda 1 is not put forward for voting. EXPLANATORY NOTES ON SPECIAL BUSINESS 8. The proposed Resolution 6 to 8, are to allow the Independent Non-Executive Directors to be retained and continue acting as Independent Non-Executive Directors to fulfill the requirements of Paragraph 3.04 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and to be in line with the recommendations 3.2 and 3.3 of the Malaysian Code of Corporate Governance The details of justifications are set out in the Company s Annual Report. 9. The proposed Resolution 9, is to seek a renewal of the general mandate for the Directors of the Company to allot and issue shares in the Company up to an amount not exceeding 10% of the total issued capital of the Company for the time being for such purposes as the directors consider will be in the best interest of the Company. This authority, unless revoked or varied by the shareholders of the Company in general meeting will expire at the conclusion of the next Annual General Meeting. As at the date of notice of meeting, no new shares has been issued pursuant to the general mandate granted at the last Annual General Meeting of the Company. The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares for the purpose of funding future investment, working capital and/or acquisition. 10. The proposed Resolution 10, is to seek shareholders approval on the Proposed Mandate for the Company s subsidiaries to enter into recurrent transactions involving the interests of related parties, which are of a revenue or trading nature and necessary for the Group s day-to-day operations, subject to the transactions being carried out in the ordinary course of business and on terms not to the detriment of minority shareholders of the Company. The details of the Proposed Mandate are set out in the Circular to Shareholders dated 28 November which has been dispatched together with the Company s Annual Report. ANNUAL REPORT The Annual Report is in CD-ROM format. Printed copy of the Annual Report shall be provided to the shareholder upon request within four (4) market days from the date of receipt of the verbal or written request. Shareholders who wish to receive the printed Annual Report and who require assistance in viewing the CD-ROM, kindly contact Ms. Lye Chooi Kuan at telephone no ext: 205 or your request to [email protected] 4 ANNUAL REPORT

6 CORPORATE INFOATION Board of Directors Lim Chien Ch eng Tsai Yung Chuan Tsai Chang Hsiu-Hsiang Tsai Chia Ling Ung Peng Joo Ong Eng Choon Sharmin Fazlina Binti Mohd Shukor (Chairman, Independent Non-Executive Director) (Managing Director) (Executive Director) (Executive Director) (Independent Non-Executive Director) (Independent Non-Executive Director) (Independent Non-Executive Director) Audit Committee Company Secretary Ong Eng Choon Ung Peng Joo Lim Chien Ch eng Remuneration Committee Lim Chien Ch eng Ung Peng Joo Tsai Yung Chuan Nomination Committee Ung Peng Joo Ong Eng Choon Lim Chien Ch eng Registered Office A, Menara BHL Bank Jalan Sultan Ahmad Shah Penang, Malaysia Tel : (604) Fax : (604) Business Address (Chairman) (Member) (Member) (Chairman) (Member) (Member) (Chairman) (Member) (Member) Lee Peng Loon (MACS 01258) P ng Chiew Keem (MAICSA ) Principal Bankers Citibank Berhad Hong Leong Bank Berhad HSBC Bank Malaysia Berhad Malayan Banking Berhad United Overseas Bank (Malaysia) Bhd Chinatrust Commercial Bank Far East National Bank Mega International Commercial Bank Co., Ltd Taipei Fubon Commercial Bank Vietnam International and Commercial Joint Stock Bank Auditors Grant Thornton (AF 0042) Chartered Accountants Stock Exchange Listing Main Market of Bursa Malaysia Securities Berhad No Mk 11 Lorong Perusahaan Utama 1 Bukit Tengah Industrial Park Bukit Mertajam, Penang Solicitors Ghazi & Lim Share Registrar Bina Management (M) Sdn. Bhd. Lot 10, The Highway Centre, Jalan 51/205, Petaling Jaya, Selangor Darul Ehsan Tel : (603) Fax : (603) ANNUAL REPORT

7 CORPORATE STRUCTURE OF THE GROUP AS AT 30 JUNE CHIN WELL HOLDINGS BERHAD and Subsidiaries ( CWHB Group or the Group ) CHIN WELL HOLDINGS BERHAD ( CWHB ) (Principal Activities : Investment holding) Fasteners Divison Chin Well Fasteners Co. Sdn Bhd (a wholly-owned Subsidiary of CWHB) (Principal Activities : Manufacturing of screws, nuts, bolts and other fastening products) Wire division Chin Herr Industries (M) Sdn Bhd (a wholly-owned Subsidiary of CWHB) (Principal Activities : Manufacturing of precision galvanised wire, annealing wire, bright wire, hard drawn wire, PVC wire, bent round bar and grill mesh) Chin Well Service Centre Sdn Bhd (a wholly-owned Subsidiary of CWHB) (Principal Activities : Trading in screws, nuts, bolts and other fastening products) Chin Well Fasteners (Vietnam) Co., Ltd. (a 60%-owned Subsidiary of CWHB) (Principal Activities : Manufacturing of screws, nuts, bolts and other fastening products) 6 ANNUAL REPORT

8 CHAIAN S STATEMENT Dear Shareholders, On behalf of the Board of Directors of Chin Well Holdings Berhad ( Chin Well or the Group ), it is my privilege to provide you the Annual Report and financial statements of the Group for the financial year ended 30 June ( FY ). This financial year has proved to be eventful and significant to the Group, as Chin Well not only positioned itself to ride the recovery of the European economy but also sought to enhance the sustainability of all our business segments. Our FY financial performance aptly demonstrated the fruits of the initial strategies adopted at the commencement of the year. We are hopeful that this achievement will form a strong foundation for the Group s future track record. FY Financial Performance I am pleased to announce that Chin Well posted a commendable net profit of 35.8 million in FY, jumping 61.8% from 22.1 million a year before. This was on the back of 5.1% rise in group revenue to million in FY, compared to million previously. The Group s improved profitability primarily resulted from an enhanced product mix, as well as greater operational efficiency due to higher sales. Notably, fastener sales to Europe the Group s largest market - rebounded strongly in FY in tandem with the recovering European economy, accounting for million or 58% of total revenue. Sales from Malaysia amounted to million or 24% of group revenue, while other countries contributed the balance 90.2 million or 18% for the same timeframe. Furthermore, the Group enhanced its product mix by extending its network in the Do-It-Yourself ( DIY ) fastener market. The year under review saw Chin Well securing contracts from the largest DIY fastener suppliers in Germany and France, complementing existing agreements in the United States and United Kingdom. Flowing from the better net profit, FY basic earnings increased 61.7% to sen, versus 8.13 sen previously. The favourable income statement was accompanied by an equally-robust balance sheet, where shareholder funds increased to million as at end-june, from million a year ago. In keeping with the Group s prudent financial policy, total borrowings reduced to 73.1 million, consisting only of trade-related short-term borrowings; and therefore comparing favourably with 91.8 million in borrowings in the previous year end. Cash and cash equivalents rose to 47.9 million, versus 30.7 million. Resulting from this, the Group maintained a low net gearing level of 0.1 time as at end-june, compared to 0.2 time previously. This financial position will provide Chin Well the necessary agility to fund any future expansion proposals as and when required. Dividends Arising from the positive financial performance, Chin Well declared and paid total dividends of 4.83 sen in respect of FY, comprising the following:- First interim single-tier dividend of 2.00 sen per share paid on 21 April, and; Second interim single tier of 2.83 sen per share paid on 21 October. The total dividend payout of 13.2 million constitutes 36.7% of group net profit. The Board is appreciative of our shareholders continued confidence in the Group, and we look forward to a mutually-rewarding partnership in the coming years. Forward Strategies The demand for fasteners from the public sector is for infrastructure applications, and from general consumers for usage in homes and/or offices. This versatility in fastener products is beneficial to industry players such as Chin Well who serve both corporate and end-user segments, as it mitigates business risk in the various economic cycles. Recognizing this, Chin Well intends to leverage on the positive reputation it has achieved and the wide product range it offers to capture the anticipated demand growth in the global fastener market. Therefore, we intend to enhance our production efficiency by investing in new higher-technology production lines. These machines, targeted to be commissioned in the Malaysia and Vietnam plants by end-, will allow us to increase output to meet customers requirements. 7 ANNUAL REPORT

9 CHAIAN S STATEMENT (Cont d) Forward Strategies (Cont d) The Group also intends to broaden our customer base by expanding our presence in existing markets and by entering new segments. In this respect, we are looking out for potential partners in the DIY fastener sector in other European countries to tap into the promising growth prospects. At the same time, we are in the process of obtaining the necessary European certifications so that Chin Well fasteners will be approved for usage in Eurozone s construction sector. Finally, we are embarking on product development initiatives, in order to build up a steady pipeline. A case in point is the high-security fencing produced by our wire-rod operations under Chin Herr Industries Sdn Bhd ( Chin Herr ). With unique anti-cut and anti-climb features, these high-security fences have been well-accepted by the domestic market since the fourth quarter of FY, and we believe have great export potential to overseas markets. We are optimistic that this valueadded product would be a game-changer for Chin Herr going forward. With these strategies in place, the Group is optimistic of our future outlook, and will endeavour to continue writing the next chapter of our growth story. Appreciation I wish to record my appreciation to my fellow Directors and to the management for their contribution and valued advice which has enabled Chin Well to reach a momentous year. I further wish to thank the Group s business associates, suppliers, customers, shareholders and employees for their collaboration and loyalty. Lim Chien Ch eng Chairman 8 ANNUAL REPORT

10 DIRECTORS PROFILE LIM CHIEN CH ENG (Independent Non-Executive Chairman, aged 61, Malaysian) He was appointed to the Board of CWHB on 2 March 1999 and subsequently on 24 February 2011, he was appointed as the Independent Non-Executive Chairman of the Company. He graduated from Universiti Sains Malaysia in 1976 with a Bachelor of Social Science (Hons.) Degree majoring in Politics. Subsequently, he pursued a law degree and graduated from Kings College, University of London in 1979 with a Bachelor of Law (LLB. Hons.). He was called to the English Bar in 1980 and the Malaysian Bar in He is a member of the Lincoln s Inn. He has been practicing as an Advocate & Solicitor in Malaysia since 1981 and is a Partner in a legal firm with offices in Penang, Seberang Jaya and Kuala Lumpur. He also sits on the board of several private limited companies. TSAI YUNG CHUAN (Managing Director, aged 57, Taiwanese) He was appointed to the Board of Chin Well Holdings Berhad ( CWHB ) on 2 March He is one of the founders of CWHB Group. He graduated with a Certificate in Electrical Engineering from Lienho Junior College of Technology in Taiwan in He started his career as a General Manager by joining his family business, Jinn Her Enterprise Co. Ltd., a factory manufacturing fasteners in He then initiated the business expansion into Malaysia when he visited this country in He also sits on the board of several private limited companies. TSAI CHANG HSIU-HSIANG (Executive Director, aged 57, Taiwanese) She was appointed to the Board of CWHB on 2 March She graduated from Yuan Lin Senior High School in 1973 and she joined the family business, Jinn Her Enterprise Co. Ltd. in 1980, of which she was in-charge of the financial affairs of company. She came to Malaysia in 1989 and helped to form Chin Well Fasteners Co. Sdn. Bhd. She is currently in charge of the financial affairs of CWHB Group. She also sits on the board of several private limited companies. UNG PENG JOO (Independent Non-Executive Director, aged 68, Malaysian) He was appointed to the Board of CWHB on 2 March He is a tax consultant by profession and a fellow of the Malaysian Institute of Taxation. He started his taxation career with the Inland Revenue Board and served as a senior officer for several years before joining Arthur Andersen Tax Services in He was the head of the tax and business advisory practice in Penang and Alor Setar, holding the position of Executive Director. He left Arthur Andersen in June 1995 and commenced professional taxation advisory practice with Taxnet Consultants Sdn Bhd until Currently, he serves as honorary tax advisor to a few large organizations and high net worth individuals. He also sits on the board of several private limited companies. ONG ENG CHOON (Independent Non-Executive Director, aged 62, Malaysian) He was appointed to the Board of CWHB on 27 December 1995 and also is the promoter and first director of CWHB. He graduated from Tunku Abdul Rahman College, Kuala Lumpur with a Diploma in Business Administration and has 36 years of working experience in the field of taxation. He spent 3 years with the Inland Revenue Department and 10 years with one of the top 4 accounting firms before he was appointed the Managing Director of Taxnet Consultants Sdn. Bhd. Currently, he is the Executive Director of BDO Tax Services Sdn. Bhd. He is a Chartered Accountant (Malaysia), a Fellow Member of the Chartered Association of Certified Accountants, an Associate Member of the Institute of Chartered Secretaries and Administrators and a Fellow Member of the Chartered Tax Institute of Malaysia. He is also an Independent Non-Executive Director of Public Packages Holdings Berhad. TSAI CHIA LING (Executive Director, aged 35, Taiwanese) She was appointed to the Board of CWHB on 7 March She graduated from National Cheng Kung University in 2001 with a Bachelor of Business Administration Degree. She started her career as a Management Trainee with Gem-Year Industrial Co. Ltd. (China) before she joined Chin Well Fasteners Co. Sdn. Bhd. as a Marketing Executive in She is also a Non-Independent Non-Executive Director of Tambun Indah Land Berhad. 9 ANNUAL REPORT

11 DIRECTORS PROFILE (Cont d) SHAIN FAZLINA BINTI MOHD SHUKOR (Independent Non-Executive Director, aged 35, Malaysian) She was appointed to the Board of CWHB on 1 October. She holds a Bachelor of Laws (Honours) degree from Brunel University, United Kingdom and the Certificate of Legal Practice from the Legal Qualifying Board of Malaysia. She was admitted to the High Court of Malaya in She began her career with Skrine and later joined Zaid Ibrahim & Co. She was named by the Islamic Finance News Awards 2012 as one of the leading lawyers in the corporate and commercial area of legal practice in Currently, she is a partner of a legal practice in Kuala Lumpur. She advises on general matters relating to corporate and commercial law and has been actively involved in various legal due diligence exercises. She also sits on the board of several private limited companies. Notes N1) Family relationships amongst the Directors and/or major shareholders of CWHB:- a) Tsai Yung Chuan and Tsai Yung Yu are brothers; b) Tsai Chang Hsiu-Hsiang is the spouse of Tsai Yung Chuan; c) Tsai Chia Ling is the daughter of Tsai Yung Chuan and Tsai Chang Hsiu-Hsiang. N2) None of the Directors has any conflict of interest with the Group or has been convicted for offences within the past 10 years other than traffic offences, if any. 10 ANNUAL REPORT

12 CORPORATE GOVERNANCE STATEMENT The Board of Directors ( the Board ) fully recognised the importance of adopting high standards of corporate governance within the Group. The Board views corporate governance as synonymous with three key concepts namely transparency, accountability as well as corporate performance. It is believed that a sound corporate governance structure is vital for sustainability as well as business growth. The Board is pleased to provide the following statements which outline the Group s corporate governance practices with reference to the recommended principles set out in the Malaysian Code of Corporate Governance 2012 ( MCCG 2012 ) throughout the financial year ended 30 June. Through this statement, the Board reaffirms its commitment in so far as it is practicable in upholding the highest standard of corporate governance is practiced throughout the Group. PRINCIPLE 1 - CLEAR ROLES AND RESPONSIBILITIES Board Charter As part of governance process, the Board had formalized and adopted the Board Charter which forms an integral part to guide the conduct of the Board. The Board Charter outlines amongst others, the roles and responsibilities of the Board as a whole, Directors and Sub-Board Committees, remunerations policies, shareholders and investor relations. The Board will review the Board Charter when necessary to ensure their relevance and compliance. A copy of the Board Charter is available in the Company s web-site ( Roles and Responsibilities of the Board The Board, currently consists of seven (7) members; comprising three (3) Executive Directors and four (4) Independent Non-Executive Directors. The Directors, with their different background and specialisation, collectively bring with them a wide range of experience and expertise in areas such as finance, corporate affairs, marketing and operations. A brief profile of each Director is presented on pages 9 to 10 of this Annual Report. The responsibilities of the Board amongst others, include the following:- a) Overseeing and monitoring the performance of the Management and business operation; b) Oversees the Group policies and operating procedures and delegates it to the Group Management to implement; c) Formalise and commit to a Code of Conduct and Ethics and ensure its compliance with appropriate internal systems to support and promote it; d) Oversee the risk management framework with the assistance from internal auditor. e) Reviewing the adequacy of internal control system; f) Monitoring the Group business operation in compliance with all relevant law and regulatory obligations; g) Approving the Group major capital expenditure and acquisitions/divestures; h) Approving financial report to relevant regulatory; i) Approving and determine dividend payments. The position of Chairman and Managing Director are held by two (2) different individual directors to ensure clear division of responsibilities and a balance of authority and power in the Company. The Independent Non-Executive Directors bring independent judgement to the decision making of the Board and provide a capable check and balance for governance and controls. The Chairman of the Company is an independent non-executive member of the Board and is responsible for leading the Board to ensure its effectiveness, ensuring effective communications with shareholders and relevant stakeholders and for orderly conducts of meetings. Whilst, the Managing Director is responsible in formulation and development of the Group s strategies and policies. The Managing Director is responsible for the day-to-day management of the business and operations of the Group in respect of both its regulatory and commercial functions. He is supported by the Executive Directors and Management who are responsible for implementing of policies and decisions of the Board. Ethical Standards through Code of Conducts and Ethics The Board had formalized and adopted the Code of Conducts and Ethics which outlines the business conducts and practices in the Group which is applicable to all directors, employees and any other persons who represent the Group in executing their duties and functions of the Group. The Whistleblowing policy is in place with the objective to provide a channel for all employees and stakeholders to report in good faith about alleged unethical behaviour, actual or suspected improprieties within the business conducts of the Group and about business improvement opportunities whilst keeping the identity of the whistleblower confidential. The policy is expected to improve the overall organizational effectiveness and enhance corporate governance practices across the Group. 11 ANNUAL REPORT

13 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 1 - CLEAR ROLES AND RESPONSIBILITIES (Cont d) Ethical Standards through Code of Conducts and Ethics (Cont d) A copy of the Code of Conducts and Ethics and Whistleblowing policy are available in the Company s web-site (www. chinwell.com.my). Strategies promoting sustainability The Board believes the benefits of good corporate governance practices will contribute towards better corporate performance, long term growth and sustainability of the Group. The Group s sustainability strategies towards environmental, community and social are set out in the Corporate Social Responsibility Statement of this Annual Report. Company Secretaries The Board is supported by qualified and competent Company Secretary who plays an advisory role to the Board. All Directors have unrestricted access to the advice of the Company Secretary on matters which are relevant to the Company such as compliance of the Main Market Listing Requirements, Companies Act, 1965, corporate governance issues, boardroom effectiveness and directors duties and responsibilities. The Company Secretary also ensures meetings are properly convened and accurate recording of minutes of proceedings and proper maintenance of secretarial records. Supply of Information The Board is provided with the agenda and board papers at least 7 days prior to meeting of Directors to enable them to participate actively in the meetings. All the directors will have full access to the information of the Company and are entitled to obtain full disclosure by the management and advice or services from the Company Secretary or independent professionals on matters that will be put forward to the Board for decision making and to discharge their responsibilities. PRINCIPLE 2 - STRENGTHENS COMPOSITION The Board, in discharging its fiduciary duties, is assisted by the following Board Committees:- Nominating Committee The Board had established a Nominating Committee comprising wholly independent directors and the present members are as follows:- Name Designation Directorate Ung Peng Joo Chairman Independent Non-Executive Ong Eng Choon Member Independent Non-Executive Lim Chien Ch eng Member Independent Non-Executive The Nominating Committee applies a set of assessment criteria to evaluate the performance of individual directors, Board as a whole, each Board Committee and review their performance annually. The assessment criteria shall be reviewed whenever required. The Board through the Nominating Committee reviewed the required mix of skills, experience and other qualities of the Board and Board Committee and agreed that the current composition of the Board has the necessary mix of skill, experience, independency and other necessary qualities to serve effectively. The Nominating Committee is responsible for assessing the nominee(s) for directorship and Board Committee membership through a formal and transparent selection process. New appointees will be considered and evaluated by the Nominating Committee after taking into consideration the mix of skills, competencies, experiences and other qualities which are relevant to the business of the Group. The Nominating Committee will also consider other factors such as the level of independence of the candidates for the appointment of independent director. The Nominating Committee will then submit their recommendation to the Board for decision. The Company Secretary will then ensure that all appointments are properly made, all necessary information is obtained, as well as all legal and regulatory obligations are met. The Nominating Committee is also responsible to recommends the re-election of directors due for rotation retirement under the Articles of Association of the Company and to review for the continuation in office of any independent director who has reached the tenure of 9 years. 12 ANNUAL REPORT

14 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 2 - STRENGTHENS COMPOSITION (Cont d) Nominating Committee (Cont d) In accordance with the Company s Articles of Association, any additional Director appointed shall hold office only until the next following Annual General Meeting and shall then be eligible for re-election. The Articles of Association also provide that at least one-third (1/3) of the remaining Directors be subject to re-election by rotation at each Annual General Meeting and all the Directors shall retire from office once at least in each three (3) years but shall be eligible for re-election. 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, The Nominating Committee met once during the financial year ended 30 June with full members being present. The activities of the Nominating Committee were summarised as follows:- a) Reviewed and assessed the composition of the Board and Board Committees b) Reviewed and assessed the contributions of individual Directors c) Reviewed and assessed the Directors due for retirement by rotation d) Reviewed and assessed the Independent Directors whose tenure had reached 9 years Remuneration Committee The Board had established a Remuneration Committee comprising majority of non-executive directors and the present members are as follows:- Name Designation Directorate Lim Chien Ch eng Chairman Independent Non-Executive Ung Peng Joo Member Independent Non-Executive Tsai Yung Chuan Member Non-Independent Executive The Remuneration Committee is responsible to recommending to the Board the remuneration package, rewards and other benefits of Executive Directors. The Director Remuneration Policy is made available in the Board Charter. Nevertheless, the remuneration of Non-Executive Directors is a matter of the Board as a whole and the respective Director is required to abstain from deliberation and voting on decisions in respect of his individual remuneration. The Remuneration Committee meets whenever necessary. For the financial year ended 30 June, the Remuneration Committee had held one meeting with full attendance. Details of Directors Remuneration The aggregate remuneration of the Directors during the financial year is presented in the table below:- Category Fees Salaries/ Allowances Bonus Benefits-in-kind Total Executive Directors Non-Executive Directors ( 000) ( 000) ( 000) ( 000) ( 000) 90 2, , ANNUAL REPORT

15 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 2 - STRENGTHENS COMPOSITION (Cont d) Details of Directors Remuneration (Cont d) The numbers of Directors whose remuneration fall within the following bands are:- Remuneration bands Number of Directors Executive Non-Executive Below 50, ,001 to 500, ,001 to 1,000, ,600,001 to 1,650, PRINCIPLE 3 - REINFORCE INDEPENDENCE The concept of independence adopted by the Board is in tandem with the definition of Independent Director in Paragraph 1.01 of the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ). The key elements for fulfilling the criteria are the appointment of an Independent Director who is not a member of management (a Non-Executive Director) and who is free from any relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. The Board complies with Paragraph of the Listing Requirements of Bursa Securities which requires that at least two (2) Directors or one-third (1/3) of the Board, whichever is the higher, are Independent Directors. The current Board comprises four (4) Independent Non-Executive Directors and this reflects a strong independence element on its composition. The Independent Non-Executive Directors bring to bear objective and independent judgement to the decision making of the Board and provide a capable check and balance for the Executive Directors. The Nominating Committee had reviewed the performance of the said Independent Directors and is satisfied they have been able to discharge their responsibilities in an independent manner. On the option of the recommendation of the MCCG 2012 to set the tenure of an independent director at 9 years or to seek shareholders approval to retain an independent director who had served in that capacity for more than 9 years, the Board is presently of the view that there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and knowledge of the Company s businesses and affairs. In addition, the ability of a Director to serve effectively as an Independent Director is very much dependent on his/her caliber and personal integrity and objectivity, and has no real connection to his tenure as an Independent Director. The Board had deliberated and satisfied that the three (3) Independent Non-Executive Directors who had served the Company for more than 9 years, are free from any business dealing or relationships with the Group which could reasonably be perceived to materially interfere with the exercise of their independent judgement. Hence, the Board recommends the existing directorate of the three (3) Independent Non-Executive Directors to remain unchanged but subject to shareholders approval at the forthcoming Annual General Meeting of the Company. PRINCIPLE 4 - FOSTER COMMITMENT Time Commitment The Board ordinarily meets at least five (5) times a year at quarterly intervals with additional meetings convened when urgent and important decisions need to be taken between the scheduled meetings. The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. The Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions are made. All proceedings from the Board meetings are minuted and signed by the Chairman of the meeting. The Board met five (5) times for the financial year ended 30 June. The details of each Director s meeting attendances are as follows:- 14 ANNUAL REPORT

16 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 4 - FOSTER COMMITMENT (Cont d) Time Commitment (Cont d) Name of Directors Tsai Yung Chuan Tsai Chang Hsiu-Hsiang Lim Chien Ch eng Ong Eng Choon Ung Peng Joo Tsai Chia Ling Onn Hafiz Bin Ghazi (Resigned on 01 October ) Number of Board Meetings Attended 5/5 meetings 5/5 meetings 4/5 meetings 4/5 meetings 4/5 meetings 5/5 meetings 4/5 meetings In line with the Listing Requirements of Bursa Securities, the existing Directors do not hold more than five (5) directorships in public listed companies, thus enable them to carry out their duties for the tenure of their appointments with the Company. To facilitate the Directors time planning, an annual meeting calendar is discussed and circulated to them before the beginning of every financial year. It provides the scheduled dates for meetings of the Board and Board Committees, as well as the AGM. The Board is satisfied with the level of time commitment given by its members towards fulfilling their roles and responsibilities as Directors of the Company. Director Trainings All Directors have attended the Mandatory Accreditation Programme prescribed by Bursa Securities. The Directors are to evaluate their own training needs on a continuous basis and to attend workshops, seminars and other training programmes that would enable them to enhance their knowledge and contribution to the Board. Training programmes and workshop attended by the Directors during the financial year are as follows:- Director Training programme Mr Lim Chien Ch eng Corporate Governance Workshop Mr Ong Eng Choon BDO Tax Seminar National Tax Seminar Kursus Khas Cukai Barang Dan Perkhidmatan (GST) Save as disclosed above, the other Directors did not participate in any structured trainings during the financial year as they opined that their business meetings and interaction with various business parties and other directorships sufficiently served them in discharging their duties on the Board. PRINCIPLE 5 - UPHOLD INTEGRITY IN FINANCIAL REPORTING Financial Reporting The Board aims to provide and present a balanced and meaningful assessment of the Group s financial performance and prospects at the end of the financial year, primarily through the annual financial statements and quarterly 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. Relationship with the Auditors The Board through the Audit Committee maintains a professional and transparent relationship with the external auditors in conduct of the audit and towards ensuring compliance with the requirements of the approved accounting standards. The Audit Committee met with the external auditors, including two occasions without the presence of the Executive Directors and Management. The external auditors, Messrs. Grant Thornton had confirmed to the Audit Committee in writing that they are, and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements. 15 ANNUAL REPORT

17 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 5 - UPHOLD INTEGRITY IN FINANCIAL REPORTING (Cont d) Relationship with the Auditors (Cont d) The Audit Committee assesses the suitability and independence of the external auditors annually. After having been satisfied with the performance of Messrs. Grant Thornton and its audit independence, the Audit Committee recommended the re-appointment of Messrs. Grant Thornton to the Board for approval by its shareholders at the forthcoming 18th AGM. PRINCIPLE 6 RECOGNISE AND MANAGE RISKS Since the listing of the Company, the Board continuously placed emphasis on the need for maintaining a sound internal control system within the Group with the objective to manage and mitigate risk at an acceptable level and to safeguard the assets of the Group as well as the investors interest. The Company outsourced its internal audit function to a professional consulting firm, which assists the Audit Committee in discharging its duties and responsibilities. The internal auditors will be able to provide independent review on the state of risk management and internal control of the Group and has an independent reporting channel to Audit Committee. The Audit Committee reviews, deliberates and evaluates the effectiveness and efficiency of the risk management and internal control systems in the organization. The Audit Committee meets with the Internal Auditors regularly to ensure controls are effectively applied. Through the Audit Committee, the Board has established a transparent relationship with the Internal Auditors. The Group has an on-going process for identifying, evaluating and managing the principal risks. The Management with the assistance of the outsourced internal auditors had established a risk management framework to assess, review and monitor the risk at an acceptable level to the Group. The risk registers will be updated and presented to the Audit Committee for review on annual basis. PRINCIPLE 7 - ENSURE TIMELY AND HIGH QUALITY DISCLOSURE Corporate Disclosures The Board is mindful of the compliance with the Listing Requirements of Bursa Securities in relation to disclosures of information and acknowledges the importance of timely dissemination of information to shareholders, stakeholders and investment community. Such information is communicated through:- Announcements and disclosures to Bursa Securities Annual Report of the Company Circulars to Shareholders Company s website at Disseminate the Group s result to the Company public relation consultant in conjunction with the release of its quarterly announcements. PRINCIPLE 8 - STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS Encourage Shareholders participation at General Meetings The Company s Annual General Meeting serves as a principal forum for dialogue and interaction with shareholders and investors. The Extraordinary General Meeting is held as and when required. At the commencement of the meeting, the Chairman will share with the shareholders of their rights to demand for a poll vote on any resolutions being proposed according to the Company s Articles of Association. During the meeting, shareholders are given every opportunity to enquire and comment on matters relating to the Group s business. The Directors, senior management and the Group s External Auditors are in attendance to respond to shareholders questions. The Company s annual report, together with notice of annual general meeting, is sent to shareholders at least twenty one (21) days before the date of each annual general meeting. Each item of special business included in the notice of annual general meeting will be accompanied by explanatory statement to facilitate a full understanding and evaluation of issues involved. The adequate information and timely notice allow shareholders to make necessary arrangements to attend and participate in the meeting either in person, by corporate representative, by proxy or by attorney. 16 ANNUAL REPORT

18 CORPORATE GOVERNANCE STATEMENT (Cont d) PRINCIPLE 8 - STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS (Cont d) Investor Relations The Company had appointed an Investor Relations team who is tasked to build long term relationships with shareholders and the investment community. The team focuses its communications through roadshows, media interviews, press conference and corporate briefings to keep shareholders and investment community updated of the Group s development and financial performance. This statement is issued in accordance with a resolution of the Directors dated 21 October. Additional Compliance Information For the financial year ended 30 June, there were no proceeds raised by the Company from any corporate proposal. Share Buy-Backs The Company does not have a share buy-backs programme in place. Options or Convertible Securities For the financial year ended 30 June, the Company does not issue any options or convertible securities. Depository Receipt Programme The Company does not have any depository programme in place. Sanctions and/or Penalties For the financial year ended 30 June, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. Non-Audit Fees The non-audit fees paid to External Auditors for the financial year ended 30 June was 8,360. Variation in Results For the financial year ended 30 June, there were no profit estimates, forecasts or projections or unaudited financial results previously announced which differ by 10% or more from the audited results. Profit Guarantee For the financial year ended 30 June, there was no profit guarantee received by the Company. Material Contracts There were no material contracts entered by the Company and its subsidiaries involving Directors and major shareholders interest other than those disclosed in the financial statements. Recurrent Related Party Transaction of a Revenue or Trading Nature ( RRPT ) Shareholders mandate for the Group to enter RRPT was obtained at the Annual General Meeting held on 19 December. The said mandate is subject to renewal at the forthcoming Annual General Meeting. Details of such transactions during the financial year are disclosed in Note 32 of the financial statements. 17 ANNUAL REPORT

19 DIRECTORS RESPONSIBILITY STATEMENT The Board is required by the Companies Act, 1965 to prepare financial statements for each financial year for ensuring that the financial statements of the Group give a true and fair view of the state of affairs of the Group and of the Company as at the end of the accounting period and of the results and cashflows for the period then ended. In preparing the financial statements, the Directors had:- Applied appropriate approved accounting standards consistently, Made judgements and estimates that are reasonable and prudent, Prepared financial statements on a going concern basis. The Directors had ensured the Company maintains proper accounting records which disclose with reasonable accuracy the financial position of the Group to enable them to ensure that the financial statements comply with the Companies Act, The Directors also had taken steps that are reasonably available to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. This statement is issued in accordance with a resolution of the Directors dated 21 October. CORPORATE SOCIAL RESPONSIBILITY STATEMENT The Board of Directors fully acknowledges the importance of Corporate Social Responsibility ( CSR ) and has always been actively playing its role in maintaining the CSR in the Group s operations. The various CSR initiatives undertaken by the Group are summarized below:- WORKPLACE The Group strives to ensure a safe and healthy working environment for all the employees and had continuously undertaken various programmes such as first aid training, fire drill and emergency response training during the financial year. At the manufacturing location, equipment and machineries are ensured properly functioning and well maintained. Sports and recreational activities within and outside workplace were also organized during the financial year to promote healthier living, harmony, better working relationships, co-operations and teamwork amongst the employees. COMMUNITY For the purpose of demonstrating care for the less fortunate and underprivileged communities in improving their lives, the Group had, periodically provided and contributed monetary donation to various non-profit organisations during the financial year. ENVIRONMENTAL As part of the Group s on-going efforts in preserving and conserving the environment, various measures were undertaken by the Group during the financial year to ensure its manufacturing operations has little environmental impact and are in accordance with industry standards and procedures. In addition, the Group also focused on optimizing recycling and encourages its staff to reduce paper usage and practicing the good culture of recycling waste materials. 18 ANNUAL REPORT

20 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Pursuant to Paragraph (b) of Bursa Malaysia Securities Berhad ( Bursa Securities ) Main Market Listing Requirements, the Board of Directors ( Board ) of Chin Well Holdings Berhad is pleased to provide the following statement on risk management and internal control of the Group, which has been prepared in accordance with the Statement on Risk Management & Internal Control: Guidance for Directors of Listed Issuers ( Internal Control Guidance ) issued by the Institute of Internal Auditors Malaysia and adopted by Bursa Securities. RESPONSIBILITY FOR RISK AND INTERNAL CONTROL The Board recognises the importance of a structured risk management and a risk-based internal audit to establish and maintain a sound system of internal control. The Board affirms its overall responsibility for the Group s systems of internal control and for reviewing the adequacy and integrity of those systems. The system of internal control covers not only financial controls but operational controls and risk management procedures. In view of the limitations inherent in any system of internal controls, the system is designed to manage, rather than to eliminate, the risk of failure to achieve the Group s business and corporate objectives. The system can therefore only provide reasonable, but not absolute assurance, against material misstatement, loss or fraud. The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced, or potentially exposed to, by the Group in pursuing its business objectives. This process has been in place throughout the financial year and up to the date of approval of the annual report. The adequacy and effectiveness of this process have been continually reviewed by the Board and are in accordance with the Internal Control Guidance. RISK MANAGEMENT The Board and Management are mindful of measures required to identify risks residing in any major proposed transactions, changes in nature of activities and/or operating environment, or venturing into new operating environment which may entail different risks. Management proactively identifies significant risk on a regular basis with design and implementation of suitable internal controls. Adequate risk response strategies such as risk register, are in place to ensure consistent controls are practiced in the on-going process of identifying, managing and monitoring the risks. For each of the key risks identified, the management is responsible to continuously monitor the implementation of risk mitigation action plan to a level acceptable to the Board. During the year, the internal auditors are appointed to assist in the facilitation of the risk assessment update to certain subsidiaries in the Group. The update shall be reported to the Audit Committee on annual basis. INTERNAL AUDIT The Board acknowledges the importance of the internal audit function and has outsourced this function to an independent consulting firm. The internal audit adopts a risk-based approach in developing its audit plan which includes reviewing key processes of the core operating units of the Group based on their risk profile. The Audit Committee reviews the work of the Internal Auditors, their findings and recommendations to ensure that it obtains the necessary level of assurance with respect to the adequacy of the internal controls. In accordance with the audit plan approved by the Audit Committee, the internal auditors have conducted periodic reviews on the areas with high risk to ensure that an adequate action plan is in place to improve the controls and to ascertain that the risks are effectively mitigated. The independent reports on the state of internal control of the various core operating units are tabled directly to the Audit Committee and the audit findings were discussed at the Audit Committee meeting. Internal auditors will advise management on areas of improvement and subsequently initiate follow-up actions to determine the extent of implementation of their recommendations. INTERNAL CONTROL Apart from risk management framework and internal audit function, the Group has put in place the following key elements of internal control:- An organisation structure with well-defined scopes of responsibility, clear lines of accountability, and appropriate levels of delegated authority; A process of hierarchical reporting which provides for a documented and auditable trail of accountability; A set of documented internal policies and procedures for operational and human resource management, which is subject to regular review and improvement; Regular and comprehensive information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making; 19 ANNUAL REPORT

21 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (Cont d) INTERNAL CONTROL (Cont d) Quarterly meetings for Board of Directors are held to discuss on quarterly financial statements and issues that warrant the Board s attention. Regular visits to operating units by Executive Directors and senior management. The professionalism and competence of the Group s human resources are maintained through established recruitment process, performance appraisal system and training. Training and development programmes are attended by the staff to enhance their competency skills. Based on the internal auditors reports for the financial year ended 30 June, there is a reasonable assurance that the Group s systems of internal control for areas audited are generally adequate and appear to be working satisfactorily. A number of minor internal control weaknesses were identified during the financial year under review, all of which have been or are being addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group s annual report. The Board is cognizant of the importance of maintaining appropriate controls and will continue to review the adequacy, integrity and implementation of appropriate internal controls system. REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS As required by the Listing Requirement of Bursa Malaysia Securities Berhad, the external auditors have reviewed this statement on Risk Management and Internal Control for inclusion in the annual report for the financial year under review. Their review was performed in accordance with Recommended Practice Guide 5 (Revised): Guidance for Auditors on the Review of Directors Statement on Internal Control issued by the Malaysian Institute of Accountants. From the review conducted, the external auditors have reported that nothing have come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and effectiveness of the risk management and internal control systems of the Group. The Board has also received reasonable assurance from the Group Managing Director and the Group Finance Director that the Group s risk management and internal control system are operating adequately and effectively in all material aspects, based on the risk management and internal control system of the Group. This Statement is issued in accordance with a resolution of the Directors dated 21 October. 20 ANNUAL REPORT

22 AUDIT COMMITTEE REPORT MEMBERSHIPS The present Audit Committee ( the Committee ) of the Company consists of three (3) members, comprising wholly Independent Non-Executive Directors and this meets the requirements of paragraph 15.09(1)(b) of the MMLR of Bursa Securities. The members of the Committee and their meeting attendance during the financial year ended 30 June are as follows:- Name Designation Directorate Number of Meetings Attended Ong Eng Choon Chairman Independent Non-Executive 4/5 Ung Peng Joo Member Independent Non-Executive 4/5 Lim Chien Ch eng Member Independent Non-Executive 4/5 SUMMARY OF AUDIT COMMITTEE ACTIVITIES The activities of the Committee during the financial year ended 30 June were summarised as follows:- a) Reviewed the unaudited quarterly financial results before presentation to the Board for approval and for release to the authorities and public. b) Reviewed and approved internal and external audit plan for the implementation of the plan. c) Reviewed draft audited financial statements before presentation to the Board for approval and for release to the authorities and public. d) Reviewed related party transactions. e) Reviewed internal audit reports and the management action plan on the recommendation noted in the reports. f) Reviewed the risk assessment and internal control framework of the Group. g) Reviewed management letter with external auditors. h) Met twice with the External Auditors without the presence of Executive Directors. i) Reviewed and recommended the Statement of Corporate Governance, Statement on Risk Management and Internal Control and Audit Committee Report, to the Board for approval and inclusion in the Annual Report. j) Reviewed the Internal Auditor s performance throughout the financial year to oversee the adequacy and effectiveness of the internal audit function. k) Review the independence and objectivity of the external auditors and their services. INTERNAL AUDIT FUNCTION The Board has extended the responsibilities of the Committee to include the work of monitoring all internal controls, on its behalf and has outsourced its internal audit function (IAF). The Committee sets the scope of the IAF, reviews and approves the IAF s annual audit plan and Internal Audit s financial budget. The IAF reports directly to the Committee on areas for improvement and will subsequently follow up to determine the extent of their recommendations that have been implemented. Internal audit independently reviews the internal controls in key activities of the Group s businesses on the basis of a detailed annual internal audit plan presented to the Committee for approval. The internal audit function adopts a risk-based approach and prepares its audit strategy and plan based on the risk profiles of the major business units of the Group. The Committee reviews the risk monitoring and compliance procedures, ensuring that an appropriate mixed of techniques are used to obtain the level of assurance required by the Board. The Committee presents its findings to the Board on a quarterly basis or earlier as appropriate. During the financial year ended 30 June, the Company s Internal Auditors had carried out its duties in accordance with the Internal Audit Plan as follows:- 1. Reviewed the Group s systems of internal controls and ascertained the extent of compliance with the established policies, procedures and statutory requirements. 2. Identified areas for improvement of controls in operations and processes of the Group. 3. Assist the management to carry out high level risk assessment review and internal control framework of the Group. All the findings by the Internal Auditors were presented to the Audit Committee. The Audit Committee had taken steps to ensure that appropriate actions are being taken to continuously improve the current systems of internal control. The total cost incurred in managing the IAF which was out-sourced for the financial year ended 30 June were approximately 18, ANNUAL REPORT

23 AUDIT COMMITTEE REPORT (Cont d) TES OF REFERENCE OF THE AUDIT COMMITTEE Composition The Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members of whom all the members must be Non-Executive Directors, with a majority of them being Independent Directors. The members of the Committee shall elect a chairman from among their member who shall be an Independent Director. An Alternate Director must not be appointed as a member of the Committee and all members of the Committee should be financially literate. The Board shall at all times ensure that at least one (1) member of the Committee shall be:- Meetings a member of the Malaysian Institute of Accountants ( the MIA ); or if he or she is not a member of the MIA, he must have at least three (3) years working experience and he or she must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967 ( the Act ); or he or she must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Act. he or she fulfills such other requirements as prescribed or approved by Bursa Securities. Meetings shall be held not less than four (4) times a year. The quorum of the meeting is two (2) and the majority of the members present must be Independent Directors. The external auditors may be required to attend the meeting when it is necessary. At least twice a year the Committee shall meet with the external auditors without any executive of the Group being present. Other Board members and senior management may attend meetings upon the invitation of the Audit Committee. The Secretary to the Committee shall be the Company Secretary. Minutes of each meeting shall be distributed to each member of the Board. The Chairman of the Committee shall report on each meeting to the Board. The Chairman of the Committee should engage on a continuous basis with senior management, such as the Group Managing Director and the Finance Director in order to be kept informed of matters affecting the Company. Authorities The Committee is authorised by the Board to investigate any activity within its terms of reference and shall have unrestricted access to any information pertaining to the Group. The Committee has direct communication channels with both the Internal and External Auditors and to all employees of the Group. The Internal Audit function reports directly to the Committee. The Committee is able to convene meetings with external and internal auditors excluding the attendance of the Executive Directors and management of the Company whenever deemed necessary. The Committee is also authorised by the Board to obtain external legal or other independent professional advice as necessary. Responsibilities and duties The responsibilities and duties of the Committee shall be:- Related Party Transactions To review any related party transaction and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of management integrity. They are also required to ensure that the Directors report such transactions annually to shareholders via the annual report; Financial Reporting To review the quarterly reporting to the Bursa Securities and year-end annual financial statements of the Group before submission to the Board, focusing on:- - going concern assumption - compliance with accounting standards and regulatory requirements - any changes in accounting policies and practices - significant issues arising from the audit - implementation of major accounting policies and practices 22 ANNUAL REPORT

24 AUDIT COMMITTEE REPORT (Cont d) Internal Audit To review the following in respect of internal audit:- - adequacy of scope, functions, competency and resources of the internal audit function and that it has the necessary authority to carry out its work - internal audit program - coordination of external audit with internal audit - the major findings of internal audit investigations and management s responses, and ensure that appropriate actions are taken on the recommendations of the internal audit function - assessment of the performance of the outsourced internal auditor - appointment or termination of the internal auditor - to take cognizance of resignation of internal auditor and provide them an opportunity to submit their reasons for resigning. External Audit To discuss with the External Auditors, prior to the commencement of audit, the audit plan which states the nature and scope of audit and to ensure coordination of audit where more than one audit firm is involved; To discuss problems and reservations arising from the interim and final external audits, the audit report and any matters the External Auditors may wish to discuss (in the absence of management, where necessary); To review with the External Auditors, his evaluation of the system of internal controls, his management letter and management s response; To recommend the nomination and appointment of External Auditors, as well as the audit fee; To review any letter of resignation from the External Auditors and any questions of resignation or dismissal; To report promptly to Bursa Securities on any matter reported by it to the Board which has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities; Risk Management To oversee the risk management and internal control systems instituted within the Group. Other Functions To review and verify the allocation of share options granted to employees pursuant to the Employee Share Option Scheme. To perform any other functions as may be agreed by the Audit Committee and the Board. 23 ANNUAL REPORT

25 DIRECTORS REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June. PRINCIPAL ACTIVITIES The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are manufacturing and trading of fastening and wire products. There have been no significant changes in the nature of these activities during the financial year. RESULTS GROUP COMPANY Profit after taxation for the year 44,634,842 10,918,492 Attributable to: Owners of the Company 35,845,580 10,918,492 Non-controlling interest 8,789,262-44,634,842 10,918,492 In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year ended 30 June 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, other than those disclosed in the financial statements. RESERVES AND PROVISIONS All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements. DIVIDENDS Since the end of the previous financial year, the Company has paid the following dividends:- A second interim tax exempt dividend of 2 sen per share in respect of the financial year ended 30 June, as reported in the Directors report of that year 5,450,663 An interim single tier dividend of 2 sen per share in respect of the financial year ended 30 June 5,450,663 10,901,326 On 21 August, the Company has declared a second interim single tier dividend of 2.83 sen per share amounting to 7,712,689 in respect of the financial year ended 30 June payable on 21 October. The financial statements for the current financial year do not reflect the second interim single tier dividend as it was declared subsequent to the financial year end. Such dividend will be accounted for in equity as an appropriation of retained profits in the financial year ending 30 June The directors do not recommend any final dividend payment for the financial year. SHARE CAPITAL AND DEBENTURE During the financial year, the Company did not issue any share or debenture and did not grant any option to anyone to take up unissued shares of the Company. 24 ANNUAL REPORT

26 DIRECTORS REPORT (Cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE DIRECTORS The directors who served since the date of the last report are as follows:- Lim Chien Ch eng Tsai Yung Chuan Tsai Chang Hsiu-Hsiang Tsai Chia Ling Ung Peng Joo Ong Eng Choon Sharmin Fazlina Binti Mohd Shukor (appointed on ) Onn Hafiz Bin Ghazi (resigned on ) DIRECTORS INTERESTS IN SHARES According to the Register of Directors Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows: Number of ordinary shares of 0.50 each Balance at 1.7. Bought Sold Balance at The Company Direct Interest: Lim Chien Ch eng 6,855,100 3,506,250 (4,500,000) 5,861,350 Tsai Yung Chuan 77,207,674 - (77,207,674) - Tsai Chang Hsiu-Hsiang 11,408,616 - (11,408,816) - Tsai Chia Ling 50,000 - (50,000) - Deemed Interest: Lim Chien Ch eng 1,765, ,765,314 Tsai Yung Chuan 100, ,781, ,881,562 Tsai Chang Hsiu-Hsiang 100, ,000 Tsai Chia Ling 100, ,000 Other Interest: Tsai Yung Chuan 124,400 - (124,400) -* Tsai Chang Hsiu-Hsiang 124,400 - (124,400) -* *By virtue of the children s interests. By virtue of his shareholding in the Company, Mr. Tsai Yung Chuan is also deemed interested in the shares of all the subsidiaries of the Company, to the extent that the Company has interests. Other than as disclosed above, none of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year. DIRECTORS BENEFITS Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with a 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 those related party transactions disclosed in the notes to the financial statements. During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the objects 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. 25 ANNUAL REPORT

27 DIRECTORS REPORT (Cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE OTHER STATUTORY INFOATION Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps:- (i) (ii) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts, and to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. At the date of this report, the directors are not aware of any circumstances:- (i) (ii) (iii) (iv) that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts in the Group and in the Company inadequate to any substantial extent, and that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, and that would render any amount stated in the financial statements of the Group and of the Company misleading, and which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, there does not exist:- (i) (ii) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other persons, and any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year. No contingent liability or other liability of the Group and of the Company 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. SUBSEQUENT EVENT Details of the subsequent event are disclosed in Note 35 to the financial statements. AUDITORS The auditors, Grant Thornton, have expressed their willingness to continue in office. Signed in accordance with a resolution of the directors:-... Tsai Yung Chuan Managing Director... Tsai Chang Hsiu-Hsiang Executive Director Penang, Date: 21 October 26 ANNUAL REPORT

28 DIRECTORS STATEMENT In the opinion of the directors, the financial statements set out on pages 30 to 81 are properly drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June and of their financial performance and cash flows for the financial year then ended. In the opinion of the Directors, the supplementary information set out on page 82 has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed in accordance with a resolution of the directors:-... Tsai Yung Chuan Managing Director... Tsai Chang Hsiu-Hsiang Executive Director Date: 21 October STATUTORY DECLARATION I, Tsai Chang Hsiu-Hsiang, the director primarily responsible for the financial management of Chin Well Holdings Berhad do solemnly and sincerely declare that the financial statements set out on pages 30 to 81 and the supplementary information set out on page 82 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, Subscribed and solemnly declared by ) the abovenamed at Penang, this 21st ) day of October. )... Tsai Chang Hsiu-Hsiang Executive Director Before me,... Goh Suan Bee No.:P125 Commissioner for Oaths 27 ANNUAL REPORT

29 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF CHIN WELL HOLDINGS BERHAD Report on the Financial Statements We have audited the financial statements of Chin Well Holdings Berhad, which comprise the statements of financial position as at 30 June of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 30 to 81. Directors Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 30 June and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:- (a) (b) (c) (d) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act, We have considered the accounts and the auditors report of the subsidiary of which we have not acted as auditors, which is indicated in Note 6 to the financial statements, We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes, and The auditors reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 28 ANNUAL REPORT

30 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF CHIN WELL HOLDINGS BERHAD (Cont d) Other Reporting Responsibilities The supplementary information set out on page 82 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Grant Thornton No. AF: 0042 Chartered Accountants John Lau Tiang Hua, DJN No. 1107/03/16 (J) Chartered Accountant Penang, Date: 21 October 29 ANNUAL REPORT

31 STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE NOTE GROUP COMPANY ASSETS Non-current assets Property,plant and equipment 4 155,220, ,964, Investment properties 5 5,126,990 5,194, Investment in subsidiaries ,591, ,591,679 Investment in an associate 7-5,584, Other investment 8 143, , Trade receivable , Other receivable , , ,491, ,819, ,591, ,407,326 Current assets Inventories 9 227,064, ,055, Trade receivables 10 91,992,569 85,596, Other receivables, deposits and prepayments 11 26,658,831 21,161, , ,383 Tax recoverable 57, ,282 2,590 - Cash and bank balances 12 47,934,440 30,703, , , ,707, ,433,231 1,734, ,591 Non-current asset held for sale 13 2,540, ,248, ,433,231 1,734, ,591 TOTAL ASSETS 556,739, ,253, ,326, ,303,917 EQUITY AND LIABILITIES Equity attributable to owners of the parent Share capital ,266, ,266, ,266, ,266,584 Share premium 2,512,800 2,512,800 2,512,800 2,512,800 Foreign translation reserve 15 1,348, , Retained profits ,056, ,111,952 78,311,355 78,294, ,183, ,674, ,090, ,073,573 Non-controlling interest 60,419,989 51,308, Total equity 439,603, ,983, ,090, ,073,573 Non-current liabilities Provision for retirement benefits ,342 1,875, Borrowings 18-3,152, Deferred tax liabilities 19 8,716,630 9,204, ,637,972 14,231, Current liabilities Trade payables 20 24,029,187 18,093, Other payables and accruals 21 6,694,155 22,095, , ,344 Provision for retirement benefits , , Borrowings 18 73,137,926 88,611, Provision for taxation 2,720, , ,497, ,037, , ,344 Total liabilities 117,135, ,269, , ,344 TOTAL EQUITY AND LIABILITIES 556,739, ,253, ,326, ,303,917 The notes set out on pages 37 to 81 form an integral part of these financial statements. 30 ANNUAL REPORT

32 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE NOTE GROUP COMPANY Revenue ,340, ,889,300 11,475,000 51,100,000 Cost of sales (398,697,297) (402,739,332) - - Gross profit 86,643,642 59,149,968 11,475,000 51,100,000 Other income 23 5,763,754 6,942,766 48,226 71,290 Administrative expenses (16,997,262) (15,212,079) (483,711) (545,571) Selling and distribution expenses (18,904,626) (15,928,608) - - Operating profit 56,505,508 34,952,047 11,039,515 50,625,719 Finance costs 24 (1,200,129) (1,799,004) - - Share of loss of an associate (708,954) (559,138) - - Profit before taxation 25 54,596,425 32,593,905 11,039,515 50,625,719 Taxation 26 (9,961,583) (5,840,484) (121,023) (300,000) Profit for the year 44,634,842 26,753,421 10,918,492 50,325,719 Other comprehensive income/(loss), net of tax Item that will be reclassified subsequently to profit or loss: Foreign currency translation: - differences for foreign operation 805,287 (2,384,681) transfer to profit or loss upon reclassification to non-current asset held for sale 81, ,689 (2,384,681) - - Total comprehensive income for the year 45,521,531 24,368,740 10,918,492 50,325,719 The notes set out on pages 37 to 81 form an integral part of these financial statements. 31 ANNUAL REPORT

33 STATEMENTS OF COMPREHENSIVE INCOME (Cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE NOTE GROUP COMPANY Profit attributable to: Owners of the Company 35,845,580 22,149,768 10,918,492 50,325,719 Non-controlling interest 8,789,262 4,603, ,634,842 26,753,421 10,918,492 50,325,719 Total comprehensive income attributable to: Owners of the Company 36,410,380 20,685,925 10,918,492 50,325,719 Non-controlling interest 9,111,151 3,682, ,521,531 24,368,740 10,918,492 50,325,719 Basic/Diluted earnings per share attributable to owners of the Company (sen) The notes set out on pages 37 to 81 form an integral part of these financial statements. 32 ANNUAL REPORT

34 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE Attributable to Owners of the Company Non-distributable Distributable NOTE Share Capital Share Premium Foreign Translation Reserve Retained Profits Total Non-controlling Interest Total Equity Balance at beginning 136,266,584 2,512, , ,111, ,674,678 51,308, ,983,516 Foreign currency translation: - differences for foreign operation , , , ,287 - transfer to profit or loss upon reclassification to noncurrent asset held for sale ,402-81,402-81,402 Total other comprehensive income for the year , , , ,689 Profit for the year ,845,580 35,845,580 8,789,262 44,634,842 Total comprehensive income for the year ,800 35,845,580 36,410,380 9,111,151 45,521,531 Transaction with owners: Dividends (10,901,326) (10,901,326) - (10,901,326) Balance at end 136,266,584 2,512,800 1,348, ,056, ,183,732 60,419, ,603,721 Balance at beginning 136,266,584 2,512,800 2,247, ,775, ,802,082 47,626, ,428,105 Foreign currency translation differences for foreign operation - - (1,463,843) - (1,463,843) (920,838) (2,384,681) Profit for the year ,149,768 22,149,768 4,603,653 26,753,421 Total comprehensive income for the year - - (1,463,843) 22,149,768 20,685,925 3,682,815 24,368,740 Transaction with owners: Dividends (6,813,329) (6,813,329) - (6,813,329) Balance at end 136,266,584 2,512, , ,111, ,674,678 51,308, ,983,516 The notes set out on pages 37 to 81 form an integral part of these financial statements. 33 ANNUAL REPORT

35 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE NOTE Share Capital Non- distributable Share Premium Distributable Retained Profits Total Equity Balance at beginning 136,266,584 2,512,800 78,294, ,073,573 Profit for the year, representing total comprehensive income for the year ,918,492 10,918,492 Transaction with owners: Dividends (10,901,326) (10,901,326) Balance at end 136,266,584 2,512,800 78,311, ,090,739 Balance at beginning 136,266,584 2,512,800 34,781, ,561,183 Profit for the year, representing total comprehensive income for the year ,325,719 50,325,719 Transaction with owners: Dividends (6,813,329) (6,813,329) Balance at end 136,266,584 2,512,800 78,294, ,073,573 The notes set out on pages 37 to 81 form an integral part of these financial statements. 34 ANNUAL REPORT

36 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE CASH FLOWS FROM OPERATING ACTIVITIES GROUP COMPANY Profit before taxation 54,596,425 32,593,905 11,039,515 50,625,719 Adjustments for: Bad debts - 1,776, Depreciation 17,420,570 16,817, Dividend income - - (11,475,000) (51,100,000) Gain on disposal of property, plant and equipment (16,586) (24,125) - - Impairment loss on investment in an associate 2,243, Interest expense 1,200,129 1,799, Interest income (541,626) (391,822) - - Property, plant and equipment written off 115, , Provision for retirement benefits 39,610 67, Reversal of impairment loss on receivables (1,148,283) (343,361) (48,226) (71,290) Share of results of an associate 708, , Unrealised (gain)/loss on foreign exchange (857,622) 133, Operating profit/(loss) before working capital changes 73,760,920 53,182,881 (483,711) (545,571) Decrease in inventories 9,961,416 10,153, (Increase)/Decrease in receivables (10,538,735) 13,189, , ,111 (Decrease)/Increase in payables (9,888,913) (11,180,191) 5,000 4,000 Cash from operations 63,294,688 65,345, , ,540 Interest paid (1,200,129) (1,799,004) - - Income tax paid (8,286,583) (6,103,166) - - Income tax refund 1,131,898 1,928,856 1,387 - Retirement benefits paid (1,015,915) (21,120) - - Net cash from operating activities 53,923,959 59,351, , ,540 CASH FLOWS FROM INVESTING ACTIVITIES Interest received 541, , Investment in an associate - (6,224,911) - - Net dividend received from subsidiaries ,350, ,000 Proceeds from disposal of property, plant and equipment 38,586 71, Recoupment of invesment cost 90, Purchase of property, plant and equipment (8,763,255) (5,554,132) - - Net cash (used in)/from investing activities (8,092,194) (11,315,994) 11,350, ,000 Balance carried forward 45,831,765 48,035,310 11,712,786 1,198,540 The notes set out on pages 37 to 81 form an integral part of these financial statements. 35 ANNUAL REPORT

37 STATEMENTS OF CASH FLOWS (Cont d) FOR THE FINANCIAL YEAR ENDED 30 JUNE GROUP COMPANY Balance brought forward 45,831,765 48,035,310 11,712,786 1,198,540 CASH FLOWS FROM FINANCING ACTIVITIES Advance from a subsidiary ,629,375 Dividends paid (10,901,326) (6,813,329) (10,901,326) (6,813,329) Repayment of bankers acceptance - (2,572,000) - - Repayment of onshore foreign currency loans (19,064,773) (31,511,129) - - Repayment of long term loan to non-controlling interest of a subsidiary (6,506,691) (2,979,627) - - Drawdown/(Repayment) of short term loans 7,932,377 (922,713) - - Net cash used in financing activities (28,540,413) (44,798,798) (10,901,326) (1,183,954) NET INCREASE IN CASH AND BANK BALANCES 17,291,352 3,236, ,460 14,586 Effects of changes in exchange rates on cash and bank balances (60,368) (236,218) - - CASH AND BANK BALANCES AT BEGINNING 30,703,456 27,703, ,208 85,622 CASH AND BANK BALANCES AT END 47,934,440 30,703, , ,208 The notes set out on pages 37 to 81 form an integral part of these financial statements. 36 ANNUAL REPORT

38 NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 1. CORPORATE INFOATION General The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at A, Menara BHL Bank, Jalan Sultan Ahmad Shah, Penang. The principal place of business of the Company is located at No MK11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 21 October. Principal Activities The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are manufacturing and trading of fastening and wire products. There have been no significant changes in the nature of these activities during the financial year. 2. BASIS OF PREPARATION 2.1 Statement of Compliance The financial statements of the Group and of the Company have been prepared in accordance with applicable Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards ( IFRSs ) and the requirements of the Companies Act, 1965 in Malaysia. 2.2 Basis of measurement The financial statements of the Group and of the Company are prepared under the historical cost convention unless otherwise indicated in the summary of accounting policies under Note 3. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. A fair value measurement of a non-financial asset takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to their fair value measurement as a whole:- 37 ANNUAL REPORT

39 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 2. BASIS OF PREPARATION (Cont d) 2.2 Basis of measurement (Cont d) - Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities. - Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is directly or indirectly observable. - Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is unobservable. 2.3 Functional and Presentation Currency The financial statements are presented in Ringgit Malaysia ( ) which is also the Company s functional currency. 2.4 Adoption of New MFRSs, Amendments/Improvements to MFRSs, IC Interpretations ( IC Int ) and Amendments to IC Int The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial years except for the adoption of the following new MFRSs, amendments/improvements to MFRSs, IC Int and amendments to IC Int that are mandatory for the current financial year:- MFRSs and IC Int effective 1 January MFRS 10 Consolidated Financial Statements MFRS 11 Joint Arrangements MFRS 12 Disclosure of Interests in Other Entities MFRS 13 Fair Value Measurement MFRS 119 Employee Benefits (International Accounting Standard ( IAS ) 19 as amended by International Accounting Standards Board ( IASB ) in June 2011) MFRS 127 Separate Financial Statements (IAS 27 as amended by IASB in May 2011) MFRS 128 investments in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2011) IC Int 20 Stripping Costs in the Production of A Surface Mine Amendments to MFRSs effective 1 January MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards - Government Loans MFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities MFRS 10, 11 and 12 Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance Annual Improvements Cycle issued in July 2012 Initial application of the above standards did not have any material impact to the financial statements of the Group and of the Company except for the following:- MFRS 13 Fair Value Measurement The Group and the Company have applied MFRS 13 for the first time in the current period. MFRS 13 established a single source of guidance and disclosure for fair value measurements. The scope of MFRS 13 is broad. The fair value measurement requirements of MFRS 13 apply to both financial instrument items and non-financial instrument items for which other MFRSs require or permit fair value measurements and disclosures about fair value measurements, except for share-based payment transactions that are within the scope of MFRS 2 Share-based Payment, leasing transaction that are within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value (e.g. net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes). 38 ANNUAL REPORT

40 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 2. BASIS OF PREPARATION (Cont d) 2.4 Adoption of New MFRSs, Amendments/Improvements to MFRSs, IC Interpretations ( IC Int ) and Amendments to IC Int (Cont d) MFRS 13 Fair Value Measurement (Cont d) MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under MFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, MFRS 13 includes extensive disclosure requirements. MFRS 13 requires prospective application from 1 January. In addition, specific transition provisions were given to entities such that they need not apply the disclosure requirements set out in the MFRS 13 in comparative information provided for periods before the initial application of the MFRS 13. In accordance with these transitional provisions, the Group and the Company have not made any new disclosures required by MFRS 13 for the comparative period. Other than the additional disclosures, the application of MFRS 13 did not have any material impact on the amounts recognised in the Group and in the Company s financial statements. 2.5 Standards Issued But Not Yet Effective The Group and the Company have not applied the following new MFRSs, amendments to MFRSs and IC Int that have been issued by the Malaysian Accounting Standards Board ( MASB ) but are not yet effective for the Group and for the Company:- Amendments to MFRSs and IC Int effective for financial periods beginning on or after 1 January MFRS 10, 12 and 127 Consolidated Financial Statements, Disclosure of Interests in Other Entities and Separate Financial Statements: Investment Entities MFRS 132 Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities MFRS 136 Recoverable Amount Disclosures for Non-Financial Assets MFRS 139 Novation of Derivatives and Continuation of Hedge Accounting IC Int 21 Levies Effective for financial periods beginning on or after 1 July Amendments to MFRS 119 Defined Benefit Plans: Employee Contributions Annual improvements to MFRSs Cycle Annual improvements to MFRSs Cycle Effective for financial periods beginning on or after 1 January 2016 MFRS 14 Regulatory Deferral Accounts Amendments to MFRS 116 Clarification of Acceptable Methods of Depreciation and Amortisation and MFRS 138 Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations Amendments to MFRS 116 Agriculture: Bearer Plants and MFRS 141 Effective for financial periods beginning on or after 1 January 2017 MFRS 15 Revenue from Contracts with Customers Effective date yet to be confirmed Amendments to MFRS 7 Financial Instrument: Disclosures - Mandatory Date of MFRS 9 and Transition Disclosures MFRS 9 Financial Instruments (2009,2010) MFRS 9 Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS ANNUAL REPORT

41 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 2. BASIS OF PREPARATION (Cont d) 2.5 Standards Issued But Not Yet Effective (Cont d) The existing MFRS 111, MFRS 118, IC Int 13, IC Int 15, IC Int 18 and IC Int 131 will be withdrawn upon the adoption of MFRS 15 on 1 January The initial application of the above standards is not expected to have any financial impacts to the financial statements upon adoption. 2.6 Significant Accounting Estimates and Judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected Judgements made in applying accounting policies There are no significant areas of critical judgement in applying accounting policies that have any significant effect on the amount recognised in the financial statements Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:- (i) Useful lives of depreciable assets The cost of plant and machinery for the manufacturing of fastening and wire products is depreciated on a straight line basis over their estimated useful lives. Management estimates the useful lives of these plant and machinery to be within 5 to 17 years. These are common life expectancies applied in the fastening and wire products industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual values of these plant and machinery. Therefore, future depreciation charges could be revised. (ii) Impairment of plant and equipment The Group performs an impairment review as and when there are impairment indicators to ensure that the carrying value of the plant and equipment does not exceed its recoverable amount. The recoverable amount represents the present value of the estimated future cash flows expected to arise from continuing operations. Therefore, in arriving at the recoverable amount, management exercises judgement in estimating the future cash flows, growth rate and discount rate. (iii) Inventories The management reviews for slow-moving and obsolete inventories. This review requires judgements and estimates. Possible changes in these estimates could result in revision to the valuation of inventories. 40 ANNUAL REPORT

42 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 2. BASIS OF PREPARATION (Cont d) Key sources of estimation uncertainty (Cont d) (iv) Impairment of loans and receivables The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics. In addition, the local subsidiaries have made collective impairment of 1% as described in Note 3.7. (v) Deferred tax assets Deferred tax assets are recognised for unused tax losses and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the tax losses and other deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with tax planning strategies. 3. SIGNIFICANT ACCOUNTING POLICIES The following accounting policies adopted by the Group and by the Company are consistent with those adopted in the previous financial years unless otherwise indicated below:- 3.1 Basis of Consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Group adopted MFRS 10 Consolidated Financial Statements in the current financial year. This resulted in changes to the following policies:- Control exists when the Group is exposed, or has rights, to variable returns through its power over the entity. In the previous financial years, control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Potential voting rights are considered when assessing control only when such rights are substantive. In the previous financial years, potential voting rights are considered when assessing control when such rights are presently exercisable. The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee s return. In the previous financial years, the Group did not consider de facto power in its assessment of control. The change in accounting policy has been made retrospectively and in accordance with the transitional provision of MFRS 10. However, the adoption of MFRS 10 has no significant impact to the financial statements of the Group for the current financial year. Investment in subsidiaries is measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs. Upon disposal of investment in subsidiaries, the difference between the net disposal proceeds and their carrying amounts is recognised in profit or loss. 41 ANNUAL REPORT

43 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.1 Basis of Consolidation (cont d) (ii) Business combination Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group. For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:- the fair value of the consideration transferred, plus the recognised amount of any non-controlling interest in the acquiree, plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree, less the net recognised amount at fair value of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised in profit or loss. For each business combination, the Group elects whether to recognise non-controlling interest in the acquiree either at fair value, or at the proportionate share of the acquiree s identifiable net assets at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. (iii) Acquisitions of non-controlling interests The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserve. (iv) Loss of control Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained. (v) Associate An associate is an entity, including unincorporated entity, in which the Group has significant influence, but not control, over the financial and operating policies. Investment in associate is accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the associate, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate. 42 ANNUAL REPORT

44 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.1 Basis of Consolidation (cont d) (v) Associate (Cont d) When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss. When the Group s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to the profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities. Investments in associates are measured in the Group s separate financial statements at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs. (vi) Non-controlling interest Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. (vii) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associate are eliminated against the investment to the extent of the Group s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 43 ANNUAL REPORT

45 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.2 Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Property, plant and equipment are depreciated on the straight line method to write off the cost of each asset to its residual value over its estimated useful life at the following annual rates:- Short leasehold land Amortised over lease periods Buildings 1.9% - 10% Plant and machinery 6% - 20% Tools and implements 6% - 20% Office equipment 8.33% - 20% Furniture and fittings 10% - 20% Electrical installation 10% - 20% Motor vehicles 10% - 20% Freehold land is not amortised as it has an infinite life. Short leasehold land refers to land with remaining lease period of less than 50 years determined as at the end of the reporting period. Depreciation on capital expenditure in progress commences when the assets are ready for their intended use. The residual value, useful life and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. Upon the disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is recognised in profit or loss. 3.3 Investment Properties Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost. Initial cost comprises purchase price and any directly attributable expenditure for a purchased investment property. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses. Freehold land is not amortised as it has an infinite life. Buildings are depreciated on the straight line method to write off the cost to their residual value over its estimated useful lives at 2% per annum. Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise. 3.4 Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement. Finance lease A finance lease which includes hire purchase arrangement, is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee. Title may or may not eventually be transferred. 44 ANNUAL REPORT

46 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.4 Finance lease (Cont d) Minimum lease payments made under finance leases are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Leasehold land which in substance is a finance lease is classified as property, plant and equipment. Operating leases Leases where the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred. Leasehold land which in substance is an operating lease is classified as prepaid land lease payments. 3.5 Impairment of Non-Financial Assets The Group assesses at the end of each reporting period whether there is an indication that an asset may be impaired. For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating units ( CGU ) to which the asset belongs. If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the profit or loss. An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss. 3.6 Financial Instruments Initial recognition and measurement A financial asset or a financial liability is recognised in the statement of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the instrument. 45 ANNUAL REPORT

47 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.6 Financial Instruments (Cont d) Initial recognition and measurement (Cont d) A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transactions costs that are directly attributable to the acquisition or issue of the financial instrument. An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows:- Financial assets (a) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method. Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the end of the reporting period which are classified as non-current. (b) Available-for-sale financial assets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading. The Group s available-for-sale financial assets consist of golf club membership. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-forsale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. All financial assets are subject to review for impairment. Financial liabilities All financial liabilities are subsequently measured at amortised cost. Financial liabilities are classified as current liabilities, except for those having maturity dates later than 12 months after the end of the reporting period which are classified as non-current Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due. 46 ANNUAL REPORT

48 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.6 Financial Instruments (Cont d) Financial guarantee contracts (Cont d) Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in statement of comprehensive income over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation Derecognition A financial asset or part of it is derecognised, when and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 3.7 Impairment of Financial Assets All financial assets (except for investment in subsidiaries and investment in an associate) are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the asset s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. In addition, a collective impairment is provided on the total trade receivables at the end of the reporting period based on their aging after deducting bad debts and specific impairment. However, during the financial year ended 30 June, the management has reassessed the overall repayment from the customers and revised the collective impairment rate so as to reflect the expected pattern of collection as shown below:- New rate Old rate 31 to 90 days 0% 2% 91 to 120 days 1% 3% More than 120 days 1% 4% The revision was accounted for prospectively as a change in accounting estimates. The effect of the above revision is a decrease of current impairment charge by 1,362,657 and the profit for the year has increased by the same amount. An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset s acquisition cost (net of any principal repayment and amortisation) and the asset s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss. Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-forsale is not reversed through profit or loss. 47 ANNUAL REPORT

49 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.8 Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and on hand, demand deposits and short term highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value, against which bank overdraft balances, if any, are deducted. 3.9 Inventories Inventories are stated at the lower of cost and net realisable value. Cost of raw materials, indirect materials and trading goods is determined on a weighted average basis and comprises the original cost of purchases plus the cost of bringing the inventories to their present location and condition. The cost of finished goods and work-in-progress includes raw materials, direct labour and a proportion of manufacturing overheads and is determined on the weighted average basis. Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale Non-current Assets Held for Sale Non-current assets that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale or distribution. Immediately before classification as held for sale or distribution, the net assets are remeasured in accordance with the Group s accounting policies. Thereafter generally the assets are measured at the lower of their carrying amount and fair value less costs of disposal. Intangible assets and property, plant and equipment once classified as held for sale or distribution are not amortised or depreciated. In addition, equity accounting of equity-accounted associate venture ceases once classified as held for sale or distribution Provisions Provisions are recognised when the Group and the Company have a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation Income Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and to the Company and when the revenue can be reliably measured on the following bases:- (i) (ii) (iii) (iv) Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Dividend income is recognised when the Group s right to receive payment is established. Interest income is recognised on a time proportion basis using the applicable effective interest rate. Rental income is recognised on a time proportion basis over the lease term. 48 ANNUAL REPORT

50 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.13 Employee Benefits Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense 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 the absences occur. Defined contribution plans As required by law, companies in Malaysia make contributions to the national pension scheme, the Employees Provident Fund ( EPF ). Such contributions are recognised as an expense as incurred. Retirement benefits Prior to 1 January, the Group operates an unfunded retirement benefits plan under a Collective Agreement made between the Metal Industry Employees Union and certain subsidiaries in Malaysia, whereby an eligible employee upon attaining the retirement age shall be paid retirement benefits of 20 days wages based on the last drawn salary for each completed year of service provided the employee had completed more than 5 years of continuous service with the Group. In addition, the Group may consider at its absolute discretion to extend this benefit to non-eligible employees upon their retirement based on the same terms and conditions as provided for under the said Collective Agreement. The Group s obligations under this plan are determined internally based on certain actuarial assumptions where the amount of benefits that employees have earned in return for their services rendered is estimated. Benefits are discounted using the Projected Unit Method in order to determine their present values. Based on this assumption, the directors are of the opinion that the present value of the benefits will not be materially different from the amount of provision made in the financial statements. However, effective 1 January, this retirement benefits scheme was superseded upon renewal of the Collective Agreement with the Metal Industry Employees Union, of which the revised terms and conditions are disclosed in Note 17 to the financial statements Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. Other borrowing costs are expensed as expenses in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds Income Tax Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years. 49 ANNUAL REPORT

51 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.15 Income Tax (Cont d) Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against which the unutilised tax incentive can be utilised Foreign Currency Foreign Currency Transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies at the end of the reporting period, except for those that are measured at fair value, are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge or currency risk, which are recognised in other comprehensive income. Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations denominated in functional currencies other than, are translated to at exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated to at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign translation reserve ( FTR ) in equity. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, the significant influence or joint control is lost, the cumulative amount in the FTR related to the foreign operation is reclassified to profit or loss as part of the profit or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. 50 ANNUAL REPORT

52 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 3. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 3.16 Foreign Currency (Cont d) Operations denominated in functional currencies other than Ringgit Malaysia (Cont d) In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the FTR in equity Share Capital, Share Issuance Expenses and Dividends An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Share capital represents the nominal value of shares that have been issued. Dividends on ordinary shares are accounted for in shareholder s equity as an appropriation of unappropriated profits and recognised as a liability in the period in which they are declared. Share premium includes any premiums received upon issuance of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. Costs directly attributable to the issuance of instruments classified as equity are recognised as a deduction from equity Segment Reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. An operating segment s operating results are reviewed regularly by the chief operating decision maker, which in this case are the Executive Directors of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group and of the Company. Contingent liabilities and assets are not recognised in the statement of financial position of the Group and of the Company. 51 ANNUAL REPORT

53 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 4. PROPERTY, PLANT AND EQUIPMENT GROUP Balance at beginning Additions Disposals Written off Reclassification Foreign currency translation Balance at end At cost Freehold land 434, ,396 Short leasehold land 29,692, ,256 29,802,238 Buildings 102,688, (89,767) (3,428) 361, ,956,377 Plant and machinery 200,403,427 6,367,430 (197,047) - (325,659) 793, ,041,990 Tools and implements 17,049, ,870 - (22,509) 404,383 89,355 17,710,661 Office equipment 3,361,114 23,682 - (34,300) (75,296) 8,756 3,283,956 Furniture and fittings 523, ,252 Electrical installation 2,548, ,548,627 Motor vehicles 3,488, (4,710) - 7,689 3,491,037 Capital expenditure in progress - 2,182, ,182, ,189,718 8,763,255 (197,047) (151,286) - 1,370, ,974,807 Accumulated depreciation Freehold land Short leasehold land 5,801, , ,537 6,427,376 Buildings 29,251,795 2,443,447 - (615) (1,061) 42,973 31,736,539 Plant and machinery 140,599,094 12,854,980 (175,047) (489) (228,781) 275, ,325,237 Tools and implements 13,587, , ,088 47,891 14,803,979 Office equipment 2,625, ,796 - (34,300) (76,246) 6,479 2,726,576 Furniture and fittings 474,272 8, ,511 Electrical installation 2,432,220 49, ,481,933 Motor vehicles 2,452, ,554 - (141) - 1,298 2,770,121 Capital expenditure in progress ,224,938 17,353,268 (175,047) (35,545) - 386, ,754,272 Carrying amount at end Freehold land 434,396 Short leasehold land 23,374,862 Buildings 71,219,838 Plant and machinery 53,716,753 Tools and implements 2,906,682 Office equipment 557,380 Furniture and fittings 40,741 Electrical installation 66,694 Motor vehicles 720,916 Capital expenditure in progress 2,182, ,220, ANNUAL REPORT

54 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 4. PROPERTY, PLANT AND EQUIPMENT (Cont d) Balance at beginning Additions Disposals Written off Reclassification Foreign currency translation Balance at end At cost Freehold land 434, ,396 Short leasehold land 29,920, (227,531) 29,692,982 Buildings 102,938,838 43, ,370 (747,121) 102,688,300 Plant and machinery 198,532,192 4,702,924 - (1,206,293) - (1,625,396) 200,403,427 Tools and implements 16,938, , (175,194) 17,049,562 Office equipment 3,340,286 57,015 - (16,393) - (19,794) 3,361,114 Furniture and fittings 519,852 3, ,252 Electrical installation 2,548, ,548,627 Motor vehicles 3,380, ,942 (390,824) - 51,818 (14,025) 3,488,058 Capital expenditure in progress 505, (505,188) ,058,157 5,554,132 (390,824) (1,222,686) - (2,809,061) 360,189,718 Accumulated depreciation Freehold land Short leasehold land 5,228, , (29,937) 5,801,696 Buildings 26,934,563 2,419, (101,963) 29,251,795 Plant and machinery 130,118,470 12,188,369 - (1,011,315) - (696,430) 140,599,094 Tools and implements 12,774, , (116,850) 13,587,604 Office equipment 2,432, ,280 - (16,393) - (9,987) 2,625,847 Furniture and fittings 466,458 7, ,272 Electrical installation 2,363,188 69, ,432,220 Motor vehicles 2,489, ,363 (343,722) - - (8,120) 2,452,410 Capital expenditure in progress ,809,056 16,750,599 (343,722) (1,027,708) - (963,287) 197,224,938 Carrying amount at end Freehold land 434,396 Short leasehold land 23,891,286 Buildings 73,436,505 Plant and machinery 59,804,333 Tools and implements 3,461,958 Office equipment 735,267 Furniture and fittings 48,980 Electrical installation 116,407 Motor vehicles 1,035,648 Capital expenditure in progress - 162,964, ANNUAL REPORT

55 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 4. PROPERTY, PLANT AND EQUIPMENT (Cont d) COMPANY Office equipment At cost 1,600 1,600 Accumulated depreciation 1,599 1,599 Carrying amount INVESTMENT PROPERTIES Freehold land Buildings Total At Cost 2,656,055 3,365,111 6,021,166 Accumulated depreciation Balance at beginning - 826, ,874 Current charge - 67,302 67,302 Balance at end - 894, ,176 Carrying amount 2,656,055 2,470,935 5,126,990 At Cost 2,656,055 3,365,111 6,021,166 Accumulated depreciation Balance at beginning - 759, ,571 Current charge - 67,303 67,303 Balance at end - 826, ,874 Carrying amount 2,656,055 2,538,237 5,194, ANNUAL REPORT

56 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 5. INVESTMENT PROPERTIES (Cont d) The above investment properties are held to earn rental income. The following are recognised in profit or loss in respect of investment properties:- GROUP Rental income from rental generating properties 318, ,000 Direct operating expenses arising from rental generating properties, including depreciation 114, ,256 Fair value information Fair value of investment properties are categorised as follows:- Level 1 Level 2 Level 3 Freehold land - 11,023,000 - Buildings - 5,077,000 - Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as at the date of the event or change in circumstances that caused the transfer. There were no transfers between Level 1 and Level 2 during the financial year. Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indirectly. Level 2 fair values of freehold land and buildings have been generally derived by directors estimation using the sales comparison approach. Sales prices of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. 6. INVESTMENT IN SUBSIDIARIES COMPANY Unquoted shares, at cost 174,091, ,091,679 Redeemable non-cumulative preference shares 41,500,000 41,500, ,591, ,591, ANNUAL REPORT

57 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 6. INVESTMENT IN SUBSIDIARIES (Cont d) The details of the subsidiaries, all of which are incorporated in Malaysia, except where indicated are as follows:- Name of Subsidiaries % Effective Equity Interest % Principal Activities Chin Well Fasteners Co Sdn. Bhd Manufacturing of screw, nuts, bolts and other fastening products Chin Well Service Centre Sdn. Bhd Trading in screws, nuts, bolts and other fastening products. Chin Herr Industries (M) Sdn. Bhd Manufacturing of precision galvanised wire, annealing wire, bright wire, hard drawn wire, PVC wire, bent round bar and grill mesh. *Chin Well Fasteners (Vietnam) Co., Ltd. (Incorporated in Vietnam) Manufacturing of screws, nuts, bolts and other fastening products. *Not audited by Grant Thornton. During the financial year ended 30 June, the Company has capitalised the amount due from a subsidiary, Chin Well Fasteners Co. Sdn. Bhd., by accepting the allotment of 415,000 redeemable non-cumulative preference shares of 1 each, fully paid-up in the capital of the subsidiary, at an issue price of 100 each. Non-controlling interest in a subsidiary The Group s subsidiary that has material non-controlling interest ( NCI ) are as follows:- Chin Well Fasteners (Vietnam) Co., Ltd. NCI percentage of ownership interest and voting interest 40% 40% Carrying amount of NCI 60,419,989 51,308,838 Profit allocated to NCI 8,789,262 4,603,653 Summarised financial information before intra-group elimination As at 30 June Non-current assets 75,654,965 82,414,938 Current assets 128,214, ,263,999 Non-current liabilities - (6,304,963) Current liabilities (52,819,237) (55,101,877) Net assets 151,049, ,272, ANNUAL REPORT

58 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 6. INVESTMENT IN SUBSIDIARIES (Cont d) Non-controlling interest in a subsidiary (Cont d) Chin Well Fasteners (Vietnam) Co., Ltd. Year ended 30 June Revenue 210,812, ,491,235 Profit for the year 21,973,154 11,509,132 Total comprehensive income for the year 22,778,441 9,205,853 Cash flows from operating activities 11,787,441 4,147,488 Cash flows from investing activities (2,209,661) (4,619,566) Cash flows from financing activities 1,782,656 (3,165,301) Net increase/(decrease) in cash and bank balances 11,360,436 (3,637,379) 7. INVESTMENT IN AN ASSOCIATE GROUP #Unquoted shares, at cost 6,134,062 6,224,911 Exchange translation reserve (81,402) (81,402) Share of post-acquisition reserve (1,268,092) (559,138) 4,784,568 5,584,371 Less: Impairment loss (2,243,608) - 2,540,960 5,584,371 Less: Reclassified to non-current asset held for sale (Note 13) (2,540,960) - - 5,584,371 # The professional fee capitalised as part of the investment cost in the previous financial year, totalling 90,849 was refunded during the financial year under review. Details of the associate are as follows:- Effective Equity Interest Name of Associate Principal Activities *Swisstec Sourcing Limited (Incorporated in Hong Kong) - 50% Source, sell and market fasteners, hand tools and power tools mainly for do-it-yourself (DIY) customers and wholesalers. * Not audited by Grant Thornton. 57 ANNUAL REPORT

59 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 7. INVESTMENT IN AN ASSOCIATE (Cont d) On 8 July, a wholly-owned subsidiary of the Company, Chin Well Fastener Co. Sdn. Bhd. ( CWFC ) has entered into a sale of shares agreement with DKSH Holding Ltd ( DKSH ) to dispose of its 50% equity interest in Swisstec Sourcing Limited ( Swisstec ) for a total cash consideration of USD0.8 million or approximately 2,540,960 details of which is disclosed in Note 35. As the carrying amount of the investment is higher than its fair value less cost of disposal, an impairment loss of 2,243,608 was recognised in profit or loss for the current financial year before reclassifying it to non-current asset held for sale. On 28 September 2012, CWFC has acquired 17,653 ordinary shares of HKD1,000 each in Swisstec, equivalent to 45.04% of the total issued and paid-up capital of Swisstec for a total cash consideration of HKD2. Subsequently, on 11 January, CWFC subscribed for an additional 15,560 ordinary shares of HKD1,000 each in Swisstec amounting to HKD15.56 million or equivalent to USD2 million. Consequently, the Company holds 50% effective equity interest in Swisstec, making it an associate. The summarised financial information of the associate is as follows:- Assets and liabilities Total assets (100%) - 11,049,358 Total liabilities (100%) - 2,188,108 Results Revenue (100%) - 7,075,723 Loss for the year (100%) - 1,087, OTHER INVESTMENT Available-for-sale financial assets: GROUP Transferrable golf club membership, at cost Balance at beginning 142, ,111 Foreign exchange translation 1,413 (2,949) Balance at end 143, , ANNUAL REPORT

60 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 9. INVENTORIES GROUP Raw materials 53,613,937 77,146,804 Work-in-progress 14,371,451 23,646,762 Finished goods 109,871, ,275,225 Trading goods 396, ,103 Indirect materials 31,234,116 29,824,563 Goods-in-transit 17,576, ,064, ,055,457 During the financial year, the inventories recognised in profit or loss as cost of sales is 398,314,429 (: 402,095,563). 10. TRADE RECEIVABLES GROUP Total amount 92,314,782 87,137,632 Less: Allowance for impairment Balance at beginning (1,422,270) (1,694,341) Reversal 1,100, ,071 Analysis as:- Balance at end (322,213) (1,422,270) 91,992,569 85,715,362 Current 91,992,569 85,596,731 Non-current: - Later than 1 year but not later than 2 years - 118,631 91,992,569 85,715,362 The currency profile of trade receivables is as follows:- GROUP Ringgit Malaysia 31,306,112 32,148,964 US Dollar 43,752,726 42,525,117 Euro 15,421,189 10,415,484 Vietnam Dong 1,222, ,369 Australian Dollar 247,948 - Singapore Dollar 42,591 32,428 91,992,569 85,715, ANNUAL REPORT

61 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 10. TRADE RECEIVABLES (Cont d) The trade receivables are non-interest bearing and are generally on 30 to 120 days (: 30 to 120 days) credit terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition. Included in trade receivables is an amount of 125,521 (: 363,875) which the Group has entered into a settlement agreement. The debt is unsecured, interest free and is repayable by 29 equal monthly instalments of Euro5,000 each and a final instalment of Euro4,023 commencing July OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS GROUP COMPANY Non-current assets Other receivables 840,115 1,680, ,115 1,680,225 Less: Impairment losses Balance at beginning (72,696) (143,986) (72,696) (143,986) Reversal 48,226 71,290 48,226 71,290 Balance at end (24,470) (72,696) (24,470) (72,696) 815,645 1,607, ,645 1,607,529 Less: Receivable within next 12 months included under current assets (815,645) (791,883) (815,645) (791,883) - 815, ,646 Current assets Other receivables 6,294,418 9,336, , ,883 Refundable deposits 213, ,328 4,500 4,500 Non-refundable deposits 1,511 1,502, Prepayments 20,149,436 10,150, ,658,831 21,161, , ,383 Total 26,658,831 21,976, ,145 1,612,029 Analysed as: Current 26,658,831 21,161, , ,383 Non-current: - Later than 1 year but not later than 2 years - 815, ,646 26,658,831 21,976, ,145 1,612, ANNUAL REPORT

62 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 11. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (Cont d) The currency profile of other receivables, deposits and prepayments is as follows:- GROUP COMPANY Ringgit Malaysia 4,020,430 11,398, ,145 1,612,029 Vietnam Dong 22,638,401 10,578, ,658,831 21,976, ,145 1,612,029 Included in the Group s other receivables, prepayments and deposits are the following:- (i) (ii) Prepayments of 18,980,895 (: 9,459,076) paid to suppliers as down payment for purchase of raw materials, and An unsecured and non-interest bearing amount of 815,645 (: 1,607,529) due from a third party of which the amount is repayable by 4 equal yearly instalments of 840,111 each and a final instalment of 840,115 commencing May CASH AND BANK BALANCES GROUP COMPANY Short term investments with licensed financial institutions 9,565,104 13,989, ,000 - Cash and bank balances 38,369,336 16,714, , ,208 47,934,440 30,703, , ,208 The currency profile of cash and bank balances is as follows:- GROUP COMPANY Ringgit Malaysia 15,662,328 20,681, , ,208 US Dollar 13,363,351 3,703, Euro 12,436,767 5,551, Vietnam Dong 6,420, , Singapore Dollar 51,284 7, ,934,440 30,703, , ,208 Short term investments represent investments in money market, repo and unit trusts. The effective interest rates per annum and maturities of the short term investments as at the end of the reporting period are as follows:- GROUP COMPANY Interest rates (%) 2.60 to to Maturities (days) 7 to 30 2 to ANNUAL REPORT

63 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 13. NON-CURRENT ASSET HELD FOR SALE GROUP Reclassified from investment in an associate (Note 7) 2,540,960 - The above investment was disposed of subsequent to the end of the reporting period, details of which is disclosed in Note SHARE CAPITAL Number of ordinary shares of 0.50 each Amount Authorised 1,000,000,000 1,000,000, ,000, ,000,000 Issued and fully paid 272,533, ,533, ,266, ,266, FOREIGN TRANSLATION RESERVE GROUP This is in respect of foreign exchange differences on translation of the financial statements of the Group s foreign subsidiary. 16. RETAINED PROFITS COMPANY As at 31 December, the remaining 108 balance of the Company has expired upon reaching the six-year transitional period. Accordingly, there are no longer any restrictions on the Company to distribute dividends subject to the availability of retained profits effective 1 January. 17. PROVISION FOR RETIREMENT BENEFITS GROUP Balance at beginning 2,813,698 2,767,349 Additions 39,610 67,469 Benefits paid (1,015,915) (21,120) Balance at end 1,837,393 2,813,698 Analysed as: Current liabilities 916, ,414 Non-current liabilities Later than 1 year but not later than 2 years 921, ,642 Later than 2 years but not later than 5 years - 937, ,342 1,875,284 1,837,393 2,813, ANNUAL REPORT

64 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 17. PROVISION FOR RETIREMENT BENEFITS (Cont d) In the previous financial year, the Group has renewed its Collective Agreement signed with the Metal Industry Employees Union. The revised terms and conditions are as below:- (a) The Group will contribute to the existing retirement benefits scheme only up to 31 December (b) Effective from 1 January, employees who have completed more than five (5) years of continuous service with the Group will be entitled to an additional contribution of 2% on top of the employer s statutory contribution of 12% or 13% to the EPF. This will supersede the previous retirement benefits scheme. (c) The existing retirement benefits will be paid in the following manner:- (i) (ii) (iii) Employees who have three (3) years or less to attain the retirement age will be paid directly to the employees concerned semi-annually over 6 instalments commencing July. The retirement benefits of employee with more than 3 years to attain the retirement age will be paid by contribution of at least 50% of his/her retirement benefits amount to his/her EPF with the remaining balance being paid directly to him/her. The payment will be made semi-annually over 6 instalments commencing July. Employee who is medically boarded out of service, deceased, retrenched or opt for optional retirement will be paid directly to the employee or his/her legal beneficiary whatever balance amount that is still with the Group. 18. BORROWINGS GROUP Non-current liabilities # Loan from non-controlling interest of a subsidiary - 3,152,481 Current liabilities Onshore foreign currency loans 37,224,007 57,930,668 Short term loans 35,913,919 27,528,263 # Loan from non-controlling interest of a subsidiary - 3,152,482 73,137,926 88,611,413 All the loans are denominated in US Dollar. # The loan of USD 3 million was obtained from the non-controlling interest of a subsidiary during the financial year ended 30 June It was unsecured and was repayable by way of 3 yearly equal instalments of USD 1 million each commencing May. However, the Group has fully repaid the loan in one lump sum during the financial year under review. The borrowings are secured by way of:- (i) Corporate guarantees of the Company and of a subsidiary, and (ii) Negative pledge of the assets of certain subsidiaries. 63 ANNUAL REPORT

65 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 18. BORROWINGS (Cont d) A summary of the average effective interest rates and the maturities of the borrowings are as follows:- Average effective interest rate per annum (%) Total Within 1 year Later than 2 years but not later than 5 years Onshore foreign currency loans 0.72 to ,224,007 37,224,007 - Short term loans 1.80 to ,913,919 35,913,919 - Onshore foreign currency loans 0.73 to ,930,668 57,930,668 - Short term loans 1.80 to ,528,263 27,528,263 - Loan from non-controlling interest ,304,963 3,152,482 3,152, DEFERRED TAX LIABILITIES GROUP Balance at beginning 9,204,130 10,076,130 Transfer to profit or loss (468,500) (907,000) 8,735,630 9,169,130 (Over)/Under provision in prior year (19,000) 35,000 Balance at end 8,716,630 9,204,130 The deferred tax liabilities are represented by taxable/(deductible) temporary differences arising from:- GROUP - Property, plant and equipment 7,718,500 8,747,000 - Acquisition of a subsidiary 1,516,130 1,516,130 - Provision for retirement benefits (441,000) (703,000) - Allowance for impairment (77,000) (356,000) 8,716,630 9,204, ANNUAL REPORT

66 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 20. TRADE PAYABLES The currency profile of trade payables is as follows:- GROUP Ringgit Malaysia 6,409,703 5,758,781 Vietnam Dong 13,257,488 9,347,854 US Dollar 4,361,996 2,973,151 Euro - 13,809 24,029,187 18,093,595 Included herein is amount of 22,522 (: Nil) due to a company in which certain directors of the Company and persons connected to them have substantial financial interests. The trade payables are non-interest bearing and are normally settled within 30 to 90 days (: 30 to 90 days) credit terms. 21. OTHER PAYABLES AND ACCRUALS GROUP COMPANY Other payables 3,632,748 17,307,819 1,344 1,344 Accruals 3,061,407 4,787, , ,000 6,694,155 22,095, , ,344 The currency profile of other payables and accruals is as follows:- GROUP COMPANY Ringgit Malaysia 4,235,357 4,704, , ,344 US Dollar 737,914 15,294, Vietnam Dong 1,485,328 1,876, Euro 235, , ,694,155 22,095, , ,344 Included in the Group s other payables is an amount of Nil (: 15,131,912) due to non-controlling interest of a subsidiary and it is unsecured, interest free and is repayable on demand. 65 ANNUAL REPORT

67 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 22. REVENUE GROUP COMPANY Invoiced value of goods sold less returns and discounts 485,340, ,889, Gross dividend income received from subsidiaries ,475,000 51,100, ,340, ,889,300 11,475,000 51,100, OTHER INCOME GROUP COMPANY Realised gain on foreign exchange 2,859,343 5,467, Unrealised gain on foreign exchange 857, , Interest income 541, , Rental income from investment properties 318, , Reversal of impairment loss on receivables 1,148,283 89,100 48,226 71,290 Gain on disposal of property, plant 16,586 68, and equipment Others 22,294 52, ,763,754 6,942,766 48,226 71, FINANCE COSTS GROUP Interest expense of financial liabilities at amortised cost: - Bank overdraft 40,488 41,570 - Bankers acceptance - 8,765 - LC charges 33, ,210 - Loan from non-controlling interest 224, ,422 - Onshore foreign currency loans 310, ,411 - Short term loans 591, ,626 1,200,129 1,799, ANNUAL REPORT

68 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 25. PROFIT BEFORE TAXATION This is arrived at:- GROUP COMPANY After charging: Audit fee - Company s auditors - statutory audit 73,000 68,000 22,000 17,000 - other services 8,360 10,480 8,360 10,480 - Other auditors - statutory audit 16,920 16, Bad debts - 1,776, Depreciation on: - Property, plant and equipment 17,353,268 16,750, Investment properties 67,302 67, Directors remuneration for non-executive directors - fees 120, , , ,000 - emoluments 4,000 3,600 4,000 3,600 Reversal of impairment loss on receivables - (254,261) - - Impairment loss on investment in an associate 2,243, Loss on disposal of property, plant and equipment - 43, Property, plant and equipment written off 115, , Rental of forklift 288,600 57, * Staff costs 26,790,388 22,582,400 93,000 93,000 Unrealised loss on foreign exchange - 685, * Staff costs - Salaries, bonus, wages and incentives 25,550,165 21,369,249 3,000 3,000 - EPF 1,026, , SOCSO 83,671 84, Directors fee 90,000 90,000 90,000 90,000 26,750,778 22,514,931 93,000 93,000 - Provision for retirement benefits 39,610 67, ,790,388 22,582,400 93,000 93,000 Directors remuneration Included in the staff costs of the Group and of the Company is directors remuneration as shown below:- 67 ANNUAL REPORT

69 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 25. PROFIT BEFORE TAXATION (Cont d) Directors Remuneration (Cont d) GROUP COMPANY Executive directors of the Company: Directors emoluments - Salaries, bonus, allowance and incentive 2,735,264 2,350,227 3,000 3,000 - EPF 244, , ,979,824 2,573,859 3,000 3,000 Directors fee 90,000 90,000 90,000 90,000 3,069,824 2,663,859 93,000 93,000 Benefits-in-kind 11,150 11, ,080,974 2,675,009 93,000 93,000 Executive directors of a subsidiary: Directors emoluments - Salaries, allowance and bonus 339, , Total executive directors remuneration 3,420,537 2,884,419 93,000 93, TAXATION GROUP COMPANY Current tax: Based on results for the financial year - Malaysian income tax (8,602,410) (6,542,000) (122,410) (300,000) - Foreign tax (1,842,957) (221,811) - - (10,445,367) (6,763,811) (122,410) (300,000) Deferred tax: Relating to origination and reversal of temporary differences - Malaysian 168, , Changes in tax rate 300, , , (9,976,867) (5,856,811) (122,410) (300,000) Over/(Under) provision in prior years - Current tax (3,716) 51,327 1, Deferred tax 19,000 (35,000) ,284 16,327 1,387 - (9,961,583) (5,840,484) (121,023) (300,000) 68 ANNUAL REPORT

70 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 26. TAXATION (Cont d) The reconciliation of the tax expense of the Group and of the Company is as follows:- GROUP COMPANY Profit before taxation 54,596,425 32,593,905 11,039,515 50,625,719 Add: Share of loss of an associate 708, , ,305,379 33,153,043 11,039,515 50,625,719 Income tax at Malaysian statutory tax rate of 25% (13,826,345) (8,288,261) (2,759,879) (12,656,430) Effects of different tax rate in other country 4,167,819 2,052, Income not subject to tax 364, ,017 2,758,397 12,475,000 Expenses not deductible for tax purposes (983,716) (464,918) (120,928) (118,570) Utilisation of unabsorbed tax losses - 658, Changes in tax rate 300, (9,976,867) (5,856,811) (122,410) (300,000) Over provision in prior years 15,284 16,327 1,387 - (9,961,583) (5,840,484) (121,023) (300,000) The corporate tax rate will be reduced to 24% from the year of assessment 2016 as announced in the Malaysian Budget. Consequently, deferred tax is measured using this tax rate. 27. EARNINGS PER SHARE GROUP (a) Basic earnings per share The basic earnings per share of the Group is calculated by dividing the profit for the year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year as below:- Profit attributable to owners of the Company () 35,845,580 22,149,768 Weighted average number of ordinary shares of 0.50 each 272,533, ,533,168 Basic earnings per share (sen) (b) Diluted earnings per share Diluted earnings per share (sen) There is no diluted earnings per share as the Company does not have any convertible financial instruments as at the end of the reporting period. 69 ANNUAL REPORT

71 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 28. DIVIDENDS Net dividend per share (sen) GROUP AND COMPANY Net dividend Net dividend per share (sen) Net dividend In respect of the financial year ended 30 June - An interim single tier dividend of 2 sen per share 2 5,450, In respect of the financial year ended 30 June - An interim tax exempt dividend of 1 sen per share ,725,332 - Second interim tax exempt dividend of 2 sen per share 2 5,450, In respect of the financial year ended 30 June Second interim tax exempt dividend of 1.5 sen per share ,087, ,901, ,813,329 On 21 August, the Company has declared a second interim single tier dividend of 2.83 sen per share amounting to 7,712,689 in respect of the financial year ended 30 June payable on 21 October. The financial statements for the current financial year do not reflect the second interim single tier dividend as it was declared subsequent to the financial year end. Such dividend will be accounted for in equity as an appropriation of retained profits in the financial year ending 30 June SEGMENTAL INFOATION Segmental information is presented in respect of the Group s business and geographical segments. The business segments are based on the Group s management and internal reporting structure. Inter-segment pricing is determined based on negotiated terms. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Business Segments The Group comprises the following main business segments:- (1) Fastening products Manufacturing and trading of screws, nuts, bolts and other fastening products. (2) Wire products Manufacturing of precision galvanized wire, annealing wire, bright wire, hard drawn wire, PVC wire, bent round bar and grill mesh. (3) Investment holding Investment holding. 70 ANNUAL REPORT

72 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 29. SEGMENTAL INFOATION (Cont d) By business segment Revenue: Fastening products Wire products Investment holding Adjustments and Elimination Total NOTE External customers 409,188, ,619,884 76,152, ,269, ,340, ,889,300 Inter-segment 7,044-9,457 4,641 11,475,000 51,100,000 (11,491,501) (51,104,641) A - - Total revenue 409,195, ,619,884 76,162, ,274,057 11,475,000 51,100,000 (11,491,501) (51,104,641) 485,340, ,889,300 Results: Interest income 399, , ,965 89, (3,668) - 541, ,822 Interest expenses (1,005,260) (1,370,801) (198,537) (428,203) - - 3,668 - (1,200,129) (1,799,004) Depreciation (15,184,674) (14,580,600) (2,235,896) (2,237,302) (17,420,570) (16,817,902) Share of loss of an associate (708,954) (559,138) (708,954) (559,138) Other non-cash income/ (expenses) (1,010,062) (1,240,309) 585,368 (635,735) 48,226 71, B (376,468) (1,804,754) Segment profit 53,076,030 31,116,760 1,955,880 1,951,426 11,039,515 50,625,719 (11,475,000) (51,100,000) 54,596,425 32,593,905 Assets: Additions to noncurrent assets 5,873,093 10,661,426 2,890, , C 8,763,255 11,138,503 Segment assets 469,259, ,658,769 85,752,763 93,882, ,326, ,303,917 (215,598,723) (215,591,679) 556,739, ,253,113 Segment liabilities 93,048, ,406,558 23,858,586 33,632, , ,344 (7,044) - 117,135, ,269, ANNUAL REPORT

73 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 29. SEGMENTAL INFOATION (Cont d) Notes to segment information: A B Inter-segment revenues are eliminated on consolidation. Other non-cash income/(expenses) consist of the following items:- Bad debts - (1,776,700) Gain on disposal of property, plant and equipment 16,586 24,125 Impairment loss on investment in an associate (2,243,608) - Property, plant and equipment written off (115,741) (194,978) Provision for retirement benefits (39,610) (67,469) Reversal of impairment loss on receivables 1,148, ,361 Unrealised gain/(loss) on foreign exchange 857,622 (133,093) (376,468) (1,804,754) C Additions to non-current assets consists of:- Property, plant and equipment 8,763,255 5,554,132 Investment in an associate - 5,584,371 8,763,255 11,138,503 Information about major customers During the financial year, there was no single customer that contributed to more than 10% of the Group s revenue. Geographical Segments The Group s location of its customers is in the principal geographical regions, namely Malaysia, Vietnam, other Asian and European countries. Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:- Revenue Non-current assets Malaysia 114,564, ,050,197 84,778,704 91,413,801 Vietnam 12,313,049 6,005,631 75,568,821 82,329,642 Other Asian Countries 39,595,936 60,625, European Countries 280,492, ,322, Others 38,374,851 53,885, ,340, ,889, ,347, ,743, ANNUAL REPORT

74 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 29. SEGMENTAL INFOATION (Cont d) Non-current assets information presented above which excludes financial assets, consist of the following items as presented in the Group s statement of financial position:- Property, plant and equipment 155,220, ,964,780 Investment properties 5,126,990 5,194,292 Investment in an associate - 5,584, ,347, ,743, CONTINGENT LIABILITIES (UNSECURED) COMPANY Corporate guarantees extended to financial institutions for banking facilities granted to subsidiaries - Limit 339,788, ,080, COMMITMENTS GROUP (i) Capital commitments Contracted but not provided for: - Property, plant and equipment 815,985 66,000 (ii) Cancellable operating lease receivable commitments Future minimum rentals receivable: Not later than 1 year 115,200 60,000 Operating lease receivable is in respect of the letting of its investment properties for terms ranging from two to three years. (iii) Non-cancellable operating lease payable commitments Future minimum rentals payable: Not later than 1 year 288, ,400 Later than 1 year but not later than 2 years 288, ,400 Later than 2 years but not later than 5 years 216, , , ,000 Operating lease payable is in respect of rentals payable for use of forklift for terms of four years. 73 ANNUAL REPORT

75 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 32. RELATED PARTY DISCLOSURES (i) Identity of related parties For the purpose of these financial statements, parties are considered to be related to the Group, if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making any financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The Group has related party relationship with its subsidiaries, key management personnel and the following parties: Related party Relationship Asia Angel Holdings Limited : Non-controlling interest of a subsidiary. Jinn Her Enterprise Co., Ltd. : A company in which Messrs Tsai Yung Chuan, Tsai Chang Hsiu-Hsiang and persons connected to them have substantial financial interests. (ii) Related party transactions GROUP COMPANY Gross dividend income from unquoted subsidiaries - Chin Well Fasteners Co. Sdn. Bhd ,000,000 6,800,000 - Chin Well Service Centre Sdn. Bhd ,475,000 44,300,000 Loan interest charged by non-controlling interest of a subsidiary - Asia Angel Holdings Limited 224, , Purchases from a related party - Jinn Herr Enterprise Co., Ltd. 208, , (iii) Compensation of key management personnel The Company has no other members of key management personnel apart from the Board of Directors which compensation has been shown in Note FINANCIAL INSTRUMENTS 33.1 Categories of financial instruments The table below provides an analysis of financial instruments categorised as follows:- (i) (ii) (iii) Available-for-sale financial assets ( AFS ); Loans and receivables ( L&R ); and Financial liabilities measured at amortised cost ( FL ). 74 ANNUAL REPORT

76 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) 33.1 Categories of financial instruments (Cont d) GROUP Carrying amount AFS L&R FL Financial assets Other investment 143, , Trade receivables 91,992,569-91,992,569 - Other receivables and refundable deposits 6,507,884-6,507,884 - Cash and bank balances 47,934,440-47,934, ,578, , ,434,893 - Financial liabilities Trade payables 24,029, ,029,187 Other payables and accruals 6,694, ,694,155 Borrowings 73,137, ,137, ,861, ,861,268 Financial assets Other investment 142, , Trade receivables 85,715,362-85,715,362 - Other receivables and refundable deposits 10,323,800-10,323,800 - Cash and bank balances 30,703,456-30,703, ,884, , ,742,618 - Financial liabilities Trade payables 18,093, ,093,595 Other payables and accruals 22,095, ,095,680 Borrowings 91,763, ,763, ,953, ,953, ANNUAL REPORT

77 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) 33.1 Categories of financial instruments (Cont d) COMPANY Carrying amount AFS L&R FL Financial assets Other receivable and refundable deposits 820, ,145 - Cash and bank balances 911, ,668-1,731,813-1,731,813 - Financial liabilities Other payables and accruals 235, ,344 Financial assets Other receivable and refundable deposits 1,612,029-1,612,029 - Cash and bank balances 100, ,208-1,712,237-1,712,237 - Financial liabilities Other payables and accruals 230, , Financial risk management The Group and the Company are exposed to a variety of financial risks arising from its operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk. The Group operates within clearly defined guidelines that are approved by the Board and the Group s policy is not to engage in speculative activities Credit risk Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group and to the Company. The Group s exposure to credit risk arises principally from its trade and other receivables. The Company s exposure to credit risk arises principally from financial guarantees given Trade receivables The Group extends credit terms to its customers that range between 30 to 120 days. In deciding whether credit shall be extended, the Group will take into consideration factors such as the relationship with the customer, its payment history and credit worthiness. The Group subjects new customers to credit verification procedures. In addition, debt monitoring procedures are performed on an on-going basis with the result that the Group s exposure to bad debts is not significant. The maximum exposure to credit risk arising from trade receivables is represented by the carrying amount in the Group s statement of financial position. The ageing of trade receivables and accumulated impairment losses of the Group is as follows:- 76 ANNUAL REPORT

78 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) Trade receivables (Cont d) Gross Collective impairment Net Not past due 55,945,342-55,945,342 1 to 30 days past due 7,738,471 (43,908) 7,694, to 60 days past due 4,301,360 (35,415) 4,265,945 Past due more than 60 days 24,329,609 (242,890) 24,086,719* 36,369,440 (322,213) 36,047,227 92,314,782 (322,213) 91,992,569 Not past due 54,747,543 (446,798) 54,300,745 1 to 30 days past due 13,098,290 (233,410) 12,864, to 60 days past due 3,027,684 (97,090) 2,930,594 Past due more than 60 days 16,264,115 (644,972) 15,619,143* 32,390,089 (975,472) 31,414,617 87,137,632 (1,422,270) 85,715,362 Trade receivables that are neither past due nor impaired are creditworthy customers with good payment record with the Group. None of the Group s trade receivables that are neither past due nor impaired have been renegotiated during the financial year. The Group has trade receivables amounting to 36,047,227 (: 31,414,617) that were past due but not impaired as the management is of the view that these debts are recoverable in due course. The Group has significant concentration of credit risk in the form of outstanding balance due from 1 customer (: 1 customer) representing 25% (: 23%) of the total trade receivables. *Included herein is an amount of 125,521 (: 363,875) due from a debtor which is having financial difficulties. The Group has entered into a repayment plan with the said debtor as disclosed in Note 10. The management will follow up closely to ensure the said debtor adheres to the repayment plan. As such, the management is of the opinion that this debt can be recovered and no further impairment loss is needed Financial guarantees The Company provides unsecured financial guarantees to financial institutions for banking facilities granted to subsidiaries as disclosed in Note 30. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries. As at the end of the reporting period, there was no indication that any of the subsidiaries would default on repayment. 77 ANNUAL REPORT

79 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) 33.4 Liquidity risk Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as and when they fall due. The Group and the Company actively manage their debt maturity profile, operating cash flows and availability of funding so as to ensure that all repayment and funding needs are met. As part of their overall prudent liquidity management, the Group and the Company maintain sufficient levels of cash and cash equivalents to meet their working capital requirements. The table below summarises the maturity profile of the Group s and the Company s financial liabilities as at the end of the reporting period based on the undiscounted contractual payments:- GROUP Carrying amount Contractual cash flows Within 1 year More than 2 years and less than 5 years Interest bearing borrowings 73,137,926 73,137,926 73,137,926 - Trade and other payables 30,723,342 30,723,342 30,723, ,861, ,861, ,861,268 - Interest bearing borrowings 91,763,894 91,763,894 88,611,413 3,152,481 Trade and other payables 40,189,275 40,189,275 40,189, ,953, ,953, ,800,688 3,152,481 COMPANY Other payables 235, , ,344 - Other payables 230, , , Interest rate risk The Group s and the Company s fixed rate instruments are exposed to a risk of change in their fair value due to changes in interest rates. The Group s and the Company s floating rate instruments are exposed to a risk of change in cash flows due to changes in interest rates. The interest rate profile of the Group s and the Company s interest-bearing financial instruments based on the carrying amounts as at the end of the reporting period is as follows:- 78 ANNUAL REPORT

80 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) 33.5 Interest rate risk (Cont d) GROUP COMPANY Fixed rate instruments Financial liabilities - 6,304, Floating rate instruments Financial assets 9,565,104 13,989, ,000 - Financial liabilities 73,137,926 91,763, Sensitivity analysis for fixed rate instruments The Group and the Company do not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group and the Company do not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss. Sensitivity analysis for variable rate instruments An increase of 25 basis point would have decreased profit before taxation by amount shown below and a corresponding decrease would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. GROUP COMPANY Decrease in profit before taxation 81, , Foreign currency risk The objectives of the Group s foreign exchange policies are to allow the Group to manage exposures that arise from trading activities effectively within a framework of controls that does not expose the Group to unnecessary foreign exchange risks. The Group is exposed to foreign currency risk on sales and purchases that are denominated in currencies other than the functional currency of the Group entities. The Group also holds cash and bank balances denominated in foreign currencies for working capital purposes. The currencies giving rise to this risk is US Dollar ( USD ), Euro ( EUR ), Australia Dollar ( AUD ) and Singapore Dollar ( SGD ). 79 ANNUAL REPORT

81 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 33. FINANCIAL INSTRUMENTS (Cont d) 33.6 Foreign currency risk (Cont d) The Group s exposure to foreign currency risk, based on carrying amounts as at the end of the reporting period is as follows:- USD EUR AUD SGD Trade receivables 43,752,726 15,421, ,948 42,591 Cash and bank balances 13,363,351 12,436,767-51,284 Trade payables (4,361,996) Other payables and accruals (737,914) (235,556) - - Borrowings (73,137,926) Net exposure (21,121,759) 27,622, ,948 93,875 Trade receivables 42,525,117 10,415,484-32,428 Cash and bank balances 3,703,402 5,551,680-7,458 Trade payables (2,973,151) (13,809) - - Other payables and accruals (15,294,139) (220,269) - - Borrowings (91,763,894) Net exposure (63,802,665) 15,733,086-39,886 Sensitivity analysis for foreign currency risk Below demonstrates the sensitivity to a reasonably possible change in the foreign currency exchange rates against Ringgit Malaysia, with all other variables held constant, of the Group s profit before taxation. A 10% strengthening of the against the following currencies at the end of the reporting period would have (decreased)/increased profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect. USD 2,112,176 6,380,267 EUR (2,762,240) (1,573,309) AUD (24,795) - SGD (9,388) (3,989) (Decrease)/Increase in profit before taxation (684,247) 4,802, Fair value information The carrying amounts of the Group s and of the Company s cash and bank balances, short term receivables and payables and short term borrowings as at the end of the reporting period approximate their fair values due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. It was not practicable to estimate the fair value of the Group s other investment which comprise of transferrable golf club membership due to the lack of comparable quoted price in an active market and the fair value cannot be reliably measured. Therefore, this investment is carried at its original cost less any impairment losses. 80 ANNUAL REPORT

82 NOTES TO THE FINANCIAL STATEMENTS (Cont d) - 30 JUNE 34. CAPITAL MANAGEMENT The primary objective of the Group s capital management policy is to maintain a strong capital base to support its businesses and maximise shareholders value. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions or expansion of the Group. The Group may adjust the capital structure by issuing new shares, returning capital to shareholders or adjusting the amount of dividends to be paid to shareholders or sell assets to reduce debts. No changes were made in the objective, policy and process during the financial year under review as compared to the previous financial year. As at the end of the reporting period, the Group has not breached any of the debt covenants imposed by its lenders. 35. SUBSEQUENT EVENT On 8 July, the Company has announced to Bursa Malaysia Securities Berhad that CWFC had disposed of its 33,213 ordinary shares of HK$1,000 each in the associate, Swisstec, equivalent to 50% of the total issued and paid-up share capital of Swisstec to DKSH Holding Ltd. for a total cash consideration of USD0.8 million or approximately 2,540,960. Following the disposal, Swisstec ceased to be the associate of the Group. Swisstec is loss making and the disposal is to eliminate further future sharing of losses in Swisstec. By realising the investment in Swisstec which is deemed to be non-core business of the Group, CWFC will be able to remobilise its resources for existing operation or being considered for other prospective investment opportunities. In view of the above, the Group has reclassified such investment as non-current asset held for sale as at 30 June. 81 ANNUAL REPORT

83 SUPPLEMENTARY INFOATION DISCLOSURE OF REALISED AND UNREALISED PROFITS/(LOSSES) The breakdown of retained profits of the Group and of the Company as at the end of the reporting period has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and the Guidance on Special Matter No. 1 - Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants are as follows:- GROUP COMPANY Total retained profits of the Company and its subsidiaries: - Realised 336,123, ,884,910 78,311,355 78,294,189 - Unrealised (7,859,008) (7,821,093) ,264, ,063,817 78,311,355 78,294,189 Total share of accumulated losses of an associate: - Realised (1,268,092) (559,138) ,995, ,504,679 78,311,355 78,294,189 Less: Consolidation adjustments (87,939,729) (80,392,727) - - Total retained profits as per statements of financial position 239,056, ,111,952 78,311,355 78,294, ANNUAL REPORT

84 PROPERTIES OF THE GROUP No. Location Description Tenure Land Area Existing Use, Age of building And Built-up Area 1. Block T-3-05 to Block T-3-08, Block T-4-12 Taman Pelangi, Prai, Penang 2. 5,7,9,11,11A & 15 Lorong Nagasari 14, Taman Nagasari, Prai, Penang Lorong Nagasari 14, Taman Nagasari, Prai, Penang Lorong Kurau 11, Chai Leng Park, Prai, Penang , Lebuh Turi, Off Persiaran Raja Muda Musa, Taman Chi Liung, Klang, Selangor , Mukim 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang 7. 11Lorong Siram 1, Desa Siram, Butterworth, Penang 8. 11A Lorong Siram 1, Desa Siram, Butterworth, Penang 9. 4 Jalan Sungai Kayu Ara 32/37, Sekysen 32, Shah Alam, Selangor (PT 2984), Mukim 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang , Mukim 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang 12. Nhon Trach 3 Industrial Park, Nhon Trach District, Dong Vai Province, Vietnam 3 room flat unit of 5 storey flat Double Storey Terrace House 3 rooms Double Storey Terrace House 3 room Double Storey Semi-Detach House 3 room 4 ½ Storey Terrace Shophouse 1 Block 3 storey Office Building, 3 Block Single Storey Factory, 2 Treatment Plants and Automate Warehouse 3 ½ storey Terrace Light Industrial Building Corner unit 3 ½ storey Terrace Light Industrial Building Industrial Land with Factory Industrial Land with warehouse Industrial Land with Factory Industrial Land with Factory 99 years expiring on sq. ft./ 65.03sq. m. per block Freehold sq ft/ 83 sq. m. per unit Freehold Freehold Freehold 60 years expiring on Freehold Freehold 1, sq ft/ 156 sq. m. 4,000 sq ft/ sq. m. 4,072 sq. ft/ sq. m Hostel, 17 years 700 sq. ft./ sq. m per block Hostel, 21years 1,242. sq. ft./ sq.m per unit Hostel, 21 years 1,514. sq. ft./ sq.m per unit Company House, 18 years, 5,250. sq. ft./ sq.m per unit Rental for Business, 21 years 18, sq. ft/ 1,400 sq.m. 15 acres Factory & Office, 17 years, 391, sq. ft/ 36, sq.m. 1, sq. ft/ 173 sq. m 2,593.16sq. ft/ 241sq. m Shop Lot Vacant 19 years, 5,610 sq. ft/ sq.m. Shop Lot Vacant 19 years, 8,282 sq. ft/ sq.m. Freehold 105,803 sq. ft Rental, 10 years 35, sq. ft/ 3, sq.m. 60 years expiring on years expiring on years expiring on ,889 sq. ft./ 10,117 sq.m Warehouse 4 years, 103,899 sq. ft / 9,653 sq.m acres Factory & Office 18 years, 290,748 sq. ft/ 27,011 sq.m. 171, sq. m Factory & Office, 10 years, 171, sq. m Net carrying 30/06/ 358, , , , , ,508, , , ,615, ,621, ,584, ,389, Total 100,156,086 Year of Acquisition/ Valuation 83 ANNUAL REPORT

85 ANALYSIS OF SHAREHOLDINGS as at 31 October Authorised share capital : 500,000, Paid-up share capital : 136,266, Class of shares : Ordinary shares of 0.50 each Voting right : One vote per ordinary share Distribution of shareholders Size of holdings No. of shareholders No. of shares % Less than to 1, , ,001 to 10,000 1,226 5,178, ,001 to 100, ,114, ,001 shares to less than 5% of issued shares 99 97,843, % and above of issued shares 1 158,306, TOTAL 1, ,533, List of substantial shareholders as shown in the Register of Substantial Shareholders Substantial Shareholder No. of ordinary shares of 0.50 held Direct % Deemed % N1 N2 Deemed interested by virtue of Section 6A of the Companies Act, 1965 held through Amal Pintas Sdn. Bhd. and Benua Handal Sdn. Bhd. Deemed interested by virtue of Section 6A of the Companies Act, 1965 held through Benua Handal Sdn. Bhd. List of directors shareholdings as shown in the Register of Directors Shareholdings Directors No. of ordinary shares of 0.50 held Direct % Deemed % Benua Handal Sdn. Bhd. 158,306, Tsai Yung Chuan ,406,846 (N1) Tsai Yung Yu ,306,846 (N2) Notes:- Tsai Yung Chuan ,406,846 (N1) Tsai Chang Hsiu-Hsiang ,000 (N2) 0.04 Lim Chien Ch eng 5,861, ,765,314 (N3) 0.65 Ung Peng Joo Ong Eng Choon Tsai Chia Ling ,000 (N2) 0.04 Sharmin Fazlina Binti Mohd Shukor Notes:- N1 N2 N3 Deemed interested by virtue of Section 6A of the Companies Act, 1965 held through Amal Pintas Sdn. Bhd. and Benua Handal Sdn. Bhd. Deemed interested by virtue of Section 6A of the Companies Act, 1965 held through Amal Pintas Sdn. Bhd. Deemed interested by virtue of Section 6A of the Companies Act, 1965 held through Indra Cempaka Sdn. Bhd. 84 ANNUAL REPORT

86 ANALYSIS OF SHAREHOLDINGS (Cont d) as at 31 October List of 30 largest shareholders according to the Record of Depositors Shareholders No. of shares held % 1. Benua Handal Sdn. Bhd. 158,306, Lembaga Tabung Haji 12,236, Citigroup Nominees (Tempatan) Sdn. Bhd. 6,358, Beneficiary : Exempt An For AIA Bhd. 4. Cimsec Nominees (Tempatan) Sdn. Bhd. 5,835, Beneficiary : CIMB Bank for Lim Chien Ch eng (PBCL-OG0010) 5. Maybank Nominees (Tempatan) Sdn. Bhd. 5,552, Beneficiary : Pledged Securities Account for Toh Su See 6. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 4,190, Beneficiary : Exempt An for Kumpulan Sentiasa Cemerlang Sdn. Bhd. (TSTAC / CLNT) 7. HSBC Nominees (Asing) Sdn. Bhd. 4,027, Beneficiary : Exempt An for Credit Suisse (SG BR-TST-ASING) 8. Maybank Nominees (Tempatan) Sdn. Bhd. 3,784, Beneficiary : Pledged Securities account for Ng Beng Hoo) 9. RHB Capital Nominees (Tempatan) Sdn. Bhd. 3,320, Beneficiary : Pledged Securities Account for Su Ming Yaw 10. Su Ming Keat 3,128, Ng Hook 3,105, Pelaburan Mara Berhad 3,000, DB (Malaysia) Nominee (Asing) Sendirian Berhad 2,800, Beneficiary : Deutsche Bank AG Singapore for IAM Traditional Asian Growth Fund 14. Cartaban Nominees (Tempatan) Sdn. Bhd. 2,449, Beneficiary : RHB Trustees Berhad for Manulife Investment Shariah Progress Fund 15. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd. 1,765, Beneficiary : Indra Cempaka Sdn. Bhd. (P8011) 16. HSBC Nominees (Tempatan) Sdn. Bhd. 1,734, Beneficiary : HSBC (M) Trustee for Affin Hwang Aiiman Growth Fund (4207) 17. Su Ming Yaw 1,600, Ambank (M) Berhad 1,575, Beneficiary : Pledged Securities Account for Tan Kong Han (SMART) 19. Kumpulan Wang Simpanan Guru-Guru 1,500, Citigroup Nominees (Tempatan) Sdn. Bhd. 1,221, Beneficiary : Employees Provident Fund Board (PHEIM) 21. Citigroup Nominees (Tempatan) Sdn. Bhd. 1,201, Beneficiary : Bank Negara Malaysia National Trust Fund (HWANG) 22. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 1,170, Beneficiary : Deutsche Bank AG Singapore for KSC (S) Pte Ltd (Lee Hau Hian) 23. Cimsec Nominees (Tempatan) Sdn. Bhd. 1,119, Beneficiary : CIMB Bank for Toh Su See (M73111) 24. Chin Chin Seong 1,000, Citigroup Nominees (Tempatan) Sdn. Bhd. 1,000, Beneficiary : Pledged Securities Account for Susy Ding (471873) 26. HSBC Nominees (Tempatan) Sdn. Bhd. 990, Beneficiary : HSBC (M) Trustee Bhd for Affin Hwang Aiiman Select Income Fund 27. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad 940, Beneficiary : Asian Islamic Investment Management Sdn. Bhd. for Federal Land Development Authority (TST/AC) 28. Koperasi Permodalan Felda Malaysia Berhad 881, Citigroup Nominees (Tempatan) Sdn. Bhd. 872, Beneficiary : Kumpulan Wang Persaraan (Diperbadankan) (HWNG SML CAP FD) 30. Heah Sieu Lay 854, ANNUAL REPORT

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88 Proxy Form CHIN WELL HOLDINGS BERHAD (Company No T) Incorporated in Malaysia *I/We..... (FULL NAME IN BLOCK LETTERS & I.C. NO. OR COMPANY NO.) of (ADDRESS) being a member / members of the abovenamed Company, hereby appoint of... (FULL NAME IN BLOCK LETTERS & I.C. NO. OR COMPANY NO.) (ADDRESS)... or failing him, the Chairman of the meeting as *my/our proxy to vote for *me/us on *my/ our behalf at the Eighteenth Annual General Meeting of the Company to be held at Conference Room of Chin Well Holdings Berhad at No. 1586, MK. 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang on Monday, 22 December at a.m. and at any adjournment thereof. RESOLUTION FOR AGAINST Please indicate with an x in the appropriate spaces provided above on how you wish your vote to be cast. If no specific direction as to voting is given, the proxy may vote as he thinks fit. Signed this day of,. No. of shares held Notes 1. A proxy may but need not be a member of the Company.... Signature(s)/Common Seal of member(s) 2. For a proxy to be valid, this form be duly completed and must be deposited at the Registered Office of the Company, A Menara BHL Bank, Jalan Sultan Ahmad Shah, Penang not less than forty-eight (48) hours before the time appointed for holding the meeting. 3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. 4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. 5. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ) there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds. 6. If the appointer is a corporation, this form must be executed under the corporation s Common Seal or under the hand of an officer or attorney duly authorised. 7. Only a depositor whose name appears on the Record of Depositors as at 15 December shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf. *strike out whichever is not desired. 87 ANNUAL REPORT

89 Fold this flag sealing 2nd fold here Stamp The Company Secretary Chin Well Holdings Berhad A Menara BHL Bank Jalan Sultan Ahmad Shah Penang 1st fold here

90 Chin Well Holdings Berhad T 1586, MK 11, Lorong Perusahaan Utama 1, Bukit Tengah Industrial Park, Bukit Mertajam, Penang, Malaysia. T : (14 line) F : , , E : [email protected]