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ASIA POLY HOLDINGS BERHAD ( 619176-A )

Lot 758, Jalan Haji Sirat, Mukim Kapar42100 Klang, Selangor Darul Ehsan, MalaysiaT | +603.3342 2567 / 3341 8604F | +603.3341 8320www.asiapoly.com.my

ASIA POLY HOLDINGS BERHAD(Company No.: 619176-A)

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ANNUAL REPORT 2013

ALWAYS EVOLVING . CONSTANTLY INNOVATING

CONTENTS0203050607121921

222628293132336162636566

Corporate Information

Directors’ Profile

Chairman’s Statement

Our Products

Audit Committee Report

Corporate Governance Statement

Statement of Internal Control

Statement of Directors’ Responsibilities inRelation to the Financial Statements

Directors’ Report

Independent Auditors’ Report

Statements of Comprehensive Income

Statements of Financial Position

Statements of Changes In Equity

Statements of Cash Flows

Notes to the Financial Statements

Statement by Directors/Declaration by Officer

Landed Property

Analysis of Shareholdings

Notice of Tenth Annual General Meeting

Statement Accompanying Notice of the TenthAnnual General Meeting of the Company

Proxy Form

CORPORATE INFORMATION

Board of DirectorsHans Peter HolstTeoh Cheng ChuanTan Yee KhunNoel ChuaKong Kok CheePang Hee Kin

AuditorsDeloitte KassimChan (AF 0080)Chartered Accountants

Stock Exchange ListingACE Market of Bursa Malaysia Securities Berhad

Share RegistrarSymphony Share Registrars Sdn Bhd Level 6 Symphony House,Block D13, Pusat Dagangan Dana 1,Jalan PJU 1A/46,47301 Petaling Jaya,Selangor Darul Ehsan.Tel No : 603-7841 8000Fax No : 603-7841 8008

Principal BankerAmBank (M) Berhad AmIslamic Bank Berhad

Website www.asiapoly.com.my

Stock Short NameASIAPLY

Stock Code0105

SecretarySiew Suet Wei (MAICSA 7011254)

Board Committees

Audit CommitteeHans Peter Holst (Chairman)Pang Hee KinKong Kok Chee

Nomination CommitteeHans Peter Holst (Chairman)Pang Hee Kin

Remuneration CommitteeHans Peter Holst (Chairman)Teoh Cheng ChuanPang Hee Kin

Registered OfficeNo. 5-9A, The Boulevard Offices,Mid Valley City,Lingkaran Syed Putra,59200 Kuala Lumpur.Tel No : 603-2282 6331Fax No : 603-2201 9331

Chairman/Independent Non-Executive DirectorChief Executive OfficerExecutive DirectorExecutive DirectorIndependent Non-Executive DirectorIndependent Non-Executive Director

02 ASIA POLY HOLDINGS BERHADANNUAL REPORT 2013

DIRECTORS’ PROFILE

Hans Peter Holst

Danish, resident in Malaysia, age 71. Mr. Holst was appointed to the Board of Directors of Asia Poly on 28 February, 2006 as an Independent Non-Executive Chairman and is also the Chairman of the Audit Committee, Nomination Committee and Remuneration Committee. He has an MBA, Copenhagen Business School (1995) and a Dr. Phil, University of Malaya, Faculty of Business and Accountancy (2010). His other qualifications include the Alpha Certificate, INSEAD (1987) and Logistics-Projects Certificate, Cranfield University (1996).

Mr. Holst’s past appointments include Executive Director, Hap Seng Consolidated Berhad from 1997 to 2002, Vice President, The East Asiatic Company Ltd. A/S, Copenhagen, Denmark from 1985 to 1997, and President, The East Asiatic Company (Canada) Ltd., Vancouver, Canada from 1978 to 1985. Prior to his appointment in Canada, he served in general management positions in industry and trade in Australia, South Africa, Singapore, Indonesia and Philippines.

Tan Yee Khun

Malaysian, age 54. Mr. Tan was appointed to the Board of Directors of Asia Poly on 22 February 2006 as an Independent Non-Executive Director. He was subsequently re-designated as an Executive Director on 29 May 2006. He also served as a member of the Audit Committee until 22 January 2009.

Mr. Tan graduated with a Diploma in Science (with merit) B.S. cum Laude. He worked as a Chemist with Lam Soon Oils & Fats Sdn Bhd from 1981 to 1983. Subsequently from 1983 to 2003 he worked with Intercontinental Specialty Fats Sdn Bhd as a Chemist before being promoted to Technical Manager where his portfolio ranged from quality control and assurance, R & D, logistics, production planning and technical assistance to marketing. From 2002 to 2004, he was employed by Asia Poly Industrial Sdn Bhd as a Chief Chemist and General Manager of Micronisers (M) Sdn Bhd from 2004 – 2009.

03ASIA POLY HOLDINGS BERHADANNUAL REPORT 2013

Teoh Cheng Chuan

Malaysian, age 58. Mr. Teoh was appointed to the Board of Asia Poly on 2 September 2004 and assumed the position of Chief Executive Officer and is also a member of the Remuneration Committee. He is in charge of the Group’s operations, management and strategic planning. Mr. Teoh graduated with a Bachelor of Science in Chemistry from University Malaya, in 1978. He has an accumulated experience in the chemical industry of over twenty (20) years, beginning his career with Sumitomo Corporation (Kuala Lumpur) as a Business Executive in 1980 and rose to the position of Senior Manager before he left and took over the business of running Asia Poly. During his tenure as the Senior Manager of Business Development with Sumitomo Corporation (Kuala Lumpur), he successfully initiated and developed businesses in areas such as export and domestic markets for chemical based products, food products, wires, animal feed, fatty acids and palm oil and its derivative products for both export and local markets.

As Chief Executive Officer of the Group, Mr. Teoh has been the main driving force of the Asia Poly Group. Together with a dedicated team of key personnel, he has managed to establish a sound working relationship with the Group’s major customers and suppliers.

DIRECTORS’ PROFILE (Cont’d)


Noel Chua

Malaysian, age 43. Mr. Chua was appointed to the Board of Directors of Asia Poly on 9 April 2007 as an Executive Director. He holds an Honours Degree in law from the University of London. He has extensive experience in handling matters relating to legal, corporate advisory, compliance and secretarial practice of private, public and listed companies.

Mr. Chua began his career as an assistant in a mid-sized consultant’s firm and later took on positions as Company Secretary and Legal Manager of public listed companies. His appointment prior to joining Asia Poly was with Pantai Holdings Berhad, where he headed the Legal and Corporate Secretarial Department there.

Kong Kok Chee

Malaysian, age 46. Mr. Kong was appointed to the Board of Directors of Asia Poly on 15 February 2012, as an Independent Non-Executive Director. He is also a member of the Audit Committee. Mr. Kong graduated from the Southern Illinois University, USA with a degree in Finance and Banking in 1988. He also successfully completed the ASEAN Senior Management Development Program of the Harvard Business School, Boston, USA in 2007.

He is presently a Director and Chief Executive Officer of European Credit Investment Bank Ltd. He is also an adviser for Foreign Trade to the Ministry of Economic and Foreign Affairs of Belgium, Treasurer-Director of the Malaysia-Belgium-Luxemburg Business Council and an Associate Member of the Harvard Business School Alumni Club of Malaysia. Some of his previous appointments include General Manager of KBC Bank NV, Labuan, Senior Vice President of KBC Bank NV, General Manager of ABN AMRO Bank NV, Labuan, Head of Corporate Banking of ABN AMRO Bank of Singapore and Penang and Manager of Corporate Finance & Capital Markets Department of Affin Merchant Bank Berhad.

Pang Hee Kin

Malaysian, age 60. Mr. Pang was appointed to the Board of Directors of Asia Poly on 7 December 2012, as an Independent Non-Executive Director. He is also a member of the Audit Committee, Nomination Committee and Remuneration Committee. He has a Bachelor of Science degree (1977) and Diploma In Education (1978) from University Malaya and an MBA from Asia Institute of Management, Philippines (1985).

Mr. Pang presently serves on the Board of SumiMa Sdn Bhd, a trading company which represents Sumitomo Corporation Tokyo for petrochemicals marketing in Malaysia. His previous appointments include Superintendent of Customs, Royal Customs and Excise, Malaysia (1979-1995), Senior General Manager, Tai Kwong Yokohama Bhd (1996-1997 and 2005-2008), Executive Director, Empire Valley Sdn Bhd (1997-1999), Executive Director, Tongkah Holdings Bhd (2001-2005) and Independent Non-Executive Director, Merge Holdings Bhd (2001-2007).

Notes:-

*

*

Save as disclosed above, none of the Directors have any family relationships with any Directors and/or substantial shareholder of the Company nor conflict of interest involving the Company.

None of the Directors have been convicted for any offences within the past 10 years other than traffic offences (if any). The details of the interest of Directors are set out on pages 24 and 63 of this Annual Report.

Dea r Sha r e h o l d e r s , Cu s t om e r s , a n d Emp l o y e e s ,On behalf of the Board of Directors, I am pleased to present you the Eighth Annual Report of your Company.

For the financial year ended 31st March 2013 your Company achieved a net profit of RM1.360 million on sales of RM77.704 million. This compares with a net profit in the previous financial year of RM0.694 million on sales of RM79.785 million.

During the year, your Company declared and paid an interim tax-exempt dividend amounting to RM219,788.00 and a final tax-exempt dividend of the same amount is proposed for the shareholders’ consideration and approval at the forthcoming 10th Annual General Meeting.

Customers' orders fully utilised your Company's manufacturing capacity during the year under review. Like in the previous year, your Company continued to develop the technological efficiency of its A-Cast® product assortment capability, cementing and improving existing marketing relationships, and building new customers at this higher level of efficiency. In addition to its ISO certifications, your Company was certified for compliance with the European Union's EN263 standard for sanitary grade sheets, and with Japan's JIS standard for general purpose sheets. Further, your Company installed a pilot plant in the form of a miniature jacketed reactor, to mirror the production reactors, for research and development of the polymerization process with different additives and under different process conditions, and equipment to study the thermoforming performance of acrylic sheets. Additional sophisticated laboratory equipment was also installed, e.g. gas chromatography, gel permeability chromatography, universal testing machine, colour spectrophotometer, weatherbility machine, to control the finished products to meet customers' general and unique requirements and for international standards. Please visit the Company website, asiapoly.com.my, and see for yourselves what the A-Cast® brand can do for the established and potential end-uses of acrylic products, and, thereby, for the distributors, the customers. This is commensurate with your Company's objective of being a preferred supplier of cast sheets to demanding customers in Malaysia and internationally.

In the previous financial year, price increases obtainable from domestic and export customers lagged behind the absorption of cost increases imposed on your Company by especially ingredients suppliers. The cost pressures abated somewhat during the year under review. Nevertheless, your Company is now faced with managing the absorption of the minimum wage increase mandated by the Government of Malaysia and which took effect on 1 January 2013.

Whereas your Company's share of the Malaysian market for cast acrylic sheets is very strong and continues to grow, export markets are an equally important part of your Company's manufacturing and marketing strategy, including of pursuing value-added on par with similar manufacturers in developed economies. Therefore, the economic growth of Malaysia and the export markets, and relatively stable, foreign currency exchange rates are crucial factors in your Company's further growth of its profitability. Going forward, the global economy and the domestic and export markets of your Company are becoming increasingly intertwined - and less predictable. Economic changes taking place, e.g. liquidity, e.g. USA and the European Union (EU), policy, and expectations reflect on the currency exchange rates and demand, affecting short and medium term competiveness and trade flows of commodities, acrylic sheets and its major ingredient, Methyl Methacrylate, MMA, included.

At your Company, a third casting line is past the drawing board stage and can be implemented relatively quickly when market conditions are deemed to be right. Nevertheless, in view of the current uncertain outlook for economic activity in your Company's established markets, your Company will continue until further to prioritize technological upgrading of its production over an increase of capacity.

On behalf of the Board of Directors, I extend our appreciation to our management and staff for their contributions, and to our customers and other business partners for their support and constructive cooperation.

Hans Peter HolstChairman6 August 2013

Chairman’s Statement


Our Products

Asia Poly’s brand of A-Cast® cast acrylic sheet is manufactured from 100% Virgin Methyl Methacrylate monomer (MMA) sourced exclusively from reputable and reliable suppliers. As the premier manufacturer of cast acrylic sheet in Malaysia, Asia Poly utilises the cell-cast production process, maximising the mechanical properties and chemical resistance of the A-Cast® sheet for use in a wide range of applications.

With a state-of-the-art manufacturing facility, A-Cast® is produced in small batch quantities which in turn offers the flexibility to produce an extensive range of colours, finishes and effects with colour matching service also available.

A-Cast® is a cast acrylic sheet that has become synonymous with clarity, colours and choice. The versatility of the material and wide range of colours, surfaces and finishes enable designers to quickly realise their creative ideas. The MMA is an organic compound that is processed through a series of mixing stations to blend the required additives and pigments which are then cast between two sheets of high quality flat glass. The batch is then polymerised in specially developed waterbaths and ovens, allowing the sheets to harden and cure. The cell cast process has benefited over the years from the application of engineering technology to increase process control and repeatability from one production batch to the next and Asia Poly have taken full advantage of these developments to produce a quality cast acrylic sheet, second to none.

While this batch process delivers significant flexibility in the product mix with a wide range of colours, finishes and thicknesses, other benefits of A-Cast cell cast acrylic arise from its molecular structure and inherent physical properties which include:

•••••••

These physical properties of the product, including the ability to be readily fabricated, formed and cemented, lend it to many different applications including both functional and aesthetic uses. As a leading manufacturer and innovator in the production and supply of cast acrylic sheets, Asia Poly prides itself on its international service and delivery capability, supporting many distributors worldwide with a wide portfolio of quality products.

Clear sheet with a light transmission and optical clarity higher than that of glass at 93%.High gloss surface finish as standard with single-sided and dual-sided matt options.Half the weight of glass with five times the strength so less liable to breakage.Excellent resistance to weathering means the material is suitable for indoor and outdoor applications.Excellent surface hardness for abrasion resistance.Good chemical resistance so durable and easily cleaned.Thermoplastic so can be recycled into other products and itself.


Building Applications

GlazingExterior wall liningInterior decorative partitionsInterior wall panelsShower screensShower bath cabinetsBathsVanity unitsStair and elevator panelsSignages

••••••••••

Domestic Applications

AquariaBathroom cabinetsCoffee tablesFurnitureLighting fittingsMahjong setsPartitionsPhotograph frames

••••••••

Food Industry/Catering

Bar fittingsCinema ice-cream andvending trays (illuminated)Display counter coversFood coversFood conveyor belt coversFood packaging machinewindowsKitchen and restaurant partitionsSelf-service fiod compartment flapsShelf paneling

••

••••

•••

Transport

Boat cabin windowsBoat windscreensCar accessories/visorsCaravan windowsCoach observation panelsCoach seat corner protectorsMotorcycle windshieldsSliding window panels

••••••••

Medical Applications

Hospital trays and equipmentIncubatorsIlluminated eye testing charts

•••

Miscellaneous Applications

Bus shelter glazingDisplay cabinetsFire hydrant platesGeneral engravingGreenhousesMuseum protective coversand display unitsSlim box displays

••••••

•

AUDIT COMMITTEE REPORT

I.

II.

III.

COMPOSITION AND DESIGNATION OF AUDIT COMMITTEE

The current membership of the Audit Committee is made up of the following Directors:

Chairman : Mr Hans Peter Holst (Independent Non-Executive Director) Member : Mr Kong Kok Chee (Independent Non-Executive Director)Member : Mr Pang Hee Kin (Independent Non-Executive Director)

SUMMARY OF ATTENTANCE OF AUDIT COMMITTEE MEETINGS

During the financial year ended 31 March 2013, the Audit Committee met four times and the attendance of the Members was as follows:

(*) Resigned on 5.12.2012(#) Appointed on 7.12.2012

TERMS OF REFERENCE OF AUDIT COMMITTEE

1.

2.

CONSTITUTION

The Board of Directors has established a Committee of the Board known as the Audit Committee.

COMPOSITION OF AUDIT COMMITTEE

i.

ii.

iii.

iv.

v.

The Audit Committee shall be appointed by the Board of Directors from amongst their members and shall consist of at least three (3) members, all of whom must be non-executive directors with a majority of them being independent directors.

At least one member of the audit committee:-

a.

b.

c.

The Chairman of the Audit Committee shall be an Independent Non-Executive Director appointed by the Board.

The Board must ensure that the Chief Executive Officer shall not be a member of the Audit Committee.

No alternate Director shall be appointed as member of the Audit Committee.

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

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

(aa)

(bb)

Fulfils such other requirements as prescribed or approved by the Exchange.

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

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

Name of Members

Hans Peter HolstBrian Chieng Ngee Wan (*)Kong Kok CheePang Hee Kin (#)

Total meetings attended

4/43/34/41/1

Percentage of attendance (%)

100100100100


AUDIT COMMITTEE REPORT (Cont’d)

MEETINGS

(a)

(b)

(c)

(d)

Frequency of Meeting

i.

Proceedings of Meeting

i.

ii.

iii.

iv.

v.

vi.

Attendance at Meeting

i.

ii.

Keeping and Inspection of Minutes

i.

ii.

iii.

iv.

The Committee shall meet not less than four (4) times a year and as many times as the Committee deems necessary with due notice of issues to be discussed.

The quorum for meeting of the Audit Committee shall be two (2) members of which the majority of members present must be Independent Non-Executive Directors.

If at any meeting, the Chairman of the Audit Committee is not present within fifteen minutes of the time appointed for holding the same, the members of the Audit Committee present shall choose one of their numbers who shall be an Independent Non-Executive Director to be Chairman of such meeting.

The Committee may hold a meeting of Audit Committee by using any technology means to enable the members of the Committee to participate in the meeting for the entire duration of the meeting at two or more venues within or outside Malaysia. All information and documents for the meeting must be available to all members of the Committee prior to or at the meeting.

The Company Secretary shall be the Secretary of the Audit Committee.

Questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the Chairman of the Audit Committee shall have a second or casting vote.

Upon the request of the external auditors or internal auditors (if any), the Chairman of the Audit Committee shall convene a meeting of the Committee to consider any matters that the auditors believe should be brought to the attention of the Directors or shareholders.

The presence of external auditors and internal auditors (if any) at any meeting of Audit Committee can be requested if required by the Audit Committee and they have right to appear and be heard at any meeting of any Audit Committee.

Other members of the Board and officers of the Company and its group may attend the meeting (specific to the relevant meeting) upon the invitation of the Audit Committee.

The Company shall cause minutes of all proceedings of Audit Committee Meeting to be entered in books kept for that purpose within fourteen (14) days of the date upon which the relevant meeting was held.

Those minutes to be signed by the Chairman of the Audit Committee Meeting at which the proceedings were held or by the Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates.

The books containing the minutes of proceedings of Audit Committee Meeting shall be kept by the Company at the place to be determined by the Board, and shall be open to the inspection of any members of the Board of Directors or Audit Committee members without charge.

The minutes of the Audit Committee Meeting shall be circulated to the members of the Board for notation.

III. TERMS OF REFERENCE OF AUDIT COMMITTEE (Cont’d)

3.



AUTHORITY

The Audit Committee shall in accordance with the procedures determined by the Board and at the cost of the Company:-

i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

DUTIES AND RESPONSIBILITIES

The duties and responsibilities of the Audit Committee shall include the following:-

(a)

have explicit authority to investigate any matter within its Terms of Reference;

have the resources which the Audit Committee requires to perform the duties;

have full and unrestricted access to any information which the Audit Committee requires in the course of performing the duties;

be able to convene meetings with the external auditors, internal auditors or both, excluding the attendance of other directors and employees of the Company, wherever deemed necessary;

have unrestricted access to the Chief Executive Officer of the Company;

have direct communication channels with the external auditors and person carrying out the internal audit function (if any);

be able to obtain independent professional or other advice in the performance of its duties at the cost of the Company; and

be able to invite outsiders with relevant experience to attend its meetings, if necessary.

Matters relating to External Audit:-

i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

ix.


4.

5.

To review the nomination of external auditors and the external audit fee;

To review the nature, scope and quality of external audit plan/arrangements;

To review quarterly and year end financial statements of the Company, before submission to the Board, focusing in particular on the going concern assumption, compliance with accounting standards and regulatory requirements, any changes in accounting policies and practices, significant issues and unusual event arising from the audit and major judgement issues;

To review the external auditors’ Audit Report on the Financial Statement;

To review any management letter sent by the external auditors to the Company and the management’s response to such letter;

To review any letter of resignation from the Company’s external auditors;

To consider and review whether there is reason (supported by grounds) to believe that the Company’s external auditors are not suitable for re-appointment;

To review the assistance given by the Company’s officers to the External Auditors;

To discuss problems and reservation arising from the interim and final audits on any significant audit findings, reservations, difficulties encountered or material weakness reported.




5. DUTIES AND RESPONSIBILITIES

(b)

(c)

(d)

Matters relating to Internal Audit function:-

i.

ii.

iii.

iv.

v.

vi.

vii.

viii.

Roles and Rights of the Audit Committee:-

i.

ii.

iii.

Retirement and Resignation of member of Audit Committee:-

i.

ii.

To review the nomination of internal auditors and the internal audit fee;

To review the adequacy of the scope, functions, competency, effectiveness and resources of the internal audit function and that it has the necessary authority to carry its work;

To review the effectiveness of the internal control and management information systems;

To review the internal audit programme and results of the internal audit process and follow up actions by the management on the weakness of internal accounting procedures and controls;

To review on all areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;

To review any assessment of the performance of the staff of the internal audit function;

To review any letter of resignation from internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning.

The head of Internal Audit function shall report directly to the Audit Committee.

To consider and review any significant transactions which are not within the normal course of business and any related party transactions and potential conflict of interests situations that may arise within the Company and the Group.

To report to the Bursa Malaysia Securities Berhad (“Bursa Securities”) on any matter reported by the Board of the Company which has not been satisfactorily resolved resulting in a breach of the Listing Requirements of Bursa Securities.

To carry out any other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to the Company and ensure the effective discharge of the Committee’s duties and responsibilities.

Retire/Resign

•

Vacancy

•

A member of the Audit Committee who wishes to retire or resign should provide sufficient written notice to the Company so that a replacement may be appointed before he leaves.

In the event of any vacancy in the Audit Committee, the Company shall fill the vacancy within two (2) months, but in any case not later than three (3) months from the date of resignation/retirement.



IV.

V.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

The activities of the Committee for the financial year included:

•

••

INTERNAL AUDIT FUNCTION

The Company’s internal audit function is outsourced to a chartered accounting firm to assist the Committee in discharging its duties and responsibilities more effectively.

During the year under review, the internal audit function’s scope of audit covered the areas of Financial Controls involving Debtors/Creditors and Revenue/Cash Flow Management, Billing and Collections Management as well as Management Information System for Financial Reporting. The audit findings were presented to the Committee.

reviewing the quarterly results before submission to your Board for approval, focusing on the key changes to the accounting policies, compliance to regulatory requirements;discussing with the external auditors on its nature, scope and quality of external audit; andreviewing any related party transactions that may arise in the Company.


CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“Board”) of Asia Poly Holdings Berhad (“the Company”) is committed to promote the highest standards of corporate governance within the Group by supporting and implementing the principles and best practices as outlined in the Malaysian Code of Corporate Governance 2012 (“MCCG 2012” or “the Code”) and the relevant provisions of Bursa Malaysia Securities Berhad Listing Requirements. The Board strives to ensure that high standards of corporate governance are practiced throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Company.

This statement, which is made pursuant to Rule 15.25 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) for ACE Market, sets out the commitment of the Board of Asia Poly Holdings Berhad towards good corporate governance principles and the extent to which it has complied with the Best Practices of the Malaysian Code of Corporate Governance (“the Code”) throughout the financial year.

A. BOARD OF DIRECTORS1)

2)

THE BOARD

The Company is led and controlled by the Board which assumes overall responsibility for corporate governance, strategic direction and investments made by the Company. The Board is responsible for the stewardship of the Company’s business and affairs on behalf of the shareholders with a view to enhance long term shareholder value whilst taking into account the interest of other stakeholders and maintaining high standards of transparency and accountability.

The Board has a formal schedule of matters specifically reserved to it for decision to ensure that the direction and control of the Company is firmly in its hands.

The Board has formally adopted a Board Charter that clearly sets out the role, functions, composition, operation and processes of the Board.

The Board assumes the following specific duties:

a)

b)

c)

d)

e)

f)

BOARD MEETINGS

Board meetings for the ensuing year are scheduled in advance before the commencement of a new financial year to enable Directors to plan ahead and fit the year’s Board Meetings into their respective schedules.

The Board meets at least 4 times each year with additional meetings being convened as and when necessary. During the financial year under review, the Board met four times and the attendance record for each Director is as follows:

Establishing and reviewing the strategic direction of the Company;

Overseeing and evaluating the conduct of the Company’s businesses;

Identifying principal risks and ensure that the risks are properly managed;

Establishing a succession plan;

Developing and implementing an investors relations programme or shareholder communication policy; and

Reviewing the adequacy of the internal control policy

Name of Director

Hans Peter HolstTeoh Cheng ChuanTan Yee KhunFong Kok Keong @Noel ChuaBrian Chieng Ngee Wan (*)Kong Kok Chee Pang Hee Kin (#)

@ Resigned on 18.7.2013(*) Resigned on 5.12.2012(#) Appointed on 7.12.2012

Total meetings attended

4/44/44/42/44/43/34/41/1

Percentage of attendance (%)

100100100

50100100100100


CORPORATE GOVERNANCE STATEMENT (Cont’d)

A. BOARD OF DIRECTORS (Cont’d)2)

3)

4)

5)

BOARD MEETINGS

All the Directors have complied with the minimum 50% attendance requirement in respect of Board meetings as stipulated by the Listing Requirements of Bursa Securities.

In the periods between the four Board meetings, Board approvals are sought via circular resolutions which are attached with sufficient information required to make an informed decision.

Where a potential of conflict involving director’s interest in the Group’s investments, projects or any transactions, such director is required to declare his interest and abstain from further discussion and the decision making process.

BOARD BALANCE

The Board currently consists of six (6) members, comprising an Independent Non-Executive Chairman, a Chief Executive Officer, two (2) Executive Directors and two (2) Independent Non-Executive Directors which is in compliance with the Listing Requirements of Bursa Securities in respect of the board composition. The profiles of each Director are presented on Pages 3 to 4 of this Annual Report.

The Company considers that its complement of non-executive directors provides an effective Board with a mix of industry-specific knowledge and broad business and commercial experience. The balance enables the Board to provide clear and effective leadership of the Company and to bring informed and independent judgment to many aspects of the Company’s strategy and performance so as to ensure the highest standards of conduct and integrity are maintained throughout the Group.

No individual or group of individuals dominates the Board’s decision making and the number of directors fairly reflects the investment of the shareholders.

There is a clear division of responsibilities between the Chairman and the Chief Executive Officer to ensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and standard of conduct while the management of the Group’s businesses and implementation of policies and day-to-day running of the businesses are handled by the Chief Executive Officer. The Independent Non-Executive Directors provide independent views to safeguard the interests of shareholders.

SUPPLY OF INFORMATION

All Directors receive appropriate and timely information to facilitate informed decision-making and thus enabling them to discharge their duties and responsibilities effectively. Prior to each Board meeting, the Directors are supplied with an agenda and a set of Board papers on the matters to be deliberated. The Board receives information that is not just historical and bottom line and financial-oriented but also information that is beyond assessing the quantitative performance of the Group and looks at other performance factors such as customer satisfactions, product and service quality, market share, market reaction, environmental performance.

All Directors have full access to information pertaining to all matters for the purpose of making decisions.

There is an agreed procedure for the Directors to take independent professional advice at the Company’s expense, if necessary. All Directors have access to the advice and services of the Company Secretary who is tasked with ensuring compliance with statutory obligations, Listing Rules of Bursa Malaysia Securities Berhad or other regulatory requirements. The removal of the Company Secretary shall be a matter for the Board as a whole.

APPOINTMENT AND RE-ELECTION TO THE BOARD

In accordance with the Company’s Articles of Association, at least one third of the Directors shall retire from office every year provided always that all Directors shall retire from office at least once in every three (3) years but shall be eligible for re-election in the Annual General Meeting.

Pursuant to Section 129 of the Companies Act 1965, Directors who are over the age of seventy (70) years shall retire at every Annual General Meeting and may offer themselves for re-appointment to hold office until the next Annual General Meeting.

Appointments to the Board shall be made based on the recommendations of the Nomination Committee.



BOARD OF DIRECTORS (Cont’d)5)

6)

7)

APPOINTMENT AND RE-ELECTION TO THE BOARD (Cont’d)

The present members of the Nomination Committee are as follows:

Chairman : Mr Hans Peter Holst (Independent Non-Executive Director)Member : Mr Pang Hee Kin (Independent Non-Executive Director)

The duties and responsibilities of the Nomination Committee includes:

i)

ii)

iii)

iv)

v)

vi)

One of the recommendations of the MCCG 2012 states that the tenure of an Independent Director should not exceed a cumulative terms of nine years. Upon completion of the nine (9) year term, an Independent Director may continue to serve on the Board subject to the said Director’s re-designation as a non-Independent Director.

Currently, none of the Independent Directors have exceeded a nine (9) year term.

In line with the recommendations of the MCCG 2012, the Board takes cognizance of gender diversity in the boardroom as recommended by the MCCG 2012 to promote the representation of women in the composition of the board. Presently, the Company does not have a policy on gender diversity. In its selection for board representation, the Board membership is dependent on each candidate’s skills, experience, core competencies and other qualities, regardless of gender. Nevertheless, the Board will give consideration to the gender diversity objectives in the coming years.

The Directors also observe the recommendation of the MCCG 2012 that they are required to notify the Chairman before accepting any new directorship and to indicate the time expected to be spent on the new appointment.

DIRECTORS’ TRAINING The Board assesses the training needs of the Directors and encourages the Directors to attend seminars, courses, conferences and other relevant training programmes to further enhance their knowledge and to keep abreast with the latest development in the industry to enable them to discharge their responsibility more effectively.

All Directors have attended the Mandatory Accreditation Programme (MAP) and a newly appointed Board member is provided orientation on the Group’s operations and activities. All Directors have also visited the Group’s manufacturing facility and were briefed in detail on the operational features and processes adopted at the said facility.

During the year, the seminars, courses and talks attended by the Directors included the following:

i)ii)iii)

iv)

BOARD COMMITTEES

The Board has delegated certain responsibilities to Board Committees which operate within defined terms of reference. The Board Committees include the Audit Committee, Nomination Committee and Remuneration Committee. The respective Committees report to the Board on matters considered and their recommendations thereon. The ultimate responsibility for the final decision on all matters, however, lies with the Board.

Establishing and reviewing the strategic direction of the Company;

Overseeing and evaluating the conduct of the Company’s businesses;

Identifying principal risks and ensure that the risks are properly managed;

Establishing a succession plan;

Developing and implementing an investors relations programme or shareholder communication policy; and

Reviewing the adequacy of the internal control policy.

Seminar on Dynamic Mechanical Analysis organized by Mettler-Toledo A.G.;Seminar on Corporate Governance organized by Bursa Malaysia;SSM National Conference on the topics of Managing Corporate Governance, Creating Value and Transforming the Economy organized by the Companies Commission of Malaysia;Seminar on Corporate Cessation: Voluntary Winding-up and Striking Off organized by the Companies Commission of Malaysia.



B. DIRECTORS’ REMUNERATIONThe Executive Directors’ remunerations comprise basic salary, allowances, bonuses and other customary benefits to the Group made available as appropriate. The Non-Executive Directors’ remunerations comprise fees and allowances.

The Group’s remuneration scheme for Executives Directors is linked to performance, seniority, experience and scope of responsibility and is benchmarked to market/industry practices. For Non-Executive Directors, the level of remuneration reflects the level of responsibilities undertaken by them.

Details of the Directors’ remuneration are disclosed in Note 7 to the financial statements of this Annual Report. The Board does not consider it appropriate to disclose the remuneration of each individual Director so as to preserve a degree of privacy. The Board is of the view that the transparency and accountability aspects of corporate governance as applicable to Directors’ Remuneration is adequately served by the information below, in accordance with the Listing Requirements.

A summary of the remuneration of the Directors for the financial year under review, distinguishing between Executive and Non-Executive Directors is set out below:

Categories of Remuneration

Salaries FeesBonusesBenefits in KindOther emoluments

TOTAL

The number of Directors whose remuneration falls into the following bands are:

Remuneration Bands

RM50,000 and belowRM200,001 – RM250,000RM250,001 – RM300,000RM300,001 – RM350,000RM350,001 – RM400,000

The Board had established a Remuneration Committee which comprise of the following members:

Chairman : Mr Hans Peter Holst (Independent Non-Executive Director)Member : Mr Pang Hee Kin (Independent Non-Executive Director) Mr Teoh Cheng Chuan (Chief Executive Officer)

The Committee’s roles include making recommendation to the Board on the remunerations framework for Executive Directors of the Group as well as reviewing and recommending annual remuneration adjustments of the Executive Directors. Where necessary, with the emphasis being placed on performance and comparability with market practices and the performance of the Group.

The Board, as a whole, determines the remuneration and fee of the Executive and Non-Executive Directors and the individual Director is required to abstain from discussing his own remuneration.

Executive Directors

(RM)

1,152,650-

126,75042,734

-

1,322,134

Non-Executive Directors

(RM)

-38,280

--

3,600

41,880

Executive Directors

(RM)

--112

Non-Executive Directors

(RM)

4----



C.

D.

E.

F.

RELATIONSHIP WITH SHAREHOLDERS The Board maintains an effective communications policy that enables both the Board and the management to communicate effectively with its shareholders, stakeholders and the public. The policy effectively interprets the operations of the Group to the shareholders and accommodates feedback from shareholders, which are factored into the Group’s business decisions.

The Board communicates information on the operations, activities and performance of the Group to the shareholders, stakeholders and the public through the following:

a)

b)

c)

In addition, the Annual General Meeting (“AGM”) provides an opportunity for the shareholders to seek and clarify any matter pertaining to the business and financial performance of the Group. The Board encourages shareholders to attend and participate in the AGM held annually. Recommendation 8.2 of the MCCG 2012 recommends that the Board should encourage poll voting for substantive resolutions. The board will evaluate the feasibility of carrying out electronic polling at its general meetings in future.

CORPORATE DISCLOSURE POLICYThe Company recognises the value of transparent, consistent and coherent communications with the investing community consistent with commercial confidentiality and regulatory considerations.

The Company is committed to ensure that communications to the investing public regarding the business, operations and financial performance of the company are accurate, timely, factual, informative, consistent, broadly disseminated and where necessary, information filed with regulators is in accordance with applicable legal and regulatory requirements.

CORPORATE SOCIAL RESPONSIBILITYThe Company is aware of its corporate social responsibility and endeavours to operate as a responsible and ethical corporate entity.

The Company also ensures its business practices comply with a general respect for its environment, community, customers, suppliers and its employees. During the financial year, there were no corporate social responsibilities activities or practices undertaken by the Group.

ACCOUNTABILITY AND AUDIT1.

the Annual Report, which contains the financial and operational review of the Group’s business, corporate information, financial statement, and information on Audit Committee and Board of Directors;

various announcements made to Bursa Malaysia Securities Berhad, which includes announcement on quarterly results;

its official website, www.asiapoly.com.my.

Financial Reporting

The Board of Directors aims to provide and present a balanced and understandable assessment of the Group’s financial performance and prospects through the annual financial statement, quarterly announcements to shareholders as well as Chairman’s Statement in the Annual Report. In this respect, the Audit Committee assists the Board by overseeing the Group’s financial reporting processes and the quality of the financial reporting.



F. ACCOUNTABILITY AND AUDIT (Cont’d)2.

3.

Risk Management and Internal Control

The Board acknowledges its responsibility for the Group’s system of internal controls that is designed to identify and manage the risks to which the Group is exposed. However, the Board recognizes that such system is structured to manage rather than eliminate possibility of encountering risk of failure to achieve corporate objectives.

The Company has outsourced its internal audit functions to an independent professional firm.

The Group’s overall internal controls system includes: -

•

•

•

•

The Statement on Risk Management and Internal Control set out on Pages 19 and 20 of this Annual Report provides an overview of the state of internal controls within the Group.

Relationship with Auditors

The Board has established a transparent relationship with the external auditors through the Audit Committee, which has been accorded the power to communicate directly with the external auditors, towards ensuring compliance with the accounting standards and other related regulatory requirements.

The role of the Audit Committee is described in the Audit Committee Report set out on Page 10 of this Annual Report.

clearly established policies and procedures;

regular review and update of policies and procedures to meet business needs;

clearly defined job responsibilities and appropriate segregation of duties;

regular internal audits to monitor compliance with policies, procedures, external regulations and assess integrity of financial information.


Share Buy-BackThere were no share buy-backs exercised by the Company.

Options, Warrants or Convertible Securities There were no options, warrants or convertible securities exercised by the Company.

Depository Receipts The Group did not sponsor any Depository Receipt programme.

Sanctions and/or PenaltiesNo public sanctions and/or penalties were imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies. Non-Audit FeesThere were no non-audit fees paid to the affiliated auditor’s firm.

Variation of ResultsThere were no variance of 10% or more between the results for the financial year and the unaudited results previously announced. The Company did not release any profit estimate, forecast or projection for the financial year. Profit GuaranteesThere were no profit guarantees given by the Group.

Revaluation PolicyThe Group does not have any revaluation policy on landed properties.

Employees’ Share Option Scheme (“ESOS”)The Company has not implemented any ESOS.

Material ContractsThere were no material contracts of the Company or its subsidiaries involving the Directors’ and substantial shareholders’ interest, either still subsisting at the end of the financial year or entered into since the end of the previous financial year.

Utilisation of ProceedsThe Company did not raise funds through any corporate proposals during the financial year.

This Statement is made in accordance with a resolution of the Board of Directors dated 12 June 2013.

ADDITIONAL COMPLIANCE INFORMATION1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.



STATEMENT OF INTERNAL CONTROL

INTRODUCTION

Directors of listed companies are required to disclose in their annual reports on the state of risk management and internal control of the listed company as a group in accordance with the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers, a publication of Bursa Securities, provides guidelines for compliance with this requirement.

BOARD RESPONSIBILITY

The Board recognises the importance of a sound system of internal control and effective risk management practices for good corporate governance, safeguard shareholders’ investment and the Group’s assets. The Board acknowledges its overall responsibility for identifying principal risks within the Group and ensuring the implementation of appropriate systems to manage these risks, as well as reviewing the adequacy and integrity of the Group’s system of internal control. It covers not only financial controls but operational and compliance controls, and risk management. The Group’s system of risk management and internal control was designed to manage the principal risks that may impede the Group from achieving its business objectives, as well as comply with applicable laws, regulations, rules, directives and guidelines.

However, due to the limitations that are inherent in any system of internal control, such a system is designed to manage rather than eliminate the risk of failure to achieve the Group’s business objectives. The system, by its nature, can only provide reasonable but not absolute assurance against the occurrence of any material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Board recognises that risk management is an integral part of the Group’s business objectives and is critical for the Group to achieve continues profitability and sustainable growth in shareholders’ value.

In pursuing these objectives, the Group has put in place an on-going process to manage its risks and opportunities which includes periodic assessment of the costs and benefits, impact of risks on the Group as well as review of financial implication before any investment or significant expenditure is made. This on-going process is undertaken by all major subsidiaries of the Group, and the processes, findings and actions taken by the Management are regularly reviewed by the Board.

INTERNAL CONTROL MECHANISM

The Group’s internal audit function is outsourced to an independent professional firm. The role of internal audit function is to assess and report the adequacy and effectiveness of the system of internal control. Risk-based internal audits are carried out based on the approved internal audit plan. The internal audit function reports directly to the Audit Committee. The audit findings and recommendations for improvement are presented at the Audit Committee Meetings.

OTHER KEY ELEMENTS OF INTERNAL CONTROL

The Group’s system of internal control comprises the following key elements:

•

•

•

•

•

•

•

An organisational structure, which clearly defines the lines of responsibility, proper segregation of duties and delegation of authority;

Established internal policies and procedures for key business units within the Group;

Rigorous review of key information such as financial performance, key business indicators, management accounts and detailed budgets by the Board and Audit Committee;

Experienced and dedicated team of personnel across key functional units;

Regular management meetings to discuss about the Group’s performance, business operations and management issues as well as formulate appropriate measures to address them;

Active involvement of the Executive Directors in the management of business and operations of the Group including reporting to the Board on significant changes in the business and external environment, which may affect the operations of the Group at large; and

Provision of regular and comprehensive information to the Board and Senior Management for performance monitoring.


STATEMENT OF INTERNAL CONTROL (Cont’d)

WEAKNESSES IN INTERNAL CONTROLS WHICH RESULTED IN MATERIAL LOSSES

There were no major weaknesses in internal controls which resulted in material losses during the financial year under review until the date of approval of this Statement.

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

In line with the Guidelines, the Group Chief Executive Officer and Chief Financial Officer have provided assurance to the Board in writing stating that the Group’s risk management and internal control systems have operated adequately and effectively, in all material aspects, to meet the Group’s objectives during the financial year under review.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by paragraph 15.23 of the Main Market Listing Requirements of Bursa Securities, the external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report of the Group for the year ended 31 March 2013. Their review was performed in accordance with the Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants.

RPG 5 does not require the external auditors to consider whether this Statement covers all risks and controls, or to form an opinion on the effectiveness of the Group’s risk manage and internal control system. In accordance with the external auditors’ report issued to the Board, nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and effectiveness of the risk management and internal control system of the Group.

CONCLUSION

The Board has taken the necessary steps to ensure that appropriate systems are in place for the assets of the Group to be adequately safeguarded through the prevention and detection of fraud and other irregularities and material misstatements.

The Board is of the view that the risk management and internal control systems are satisfactory and have not resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report. The Board continues to take pertinent measures to sustain and, where required, to improve the Group’s risk management and internal control systems in meeting the Group’s strategic objectives.

This statement is made in accordance with a resolution of the Board dated 12 June 2013.


STATEMENT OF DIRECTORS’ RESPONSIBILITIESIN RELATION TO THE FINANCIAL STATEMENTS

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs of the Group and Company at the end of the financial year and of the results and cash flows of the Group and Company for the financial year.

The Directors are satisfied that in preparing the financial statements of the Group and of the Company for the financial year ended 31 March 2013, the Group has used the appropriate accounting policies and applied them consistently. The Directors are also of the view that relevant approved accounting standards have been followed in the preparation of these financial statements.


DIRECTORS’ REPORT

The directors of ASIA POLY HOLDINGS BERHAD have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2013.

PRINCIPAL ACTIVITIES The principal activity of the Company is that of investment holding.

The principal activities of the subsidiary company are disclosed in Note 12 to the financial statements.

There have been no significant changes in the nature of the activities of the Company and of its subsidiary company during the financial year.

RESULTS OF OPERATIONS The results of operations of the Group and of the Company for the financial year are as follows:

Profit/(Loss) before taxIncome tax expense

Profit/(Loss) for the year

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

A final interim tax exempt dividend of 2.50% per ordinary share on 87,914,960 ordinary shares of RM0.10 each, amounting to RM219,787 proposed in the previous financial year was paid during the current financial year. An interim tax exempt dividend of 2.50% per ordinary share on 87,914,960 ordinary shares of RM0.10 each, amounting to RM219,788 in respect of the current financial year was declared and paid during the current financial year.

The directors proposed a final tax exempt dividend of 2.50% per ordinary share on 87,914,960 ordinary shares of RM0.10 each, amounting to RM219,787 in respect of the current financial year. The proposed final dividend is subject to approval by the shareholders at the forthcomnig Annual General Meeting of the Company and has not been included as a liability in the financial statements.

RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company. No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

The Company2011

RM

(160,043)-

(160,043)

The Group2011

RM

1,666,246(306,000)

1,360,246


OTHER STATUTORY INFORMATION Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(a)

(b)

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

(a)

(b)

(c)

(d)

At the date of this report, there does not exist:

(a)

(b)

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the succeeding financial year.

DIRECTORS The following directors served on the Board of the Company since the date of the last report:

Teoh Cheng Chuan Tan Yee Khun Hans Peter Holst Noel Chua Fong Kok Keong Kong Kok Chee Pang Hee Kin (appointed on 7 December 2012)Brian Chieng Ngee Wen (resigned on 5 December 2012)

In accordance with Article 103(a) of the Company’s Articles of Association, Mr. Noel Chua and Mr. Fong Kok Keong retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.

Mr. Pang Hee Kin, who was appointed to the Board after the date of the last Annual General Meeting, retires under Article 84 of the Company’s Articles of Association and, being eligible, offers himself for re-election.

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 had satisfied themselves that no known bad debts need to be 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 book values in the ordinary course of business had been written down to their estimated realisable values.

which would require the writing off of bad debts or render the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

DIRECTORS’ REPORT (Cont’d)


DIRECTORS’ INTERESTS The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

*

By virtue of their interest in shares of the Company, the above directors are deemed to have an interest in the shares of the subsidiary company to the extent the Company has an interest.

None of the other directors in office at the end of the financial year held shares or had beneficial interest in the shares of the Company or its related companies during and at the end of the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than those disclosed as directors’ remuneration in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS’ REPORT (cont’d)

Shares in the Company

Direct interestTeoh Cheng ChuanTan Yee KhunHans Peter HolstNoel ChuaFong Kok KeongPang Hee Kin

Indirect interestHans Peter Holst*Fong Kok Keong*Pang Hee Kin*

As of 1.4.2012/(Date of

appointment)

20,000,000500,014280,000

2,652,9064,728,8004,263,000

777,500-

250,000

Number of ordinary shares of RM0.10 each

Bought

------

---

Sold

---

(2,652,906)(2,371,000)

-

---

Transferred

----

(2,000,000)-

-2,000,000

-

As of 31.3.2013

20,000,000500,014280,000

-357,800

4,263,000

777,5002,000,000

250,000

Pursuant to Section 134(12)(c) of the Companies (Amendment) Act, 2007:

(a)

(b)

(c)

these shares were treated as interest of Mr. Hans Peter Holst by virtue of direct shareholding of his spouse, Inge-Marie Lorenzen and his child, Niels Christian Holst who were not themselves directors of the Company.

these shares were treated as interest of Mr. Fong Kok Keong by virtue of direct shareholding of his spouse, Sum Wai Fong who was not herself director of the Company. these shares were treated as interest of Mr. Pang Hee Kin by virtue of direct shareholding of his spouse, Wee Leu Kee who was not herself director of the Company.


AUDITORS

The auditors, Messrs. Deloitte KassimChan, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

_____________________________________TEOH CHENG CHUAN

_____________________________________FONG KOK KEONG

Petaling Jaya12 June 2013

DIRECTORS’ REPORT (cont’d)


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFASIA POLY HOLDINGS BERHAD (Incorporated in Malaysia)

Report on the Financial Statements

We have audited the financial statements of ASIA POLY HOLDINGS BERHAD, which comprise the statements of financial position of the Group and of the Company as of 31 March 2013 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 year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 28 to 59.

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 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 the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors 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 that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2013 and of their financial performance and cash flows for the 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 that:

(a)

(b)

(c)

in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary company of which we acted as auditors, have been properly kept in accordance with the provisions of the Act;

we are satisfied that the accounts of the subsidiary company that have been consolidated with the financial statements of the Company 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 as required by us for these purposes; and

the auditors’ report on the accounts of the subsidiary company, Asia Poly Industrial Sdn Bhd, did not contain any qualification or any adverse comment made under Section 174(3) of the Act.


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFASIA POLY HOLDINGS BERHAD (Incorporated in Malaysia) (Cont’d)

Other Matters

Other Reporting Responsibilities

The supplementary information set out in Note 27 to the financial statements 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.

DELOITTE KASSIMCHAN AF 0080Chartered Accountants

TEO SWEE CHUAPartner - 2846/01/14 (J)Chartered Accountant


(a)

(b)

As stated in Note 2 to the financial statements, the Group and the Company adopted Malaysian Financial Reporting Standards on 1 April 2012 with a transition date of 1 April 2011. These standards were applied retrospectively by the directors to the comparative information in these financial statements, including the statements of financial position as of 31 March 2012 and 1 April 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended 31 March 2012 and related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended 31 March 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as of 1 April 2012 do not contain misstatements that materially affect the financial position as of 31 March 2013 and financial performance and cash flows for the year then ended.

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the contents of this report.


STATEMENTS OF COMPREHENSIVE INCOMEFOR THE YEAR ENDED 31 MARCH 2013

RevenueOther operating incomeChanges in inventories of finished goods and work-in-progressRaw materials and consumables usedPurchase of trading merchandiseStaff costsDepreciation of property, plant and equipmentOther operating expensesFinance costs

Profit/(Loss) before taxIncome tax expense

Profit/(Loss) for the year

Other comprehensive income for the year

Total comprehensive income/(loss) for the year

Earnings per ordinary share (sen) Basic

The Group2013

RM

77,704,66383,417

(1,034,363)(58,712,525)

(157,123)(4,564,594)(1,786,836)(8,920,844)

(945,549)

1,666,246(306,000)

1,360,246

-

1,360,246

1.55

2012RM

79,784,89668,717

144,615(63,775,311)

-(4,223,042)(1,793,040)(8,435,106)

(911,089)

860,640(166,000)

694,640

-

694,640

0.79

The Company2013

RM

--

--

--

(160,043)-

(160,043)-

(160,043)

-

(160,043)

2012RM

3,419,787-

--

--

(187,259)-

3,232,528-

3,232,528

-

3,232,528

Note

57

711

78

9

10

The accompanying Notes form an integral part of the Financial Statements.


STATEMENTS OF FINANCIAL POSITIONAS OF 31 MARCH 2013

ASSETS

Non-Current AssetsProperty, plant and equipment

Total Non-Current Assets

Current AssetsInventories Trade receivables Other receivables and prepaid expensesTax recoverableCash and bank balances

Total Current Assets

Total Assets

EQUITY AND LIABILITIES

Capital and ReservesShare capitalShare premiumRetained earnings

Total Equity

Non-Current LiabilitiesHire-purchase payables - non-current portionDeferred tax liabilities

Total Non-Current Liabilities

Current LiabilitiesTrade payablesOther payables and accrued expensesHire-purchase payables - current portionShort-term borrowings

Total Current Liabilities

Total Liabilities

Total Equity and Liabilities

The Group1.4.2011

RM

27,002,423

27,002,423

10,990,75615,512,752

414,585381,940

2,967,732

30,267,765

57,270,188

8,791,4964,222,9608,012,922

21,027,378

42,4781,535,000

1,577,478

12,736,261794,685

50,88221,083,504

34,665,332

36,242,810

57,270,188

31.3.2013RM

25,953,936

25,953,936

10,174,65518,673,052

348,238277,541

2,739,335

32,212,821

58,166,757

8,791,4964,222,9609,408,446

22,422,902

3,2862,007,000

2,010,286

12,080,3741,434,711

19,59620,198,888

33,733,569

35,743,855

58,166,757

31.3.2012RM

26,812,676

26,812,676

11,439,64114,917,074

323,334276,295

5,296,043

32,252,387

59,065,063

8,791,4964,222,9608,487,775

21,502,231

22,8821,701,000

1,723,882

11,515,4451,040,788

19,59623,263,121

35,838,950

37,562,832

59,065,063

Note

11

131414

15

161718

1920

21211922



ASSETS

Non-Current AssetsInvestment in subsidiary company

Total Non-Current Assets

Current AssetsAmount owing by subsidiary companyCash and bank balances

Total Current Assets

Total Assets

EQUITY AND LIABILITIES

Capital and ReservesShare capitalShare premiumRetained earnings/(Accumulated losses)

Total Equity

Current LiabilitiesOther payables and accrued expenses

Total Current Liabilities

Total Liabilities

Total Equity and Liabilities

The Company1.4.2011

RM

6,573,576

6,573,576

4,699,7165,015

4,704,731

11,278,307

8,791,4964,222,960

(1,798,227)

11,216,229

62,078

62,078

62,078

11,278,307

31.3.2013RM

6,573,576

6,573,576

7,086,6802,030

7,088,710

13,662,286

8,791,4964,222,960

614,896

13,629,352

32,934

32,934

32,934

13,662,286

31.3.2012RM

6,573,576

6,573,576

7,693,2484,866

7,698,114

14,271,690

8,791,4964,222,9601,214,514

14,228,970

42,720

42,720

42,720

14,271,690

Note

12

1215

161718

21


STATEMENTS OF FINANCIAL POSITIONAS OF 31 MARCH 2013 (Cont’d)


STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2013

The Group

As of 1 April 2011Total comprehensive income for the yearDividends paid (Note 23)

As of 31 March 2012


As of 31 March 2013

The Company


As of 31 March 2012

As of 1 April 2012Total comprehensive loss for the yearDividends paid (Note 23)

As of 31 March 2013

Non-distributable reserve -

Share premiumRM

4,222,960--

4,222,960

4,222,960--

4,222,960

4,222,960--

4,222,960

4,222,960--

4,222,960

Share capital

RM

8,791,496--

8,791,496

8,791,496--

8,791,496

8,791,496--

8,791,496

8,791,496--

8,791,496

Distributable reserve - Retained earnings

RM

8,012,922694,640

(219,787)

8,487,775

8,487,7751,360,246(439,575)

9,408,446

(1,798,227)3,232,528(219,787)

1,214,514

1,214,514(160,043)(439,575)

614,896

Total equity

RM

21,027,378694,640

(219,787)

21,502,231

21,502,2311,360,246(439,575)

22,422,902

11,216,2293,232,528(219,787)

14,228,970

14,228,970(160,043)(439,575)

13,629,352



STATEMENTS OF CASH FLOWSFOR THE YEAR ENDED 31 MARCH 2013

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIESProfit/(Loss) before taxAdjustments for: Depreciation of property, plant and equipment Finance costs Unrealised (gain)/loss on foreign exchange Property, plant and equipment written offBad debts written offGain on disposal of property, plant and equipmentDividend income

Operating Profit/(Loss) Before Working Capital Changes

(Increase)/Decrease in: Inventories Trade receivables Other receivables and prepaid expenses

Increase/(Decrease) in: Trade payables Other payables and accrued expenses

Cash Generated From/(Used In) OperationsIncome tax refundedIncome tax paid

Net Cash From/(Used In) Operating Activities

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESPurchase of property, plant and equipmentProceeds from disposal of property, plant and equipmentDividends received (Note)Decrease in amount owing by subsidiary company

Net Cash (Used In)/From Investing Activities

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES(Decrease)/Increase in short-term borrowingsFinance costs paidDividends paid Payment of hire-purchase payables

Net Cash From/(Used In) Financing Activities

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END OF YEAR (REPRESENTING CASH AND BANK BALANCES)

Note: Dividends are received through the following:

The Group2013

RM

1,666,246

1,786,836945,549(37,804)

2,578---

4,363,405

1,264,986(3,749,786)

(24,904)

582,050444,259

2,880,010-

(1,246)

2,878,764

(981,010)---

(981,010)

(3,049,742)(945,549)(439,575)

(19,596)

(4,454,462)

(2,556,708)

5,296,043

2,739,335

2012RM

860,640

1,793,040911,089

16,1253,939

700(4,379)

-

3,581,154

(448,885)703,111

91,251

(1,394,348)255,763

2,788,046105,645

-

2,893,691

(1,622,053)19,200

--

(1,602,853)

2,219,231(911,089)(219,787)

(50,882)

1,037,473

2,328,311

2,967,732

5,296,043

The Company2013

RM

(160,043)

-------

(160,043)

---

-(9,786)

(169,829)--

(169,829)

---

606,568

606,568

--

(439,575)-

(439,575)

(2,836)

4,866

2,030

2012RM

3,232,528

------

(3,419,787)

(187,259)

---

-(19,358)

(206,617)--

(206,617)

--

219,787206,468

426,255

--

(219,787)-

(219,787)

(149)

5,015

4,866


The Company2013

RM

--

-

2012RM

219,7873,200,000

3,419,787

CashAmount owing by subsidiary company


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013

GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the ACE Market of Bursa Malaysia Securities Berhad.

The principal activity of the Company is that of investment holding.

The principal activities of the subsidiary company are disclosed in Note 12.

There have been no significant changes in the nature of the activities of the Company and of its subsidiary company during the financial year.

The registered office of the Company is located at No. 5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia.

The principal place of business of the Company is located at Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan, Malaysia.

The financial statements of the Group and of the Company have been authorised by the Board of Directors for issuance on 12 June 2013.

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.

Adoption of new and revised Financial Reporting Standards

The Group’s and the Company’s financial statements for the financial year ended 31 March 2013 have been prepared in accordance with MFRSs for the first time. In the previous years, these financial statements were prepared in accordance with Financial Reporting Standards (“FRSs”).

The transition to MFRSs is accounted for in accordance with MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards, with 1 April 2011 as the date of transition. The adoption of MFRSs has not affected the amounts reported on the financial statements of the Group and of the Company.

Standards and IC Interpretations in Issue but not yet effective

At the date of authorisation for issue of these financial statements, the new and revised Standards and IC Interpretations which were in issue but not yet effective and not early adopted by the Group and the Company are as listed below:

MFRS 7

MFRS 9MFRS 9MFRS 10MFRS 10MFRS 11MFRS 11MFRS 12MFRS 12MFRS 13MFRS 101

MFRS 119MFRS 127MFRS 128MFRS 132

IC Interpretation 20

Amendments to MFRSs contained in the document entitled Annual Improvements 2009-2011 cycle1

1

2

Financial Instruments: Disclosures (Amendment relating to Disclosures - Offsetting Financial Assets and Liabilities)1

Financial Instruments (IFRS 9 issued by IASB in November 2009)2

Financial Instruments (IFRS 9 issued by IASB in October 2010)2

Consolidated Financial Statements1

Consolidated Financial Statements (Amendments relating to Transition Guidance)1

Joint Arrangements1

Joint Arrangements (Amendments relating to Transition Guidance)1

Disclosure of Interests in Other Entities1

Disclosure of Interests in Other Entities (Amendments relating to Transition Guidance)1

Fair Value Measurement1

Presentation of Financial Statements (Amendments relating to Presentation of Items of Other Comprehensive Income)3

Employee Benefits (IAS 19 as amended by IASB in June 2011)1

Separate Financial Statements (IAS 27 as amended by IASB in May 2011)1

Investment in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2011)1

Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial Liabilities)4

Stripping Costs in the Production Phase of a Surface Mine1

Effective for annual periods beginning on or after 1 January 2013Effective for annual periods beginning on or after 1 January 2015 instead of 1 January 2013 immediately upon the issuance of Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and MFRS 7 relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” on 1 March 2012

1.

2.


NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2013 (Cont’d)

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (Cont’d)

Standards and IC Interpretations in Issue but not yet effective (Cont’d)3

4

The directors anticipate that abovementioned Standards and IC Interpretations will be adopted in the annual financial statements of the Group and of the Company when they become effective and that the adoption of these Standards and IC Interpretations will have no material impact on the financial statements of the Group and of the Company in the period of initial application.

Amendments to MFRS 7 and MFRS 132: Offsetting Financial Assets and Financial Liabilities and the related disclosures

The amendments to MFRS 132 clarify existing application issues relating to the offset of the financial assets and financial liabilities requirements. Specifically, the amendments clarify the meaning of “currently has a legally enforceable right of set-off” and “simultaneous realisation and settlement”.

The amendments to MFRS 7 introduce new disclosure requirements relating to rights of offset and related arrangements for financial instruments under an enforceable master netting agreements or similar arrangements. Both MFRS 132 and MFRS 7 require retrospective application upon adoption.

To date, the Group has not entered into any such agreements or similar arrangements. However, the directors anticipate that the application of these amendments to MFRS 132 and MFRS 7 may result in more disclosures being made with regard to offsetting financial statements and financial liabilities in the future.

SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention, modified to include the revaluation of freehold land of a subsidiary company. This freehold land is stated in the Group’s financial statements at the effective acquisition cost by the Group. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiary companies acquired or disposed of during the year are included in the statement of comprehensive income of the Group from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiary companies to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Non-controlling interests in subsidiary companies are identified separately from the Group’s equity therein. The interests of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s interests in subsidiary companies that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary companies. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

2.

3.

Effective for annual periods beginning on or after 1 July 2012Effective for annual periods beginning on or after 1 January 2014



SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Basis of Consolidation (Cont’d)

When the Group loses control of a subsidiary company, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary company and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary company are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary company at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity

Business Combinations

Acquisitions of subsidiary companies and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant MFRSs. Changes in the fair value of contingent consideration classified as equity are not recognised.

Where a business combination is achieved in stages, the Group’s previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under MFRS 3 (revised) are recognised at their fair value at the acquisition date, except that:

•

•

•

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see below), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date.

The measurement period is the period from the date of acquisition to the date the Group obtains complete information about facts and circumstances that existed as of the acquisition date and is subject to a maximum of one year.

Revenue Recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of sales tax, trade discounts and allowances, and returns. The Group recognises revenue when the amount of the revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Group, upon satisfying the conditions of the Group activities as set out below.

Revenue from sales of goods is recognised upon delivery of products and when the risks and rewards of ownership have passed to customers.

Dividend income is recognised when the right to receive payment is established.

3.

deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively;

liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with MFRS 2 Share-based Payment; and

assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.




Employee Benefits

(i)

(ii)

Foreign Currency Conversion The financial statements of the Group and of the Company are presented in Ringgit Malaysia, the currency of the primary economic environment in which the Company operates (its functional currency).

In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair values were determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the profit or loss for the year. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the year except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.

Income Tax Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year, calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or recoverable).

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the “liability” method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Such assets and liabilities are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets, if any, is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is measured at the tax rates that are expected to apply in the year when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised in profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

3.

Short-Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which employees of the Group render the associated services. 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 Plan

The Group and its eligible employees are required by law to make monthly contributions to Employees Provident Fund (“EPF”), a statutory defined contribution plan, at certain prescribed rates based on the employees’ salaries. The Group’s contributions to EPF are disclosed separately while the employees’ contributions to EPF are included in staff costs. Once these contributions have been made, the Group has no further payment obligations.




Impairment of Assets

At the end of each reporting period, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future benefits associated with the item will flow to the Group and the cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repair and maintenance costs are charged to profit or loss in the period in which they are incurred.

Freehold land is not depreciated. All other assets are depreciated on a straight-line basis to their residual values at rates based on the estimated useful lives. The principal annual rates used are as follows:

Factory buildingPlant and machineryFire protection systemOffice equipment, furniture and fittingsLaboratory and factory equipmentMotor vehicles

Where significant parts of an item of property, plant and equipment have different useful lives, the cost or valuation of the item is allocated on a reasonable basis between the parts and each part is depreciated separately.

At the end of each reporting period, the residual values, useful lives and depreciation methods of property, plant and equipment are reviewed, and the effect of any changes are recognised prospectively.

Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss. On disposal of revalued assets, the amounts in revaluation reserve account relating to the assets disposed of are transferred to retained earnings.

Property, Plant and Equipment under Hire-Purchase Arrangements

Property, plant and equipment acquired under hire-purchase arrangements are capitalised in the financial statements and the corresponding obligations treated as liabilities. Finance charges are allocated to profit or loss to give a constant periodic rate of interest on the remaining hire-purchase liabilities.

Assets held under hire-purchase arrangement are depreciated over their expected useful lives on the same basis as owned assets.

3.

2%4% - 40%

10%10%10%20%




Investments in Subsidiary Company

A subsidiary company is an entity over which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from its activities.

Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.

Investment in subsidiary company, which is eliminated on consolidation, is stated at cost less impairment losses, if any, in the Company’s separate financial statements.

Inventories Inventories are stated at the lower of cost (determined on the first-in, first-out basis) and net realisable value. The cost of raw materials comprises the original cost of purchase plus the cost of bringing the inventories to their present location and condition. The cost of work-in-progress and finished goods include the cost of raw materials, direct labour and a proportion of production overheads. Net realisable value represents the estimated selling price in the ordinary course of business less selling and distribution costs and all other estimated costs to completion.

Provisions

Provisions are made when the Group or the Company have a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount can be made.

Provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the end of the reporting period, and are discounted to present value where the effect is material.

At the end of each reporting period, the provisions are reviewed by the directors and adjusted to reflect the current best estimate. The provisions are reversed if it is no longer probable that the Group or the Company will be required to settle the obligation.

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 revenue and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed by the chief operating decision makers to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Contingent Liabilities

The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or a sufficiently reliable estimate of the amount of the obligation cannot be made.

3.




Financial Instruments

Financial instruments are recognised in the statements of financial position when, and only when, the Group becomes a party to the contractual provisions of the financial instruments.

(a)

3.

Financial Assets

Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, such financial assets are recognised and derecognised on trade date.

Financial instruments are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value. Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (“FVTPL”), ‘held-to-maturity’ investments, ‘available-for-sale’ (“AFS”) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Effective Interest Rate Method

The effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

(i)

(ii)

Financial Assets At FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

••

•

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:

•

•

•

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the “other gains and losses” line item in the statement of comprehensive income.

Held-to-Maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity. Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest rate method less any impairment, with revenue recognised on an effective yield basis.

it has been acquired principally for the purpose of selling it in the near term; oron initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; orit is a derivative that is not designated and effective as a hedging instrument.

such designation eliminates or significantly reduces measurement or recognition inconsistency that would otherwise arise; orthe financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; orit forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial Instruments; Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.




Financial Instruments (Cont’d)

(a)

3.

Financial Assets (Cont’d)

(iii)

(iv)

(v)

AFS Financial Assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investment or financial assets at FVTPL. All AFS assets are measured at fair value at the end of the reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest rate method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period.

Dividends on AFS equity instruments are recognised in profit or loss when the Company’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at amortised cost using the effective interest rate method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of Financial Assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investments have been affected.

For equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, including redeemable bonds classified as AFS and finance lease receivables, objective evidence of impairment could include:

•••

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

significant financial difficulty of the issuer or counterparty; or default or delinquency in interest or principal payments; orit becoming probable that the borrower will enter bankruptcy or financial re-organisation.





(a)

(b)

3.

Financial Assets (Cont’d)

(v)

(vi)

Financial Liabilities and Equity Instruments issued by the Group

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

(i)

(ii)

(iii)

Impairment of Financial Assets (Cont’d)

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income.

Derecognition of Financial Assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risk and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Financial Liabilities

Financial liabilities are initially measured at fair value, net of transaction costs. It is subsequently measured at amortised cost using the effective interest rate method, with the interest expense recognised on an effective yield basis.

The effective interest rate method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Financial Liabilities at FVTPL Financial liabilities are classified as FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

••

•

it has been acquired principally for the purpose of repurchasing in the near term; oron initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; orit is a derivative that is not designated and effective as a hedging instrument.





(b)

Statements of Cash Flows

The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.

Cash and cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are readily convertible to cash with insignificant risk of changes in value.

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

i)

ii)

3.

4.

Financial Liabilities and Equity Instruments issued by the Group (Cont’d)

(iii)

(iv)

(v)

Critical judgement in applying the Group’s and the Company’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 3 above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

Management believes that there are no key assumptions made 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 except as disclosed below:

Allowance for doubtful debts

The policy for allowance for doubtful debts of the Group is based on the evaluation of collectability and aging analysis of accounts and on management’s estimate. A considerable amount of judgement is required in assessing the ultimate realisation of these receivables, including the current creditworthiness and the past collection history of each customer. If the financial conditions of the customers with which the Group deals were to deteriorate, resulting in an impairment of their ability to make payments, an additional allowance may be required.

Financial Liabilities at FVTPL (Cont’d) A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

•

•

•

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item in the statement of comprehensive income.

Other Financial Liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis.

Derecognition of Financial Liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; orthe financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; orit forms part of a contract containing one or more embedded derivatives, and MFRS 139 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.



REVENUE

Sales of finished goodsSales of trading merchandiseDividend income from subsidiary company

SEGMENT REPORTING

(a)

5.

6.

The Group2013

RM

74,830,2452,874,418

-

77,704,663

2012RM

77,059,1522,725,744

-

79,784,896

The Company2013

RM

---

-

2012RM

--

3,419,787

3,419,787

Business segments

For management purposes, the Group is organised into the following divisions:(i)(ii)(iii)

The Group2013

Revenue

ResultsSegment results

Finance costs

Profit before taxIncome tax expense

Profit for the year

Other InformationCapital additionsDepreciation of property, plant and equipment

Statement of Financial PositionAssetsTax recoverableSegment assets

LiabilitiesDeferred tax liabilitiesSegment liabilities

Investment holdingManufacturingTrading

Investment holding division

RM

-

-

-

-

-13,662,286

-32,934

Manufacturing division

RM

74,830,245

2,554,850

981,010

1,786,836

277,54157,887,186

2,007,00040,790,601

Tradingdivision

RM

2,874,418

56,945

-

-

--

--

EliminationsRM

-

-

-

-

-(13,660,256)

-(7,086,680)

ConsolidatedRM

77,704,663

2,611,795

(945,549)

1,666,246(306,000)

1,360,246

981,010

1,786,836

277,54157,889,216

2,007,00033,736,855


Investment holding division

RM

3,419,787

3,232,528

-

-

-14,271,690

-42,720

Manufacturing division

RM

77,059,152

1,863,428

1,622,053

1,793,040

276,29558,783,902

1,701,00043,512,360

Tradingdivision

RM

2,725,744

95,560

-

-

--

--

EliminationsRM

(3,419,787)

(3,419,787)

-

-

-(14,266,824)

-(7,693,248)

ConsolidatedRM

79,784,896

1,771,729

(911,089)

860,640(166,000)

694,640

1,622,053

1,793,040

276,29558,788,768

1,701,00035,861,832

SEGMENT REPORTING (Cont’d)

(a)

(b)

OTHER OPERATING INCOME/(EXPENSES) AND STAFF COSTS

Included in other operating income/(expenses) are the following credits/(charges):

Cost of inventories recognised as expenseDirectors’ remuneration: Salaries and other emoluments Fees(Loss)/Gain on foreign exchange: Realised UnrealisedAuditors’ remuneration: Statutory audit Non-audit servicesProperty, plant and equipment written offBad debts written offGain on disposal of property, plant and equipment

Business segments (Cont’d)

The Group2012

Revenue

ResultsSegment results

Finance costs

Profit before taxIncome tax expense

Profit for the year

Other InformationCapital additionsDepreciation of property, plant and equipment

Statement of Financial PositionAssetsTax recoverableSegment assets

LiabilitiesDeferred tax liabilitiesSegment liabilities

Geographical Segment

The Group’s operations are mainly located in Malaysia.

The Group2013

RM

(59,904,011)

(1,283,000)(38,280)

(119,397)37,804

(57,000)(3,000)(2,578)

-

-

2012RM

(63,630,696)

(1,254,893)(54,000)

(217,064)(16,125)

(57,000)(3,000)(3,939)

(700)

4,379

The Company2013

RM

-

(3,600)(38,280)

--

(25,000)(3,000)

--

-

2012RM

-

(3,600)(54,000)

--

(25,000)(3,000)

--

-


6.

7.


OTHER OPERATING INCOME/(EXPENSES) AND STAFF COSTS (Cont’d)

(a)

FINANCE COSTS

Interest expense on: Bankers’ acceptance Bank overdraft Hire-purchase

INCOME TAX EXPENSE

Estimated tax payable:

Deferred tax (Note 20): Current year Overprovision in prior years

Income tax expense


7.

8.

9.

Staff costs

Staff costs include salaries, contributions to Employees Provident Fund (“EPF”) and all other staff related expenses. Contributions to EPF, included in staff costs, made by the Group during the current financial year amounted to RM289,673 (2012: RM249,197).

Key management personnel compensation

The remuneration of members of key management personnel, who are also directors, during the year are as follows:

Short-term employee benefits: Salaries, bonuses, allowances and contributions to EPF

Directors’ remuneration

Contributions to EPF, included in directors’ remuneration, made by the Group during the current financial year amounted to RM137,410 (2012: RM121,308).

The estimated monetary value of benefits-in-kind received and receivable by the directors of the Company otherwise than in cash from the Group amounted to RM42,734 (2012: RM32,483).

The Group2013

RM

1,283,000

2012RM

1,254,893

The Company2013

RM

3,600

2012RM

3,600

The Group2013

RM

-

509,000(203,000)

306,000

306,000

2012RM

-

290,000(124,000)

166,000

166,000

The Company2013

RM

-

--

-

-

2012RM

-

--

-

-

The Group2013

RM

928,35614,853

2,340

945,549

2012RM

885,21519,554

6,320

911,089


INCOME TAX EXPENSE (Cont’d)


9.

10.

The Group2013

RM

1,666,246

416,561

84,349-

8,090(203,000)

306,000

2012RM

860,640

215,160

74,840--

(124,000)

166,000

The Company2013

RM

(160,043)

(40,011)

40,011---

-

2012RM

3,232,528

808,132

46,815(854,947)

--

-

A reconciliation of income tax expense at the applicable statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows:

Profit/(Loss) before tax

Tax at statutory tax rate of 25% (2012: 25%)Tax effects of: Non-deductible expenses Non-taxable income Reinvestment allowances clawed backOverprovision in prior years

As of 31 March 2013, the Company has tax exempt income of approximately RM201,000 (2012: RM201,000) which, subject to the agreement of Inland Revenue Board, is available for the distribution of tax exempt dividends to the shareholders of the Company.

As of 31 March 2013, the subsidiary company of the Company has approximately RM3,544,000 (2012: RM3,576,000) of tax exempt income in respect of reinvestment allowances claimed and utilised under Schedule 7A of the Income Tax Act, 1967, which, if agreed with the Inland Revenue Board, will enable the subsidiary company to distribute tax exempt dividends up to the same amount.

EARNINGS PER ORDINARY SHARE

Basic

Basic earnings per ordinary share is calculated by dividing profit for the year by the number of ordinary shares in issue during the financial year.

Profit for the year (RM)

Number of ordinary shares of RM0.10 each

Basic earnings per ordinary share (sen)

The Group2013

RM

1,360,246

87,914,960

1.55

2012RM

694,640

87,914,960

0.79



The Group

CostAs of 1 April 2011AdditionsDisposalWrite-offsReclassification

As of 31 March 2012/1 April 2012AdditionsAdjustmentWrite-off

As of 31 March 2013

Accumulated DepreciationAs of 1 April 2011Charge for the yearDisposalWrite-offsReclassification

As of 31 March 2012/ 1 April 2012Charge for the yearAdjustmentWrite-off

As of 31 March 2013

Net Book ValueAs of 31 March 2013

As of 31 March 2012

As of 1 April 2011

Freehold Land

RM

4,520,000----

4,520,000---

4,520,000

-----

----

-

4,520,000

4,520,000

4,520,000

Factory Building

RM

7,327,78994,360

---

7,422,14974,307

--

7,496,456

812,031148,268

---

960,299149,053

--

1,109,352

6,387,104

6,461,850

6,515,758

Plant and Machinery

RM

14,613,707

1,197,045-

(9,278)-

15,801,474487,007(53,932)

-

16,234,549

2,776,3771,025,358

-(8,493)36,759

3,830,0011,034,024

(3,596)-

4,860,429

11,374,120

11,971,473

11,837,330

Fire Protection

SystemRM

355,931----

355,931---

355,931

79,57635,584

---

115,16035,458

--

150,618

205,313

240,771

276,355

Office Equipment,

Furniture and Fittings

RM

2,708,80131,437

-(3,969)

-

2,736,26944,021

-(4,646)

2,775,644

704,693267,548

-(1,278)

-

970,963268,176

-(2,068)

1,237,071

1,538,573

1,765,306

2,004,108

PROPERTY, PLANT AND EQUIPMENT11.

Laboratoryand

Factory Equipment

RM

2,335,269

193,549-

(555)-

2,528,263375,675

--

2,903,938

573,293236,269

-(92)

-

809,470258,294

--

1,067,764

1,836,174

1,718,793

1,761,976

Motor Vehicles

RM

181,683105,662(26,750)

-606,189

866,784---

866,784

149,54559,314

(11,929)-

578,493

775,42341,831

--

817,254

49,530

91,361

32,138

Motor Vehicles

Under Hire-Purchase

RM

709,683---

(606,189)

103,494---

103,494

654,92520,699

--

(615,252)

60,372---

60,372

43,122

43,122

54,758

TotalRM

32,752,8631,622,053

(26,750)(13,802)

-

34,334,364981,010(53,932)

(4,646)

35,256,796

5,750,4401,793,040

(11,929)(9,863)

-

7,521,6881,786,836

(3,596)(2,068)

9,302,860

25,953,936

26,812,676

27,002,423

Included in property, plant and equipment of the Group are fully depreciated plant and equipment at cost totalling approximately RM2,509,000 (2012: RM2,495,000) which are still in use.



INVESTMENT IN SUBSIDIARY COMPANY

Unquoted shares - at cost

The details of the subsidiary company, which is incorporated in Malaysia, are as follows:

Name of Company

Direct subsidiary companyAsia Poly Industrial Sdn Bhd

Amount owing by subsidiary company, which arose mainly from payments on behalf, is interest-free and repayable on demand.

INVENTORIES

Raw materialsWork in progressFinished goods

TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES

Trade receivablesLess: Allowance for doubtful debts

Net

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms with customers are mainly on credit. The credit period generally ranges from 30 to 150 days (31 March 2012: 30 to 120 days; 1 April 2011: 30 to 120 days). Each customer has a maximum credit limit. The Group seeks to maintain strict control over its outstanding receivables and has a credit control department to minimise credit risk. Overdue balances are reviewed regularly by senior management.

The Group has significant concentration of credit risk as certain major customers account for approximately 63% (31 March 2012: 57%; 1 April 2011: 61%) of the total amount outstanding. There are no other customers who represent more than 5% of the total balance of trade receivables at the end of the reporting period.

Trade receivables include amounts (see below for aged analysis) that are past due at the end of the reporting period but against which the Group has not recognised an allowance for doubtful debts since there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral or other credit enhancements over these balances.

12.

13.

14.

The Company1.4.2011

RM

6,573,576

31.3.2013RM

6,573,576

31.3.2012RM

6,573,576

Effective Equity Interest

2013RM

100%

2012RM

100%

Principal Activity

Manufacture and sale of cast acrylic products

The Group1.4.2011

RM

2,918,595360,116

7,712,045

10,990,756

31.3.2013RM

2,992,2421,305,7615,876,652

10,174,655

31.3.2012RM

3,222,865644,362

7,572,414

11,439,641

The Group1.4.2011

RM

15,767,622(254,870)

15,512,752

31.3.2013RM

18,927,922(254,870)

18,673,052

31.3.2012RM

15,171,944(254,870)

14,917,074


TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES (Cont’d)

The table below is an analysis of trade receivables at the end of the reporting period:

Neither past due nor impairedPast due but not impairedPast due and impaired

Ageing of past due but not impaired

Less than 30 days 30 to 60 days 60 to 90 days 90 to 120 days More than 120 days

Ageing of impaired trade receivables

More than 120 days

Movement in the allowance for doubtful debts

At beginning and end of year

The currency profile of trade receivables of the Group is as follows:

United States DollarRinggit Malaysia

Other receivables and prepaid expenses consist of:

Other receivablesRefundable depositsPrepayments

14.

The Group1.4.2011

RM

13,835,7321,677,020

254,870

15,767,622

31.3.2013RM

16,144,3852,528,667

254,870

18,927,922

31.3.2012RM

13,868,8921,048,182

254,870

15,171,944

132,028314,658276,583781,371172,380

1,677,020

254,870

2,375,850152,817

---

2,528,667

254,870

1,040,4287,754

---

1,048,182

254,870

The Group2012

RM

254,870

2013RM

254,870

The Group1.4.2011

RM

10,709,9345,057,688

15,767,622

31.3.2013RM

13,296,6865,631,236

18,927,922

31.3.2012RM

9,984,5015,187,443

15,171,944

The Group1.4.2011

RM

43,640184,023186,922

414,585

31.3.2013RM

30,420193,564124,254

348,238

31.3.2012RM

32,551104,534186,249

323,334



The Group1.4.2011

RM

2,642,937324,795

--

2,967,732

31.3.2013RM

2,258,988471,835

8,512-

2,739,335

31.3.2012RM

2,180,6803,110,350

135,000

5,296,043

CASH AND BANK BALANCES

The currency exposure profile of cash and bank balances is as follows:

United States DollarRinggit MalaysiaEuroChinese Renminbi

Ringgit Malaysia

SHARE CAPITAL

Authorised: 100,000,000 ordinary shares of RM0.10 each

Issued and fully paid: 87,914,960 ordinary shares of RM0.10 each

SHARE PREMIUM

Share premium arose from the public issue of 22,179,000 ordinary shares of RM0.10 each at premium of RM0.24 per ordinary share less share issue expenses of RM1,100,000.

RETAINED EARNINGS

In accordance with the Finance Act 2007, the single tier income tax system became effective from the year of assessment 2008. Under this system, tax on a company’s profit is a final tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the previous imputation system, the recipient of the dividend would no longer be able to claim any tax credit.

Companies without Section 108 tax credit balance will automatically move to the single tier income tax system on 1 January 2008. However, companies with such tax credits are given an irrevocable option to elect for the single tier income tax system and disregard the tax credit or to continue to use the tax credits under Section 108 account to frank the payment of cash dividends on ordinary shares for a period of 6 years ending 31 December 2013 or until the tax credits are fully utilised, whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any tax credits utilised will reduce the tax credit balance. All companies will be on the new system on 1 January 2014. At the end of the reporting period, the Company has not elected for the irrevocable option to disregard the Section 108 tax credits. Accordingly, subject to the agreement of the Inland Revenue Board and based on the prevailing tax rate applicable to dividend, the Company has sufficient Section 108 tax credit to frank approximately RM201,000 out of its retained earnings as of 31 March 2013 if distributed by way of cash dividends. The balance of retained earnings which is not covered by tax credits, if distributed as dividends, would be under single tier income tax system as explained above.

The Company1.4.2011

RM

5,015

31.3.2013RM

2,030

31.3.2012RM

4,866

The Group and The Company1.4.2011

RM

10,000,000

8,791,496

31.3.2013RM

10,000,000

8,791,496

31.3.2012RM

10,000,000

8,791,496

15.

16.

17.

18.



HIRE-PURCHASE PAYABLES

Total outstandingLess: Interest in suspense

Principal outstandingLess: Amount due within 12 months (shown under current liabilities)

Non-current portion

The non-current portion is payable as follows:

Financial years ending 31 March: 2013 2014 2015

It is the Group’s policy to acquire certain of its property, plant and equipment under hire-purchase arrangements. The average term of hire-purchase is 5 years. The interest rate implicit in the hire-purchase obligations is 2.38% (31 March 2012: 2.38%; 1 April 2011: ranged from 2.38% to 2.54%) per annum.

The Group’s hire-purchase payables are secured by the financial institutions’ charge over the assets under hire-purchase as disclosed in Note 11.

DEFERRED TAX LIABILITIES

At beginning of yearTransfer from/(to) profit or loss (Note 9): Property, plant and equipment Trade receivables Trade payables Other payables and accrued expenses Unused tax losses Unabsorbed capital allowances

At end of year

Certain deferred tax assets and liabilities have been offset in accordance with the Group’s accounting policy. The following is an analysis of the deferred tax balances (after offset) for statement of financial position purposes:

Deferred tax assetsDeferred tax liability

19.

20.

The Group1.4.2011

RM

104,732(11,372)

93,360(50,882)

42,478

31.3.2013RM

25,594(2,712)

22,882(19,596)

3,286

31.3.2012RM

47,530(5,052)

42,478(19,596)

22,882

The Group1.4.2011

RM

19,59619,596

3,286

42,478

31.3.2013RM

--

3,286

3,286

31.3.2012RM

-19,596

3,286

22,882

The Group1.4.2011

RM

(529,000)2,064,000

1,535,000

31.3.2013RM

(662,000)2,673,000

2,007,000

31.3.2012RM

(692,000)2,393,000

1,701,000

The Group2012

RM

1,535,000

346,00027,000

(33,000)2,000

-(176,000)

166,000

1,701,000

2013RM

1,701,000

278,000(7,000)18,000

(49,000)(68,000)134,000

306,000

2,007,000



DEFERRED TAX LIABILITIES (Cont’d)

Deferred tax assets/(liabilities) provided in the financial statements are in respect of the tax effects of the following:

Deferred tax assetsTemporary differences arising from: Trade receivables Trade payables Other payables and accrued expensesUnabsorbed capital allowancesUnused tax losses

Offsetting

Deferred tax assets (after offsetting)

Deferred tax liabilityTemporary differences arising from: Property, plant and equipment Trade payables Other payables and accrued expenses

Offsetting

Deferred tax liability (after offsetting)

TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables of the Group comprise amounts outstanding for trade purchases. The credit period granted to the Group for trade purchases ranges from 30 to 60 days (31 March 2012: 30 to 60 days; 1 April 2011: 30 to 60 days).

The currency profile of trade payables of the Group is as follows:

United States DollarRinggit MalaysiaEuro

Other payables and accrued expenses consist of:

Other payablesAccrued expenses

20.

21.

The Group1.4.2011

RM

82,000--

447,000-

529,000(529,000)

-

(2,045,000)(19,000)

-

(2,064,000)529,000

(1,535,000)

31.3.2013RM

62,000-

47,000489,000

68,000

666,000(666,000)

-

(2,669,000)(4,000)

-

(2,673,000)666,000

(2,007,000)

31.3.2012RM

55,00014,000

-623,000

-

692,000(692,000)

-

(2,391,000)-

(2,000)

(2,393,000)692,000

(1,701,000)

The Group1.4.2011

RM

11,057,5561,581,239

97,466

12,736,261

31.3.2013RM

10,464,4881,615,886

-

12,080,374

31.3.2012RM

9,805,3531,709,136

956

11,515,445

The Group1.4.2011

RM

37,583757,102

794,685

31.3.2013RM

353,3491,081,362

1,434,711

31.3.2012RM

121,663919,125

1,040,788



21.

22.

TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES (Cont’)

The currency profile of trade payables of the Group is as follows: (Cont‘d)

Other payablesAccrued expenses

The currency profile of other payables and accrued expenses of the Group and of the Company is as follows:

United States DollarRinggit Malaysia

Ringgit Malaysia

SHORT-TERM BORROWINGS

Bankers’ acceptanceBank overdraftDiscount bills

The currency exposure profile of short-term borrowings is as follows:

Ringgit MalaysiaUnited States Dollar

The Group has bank overdraft and other credit facilities totalling RM26,150,000 (31 March 2012: RM35,906,800; 1 April 2011: RM36,302,000) obtained from local banks. The amount utilised bears interest at rates ranging from 3.50% to 8.10% (31 March 2012: 3.60% to 8.10%; 1 April 2011: 3.30% to 7.80%) annum. These facilities are secured by a corporate guarantee from the Company.

The Group1.4.2011

RM

-794,685

794,685

31.3.2013RM

352,4001,082,311

1,434,711

31.3.2012RM

117,096923,692

1,040,788

The Company1.4.2011

RM

62,078

31.3.2013RM

32,934

31.3.2012RM

42,720

The Group1.4.2011

RM

19,233,1791,342,885

507,440

21,083,504

31.3.2013RM

20,198,888--

20,198,888

31.3.2012RM

23,127,342135,779

-

23,263,121

The Group1.4.2011

RM

1,748,65119,334,853

21,083,504

31.3.2013RM

20,198,888-

20,198,888

31.3.2012RM

16,468,4976,794,624

23,263,121



The Company1.4.2011

RM

14,15147,927

62,078

31.3.2013RM

94931,985

32,934

31.3.2012RM

3,56039,160

42,720

23.

24.

25.

DIVIDENDS

Interim tax exempt dividend of 2.50% per ordinary share in respect of the financial year ended 31 March 2013 (31 March 2012)Final tax exempt dividend of 2.50% per ordinary share in respect of the financial year ended 31 March 2012

The directors proposed a final tax exempt dividend of 2.50% per ordinary share on 87,914,960 ordinary shares of RM0.10 each, amounting to RM219,787 in respect of the current financial year. The proposed final dividend is subject to approval by the shareholders at the forthcomnig Annual General Meeting of the Company and has not been included as a liability in the financial statements.

CAPITAL COMMITMENTS

At the end of the reporting period, the Group has the following capital commitments in respect of acquisition of property, plant and equipment:

Contracted but not provided for

CONTINGENT LIABILITY

The Company has given unsecured corporate guarantees totalling RM26,150,000 (2012: RM35,906,800) to certain licensed banks for bank overdraft and other credit facilities granted to a subsidiary company as disclosed in Note 22. Accordingly, the Company is contingently liable to the said licensed banks to the extent of the amount of credit facilities utilised by the said subsidiary company.

The Group andThe Company

2012RM

219,787

-

219,787

2013RM

219,788

219,787

439,575

The Group2012

RM

-

2013RM

121,162



26. FINANCIAL INSTRUMENTS

Capital risk management

The objective of the Group’s capital risk management is to safeguard the Group’s ability to continue as a going-concern while maximising the return to shareholders through the optimisation of debt and equity balance. The Group’s overall strategy remains unchanged since 2012.

The capital structure of the Group consists of net debt (borrowings offset by cash and bank balances) and equity of the Group (comprising issued capital, reserves and retained earnings).

The Board of Directors reviews the capital structure of the Group on a regular basis. As part of the review, the Board of Directors considers the cost of capital and risk associated with each class of capital.

The gearing ratio at the end of the reporting period is as follows:

Borrowings (i)Cash and bank balances (Note 15)

Net debt

Equity (ii)

Net debt to equity ratio

(i)

(ii)

Significant accounting policies

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses), for each class of financial assets, financial liabilities and equity instruments are disclosed inv Note 3.

Financial AssetsLoans and receivables: Trade receivables Other receivables and refundable deposits Amount owing by subsidiary company Cash and bank balances

Financial LiabilitiesHeld at amortised cost: Trade payables Other payables and accrued expenses Hire-purchase payables Short-term borrowings

The Group2012

RM

23,305,599(5,296,043)

18,009,556

21,502,231

84%

2013RM

20,221,770(2,739,335)

17,482,435

22,422,902

78%

Borrowings are defined as hire-purchase payables and short-term borrowings as disclosed in Notes 19 and 22, respectively.

Equity includes share capital, share premium and retained earnings.


The Group2013

RM

18,673,052223,984

-2,739,335

12,080,3741,434,711

22,88220,198,888

2012RM

14,917,074137,085

-5,296,043

11,515,4451,040,788

42,47823,263,121

The Company2013

RM

--

7,086,6802,030

-32,934

--

2012RM

--

7,693,2484,886

-42,720

--



26. FINANCIAL INSTRUMENTS (Cont’d)

Financial risk management objectives and policies

The operations of the Group are subject to a variety of financial risks, including foreign currency risk, interest rate risk, credit risk, cash flow risk and liquidity risk. The Group has taken measures to minimise its exposure to risks and/or costs associated with the financing, investing and operating activities of the Group.

Foreign currency risk

The Group undertakes certain transactions in United States Dollar, Chinese Renminbi and Euro where the amounts outstanding are exposed to foreign currency risk. Exposures to foreign currency risk are monitored on an ongoing basis.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are disclosed in the respective notes.

Foreign currency sensitivity analysis

The following table details the Group’s sensitivity to a 10% increase or decrease in Ringgit Malaysia against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A positive number below indicates a gain in profit or loss and other equity where the Ringgit Malaysia strengthens 10% against the relevant currency. For a 10% weakening of the Ringgit Malaysia against the relevant currency, there would be a comparable impact on the profit or loss and other equity and the balances would be negative.

United States DollarEuroChinese Renminbi

The Group’s sensitivity to foreign currency during the current year is mainly due to exposure of cash and bank balances and outstanding receivables, payables and borrowings denominated in foreign currencies at the end of the reporting period.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the period end exposure does not reflect the exposure during the year.

The Group2013

RM

473,879851

-

474,730

2012RM

(455,189)(94)500

(454,783)




Interest rate risk

The Group is exposed to interest rate risk through the impact of rate changes on interest bearing short-term borrowings. The interest rates of short-term borrowings of the Group are disclosed in Note 22. Interest rate for hire-purchase payables, which is disclosed in Note 19, is fixed at the inception of the financing arrangement.

The Group’s exposures to interest rates on financial liabilities are detailed below. The sensitivity analyses below have been determined based on the exposure to interest rates for financial liabilities at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liabilities at the end of the reporting period will remain unchanged for the whole year. A 50 basis point increase or decrease in the interest rate is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group’s profit for the year ended 31 March 2013 would be decrease/increase as a result of the following:

Interest expense on: Banker acceptance Bank overdraft

Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations.

The Group is exposed to credit risk mainly from trade and other receivables. The Group extends credit to its customers based upon careful evaluation of the customers’ financial condition and credit history. An allowance for doubtful debts is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the receivables. Apart from the customers as disclosed in Note 14, the Group does not have any significant credit risk exposure to any single counterparty having similar characteristics. The Group’s exposure to credit risk in relation to its receivables, should all its customers fail to perform their obligations as of 31 March 2013, is the carrying amount of these receivables as disclosed in the statements of financial position.

Cash flow risk

The Group reviews its cash flow position regularly to manage its exposure to fluctuations in future cash flows associated with its monetary financial instruments.

Liquidity risk

The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short-term funding so as to achieve overall cost effectiveness.

The Group2012

RM

115,637679

116,316

2013RM

100,994-

100,994




The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations. The tables include both interest and principal cash flows.

2013

The GroupFinancial liabilitiesNon-interest bearing: Trade payables Other payables and accrued expenses

Interest bearing: Hire-purchase payables Short-term borrowings

The Company Non-interest bearing: Other payables and accrued expenses

Less than1 year

RM

12,080,374

1,434,711

13,515,085

21,93620,198,888

20,220,824

33,735,909

32,934

1 to 2 years

RM

-

-

-

3,658-

3,658

3,658

-

2 to 5 years

RM

-

-

-

--

-

-

-

More than5 years

RM

-

-

-

--

-

-

-

TotalRM

12,080,374

1,434,711

13,515,085

25,59420,198,888

20,224,482

33,739,567

32,934

Contractual interest rate

%

-

-

2.38%3.50%

-

2012

The GroupFinancial liabilitiesNon-interest bearing: Trade payables Other payables and accrued expenses

Interest bearing: Hire-purchase payables Short-term borrowings

The Company Non-interest bearing: Other payables and accrued expenses

11,515,445

1,040,788

12,556,233

21,93623,263,121

23,285,057

35,841,290

42,270

-

-

-

21,936-

21,936

21,936

-

-

-

-

3,658-

3,658

3,658

-

-

-

-

--

-

-

-

11,515,445

1,040,788

12,556,233

47,53023,263,121

23,310,651

35,866,884

42,270

-

-

2.38%3.60% - 8.10%

-




Fair values of financial instruments

Except as detailed in the following table, the directors consider that the carrying amounts of financial assets and financial liabilities carried at amortised cost in the financial statements approximate their fair values.

2013Financial liabilities Hire-purchase payables

2012Financial liabilities Hire-purchase payables

^ The fair values of hire-purchase payables is estimated using discounted cash flow analysis based on current borrowing rates for similar type of financing and borrowing arrangements.

The GroupFair

value RM

25,809

46,852

^

^

Carrying amount

RM

22,882

42,478



27. SUPPLEMENTARY INFORMATION

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Securities”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements which requires all listed issuers to disclose the breakdown of the retained earnings or accumulated losses as of the end of the reporting period, into realised and unrealised profits or losses.

On 20 December 2010, Bursa Securities further issued guidance on the disclosure and the prescribed format of disclosure.

The breakdown of the retained earnings of the Group and of the Company as of 31 March 2013 into realised and unrealised profits or losses, pursuant to the directive, is as follows:

Total retained earnings of the Company and its subsidiary: Realised Unrealised

Less: Consolidation adjustments

Total retained earnings as per statements of financial position

Total retained earnings of the Company Realised Unrealised

Total retained earnings as per statements of financial position

The determination of realised and unrealised profits or losses is based on 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 on 20 December 2010. A charge or credit to the profit or loss of a legal entity is deemed realised when it resulted from the consumption of resource of all types and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource may be consumed through sale or use. Where a credit or a charge to profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge should not be deemed as realised until the consumption of resource could be demonstrated.

This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directive of Bursa Malaysia Securities Berhad and is not made for any other purposes.


The Group2012

RM

7,629,818(14,491)

7,615,327872,448

8,487,775

2013RM

8,509,60026,398

8,535,998872,448

9,408,446

The Company2012

RM

1,214,514-

1,214,514

2013RM

614,896-

614,896

STATEMENT BY DIRECTORS/ DECLARATION BY THE OFFICER

Subscribed and solemnly declared by the abovenamed CH’NG SIEW LEI at PETALING JAYA on this 12th day of June, 2013

STATEMENT BY DIRECTORS

The directors of ASIA POLY HOLDINGS BERHAD. state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March 2013 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

The supplementary information set out in Note 27 to the financial statements, which is not part of the financial statements, is prepared in all material respects, 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 and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the Directors,

_____________________________________ _____________________________________TEOH CHENG CHUAN FONG KOK KEONG


DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY

I, CH’NG SIEW LEI, being the officer primarily responsible for the financial management of ASIA POLY HOLDINGS BERHAD, do solemnly and sincerely declare that the accompanying financial statements of the Group and of the Company are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

_____________________________________CH’NG SIEW LEI

Before me,

_____________________________________COMMISSIONER FOR OATHS


LANDED PROPERTY

Registered/Beneficialowner

Asia PolyIndustrialSdn Bhd

None of the existing use on the abovementioned land is in breach of any land-use conditions or permissible land use. There is no restriction-in-interest for the abovementioned land.

Title no./Location

Title No.G.M.2277,

Lot No.758, Mukim

Kapar,District of

Klang, Stateof SelangorDarul Ehsan

Address

Lot 758, Jalan Haji Sirat,Mukim Kapar,

42100 Klang,Selangor

Darul Ehsan

Description/Existing use Comprising of factory/warehouse

buildingand a unit of doublestorey offi

ce building.The land is

designatedfor industrial

use only

Approximateland area/

Built-uparea

(sq.m.)

19,096/10,144

Approximateage of

building(years)

Approximaely

21 years

Date ofissuance of

certificateof fitness

19 August1997

Tenure

Freehold

Auditednet book

value as at31.3.2011

RM’000

11,036


ANALYSIS OF SHAREHOLDINGSAS AT 23 JULY 2013


Authorised Share Capital : RM10,000,000 divided into 100,000,000 Ordinary Shares of RM0.10 eachPaid-up and Issued Capital : RM8,791,496 represented by 87,914,960 Ordinary Shares in issue of RM0.10 each Class of Share : Ordinary Shares of RM0.10 eachVoting Rights Per Share : One

DISTRIBUTION TABLE ACCORDING TO THE NUMBER OF SECURITIES HELD IN RESPECT OF ORDINARY SHARES

SIZE OF HOLDINGS

Less than 100100 – 1,0001,001 – 10,00010,001 – 100,000100,001 – less than 5% of issued shares5% and above of issued shares

TOTAL

SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES)

NAME OF SUBSTANTIAL SHAREHOLDERS

LIM TONG YONG @ LIM TONG YAIMTEOH CHENG CHUANMICHAEL FOONG KA-MENGLIM CHANG CHING

* Deemed interest by virtue of interest held by his daughter.** Deemed interest by virtue of interest held by her father.

DIRECTORS’ SHAREHOLDINGS

NAME OF DIRECTOR

HANS PETER HOLSTTEOH CHENG CHUANTAN YEE KHUNNOEL CHUAKONG KOK CHEEPANG HEE KIN

*** Deemed interest by virtue of interest held by his spouse and son.

NO. OFHOLDERS

3117133141

343

431

%

0.6927.1430.8632.71

7.890.70

100.00

%

0.000.031.006.55

29.2663.16

100.00

NO. OF SHARES

11430,400

878,2005,760,700

25,719,37655,526,170

87,914,960

NO. OFSHARES HELD

(DIRECT)

24,272,00020,000,00011,254,170

3,931,700

%

27.6122.7512.80

4.47

%

4.47--

27.61

NO. OFSHARES HELD

(INDIRECT)

3,931,700*--

24,272,000**

NO. OFSHARES HELD

(DIRECT)

280,00020,000,000

500,014--

4,263,000

%

0.3222.75

0.57--

4.85

%

0.88-----

NO. OFSHARES HELD

(INDIRECT)

777,500***-----

ANALYSIS OF SHAREHOLDINGSAS AT 23 JULY 2013 (Cont’d)


THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS

(Without aggregating the securities from the different securities account belonging to the same Depositor)

NO.

1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.20.21.22.23.24.25.26.27.28.29.30.

NAME OF SHAREHOLDERS

LIM TONG YONG @ LIM TONG YAIMTEOH CHENG CHUANMICHAEL FOONG KA-MENGER KOK LEONG @ ER CHAI TUANPANG HEE KINLIM CHANG CHINGSUM WAI FONGYU KIM LUNGCHEAH HO LEE JOHNLIU CHI KEUNG RICKYNG POH CHUANLUM CHEE FAIYAP AH SENGNIELS CHRISTIAN HOLSTTAN YEE KHUN LAU YI YEAN @ LOW YEE WANFONG KOK KEONGCHEAH CHEOW PHENGHANS PETER HOLSTINGE-MARIE LORENZEN HOLSTZALINA BINTI OTHMANWEE LEU KEEYEOW KUEI CHAIYAP LOO SEECHEAH SIEW HWAWONG TZE PENGKOH THIN MINMOHD IBRAHIM BIN MOHD NORCHAN BEE HOONLOW KENG CHIEW

% OFISSUED CAPITAL

27.6122.7512.80

4.994.854.472.271.391.341.251.000.630.590.580.570.520.410.350.320.310.300.280.280.250.250.230.220.200.200.18

91.40

NO. OFSHARES HELD

24,727,00020,000,00011,254,170

4,390,0004,263,0003,931,7002,000,0001,220,0001,180,0001,100,000

877,476556,000518,300507,000500,000458,400357,800308,900280,000270,500260,000250,000250,000220,000219,000200,000193,500180,000179,400158,200

80,355,346

NOTICE OF TENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of Asia Poly Holdings Berhad will be held at the Conference Room of Asia Poly Industrial Sdn. Bhd., Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan on Wednesday, 28 August 2013 at 12.00 noon to transact the following business:-

AGENDAAs Ordinary Business

1.

2.

3.

4.

5.

6.

As Special Business

To consider and if thought fit, to pass the following resolutions with or without modifications:

7.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT the final tax exempt dividend of 2.5% (RM0.0025) per ordinary share of RM0.10 each in respect of the financial year ended 31 March 2013, if approved, will be paid on 18 September 2013. The entitlement date for the dividend payment is on 30 August 2013.

A Depositor shall qualify for entitlement to the dividend only in respect of:

a.

b.

By Order of the Board

SIEW SUET WEI (MAICSA 7011254)Secretary

Kuala Lumpur

Dated: 6 August 2013

To receive the Audited Financial Statements for the financial year ended 31 March 2013 and the Reports of the Directors and Auditors thereon.

To approve the payment of a final tax exempt dividend of 2.5% (RM0.0025) per ordinary share of RM0.10 each in respect of the financial year ended 31 March 2013.

To approve the payment of Directors’ Fees in respect of the financial year ended 31 March 2013.

To elect Pang Hee Kin as Director of the Company who retires pursuant to Article 84 of the Company’s Articles of Association and being eligible offers himself for re-election.

To re-elect Noel Chua as Director of the Company, who retires by rotation pursuant to Article 103(a) of the Company’s Articles of Association and being eligible offers himself for re-election.

To re-appoint Messrs Deloitte KassimChan, the retiring Auditors and to authorise the Directors to determine their remuneration.

Ordinary Resolution

Re-appointment of Hans Peter Holst as a Director pursuant to Section 129(6) of the Companies Act, 1965

"THAT pursuant to Section 129 of the Companies Act, 1965, Hans Peter Holst who is over 70 years of age be and is hereby re-appointed as a Director of the Company and to hold office until the conclusion of the next Annual General Meeting."

Shares transferred into the depositor’s securities account before 4.00 p.m. on 30 August 2013 in respect of transfer; and

Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)


NOTICE OF TENTH ANNUAL GENERAL MEETING (Cont’d)

NOTES :-

i)

ii)

iii)

iv)

v)

vi)

Explanatory Note on Special Business:

1.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING

Pang Hee Kin was appointed to the Board of Directors of the Company on 7 December 2012. He is standing for election at the Tenth Annual General Meeting of the Company which will be held at the Conference Room of Asia Poly Industrial Sdn. Bhd., Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan on Wednesday, 28 August 2013 at 12.00 noon.

His profile is set out in the Directors’ Profile section in page 4 of the Annual Report.

A member of the Company entitled to attend and vote at this Meeting is entitled to appoint a proxy or attorney or other duly authorised representative to attend and vote in his stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his shareholding to be represented by each proxy.

The instrument appointing a proxy shall be in writing signed by the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorney duly authorised.

Where a member of a Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

Where a member of the company 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.

The instrument appointing a proxy and the power of attorney or other authority duly authorised in writing or if such appointor is a Corporation, under its common seal or under the hand of an officer or attorney of the Corporation duly authorised, shall be deposited at the registered office at No. 5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting.

For the purpose of determining a member who shall be entitled to attend the Tenth Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd., in accordance with Article 58(b) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositor as at 22 August 2013. Only a depositor whose name appears therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his stead.

Proposed Resolution 7

Section 129(6) of the Companies Act, 1965

The Proposed Resolution 7, is to seek shareholders' approval on the re-appointment of a Director who is over 70 years of age pursuant to Section 129(6) of the Companies Act, 1965.


PROXY FORM

I/We ................................................................................................................................................ Tel ............................................. (Full name in block, NRIC No./Company No. and telephone number)

of.....................................................................................................................................................................................................being a member/members of Asia Poly Holdings Berhad, hereby appoint:-

and / or (delete as appropriate)

Signed this ............... day of.............................................................., 2013

Signature of Shareholder/Common Seal ......................................................................

No. of shares held

CDS A/C No.:

ASIA POLY HOLDINGS BERHAD (619176-A)(Incorporated in Malaysia)

Full Name (in Block)No. of Shares %

Address

NRIC / Passport No. Proportion of Shareholdings

Full Name (in Block)No. of Shares %

Address

NRIC / Passport No. Proportion of Shareholdings

or failing him, the Chairman of the Meeting as my/our proxy to vote for me/us and on my/our behalf at the Tenth Annual General Meeting of the Company to be held at Conference Room of Asia Poly Industrial Sdn Bhd, Lot 758, Jalan Haji Sirat, Mukim Kapar, 42100 Klang, Selangor Darul Ehsan on Wednesday, 28 August 2013 at 12.00 noon or any adjournment thereof, and to vote as indicated below:-

AGAINSTFORRESOLUTION

Audited Financial Statements

Payment of Final Dividend

Payment of Directors’ Fees

Election of Pang Hee Kin as Director

Re-election of Noel Chua as Director

Re-appointment of Messrs Deloitte KassimChan as Auditors

Re-appointment of Hans Peter Holst as Director of the Company pursuant to Section 129(6) of the Companies Act, 1965

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

(Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific direction, your proxy will vote or abstain as he thinks fit).

Notes:-

i)

ii)

iii)

iv)

v)

vi)

A member of the Company entitled to attend and vote at this Meeting is entitled to appoint a proxy or attorney or other duly authorised representative to attend and vote in his stead. A proxy may but need not be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. A member shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting and where a member appoints two (2) proxies, the appointments shall be invalid unless he specifies the proportions of his shareholding to be represented by each proxy.The instrument appointing a proxy shall be in writing signed by the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or signed by an officer or attorney duly authorised.Where a member of a Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.Where a member of the company 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.The instrument appointing a proxy and the power of attorney or other authority duly authorised in writing or if such appointor is a Corporation, under its common seal or under the hand of an officer or attorney of the Corporation duly authorised, shall be deposited at the registered office at No.5-9A, The Boulevard Offices, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting.For the purpose of determining a member who shall be entitled to attend the Tenth Annual General Meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd., in accordance with Article 58(b) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Deposito-ries) Act, 1991 to issue a General Meeting Record of Depositor as at 22 August 2013. Only a depositor whose name appears therein shall be entitled to attend the said meeting or appoint a proxy to attend and/or vote on his stead.

FOLD THIS FLAP FOR SEALING

FOLD HERE

FOLD HERE

STAMP

Asia Poly Holdings Berhad(Company No. 619176-A)No. 5-9A, The Boulevard Offices,Mid Valley City, Lingkaran Syed Putra59200 Kuala Lumpur

asia poly holdings berhad - malaysiastock.biz asia poly holdings berhad ( 619176-a ) lot 758, ......

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