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RESINTECH BERHAD (Company No.: 341662-X)

Lot 3 & 5, Jalan Waja 14,Kawasan Perindustrian Telok Panglima Garang,42500 Telok Panglima Garang,Selangor Darul Ehsan, Malaysia.Tel: 603-3122 2422/8 Fax: 603-3122 2411E-mail: [email protected]

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HIGH QUALITY

Annual Report2008

productions

www.resintechmalaysia.com

(COMPANY NO.: 341662-X)(Incorporated in Malaysia under the Companies Act, 1965)

Resintech BeRhad 341662-X

annual Report 2008

Contents

Corporate Information 2Corporate structure 3notice of Annual General Meeting 4Directors’ Profile 6Chairman’s statement 8Audit Committee Report 10statement of Corporate Governance 13Additional Compliance Information 17statement of Internal Control 18Directors’ Responsibilities statement 20Corporate social Responsibility statement 20Financial statement 21List of Properties 61Analysis of shareholdings 62Form of Proxy

BOARD OF DIRECTORS

Dato’ Abu sujak bin Mahmud(Independent non-executive Chairman)

Dato’ Dr. teh Kim Poo, DssA, PJK, JP

(Managing Director)

Datin Gan Jew, PJK

(executive Director)

teh Leng Kang, PJK

(executive Director)

Khairul Anuar bin shaharudin(Independent non-executive Director)

Wei Hwei Hong(executive Director)

Kok Wee Wah(non-Independent non-executive Director)

AUDIT COMMITTEE

ChairmanDato’ Abu sujak bin Mahmud(Independent non-executive Chairman)

MembersKhairul Anuar bin shaharudin(Independent non-executive Director)

Kok Wee Wah(non-Independent non-executive Director)

NOMINATION COMMITTEE

ChairmanDato’ Abu sujak bin Mahmud(Independent non-executive Chairman)

MemberKhairul Anuar bin shaharudin(Independent non-executive Director)

REMUNERATION COMMITTEE

ChairmanDato’ Dr. teh Kim Poo, DssA, PJK, JP

(Managing Director)

MembersDato’ Abu sujak bin Mahmud(Independent non-executive Chairman)

Khairul Anuar bin shaharudin(Independent non-executive Director)

COMPANY SECRETARIES

Mah Li Chen (MAICsA 7022751)Lau Chin Lee (MAIsCA 7040063)

REGISTERED OFFICE

Lot 3 & 5, Jalan Waja 14Kawasan Perindustrian telok Panglima Garang42500 telok Panglima Garangselangor Darul ehsantel : 03-3122.2422 Fax : 03-3122.2411

CORPORATE OFFICE

Lot 3 & 5, Jalan Waja 14Kawasan Perindustrian telok Panglima Garang42500 telok Panglima Garangselangor Darul ehsantel : 03-3122.2422 Fax : 03-3122.2411

AUDITORS

HorwathChartered AccountantsLevel 16, tower CMegan Avenue IIno. 12, Jalan Yap Kwan seng50450 Kuala Lumpur

SHARE REGISTRAR

symphony share Registrars sdn BhdLevel 26, Menara Multi-PurposeCapital squareno. 8, Jalan Munshi Abdullah50100 Kuala Lumpurtel : 03-2721.2222 Fax : 03-2721.2530

PRINCIPAL BANKERS

eon Bank Berhadno 90 Jalan Persiaran Raja Muda Musa42000 Port Klangselangor Darul ehsan

oCBC Bank (Malaysia) Berhadno 19 Jalan stesen41000 Klangselangor Darul ehsan

AmBank (M) Berhadno 42 & 44 Wisma sH ngPersiaran sultan Ibrahim41300 Klangselangor Darul ehsan

United overseas Bank (Malaysia) BerhadKepong Branch, 80-84 Jalan 3/62D,Medan Putra Business Centre, sri Menjalara,off Jalan Damansara, 52200 Kuala Lumpur.

STOCK EXCHANGE LISTING

second Board of the Bursa Malaysia securities Berhadstock name : ResIntCstock Code : 7232

corporate information


pg.2

corporate structure

Resintech Berhad Group at a Glance.

RPSB : Resintech Plastics (M) sdn Bhd (110562-P)RKSB : Resintech-Kapar sdn Bhd (736066-t)RSSB : Resintech (sabah) sdn Bhd (168589-M)RPMSB : Resintech Products Marketing sdn Bhd (303740-M)RESB : Resintech engineering sdn Bhd (160967-K)VMSSB : Vision Mould specialist (M) sdn Bhd (431473-t)ELSB : exact Link sdn Bhd (423292-t)RTWSB : Rt Water technology sdn Bhd (358826-A)

annual Report 2008

pg.3

Direct subsidiaries

Legend:

Indirect subsidiaries

100% RPSB100% RKSB

60%RTWSB

100%RSSB

100%RPMSB

100%RESB

100%VMSSB

100%ELSB

pg.4

notice of annual General Meeting

NOTICE IS HEREBY GIVEN that the Thirteenth Annual General Meeting of RESINTECH BERHAD will be held at Concorde III, Level 2, Concorde Hotel, 3 Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Friday, 29 August 2008 at 10.00 a.m. for the following purposes:

AGENDA

AS ORDINARY BUSINESS

1. to receive the Audited Financial statements for the financial year ended 29 February 2008 together with the Reports of Directors and Auditors thereon.

2. to re-elect the following Directors, who retire pursuant to Article 126 of the Articles of Association of the Company:

2.1 Dato’ Abu sujak bin Mahmud

2.2 teh Leng Kang, PJK

3. to re-elect Kok Wee Wah who is retiring pursuant to Article 131 of the Articles of Association of the Company.

4. to approve the sum of RM60,000.00 being the directors’ fees for the financial year ended 29 February 2008.

5. to re-appoint Messrs Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration.

AS SPECIAL BUSINESS

6. to consider and, if thought fit, pass the following resolution:

6.1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“tHAt pursuant to section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to allot and issue shares in the Company, at any time, at such price, until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares does not exceed 10% of the issued share capital of the Company at the time of issue and tHAt the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued, subject to the Companies Act, 1965, the Articles of Association of the Company and approval from the Bursa Malaysia securities Berhad and other relevant bodies where such approval is necessary.”

Ordinary Resolution 1






BY oRDeR oF tHe BoARD

MAH LI CHEN (MAICSA 7022751)LAU CHIN LEE (MAICSA 7040063)

CoMPAnY seCRetARIes

selangor7 August 2008


annual Report 2008

notice of annual General Meeting(cont’d)

Notes:

A member entitled to attend and vote at the meeting is entitled to appoint up to two (2) proxies to attend and vote in his/her stead. If a member 1. appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. A proxy may but need not be a member of the Company. If the proxy is not a member, he/she need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

the instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney or if such appointor is a corporation under its 2. common seal or the hands of its attorney.

the instrument appointing a proxy must be deposited at the Company secretary’s office at 10th Floor, Menara Hap seng, no. 1 & 3, Jalan P. Ramlee, 3. 50250 Kuala Lumpur not less than forty-eight (48) hours before the time for the holding of the Annual General Meeting or any adjournment thereof.

Explanatory Note on the Special Business

ordinary Resolution 6Authority to Allot shares pursuant to section 132D of the Companies Act, 1965

the proposed ordinary Resolution 6, if passed, will empower the Directors of the Company, from the date of the Annual General Meeting, to issue shares (other than bonus or rights issue) of the Company up to and not exceeding in total 10% of the issued share capital of the Company at the time of issue for such purpose as they considered would be in the best interest of the Company. this authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

statement accompanying notice of annual General Meeting

(Pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Malaysia securities Berhad)

1. names of Directors who are standing for re-election at the thirteenth Annual General Meeting of the Company:

Dato’ Abu sujak bin Mahmud; (i) teh Leng Kang, PJK; and(ii) Kok Wee Wah.(iii)

2. Details of attendance of Directors at Board Meetings

the details are set out on page 13 & 14 of this Annual Report.

3. Venue, date and time of the thirteenth Annual General Meeting of the Company

the thirteenth Annual General Meeting of the Company will be held at Concorde III, Level 2, Concorde Hotel, 3 Jalan tengku Ampuan Zabedah C9/C, 40100 shah Alam, selangor Darul ehsan on Friday, 29 August 2008 at 10.00 a.m.

4. Further details of Directors who are standing for re-election as Directors

the details of the Directors who are standing for re-election at the thirteenth Annual General Meeting are set out in page 6 & 7 of this Annual Report.

no individual other than the retiring Directors is seeking election as a Director at the thirteenth Annual General Meeting of the Company.

no notice of nomination has been received todate from any member nominating any individual for election as a Director at the thirteenth Annual General Meeting of the Company.

pg.5

directors’ Profile

Y. Bhg. Dato’ Abu sujak bin Mahmud, DssA, KMn, PPt, PJK, a Malaysian aged 69, is the Independent non-executive Chairman of the Company and was appointed to the Board on 25 July 2006. He is also the Chairman of the Audit Committee and nomination Committee and a member of the Remuneration Committee. He began his career as an audit clerk in Jabatan Pembangunan Koperasi Malaysia in 1958. He then joined the Maktab Perguruan Bahasa in 1960 and then taught for a period of five (5) years before pursuing his degree in the University of Malaya. He obtained a Bachelor of Arts in Malay studies in 1970. In 1971, he joined Dewan Bandaraya Kuala Lumpur and subsequently was appointed as secretary of Majlis Perbandaran Klang and Majlis Perbandaran shah Alam. In 1986, he was chosen to stand for the election, which marked his career as a politician. He served as a member of the selangor state Legislative Council for three (3) terms and was also a member of the selangor state executive Council from 1986 to 1995. He was also appointed as timbalan Menteri Besar selangor in 1990 until 1995. In the year 2000, he was appointed as the Datuk Bandar Majlis Bandaraya shah Alam and was in office until 2002. He also sits on the Board of Brem Holding Berhad.

Y. Bhg. Dato’ Dr. teh Kim Poo, DssA, PJK, JP, a Malaysian aged 57, is the founder and Managing Director of the Company. He was appointed to the Board on 24 April 1995 and he is also the Chairman of the Remuneration Committee. He obtained his PhD in total Quality Management (tQM) from newport University UsA in 2002. He also possesses a Diploma in Accounting (LCCI), Post Graduate Diploma in Marketing (CIM, UK) and Master in Business Administration in Marketing from University of Hull, UK. Dato’ Dr. teh is also a chartered marketer of the Chartered Institute of Marketing (CIM, UK). Dato’ Dr. teh possesses in-depth knowledge and vast experience in the plastics industry and has successfully built up the Group into one of the more prominent plastic pipe manufacturers in Malaysia. As the Managing Director, he is responsible for the overall Management and strategic direction of the Group. Y. Bhg. Dato’ Dr. teh Kim Poo was the state Assemblyman of Kawasan Pandamaran selangor in 2004 until 2008. Dato’ Dr. teh is now the Chairman of Barisan nasional Bahagian Klang and Chairman of Malaysia Chinese Association (MCA) Klang Division.

teh Leng Kang, PJK, a Malaysian aged 32, was appointed to the Board on 25 July 2006 as an executive Director. He graduated from Western Michigan University with a degree in Mechanical engineering. He joined Resintech Plastics (M) sdn Bhd in 1998. He was in the production department during the first two (2) years of his service, where he gained invaluable knowledge and experience in the machineries and production processes. subsequently, he joined the sales and Marketing Department, wherein he expanded his knowledge in our sales and marketing activities. teh Leng Kang was one of the key persons involved in the launching and marketing of the HDPe corrugated sewer pipe in 2000. over the years, he has continued to play a significant role in the managing our production operations and he has set his sights now on expanding our business. He currently oversees the Group’s entire operation. He is also a member of the Research & Development team, where he plays an important role in defining the scope of research and its objectives. He was appointed as the Management Representative position of the Iso team in 2003 and leads us through the Iso renewal audit.

Y. Bhg. Datin Gan Jew, PJK, a Malaysian aged 54, is the co-founder and executive Director of the Company. she was appointed on the Board on 24 April 1995. she has vast experience in the handling of manufacturing operations of the Group. Datin Gan is well versed with all the operations on the production floor and her Management style encompasses a very hands-on approach. Datin Gan is also experienced in human resource matters and she has been very much involved in the selection and co-ordination of the Group’s employees. she currently oversees the cost savings operations of the Group, a role where she is able to leverage upon her experience of over twenty (20) years in the industry.

Y. Bhg. Datin Gan is also the Chairman of Wanita MCA Klang Division, Chairman of Wanita Hin Ann Association selangor and Chairman of Wanita Gan Association selangor.

pg.6Resintech BeRhad 341662-X

directors’ Profile(cont’d)

Khairul Anuar bin shaharudin, a Malaysian aged 34, was appointed to the Board on 25 July 2006 as an Independent non executive Director of the Company. He is also a Member of the Audit Committee, Remuneration Committee and nomination Committee. He obtained a LL.B (Hons) from the Universiti Kebangsaan Malaysia in 1998 and was duly admitted as an Advocate and solicitor to the High Court of Malaya in 1999. He began his career by chambering in Messrs. Azmah & Maishiah during the period of 1998 to 1999. subsequent to that, he progressed in his career and was made a partner in the legal firms of Messrs. Hanif Hassan & Co and Messrs. Khairul Anuar, suhaila & Co. in the year 1999 and 2000 respectively. In 2001, he was appointed as the Managing Partner in the legal firm of Messrs. Jefrizal & Co. and this was followed by a stint as a Managing Partner in Messrs Khairul, suhaila & Hazlina (formerly known as syed noh, Khairul & suhaila)

Wei Hwei Hong, a Malaysian aged 32, is an executive Director and also Financial Controller. she was appointed to the Board on 25 July 2006 and had resigned as member of the Audit Committee on 22 February 2008. she graduated from the University of sheffield with a Bachelor of Arts (Hons) and has also obtained her membership in Association of Certified Chartered Accountants (ACCA). she is now a Fellow Member of ACCA. she also holds a membership in Malaysia Institute of Accountants (MIA). she possesses hands-on audit experience in one of the big four (4) accounting firms for a period of three (3) years, working on a vast array of projects. she joined RPsB in May 2003 and currently is responsible for overseeing the entire Accounts and Finance Department of the Group.

Kok Wee Wah, a Malaysian aged 42, is a non-Independent non-executive Director. He was appointed to the Board on 22 February 2008. He is also a Member of the Audit Committee. He obtained his membership in Association of Certified Chartered Accountants (ACCA) in 1992. He is now a Fellow Member of ACCA. He is also a member of Malaysia Institute of Accountants (MIA). He has many years experience in one of the big four accounting firms and has worked in many other industries before he joined RKsB in 2006. in February this year, he resigned as the General Manager of RKsB and took on the position in the Board of Directors as non-Independent non-executive Director. He is also a member of Audit Committee.

notes to Directors’ Profile

1. Family RelationshipDato’ Dr. teh Kim Poo, DssA, PJK, JP is the spouse to Datin Gan Jew, PJK, a director and major shareholder of the Company. He is also a father to Mr teh Leng Kang, PJK, a director and major shareholder of the Company.

2. Conflict of Interestnone of the Directors have any conflict of interest with the Company.

3. Conviction of offencesnone of the Directors have been convicted any offences (other than traffic offences) within the past 10 years.

4. Attendances at Board Meetingsthe details of the Directors’ attendance at the Board Meetings are set out on page 13 of this Annual Report.

5. shareholdingsthe details of the Directors’ interest in the securities of the Company are set on Page 64 of this Annual Report.

annual Report 2008

pg.7annual Report 2008

chairman’s statement

Dear Shareholders,

On behalf of the Board of Directors of Resintech Berhad, I have pleasure in presenting the Annual Report and Financial Statements of the Group for the financial year ended 29 February 2008.

FInAnCIAL HIGHLIGHts

For the year under review, the Group recorded a total revenue of RM88.0 million (2007 - RM83.37 million) and a pre-tax profit of RM7.83 million (2007 – RM7.75 million). the revenue growth was mainly attributable to higher market share whereas the better pre-tax profit was attributable to lower finance expenses.

oPeRAtIons HIGHLIGHts

It has been a challenging year with the volatile raw material prices which are mainly crude oil based. the strengthening of Malaysian Ringgit against the Us Dollars has softened the impact of the higher material prices during the year.

on the contrary, palm oil estates have experienced a year of windfall profit as the crude palm oil rocketed from RM1,923.00 in January 2007 to RM2,925.50 in December 2007 per tonne. the situation has helped the Group to push its sales into the sabah region.

Meanwhile, the tremendous increase in steel price in the construction industry has helped to boost the market of other substitute products particularly the plastic materials.

DIVIDenDs

During year, the Board recommended and paid an interim tax-exempt dividend of 3.5 sen per share.

oUtLooK

the Malaysian economy outlook for 2008 is positive. Based on the economy Report 2007/2008, the real Gross Domestic Product (GDP) is envisaged to be around 6%. therefore, the manufacturing industry should also remain positive in general. the growth in the crude palm oil plantation in the country and globally at the moment will have a positive spill-over effect on other sectors; the property and development sector nonetheless. this should also have a positive impact on our sales. We see continuous growth in penetrating the sabah market.

the Group also aims to increase its sale of Rainwater Harvester system. People are now looking into ways to conserve and minimise the use of treated water as there


chairman’s statement(cont’d)

is fear that there will be shortage of clean water supply in the country by 2015 if we waste now. As such, recycling of rainwater particularly for non-essential purposes will help. therefore, we are confident we will see growth in sales of our Rainwater Harvester system.

notwithstanding, the Group will continue to be affected by other factors such as the volatility of resin prices, the increase in essential energy and fuel cost, the country and global inflation rates, and the growth rates of he construction and infrastructure.

ACKnoWLeDGeMent

on behalf of the Board, I wish to extend our deepest gratitude to our team of management and staff as well as our valued shareholders, customers, financiers, suppliers and relevant authorities for their continued support and loyalty. the achievements in Resintech thus far would not have been possible without your support.

Y. Bhg. Dato Abu Sujak Bin MahmudChairman

annual Report 2008


audit committee Report

1. COMPOSITION AND MEETINGS

During the financial year ended 29 February 2008, a total of five (5) Audit Committee meetings were conducted and the members of the Audit Committee and details of their attendance of the meetings during the financial year are as follows:

Attendance of meetings

Chairman:Dato’ Abu sujak bin Mahmud (Independent non-executive Chairman) 5

Members:Khairul Anuar bin shaharudin (Independent non-executive Director) 5

Wei Hwei Hong (executive Director) (Resigned w.e.f. 22 February 2008)

5

Kok Wee Wah (non-Independent non-executive Director)(Appointed w.e.f. 22 February 2008)

not Applicable

the agenda of the meetings and relevant information are distributed to the Audit Committee members with sufficient notification. the Company secretary is also responsible for recording the proceedings of the Audit Committee meetings. the senior Management staff, internal auditors and external auditors were invited to attend the Audit Committee meetings.

2. TERMS OF REFERENCE

a) Composition of Audit Committee

the Committee shall be appointed from amongst the Board of Directors and shall comprise no fewer than three (3) members. All the audit committee members must be non-executive directors and at least one (1) member must be a member of the Malaysian Institute of Accountants or possess such other qualifications and/or experience as approved by the Bursa Malaysia securities Berhad.

In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy shall be filled within two (2) months but in any case not later than three (3) months.

b) Chairman

the Chairman, who shall be elected by the Audit Committee, must be an independent director.

c) Secretary

the Company secretary shall be the secretary of the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.

the secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee Members.

d) Meetings

the Audit Committee shall meet at least four (4) times in each financial year. the quorum for a meeting shall be two (2) members, provided that the majority of members present shall be Independent Directors.

the external auditors have the right to appear at any meeting of the Audit Committee and shall appear before the Committee when required to do so by the Committee. the external auditors may also request a meeting if they consider it necessary.


2. TERMS OF REFERENCE (Cont’d)

e) Rights

the Audit Committee shall:

(a) have authority to investigate any matter within its terms of reference;(b) have the resources which are required to perform its duties;(c) have full and unrestricted access to any information pertaining to the Group;(d) have direct communication channels with the external auditors and person(s) carrying out the internal audit function

or activity;(e) have the right to obtain legal or independent professional or other advice at the Company’s expense;(f) have the right to convene meetings with the external auditors, excluding the attendance of the executive members

of the audit committee, whenever deemed necessary;(g) promptly report to the Bursa Malaysia securities Berhad, or such other name(s) as may be adopted by Bursa

Malaysia securities Berhad, matters which have not been satisfactorily resolved by the Board of Directors resulting in a breach of the Listing Requirements of Bursa Malaysia securities Berhad;

(h) have the right to pass resolutions by a simple majority vote from the Committee and that the Chairman shall have the casting vote should a tie arise;

(i) meet as and when required on a reasonable notice; and(j) have the right to request the Chairman to call for a meeting upon the request of the external auditors.

f) Duties

the duties of the Audit Committee shall include a review of:

(a) to review with the external auditors on:• theauditplan,itsscopeandnature;• theauditreport;• theresultsoftheirevaluationoftheaccountingpoliciesandsystemsofinternalaccountingcontrolswithinthe

Group; and• theassistancegivenbytheofficersoftheCompanytoexternalauditors,includinganydifficultiesordisputes

with Management encountered during the audit.

(b) to review the adequacy of the scope, functions and resources and set the standards of the internal audit function.

(c) to recommend such measures as to be taken by the Board of Directors on the effectiveness of the system of internal control, Management information and risk Management practices of the Group.

(d) to review the internal audit programme and the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function.

(e) to review with Management:• audit reports and Management letter issued by the external auditors and the implementation of audit

recommendations;• interimfinancialinformation;and• theassistancegivenbytheofficersoftheCompanytoexternalauditors.

(f) to monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public, and to ensure that the Directors report such transactions annually to shareholders via the annual report, and to review conflicts of interest that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of Management integrity.

(g) to review the quarterly reports on consolidated results and annual financial statements prior to submission to the Board of Directors, focusing particularly on:• changesinorimplementationofmajoraccountingpolicyandpractices;• significantand/orunusualmattersarisingfromtheaudit;• thegoingconcernassumption;• compliancewithaccountingstandardsandotherlegalrequirements;and• othermajorareas.

audit committee Report(cont’d)

annual Report 2008


audit committee Report(cont’d)

2. TERMS OF REFERENCE (Cont’d)

f) Duties (Cont’d)

(h) to consider the appointment and / or re-appointment of auditors, the audit fee and any questions of resignation or dismissal including recommending the nomination of person or persons as auditors to the Board of Directors.

(i) to review the allocation of options pursuant to a share scheme, if any, for employees as being in compliance with the criteria for allocation of options under the employees’ share option scheme, at the end of each financial year.

3. SUMMARY OF ACTIVITIES

In line with the terms of Reference of the Audit Committee, the following activities were undertaken by the Audit Committee during the financial year ended 29 February 2008, in the discharge of its functions and duties, included the deliberation and: (a) Reviewed the unaudited quarterly reports on the consolidated results of the Group;

(b) Reviewed the audited financial statements and ensured that the financial reporting and disclosure requirements of relevant authorities had been complied with before recommending to the Board for approval;

(c) Reviewed the statement on Internal Control and Audit Committee Report for inclusion in the 2008 Annual Report;

(d) Considered related party transactions and conflict of interest situation that may arise within the Group;

(e) Considered the re-appointment of the external auditors after they have expressed their willingmess to continue in office with the consultation of the Management and recommended to the Board of Directors for approval;

(f) Considered the external audit fees and recommended the same for the approval of the Board of Directors;

(g) Reviewed the external auditors’ report in relation to audit and accounting issues arising from the audit, new development and updates on the Financial Reporting standards issued by the Malaysian Accounting standards Board and their impact on the Group;

(h) Meeting with the external auditors without the presence of the executive Board members and Management;

(i) Reviewed and follow-up reports presented by the internal auditors to ensure adequate scope and coverage of the activities of the Group; and

(j) Considered the appointment of the existing internal auditors and recommended to the Board members for approval.

4. INTERNAL AUDIT FUNCTION

the Company’s internal audit function is outsourced to an external professional services firm. the principal objective of the internal audit function is to assist the Board to monitor the risks and to periodically review the system of internal control to ensure that the system of internal control established by the Management is functioning effectively and satisfactorilyin the Group. As an independent function, the professional services firm reported directly to the Audit Committee. An internal audit plan for the year was prepared by the professional services firm and was approved by the Audit Committee. In carryingout the internal audit plan for the year under review, the independent professional services firm carried out internal audit reviews on the Production Department and Warehouse (receiving and dispatch) function. these reviewswere coordinatedby the Group’s Management and staff. Arising from these reviews, recommendations for improvement to the system of internal control were provided to the Management. the Audit Committee was also updated on the implementation status of action plans agreed to be taken by the Management.

5. EMPLOYEES SHARE OPTION SCHEME

During the financial year, no allocation of share options was made by the Company pursuant to the employees share option scheme.


statement Of corporate Governance

the Board of Directors (“Board”) of Resintech Berhad recognises the importance of establishing and maintaining good corporate governance within the Group. the Board is committed to ensure the adoption of the principles and best practices of the Malaysian Code on Corporate Governance (“the Code”) to safeguard the Group’s assets and shareholders’ interests. this statement sets out the manner in which the Group has applied the Principles and the extent of compliance with the Best Practices in Corporate Governance as set out in Part 1 and Part 2 respectively of the Code. the best practices that were not adopted during the financial year are explained in the relevant paragraphs.

THE BOARD OF DIRECTORS

• Composition

the Group is led by an effective and experienced Board with members from different backgrounds possessing a wide range of expertise. together they bring a broad range of skills, experience and knowledge which give added strength to the leadership in managing and directing the Group’s operations.

the Board recognises its key role in charting the strategic direction, development and control of the Group which would include the reviewing and monitoring of matters relating to strategy, performance, resource allocation, standards of conduct, financial matters, succession planning, effectiveness and adequacy of the Group’s system of internal controls and risk Management practices.

• Board Balance

the Board comprises seven (7) members, of whom, two (2) are Independent non-executive Directors, one (1) is non-Independent non-executive Director and four (4) are executive Directors. the profiles of the members of the Board are set out on page 6 to 7 of this Annual Report.

the executive Directors are primarily responsible for the implementation of policies and decisions of the Board, overseeing the Group’s operations and developing the Group’s business strategies. the role of the Independent non-executive Directors is to provide objective and independent judgment to the decision making of the Board and as such, provide an effective check and balance to the Board’s decision making process.

With this composition of members, the Board is satisfied that it fairly reflects the investment of the minority shareholders and represents the mix of skills and experiences required for the effective discharge of Board’s duties and responsibilities.

there is a clear division of responsibilities between the roles of the Chairman and Managing Director to ensure that there is equilibrium of power and authority in managing and directing the Group. the Chairman is primarily responsible for the effective and efficient conduct and working of the Board whilst the Managing Director oversees the day-to-day Management of the Group’s business operations and implementation of policies and strategies adopted by the Board.

• Board Meetings

During the financial year ended 29 February 2008, a total of five (5) Board meetings were conducted and the attendance details of individual Board members are shown below:

Name of Director Designation No. of meetings attended

Dato’ Abu sujak bin Mahmud Independent non-executive Chairman 5

Dato’ Dr. teh Kim Poo, DssA, PJK, JP Managing Director 5

Datin Gan Jew, PJK executive Director 5

teh Leng Kang, PJK executive Director 5

Khairul Anuar bin shaharudin Independent non-executive Director 5

Wei Hwei Hong executive Director 5

Kok Wee Wah(Appointed w.e.f. 22 February 2008)

non-Independent non-executive Director not Applicable

annual Report 2008


statement Ofcorporate Governance (cont’d)

THE BOARD OF DIRECTORS (Cont’d)

• Board Meetings (Cont’d)

Board meetings are scheduled every quarter and additional meetings are convened as and when necessary. During the meetings, Board members will deliberate on and consider matters relating to the Group’s financial performance, significant investments, corporate development, strategic issues and business plans. All meetings of the Board are duly recorded in the Board Minutes by the Company secretary.

All Directors have full access to the advice and services of the Company secretary who ensures that Board procedures are adhered to at all times during meetings and advises the Board on matters including corporate governance issues and the Directors’ responsibilities in complying with the relevant legislations and regulations.

• Supply of Information to Board Members

Directors are provided with sufficient notices for each Board meeting and board papers are distributed prior to the meetings to enable the Directors to review and consider the agenda items that will be discussed in the Board Meeting. the board papers providing updates on operations, financial, corporate developments and minutes of the Board Committees are circulated prior to each meeting. this is to provide the Directors with sufficient time to enable them to participate in the deliberations of the issues to be raised at the meetings and to make informed decisions.

• Appointment and Re-election of Directors

the appointment of Directors is undertaken by the Board as a whole guided by formal recommendations by the nomination Committee.

In accordance with the Company’s Articles of Association, all Board members who are appointed by the Board shall be subject to election by shareholders at the first opportunity of their appointment. the Company’s Articles of Association also provide that at least one-third (1/3) of the Directors shall retire by rotation at each Annual General Meeting and that all Directors shall retire once every three (3) years. A retiring Director shall be eligible for re-election.

• Directors’ Training

All members of the Board have attended and successfully completed the Mandatory Accreditation Programme (“MAP”) as prescribed by Bursa securities. the Directors will continue to undergo other relevant training programmes to further enhance their skills and knowledge.

During the year, the Directors were also briefed by the Company secretaries on the various amendments to the Listing Requirements of Bursa securities, Companies Act, 1965 as well as the Code.

Amongst the training programmes and seminars or courses attended by members of the Board in 2007 and 2008 were:

Directors Date of Course Seminar / Course

Dato’ Dr teh Kim Poo 13-14 March 07 Mandatory Accrediation Programme for Directors of Public Listed Companies

Datin Gan Jew 13-14 March 07 Mandatory Accrediation Programme for Directors of Public Listed Companies

teh Leng Kang 13-14 March 07 Mandatory Accrediation Programme for Directors of Public Listed Companies

teh Leng Kang 1-4 April 07 World executive Conference on Wood Composite

Khairul Anuar bin shaharudin

13-14 February 07 Mandatory Accrediation Programme for Directors of Public Listed Companies

Wei Hwei Hong 27-28 May 08 Mandatory Accrediation Programme for Directors of Public Listed Companies

Wei Hwei Hong 1-4 April 07 World executive Conference on Wood Composite

Kok Wee Wah 27-28 May 08 Mandatory Accrediation Programme for Directors of Public Listed Companies

BOARD COMMITTEES

Apart from the Audit Committee, there are two additional committees established to assist the Board of Directors in the execution of its responsibilities. All the committees are provided with written terms of reference. Details of the Board committees are provided below.


BOARD COMMITTEES (Cont’d)

• Nomination Committee

the nomination Committee has two (2) members, all of whom are Independent non-executive Directors. the members of the nomination Committee are:

ChairmanDato’ Abu sujak bin Mahmud – Independent non-executive Chairman

MemberKhairul Anuar bin shaharudin - Independent non-executive Director

the nomination Committee is empowered by the Board of Directors and its terms of reference to assist the Board of Directors in their responsibilities in nominating new candidates for the Board and Board Committees and also assess their effectiveness.

the nomination Committee held one (1) meeting during the financial year with the full attendance of its members.

• Remuneration Committee

the Remuneration Committee comprises one (1) executive Director and two (2) non-executive Directors. the members of the Remuneration Committee are:

ChairmanDato’ Dr. teh Kim Poo, DssA, PJK, JP – Managing Director

MembersDato’ Abu sujak bin Mahmud – Independent non-executive ChairmanKhairul Anuar bin shaharudin - Independent non-executive Director

the responsibility of the Remuneration Committee is to recommend the remuneration policy for executive Directors. this includes recommending remuneration packages to attract, retain and motivate the Directors, which are reflective of the Directors’ experience and level of responsibilities.

none of the executive Directors participate in any way in determining their individual remuneration. the remuneration of the executive Directors is to be reviewed annually. the remuneration and entitlements of the non-executive Directors is a matter of the Board of Directors as a whole.

• Audit Committee

the report of the Audit Committee is set out on pages 10 to 12.

DIRECTORS’ REMUNERATION

the aggregate remuneration of Directors for the financial year ended 29 February 2008 are categorised as follows:

(a) Total Remuneration

Executive DirectorsRM

Non-Executive DirectorsRM

TotalRM

Basic salary 667,139 - 667,139

Bonuses & incentives - - -

Fees - 60,000 60,000

Benefits-in-kind - - -

total 667,139 60,000 727,139


annual Report 2008


DIRECTORS’ REMUNERATION (Cont’d)

(b) Directors’ remuneration by bands

executive non-executive totalBelow RM50,000 - 2 2RM50,001 to RM100,000 1 - 1RM100,001 to RM150,000 1 - 1RM150,001 to RM200,000 1 - 1RM400,001 to RM450,000 1 - 1total number of Directors 4 2 6

the details of individual Director’s remuneration are not disclosed as the Board considers the above disclosures on the Directors’ remuneration are sufficient to cater to the transparency and accountability aspects of the Code.

RELATION WITH SHAREHOLDERS AND INVESTORS

Shareholders and Investors Relations

the Group recognises the importance of timely and thorough dissemination of information to shareholders. In this regard, the information that is disseminated to the investment community conforms strictly with the Bursa securities disclosure rules and regulations. Care is taken to ensure that no market sensitive information such as corporate proposals, financial results and other material information is disseminated to any party without first making an official announcement through Bursa securities. the annual report has comprehensive information pertaining to the Group, while various disclosures on quarterly and annual results provide investors with financial information.

the Group has also established a website at www.resintechmalaysia.com from which shareholders as well as members of the public may access for the latest information on operations and activities of the Group.

Annual General Meeting

the Annual General Meeting (“AGM”) is the principal platform for dialogue with the shareholders. At the AGM, the Board presents the progress and performance of the Group to provide shareholders with the opportunity to question the business issues, concerns and operations in general. the Board will also ensure that each item of special business is included in the notice of the AGM and will be accompanied by an explanation of the effects of the proposed resolutions.

ACCOUNTABILITY AND AUDIT

Financial Reporting

In presenting the annual audited financial statements and interim financial statements on a quarterly basis to the shareholders, the Board is responsible to present a clear, balanced and understandable assessment of the Group’s performance and position. the Audit Committee assists the Board in reviewing the information to be disclosed, to ensure the completeness, accuracy and adequacy of financial disclosures.

Internal Controls

In relation to the internal audit function, having considered the Group’s operational requirements, the Board is of the view that the Group should still continue to outsource its internal audit function to external consultants. nevertheless, this outsourcing arrangement shall be reviewed annually to ensure that it continues to meet the Group’s requirements. the outsourced internal auditors assist the Board and the Audit Committee in providing independent assessment of the adequacy, efficiency and effectiveness of the Group’s internal control systems. they report directly to the Audit Committee.

the statement on Internal Control set out on pages 18 to 19 of this Annual Report provides an overview of the state of internal controls within the Group.

Relationship with Auditors

through the Audit Committee, the Board maintains a formal and transparent relationship with the external auditors in seeking professional advice and ensuring compliance with the appropriate accounting standards. the external auditors will highlight to the Audit Committee and the Board on matters that require their attention.

Information on the role of Audit Committee in relation to the external auditors is set out in the Audit Committee Report on pages 10 to 12 of this Annual Report.



additionalcompliance information

1. SHARE BUY-BACK

During the financial year, there was no share buy-back by the Company.

2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

there were no exercise of options, warrants or convertible securities during the financial year ended 29 February 2008.

3. AMERICAN DEPOSITORY RECEIPTS (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”)

the Company did not participate in any ADR or GDR Programme during the financial year.

4. IMPOSITION OF SANCTIONS / PENALTIES

there were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any regulatory bodies during the financial year.

5. NON-AUDIT FEES

During the financial year, there was a total of RM12,000 of non-audit fees paid to the external auditors.

6. VARIATION IN RESULTS FOR THE FINANCIAL YEAR

there was no material variance between the audited results for the financial year ended 29 February 2008 and the unaudited results previously announced.

7. PROFIT GUARANTEE

the Company did not give any profit guarantee during the financial year.

8. MATERIAL CONTRACTS

there were no material contracts entered into by the Company and its subsidiaries involving the Directors’ and major shareholders’ interests which subsisted at the end of the financial year ended 29 February 2008.

9. UTILISATION OF PROCEEDS there were no proceeds raised from any corporate proposals during the financial year.

10. REVALUATION POLICY ON LANDED PROPERTIES

the Company does not have any revaluation policy on landed properties.

11. Recurrent Related Party Transactions

the Company and/or its subsidiaries has not entered into recurrent related party transactions during the financial year ended 29 February 2008 which exceeded the value prescribed by the Listing Requirements of Bursa securities.

annual Report 2008


In accordance with the Paragraph 15.27(b) of the Listing Requirements of Bursa securities Bhd., the Board is pleased to present herewith its statement on Internal Control.

BOARD RESPONSIBILITY

the Board of Directors recognises the importance of a sound system of internal control to safeguard shareholders’ investment and the Group’s assets against the potential shortcomings.

Due to the limitations that are inherent in any system of internal control, the system is, therefore, designed to manage, rather than eliminate, the risk of failure to achieve corporate objectives. therefore, the system of internal control can only provide reasonable assurance rather than absolute assurance against material misstatement or loss. In devising control procedures, due consideration is given to the cost of implementation as compared to the expected benefits.

RISK MANAGEMENT

the Board acknowledges that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of its significant risks. the Management from each department identifies their risks within the defined parameters and standards. such process was exercised through periodic Management meetings held to communicate and deliberate the key issues and risks amongst the Management team members. Where appropriate, controls are devised and implemented.

INTERNAL AUDIT FUNCTION

the Board has been assisted by the outsourced external consultants and the Management team to review and evaluate the adequacy and integrity of the Group’s internal control audit systems. the Management also depends on the work of its Iso auditors in carrying out the assessment. the results of their reviews are brought to the attention of the Management and the Audit Committee with follow-up reviews being conducted to ensure that the recommendations for improvement are implemented on a timely basis.

OTHER KEY ELEMENTS OF INTERNAL CONTROLS

the other key elements of the Group’s internal control system are as follows:-

a) Well Defined organisational structure

Key responsibilities are clearly defined and authorisation policy sets out appropriate authorisation limit. operational issues are highlighted during the Management meetings.

b) operating Manual

Internal policies and procedures are properly documented in the standard operating Procedures manuals.

c) Management Meetings

Regular Management meetings are conducted and chaired by the Group’s Managing Director. Relevant progress and reports are presented for review and discussion.

d) Regular Internal Audit Activities

Audit activities are conducted on a regular basis to assess the adequacy of internal controls and to monitor compliance with the Group’s Policies and Procedures.

statement Ofinternal control


statement Of internal control(cont’d)

annual Report 2008


OTHER KEY ELEMENTS OF INTERNAL CONTROLS (Cont’d)

e) Management Visits

Regular inspections of operations are performed by the members of the senior Management team.

f) Financial Results

Financial results are reviewed quarterly by the Audit Committee and the Board.

CONCLUSION

During the financial year under review, a number of internal control weaknesses were identified and recommendations for improvement were presented for Management’s discussion and adoption. these are not expected to result in any material loss to the Group.

Moving forward, the Group will continue to improve and enhance the existing system of internal control pertaining to the identified risks with the anticipation of the changing business environment.

the Directors of the Company are required to prepare the financial statements for each financial year which gives a true and fair view of the state of affairs and results of the Company and the Group.

the Directors are responsible for ensuring that the Company and the Group keep proper accounting records to enable the Company and the Group to disclose, with reasonable accuracy and without any material misstatement, the financial position of the Company and the Group as at 29 February 2008 and the profit and loss of the Company and the Group for the financial year ended on that date.

In preparing the financial statements for the financial year ended 29 February 2008, the Directors have:

a) adopted the relevant and appropriate accounting policies consistently;b) made judgements and estimates that are reasonable and prudent;c) adopted applicable accounting standards, subjects to any material departures, if any, which will be disclosed and explained

in the financial statements; andd) prepared the financial statements on the assumption that the Company and the Group will operate as going concern.

In assessing the adequacy and effectiveness of the system of internal control and accounting control procedures of the Group, the Audit Committee reports to the Board its activities, significant results, findings and the necessary recommendations or changes.

the RB Group has always been aware of its corporate responsibility for the community, employees, the environment, shareholders, investors, business associates, clients and other stakeholders.

In recognising the importance of such social responsibilities to make positive contributions to the community we live in, RB had undertaken initiatives to integrate corporate social responsibility (“CsR”) concepts into its operations and decision making, which includes communicating the Group’s actions to its stakeholders and encouraging their feedback through prompt and detail disclosure. As we do so, our actions improve the quality of life for the people of RB Group as well as the community at large.

overall, the Company strongly supports CsR practices as a contribution to society, environment and human resource which would enable the organisation to generate value and hope to continue contributing actively in 2009.

directors’Responsibilities statement

corporate social Responsibility statement


22 Directors’ Report25 Statement by Directors25 Statutory Declaration26 Report of the Auditors27 Balance Sheets29 Income Statements30 Statements of Changes in Equity31 Cash Flow Statements33 Notes to the Financial Statements

FinancialStatements


pg.22

directors’ Report

The directors hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 29 February 2008.

PrinciPal activities

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

results

the GrouP the comPany

rm rm

Profit/(Loss) after taxation 7,993,820 (15,485)

Attributable to:

Equity holders of the Company 7,988,929 (15,485)

Minority interests 4,891 -

7,993,820 (15,485)

DiviDenDs

Since the end of the previous financial year, the Company paid an interim tax-exempt dividend of RM3,430,000 in respect of the current financial year. The directors do not recommend the payment of any final dividend for the current financial year.

reserves anD Provisions

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

issues of shares anD Debentures

During the financial year,

(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and

(b) there were no issues of debentures by the Company.

oPtions GranteD over unissueD shares

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

baD anD Doubtful Debts

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would further require the writing off of bad debts, or the additional allowance for doubtful debts in the financial statements of the Group and of the Company.

annual Report 2008


directors’ Report(cont’d)

current assets

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected so to realise.

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

valuation methoDs

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

continGent anD other liabilities

The contingent liabilities are disclosed in Note 36 to the financial statements. At the date of this report, there does not exist:-

(a) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

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

chanGe of circumstances

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

items of an unusual nature

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

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

Directors

The directors who served since the date of the last report are as follows:-

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP

Datin Gan Jew, PJK

Dato’ Abu Sujak Bin Mahmud Khairul Anuar Bin Shaharudin Teh Leng Kang, PJK Wei Hwei Hong Kok Wee Wah (Appointed on 22.2.2008)


pg.24

directors’ Report(cont’d)

Directors’ interests

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-

number of orDinary shares of rm0.50 each

at at

1.3.2007 bouGht solD 29.2.2008the comPany

Direct Interests

DATo’ DR. Teh KiM Poo, DSSA, PJK, JP 40,290,000 - - 40,290,000

DATiN GAN JeW, PJK 6,830,000 61,000 - 6,891,000

DATo’ ABu SuJAK BiN MAhMuD 3,264,000 - - 3,264,000

Teh LeNG KANG, PJK 3,000,000 - - 3,000,000

Deemed Interests

DATo’ DR. Teh KiM Poo, DSSA, PJK, JP 9,880,000 61,000 - 9,966,000*

DATiN GAN JeW, PJK 43,340,000 - - 43,365,000*

* - includes 25,000 ordinary shares of deemed interests by virtue of Section 134(12)(c) of the Companies (Amendment) Act, 2007 which was effective from 15 August 2007.

By virtue of their interests in shares in the Company, Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP and Datin Gan Jew, PJK are deemed to have interests in shares in its related corporations to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act, 1965.

The other directors holding office at the end of the financial year had no interest in shares in the Company and its related corporations during the financial year.

Directors’ benefits

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) 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 except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a company in which certain directors have substantial financial interests as disclosed in Note 34 to the financial statements.

Neither during nor at the end of the financial year was the Company or its subsidiaries a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

siGnificant events

The significant events during the financial year and subsequent to the balance sheet date are disclosed in Note 41 and Note 42 respectively, to the financial statements.

auDitors

The auditors, Messrs. horwath, have expressed their willingness to continue in office.

siGneD in accorDance With a resolution of the DirectorsDateD 27 June 2008

Dato’ Dr. teh Kim Poo, Dssa, PJK, JP

teh leng Kang, PJK

annual Report 2008


statutorydeclaration

statement BYdirectors

We, Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP and Teh Leng Kang, PJK, being two of the directors of Resintech Berhad, state that, in the opinion of the directors, the financial statements set out on pages 27 to 60 are drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company at 29 February 2008 and of their results and cash flows for the financial year ended on that date.

siGneD in accorDance With a resolution of the DirectorsDateD 27 June 2008

Dato’ Dr. teh Kim Poo, Dssa, PJK, JP teh leng Kang, PJK

i, Wei hwei hong, i/C No. 760909-10-5544, being the director primarily responsible for the financial management of Resintech Berhad, do solemnly and sincerely declare that the financial statements set out on pages 27 to 60 are, to the best of my knowledge and belief, correct, and i make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared byWei hwei hong, i/C No. 760909-10-5544,at Kuala Lumpur in the Federal Territory on this 27 June 2008

Wei hwei hong Before meDatin hajah Raihela Wanchik (No. W275)


pg.26

Report of the auditorsto the Members of Resintech Berhad(incorporated in Malaysia) company no: 341662-X

We have audited the financial statements set out on pages 27 to 60. The preparation of the financial statements is the responsibility of the Company’s directors.

it is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report.

We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. our audit included examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. our audit also included an assessment of the accounting principles used and significant estimates made by the directors as well as evaluating the overall adequacy of the presentation of information in the financial statements. We believe our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable approved Financial Reporting Standards in Malaysia so as to give a true and fair view of:-

(i) the state of affairs of the Group and of the Company at 29 February 2008 and their results and cash flows for the financial year ended on that date; and

(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements of the Group and of the Company; and

(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the Company and by the subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the said Act.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purpose of the preparation of the consolidated financial statements and we have received satisfactory information and explanations as required by us for those purposes.

our audit reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comments made under Sub-Section (3) of Section 174 of the Companies Act, 1965.

horwath lee Kok WaiFirm No : AF 1018 Approval No : 2760/06/10 (J)Chartered Accountants Partner

Kuala Lumpur

27 June 2008

annual Report 2008


Balance sheetsat 29 February 2008

the GrouP the comPany 2008 2007 2008 2007

note rm rm rm rm(restated)

assetsnon-current assets

Investments in subsidiaries 6 - - 43,060,437 42,160,437

Property, plant and equipment 7 77,799,737 65,421,853 - -

Prepaid lease payments 8 11,275,145 11,090,361 - -

Intangible asset 9 406,333 452,333 - -

89,481,215 76,964,547 43,060,437 42,160,437

current assets

Inventories 10 26,262,963 22,140,979 - -

Amount due from contract customers 11 268,505 206,426 - -

Trade receivables 12 27,821,568 16,450,653 - -

Other receivables, deposits and prepayments 3,542,211 669,855 7,500 8,000

Amount owing by subsidiaries 13 - - 7,646,061 6,809,722

Dividend receivable - - - 4,000,000

Tax refundable 757,799 121,801 - -

Cash and bank balances 1,086,473 12,417,862 41,490 1,205,835

59,739,519 52,007,576 7,695,051 12,023,557

total assets 149,220,734 128,972,123 50,755,488 54,183,994

eQuity anD liabilities

eQuity

Share capital 14 49,000,000 49,000,000 49,000,000 49,000,000

Share premium 15 1,274,301 1,274,301 1,274,301 1,274,301

Retained profits 16 20,122,051 15,563,122 426,998 3,872,483

shareholDers’ eQuity 70,396,352 65,837,423 50,701,299 54,146,784

Minority interests 142,787 137,896 - -

total eQuity 70,539,139 65,975,319 50,701,299 54,146,784

The annexed notes from an integral part of these financial statements.


pg.28


note rm rm rm rm(restated)

non-current liabilities

Long-term borrowings 17 13,058,126 11,005,308 - -

Deferred tax liabilities 20 8,933,283 10,197,630 - -

21,991,409 21,202,938 - -

current liabilities

Amount due to contract customers 11 - 59,934 - -

Trade payables 21 7,779,661 5,729,973 - -

Other payables and accruals 22 2,416,890 2,566,433 27,595 37,210

Provision for taxation 1,078,811 186,437 26,594 -

Short-term borrowings 23 36,859,570 27,338,681 - -

Bank overdrafts 24 8,555,254 5,912,408 - -

56,690,186 41,793,866 54,189 37,210

total liabilities 78,681,595 62,996,804 54,189 37,210

total eQuity anD liabilities 149,220,734 128,972,123 50,755,488 54,183,994


Balance sheetsat 29 February 2008 (cont’d)

annual Report 2008


income statementsFor the Financial Year ended 29 February 2008

the GrouP the comPany2008 2007 2008 2007

note rm rm rm rm

revenue 25 88,024,190 83,372,507 - 4,000,000

cost of sales (69,831,319) (65,557,312) - -

Gross Profit 18,192,871 17,815,195 - 4,000,000

other income 26 1,189,322 1,062,062 240,000 -

19,382,193 18,877,257 240,000 4,000,000

sellinG anD Distribution eXPenses (1,698,807) (1,442,085) - -

aDministrative eXPenses (5,400,477) (4,481,056) (228,891) (49,566)

other eXPenses (1,602,116) (1,832,291) - -

(8,701,400) (7,755,432) (228,891) (49,566)

10,680,793 11,121,825 11,109 3,950,434

finance costs (2,847,215) (3,369,191) - (23)

Profit before taXation 27 7,833,578 7,752,634 11,109 3,950,411

income taX eXPense 28 160,242 (818,015) (26,594) -

Profit/(loss) after taXation 7,993,820 6,934,619 (15,485) 3,950,411

attributable to:

Equity holders of the Company 7,988,929 6,920,941 (15,485) 3,950,411

Minority interests 4,891 13,678 - -

7,993,820 6,934,619 (15,485) 3,950,411

earninGs Per share

- basic (sen) 29 8 8

- diluted (sen) 29 not applicable

Not Applicable



pg.30

retaineD Profits/

share share (accumulateD minority total caPital Premium losses) total interests eQuity

the GrouP rm rm rm rm rm rm

Balance at 1.3.2006 42,060,000 439 8,642,181 50,702,620 124,218 50,826,838

Shares issued pursuant to the public issue 6,940,000 2,776,000 - 9,716,000 - 9,716,000

Listing expenses* - (1,502,138) - (1,502,138) - (1,502,138)

Profit attributable to equity holders - - 6,920,941 6,920,941 13,678 6,934,619

Balance at 28.2.2007/1.3.2007 49,000,000 1,274,301 15,563,122 65,837,423 137,896 65,975,319

interim tax-exempt dividend of 3.5 sen - - (3,430,000) (3,430,000) - (3,430,000)

Profit attributable to equity holders - - 7,988,929 7,988,929 4,891 7,993,820

Balance at 29.2.2008 49,000,000 1,274,301 20,122,051 70,396,352 142,787 70,539,139

the company

Balance at 1.3.2006 42,060,000 439 (77,928) 41,982,511 - 41,982,511

Shares issued pursuant to the public issue 6,940,000 2,776,000 - 9,716,000 - 9,716,000

Listing expenses* - (1,502,138) - (1,502,138) - (1,502,138)

Profit attributable to equity holders - - 3,950,411 3,950,411 - 3,950,411

Balance at 28.2.2007/1.3.2007 49,000,000 1,274,301 3,872,483 54,146,784 - 54,146,784

interim tax-exempt dividend of 3.5 sen - - (3,430,000) (3,430,000) - (3,430,000)

Profit attributable to equity holders - - (15,485) (15,485) - (15,485)

Balance at 29.2.2008 49,000,000 1,274,301 426,998 50,701,229 - 50,701,299

* - represent expenses not recognised in the income statement.


statements Of changes in equityFor the Financial Year ended 29 February 2008

annual Report 2008



note rm rm rm rmcash floWs (for)/from oPeratinG activities

Profit before taxation 7,833,578 7,752,634 11,109 3,950,411

Adjustments for:-

Allowance for doubtful debts 208,790 318,311 - -

Allowance for doubtful debts written back (639,204) (247,085) - -

Amortisation of intangible asset 46,000 7,667 - -

Amortisation of prepaid lease payments 175,216 - - -

Bad debts written off 17,992 12,258 - -

Depreciation for property, plant and equipment 6,949,812 6,526,598 - -

Equipment written off 5,226 5,270 - -

interest expense 2,845,031 3,008,410 - -

Dividend income - - - (4,000,000)

Net gain on disposal of plant and equipment (107,356) (103,113) - -

operating profit/loss before working capital changes 17,335,085 17,280,950 11,109 (49,589)

Increase in inventories (4,121,984) (1,635,773) - -

(increase)/Decrease in trade and other receivables (13,830,849) 4,080,831 500 (650)

increase/(Decrease) in other payables and accruals 1,900,145 168,794 (9,615) 34,960

Increase in net amount owing by contract customers (122,013) (193,424) - -

cash from/(for) oPerations 1,160,384 19,701,378 1,994 (15,279)

income tax paid (847,729) (940,384) - -

Interest paid (2,845,031) (3,008,410) - -

net cash (for)/from oPeratinG activities carrieD forWarD (2,532,376) 15,752,584 1,994 (15,279)


cash Flow statementsFor the Financial Year ended 29 February 2008


pg.32

cash Flow statementsFor the Financial Year ended 29 February 2008 (cont’d)


note rm rm rm rm

net cash (for)/from oPeratinG activities brouGht forWarD (2,532,376) 15,752,584 1,994 (15,279)

cash floWs (for)/from investinG activities

Proceeds from disposal of plant and equipment 203,350 240,750 - -

Additional investment in a subsidiary - - (900,000) (99,998)

Advances to subsidiaries - - (836,339) (6,809,722)

Dividend received - - 4,000,000 -

Purchase of intangible asset - (460,000) - -

Prepayment of leases (360,000) - - -

Purchase of property, plant and equipment 30 (18,968,916) (22,730,752) - -

Net cash outflow from acquisition of subsidiary 31 - - - (2)

net cash (for)/from investinG activities (19,125,566) (22,950,002) 2,263,661 (6,909,722)

cash floWs from/(for) financinG activities

Drawdown of bills payable 7,790,387 3,755,145 - -

Drawdown of term loans 7,017,500 15,174,529 - -

Repayment of hire purchase obligations (171,712) (516,114) - -

Repayment of term loans (3,522,468) (6,805,257) - -

Proceeds from issuance of shares - 9,716,000 - 9,716,000

Listing expenses - (1,502,138) - (1,502,138)

Repayment to a subsidiary - - - (44,359)

Repayment to related parties - - - (38,667)

Dividend paid (3,430,000) - (3,430,000) -

net cash from/(for) financinG activities 7,683,707 19,822,165 (3,430,000) 8,130,836

net (Decrease)/increase in cash anD cash eQuivalents (13,974,235) 12,624,747 (1,164,345) 1,205,835

cash anD cash eQuivalents at beGinninG of the financial year 6,505,454 (6,119,293) 1,205,835 -

cash anD cash eQuivalents at enD of financial year 32 (7,468,781) 6,505,454 41,490 1,205,835


annual Report 2008


1. General information

The Company is a public company limited by shares and is incorporated under the Malaysian Companies Act, 1965. The domicile of the Company is Malaysia. The registered office, which is also the principal place of business, is at Lot 3 & 5, Jalan Waja 14, Kawasan Perindustrian Telok Panglima Garang, 42500 Telok Panglima Garang, Selangor Darul ehsan.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 27 June 2008.

2. PrinciPal activities

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

3. financial risK manaGement Policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s business whilst managing its market, credit, liquidity and cash flow risks. The policies in respect of the major areas of treasury activity are as follows:-

(a) market risk

(i) Foreign Currency Risk

The Group is exposed to foreign exchange risk on sales that are denominated in foreign currencies, mainly in united States Dollar.

Foreign currency risk is monitored closely and managed to an acceptable level.

(ii) Interest Rate Risk

The Group obtains financing through banking and hire purchase facilities. its policy is to obtain the most favourable interest rates.

(ii) Price Risk

The Group is exposed to price risk on purchases of resin as the price of resin generally follows the price trend of crude oil. Price risk is monitored closely and managed to an acceptable level.

(b) credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables. The maximum exposure to credit risks is represented by the total carrying amount of these financial assets in the balance sheet reduced by the effects of any netting arrangements with counterparties.

The Group does not have major concentration of credit risk related to any individual customer or counterparty.

The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

(c) liquidity and cash flow risks

The Group’s exposure to liquidity and cash flow risks arises mainly from general funding and business activities.

it practises prudent liquidity risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

notes to the Financial statementsFor the Financial Year ended 29 February 2008


pg.34

4. basis of PreParation

The financial statements of the Group and of the Company are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965.

During the current financial year, the Group and the Company have adopted all the following new and revised Financial Reporting Standards (“FRSs”) issued by the Malaysian Accounting Standards Board (MASB) which are relevant to its operations and effective for financial periods beginning on or after 1 January 2007.

The effects of adopting FRS 117 are disclosed in Note 5(k) to the financial statements and the effects on the opening balances are disclosed in Note 40 to the financial statements.

The adoption of FRS 124 does not have any material financial effects on the financial statements of the Group and of the Company except for the form and content of disclosures presented in the financial statements.

FRS 6 and Amendment to FRS 1192004 are not relevant to the Group and the Company’s operations.

Framework for the Preparation and Presentation of Financial Statements has been issued and is effective immediately. This Framework sets out the concepts that underlie the preparation and presentation of financial statements for external users. it is not an MASB approved accounting standard and hence, does not define standards for any particular measurement or disclosure issue. The Group and the Company have applied this Framework for the financial year ended 29 February 2008 onwards.

The Group and the Company have not adopted FRS 139 - Financial instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 as the effective date is deferred to a date to be announced by the MASB. FRS 139 establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on its financial statements upon first adoption of the standard as required by paragraph 30(b) of FRS 108 is not disclosed.

The following FRSs have been issued and are effective for financial periods beginning on or after 1 July 2007 and will be effective for the Group and the Company’s financial statements for the financial year ending 28 February 2009:

FRS 107 Cash Flow Statements FRS 111 Construction Contracts FRS 112 income Taxes FRS 118 Revenue FRS 120 Accounting for Government Grants and Disclosure of Government Assistance FRS 137 Provisions, Contingent Liabilities and Contingent Assets

The above FRSs align the MASB’s FRSs with the equivalent international Accounting Standards (“iAS”), both in terms of form and content. The adoption of these standards will only impact the form and content of disclosures presented in the financial statements. The Group and the Company will apply these FRSs from the financial year ending 28 February 2009 onwards.

FRS 134 - interim Financial Reporting has been issued and is effective for the financial periods beginning on or after 1 July 2007. This FRS aligns the MASB’s FRSs with the equivalent iAS, both in terms of form and content. The adoption of this standard will only impact the form and content of disclosures presented in the quarterly financial statements. The Group and the Company will apply this standard from the financial year ending 28 February 2009 onwards.

Amendment to FRS 121 - The effects of Changes in Foreign exchange Rates Net investment in a Foreign operation has been issued and is effective for financial periods beginning on or after 1 July 2007. This amendment results in exchange differences arising from a monetary item that forms part of the group’s net investment in a foreign operation to be recognised in equity irrespective of the currency in which the monetary item is denominated and whether the monetary item results from a transaction with the company or any of its subsidiaries. Previously, exchange differences arising from such transactions between the company and its subsidiaries would be accounted for in the income statement or in equity depending on the currency of the monetary item. This interpretation is not relevant to the Group and the Company’s operations.

notes to the Financial statementsFor the Financial Year ended 29 February 2008 (cont’d)

annual Report 2008


4. basis of PreParation (cont’D)

iC interpretation 1 - Changes in existing Decommissioning, Restoration and Similar Liabilities have been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation addresses the effects of events that changes the measurement of an existing decommissioning, restoration or similar liability, namely a change in the estimated outflow of resources embodying economic benefits required to settle the obligation, a change in the current market-based discount rate as defined in paragraph 48 of FRS 1372004 and an increase that reflects the passage of time. This interpretation is not relevant to the Group and the Company’s operations.

IC Interpretation 2 - Members’ Shares in Co-operative Entities and Similar Instruments has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group and the Company’s operations.

IC Interpretation 5 - Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group and the Company’s operations.

iC interpretation 6 - Liabilities arising from Participating in a Specific Market - Waste electrical and electronic equipment has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group and the Company’s operations.

IC Interpretation 7 - Applying the Restatement Approach under FRS 1292004 Financial Reporting in hyperinflationary economies has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation is not relevant to the Group and the Company’s operations.

iC interpretation 8 - Scope of FRS 2 has been issued and is effective for financial periods beginning on or after 1 July 2007. This interpretation applies to transactions in which goods or services are received, including transactions in which the entity cannot identify specifically some or all of the goods or services received. Where the fair value of the share-based payment is in excess of the identifiable goods or services received, it is presumed that additional goods or services have been or will be received. The whole fair value of the share-based payment will be charged to the income statement. This interpretation is not relevant to the Group and the Company’s operations. The Group and the Company will apply this standard from the financial year ending 28 February 2009 onwards.

5. siGnificant accountinG Policies

(a) critical accounting estimates and Judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:-

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial and production factors which could change significantly as a result of technical innovations and competitor’s actions in response to the market conditions.

The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount.

Changes in the expected level of usage and commercial factors could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.



pg.36

5. siGnificant accountinG Policies (cont’D)

(a) critical accounting estimates and Judgements (cont’d)

(ii) Income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made.

(iii) Impairment of Assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the Group is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(iv) Construction Contracts

Construction contracts accounting requires reliable estimation of the costs to complete the contract and reliable estimation of the stage of completion.

(i) Contract Revenue

Construction contracts accounting requires that variation claims and incentive payments only be recognised as contract revenue to the extent that it is probable that they will be accepted by the customers. As the approval process often takes some time, a judgement is required to be made of its probability and revenue recognised accordingly.

(ii) Contract Costs

using experience gained on each particular contract and taking into account the expectations of the time and materials required to complete the contract, management estimates the profitability of the contract on an individual basis at any particular time.

(v) Allowance for Doubtful Debts of Receivables

The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyses historical bad debt, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

(vi) Allowance for Inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

(b) financial instruments

Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instruments.


annual Report 2008



(b) financial instruments (cont’d)

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the balance sheet are disclosed in the individual policy statement associated with each item.

(c) functional and foreign currency

(i) Functional and Presentation Currency

The functional currency of the Company and each of the Group’s entity is measured using the currency of the primary economic environment in which the Company or that entity operates.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Group’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currency are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are taken to the income statement.

(d) basis of consolidation

The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to 29 February 2008.

A subsidiary is defined as a company in which the parent company has the power, directly or indirectly, to exercise control over its financial and operating policies so as to obtain benefits from its activities.

All subsidiaries are consolidated using the purchase method. under the purchase method, the results of the subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries’ net assets are determined and these values are reflected in the consolidated financial statements. The cost of 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, plus any costs directly attributable to the business combination.

intragroup transactions, balances and unrealised gains on transactions are eliminated; unrealised losses are also eliminated unless cost cannot be recovered. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

Minority interests in the consolidated balance sheets consist of the minorities’ share of fair values of the identifiable assets and liabilities of the acquiree as at the date of acquisition and the minorities’ share of movements in the acquiree’s equity.

Minority interests are presented in the consolidated balance sheet of the Group within equity, separately

from the Company’s equity holders, and are separately disclosed in the consolidated income statement of the Group.



pg.38


(e) Goodwill

Goodwill on consolidation represents the excess of the fair value of the purchase consideration over the Group’s share of the fair values of the identifiable net assets of the subsidiaries at the date of acquisition.

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually. The impairment value of goodwill is recognised immediately in the consolidated income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period.

if, after reassessments, the Group's interest in the fair values of the identifiable net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated income statement.

(f) intangible assets

An intangible asset shall be recognised if, and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and that the cost of the asset can be measured reliably. An entity shall assess the probability of the expected future economic benefits using reasonable and supportable assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset. An intangible asset shall be measured initially at cost.

The useful lives of intangible assets are assessed to be either finite or indefinite.

intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement in the expense category consistent with the function of the intangible asset.

The principal amortisation rate used for this purpose is:-

Licence fee 10 years

intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. if not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.

(g) investments in subsidiaries

Investments in subsidiaries are stated at cost in the balance sheet of the Company, and are reviewed for impairment at the end of the financial year if events or changes in circumstances indicate that their carrying values may not be recoverable.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is taken to the income statement.

(h) Property, Plant and equipment

Property, plant and equipment, other than freehold land, are stated at cost less accumulated depreciation and impairment losses, if any. Freehold land is stated at revalued amount less any impairment losses, and is not depreciated.


annual Report 2008



(h) Property, Plant and equipment (cont’d)

Depreciation is calculated under the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

BuildingsPlant and machineryTools and equipmentMouldsFurniture and fittingsoffice equipmentMotor vehicles and forkliftsElectrical installationRenovationStore

2%10%

10% - 20%10%10%

10% - 12%20%10%10%20%

The depreciation method, useful life and residual values are reviewed, and adjusted if appropriate, at each balance sheet date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the balance sheet date. Capital work-in-progress is stated at cost, and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use.

Cost of capital work-in-progress includes direct cost, related expenditure and interest cost on borrowings taken to finance the construction or acquisition of the assets till the date that the assets are completed and put into use, net of interest income on the temporary investment of those borrowings.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is included in the income statement in the year the asset is derecognised.

(i) impairment of assets

The carrying values of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed at each balance sheet date for impairment when there is an indication that the assets might be impaired. impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ net selling price and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is charged to the income statement immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the

recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited directly to the revaluation surplus. however, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the income statement, a reversal of that impairment loss is recognised as income in the income statement.



pg.40


(j) assets under hire Purchase

Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out in Note 5(h) above. each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are allocated to the income statement over the periods of the respective hire purchase arrangements.

(k ) Prepaid lease Payments

The prepaid lease payments comprise the up-front payments made for the leasehold interest in land. The lease payments are amortised on a straight-line basis over the lease terms. Prior to 1 March 2007, leasehold land was classified under property, plant and equipment and was stated at cost less accumulated amortisation and accumulated impairment losses, if any. upon the adoption of the revised FRS 117, the unamortised amount of leasehold interest in the land is retained as the surrogate carrying amount of prepaid lease payments as allowed by the revised FRS 117.

(l) inventories

inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. Cost of finished goods and work-in-progress includes cost of materials, labour and an appropriate proportion of production overheads.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

Where necessary, allowance is made for obsolete, slow-moving and defective inventories.

(m) amounts Due from/to contract customers

The amounts due from/to contract customers are stated at cost plus profits attributable to contracts in progress less progress billings and provision for foreseeable losses, if any. Cost includes direct materials, labour and applicable overheads.

(n) receivables

Receivables are carried at anticipated realisable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

(o) Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received.

(p) income taxes

income taxes for the period comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred taxation is provided for, using the liability method, on temporary differences arising between tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination cost or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.


annual Report 2008



(p) income taxes (cont’d)

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 profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date.

Deferred tax is recognised in the income statement, 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 or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination cost. The carrying amounts of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

(q) interest-bearing borrowings

interest-bearing bank borrowings are recorded at the amount of proceeds received, net of transaction costs.

Borrowing costs that are directly attributable to the construction of property, plant and equipment are capitalised as part of the cost of those assets until time the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are charged to the income statement as expenses in the period in which they are incurred.

(r) equity instruments

ordinary shares are classified as equity. incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(s) research and Development expenditure

Research expenditure is written off to the income statement when incurred. Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure capitalised comprises costs incurred for development including direct and attributable indirect costs. Development costs initially recognised as an expense are not recognised as assets in the subsequent period.

Development costs that have been capitalised are amortised on a straight-line basis over the period of their expected benefit, but not exceeding 5 years, from the commencement of the commercial production of the products.

(t) segmental information

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of property, plant and equipment (net of accumulated depreciation, where applicable), intangible asset, inventories, receivables, and cash and bank balances.



pg.42


(t) segmental information (cont’d)

Most segment assets can be directly attributed to the segments on a reasonable basis. Segment assets and liabilities do not include income tax assets and liabilities respectively.

Segment revenues, expenses and results include transfers between segments. The prices charged on intersegment transactions are based on normal commercial terms. These transfers are eliminated on consolidation.

(u) cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(v) employee benefits

(i) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group.

(ii) Defined Contribution Plans

The Group’s contributions to defined contribution plans are charged to the income statement in the period to which they relate. once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(w) related Parties

Parties are considered to be related if one party has the ability to control the other party or exercise influence over the other party, to the extent that it prevents the other party from pursuing its own separate interests in making financial and operating decisions.

(x) revenue recognition

(i) Sale of Goods

Revenue is recognised upon delivery of goods and customers’ acceptance and where applicable, net of returns and trade discounts.

(ii) Contract Income

Income on contracts is recognised on the percentage of completion method unless the outcome of the contract cannot be reliably determined, in which case the income on contracts will only be recognised to the extent of contract costs incurred that are recoverable. Foreseeable losses, if any, are provided for in full as and when it can be reasonably ascertained that the contract will result in a loss.

The stage of completion is determined based on the proportion that the contract costs incurred for work performed to date bear to the estimated total contract costs.

(iii) Services Revenue is recognised upon rendering of services and when the outcome of the transaction can

be estimated reliably. in the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable.


annual Report 2008



(x) revenue recognition

(iv) Interest Income

interest income is recognised on an accrual basis, based on the effective yield on the investment.

(v) Dividend Income

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

(vi) Rental Income

Rental income is recognised on an accrual basis.

6. investments in subsiDiaries

the comPany

2008 2007

rm rm

Unquoted shares, at cost 43,060,437 42,160,437

name of comPanyeffective eQuity

interest PrinciPal activities

2008 2007Direct subsidiaries:-

Resintech Plastics (M) Sdn. Bhd. 100% 100% Designing, manufacturing, trading and marketing of a diversified range of plastic pipes, water tanks and fittings, and investment holding.

Resintech-Kapar Sdn. Bhd. 100% 100% Designing, manufacturing, trading and marketing of a diversified range of PP, Pe and ABS pipes and fittings.

Indirect subsidiaries:-

Resintech engineering Sdn. Bhd.^ 100% 100% Provision of CCTV inspection services for water and sewerage pipelines, trading and marketing of fibreglass products and investment holding.

Resintech (Sabah) Sdn. Bhd.^ 100% 100% Trading and marketing of a diversified range of plastic pipes, water tanks and fittings.

Resintech Products Marketing Sdn. Bhd.^ 100% 100% Trading in children’s playground equipment.

Vision Mould Specialist (M) Sdn. Bhd.^ 100% 100% Fabrication of plastic moulds and roto-moulding moulds.



pg.44

6. investments in subsiDiaries (cont’D)

name of companyeffective equity

interest Principal activities

2008 2007Indirect subsidiaries:-

exact Link Sdn. Bhd.^ 100% 100% Property holding.

RT Water Technology Sdn. Bhd.# 60% 60% Designing and contracting for sewerage treatment plants and the provision of consultancy services including survey, design and project management.

^ interest held by Resintech Plastics (M) Sdn. Bhd.# interest held by Resintech engineering Sdn. Bhd.

7. ProPerty, Plant anD eQuiPment

the GrouP DisPosals/ at Written DePreciation at

1.3.2007 aDDitions off charGe 29.2.2008net booK value rm rm rm rm rm

Freehold land and buildings 25,837,683 - - (473,887) 25,363,796

Plant, machinery, tools, equipment and moulds 32,824,937 11,326,815 (78,460) (5,483,759) 38,589,533

Furniture, fittings and office equipment 354,287 100,755 (116) (133,498) 321,428

Motor vehicles and forklifts 1,425,624 877,671 (22,644) (622,510) 1,658,141

Electrical installation and renovation 775,145 48,018 - (214,237) 608,926

Store 100,470 - - (21,921) 78,549

Capital work-in-progress 4,103,707 7,075,657 - - 11,179,364

65,421,853 19,428,916 (101,220) (6,949,812) 77,799,737

accumulateD net booKat cost DePreciation value

at 29.2.2008 rm rm rm

Freehold land and buildings 28,370,927 (3,007,131) 25,363,796

Plant, machinery, tools, equipment and moulds 77,685,484 (39,095,951) 38,589,533

Furniture, fittings and office equipment 1,801,197 (1,479,769) 321,428

Motor vehicles and forklifts 4,576,002 (2,917,861) 1,658,141

Electrical installation and renovation 2,655,869 (2,046,943) 608,926

Store 109,604 (31,055) 78,549

Capital work-in-progress 11,179,364 - 11,179,364

126,378,447 (48,578,710) 77,799,737


annual Report 2008


7. ProPerty, Plant anD eQuiPment (cont’D)

accumulateD net booKat cost DePreciation value

at 28.2.2007 rm rm rm

(restated)

Freehold land and buildings 28,370,927 (2,533,244) 25,837,683

Plant, machinery, tools, equipment and moulds 66,466,528 (33,641,591) 32,824,937

Furniture, fittings and office equipment 1,704,093 (1,349,806) 354,287

Motor vehicles and forklifts 3,991,684 (2,566,060) 1,425,624

Electrical installation and renovation 2,607,851 (1,832,706) 775,145

Store 109,604 (9,134) 100,470

Capital work-in-progress 4,103,707 - 4,103,707

107,354,394 (41,932,541) 65,421,853

(a) The net book values of the freehold land and buildings at the balance sheet date were as follows:-

the GrouP2008 2007 rm rm

Freehold land 5,337,500 5,337,500

Buildings 20,026,296 20,500,183

25,363,796 25,837,683

(b) The net book values of the property, plant and equipment at the balance sheet date pledged as security with the bank for credit facilities were as follows:-


Freehold land and building 25,046,996 25,515,935

Plant and machinery 16,735,658 6,652,112

41,782,654 32,168,047

(c) included in the net book values of property, plant and equipment at the balance sheet date were the following assets acquired under hire purchase terms:-


Motor vehicles 1,047,941 473,840

(d) The titles to the following assets have not yet been issued by the relevant authorities:-


At Net Book Value:-

Freehold land 5,255,000 5,255,000



pg.46

8. PrePaiD lease Payments

the GrouP2008 2007

rm rm(restated)

Long leasehold land, at carrying amount 11,450,361 11,090,361

Accumulated amortisation (175,216) -

Net book value 11,275,145 11,090,361

The long leasehold land with carrying value of approximately RM10,507,000 (2007 - RM10,627,000) has been pledged

as security with the bank for the credit facilities.

The titles of the long leasehold land with carrying amount of approximately RM8,156,000 (2007 - RM8,250,000) have not yet been issued by the relevant authorities.

9. intanGible asset

the GrouP2008 2007

rm rm

Licence fee 460,000 460,000

Accumulated amortisation:-

At 1.3.2007/2006 (7,667) -

Amortisation during the financial year (46,000) (7,667)

At 29.2.2008/28.2.2007 (53,667) (7,667)

406,333 452,333

This represents the licensing right to use a design patent acquired from KWh Pipe Ltd.

10. inventories

the GrouP2008 2007

rm rm

At Cost:-

Raw materials 7,918,813 4,547,861

Work-in-progress 35,160 38,766

Finished goods 18,308,990 17,554,352

26,262,963 22,140,979

None of the inventories were stated at net realisable value at the balance sheet date.


annual Report 2008


11. amounts Due from/(to) contract customers

the GrouP2008 2007

rm rm

Contract costs incurred 1,114,233 2,639,209

Attributable profits 144,077 433,655

1,258,310 3,072,864

Progress billings (989,805) (2,926,372)

Net amount due from contract customers 268,505 146,492

The net amount due from contract customers comprises the following:-

Amount due from contract customers 268,505 206,426

Amount due to contract customers - (59,934)

268,505 146,492

12. traDe receivables

the GrouP2008 2007

rm rm

Trade receivables 29,024,256 18,083,755

Allowance for doubtful debts:-

At 1.3.2007/2006 (1,633,102) (1,561,876)

Additions during the financial year (208,790) (318,311)

Writeback during the financial year 639,204 247,085

At 29.2.2008/28.2.2007 (1,202,688) (1,633,102)

27,821,568 16,450,653

The Group’s normal credit terms range from 30 to 120 days. other credit terms are assessed and approved on a case-by-case basis.

The foreign currency exposure profile of the trade receivables is as follows:-

the GrouP2008 2007

rm rm

United States Dollar 96,723 348,942



pg.48

13. amount oWinG by subsiDiaries

The amount owing is unsecured, interest-free and not subject to fixed terms of repayment.

14. share caPital

the comPany2008 2007 2008 2007

number of shares rm rm

oRDiNARy ShAReS oF RM0.50 eACh

AUTHORISED 200,000,000 200,000,000 100,000,000 100,000,000

iSSueD AND FuLLy PAiD-uP

At 1.3.2007/2006 98,000,000 84,120,000 49,000,000 42,060,000

Allotment of shares pursuant to the public issue - 13,880,000 - 6,940,000

At 29.2.2008/28.2.2007 98,000,000 98,000,000 49,000,000 49,000,000

15. share Premium

the comPany

2008 2007

rm rm

At 1.3.2007/2006 1,274,301 439

Premium arising from public issue - 2,776,000

Listing expenses - (1,502,138)

At 29.2.2008/ 28.2.2007 1,274,301 1,274,301

The share premium is not distributable by way of cash dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act, 1965.

16. retaineD Profits

Subject to agreement with the tax authorities, at the balance sheet date, the tax-exempt income available would enable the Company to distribute the entire retained profits without incurring any additional tax liability.

17. lonG-term borroWinGsthe GrouP

2008 2007

rm rm

SECURED:

hire purchase payables (Note 18) 355,568 196,704

Term loans (Note 19) 12,702,558 10,808,604

13,058,126 11,005,308


annual Report 2008


18. hire Purchase Payablesthe GrouP

2008 2007

rm rm

Minimum hire purchase payments:

- not later than one year 264,130 124,813

- later than one year and not later than five years 389,157 221,826

653,287 346,639

Future finance charges (56,285) (37,925)

Present value of hire purchase payables 597,002 308,714

Current:

- not later than one year (Note 23) 241,434 112,010

Non-current:

- later than one year and not later than five years (Note 17) 355,568 196,704

597,002 308,714

The hire purchase payables of the Group at the balance sheet date bore effective interest at rates ranging from 6.34% to 8.10% (2007 - 5.10% to 8.10%) per annum.

19. term loansthe GrouP

2008 2007

rm rm

SECURED:

Not later than one year (Note 23) 5,534,026 3,932,948

Later than one year and not later than five years (Note 17) 12,702,558 10,808,604

18,236,584 14,741,552

number of effectiveterm monthly monthly Date of the GrouPloan instalments instalment rePayment 2008 2007

rm rm rm

1 60 29,879 March 2006 1,203,877 1,470,264

2 84 94,840 May 2006 3,977,412 1,315,499

3 60 63,300 August 2006 2,952,178 3,509,548

4 60 193,000 October 2006 6,751,816 8,446,241

5 24 165,000 November 2007 3,351,301 -

18,236,584 14,741,552

The term loans of the Group at the balance sheet date bore effective interest at rates ranging from 7.58% to 7.75% (2007 - 4.28% to 8.10%) per annum and are secured in the same manner as the bills payable disclosed in Note 23 to the financial statements.



pg.50

20. DeferreD taX liabilities

the GrouP

2008 2007

rm rm

At 1.3.2007/2006 10,197,630 10,258,248

Recognised in the income statement (Note 28) (1,264,347) (60,618)

At 29.2.2008/28.2.2007 8,933,283 10,197,630

The deferred tax consists of the tax effects of the following items:-

the GrouP

2008 2007

rm rm

Deferred tax liabilities:-

Accelerated capital allowances 9,050,643 10,261,515

Deferred tax assets:-

Unabsorbed capital allowances (32,000) (46,983)

unutilised tax losses (44,090) (16,902)

Other temporary differences (41,270) -

(117,360) (63,885)

8,933,283 10,197,630

No deferred tax assets are recognised on the following items:-

the GrouP

2008 2007

rm rm

Unabsorbed capital allowances - 65,300

unutilised tax losses 480,600 1,004,500

Other temporary differences 135,300 218,000

615,900 1,287,800

Subject to agreement with the tax authorities, the Group has unutilised reinvestment allowances of approximately RM2,917,000 (2007 - RM6,133,000) at the balance sheet date available to be carried forward for offset against future taxable business income.

21. traDe Payables

The normal trade credit terms granted to the Group range from 30 to 90 days.


annual Report 2008


22. other Payables anD accruals

The foreign currency exposure profile of the other payables and accruals in the previous financial year was as follows:-

the GrouP

2008 2007

rm rm

Singapore Dollar - 19,216

United States Dollar - 71,496

23. short-term borroWinGs

the GrouP

2008 2007

rm rm

SECURED:

Bills payable 31,084,110 23,293,723

hire purchase payables (Note 18) 241,434 112,010

Term loans (Note 19) 5,534,026 3,932,948

36,859,570 27,338,681

The bills payable of the Group at the balance sheet date bore effective interest at rates ranging from 4.83% to 8.35% (2007 - 4.63% to 8.60%) per annum and are secured by way of:-

(a) legal charges over certain long leasehold land and buildings of the subsidiaries and of a related party;

(b) a debenture over certain plant and machinery of a subsidiary;

(c) a joint and several guarantee of certain directors of a subsidiary and a related party; and

(d) a corporate guarantee from the Company.

24. banK overDrafts

The bank overdrafts of the Group at the balance sheet date bore effective interest at rates ranging from 7.78% to 8.55% (2007 - 7.75% to 8.60%) per annum and are secured in the same manner as the bills payable as disclosed in Note 23 to the financial statements.

25. revenue


rm rm rm rm

Sale of goods 86,462,356 82,038,163 - -

Contract revenue 1,561,834 1,334,344 - -

Dividend income - - - 4,000,000

88,024,190 83,372,507 - 4,000,000



pg.52

26. other income


rm rm rm rm

Allowance for doubtful debts written back 639,204 247,085 - -

Gain on disposal of plant and equipment 107,356 103,493 - -

Insurance claims - 342,369 - -

Management fee - - 240,000 -

Realised gain on foreign exchange 93,836 209,300 - -

Sundry income 348,926 159,815 - -

1,189,322 1,062,062 240,000 -

27. Profit before taXation

In addition to those disclosed in Note 26 to the financial statements, profit before taxation is arrived at after charging:-


rm rm rm rm

Allowance for doubtful debts 208,790 318,311 - -

Amortisation of intangible asset 46,000 7,667 - -

Amortisation of prepaid lease payments 175,216 - - -

Audit fee

- statutory audit 105,000 62,400 21,000 16,000

- underprovision in the previous financial year 11,131 - - -

- other non-statutory services - 57,062 - 17,750

Bad debts written off 17,992 12,258 - -

Contract costs recognised as expenses 1,404,571 1,168,380 - -

Depreciation of property, plant and equipment 6,949,812 6,526,598 - -

Directors’ fee 60,000 - 60,000 -

Directors’ non-fee emoluments 667,139 761,840 - -

Equipment written off 5,226 5,270 - -

interest expense:

- bank overdrafts 660,480 666,701 - -

- bills payable 1,258,002 1,299,985 - -

- hire purchase 17,347 54,793 - -

- term loans 909,202 986,931 - -

Loss on disposal of plant and equipment - 380 - -

Rental of premises 56,500 62,400 - -

Research expenses 185,782 32,849 - -

Staff costs 5,678,868 4,782,961 - -


annual Report 2008


28. income taX eXPensethe GrouP the comPany

2008 2007 2008 2007 rm rm rm rm

Current tax expense:

- for the financial year 953,786 930,919 26,594 -

- under/(over)provision in the previous financial year 150,319 (52,286) - -

1,104,105 878,633 26,594 -

Deferred tax expense (Note 20)

- relating to origination and

reversal of temporary differences (527,015) (60,618) - -

- change in statutory tax rate (202,357) - - -

- overprovision in the previous financial year (534,975) - - -

(1,264,347) (60,618) - -

(160,242) 818,015 26,594 -

During the financial year, the statutory tax rate was reduced from 27% to 26%, as announced in the Malaysian Budget 2007.

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

the GrouP the comPany 2008 2007 2008 2007 rm rm rm rm

Profit before taxation 7,833,578 7,752,634 11,109 3,950,411

Tax at the statutory tax rate of 26% (2007 - 27%) 2,036,700 2,093,000 2,900 1,067,000

Tax effects of:-

Non-taxable gains/income (301,300) (36,000) - (1,080,000)

Non-deductible expenses 574,100 856,301 23,694 13,000

Utilisation of reinvestment allowances (1,575,500) (1,603,000) - -

utilisation of deferred tax assets not recognised in the previous financial year (174,700) (133,000) - -

Utilisation of industrial building allowance (27,700) - - -

Deferred tax assets not recognised during the financial year - 92,000 - -

under/(over)provision in the previous financial year

- current tax 150,319 (52,286) - -

- deferred tax (534,975) - - -

effect of change in tax rate on deferred tax (202,357) (375,000) - -

Differential in tax rates (62,700) (24,000) - -

Others (42,129) - - -

income tax expense for the financial year (160,242) 818,015 26,594 -



pg.54

29. earninGs Per share

The basic earnings per share (“ePS”) is arrived at by dividing the Group’s profit attributable to the equity holders of the Company of RM7,988,929 (2007 - RM6,920,941) by the number of ordinary shares in issue during the financial year of 98,000,000 (2007 - weighted average of 86,857,973 ordinary shares).

The fully diluted earnings per share for the Group is not presented as there were no potential dilutive ordinary shares outstanding at the balance sheet date.

30. Purchase of ProPerty, Plant anD eQuiPment

the GrouP

2008 2007

rm rm

Cost of property, plant and equipment purchased (Note 7) 19,428,916 22,980,752

Amount financed through hire purchase (460,000) (250,000)

Cash disbursed for the purchase of property, plant and equipment 18,968,916 22,730,752

31. acQuisition of subsiDiary

in the previous financial year, the Company acquired the entire equity interest comprising 100,000 ordinary shares of RM1.00 each of Resintech-Kapar Sdn. Bhd. (“RKSB”) for a cash consideration of RM100,000.

The effects of net assets acquired and the cash flow which arose from the acquisition of the subsidiary in the previous financial year were as follows:-

the GrouP

2007

rm

Fair value of net assets acquired/Total cash consideration 2

Cash and cash equivalents of subsidiary acquired (2)

Cash outflow on acquisition of subsidiary -

The effects of the acquisition of the subsidiary on the financial results of the Group in the previous financial year

were as follows:-

the GrouP

2007

rm

Revenue 11,574,232

Loss for the financial year (363,711)


annual Report 2008


32. cash anD cash eQuivalents

For the purpose of the cash flow statements, cash and cash equivalents comprise the following:-


rm rm rm rm

Cash and bank balances 1,086,473 12,417,862 41,490 1,205,835

Bank overdrafts (8,555,254) (5,912,408) - -

(7,468,781) 6,505,454 41,490 1,205,835

33. Directors’ remuneration

The aggregate amount of remuneration received and receivable by directors during the financial year are as follows:-


rm rm rm rm

executive directors:

- non-fee emoluments 667,139 761,840 - -

Non-executive directors:

- fee 60,000 - 60,000 -

727,139 761,840 60,000 -

The remuneration received/receivable by directors from the Group and the Company during the financial year falls within the following bands:-


executive directors:

RM50,001 - RM100,000 1 - - -

RM100,001 - RM150,000 1 2 - -

RM150,001 - RM200,000 1 1 - -

RM400,001 - RM450,000 1 1 - - 4 4 - -

Non-executive directors:

Below RM50,000 2 - 2 - 6 4 2 -



pg.56

34. relateD Party Disclosures

(a) identities of related parties

(i) the Company has a controlling related party relationship with its subsidiaries as disclosed in Note 6 to the financial statements;

(ii) the directors who are the key management personnel; and

(iii) entity controlled by certain key management personnel.

(b) in addition to the information disclosed elsewhere in the financial statements, the Group and the Company carried out the following transactions with its related parties during the financial year:


2008 2007 2008 2007

rm rm rm rm(i) subsidiaries

Management fee received/receivable - - 240,000 -

(ii) Key management personnel Short-term employee benefits 727,139 761,840 60,000 -

(iii) entity controlled by certain key management personnel

Rental paid/payable 30,000 30,000 - -

35. caPital commitments

the GrouP

2008 2007

rm rm

Property, plant and equipment:

- approved and contracted for 838,900 931,600

36. continGent liabilities


2008 2007 2008 2007

rm rm rm rm

Corporate guarantees given to licensed bank for banking facilities granted to the subsidiaries - - 30,960,900 -

Corporate guarantees given to a supplier as a security for the supply of materials to a subsidiary 714,100 - 714,100 -

714,100 - 31,675,000 -


annual Report 2008


37. foreiGn eXchanGe rate

The principal closing foreign exchange rate used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of the foreign currency balances at the balance sheet date is as follows:-

the GrouP

2008 2007

rm rm

United States Dollar 3.19 3.51

38. seGmental rePortinG

2008manufacturinG

anD traDinG servicescontract

revenueinvestment

holDinG elimination GrouPrm rm rm rm rm rm

revenue

external sales 86,462,356 - 1,561,834 - - 88,024,190

Inter-segment sales 16,660,283 390,000 - - (17,050,283) -

103,122,639 390,000 1,561,834 - (17,050,283) 88,024,190

results

Segment results 10,497,362 120,818 51,504 11,109 - 10,680,793

Finance costs (2,777,680) (69,535) - - - (2,847,215)

Profit before taxation 7,719,682 51,283 51,504 11,109 - 7,833,578

income tax expense 160,242

Profit after taxation 7,993,820

other information

assets

Segment assets 165,457,756 11,631,040 1,091,418 50,755,488 (80,472,767) 148,462,935

Unallocated corporate assets 757,799

Consolidated total assets 149,220,734



pg.58

38. seGmental rePortinG (cont’D)

2008manufacturinG


revenueinvestment


liabilities

Segment liabilities 93,656,443 2,303,873 736,525 27,595 (28,054,935) 68,669,501

Unallocated corporate liabilities 10,012,094

Consolidated total liabilities 78,681,595

Capital expenditure 19,426,749 - 2,167 - - 19,428,916

Depreciation 6,790,393 157,844 1,575 - - 6,949,812

Amortisation of intangible asset 46,000 - - - - 46,000

Amortisation of prepaid lease payments 130,937 44,279 - - - 175,216

2007

revenue

external sales 82,038,163 - 1,334,344 - - 83,372,507

Inter-segment sales 18,685,564 394,400 - 4,000,000 (23,079,964) -

100,723,727 394,400 1,334,344 4,000,000 (23,079,964) 83,372,507

results

Segment results 10,955,388 104,853 111,150 (49,566) - 11,121,825

Finance costs (3,287,576) (81,076) (516) (23) - (3,369,191)

Profit before taxation 7,667,812 23,777 110,634 (49,589) - 7,752,634

income tax expense (818,015)

Profit after taxation 6,934,619

other information

assets

Segment assets 149,004,401 11,621,819 750,206 54,183,994 (86,710,098) 128,850,322

Unallocated corporate assets 121,801

Consolidated total assets 128,972,123


annual Report 2008


38. seGmental rePortinG (cont’D)

2007manufacturinG


revenueinvestment


liabilities

Segment liabilities 85,238,707 2,508,682 381,554 37,210 (35,553,416) 52,612,737

Unallocated corporate liabilities 10,384,067

Consolidated total liabilities 62,996,804

Capital expenditure 22,973,199 - 7,553 - - 22,980,752

Depreciation 6,520,507 5,143 948 - - 6,526,598

Amortisation of intangible asset 7,667 - - - - 7,667

The revenue of the Group is derived mainly from customers located in Malaysia. The Group’s assets are wholly

located in Malaysia and the cost to acquire property, plant and equipment arose in Malaysia.

39. fair values of financial instruments

Fair value is defined as the amount at which the financial instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced sale or liquidation.

The following methods and assumptions are used to estimate the fair value of each class of financial instruments:-

(a) amount owing by subsidiaries

It is not practicable to estimate the fair value of the amount owing by the subsidiaries due principally to the lack of fixed repayment terms. however, the Company does not anticipate the carrying amount recorded at the balance sheet date to be significantly different from the value that would eventually be received.

(b) long-term borrowings

The carrying amounts approximated the fair values of these instruments. The fair values of the long-term borrowings are determined by discounting the relevant cash flows using the current interest rates for similar instruments at the balance sheet date.

(c) bank balances and other short-term receivables/Payables

The carrying amounts approximated their fair values due to the relatively short-term maturity of these instruments.



pg.60

39. fair values of financial instruments (cont’D)

(d) contingent liabilities

The nominal amount and net fair value of financial instruments not recognised in the balance sheets of the Company are as follows:

notenominal amount

net fair value

the GrouP

At 29 February 2008

In respect of corporate guarantee given to a supplier as a security for the supply of materials to a subsidiary 36 714,100 *

the comPany

At 29 February 2008

In respect of corporate guarantees given to licensed banks for banking facilities granted to subsidiaries 36 30,960,900 *

In respect of corporate guarantee given to a supplier as a security for the supply of materials to a subsidiary 36 714,100 *

* - The net fair value of the contingent liabilities is estimated to be minimal as the subsidiaries are expected to fulfill their obligations to repay their borrowings.

40. effects arisinG from the aDoPtion of neW anD reviseD frs

The following comparative figures have been restated as a result of accounting for the effects of FRS 117 retrospectively:-

asPreviously aDJustment as

rePorteD frs 117 restateD rm rm rm

the GrouP

Balance Sheet (extract):-

Property, plant and equipment 76,512,214 (11,090,361) 65,421,853

Prepaid lease payments - 11,090,361 11,090,361

Prior to 1 March 2007, leasehold land was classified under property, plant and equipment and was stated at cost less accumulated amortisation and accumulated impairment losses, if any. upon adoption of the revised FRS 117, the unamortised amount of leasehold interest in the land is retained as the surrogate carrying amount of the prepaid lease payments as allowed by the revised FRS 117.

41. significant event During the financial year

on 30 May 2007, the Company further subscribed for 900,000 ordinary shares of RM1 each in RKSB for a total cash consideration of RM900,000.

42. significant event subsequent to balance sheet Date

An interim tax-exempt dividend of RM0.02 per share amounting to RM1,960,000 was declared in respect of the financial year ending 28 February 2009. The dividend will be accounted for in the financial statements for the financial year ending 28 February 2009


annual Report 2008


locationDescription/ existing use

build-up area/ land area*

(sq.ft.) tenureregistered

owner

approximate age of

buildings net book value (rm)

Date of last valuation

Lot 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang42500 Telok Panglima GarangSelangor Darul Ehsan

Single-storey detached factory, a 3-storey office block and single storey hall with

additional 2 floors

237,185 / 177,139

To be issued with a 99-year

leasehold qualified title.

RPSB 9 years 15,324,906 15 September

2004

No 21 Jalan Taming 7, Taman Taming Jaya 43300 Balakong Selangor Darul Ehsan

Intermediate 1½ storey terrace light industrial factory

2,160 / 2,970 Freehold RPSB 11 years 321,750 15 September

2004

Lot PT 13749Pandamaran Port KlangSelangor Darul Ehsan

Vacant commercial land

1,600 Leasehold 99 years expiring on 26 August

2087

RPSB n/a 107,778 15 September

2004

Lot PT 14229 Pandamaran Jaya IndustrialMukim KlangSelangor Darul Ehsan

Vacant industrial land 9,075 Leasehold 60 years expiring

on 16 Mac 2068

RPSB n/a 272,222 15 September

2004

Lot 1851 Jalan Camp, Port Klang Selangor Darul Ehsan

Vacant industrial land 215,056 Leasehold 99 years expiring

on 7 April 2090

RPSB n/a 2,649,259 15 September

2004

Lot 107 Block 14 Batu 24, Kuching/Serian Road Sentah/Segu Land District Kuching Division Sarawak

Development land, approved for

construction of a 1½ storey light industrial

building

150,898 Leasehold 60 years expiring on 6 January

2012

RPSB n/a 213,056 15 October 2004

Lot 24 & 25 export Oriented Industrial Zone Phase 2 Kota Kinabalu industrial Park Sabah

2 adjoining pieces of industrial land

175,547 To be issued with a 99-year

leasehold qualified title

RPSB n/a 2,105,000 16 October 2004

Lot 3 Jalan Waja 15 Kaw Perindustrian Telok Panglima Garang 42500 Telok Panglima Garang Selangor Darul Ehsan

4 single-storey warehouses

240,508 / 117,600

To be issued with a 99-year

leasehold qualified title

eLSB 9 years 11,402,473 4 January 2005

Lot 6461 Batu 5¾ Jalan Kapar 42200 Kapar Selangor Darul Ehsan

Double-storey factory building cum office

block, a double storey canteen block cum

store, a guard house and a motorcycle

shed

219,978 / 40,000

Freehold RPSB 16 years 4,661,200 29 June 2006

(Date of Acquisition)

No 9 Jalan MJ 49 Taman Merdeka Jaya Batu Berendam 75350 Melaka

Double-storey terrace shop-office

1195 Leasehold RPSB 10 years 120,000 5 February 2008

(Date of Settlement)









List Of Propertiesat 30 June 2008


pg.62

analysis Of Ordinary shareholdingsas at 30 June 2008

Authorised Share Capital : RM 100,000,000.00 divided into 200,000,000 ordinary shares of RM0.50 eachissued and Fully Paid-up Share Capital : RM 49,000,000.00 divided into 98,000,000 ordinary shares of RM0.50 eachClass of Shares : ordinary shares of RM0.50 eachVoting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

Distribution scheDule of shareholDers

size of holdings no. of holders total shareholdings %

Less than 100 shares 3 102 0.00

100 to 1,000 shares 169 162,998 0.16

1,001 to 10,000 shares 544 2,769,000 2.83

10,001 to 100,000 shares 237 7,931,400 8.09

100,001 to 4,899,999 shares* 35 20,851,500 21.28

4,900,000 shares and above** 3 66,285,000 67.64

991 98,000,000 100.00

* Less than 5% of issued shares

** 5% and above of issued shares

30 larGest securities account holDers for orDinary shares(without aggregating securities from different securities accounts belonging to the same person)

no. name no. of shares held %

1 Dato’ Dr. Teh Kim Poo 29,540,000 30.14

2 Tema Evolusi Sdn Bhd 19,104,000 19.49

3 eB Nominees (Tempatan) Sdn Bhd(A/C for Dato’ Dr. Teh Kim Poo)

10,750,000 10.97

4 Datin Gan Jew 6,891,000 7.03

5 uBB (Malaysia) Trustee Berhad (A/C for Dato’ Abu Sujak bin Mahmud-Trust)

3,264,000 3.33

6 Teh Leng Kang 3,000,000 3.06

7 Lim Chai Beng 2,703,900 2.76

8 Techvilla Engineering Sdn Bhd 2,578,200 2.63

9 Hooi Mei Yin 1,200,300 1.22

10 Kenanga Nominees (Tempatan) Sdn Bhd(A/C for ei Kim hock)

781,600 0.80

11 PM Nominees (Tempatan) Sdn Bhd (A/C for yap Chin yu)

696,000 0.71

annual Report 2008


30 larGest securities account holDers for orDinary shares(without aggregating securities from different securities accounts belonging to the same person)

no. name no. of shares held %

12 Lim Boon Siong 602,500 0.61

13 Tee Chee Chong 475,100 0.48

14 eB Nominees (Tempatan) Sdn Bhd(A/C for ong Pick Shya)

465,000 0.47

15 Affin Nominees (Tempatan) Sdn Bhd (A/C for ong Chee Kean)

440,000 0.45

16 Chua Ching Siang 400,000 0.41

17 Tew Shau Yeng 388,000 0.40

18 Teo Chow Seng 358,000 0.37

19 Mohamad Nizam Bin Yaacob 322,200 0.33

20 Tan Ah Lan 291,000 0.30

21 uBB (Malaysia) Trustee Berhad (A/C for Beh hang Kong)

278,000 0.28

22 Khoo Ting hock 260,000 0.27

23 Mayban Nominees (Tempatan) Sdn Bhd(A/C for Beh hang Kong)

220,400 0.22

24 Public Nominees (Tempatan) Sdn Bhd(A/C for hacong hardware & electrical Sdn Bhd)

190,000 0.19

25 hDM Nominees (Tempatan) Sdn Bhd(A/C for yap Cheng Chon)

188,000 0.19

26 Tse Kim huat 167,600 0.17

27 Tan hai Kiang 150,000 0.15

28 Huan Meng Yong 147,000 0.15

29 Kok Fook yu 145,000 0.15

30 Kenanga Nominees (Tempatan) Sdn Bhd(A/C for Tan Cheoh Leong)

140,000 0.14

analysis Of Ordinary shareholdingsas at 30 June 2008 (cont’d)


pg.64

substantial shareholDers (Direct & indirect)(as per register of substantial shareholders)

No. of ordinary shares of RM0.50 each beneficially held by the Substantial Shareholders

no. shareholder Direct interest % indirect interest %

1 Dato’ Dr. Teh Kim Poo 40,290,000 41.11 9,966,000* 10.17

2 Datin Gan Jew 6,891,000 7.03 43,365,000* 44.25

3 Tema Evolusi Sdn Bhd 19,104,000 19.49 - -

* Deemed interest by virtue of family relationship.

Directors’ shareholDinG (Direct & indirect)(as per register of Directors’ shareholdings)

No. of ordinary shares of RM0.50 each beneficially held by the Directors

name of Directors Direct interest % indirect interest %

Dato’ Abu Sujak bin Mahmud 3,264,000 3.33 - -

Dato’ Dr. Teh Kim Poo 40,290,000 41.11 9,966,000* 10.17

Datin Gan Jew 6,891,000 7.03 43,365,000* 44.25

Teh Leng Kang 3,000,000 3.06 - -

Khairul Anuar bin Shaharudin - - - -

Wei Hwei Hong - - - -

* Deemed interest by virtue of family relationship.

analysis Of Ordinary shareholdingsas at 30 June 2008 (cont’d)

form of Proxy

(incorporated in Malaysia)

cDs account no. (i) .........................................................

no. of shares held .........................................................

*i/We ....................................................................................................................... NRiC No./Company No .................................. (FuLL NAMe iN BLoCK CAPiTALS)

of .......................................................................................................................................................................................................(FuLL ADDReSS)

being a member/members of ReSiNTeCh BeRhAD (341662-X), hereby appoint ..........................................................................

....................................................................................................................................... NRiC No. ................................................... (FuLL NAMe iN BLoCK CAPiTALS)

of .......................................................................................................................................................................................................(FuLL ADDReSS)

or failing *him/her, ......................................................................................................... NRiC No. ................................................... (FuLL NAMe iN BLoCK CAPiTALS)

of .......................................................................................................................................................................................................(FuLL ADDReSS)

or failing *him/her, *the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at Concorde iii, Level 2, Concorde hotel, 3 Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul ehsan on Friday, 29 August 2008 at 10.00 a.m. and at any adjournment thereof.

for against




ordinary Resolution 4



(Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast. unless voting instructions are indicated in the space above, the proxy will vote as he/she thinks fit.)(i) Applicable to shares held through a nominee account.* Delete where applicable

Signed this ......................... day of .......................... 2008For appointment of two proxies, percentage if shareholdings to be represented by the proxies:

No. of shares Percentage

Proxy 1

........................................................................................... Proxy 2

Signature/Common Seal of Member Total 100%

Notes:

1. A member entitled to attend and vote at the meeting is entitled to appoint up to two (2) proxies to attend and vote in his/her stead. if a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportion of his/her holdings to be represented by each proxy. A proxy may but need not be a member of the Company. if the proxy is not a member, he/she need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney or if such appointor is a corporation under its common seal or the hands of its attorney.

3. The instrument appointing a proxy must be deposited at the Company Secretary’s office at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, 50250 Kuala Lumpur not less than forty-eight (48) hours before the time for the holding of the Annual General Meeting or any adjournment thereof.

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