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CAREPLUS GROUP BERHAD(896134-D)

Quality & Relationshipyou can trust

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(896134-D)


Lot 110, Lorong Senawang 4/3, Off Jalan Senawang Empat,Senawang Industrial Estate, 70450 Seremban, Negeri Sembilan Darul Khusus, Malaysia.E-mail : [email protected], [email protected] : (06) 677 2781Fax : (06) 677 2780

www.careplus.comA

nnual Rep

ort 2011

Annual Report 2011

Contents CORPORATE STRUCTURE 2

CORPORATE INFORMATION 3

LETTER TO SHAREHOLDERS 4

PROFILE OF OUR DIRECTORS 10

CORPORATE GOVERNANCE STATEMENT 12

INTERNAL CONTROL STATEMENT 17

REPORT OF THE AUDIT COMMITTEE 18

ADDITIONAL COMPLIANCE INFORMATION 21

FINANCIAL STATEMENTS 22

LIST OF PROPERTIES 80

ANALYSIS OF SHAREHOLDINGS 81

NOTICE OF FIRST ANNUAL GENERAL MEETING 83

PROXY FORM ENCLOSED


2 CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 20112 CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011

CORPORATE STRUCTURE

CAREPLUS GROUP BERHAD

Careplus (M) Sdn Bhd Rubbercare Protection Products

Sdn Bhd*

Masterclean Technologies

Sdn Bhd

Careglove GlobalSdn Bhd

All subsidiaries are wholly-owned.* Formerly known as Perusahaan Pelindung Getah (M) Sdn Bhd

CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 3CORPORATE INFORMATION

BOARD OF DIRECTORSYew Nieng Choon Non-Independent Non-Executive Chairman

Lim Kwee Shyan Executive Director cum Group Chief Executive Offi cer

Yew Yee Peng Non-Independent Executive Director

Loo Teck Looi Non-Independent Executive Director

Tan Chuan Hock Independent Non-Executive Director

Foong Kuan Ming Independent Non-Executive Director

SHARE REGISTRARSymphony Share Registrars Sdn BhdLevel 6, Symphony House,Pusat Dagangan Dana 1, Jalan PJU 1A/46,47301 Petaling Jaya, Selangor.Tel: (03) 7841 8000Fax: (03) 7841 8008

AUDITORSCrowe Horwath (AF : 1018)Chartered AccountantsLevel 16, Tower C, Megan Avenue II,No. 12, Jalan Yap Kwan Seng,50450 Kuala Lumpur.Tel: (03) 2166 0000Fax: (03) 2166 1000

PRINCIPAL BANKERSRHB Bank BerhadAlliance Bank Malaysia Berhad

SPONSOROSK Investment Bank Berhad (14152-V)20th Floor, Plaza OSK,Jalan Ampang,50450 Kuala LumpurTel: (03) 2333 8333Fax: (03) 2175 3333

STOCK EXCHANGE LISTINGACE Market of Bursa Malaysia Securities BerhadStock Name: CAREPLSStock Code: 0163

AUDIT COMMITTEETan Chuan Hock ChairmanYew Nieng ChoonFoong Kuan Ming

NOMINATION COMMITEETan Chuan Hock ChairmanYew Nieng ChoonFoong Kuan Ming

REMUNERATION COMMITEETan Chuan Hock ChairmanYew Nieng ChoonFoong Kuan Ming

COMPANY SECRETARIESTea Sor Hua (MACS 01324)Chan Bee Fang (MAICSA 7032385)

REGISTERED OFFICEThird Floor, No. 79 (Room A)Jalan SS21/60Damansara Utama47400 Petaling JayaSelangor Darul EhsanTel: (03) 7728 4778Fax : (03) 7722 3668

PRINCIPAL OFFICELot 110, Lorong Senawang 4/3, Off Jalan Senawang Empat,Senawang Industrial Estate,70450 Seremban, Negeri Sembilan Darul Khusus.Tel: (06) 677 2781Fax: (06) 677 2780E-mail: [email protected] [email protected]: www.careplus.com

4 CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011

Dear Shareholders,

On behalf of the Board of Directors, we are pleased to present the First Annual Report of Careplus Group Berhad (“Careplus”) for the Financial Period Ended 31 January 2011.

LETTER TO SHAREHOLDERS


Quality & Relationshipyou can trust

CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 5

Our Listing on the ACE Market of Bursa Malaysia Securities Berhad (“ACE Market”)

The fi nancial period just ended has proven to be a historic one for our Group. After over twenty years operating away from the public eye in Senawang, we took the bold decision to seek a listing on the ACE Market. This undertaking commenced in January 2010, and culminated in our eventual listing on the ACE Market on 6 December 2010. In this regard, we’d like to thank all our professional advisers for their assistance and guidance during this time. We hope to continue to strengthen the relationships we’ve built during this journey, and that these professional advisers will grow along with us.

Industry Trends

The rubber glove industry is currently undergoing some very trying times. The increase in natural rubber latex prices, coupled with the stronger Malaysian Ringgit versus the US Dollar, have both piled tremendous price pressures on our industry.

These trends have affected all rubber glove manufacturers, to varying degrees. We address how these trends have affected our fi nancial performance in the ensuing section.


Financial Performance Review

For the fi nancial perid ended 31 January 2011, our Group registered turnover and profi t after tax (“PAT”) amounting to RM47.2 million and RM3.1 million respectively. When compared to the previous year (on a proforma basis), turnover for our Group has increased from RM41.9 million (increase of RM5.3 million or 13%) while PAT has declined from RM6.1 million (decline of RM3.0 million or 49%) respectively. The reason behind the increase in revenues which were not accompanied by the corresponding increase in profi tability lies in our earlier assessment of the state of the rubber glove industry in Malaysia over the preceding year. The signifi cant increases in latex prices coupled with the strengthening of the Malaysian Ringgit versus the US Dollar resulted in higher manufacturing costs for our gloves. Whilst our sales contracts with our customers enables us to pass on these cost increases to them, there is always a time lag between the increase in raw material costs and the increase in our selling prices. In the year under review, we were only able to partially pass on the increase in costs to our customers, resulting in a small increase in revenue which was accompanied by lower profi ts.


LETTER TO SHAREHOLDERS CONT’D


Rubbercare, our housebrandwith uncompromised reliability

CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 7CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 7

Ongoing Expansion

Away from the corporate scene, we also took a major step in our corporate history by acquiring a nine (9) acre piece of land situated merely fi ve (5) minutes away from our existing factory. This new plant will enable us to undertake an ambitious expansion plan which will see our production capacity double within the next three years. Work has progressed well at this new factory and we have completed the commissioning of the fi rst two (2) lines in this new factory in June 2011. Barring unforeseen circumstances, we expect the commissioning of the next two (2) lines to be completed by September 2011.

Corporate Developments

This has been a busy year for us in terms of corporate developments. In line with our listing exercise, we undertook a corporate restructuring exercise to arrive at our current structure. On 31 January 2011 we changed the name of one of our subsidiaries from Perusahaan Pelindung Getah (M) Sdn Bhd to Rubbercare Protection Products Sdn Bhd (“Rubbercare”). This was done to better refl ect the nature of our business and to give more prominence to our Rubbercare brand name which is used around the world. In addition the name in English would be better understood by our existing and potential customers worldwide.

On 24 February 2011, we incorporated Careglove Global Sdn Bhd (“Careglove”), primarily to carry on the business of manufacturing and dealing in gloves. On 11 June 2011 and 13 June 2011 respectively, the Group transferred approximately RM31 million worth of plant and machineries, and land, from Rubbercare to Careglove. This exercise was undertaken to segregate the recently acquired land together with the factory constructed on it into

a separate special purpose company (i.e. Careglove), in order to facilitate the enjoyment of tax and other benefi ts that may arise in the future. Another objective in undertaking this restructuring exercise was to improve effi ciency in operations. The equipment in the new factory are newer and more effi cient than the existing six (6) productions lines in the existing factory. With the new factory being accounted for under a different company/entity, it will enable the group to monitor its costs and returns from its new factory as compared to from the existing factory and ascertain further areas for improvement.

The most signifi cant corporate development for us since our listing was the signing of a conditional Joint Venture (“JV”) Agreement with Descarpack Descartaveis Do Brasil Ltda (“Descarpack”) on 17 June 2011. Descarpack is a major distributor of disposable medical supplies in Brazil. Under the joint venture, Careplus Group will own 50% plus one share in the JV company (i.e. Careglove), whereas Descarpack will own the balance shares (i.e. 50% less one share) in the JV company. The JV company will then go through the process of applying for the relevant certifi cation in Brazil to enable the JV company’s products to be sold there. Once this certifi cation has been obtained, the JV company will produce latex and nitrile gloves to be sold to Descarpack in Brazil, for their sale and distribution there. Presently our collaboration via this JV relates only to the Brazilian market, but we are able to extend this to other South American countries if so desired mutually. More details of this JV are available in our announcement to Bursa Securities on 17 June 2011. This transaction is subject to the approval of our shareholders, at an Extraordinary General Meeting to be convened.

We look forward to working very closely with Descarpack towards bringing this JV to fruition, and would like to welcome them into the Careplus Group.


LETTER TO SHAREHOLDERS CONT’D

Protectionis in our name


CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 9CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 9

Corporate Social Responsibility

We at Careplus believe in fulfi lling our social responsibilities and take a very proactive approach in being environmentally responsible in our manufacturing approach. Our anaerobic wastewater treatment plant and the construction of a new biomass plant at our new factory are merely two examples of this consciousness in all that we do towards Mother Earth.

On the social aspect, we are active supporters of Persatuan Berdikari Seremban Negeri Sembilan (PBSNS) where the Chairman of our Board, Mr Yew Nieng Choon is also the Chairman. PBSNS is an employment training centre for people with learning disabilities. Originally founded in 1998, this centre now houses up to 40 trainees in two (2) centres. Over the years, PBSNS has trained over 40 trainees in its centres, enabling some of them to fi nd jobs in suitable work places nearby and easing their fi nancial burden. The rest are employed within the centre’s Sheltered Workshop where they earn a small income to qualify them for welfare allowances. Other than the involvement of Mr. Yew as the Chairman of PBSNS, we also provide monetary contribution towards the running of the centres.

Prospects

As mentioned earlier in our statement, the rubber glove industry is undergoing a challenging period with the increase in natural rubber latex prices and the impact of the weakening US Dollar. In addition, the continuous rise in the demand for nitrile gloves as an alternative product to natural rubber latex gloves and the fear of overcapacity among the industry players also present a different dimension to the challenges faced by natural rubber latex glove manufacturers.

Despite these challenges, we believe that the industry will remain buoyant and will continue to see an increase in demand, as global standards of health care and hygiene continue to rise and with the opening up of new foreign markets.

We believe we are in a good position to weather these challenges. Our major customers have been with us for between 5 to 15 years, and we have proven ourselves to be a dependable supplier to them during this time. In addition, our ongoing expansion plan will enable us to widen our product offering, for existing customers as well as for prospective customers, and will also enable us to grow along with some of our bigger customers.

Appreciation and acknowledgments

On behalf of the Board of Directors, we would like to express our appreciation to our valued clients and suppliers, many whom have journeyed with us for numerous years, for their continued support and loyalty. A company like ours constantly deals with numerous government departments, and we’d also like to thank them for their continued assistance and support. Not forgetting our bankers, professional advisors, other business associates and partners who have shown their support to us in many ways, especially in their continued confi dence in our abilities and in our ambition.

Our journey thus far has been guided by our Board of the Directors, and we’d like to express our gratitude again for the contributions of our Board members, their guidance and their willingness to lend advice and provide support.

The core of any organisation is its people, and here we want to thank our management and staff. Many of you have been with us for many years, and we thank you for your diligence, hard work, and loyalty.

Last, but not least, we’d like to thank our valued shareholders, most of whom have been with us only since our listing, for your support. We will continue to run this group with diligence and hard work, with the aim of increasing shareholders’ value.

Yew Nieng Choon, ChairmanLim Kwee Shyan, Executive Director cum Group Chief Executive Offi cer 24 June 2011


YEW NIENG CHOONNon-Independent Non-Executive Chairman

Yew Nieng Choon, Malaysian, aged 63, is our Non-Independent Non-Executive Chairman and was appointed to our Board on 30 March 2010. Mr. Yew is also a substantial shareholder of our Company. He is also a member of our Audit Committee, Remuneration Committee and Nomination Committee. He brings with him invaluable industry experience having accumulated over 35 years of experience in the latex industry. In 1971, he graduated with a Bachelor of Science with Second Class Upper Honours in Chemistry from University of Malaya. He started his career as a Quality Control (“QC”) Chemist with Lembaga Kemajuan Tanah Persekutuan (FELDA) in 1972, where he was involved in setting up the QC laboratory in FELDA’s fi rst latex concentrate factory in Gemas, Negeri Sembilan. In 1975, he joined H&C Latex Sdn Bhd (“H&C”) as a Chemist. H&C, a producer of latex concentrate, is a subsidiary of Harrisons and Crosfi eld Inc. Throughout his 13 years employment with H&C, he held various positions. His last position held was a Factory Manager.

In 1988, he recognised the potential of the rubber gloves industry and brought his experience and knowledge to form Rubbercare Protection Products Sdn Bhd (f.k.a. Perusahaan Pelindung Getah (M) Sdn Bhd) (“Rubbercare”). Subsequently, in 1991, he founded Careplus (M) Sdn Bhd (“Careplus (M)”), a marketing arm of our Group to support Rubbercare in the rubber gloves industry. He has been instrumental in the growth and development of our Group and has been the key driving force in the expansion of the operations of our Group. Currently, Mr. Yew holds a non-executive position in our Group and serves as an adviser to our Group. With his experience and knowledge in the rubber gloves industry, Mr. Yew is able to assist our Group in troubleshooting as well as providing advice to our management, to further enhance our business development.

Mr. Yew is also actively involved in social, cultural and charitable activities. He is presently a member of the Wesley Methodist Church in Seremban, Negeri Sembilan. In addition, he presently holds the Chairman position in Persatuan Berdikari Seremban, Negeri Sembilan, an association that provides job skills training to people with learning disabilities in Seremban, Negeri Sembilan to help them to acquire jobs.

LIM KWEE SHYANExecutive Director cum Group Chief Executive Offi cer

Lim Kwee Shyan, Malaysian, aged 48, is our Executive Director cum Group Chief Executive Offi cer and was appointed to our Board on 30 March 2010. Mr. Lim is also a substantial shareholder of our Company. He graduated in 1987 with a Bachelor of Science (Honours), majoring in Chemistry and Economics from University Kebangsaan Malaysia. He joined Rubbercare in 1988 as a Production Executive and was subsequently promoted to Factory Manager, and eventually the General Manager. In 1991, Mr. Lim and Mr. Yew Nieng Choon, a common director and shareholder of Rubbercare, had incorporated Careplus (M) as a trading company by buying gloves in bulk, improving the quality and thereafter selling the gloves to its customers. Subsequently in November 2001, Careplus (M) bought over Rubbercare and became the holding company of Rubbercare, in which then Mr. Lim was promoted as Managing Director of Rubbercare and Careplus (M) in 2006. Mr. Lim is primarily responsible for the overall business, strategic planning and the entire operations of our Group. His overall management has contributed signifi cantly to the success and growth of our Group. He has thus far accumulated approximately 22 years of experience in the rubber gloves industry.

Mr. Lim was recently appointed as the President of The Malaysian Rubber Glove Manufacturers’ Association (MARGMA) on 23 April 2011. Prior to that, he had served as its Vice President for a two (2) year term. With his experience and expertise in the rubber gloves industry, he has thus far written, co-written and/or presented a number of technical papers for seminars.

PROFILE OF OUR DIRECTORS


From Left to Right:Loo Teck LooiYew Yee Peng

Yew Nieng ChoonLim Kwee ShyanTan Chuan Hock

Foong Kuan Ming


YEW YEE PENGNon-Independent Executive Director

Yew Yee Peng, Malaysian, aged 37, is our Non-Independent Executive Director and was appointed to our Board on 3 July 2010. She is also currently our Marketing Manager. She graduated with a Bachelor of Business Administration, International Business and Marketing from University of Oklahoma, US in 1996. She started her career in United Overseas Bank Malaysia Berhad (“UOB”) as an Executive in the Merchant Services, Credit Card Centre. She was responsible for the recruitment of new credit card merchants by presenting proposals to potential clients and conducting site visits to selected credit card merchants. Subsequently, she was promoted to hold the position of Customer Relationship Manager in the Privilege Banking of UOB. Her experience includes marketing a range of bank products and handling a portfolio of high net worth customers. In 1999, she joined Careplus (M) as a Marketing Executive and was promoted to a Marketing Manager in 2004, where she holds the position to-date. She is responsible in handling our Group’s marketing, shipping and purchasing activities while maintaining and building relationships with key customers for continuous sales growth.

LOO TECK LOOINon-Independent Executive Director

Loo Teck Looi, Malaysian, aged 37, is our Non-Independent Executive Director and was appointed to our Board on 3 July 2010. He graduated in 1998 with a Bachelor of Development Science with Second Class Upper Honours in Development and General Management Studies from University Kebangsaan Malaysia. He started his career in 1998 with Rubbercare as a Production Executive. Due to his dedicated services and commitment to Rubbercare, he was promoted to a Factory Manager in 2002 and was later made a director of Rubbercare in 2008. Presently, Mr. Loo is responsible for overseeing the operations of Rubbercare’s factory from the production process until the quality control stage.

FOONG KUAN MINGIndependent Non-Executive Director

Foong Kuan Ming, Malaysian, aged 56, is our Independent Non-Executive Director and was appointed to our Board on 14 September 2010. Mr. Foong is a member of our Audit Committee, Remuneration Committee and Nomination Committee.

Mr. Foong is an advocate and solicitor by profession. He graduated with a Bachelor of Arts (Honours) in Law from University of Central Lancashire, England in 1980. He subsequently post-graduated from The Council of Legal Education, London and was called to Utter Barrister-at-Law of Lincoln’s Inn, London. He was called to the Malaysian Bar in 1982 and has been in legal practice since then. He is also an Accredited Mediator with the Malaysian Mediation Centre of the Bar Council of Malaysia.

Mr. Foong is the founder and senior partner of the law fi rm, Messrs Foong & Co., which is principally engaged in banking, corporate and property legal matters. He is presently an independent director in Fajarbaru Builder Group Bhd, a public company listed on the Main Market of Bursa Malaysia Securities Berhad.

TAN CHUAN HOCKIndependent Non-Executive Director

Tan Chuan Hock, Malaysian, aged 50, is our Independent Non-Executive Director and was appointed to our Board on 3 July 2010. He is the Chairman of our Audit Committee, Remuneration Committee and Nomination Committee. He is the executive proprietor and also the founder of William C.H. Tan & Associates, a Chartered Accountants fi rm.

Mr. Tan is a member of the Malaysian Institute of Accountants, Malaysian Institute of Taxation and is a fellow Member of the Association of Chartered Certifi ed Accountants (“ACCA”).

He has more than twenty-fi ve (25) years of experience particularly in fi nancial reporting, auditing, taxation and planning, company secretarial as well as corporate management and advisory services.

He holds directorships in several limited companies. Presently, his directorship in other public companies include PCCS Group Berhad, Grand-Flo Solution Berhad and EITA Resources Berhad. He also sits on the Board of Simat Technologies Public Company Limited, a public company listed on the Stock Exchange of Thailand.

Notes:

(1) None of the Directors have family relationship with any other Directors and/or major shareholders of our Company except for the following:-

(a) Ms. Yew Yee Peng is the daughter of Mr. Yew Nieng Choon.

(b) Mr. Lim Kwee Shyan is the spouse of Madam Ng Shu Si, a major shareholder of our Company.

(c) Mr. Yew Nieng Choon is the spouse of Madam Chan Pek Harn @ Chan Wai Har, a major shareholder of our Company.

(2) None of our Directors have a personal interest in any business arrangement involving our Group except as disclosed in Note 39 of the Financial Statements on Page 65 of this Annual Report.

(3) None of our Directors have been convicted of any offences other than traffi c offences in the past ten (10) years.

PROFILE OF OUR DIRECTORS CONT’D



CORPORATE GOVERNANCE STATEMENT

INTRODUCTION

The Board of Directors of Careplus Group Berhad (“the Board”) is committed towards ensuring good corporate governance practices are implemented and maintained throughout the Company and its subsidiaries (“Group”) as a fundamental part of discharging its duties to enhance shareholders’ values consistent with the principles and best practices set out in Parts 1 & 2 of the Malaysian Code on Corporate Governance (“the Code”).

The Board is pleased to set out below its Corporate Governance Statement which describes the manner in which it has applied the Principles of the Code and the extent to which it has complied with the Best Practices of the Code during the fi nancial period ended 31 January 2011.

THE BOARD

The Group is led by an effective and experienced Board comprising members who have varied experience in general business and fi nancial aspects, as well as in the technical and operational aspects involving the rubber gloves industry. The Board maintains its focus on strategies, fi nancial performance and critical business decisions, generally involving the following:-

• Formulating strategic future business plans for the Group;• Establishing fi nancial budgets in line with the business plans;• Setting up the appropriate action plans geared towards achieving the business plans and budgets;• Establishing key performance indicators for senior management personnel, including Directors, in tandem with the Remuneration

Committee;• Major acquisitions, investments and divestments decisions; • Signifi cant corporate proposals to be undertaken by the Group; and• Internal control systems.

The Board has delegated certain responsibilities to other Board level committees, namely the Nomination Committee, the Remuneration Committee and the Audit Committee to assist the Board in discharging its fi duciary duties, and in achieving its objectives as set out above.

Composition and Balance

i. The Board currently has six (6) members, comprising three (3) Executive Directors [including Mr. Lim Kwee Shyan who is the Executive Director cum Group Chief Executive Offi cer (CEO)], one (1) Non-Independent Non-Executive Director (i.e. the Chairman) and two (2) Independent Non-Executive Directors. This composition ensures that at least one third (1/3) of the Board comprises Independent Directors, in compliance with Rule 15.02 of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).

ii. The presence of the Independent Non-Executive Directors on the Board and in meetings ensures that decisions made by the Board remains objective and independent, and that the interests of minority shareholders are addressed and are accorded with due consideration.

iii. There is a proper balance of power and authority on the Board, with clear division of responsibility between the Chairman and the Group CEO. This delineation provides a good check and balance, with the Chairman being responsible for leadership of the Board, while the Group CEO leads the management of the Group and has overall responsibility for the operating units and the implementation of the Board’s policies and decisions.

Board Meetings and Supply of Information

The Board intends to meet at least four (4) times a year, with additional meetings to be convened where necessary. There was one (1) board meeting convened during the year under review as the Company was only listed on the ACE Market of Bursa Securities on 6 December 2010.

Details of the Directors’ meeting attendance are as follows:-

Name of Directors Designation Attendance

Yew Nieng Choon (Appointed on 30 March 2010) Non-Independent Non-Executive Chairman 1 of 1

Lim Kwee Shyan (Appointed on 30 March 2010) Executive Director cum Group CEO 1 of 1

Yew Yee Peng (Appointed on 3 July 2010) Non-Independent Executive Director 1 of 1

Loo Teck Looi (Appointed on 3 July 2010) Non-Independent Executive Director 1 of 1

Tan Chuan Hock (Appointed on 3 July 2010) Independent Non-Executive Director 1 of 1

Foong Kuan Ming (Appointed on 14 September 2010) Independent Non-Executive Director 1 of 1


CORPORATE GOVERNANCE STATEMENT CONT’D

Board Meetings and Supply of Information (cont’d)

The Directors receive notices of meetings, typically at least fi ve (5) working days prior to the date of the meeting, setting out the agenda for the meetings, complete with a full set of Board Papers. The Board Papers provide suffi cient details of matters to be deliberated during the meeting, and the information provided therein is not confi ned to fi nancial data but includes also non-fi nancial information, both quantitative and qualitative, which is deemed critical for the Directors knowledge and information in arriving at a sound and informed decision.

In the event a potential confl ict of interest situation arises, the Director concerned is to declare his/her interest and shall abstain from any deliberation and participation in the decision making processes.

Minutes of Board meetings together with decisions made by way of resolutions passed are duly minuted and properly maintained by the Company Secretaries. The Company Secretaries are also responsible for ensuring that the Board meeting procedures and all statutory and compliance obligations are adhered to, in addition to offering advice to the Directors on statutory and compliance matters.

The Directors have unrestricted access to information from the management and the outsourced Internal Auditors in furtherance of their duties. If need arises, they are free to obtain independent professional advice at the Company’s expense.

Appointment and Re-election of Board members

The members of the Board are appointed in a formal and transparent practice as endorsed by the Code. The Nomination Committee will make recommendations to the Board who will then go through the list of candidates identifi ed and arrive at a decision on the appointment of the Director. The Company Secretaries will then ensure that all appointments are properly made and that all legal and regulatory obligations are met.

In accordance with the Company’s Articles of Association, at least one third (1/3) of the Directors shall retire at the Annual General Meeting (“AGM”), and be eligible for re-election provided that all Directors shall retire at least once in every three (3) years.

Directors who are appointed by the Board in the course of the year shall be subject to re-election at the next AGM to be held following their appointment.

Directors who are over seventy (70) years of age are required to submit themselves for annual re-appointment in accordance with Section 129(6) of the Companies Act, 1965.

Board Committees

The Board has delegated certain responsibilities to the Board Committees that operates within clearly defi ned terms of reference. These Committees are:

i. Audit Committee

The terms of reference of the Audit Committee and its activities are set forth in the Audit Committee Report on pages 18 to 20 of this Annual Report.

ii. Nomination Committee The Nomination Committee is responsible for identifying and recommending candidates for appointments to the Board, members of

board committees and key management positions. The Nomination Committee will assess the effectiveness of the Board as a whole, our board committees and each individual Director on an annual basis.

The members of the Nomination Committee during the year under review are as follows:-

Name of Committee Members Designation

Tan Chuan Hock, Chairman Independent Non-Executive Director

Yew Nieng Choon, Member Non-Independent Non-Executive Chairman

Foong Kuan Ming, Member Independent Non-Executive Director



Appointment and Re-election of Board members (cont’d)

iii. Remuneration Committee The Remuneration Committee is principally responsible for establishing performance criteria to evaluate the performance of each

member of the Board, developing the Group’s remuneration policy for the Directors and recommending the remuneration packages and terms of employment of the Directors.

The members of the Remuneration Committee during the year under review are as follows:-

Name of Committee Members Designation

Tan Chuan Hock, Chairman Independent Non-Executive Director

Yew Nieng Choon, Member Non-Independent Non-Executive Chairman

Foong Kuan Ming, Member Independent Non-Executive Director

Directors’ Training

All members of the Board have attended and successfully completed the Mandatory Accreditation Programme (MAP).

The Directors are encouraged to attend relevant seminars and training programmes to equip themselves with the knowledge to effectively discharge their duties as Directors. Seminars and conference attended by Directors during the fi nancial period ended 31 January 2011 include the following:-

Name of Directors Title of Some of the Seminars Attended

Yew Nieng Choon • Mandatory Accrediation Programme for Directors

Lim Kwee Shyan • Represented the Malaysian Association of Rubber Glove Manufacturers (“MARGMA”) at the ENSEARCH-UNIDO Conference on Border Carbon Adjustment

• 5th International Rubber Glove Conference & Exhibition 2010 (5th IRGCE 2010) • Represented MARGMA at the ISO/TC45 Meeting in Haarlem, Amsterdam, The Netherlands

Yew Yee Peng • Mandatory Accrediation Programme for Directors

Loo Teck Looi • Mandatory Accrediation Programme for Directors

Tan Chuan Hock • Tax Audit & Investigation Workshop • Tax Practitioner and the Anti-Fraud Forensic Accounting Perspectives • Seminar on Tax Planning & Latest Tax Developments • Malaysian Corporate Tax Practices and Principles • Practical approach to tax incentives in Malaysia • Witholding Tax & Cross Border Transactions • Seminar Percukaian Kebangsaan 2010

Foong Kuan Ming • Market Sentiments and the Future Outlook

The Directors will continue to attend other relevant training programmes as appropriate to enhance their skills and knowledge.



DIRECTORS’ REMUNERATION

The directors’ remuneration is determined in accordance to the performance and their capability to the Company. The Board recognises that levels of remuneration must be suffi cient to attract, retain and motivate the directors of the quality required to manage the business of the Company and to align the interest of the Directors with those of the shareholders.

The remuneration of the Directors for the fi nancial period under review is as follows:-

Name of Directors Salaries & Benefi ts Fees in Kind Bonuses Total (RM) (RM) (RM) (RM)

Executive Directors 47,000 298,122 151,000 496,122

Non-Executive Directors 78,000 45,090 - 123,090

TOTAL 125,000 343,212 151,000 619,212

Range of Remuneration Executive Non-Executive

Below RM50,000 - 2

RM100,001 to RM150,000 2 1

RM250,001 to RM300,000 1 -

THE SHAREHOLDERS

Dialogue between the Company and Investors

The Group values the importance of the dissemination of information on major developments of the Group to the shareholders, potential investors and the general public in a timely and equitable manner. Quarterly results, announcements, annual reports and circulars serve as primary means of dissemination of information so that the shareholders are constantly kept abreast on the Group’s progress and development. The Group’s corporate website at www.careplus.com also serves as one of the most convenient ways for shareholders and members of the public to gain access to corporate information, news and events relating to the Group.

Annual General Meeting (“AGM”)

The AGM remains as a principal forum used by the Group for communication with its shareholders. During the AGM, shareholders are accorded time and opportunity to query the Board on the resolutions being proposed and also matters relating to the performance, developments within and the future direction of the Group. Shareholders are also invited to convey and share their inputs with the Board.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board has overall responsibility for the quality and completeness of the fi nancial statements of the Company and the Group, both on a quarterly and full year basis, and has a duty to ensure that those fi nancial statements are prepared based on appropriate and consistently applied accounting policies, supported by reasonably prudent judgement and estimates and in accordance to the applicable fi nancial reporting standards.

The Audit Committee plays a crucial role in assisting the Board to scrutinise the information for disclosure to shareholders to ensure material accuracy, adequacy and timeliness.



Internal Control

The Audit Committee has been entrusted by the Board to ensure effectiveness of the Group’s internal control systems. The activities of the outsourced Internal Auditors are reported regularly to the Audit Committee, which provides the Board with the required assurance in relation to the adequacy and integrity of the Group’s system of internal controls. Information on the Group’s internal control is presented in the Internal Control Statement set out on page 17 of this Annual Report.

Relationship with Auditors

The Group has established a transparent and appropriate relationship with both the Internal Auditors and External Auditors. Such relationship allows the Group to seek professional advice on matters relating to compliance and corporate governance. The internal audit function of the Group is outsourced to a third party. Similar to the External Auditors, Internal Auditors too have direct reporting access to the Board and the Audit Committee to ensure that issues highlighted are addressed independently, objectively and impartially without any undue infl uence of the management.

DIRECTORS RESPONSIBILITY STATEMENT IN RELATION TO THE FINANCIAL STATEMENTS

It is the Directors’ responsibility to prepare the fi nancial statements which give a true and fair view of the state of affairs of the Company and the Group as at the end of the fi nancial period and of their results and cash fl ows for the period then ended.

In preparing the fi nancial statements, the Directors have taken steps to ensure that:-

• the Company and the Group have used appropriate accounting policies and are consistently applied;• the judgements and estimates made have been made with reasonableness and prudence; and• all approved and adopted fi nancial reporting standards which are applicable in Malaysia have been duly complied with.

The Directors are responsible for ensuring that the Company maintains proper accounting records in compliance with the Companies Act, 1965, which disclose with a reasonable degree of accuracy the fi nancial position of the Company and the Group.

The Directors also have general responsibilities for taking reasonable steps towards safeguarding the assets of the Group, and to prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution of the Board dated 18 May 2011.


INTERNAL CONTROL STATEMENT

IntroductionThe Malaysian Code on Corporate Governance requires listed companies to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets. Rule 15.26(b) of the ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) requires the Board of Directors (“Board”) to include a statement on the state of internal control in its annual report. The Board recognises the importance of good corporate governance practices and is committed to maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets. The Board is pleased to provide the following statement, which outlines the nature and scope of internal control of the Group for the fi nancial period ended 31 January 2011.

Board ResponsibilityThe Board affi rms its overall responsibility for the Group’s systems of internal controls, risk management and for reviewing the adequacy and integrity of these systems. The systems of internal controls can only provide reasonable and not absolute assurance against material misstatement or loss as it is designed to manage rather than eliminate the risk of failure to achieve the Group’s business objectives.

Risk ManagementRisk management is an integral part of the Group’s business operations and it is subject to periodic reviews by the Board. The Group adopted a structured risk management framework with discussions involving different levels of managements to identify and address risks faced by the Group. During the fi nancial period under review, the Board and the management have put in place an on-going process for identifying, evaluating, monitoring and managing the signifi cant risks affecting the achievement of its business objectives in their daily activities throughout the fi nancial period up to the date of this Annual Report.

The Key Elements of the Group’s Internal Control System includes:1. Organisational structure with clearly defi ned lines of responsibility, authority and accountability. These delegations of responsibilities

and authority limits are subjected to periodic review throughout the periods as to their implementation and for continuing suitability.2. Policies and procedures for key business processes are formalised and documented for implementation and continuous

improvements.3. Clearly defi ned authorization limits at appropriate levels are set out for controlling and approving capital expenditure and expenses.4. Clearly defi ned Internal Policies, Standard Operating Procedures and Personnel Manual as the key framework for good internal control

practices. These policy manuals are subject to regular reviews to meet new and changing business requirements.5. Regular Management and Operation meetings were conducted to ensure activities and risks mitigation actions were executed as

proposed.6. Key information covering fi nancial performance and key business aspects are provided to the Senior Management and the Board on a

regular and timely basis.7. There has been active participation by the Executive Directors in the day-to-day running of business operations, and regular dialogue

and reporting to the Board.

Internal Audit FunctionsThe Board acknowledges the importance of the internal audit function. Subsequent to the Company’s successful listing on Bursa Securities, the Board has outsourced its internal audit function to an independent professional consulting fi rm as part of its efforts to provide adequate and effective internal control systems. The internal audit function is carried out in accordance with the annual internal audit plan as approved by the Audit Committee. The internal audit function adopts a risk-based approach in addition to an independent and objective reporting on the state of the Group’s internal control system. During the fi nancial period, the internal auditor reviewed critical business processes, identifi ed risks and internal control gaps, assessed the effectiveness and adequacy of the existing state of internal control of the key subsidiaries and recommended possible improvements to the internal control process. This is to provide reasonable assurance that such system continues to operate satisfactorily and effectively within the Group. The Board continues to take measures to strengthen the control environment. The total cost incurred for the internal audit function was RM6,500 for only one (1) quarter of the fi nancial period ended 31 January 2011 (being the only quarter under review as a listed company). In the fi nancial period under review, there were no material losses, incurred as a result of weaknesses in the internal control system that would require disclosure in this Annual Report. The Board will continue to improve and enhance the existing system of internal control to ensure its adequacy and relevance in safeguarding the shareholders’ interests and the Group’s assets. This statement was approved by the Board.

Review by External AuditorsThe External Auditors have reviewed this Internal Control Statement and reported to the Board that nothing has come to their attention that causes them to believe that it is inconsistent with their understanding of the processes adopted by the Board in reviewing the adequacy and integrity of the Group’s internal control system.


REPORT OF THE AUDIT COMMITTEE

The principle objective of the Audit Committee is to assist the Board of Directors (“Board”) in discharging its statutory duties and responsibilities in relation to corporate governance, internal control systems, management and fi nancial reporting practices of the Group and to ensure proper disclosure to the shareholders of the Company.

MEMBERS

The current members of the Audit Committee are as follows:-

Tan Chuan Hock (Chairman, Independent Non-Executive Director)

Yew Nieng Choon (Member, Non-Independent Non-Executive Chairman)

Foong Kuan Ming (Member, Independent Non-Executive Director)

MEETINGS AND ATTENDANCE

As the Company was only recently listed on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) on 6 December 2010, only one (1) Audit Committee meeting was convened, and the attendance of Committee members at that meeting is set out as follows:- Committee Members Attendance

Tan Chuan Hock 1 of 1

Yew Nieng Choon 1 of 1

Foong Kuan Ming 1 of 1

TERMS OF REFERENCE

The following is the terms of reference of the audit committee:-

Membership

1. The Committee shall be appointed by the Board from among its members and shall comprise not less than three (3) members, whereby all members must be non-executive directors and fi nancially literate with a majority of them being Independent Directors, and at least one (1) member of the Committee:-

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

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

a) he must have passed the examinations specifi ed in Part I of the 1st Schedule of the Accountants Act 1967; or

b) he must be a member of one of the associations of accountants specifi ed in Part II of the 1st Schedule of the Accountants Act 1967; or

iii) fulfi ls such other requirements as prescribed or approved by Bursa Securities.

2. Alternate Directors shall not be appointed as a member of the Committee.

3. The Committee shall elect a Chairman from among its members and the elected Chairman shall be an Independent Director.

4. In the event the elected Chairman is not able to attend a meeting, the remaining members present shall elect one (1) of themselves as Chairman for the meeting, who shall be an Independent Director.

5. If a member of the Audit Committee resigns, retires, dies or for any other reason ceases to be a member resulting in the non-compliance with point 1 above, the Board shall fi ll the vacancy within three (3) months.

6. The Board shall review the term of offi ce and performance of the Committee and each member at least once every three (3) years.


REPORT OF THE AUDIT COMMITTEE CONT’D

Frequency of meetings

1. Meetings shall be held not less than four (4) times a year. However, additional meetings may be called at any time depending on the scope of activities of the Committee. In the event issues requiring the Committee’s decision arise between meetings, such issues shall be resolved through circular resolutions of the Committee. Such circular resolution in writing shall be valid and effectual if it is signed or approved by letter, facsimile or any electronic means by all members of the Committee.

2. Other Board members, senior management personnel, Internal and External auditors may be invited to attend meetings.

3. The Committee should meet with the external auditors without the presence of executive board members at least twice in a fi nancial year.

4. Prior notice shall be given for all meetings.

Quorum

The minimum quorum for the meeting is two (2) members of the Committee, a majority of members present must be Independent Directors.

Secretary

The Company Secretary shall be the secretary of the Committee. The Secretary shall circulate the notice and minutes of the Committee to all members of Board.

Functions

The functions of the Committee are as follows:-

i) To consider the appointment of external auditors, the audit fee and any questions of resignation or dismissal.

ii) To review with the external auditors:- a) the audit plan, scope and nature of the audit of the Group; b) their evaluation and fi ndings of the system of internal controls; and c) the audit reports on the fi nancial statements.

iii) To review the adequacy of the scope, function, competency and resources of internal audit and to ensure that it has the necessary authority to carry out its work.

iv) To appraise or assess the performance of the internal audit function and ensure that the internal audit function reports directly to the Committee.

v) To review the quality, adequacy and effectiveness of the Group’s internal control environment.

vi) To review the fi ndings of the internal and external auditors.

vii) To review the quarterly and year end fi nancial statements of the Group, focusing particularly on any changes in or implementation of major accounting policies and practices, signifi cant adjustments arising from the audit, the going concern assumption and compliance with applicable approved accounting standards and other legal and regulatory requirements.

viii) To review any related party transactions and confl icts of interest situations that may arise within the Group including any transactions, procedures or course of conduct that raises questions of management integrity.

ix) To review the external auditors’ management letter and management’s response.

x) To review and verify the allocation of options pursuant to the Employees’ Share Option Scheme (“ESOS”) in compliance with the criteria as stipulated in the by-law of ESOS of the Group, if any.

xi) Any other function that may be mutually agreed upon by the Committee and the Board which would be benefi cial to the Company and help to ensure the effective discharge of the Committee’s duties and responsibilities.


REPORT OF THE AUDIT COMMITTEE CONT’D

Authority

The Committee is authorised by the Board to investigate any activity within its term of reference at the cost of the Company, to:-

i) secure full and unrestricted access to any information pertaining to the Group.

ii) communicate directly with the external and internal auditors and all employees of the Group.

iii) seek and obtain independent professional advice and to secure the attendance of outsiders with relevant experience and expertise as it considers necessary.

iv) convene meetings with the external and internal auditors or both excluding the attendance of other directors and employees of the Group, whenever deemed necessary.

SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR

The Company was listed on the ACE Market of Bursa Securities on 6 December 2010. The Audit Committee was formed on 3 July 2010 and had its inaugural meeting on 1 December 2010. During the fi nancial period under review, the Audit Committee met with the management to review the quarterly interim fi nancial reports and to review the audit planning memorandum presented by the External Auditors to ensure compliance with approved accounting standards and adherence to regulatory reporting requirements as well as making relevant recommendation to the Board for approval.

In addition, the following activities were undertaken by the Audit Committee during the fi nancial year:-

i) Reviewed the audit plan of the external auditors for the fi nancial year;

ii) Reviewed and approved the internal audit plan prepared by the outsourced Internal Auditors; and

iii) Reviewed the internal audit reports on a quarterly basis and ensured the implementation of the action plans are carried out by Group management.

INTERNAL CONTROL REVIEW AND INTERNAL AUDIT FUNCTION

The Company was listed on the ACE Market of Bursa Securities on 6 December 2010. In preparation for the listing exercise, the Company engaged an independent professional services fi rm to conduct an independent review of the Group’s systems of internal control.

Subsequent to the listing, the Group continued to outsource the internal audit function to the same independent professional services fi rm to carry out internal audit services for the Group. Internal audit reports are presented, together with the Management’s response and proposed action plans to the Audit Committee quarterly.

The outsourced Internal Auditors undertake internal audit functions based on the operational, compliance and risk based audit plan that is reviewed by the Audit Committee and approved by the Board. The risk based audit plan covers the review of the key operational and fi nancial activities including the effi cacy of risk management practices, effi ciency and effectiveness of operational controls and compliance with relevant laws and regulations.

Activities of the outsourced Internal Audit Function during the fi nancial year were as follows:-

i) Developed the internal audit plan for the fi nancial year under review;

ii) Execution of the approved internal audit plan;

iii) Presentation of the internal audit fi ndings at the quarterly Audit Committee meetings. All fi ndings raised by the outsourced Internal Auditors have been appropriately addressed by Group management; and

iv) Conducted follow up reviews to ensure action plans are properly and appropriately implemented by Group management.

The internal audits conducted did not reveal any weaknesses which would result in material losses, contingencies or uncertainties that would require disclosure in the annual report.


ADDITIONAL COMPLIANCE INFORMATION

1. UTILISATION OF PROCEEDS

In conjunction with its listing on the ACE Market of Bursa Malaysia Securities Berhad on 6 December 2010, the Company had raised proceeds of RM14,961,500 from the public issue of 65,050,000 new ordinary shares of RM0.10 each at the issue price of RM0.23 per share, and the status of utilisation of the proceeds as at 31 May 2011 is as follows:-

Proposed utilisation Actual utilisation Intended timeframe Description RM’000 RM’000 for utilisation upon listing

Capital expenditure 10,000 7,736 Within three (3) years

Working capital 3,262 *3,122 Within one (1) year

Estimated listing expenses 1,700 *1,840 Upon completion of the listing

Total 14,962 12,698

* Listing expenses incurred during the fi nancial period ended 31 January 2011 were higher than initially proposed. This excess was funded from the amount initially set aside for working capital.

2. SHARE BUY-BACKS

The Company did not engage in any share buy-back arrangements during the fi nancial period ended 31 January 2011.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

The Company has not issued any options, warrants or other convertible securities during the fi nancial period ended 31 January 2011.

4. DEPOSITORY RECEIPT PROGRAMME

The Company did not sponsor any Depository Receipt programme during the fi nancial period ended 31 January 2011.

5. IMPOSITION OF SANCTIONS / PENALTIES

There were no material sanctions or penalties imposed on the Company and its subsidiaries (“Group”), Directors or management by the regulatory bodies during the fi nancial period ended 31 January 2011.

6. NON-AUDIT FEES

The amount of non-audit fees paid to the External Auditors by the Group for the fi nancial period ended 31 January 2011 was RM172,000.

7. VARIATION IN RESULTS

There were no material variances of ten percent (10%) or more between the audited results for the fi nancial period ended 31 January 2011 and the unaudited results previously announced.

8. PROFIT GUARANTEE

The Company did not give any form of profi t guarantee to any parties during the fi nancial period ended 31 January 2011.

9. MATERIAL CONTRACTS

There were no material contracts entered into by the Group involving Directors and substantial shareholders’ interests during the fi nancial period ended 31 January 2011.

10. REVALUATION POLICY ON LANDED PROPERTY

The Group has not adopted any regular revaluation policy on its landed properties.

11. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND TRADING NATURE

Details of Recurrent Related Party Transactions of a Revenue or Trading Nature is disclosed in Note 39 to the Financial Statements on page 65 of this Annual Report.


Directors’ Report 23

Statement by Directors 27

Statutory Declaration 27

Independent Auditors’ Report 28

Statements of Financial Position 30

Statements of Comprehensive Income 32

Statements of Changes in Equity 33

Statements of Cash Flows 34 Notes to the Financial Statements 36

FINANCIAL STATEMENTS



DIRECTORS’ REPORT

The directors hereby submit their report and the audited fi nancial statements of the Group and of the Company for the fi nancial period from 30 March 2010 (date of incorporation) to 31 January 2011.

CONVERSION OF PRIVATE COMPANY TO PUBLIC COMPANY

On 5 April 2010, the Company was converted from a private limited company to a public company limited by shares and assumed its present name, Careplus Group Berhad.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are set out in Note 6 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial period.

RESULTS

THE GROUP THE COMPANY RM RM Profi t/(Loss) after taxation for the fi nancial period 3,139,214 (1,150,465) Attributable to: Owners of the Company 3,139,214 (1,150,465)

DIVIDENDS

No dividend was paid since the date of incorporation and the directors do not recommend the payment of any dividend for the current fi nancial period.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the fi nancial period are disclosed in the fi nancial statements.

ISSUES OF SHARES AND DEBENTURES

The Company was incorporated with an authorised share capital of RM100,000 comprising 1,000,000 ordinary shares of RM0.10 each, of which 100 ordinary shares of RM0.10 each were subscribed for on the date of incorporation.

During the fi nancial period,

(a) the Company increased its authorised share capital from RM100,000 to RM50,000,000 by the creation of 499,000,000 new ordinary shares of RM0.10 each;


DIRECTORS’ REPORT CONT’D

ISSUES OF SHARES AND DEBENTURES (CONT’D)

(b) the Company increased its issued and paid-up share capital from RM10 to RM21,000,000 as part of its fl otation scheme on the ACE Market of Bursa Malaysia Securities Berhad. The issued and paid-up share capital was increased in the following manner:-

(i) Acquisition of Careplus (M) Sdn. Bhd. (“Careplus (M)”)

The Company increased its issued and paid-up share capital from RM10 to RM14,495,000 by the allotment of 144,949,900 new ordinary shares of RM0.10 each at an issue price of approximately RM0.10 per ordinary share for the acquisition of Careplus (M); and

(ii) Public Issue

Upon the completion of the Public Issue, the issued and paid-up share capital of the Company increased from RM14,495,000 to RM21,000,000 by the allotment of 65,050,000 new ordinary shares of RM0.10 each at an issue price of RM0.23 per ordinary share.

All the new ordinary shares issued during the fi nancial period rank pari passu in all respects with the existing ordinary shares of the Company; and

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

OPTIONS GRANTED OVER UNISSUED SHARES

During the fi nancial period, 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 fi nancial 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 impairment losses on receivables, and satisfi ed themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the fi nancial statements of the Group and of the Company.

CURRENT ASSETS

Before the fi nancial 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 value 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 fi nancial 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 liability is disclosed in Note 42 to the fi nancial 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 fi nancial period which secures the liabilities of any other person; or



CONTINGENT AND OTHER LIABILITIES (CONT’D)

(b) any contingent liability of the Group and of the Company which has arisen since the end of the fi nancial period.

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 fi nancial period 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 fi nancial statements of the Group and of the Company which would render any amount stated in the fi nancial statements misleading.

ITEMS OF AN UNUSUAL NATURE

There has not arisen in the interval between the end of the fi nancial period 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 fi nancial period.

DIRECTORS

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

LIM KWEE SHYAN (FIRST DIRECTOR)YEW NIENG CHOON (FIRST DIRECTOR)LOO TECK LOOI (APPOINTED ON 3 JULY 2010)YEW YEE PENG (APPOINTED ON 3 JULY 2010)TAN CHUAN HOCK (APPOINTED ON 3 JULY 2010)FOONG KUAN MING (APPOINTED ON 14 SEPTEMBER 2010)CHUAH LAY LENG (FIRST DIRECTOR AND RESIGNED ON 2 JULY 2010)YEOH LIEW SE (APPOINTED ON 3 JULY 2010 AND RESIGNED ON 30 SEPTEMBER 2010)VALENTINE PETER JESUDOSS (APPOINTED ON 3 JULY 2010 AND RESIGNED ON 30 SEPTEMBER 2010)

DIRECTORS’ INTERESTS

In accordance with the register of directors’ shareholdings, the interests of directors in offi ce at the end of the fi nancial period in shares in the Company and its related corporations during the fi nancial period are as follows:-

NUMBER OF ORDINARY SHARES OF RM0.10 EACH AT 30.3.2010 (DATE OF INCORPORATION)/ DATE OF AT APPOINTMENT ALLOTMENT SOLD 31.1.2011DIRECT INTERESTS LIM KWEE SHYAN 55 65,981,145 - 65,981,200YEW NIENG CHOON 40 7,711,360 - 7,711,400LOO TECK LOOI - 3,855,500 - 3,855,500YEW YEE PENG - 4,065,800 - 4,065,800TAN CHUAN HOCK - 2,000,000 - 2,000,000FOONG KUAN MING - 100,000 - 100,000 INDIRECT INTERESTS LIM KWEE SHYAN (1) - 15,002,300 - 15,002,300YEW NIENG CHOON (2) - 48,536,400 - 48,536,400

(1) Deemed interested through his spouse’s shareholdings in the Company.(2) Deemed interested through his spouse’s and his daughter’s shareholdings in the Company and his shareholdings of more than fi fteen percent (15%) in

Thinking Cap Sdn. Bhd.

By virtue of Mr. Lim Kwee Shyan and Mr. Yew Nieng Choon’s interests in the shares of the Company, they are deemed to have interests in the subsidiary companies under Section 6A of the Companies Act, 1965 to the extent that the Company has an interest.



DIRECTORS’ BENEFITS

Since the end of the previous fi nancial year, no director has received or become entitled to receive any benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and receivable by directors as shown in the fi nancial statements, or the fi xed 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 fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest except for any benefi ts which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain directors have substantial fi nancial interests as disclosed in Note 39 to the fi nancial statements.

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

SIGNIFICANT EVENTS DURING/SUBSEQUENT TO THE FINANCIAL PERIOD

The signifi cant events during/subsequent to the fi nancial period are disclosed in Note 44 to the fi nancial statements.

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in offi ce.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 18 MAY 2011

Lim Kwee Shyan

Yew Nieng Choon


STATEMENT BY DIRECTORS/ STATUTORY DECLARATIONSTATEMENT BY DIRECTORS

We, Lim Kwee Shyan and Yew Nieng Choon, being two of the directors of Careplus Group Berhad, state that, in the opinion of the directors, the fi nancial statements set out on pages 30 to 78 are drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company at 31 January 2011 and of their results and cash fl ows for the fi nancial period ended on that date.

The supplementary information set out in Note 46, which is not part of the fi nancial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 18 MAY 2011

Lim Kwee Shyan Yew Nieng Choon

STATUTORY DECLARATION

I, Lim Kwee Shyan, IC No. 630307-05-5337, being the director primarily responsible for the fi nancial management of Careplus Group Berhad, do solemnly and sincerely declare that the fi nancial statements set out on pages 30 to 78 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 byLim Kwee Shyan IC No. 630307-05-5337at Kuala Lumpur in the Federal Territory on this 18 May 2011

Lim Kwee ShyanBefore meKapt (B) Affandi Bin Ahmad (No. W 602)Commissioner for Oaths


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAREPLUS GROUP BERHAD

Report on the Financial Statements

We have audited the fi nancial statements of Careplus Group Berhad, which comprise the statements of fi nancial position as at 31 January 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash fl ows of the Group and of the Company for the fi nancial period then ended, and a summary of signifi cant accounting policies and other explanatory information, as set out on pages 30 to 78.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of fi nancial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation of fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the fi nancial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the fi nancial position of the Group and of the Company as of 31 January 2011 and of their fi nancial performance and cash fl ows for the fi nancial period then ended.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act;

(b) We are satisfi ed that the fi nancial statements of the subsidiaries that have been consolidated with the Company’s fi nancial statements are in form and content appropriate and proper for the purposes of the preparation of the fi nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes; and

(c) Our audit reports on the fi nancial statements of the subsidiaries did not contain any qualifi cation or any adverse comment made under Section 174(3) of the Act.

The supplementary information set out in Note 46 on page 79 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the fi nancial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.


INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF CAREPLUS GROUP BERHAD CONT’D

Other Matters

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

Crowe Horwath Lee Kok WaiFirm No: AF 1018 Approval No: 2760/06/12(J)Chartered Accountants Chartered Accountant

18 May 2011

Kuala Lumpur


STATEMENTS OF FINANCIAL POSITION AT 31 JANUARY 2011

THE GROUP THE COMPANY 2011 2010 2011 NOTE RM RM RM ASSETS NON-CURRENT ASSETS Investment in subsidiaries 6 - - 22,265,797Investment in an associate 7 - 15,314 -Goodwill on consolidation 8 204,920 204,920 -Property, plant and equipment 9 20,682,343 9,977,963 -Investment property 10 260,198 292,723 -Other investment 11 - 55,115 - 21,147,461 10,546,035 22,265,797 CURRENT ASSETS Inventories 12 5,928,851 3,853,063 -Trade receivables 13 6,672,576 7,331,871 -Other receivables, deposits and prepayments 590,273 625,811 11,300Amount owing by a subsidiary 14 - - 7,828,088Amount owing by a related party 15 6,389 - -Tax refundable 50,095 - -Derivative assets 16 219,540 - -Fixed deposits with licensed banks 17 5,300,000 2,110,509 5,300,000Cash and bank balances 1,200,566 729,871 164,842 19,968,290 14,651,125 13,304,230Asset held for sale 18 - 400,000 - 19,968,290 15,051,125 13,304,230 TOTAL ASSETS 41,115,751 25,597,160 35,570,027

EQUITY AND LIABILITIES EQUITY Share capital 19 21,000,000 14,495,000 21,000,000Share premium 20 9,106,966 1,380,232 7,727,582Merger defi cit 21 (12,900,499) (12,900,499) -Retained profi ts/(Accumulated loss) 13,160,329 11,521,115 (1,150,465) TOTAL EQUITY 30,366,796 14,495,848 27,577,117

The annexed notes form an integral part of these fi nancial statements.


STATEMENTS OF FINANCIAL POSITION AT 31 JANUARY 2011 CONT’D

THE GROUP THE COMPANY 2011 2010 2011 NOTE RM RM RM NON-CURRENT LIABILITIES Long-term borrowings 22 5,763,918 2,576,475 -Deferred tax liabilities 25 158,000 99,274 - 5,921,918 2,675,749 - CURRENT LIABILITIES Trade payables 26 1,898,376 2,176,198 -Other payables and accruals 27 1,645,371 1,458,876 55,359Amount owing to a subsidiary 14 - - 7,937,551Dividends payable - 2,500,000 -Provision for taxation 332,283 1,688,692 -Short-term borrowings 28 384,523 356,761 -Bank overdraft 29 566,484 245,036 - 4,827,037 8,425,563 7,992,910 TOTAL LIABILITIES 10,748,955 11,101,312 7,992,910 TOTAL EQUITY AND LIABILITIES 41,115,751 25,597,160 35,570,027



THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011# 31.1.2010 31.1.2011 Note RM RM RM REVENUE 30 47,226,124 41,866,303 - COST OF SALES (40,079,577) (31,052,099) - GROSS PROFIT 7,146,547 10,814,204 - OTHER INCOME 582,608 231,370 23,660 7,729,155 11,045,574 23,660 ADMINISTRATIVE EXPENSES (1,925,702) (2,261,858) (64,290) OTHER EXPENSES 31 (2,670,415) (446,116) (1,109,835) PROFIT FROM OPERATIONS 3,133,038 8,337,600 (1,150,465) FINANCE COSTS (242,239) (89,790) - SHARE OF PROFIT IN AN ASSOCIATE - 10,314 - PROFIT/(LOSS) BEFORE TAXATION 32 2,890,799 8,258,124 (1,150,465) INCOME TAX EXPENSE 33 248,415 (2,116,250) - PROFIT/(LOSS) AFTER TAXATION/TOTAL COMPREHENSIVE INCOME/(EXPENSES) FOR THE FINANCIAL PERIOD 3,139,214 6,141,874 (1,150,465) TOTAL COMPREHENSIVE INCOME/ (EXPENSES) ATTRIBUTABLE TO: Owners of the Company 3,139,214 6,141,874 (1,150,465) EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY - Basic 34 1.99 sen 4.24 sen - Diluted 34 Not applicable Not applicable

Note:-# - The fi nancial statements of the subsidiaries, namely Careplus (M), Rubbercare Protection Products Sdn. Bhd. (formerly known as

Perusahaan Pelindung Getah (M) Sdn. Bhd.) (“RPP”) and Masterclean Technologies Sdn. Bhd. (“Masterclean Tech”) have been consolidated using the merger method of accounting. Accordingly, the results of the Group incorporated the results of Careplus (M), RPP and Masterclean Tech for the fi nancial period from 1 February 2010 to 31 January 2011.


STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011


STATEMENTS OF CHANGES IN EQUITY FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011

SHARE SHARE MERGER RETAINED NOTE CAPITAL PREMIUM DEFICIT PROFITS TOTALTHE GROUP RM RM RM RM RM Balance at 30.3.2010 - date of incorporation 10 - - - 10 Shares issued pursuant to the listing scheme: - acquisition of subsidiaries 14,494,990 1,380,232 (12,900,499) 11,521,115 14,495,838 - public issue 6,505,000 8,456,500 - - 14,961,500 Dividends 35 - - - (1,500,000) (1,500,000) Listing expenses - (729,766) - - (729,766) Total comprehensive income for the fi nancial period - - - 3,139,214 3,139,214 Balance at 31.1.2011 21,000,000 9,106,966 (12,900,499) 13,160,329 30,366,796

SHARE SHARE ACCUMULATED CAPITAL PREMIUM LOSS TOTALTHE COMPANY RM RM RM RM Balance at 30.3.2010 - date of incorporation 10 - - 10 Shares issued pursuant to the listing scheme: - acquisition of subsidiaries 14,494,990 848 - 14,495,838 - public issue 6,505,000 8,456,500 - 14,961,500 Listing expenses - (729,766) - (729,766) Total comprehensive expenses for the fi nancial period - - (1,150,465) (1,150,465) Balance at 31.1.2011 21,000,000 7,727,582 (1,150,465) 27,577,117



STATEMENTS OF CASH FLOWSFOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011# 31.1.2010 31.1.2011 Note RM RM RM CASH FLOWS FROM/(FOR) OPERATING ACTIVITIES Profi t/(Loss) before taxation 2,890,799 8,258,124 (1,150,465) Adjustments for:- Bad debts written off - 4,819 -Depreciation of investment property 32,525 32,525 -Depreciation of property, plant and equipment 896,167 1,097,070 -Impairment loss on receivables - 48,500 -Interest expense 242,239 89,790 -Listing expenses 1,109,835 - 1,109,835Loss on disposal of an associate 8,813 - -Loss/(Gain) on disposal of plant and equipment 1,471 (30,000) -Plant and equipment written off - 6,342 -Dividend income (749) - -Fair value gain on derivatives (219,540) - -Gain on disposal of other investment (3,199) - -Interest income (30,993) (34,961) (23,660)Share of profi t in an associate - (10,314) -Unrealised (gain)/loss on foreign exchange (58,439) 182,867 -Writeback of impairment loss on receivables (13,331) - - Operating profi t/(loss) before working capital changes 4,855,598 9,644,762 (64,290)Increase in inventories (2,075,788) (1,998,003) -Decrease/(Increase) in trade and other receivables 719,882 (2,087,417) (11,300)(Decrease)/Increase in trade and other payables (91,327) 360,937 55,359Increase in amount by a related party (6,389) - - CASH FROM OPERATIONS 3,401,976 5,920,279 (20,231)Interest paid (242,239) (89,790) -Income tax paid (1,099,363) (559,636) - NET CASH FROM/(FOR)OPERATING ACTIVITIES 2,060,374 5,270,853 (20,231) CASH FLOWS FOR INVESTING ACTIVITIES Dividend received 749 45,000 -Interest received 30,993 34,961 23,660Proceeds from disposal of an associate 6,501 - -Proceeds from disposal of investment held for sale 404,000 - -Proceeds from disposal of other investment 58,314 - -Proceeds from disposal of property, plant and equipment 218,095 30,000 -Advances to a subsidiary - - (7,828,088)Payment for other investment - (55,115) -Acquisition of investment held for sale (4,000) (400,000) -Purchase of investment property - (325,248) -Purchase of property, plant and equipment 36 (11,820,113) (4,745,124) - NET CASH FOR INVESTING ACTIVITIES (11,105,461) (5,415,526) (7,804,428)

BALANCE CARRIED FORWARD (9,045,087) (144,673) (7,824,659)



STATEMENTS OF CASH FLOWSFOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011# 31.1.2010 31.1.2011 Note RM RM RM

BALANCE BROUGHT FORWARD (9,045,087) (144,673) (7,824,659)

CASH FLOWS FROM FINANCING ACTIVITIES Drawdown of term loans 3,559,642 2,520,000 -Dividends paid (4,000,000) (1,100,000) -Listing expenses paid (1,839,601) - (1,839,601)Proceeds from issuance of shares 14,961,510 827,929 14,961,510Net repayment to an associate - (55,000) -Advances from a subsidiary - - 167,592Repayment of bills payable - (1,165,789) -Repayment of hire purchase obligations (231,957) (327,239) -Repayment of term loans (112,480) (52,481) - NET CASH FROM FINANCING ACTIVITIES 12,337,114 647,420 13,289,501

NET INCREASE IN CASH AND CASH EQUIVALENTS 3,292,027 502,747 5,464,842 EFFECTS OF FOREIGN EXCHANGE, NET 46,711 17,362 - CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL PERIOD/YEAR 2,595,344 2,075,235 - CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL PERIOD/YEAR 37 5,934,082 2,595,344 5,464,842 Note:-# - The fi nancial statements of the subsidiaries, namely Careplus (M), RPP and Masterclean Tech have been consolidated using the merger

method of accounting. Accordingly, the results of the Group incorporated the results of Careplus (M), RPP and Masterclean Tech for the fi nancial period from 1 February 2010 to 31 January 2011.



NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 20111. GENERAL INFORMATION

The Company is a public company limited by shares and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia. The registered offi ce and principal place of business are as follows:-

Registered offi ce : Third Floor, No.79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor.

Principal place of business : Lot 110, Lorong Senawang 4/3, Off Jalan Senawang Empat, Senawang Industrial Estate, 70450 Seremban, Negeri Sembilan.

The fi nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 18 May 2011.

2. CONVERSION OF PRIVATE COMPANY TO PUBLIC COMPANY

On 5 April 2010, the Company was converted from a private limited company to a public company limited by shares and assumed its present name, Careplus Group Berhad.

3. PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are set out in Note 6 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial period.

4. BASIS OF PREPARATION

The fi nancial statements of the subsidiaries, Careplus (M), RPP and Masterclean Tech have been consolidated using the merger method of accounting as disclosed in Note 5(b) of the fi nancial statements. Accordingly, the results of the Group incorporated the results of Careplus (M), RPP and Masterclean Tech for the fi nancial period from 1 February 2010 to 31 January 2011.

The fi nancial statements of the Group for the fi nancial period from 1 February 2009 to 31 January 2010 are prepared on the assumption that the Group had been in existence throughout the fi nancial period from 1 February 2009 to 31 January 2010.

The fi nancial statements of the Group are prepared under the historical cost convention and modifi ed to include other bases of valuation as disclosed in other sections under signifi cant accounting policies, and in compliance with Financial Reporting Standards (“FRS”) and the Companies Act 1965 in Malaysia.

(a) During the current fi nancial period, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments):-

FRSs and IC Interpretations (including the Consequential Amendments)

FRS 4 Insurance Contracts

FRS 7 Financial Instruments: Disclosures


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D4. BASIS OF PREPARATION (CONT’D)

(a) FRSs and IC Interpretations (including the Consequential Amendments) (Cont’d)

FRS 8 Operating Segments

FRS 101 (Revised) Presentation of Financial Statements

FRS 123 (Revised) Borrowing Costs

FRS 139 Financial Instruments: Recognition and Measurement

Amendments to FRS 1 and FRS 127: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate

Amendments to FRS 2: Vesting Conditions and Cancellations

Amendments to FRS 7, FRS 139 and IC Interpretation 9

Amendments to FRS 101 and FRS 132: Puttable Financial Instruments and Obligations Arising on Liquidation

Amendments to FRS 132: Classifi cation of Rights Issue and the Transitional Provision in Relation to Compound Instruments IC Interpretation 9 Reassessment of Embedded Derivatives IC Interpretation 10 Interim Financial Reporting and Impairment IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions IC Interpretation 13 Customer Loyalty Programmes IC Interpretation 14: FRS 119 - The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction Annual Improvements to FRSs (2009)

The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Group’s fi nancial statements, other than the following:-

(i) FRS 7 requires additional disclosures about the fi nancial instruments of the Group. Prior to 1 January 2010, information about fi nancial statements was disclosed in accordance with the requirements of FRS 132 - Financial Instruments: Disclosures and Presentation. FRS 7 requires the disclosure of qualitative and quantitative information about exposure to risks arising from fi nancial instruments, including specifi ed minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group has applied FRS 7 prospectively in accordance with the transitional provisions. Accordingly, the new disclosures have not been applied to the comparatives and are included throughout the fi nancial statements for the current fi nancial period.



(a) (ii) FRS 101 (Revised) introduces the statement of comprehensive income, with all items of income and expense recognised in profi t or loss, together with all other items of recognised income and expense recognised directly in equity, either in one single statement, or in two linked statements. The Group has elected to present this statement as one single statement.

The revised standard also separates owner and non-owner changes in equity. The statement of changes in equity includes only details of transactions with owners, with all non-owner changes in equity presented in the statement of comprehensive income as other comprehensive income.

In addition, a statement of fi nancial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the classifi cation of items in the statement.

FRS 101 (Revised) also requires the Group to make new disclosures to enable users of the fi nancial statements to evaluate the Group’s objectives, policies and processes for managing capital. This new disclosure is made in Note 43(b) to the fi nancial statements.

Comparative information has been re-presented so that it is in conformity with the requirements of this revised standard. (iii) The Company regards fi nancial guarantee contracts of banking facilities granted to its subsidiaries as insurance contracts and

will apply FRS 4 to such fi nancial guarantee contracts. These fi nancial guarantee contracts issued are disclosed as contingent liabilities under Note 42 to the fi nancial statements.

(b) The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current fi nancial period:-

FRSs and IC Interpretations (including the Consequential Amendments) Effective date FRS 1 (Revised) First-time Adoption of Financial Reporting Standards 1 July 2010 FRS 3 (Revised) Business Combinations 1 July 2010 FRS 124 (Revised) Related Party Disclosures 1 January 2012

FRS 127 (Revised) Consolidated and Separate Financial Statements 1 July 2010

Amendments to FRS 1 (Revised): Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011 Amendments to FRS 1: Additional Exemptions for First-time Adopters 1 January 2011 Amendments to FRS 2: Scope of FRS 2 and FRS 3 (Revised) 1 July 2010 Amendments to FRS 2: Group Cash-settled Share-based Payment Transactions 1 January 2011 Amendments to FRS 5: Plan to Sell the Controlling Interest in a Subsidiary 1 July 2010 Amendments to FRS 7: Improving Disclosures about Financial Instruments 1 January 2011 Amendments to FRS 138: Consequential Amendments Arising from FRS 3 (Revised) 1 July 2010 Amendments to IC Interpretation 14: Prepayments of a Minimum Funding Requirement 1 July 2011



(b) FRSs and IC Interpretations (including the Consequential Amendments) (Cont’d) Effective date Amendments to IC Interpretation 9: Scope of IC Interpretation 9 and FRS 3 (Revised) 1 July 2010 IC Interpretation 4 Determining Whether An Arrangement Contains a Lease 1 January 2011 IC Interprétation 12 Service Concession Arrangements 1 July 2010

IC Interpretation 15 Agreements for the Construction of Real Estate 1 January 2012 IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation 1 July 2010 IC Interpretation 17 Distributions of Non-cash Assets to Owners 1 July 2010 IC Interpretation 18 Transfers of Assets from Customers 1 January 2011 IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011 Annual Improvements to FRSs (2010) 1 January 2011

The above accounting standards and interpretations (including the consequential amendments) are not relevant to the Group’s operations except as follows:-

(i) FRS 3 (Revised) introduces signifi cant changes to the accounting for business combinations, both at the acquisition date and post acquisition, and requires greater use of fair values. In addition, all transaction costs, other than share and debt issue costs, will be expensed as incurred. This revised standard will be applied prospectively and therefore there will not have any fi nancial impact on the fi nancial statements of the Group for the current fi nancial period but may impact the accounting for future transactions or arrangements.

(ii) FRS 127 (Revised) requires accounting for changes in ownership interests by the group in a subsidiary, while maintaining control, to be recognised as an equity transaction. When the group loses control of a subsidiary, any interest retained in the former subsidiary will be measured at fair value with the gain or loss recognised in profi t or loss. The revised standard also requires all losses attributable to the minority interest to be absorbed by the minority interest instead of by the parent. The Group will apply the major changes of FRS 127 (Revised) prospectively and therefore there will not have any fi nancial impact on the fi nancial statements of the Group for the current fi nancial period but may impact the accounting its future transactions or arrangements.

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 signifi cant 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 factors which could change signifi cantly as a result of technical innovations and competitors’ actions in response to the market conditions.

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


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D5. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

(a) Critical Accounting Estimates and Judgements (Cont’d)

(i) Depreciation of Property, Plant and Equipment (Cont’d)

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

(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 fi nal 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 Non-fi nancial 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 management is required to make an estimate of the expected future cash fl ows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash fl ows.

(iv) 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.

(v) Classifi cation Between Investment Properties and Owner-Occupied Properties

The Group determines whether a property qualifi es as an investment property, and has developed a criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash fl ows largely independent of the other assets held by the Group.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a fi nance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignifi cant portion is held for use in the production or supply of goods or services or for administrative purposes.

Judgement is made on an individual property basis to determine whether ancillary services are so signifi cant that a property does not qualify as investment property.

(vi) Impairment of Trade and Other Receivables

An impairment loss is recognised when there is objective evidence that a fi nancial asset is impaired. Management specifi cally reviews its loan and receivables fi nancial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgment to evaluate the adequacy of the allowance for impairment loss. Where there is objective evidence of impairment, the amount and timing of future cash fl ows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.



(a) Critical Accounting Estimates and Judgements (Cont’d)

(vii) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash fl ows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash fl ows. The future cash fl ows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill.

(viii) Fair Value Estimates for Certain Financial Assets and Liabilities

The Group carries certain fi nancial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgement. While signifi cant components of fair value measurement were determined using verifi able objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair values of these assets and liabilities would affect profi t and equity.

(b) Basis of Consolidation

The consolidated fi nancial statements incorporate the fi nancial statements of the Company and all its subsidiaries made up to 31 January 2011.

A subsidiary is defi ned as an enterprise in which the Company has the power, directly or indirectly, to exercise control over its fi nancial and operating policies so as to obtain benefi ts from its activities. The acquisition of Careplus (M) and its subsidiaries (“Careplus (M) Group”) by the Company has been accounted for as a business combination amongst entities under common control. Accordingly, the fi nancial statements of the Group have been consolidated using the merger method of accounting.

Under the merger method of accounting, the results of the subsidiaries are presented as if the merger had been effected throughout the current and previous fi nancial years. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting debit or credit difference is classifi ed as a non-distributable reserve.

The subsidiaries of Careplus (M) Group, namely RPP and Masterclean Tech, are consolidated using the acquisition method of accounting prior to the internal reorganisation undertaken by the Company. Under the acquisition method of accounting, the results of 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 refl ected in the consolidated fi nancial 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 Careplus (M) 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 fi nancial statements of the subsidiary to ensure consistency of accounting policies with those of the Group.

The gain or loss on the disposal of a subsidiary is the difference between the net disposal proceeds and the Group’s share of its net assets.

(c) Goodwill on Consolidation

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 identifi able net assets of the subsidiaries at the date of acquisition.

Goodwill on consolidation is retained in the consolidated statements of fi nancial position. The carrying value of the goodwill is reviewed annually, and is written down for impairment where it is considered necessary. The impairment value of goodwill written off is taken to the income statement. An impairment loss recognised for goodwill is not reversed in a subsequent period.



(c) Goodwill on Consolidation (Cont’d)

If, after assessment, the Group’s interest in the fair values of the identifi able net assets of the subsidiaries exceeds the cost of the business combinations, the excess is recognised immediately in the consolidated statements of comprehensive income.

(d) Functional and Foreign Currencies

(i) Functional and Presentation Currency

The individual fi nancial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated fi nancial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies 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 end of the reporting period 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 recognised in profi t or loss.

(e) Financial Instruments

Financial instruments are recognised in the statements of fi nancial position when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classifi ed as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a fi nancial instrument classifi ed as a liability, are reported as an expense or income. Distributions to holders of fi nancial instruments classifi ed 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.

A fi nancial instrument is recognised initially, at its fair value plus, in the case of a fi nancial instrument not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition or issue of the fi nancial instrument.

Financial instruments recognised in the statements of fi nancial position are disclosed in the individual policy statement associated with each item.

(i) Financial Assets

On initial recognition, fi nancial assets are classifi ed as either fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments, or available-for-sale fi nancial assets, as appropriate.

• Financial Assets at Fair Value Through Profi t or Loss

Financial assets are classifi ed as fi nancial assets at fair value through profi t or loss when the fi nancial asset is either held for trading or is designated to eliminate or signifi cantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classifi ed as held for trading unless they are designated as hedges.

Financial assets at fair value through profi t or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profi t or loss. Dividend income from this category of fi nancial assets is recognised in profi t or loss when the Company’s right to receive payment is established.



(e) Financial Instruments (Cont’d)

(i) Financial Assets (Cont’d)

• Held-to-maturity Investments

Held-to-maturity investments are non-derivative fi nancial assets with fi xed or determinable payments and fi xed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with revenue recognised on an effective yield basis.

• Loans and Receivables Financial Assets

Trade receivables and other receivables that have fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables fi nancial assets. Loans and receivables fi nancial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

• Available-for-sale Financial Assets

Available-for-sale fi nancial assets are non-derivative fi nancial assets that are designated in this category or are not classifi ed in any of the other categories.

After initial recognition, available-for-sale fi nancial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassifi ed from equity into profi t or loss.

Dividends on available-for-sale equity instruments are recognised in profi t or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

(ii) Financial Liabilities

All fi nancial liabilities are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profi t or loss.

Fair value through profi t or loss category comprises fi nancial liabilities that are either held for trading or are designated to eliminate or signifi cantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classifi ed as held for trading unless they are designated as hedges.

(iii) Equity Instruments

Ordinary shares are classifi ed 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.



(f) Investment in Subsidiaries

Investment in subsidiaries are stated at cost in the statement of fi nancial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable.

On the disposal of the investment in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profi t or loss.

(g) Investment in an Associate

An associate is an entity in which the Group and the Company have a long term equity interest and where it exercises signifi cant infl uence over the fi nancial and operating policies.

The investment in an associate is accounted for under the equity method. The Group’s share of the post acquisition profi ts of the associate is included in the consolidated statement of comprehensive income and the Group’s interest in the associate is carried in the consolidated statement of fi nancial position at cost plus the Group’s share of the post acquisition retained profi ts and reserves.

Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

(h) Property, Plant and Equipment

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

Depreciation or amortisation 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:-

Leasehold land 63 - 80 years Buildings 1% - 2% Factory and offi ce extension 10% - 20% Factory equipment 10% - 20% Forklift 20% Furniture and fi ttings 8% - 10% Motor vehicles 16% Offi ce equipment 10% Plant and machinery 10% - 20%

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

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefi ts associated with the asset will fl ow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profi t or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profi t or loss.



(i) Investment Properties

Investment properties are property held either to earn rental income or for capital appreciation or for both. Investment properties are stated at cost less accumulated depreciation and impairment losses, if any. Depreciation is calculated under the straight line method to write off the depreciable amount of the assets over their estimated useful lives at the principal rate of 10% per annum.

Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefi t is expected from its disposal.

On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profi t or loss.

(j) Impairment

(i) Impairment of Financial Assets

All fi nancial assets (other than those categorised at fair value through profi t or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash fl ows of the asset. For an equity instrument, a signifi cant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables fi nancial assets is recognised in profi t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows, discounted at the fi nancial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale fi nancial assets is recognised in profi t or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassifi ed from equity to profi t or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profi t or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profi t or loss are not reversed through profi t or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

(ii) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which FRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period 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’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash fl ow.

An impairment loss is recognised in profi t or loss 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 profi t or loss immediately, unless the asset is carried at its revalued amount. A reversal of an impairment loss on a revalued asset is credited to other comprehensive income. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense in the statements of comprehensive income, a reversal of that impairment loss is recognised as income in the statements of comprehensive income.



(k) Assets under Hire Purchase

Plant and equipment acquired under hire purchase are capitalised in the fi nancial 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 fi nance charges so as to achieve a constant rate on the fi nance balance outstanding. Finance charges are allocated to the statement of comprehensive income over the periods of the respective hire purchase agreements.

(l) Assets Held For Sale

Assets that are expected to be recovered primarily through sale rather than through continuing use are classifi ed as held for sale. Immediately before classifi cation as held for sale, the assets or components of a disposal group are remeasured in accordance with the Group’s accounting policies. Thereafter generally the assets or disposal group are measured at the lower of their carrying amount and fair value less cost to sell.

(m) 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 fi nished goods and work-in-progress includes the 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, due allowance is made for all damaged, obsolete and slow-moving items. The Group writes down its obsolete or slow moving inventories based on assessment of the condition and the future demand for the inventories. These inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recovered.

(n) Income Taxes

Income tax for the year comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profi t for the year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial 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 identifi able assets, liabilities and contingent liabilities over the business combination costs 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 profi t nor taxable profi t.

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 profi ts will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that suffi cient future taxable profi ts will be available to allow all or part of the deferred tax assets to 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 substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profi t or loss is recognised outside profi t or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifi able assets, liabilities and contingent liabilities over the business combination costs.



(o) Cash and Cash Equivalents

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

(p) Employee Benefi ts

(i) Short-term Benefi ts

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

(ii) Defi ned Contribution Plans

The Group’s contributions to defi ned contribution plans are recognised in profi t or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defi ned contribution plans.

(q) Related Parties

A party is related to an entity if:-

(i) directly, or indirectly through one or more intermediaries, the party:- • controls, is controlled by, or is under common control with, the entity (this includes the parent company, subsidiaries

and fellow subsidiaries); • has an interest in the entity that gives it signifi cant infl uence over the entity; or • has joint control over the entity; (ii) the party is an associate of the entity; (iii) the party is a joint venture in which the entity is a venturer; (iv) the party is a member of the key management personnel of the entity or its parent company; (v) the party is a close member of the family of any individual referred to in (i) or (iv); (vi) the party is an entity that is controlled, jointly controlled or signifi cantly infl uenced by, or for which signifi cant voting power in

such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or (vii) the party is a post-employment benefi t plan for the benefi t of employees of the entity, or of any entity that is a related party of

the entity.

Close members of the family of an individual are those family members who may be expected to infl uence, or be infl uenced by, that individual in their dealings with the entity.

(r) Revenue Recognition

(i) Sale of Goods

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

(ii) 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.



(r) Revenue Recognition (Cont’d) (iii) Interest Income

Interest income is recognised on an accrual basis.

(iv) Dividend Income

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

(v) Rental Income

Rental income is recognised on an accrual basis. (s) Operating Segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.

(t) Borrowing Costs

Borrowing costs, directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as 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 recognised in profi t or loss as expenses in the period in which they are incurred.

(u) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will only be confi rmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outfl ow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the fi nancial statements. When a change in the probability of an outfl ow occurs so that the outfl ow is probable, it will then be recognised as a provision.

6. INVESTMENT IN SUBSIDIARIES

THE COMPANY 2011 RM Unquoted shares in Malaysia, at cost 22,265,797


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D 6. INVESTMENT IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows:-

Country of EffectiveName of Company Incorporation Equity Interest Principal Activities 2011 % Careplus (M) Sdn. Bhd. (“Careplus (M)”) Malaysia 100 Trading of gloves and other disposable protection products and provision of quality control services for outsourced gloves. Rubbercare Protection Products Sdn. Bhd. Malaysia 100 Manufacturing of rubber gloves. (formerly known as Perusahaan Pelindung Getah (M) Sdn. Bhd.) (“RPP”) Masterclean Technologies Sdn. Bhd. Malaysia 100 Manufacturing of cleanroom gloves and trading of (“Masterclean Tech”) gloves.

7. INVESTMENT IN AN ASSOCIATE

THE GROUP 2011 2010 RM RM

At cost:- Unquoted shares in Malaysia - 6,501Share of post acquisition profi ts - 8,813 - 15,314 Represented by:- Share of net assets - 15,314

Details of the associate, which was incorporated in Malaysia, were as follows:-

EffectiveName of Company Equity Interest Principal Activity 2011 2010 Sawah Testing Sdn. Bhd. - 50% Trading and testing of gloves.

The associate was held by Careplus (M) and was not audited by Messrs Crowe Horwath.

On 8 June 2010, Careplus (M) disposed of its associate, Sawah Testing Sdn. Bhd., for a total consideration of RM6,501.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D8. GOODWILL ON CONSOLIDATION


Cost 683,067 683,067Accumulated amortisation (478,147) (478,147) 204,920 204,920 During the fi nancial period, the Group assessed the recoverable amount of the goodwill, and determined that purchased goodwill is not impaired.

The recoverable amount of a cash-generating unit is determined based on value-in-use calculations using cash fl ow projections based on fi nancial budgets approved by management covering a period of one year. The key assumptions used for value-in-use calculations are:-

Growth rate 10%Gross margin 78%Discount rate 11%

Management determined the budgeted gross margin based on past performance and its expectations of market development. The growth rate used is based on the past years’ achievements. The discount rate used is pre-tax and was estimated based on the industry weighted average cost of capital.

9. PROPERTY, PLANT AND EQUIPMENT

AT DEPRECIATION AT 1.2.2010 ADDITIONS RECLASSIFICATION DISPOSALS CHARGE 31.1.2011 RM RM RM RM RM RM

THE GROUP NET BOOK VALUE Buildings 297,977 14,480 - (52,000) (4,436) 256,021Capital work-in-progress - 11,011,624 - - - 11,011,624Factory and offi ce extension 79,347 85,410 - (58,094) (154) 106,509Factory equipment 4,762 - - - (4,762) -Freehold land 109,472 - - (109,472) - -Forklift 147,994 - - - (41,498) 106,496Furniture and fi ttings 13,339 2,850 - - (2,695) 13,494Leasehold land 5,711,867 39,641 - - (90,699) 5,660,809Motor vehicles 352,602 50,000 - - (85,686) 316,916Offi ce equipment 62,326 24,046 24,496 - (11,831) 99,037Plant and machinery 3,198,277 592,062 (24,496) - (654,406) 3,111,437 9,977,963 11,820,113 - (219,566) (896,167) 20,682,343


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

AT WRITTEN DEPRECIATION AT 1.2.2009 ADDITIONS OFF CHARGE 31.1.2010 RM RM RM RM RM

NET BOOK VALUE Buildings 302,968 - - (4,991) 297,977Factory and offi ce extension 36,159 74,762 (121) (31,453) 79,347Factory equipment 9,526 - (1) (4,763) 4,762Freehold land 109,472 - - - 109,472Forklift 27,001 162,491 - (41,498) 147,994Furniture and fi ttings 17,360 - (337) (3,684) 13,339Leasehold land 2,061,586 3,740,618 - (90,337) 5,711,867Motor vehicles 96,345 339,942 - (83,685) 352,602Offi ce equipment 61,933 19,487 (4,917) (14,177) 62,326Plant and machinery 3,513,901 507,824 (966) (822,482) 3,198,277 6,236,251 4,845,124 (6,342) (1,097,070) 9,977,963

AT ACCUMULATED NET BOOK COST DEPRECIATION VALUE RM RM RMTHE GROUP At 31.1.2011 Buildings 298,869 (42,848) 256,021Capital work-in-progress 11,011,624 - 11,011,624Factory and offi ce extension 1,258,835 (1,152,326) 106,509Factory equipment 25,412 (25,412) -Forklift 257,627 (151,131) 106,496Furniture and fi ttings 73,290 (59,796) 13,494Leasehold land 6,191,467 (530,658) 5,660,809Motor vehicles 660,920 (344,004) 316,916Offi ce equipment 328,297 (229,260) 99,037Plant and machinery 10,217,589 (7,106,152) 3,111,437 30,323,930 (9,641,587) 20,682,343 At 31.1.2010 Buildings 339,125 (41,148) 297,977Factory and offi ce extension 1,238,865 (1,159,518) 79,347Factory equipment 25,412 (20,650) 4,762Freehold land 109,472 - 109,472Forklift 257,627 (109,633) 147,994Furniture and fi ttings 70,440 (57,101) 13,339Leasehold land 6,151,826 (439,959) 5,711,867Motor vehicles 610,920 (258,318) 352,602Offi ce equipment 273,631 (211,305) 62,326Plant and machinery 9,656,147 (6,457,870) 3,198,277 18,733,465 (8,755,502) 9,977,963


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D9. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Included in property, plant and equipment of the Group are the following assets acquired under hire purchase terms:-


Forklift 9,000 18,000Motor vehicles 150,857 180,112Plant and machinery 404,590 582,155 564,447 780,267

Included in property, plant and equipment of the Group are the following fully depreciated property, plant and equipment which are still in use:-


Factory and offi ce extension 1,133,973 1,018,579Factory equipment 25,412 1,600Forklift 50,136 50,136Furniture and fi ttings 45,952 27,598Motor vehicles 87,880 87,880Offi ce equipment 175,608 146,247Plant and machinery 4,374,397 2,044,823 5,893,358 3,376,863

Included in the net book value of property, plant and equipment at the end of the reporting period are the following assets pledged to fi nancial institutions as security for banking facilities granted to the Group:-


Buildings 241,536 245,432Factory and offi ce extension 106,507 79,344Leasehold land 5,660,809 5,711,867 6,008,852 6,036,643


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D10. INVESTMENT PROPERTY


Cost 325,248 325,248Accumulated depreciation (65,050) (32,525) Net book value 260,198 292,723 Accumulated depreciation At 30.3.2010/1.2.2009 (32,525) -Addition during the fi nancial period/year (32,525) (32,525) At 31.1.2011/2010 (65,050) (32,525) Fair value 325,248 325,248 The investment property of the Group has been pledged to a licensed bank as security for banking facilities granted to the Group.

The investment property comprises commercial property leased to third parties under operating lease. Rental income and direct operating expenses arising from the investment property are as follows:


Rental income 27,373 18,795Direct operating expenses 2,343 981

11. OTHER INVESTMENT


Shares quoted in Malaysia:- At cost - 55,115 At market value - 55,115


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D12. INVENTORIES


At cost:- Raw materials 778,949 437,204Work-in-progress 3,741,403 1,528,847Finished goods 1,225,926 1,887,012 5,746,278 3,853,063At net realisable value:- Work-in-progress 182,573 -

5,928,851 3,853,063

13. TRADE RECEIVABLES


Trade receivables 6,704,720 7,380,371Allowance for impairment losses (32,144) (48,500)

6,672,576 7,331,871

Allowance for impairment losses:- At 30.3.2010/1.2.2009 (48,500) -Addition during the fi nancial period/year - (48,500)Writeback during the fi nancial period/year 13,331 -Writeoff during the fi nancial period/year 3,025 - At 31.1.2011/2010 (32,144) (48,500)

The Group’s normal trade credit terms range from 30 to 120 days (2010 - 30 to 120 days). Other credit terms are assessed and approved on a case-by-case basis.

14. AMOUNTS OWING BY/(TO) SUBSIDIARIES

The amounts owing are non-trade in nature, unsecured, interest-free and repayable on demand. The amounts owing are to be settled in cash.

15. AMOUNT OWING BY A RELATED PARTY

The amount owing by a related party is trade in nature and subject to the Group’s normal trade credit terms ranging from 30 to 120 days.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D16. DERIVATIVE ASSETS

THE GROUP 2011 2011 2010 2010 Contract/ Contract/

Notional amount Assets Notional amount Assets RM RM RM RM Forward foreign currency contracts 8,506,680 219,540 9,362,350 -

The Group does not apply hedge accounting.

As at 31 January 2011, the settlement dates for forward foreign currency contracts range from 3 to 6 months.

During the current fi nancial period, the Group recognised a gain of RM219,540 arising from fair value changes of derivative assets. The fair value changes are attributable to changes in the foreign exchange spot and forward rate.

17. FIXED DEPOSITS WITH LICENSED BANKS

The fi xed deposits with licensed banks of the Group and the Company at the end of the reporting period bore a weighted average interest rate of 2.9% (2010 - 1.8%) per annum. The fi xed deposits have a maturity period of 30 days (2010 - 30 days).

18. ASSET HELD FOR SALE THE GROUP 2011 2010 RM RM

Unquoted investment, at cost - 400,000

In the previous fi nancial year, Careplus (M) acquired a 50% equity interest in a company for a total cash consideration of RM400,000. The results of this company were not equity accounted as the interest in the company was held on a temporary basis.

On 8 February 2010, Careplus (M) increased its investment in the unquoted investment by RM4,000. Subsequently, on 30 June 2010, Careplus (M) completed the disposal of the unquoted investment for a total consideration of RM404,000, being the total original cost of the unquoted investment.

19. SHARE CAPITAL

The movements in the authorised share capital of the Company are as follows:-

2011 2010#

PAR NUMBER SHARE PAR NUMBER SHARE VALUE OF CAPITAL VALUE OF CAPITAL

RM SHARES RM RM SHARES RMORDINARY SHARES At 30.3.2010 (date of incorporation)/1.2.2009 0.10 1,000,000 100,000 0.10 1,000,000 100,000 Increase during the fi nancial period/year 0.10 499,000,000 49,900,000 0.10 499,000,000 49,900,000 At 31.1.2011/2010 0.10 500,000,000 50,000,000 0.10 500,000,000 50,000,000


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D19. SHARE CAPITAL (CONT’D)

The movements in the issued and paid-up share capital of the Company are as follows:-

2011 2010#

PAR NUMBER SHARE PAR NUMBER SHARE VALUE OF CAPITAL VALUE OF CAPITAL RM SHARES RM RM SHARES RM

ORDINARY SHARES At 30.3.2010 (date of incorporation)/1.2.2009 0.10 100 10 0.10 100 10 Allotment of shares pursuant to listing scheme:- - acquisition of subsidiaries 0.10 144,949,900 14,494,990 0.10 144,949,900 14,494,990 - public issue 0.10 65,050,000 6,505,000 - - - At 31.1.2011/2010 0.10 210,000,000 21,000,000 0.10 144,950,000 14,495,000

# - The share capital of the Company as at 31 January 2010 is prepared on the assumption that the Group had been in existence as at 31 January 2010.

The Company was incorporated with an authorised share capital of RM100,000 comprising 1,000,000 ordinary shares of RM0.10 each, of which 100 ordinary shares of RM0.10 each were subscribed for on the date of incorporation.

During the fi nancial period,

(a) the Company increased its authorised share capital from RM100,000 to RM50,000,000 by the creation of 499,000,000 new ordinary shares of RM0.10 each; and

(b) the Company increased its issued and paid-up share capital from RM10 to RM21,000,000 as part of its fl otation scheme on the ACE Market of Bursa Malaysia Securities Berhad. The issued and paid-up share capital was increased in the following manner:-

(i) Acquisition of Careplus (M)

the Company increased its issued and paid-up share capital from RM10 to RM14,495,000 by the allotment of 144,949,900 new ordinary shares of RM0.10 each for the acquisition of Careplus (M) at an issue price of approximately RM0.10 per ordinary share; and

(ii) Public Issue

Upon the completion of the Public Issue, the issued and paid-up share capital of the Company increased from RM14,495,000 to RM21,000,000 by the allotment of 65,050,000 new ordinary shares of RM0.10 each at an issue price of RM0.23 per ordinary share.

All the new ordinary shares issued during the fi nancial period rank pari passu in all respects with the existing ordinary shares of the Company.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D20. SHARE PREMIUM THE GROUP THE COMPANY 2011 2010 2011 RM RM RM

Premium arising from: - acquisition of subsidiaries 1,380,232 1,380,232 848- public issue 8,456,500 - 8,456,500Listing expenses (729,766) - (729,766) 9,106,966 1,380,232 7,727,582

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.

21. MERGER DEFICIT

The merger defi cit arose from the difference between the carrying value of the investment and the nominal value of the shares of a subsidiary upon consolidation under the merger accounting principles.

22. LONG-TERM BORROWINGS THE GROUP 2011 2010 RM RM

Hire purchase payables (Note 23) 76,000 207,601Term loan (Note 24) 5,687,918 2,368,874 5,763,918 2,576,475

23. HIRE PURCHASE PAYABLES THE GROUP 2011 2010 RM RM

Minimum hire purchase payments: - not later than one year 138,675 254,936- between one and fi ve years 85,490 223,810 224,165 478,746Less: Future fi nance charges (17,481) (40,105) Present value of hire purchase payables 206,684 438,641 Current: - not later than one year (Note 28) 130,684 231,040 Non-current: - later than one year and not later than fi ve years (Note 22) 76,000 207,601 206,684 438,641

The hire purchase payables bore a weighted average interest rate of 5.9% (2010 - 5.9%) per annum at the end of the reporting period.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D24. TERM LOANS


Current portion: - repayable within one year (Note 28) 253,839 125,721 Non-current portion: - repayable between one and two years 314,532 130,909- repayable between two and fi ve years 1,039,267 426,035- repayable after fi ve years 4,334,119 1,811,930 Total non-current portion (Note 22) 5,687,918 2,368,874 5,941,757 2,494,595

The repayment terms of the term loans are as follows:-

Number of Monthly THE GROUPTerm Monthly Instalment Commencement Amount OutstandingLoan Instalments Amount Date of Repayment 2011 2010 RM RM RM 1 180 18,703 15 October 2009 2,382,115 2,494,5952 180 29,688 15 May 2011 3,559,642 - 5,941,757 2,494,595

The term loans bore an effective interest rate of 4.8% (2010 - 4.1%) per annum at the end of the reporting period and are secured by:- (i) a fi rst legal charge over the leasehold land and certain buildings as disclosed in Note 9 to the fi nancial statements; and

(ii) a joint and several guarantee of certain directors of the Company.

25. DEFERRED TAX LIABILITIES


At 1.2.2010/2009 99,274 202,586Recognised in profi t or loss (Note 33) 58,726 (103,312) At 31.1.2011/2010 158,000 99,274


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D25. DEFERRED TAX LIABILITIES (CONT’D)

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


Deferred tax liabilities:- Accelerated capital allowances 157,700 102,416Unrealised gain on foreign exchange 10,800 - 168,500 102,416 Deferred tax assets:- Unrealised loss on foreign exchange (10,500) -Unutilised tax losses - (3,142) (10,500) (3,142) 158,000 99,274

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

THE GROUP THE COMPANY 2011 2010 2011 RM RM RM

Unutilised tax losses 39,380 - 39,380Unrealised loss on foreign exchange - 158,000 - 39,380 158,000 39,380

26. TRADE PAYABLES

The normal credit terms granted to the Group range from 30 to 120 days (2010 - 30 to 120 days).

27. OTHER PAYABLES AND ACCRUALS

THE GROUP THE COMPANY 2011 2010 2011 RM RM RM

Other payables 803,703 455,092 15,059Accruals 624,675 911,527 40,300Deposits received 216,993 92,257 - 1,645,371 1,458,876 55,359


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D28. SHORT-TERM BORROWINGS THE GROUP 2011 2010 RM RM

Hire purchase payables (Note 23) 130,684 231,040Term loans (Note 24) 253,839 125,721

384,523 356,761 29. BANK OVERDRAFT

The bank overdraft bore an effective interest rate of 7.3% (2010 - 6.6%) per annum at the end of the reporting period and is secured by:-

(i) a fi rst legal charge over the leasehold land and certain buildings as disclosed in Note 9 to the fi nancial statements; and

(ii) a joint and several guarantee of certain directors of the Company.

30. REVENUE

Revenue represents the invoiced value of goods sold and services rendered net of trade discounts and returns.

31. OTHER EXPENSES

Included in other expenses of the Group and of the Company are listing expenses amounting to RM1,109,835.

32. PROFIT/(LOSS) BEFORE TAXATION In addition to those disclosed in Note 31 to the fi nancial statements, profi t/(loss) before taxation is arrived at after charging/(crediting):-

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RMAudit fee - for the fi nancial period 64,000 38,000 20,000- (over)/underprovision in the previous fi nancial year (3,000) 270 -- other services 32,000 - 10,000Bad debts written off - 4,819 -Depreciation of property, plant and equipment 896,167 1,097,070 -Depreciation of investment property 32,525 32,525 -Directors’ fee 125,000 80,400 24,000Directors’ non-fee emoluments - salaries and other benefi ts 430,210 614,495 600- defi ned contribution plan 64,002 85,149 -Impairment loss on receivables - 48,500 -Interest expense - bank overdraft 3,704 13,263 -- export credit refi nancing 67,400 - -- revolving loan 7,349 - -- hire purchase 22,625 45,450 -- term loans 141,161 31,077 -Loss on disposal of an associate 8,813 - -Loss/(Gain) on foreign exchange - realised 1,156,148 (5,212) -- unrealised (58,439) 182,867 -


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D32. PROFIT/(LOSS) BEFORE TAXATION (CONT’D)

In addition to those disclosed in Note 31 to the fi nancial statements, profi t/(loss) before taxation is arrived at after charging/(crediting) (Cont’d):-

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RM

Loss/(Gain) on disposal of plant and equipment 1,471 (30,000) -Plant and equipment written off - 6,342 -Rental of premises 76,995 40,360 -Staff costs - salaries and other staff related expenses 3,604,832 3,216,108 -- defi ned contribution plan 169,135 157,284 -Dividend income (749) - -Interest income (30,993) (34,961) (23,660)Fair value gain on derivatives (219,540) - -Gain on disposal of other investment (3,199) - -Rental income (27,373) (26,595) -Writeback of impairment loss on receivables (13,331) - -

33. INCOME TAX EXPENSE

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RMCurrent tax expense:- - for the fi nancial period/year 924,390 2,220,000 -- share of current tax in an associate - 2,625 -- overprovision in the previous fi nancial year (1,231,531) (3,063) - (307,141) 2,219,562 - Deferred tax liabilities (Note 25):- - for the fi nancial period/year 57,977 (71,712) -- under/(over)provision in the previous fi nancial year 749 (31,600) - 58,726 (103,312) - Total tax expense (248,415) 2,116,250 -


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D33. INCOME TAX EXPENSE (CONT’D)

A reconciliation of income tax expense applicable to profi t/(loss) before taxation at the statutory tax rates to income tax expense at the effective tax rate of the Group and of the Company is as follows:-

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RM Profi t/(Loss) before taxation 2,890,799 8,258,124 (1,150,465) Tax at the statutory tax rate of 25% 722,700 2,064,531 (287,616) Tax effects of:- Differential in tax rates (66,707) (74,588) -Non-deductible expenses 356,829 100,970 277,771Non-taxable income (800) - -Utilisation of deferred tax assets not recognised in the previous fi nancial year (39,500) - -Deferred tax assets not recognised during the fi nancial period/year 9,845 60,000 9,845(Over)/Underprovision in the previous fi nancial year - current tax (1,231,531) (3,063) -- deferred tax 749 (31,600) - Income tax expense (248,415) 2,116,250 -

34. EARNINGS PER SHARE

The basic earnings per share is arrived at by dividing the Group’s profi t attributable to shareholders of RM3,139,214 (2010 - RM6,141,874) by the weighted average number of ordinary shares in issue during the fi nancial period of 158,044,481 (2010 - 144,949,900).

THE GROUP 2011 2010 RM RM Issued ordinary shares at 30.3.2010 (date of incorporation) 100 -Acquisition of subsidiaries 144,949,900 144,949,900Public issue 13,094,481 -

158,044,481 144,949,900

The diluted earnings per share was not applicable as there were no dilutive potential ordinary shares outstanding at the end of the reporting period.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D35. DIVIDENDS THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Paid:- First interim dividend of approximately RM0.87 per ordinary share less 25% tax - 500,000Second interim dividend of approximately RM0.50 per ordinary share less 25% tax - 600,000A fi nal single tier dividend of approximately RM0.94 per ordinary share 1,500,000 - 1,500,000 1,100,000Payable:- Third interim tax-exempt dividend of approximately RM1.38 per ordinary share - 2,200,000Forth interim dividend of approximately RM0.25 per ordinary share less 25% tax - 300,000

1,500,000 3,600,000

The above are in respect of dividends declared and paid to the previous shareholders of Careplus (M) before the acquisition by Careplus Group Berhad.

36. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Cost of property, plant and equipment purchased 11,820,113 4,845,124Amount fi nanced through hire purchase - (100,000) Cash disbursed for purchase of property, plant and equipment 11,820,113 4,745,124

37. CASH AND CASH EQUIVALENTS

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

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RM Fixed deposits with licensed banks 5,300,000 2,110,509 5,300,000Cash and bank balances 1,200,566 729,871 164,842Bank overdraft (566,484) (245,036) -

5,934,082 2,595,344 5,464,842


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D38. DIRECTORS’ REMUNERATION

The aggregate amount of emoluments received and receivable by Directors of the Group and the Company during the fi nancial period are as follows:-

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RMExecutive directors:- - fee 47,000 44,400 -- non-fee emoluments 390,520 509,141 -- defi ned contribution plan 58,602 70,149 - 496,122 623,690 - Non-executive directors:- - fee 78,000 36,000 24,000- non-fee emoluments 39,690 105,354 600- defi ned contribution plan 5,400 15,000 - 123,090 156,354 24,600

619,212 780,044 24,600

The details of emoluments for the directors of the Group and the Company received/receivable for the fi nancial period in bands of RM50,000 are as follows:-

THE GROUP THE COMPANY 30.3.2010 1.2.2009 30.3.2010 to to to 31.1.2011 31.1.2010 31.1.2011 RM RM RMExecutive directors:- RM100,000 - RM150,000 2 1 -RM150,001 - RM200,000 - 1 -RM250,001 - RM300,000 1 - -RM300,001 - RM350,000 - 1 - Non-executive directors:- <RM50,000 2 - 3RM100,001 - RM150,000 1 - -RM150,001 - RM200,000 - 1 - 6 4 3


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D39. RELATED PARTY DISCLOSURES

(a) Identities of related parties

The Company has controlling related party relationships with:-

(i) its subsidiaries as disclosed in Note 6 to the fi nancial statements;

(ii) entities controlled by certain key management personnel, directors and/or substantial shareholders; and

(iii) the directors who are the key management personnel.

(b) In addition to balances detailed elsewhere in the fi nancial statements, the Company carried out the following transactions with its related parties during the fi nancial period:-

THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Entity in which a director is a key management personnel: - Hostel and store management fee charged - 93,556 Transactions with a close member of the family of a director, Lim Kwee Shyan: - Purchases 10,420 20,876- Sales 78,032 13,618- Quality control and packing services expenses 14,194 63,914- Quality control services income 10,868 53,960- Insurance and renewal of road tax services expenses 35,417 22,326- Construction expenses charged 52,581 6,000 Transactions with directors: - Rental paid/payable 73,200 33,600

(c) Key management personnel

THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Short-term employee benefi ts:- - salaries, allowances and bonuses 651,815 702,431- defi ned contribution plan 84,249 87,309


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D40. OPERATING SEGMENTS

For management purposes, the Group is organised into business units based on their products and services provided.

The Group is organised into 3 main business segments as follows:-

(i) Manufacturing segment - involved in manufacturing of rubber gloves and cleanroom gloves.

(ii) Trading segment - involved in trading of gloves and other disposable protection products and provision of quality control services for outsourced gloves.

(iii) Other segment - investment holding.

The management assesses the performance of the operating segments based on the operating profi t or loss which is measured differently from those disclosed in the consolidated fi nancial statements.

Income taxes are managed on a group basis and are not allocated to operating segments.

Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the operating segments are presented under unallocated items. Unallocated items comprise mainly tax refundable, tax payable and deferred tax liabilities.

Transfer pricing between operating segments are at an arm’s length basis in a manner similar to transactions with third parties.

BUSINESS SEGMENTS MANUFACTURING TRADING OTHER GROUP RM’000 RM’000 RM’000 RM’00030.3.2010 to 31.1.2011 Revenue External revenue 43,962,926 3,263,198 - 47,226,124Inter-segment revenue 31,673,347 - - 31,673,347 75,636,273 3,263,198 - 78,899,471 Eliminations (31,673,347) Consolidated revenue 47,226,124 Results Segment results 4,581,302 7,895,639 (64,290) 12,412,651Adjustments and eliminations - (7,581,949) - (7,581,949) 4,581,302 313,690 (64,290) 4,830,702 Interest income - 7,333 23,660 30,993Other material items of income 34,260 212,653 - 246,913Depreciation of property and equipment (794,926) (101,241) - (896,167)Depreciation of investment property - (32,525) - (32,525)Other material items of expenses (229,425) (12,814) (1,109,835) (1,352,074)Other non-cash income items 24,853 46,917 - 71,770 3,616,064 434,013 (1,150,465) 2,899,612 Loss on disposal of an associate (8,813)Income tax expense 248,415 Consolidated profi t after taxation 3,139,214


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D40. OPERATING SEGMENTS (CONT’D)

BUSINESS SEGMENTS (CONT’D) MANUFACTURING TRADING OTHER GROUP RM’000 RM’000 RM’000 RM’0002011 Assets Segment assets # 31,805,441 17,258,459 35,570,027 84,633,927 Eliminations (43,568,271) Unallocated assets 50,095 Consolidated total assets 41,115,751 Liabilities Segment liabilities * 20,138,969 4,074,375 7,992,910 32,206,254 Eliminations (21,947,582) Unallocated liabilities 490,283 Consolidated total liabilities 10,748,955 Other segment items Additions to non-current assets other than fi nancial instruments:- - property, plant and equipment 11,755,496 64,617 - 11,820,113

# - Segment assets comprise total current and non-current assets, less tax refundable.

* - Segment liabilities comprise total current and non-current liabilities, less tax payable and deferred tax liabilities.

MANUFACTURING TRADING OTHER GROUP RM RM RM RM1.2.2009 to 31.1.2010 Revenue External revenue 39,328,423 2,537,880 - 41,866,303Inter-segment revenue 30,523,557 - - 30,523,557 69,851,980 2,537,880 - 72,389,860 Eliminations (30,523,557) Consolidated revenue 41,866,303



BUSINESS SEGMENTS (CONT’D) MANUFACTURING TRADING OTHER GROUP RM RM RM RM1.2.2009 to 31.1.2010 (CONT’D) Results Segment results 8,270,153 3,581,853 - 11,852,006Adjustments and eliminations - (2,245,000) - (2,245,000) 8,270,153 1,336,853 - 9,607,006 Interest income - 34,961 - 34,961Other material items of income - 56,595 - 56,595Depreciation of property and equipment (996,150) (100,920) - (1,097,070)Depreciation of investment property - (32,525) - (32,525)Other material items of expenses (78,075) (11,715) - (89,790)Other non-cash expense items (23,199) (208,168) - (231,367) 7,172,729 1,075,081 - 8,247,810 Share of profi t in an associate 10,314Income tax expense (2,116,250) Consolidated profi t after taxation 6,141,874

MANUFACTURING TRADING OTHER GROUP RM RM RM RM2010 Assets Segment assets # 16,637,985 11,690,948 10 28,328,943 Eliminations (2,747,097) Investment in an associate 15,314Unallocated assets - Consolidated total assets 25,597,160 Liabilities Segment liabilities * 8,868,026 4,990,792 - 13,858,818 Eliminations (4,545,472) Unallocated liabilities 1,787,966 Consolidated total liabilities 11,101,312 Other segment items Additions to non-current assets other than fi nancial instruments:- - property and equipment 4,505,182 339,942 - 4,845,124 - investment property - 325,248 - 325,248 4,505,182 665,190 - 5,170,372

# - Segment assets comprise total current and non-current assets, less tax refundable and investment in an associate.

* - Segment liabilities comprise total current and non-current liabilities, less tax payable and deferred tax liability.



BUSINESS SEGMENTS (CONT’D)

(a) Other material items of income consist of the following:- THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Fair value gain on derivatives 219,540 -Gain on disposal of plant and equipment - 30,000Rental income 27,373 26,595

246,913 56,595

(b) Other material items of expenses consist of the following:- THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Interest expense 242,239 89,790 Listing expenses 1,109,835 - 1,352,074 89,790

(c) Other non-cash (income)/expense consist of the following:- THE GROUP 30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Allowance for impairment losses - 48,500Unrealised gain on foreign exchange (58,439) -Unrealised loss on foreign exchange - 182,867Writeback of impairment loss on receivables (13,331) -

(71,770) 231,367

GEOGRAPHICAL INFORMATION REVENUE

30.3.2010 1.2.2009 to to 31.1.2011 31.1.2010 RM RM

Malaysia 9,747,102 8,987,848North America 11,151,568 7,824,858Central and South America 5,235,266 6,235,741Other Asia Pacifi c 17,926,956 11,453,589Others 3,165,232 7,364,267 47,226,124 41,866,303



MAJOR CUSTOMERS

Revenue from three major customers, with revenue equal to or more than 10% of Group revenue amounted to RM22,769,893 (2010 - RM12,271,872) arising from sales of the manufacturing and trading segment.

41. CAPITAL COMMITMENTS

Authorised capital expenditure not provided for in the fi nancial statements:- THE GROUP 2011 2010 RM RMContracted but not provided for: - Construction of factory 1,441,407 5,314,242- Plant and machinery 8,553,247 - 9,994,654 5,314,242

42. CONTINGENT LIABILITY THE COMPANY 2011 RM

Corporate guarantee given to licensed banks for credit facilities granted to a subsidiary 6,508,241

43. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall fi nancial risk management policy focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the Group’s fi nancial performance.

(a) Financial Risk Management Policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Market Risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than Ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar, Pound Sterling and Euro. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. On occasion, the Group enters into forward foreign currency contracts to hedge against its foreign currency risk.

The Group’s exposure to foreign currency is as follows:- UNITED STATES SINGAPORE POUND DOLLAR DOLLAR STERLING EUROTHE GROUP RM RM RM RM 2011 Financial assets Trade receivables 6,342,512 30,826 299,211 -Cash and bank balances 720,999 - 2,940 171 7,063,511 30,826 302,151 171


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D43. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d)

(i) Market Risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

UNITED STATES SINGAPORE POUND DOLLAR DOLLAR STERLING EUROTHE GROUP RM RM RM RM 2011

Financial liabilities Trade payables (851,200) - - - Net fi nancial assets 6,212,311 30,826 302,151 171Less: Forward foreign currency contracts (contracted notional principal) (6,212,311) - - - Currency exposure - 30,826 302,151 171

2010 Financial assets Trade receivables 6,901,841 21,295 98,711 260,352Cash and bank balances 357,383 - 3,014 251,767 7,259,224 21,295 101,725 512,119 Financial liabilities Trade payables (331,537) - - - Net fi nancial assets 6,927,687 21,295 101,725 512,119Less: Forward foreign currency contracts (contracted notional principal) (6,927,687) - - - Currency exposure - 21,295 101,725 512,119

The effect of the foreign currency risk to the Group is minimal. As such, sensitivity analysis is not disclosed.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from interest-bearing fi nancial assets and liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed fi nancial institutions to generate interest income.

Information relating to the Group’s exposure to the interest rate risk of the fi nancial liabilities is disclosed in Note 43(a)(iii) to the fi nancial statements.

The effect of the interest rate risk to the Group and the Company is minimal. As such, sensitivity analysis is not disclosed.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D43. FINANCIAL INSTRUMENTS (CONT’D) (a) Financial Risk Management Policies (Cont’d) (i) Market Risk (Cont’d)

(iii) Equity Price Risk

The Group does not have any quoted investments and hence is not exposed to equity price risk.

(ii) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other fi nancial assets (including cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specifi c loss component that relates to individually signifi cant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identifi ed. Impairment is estimated by management based on prior experience and the current economic environment.

Credit risk concentration profi le

The Group’s major concentration of credit risk relates to the amounts owing by three customers which constituted approximately 72% of its trade receivables as at the end of the reporting period.

Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the fi nancial assets as at the end of the reporting period.

Ageing analysis

The ageing analysis of the Group’s trade receivables is as follows:-

GROSS COLLECTIVE CARRYING AMOUNT IMPAIRMENT VALUETHE GROUP RM RM RM 2011 Not past due 6,388,875 - 6,388,875Past due 0 - 30 days 270,602 - 270,602Past due more than 30 days 45,243 (32,144) 13,099 6,704,720 (32,144) 6,672,576


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D43. FINANCIAL INSTRUMENTS (CONT’D)

(a) Financial Risk Management Policies (Cont’d)

(ii) Credit Risk (Cont’d)

Ageing analysis (Cont’d) GROSS COLLECTIVE CARRYING AMOUNT IMPAIRMENT VALUETHE GROUP RM RM RM 2010 Not past due 7,126,130 - 7,126,130Past due 0 - 30 days 190,378 - 190,378Past due more than 30 days 63,863 (48,500) 15,363 7,380,371 (48,500) 7,331,871 At the end of the reporting period, trade receivables that are individually impaired were those in signifi cant fi nancial diffi culties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.

Trade receivables that are past due but not impaired

The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.

Trade receivables that are neither past due nor impaired

A signifi cant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Groups uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having signifi cant balances past due or more than 120 days, which are deemed to have higher credit risk, are monitored individually.

(iii) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining suffi cient cash balances and the availability of funding through certain committed credit facilities.

The following table sets out the maturity profi le of the fi nancial liabilities as at the end of the reporting period based on contractual undiscounted cash fl ows (including interest payments computed using contractual rates or, if fl oating, based on the rates at the end of the reporting period):-

WEIGHTED AVERAGE CONTRACTUAL OVER EFFECTIVE CARRYING UNDISCOUNTED WITHIN 1 - 2 2 - 5 5 RATE AMOUNT CASH FLOWS 1 YEAR YEARS YEARS YEARSTHE GROUP % RM RM RM RM RM RM 2011 Hire purchase payables 5.9 206,684 224,165 138,675 59,302 26,188 -Term loans 4.8 5,941,757 8,411,132 491,628 580,692 1,742,076 5,596,736Trade payables - 1,898,376 1,898,376 1,898,376 - - -Other payables and accruals - 1,645,371 1,645,371 1,645,371 - - -Bank overdrafts - 566,484 566,484 566,484 - - - 10,258,672 12,745,528 4,740,534 639,994 1,768,264 5,596,736


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D43. Financial Instruments (Cont’d)

(a) Financial Risk Management Policies (Cont’d)

(iii) Liquidity Risk (Cont’d)

WEIGHTED AVERAGE CONTRACTUAL OVER EFFECTIVE CARRYING UNDISCOUNTED WITHIN 1 - 2 2 - 5 5 RATE AMOUNT CASH FLOWS 1 YEAR YEARS YEARS YEARSTHE GROUP % RM RM RM RM RM RM 2010

Hire purchase payables 5.9 438,641 478,746 254,936 145,023 78,787 -Term loans 4.1 2,494,595 3,320,156 224,436 224,436 673,308 2,197,976Trade payables - 2,176,198 2,176,198 2,176,198 - - -Other payables and accruals - 1,458,876 1,458,876 1,458,876 - - -Dividend payable - 2,500,000 2,500,000 2,500,000 - - -Bank overdrafts - 245,036 245,036 245,036 - - - 9,313,346 10,179,012 6,859,482 369,459 752,095 2,197,976 THE COMPANY 2011 Other payables and accruals - 55,359 55,359 55,359 - - -Amount owing to a subsidiary - 7,937,551 7,937,551 7,937,551 - - - 7,992,910 7,992,910 7,992,910 - - -

(b) Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support their businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.



(b) Capital Risk Management (Cont’d)

The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:-

THE GROUP 2011 2010 RM RM Hire purchase payables 206,684 438,641Term loans 5,941,757 2,494,595Trade payables 1,898,376 2,176,198Other payables and accruals 1,645,371 1,458,876Dividend payable - 2,500,000Bank overdrafts 566,484 245,036 10,258,672 9,313,346Less: Fixed deposits with licensed banks (5,300,000) (2,110,509)Less: Cash and bank balances (1,200,566) (729,871) Net debt 3,758,106 6,472,966 Total equity 30,366,796 14,495,848 Debt-to-equity ratio 0.12 0.45

Under the requirement of Bursa Malaysia Guidance Note No. 3/2006, the Company is required to maintain its shareholders’ equity equal to or not less than the 25% of the issued and paid-up share capital (excluding treasury shares) of the Company. The Company has complied with this requirement.

(c) Classifi cation Of Financial Instruments

THE GROUP THE COMPANY 2011 2011 RM RMFinancial assets Loans and receivables fi nancial assets Trade receivables 6,672,576 -Other receivables, deposits and prepayments 590,273 11,300Amount owing by a subsidiary - 7,828,088Amount owing by a related party 6,389 -Fixed deposits with licensed banks 5,300,000 5,300,000Cash and bank balances 1,200,566 164,842 13,769,804 13,304,230Fair value through profi t and loss Derivative assets 219,540 -



(c) Classifi cation Of Financial Instruments (Cont’d) THE GROUP THE COMPANY 2011 2011 RM RMFinancial liabilities Other fi nancial liabilities Hire purchase payables 206,684 -Term loans 5,941,757 -Trade payables 1,898,376 -Other payables and accruals 1,645,371 55,359Amount owing to a subsidiary - 7,937,551Bank overdraft 566,484 - 10,258,672 7,992,910

(d) Fair Values Of Financial Instruments

The carrying amounts of the fi nancial assets and fi nancial liabilities reported in the fi nancial statements approximated their fair values except for the following:-

2011 2010 CARRYING FAIR CARRYING FAIR AMOUNT VALUE AMOUNT VALUE RM RM RM RMTHE GROUP Hire purchase payables 206,684 200,226 438,641 406,609Term loans 5,941,757 4,232,321 2,494,595 1,781,959

The following summarises the methods used to determine the fair values of the fi nancial instruments:-

(i) The fi nancial assets and fi nancial liabilities maturing within the next 12 months approximated their fair values due to the relatively short-term maturity of the fi nancial instruments.

(ii) The carrying amounts of long term bank loans and hire purchase payables approximated their fair value of the instruments. The fair values of the long term bank loans and hire purchase payables are determined by discounting the relevant cash fl ows using current interest rates for similar instruments at the end of the reporting period.

(iii) The fair value of forward foreign currency contracts is estimated by discounting the difference between the contractual forward

price and the current forward price for the residual maturity of the contract using a risk-free interest rate.

The interest rates used to discount estimated cash fl ows, where applicable, are as follows:-

THE GROUP 2011 2010 % % Hire purchase payables 4.5 4.6Term loans 6.8 6.8


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D44. SIGNIFICANT EVENTS DURING/SUBSEQUENT TO THE FINANCIAL PERIOD

During and subsequent to the fi nancial period, the Company and a subsidiary of the Company, Careplus (M) undertook the following transactions:-

(i) on 15 February 2010, Careplus (M) increased its investment in an unquoted investment by RM4,000. Subsequently, on 30 June 2010, Careplus (M) completed the disposal of the unquoted investment for a total consideration of RM404,000, being the total original cost of the investment in the unquoted investment;

(ii) on 8 June 2010, Careplus (M) disposed of its associate, Sawah Testing Sdn. Bhd., for a total consideration of RM6,501;

(iii) on 1 July 2010, the Company entered into a conditional Share Purchase Agreement with the vendors of Careplus (M) for the acquisition of 1,595,339 ordinary shares of RM1.00 each, representing the entire issued and paid-up share capital of Careplus (M), for a total consideration of RM14,495,838 based on the audited consolidated net assets (“NA”) of Careplus (M) as at 31 January 2010 amounting to RM14,495,838. The purchase consideration was satisfi ed by the issuance of 144,949,900 new ordinary shares of RM0.10 each in the Company (“Careplus Shares” or “Shares”) at an issue price of approximately RM0.10 per share. The Acquisition was completed on 1 July 2010;

(iv) on 3 July 2010, the Company undertook an internal reorganisation by entering into a Share Transfer Agreement with Careplus (M) for the acquisition of the following:

(a) 1,311,000 ordinary shares of RM1.00 each, representing the entire issued and paid-up share capital of RPP, for a total consideration of RM7,326,750 based on the audited NA of RPP as at 31 January 2010 amounting to RM7,326,750; and

(b) 100,000 ordinary shares of RM1.00 each, representing the entire issued and paid-up share capital of Masterclean Tech, for a total consideration of RM443,209 based on the audited NA of Masterclean Tech as at 31 January 2010 amounting to RM443,209.

The Internal Reorganisation was completed on 3 July 2010.

(v) In conjunction with the listing scheme, the Company completed the public issue during the fi nancial period. The entire issued and paid-up capital of the Company was listed on the Ace Market of Bursa Malaysia Securities Berhad on 6 December 2010.

(vi) on 24 February 2011, the Company incorporated a new wholly-owned subsidiary, namely Careglove Global Sdn. Bhd., with 2 fully paid-up shares of RM1.00 each; and

(vii) on 28 April 2011, the Company proposed to undertake:-

(a) a bonus issue of 105,000,000 Warrants on the basis of one (1) free Warrant for every two (2) existing ordinary shares held on an entitlement date to be determined later; and

(b) a private placement of up to twenty percent (20%) of the issued and paid-up share capital of the Company to investors to be identifi ed.

On 16 May 2011, the Company has obtained approval from the relevant authority for the above-mentioned exercise.


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D45. FOREIGN EXCHANGE RATES

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

THE GROUP 2011 2010 RM RM Pound Sterling 4.85 5.51Euro 4.17 4.76Singapore Dollar 2.38 2.43United States Dollar 3.06 3.41


NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 30 MARCH 2010 DATE OF INCORPORATION TO 31 JANUARY 2011 CONT’D46. SUPPLEMENTARY INFORMATION - DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES

The breakdown of the retained profi ts/(accumulated loss) of the Group and of the Company as at the end of the reporting period into realised and unrealised profi ts/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profi ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-

THE GROUP THE COMPANY 2011 2011 RM RM

Total retained profi ts/(accumulated loss): - realised 13,279,310 (1,150,465)- unrealised (118,981) - At 31.1.2011 13,160,329 (1,150,465)


LIST OF PROPERTIES

Registered owner and postal address/identifi cation

Careplus (M) Sdn Bhd

Lot 104, Lorong Senawang 4/2Off Jalan Senawang EmpatSenawang Industrial Estate70450 SerembanNegeri Sembilan Darul Khusus

Title identifi cation:No. Hakmilik PM 43, Lot No. 5619, Pekan Senawang, Daerah Seremban, Negeri Sembilan Darul Khusus

No. G-51, Ground Floor of Terminal One Shopping Complex70000 SerembanNegeri Sembilan Darul Khusus

Title identifi cation:Strata Title under Geran No. 60178/M1/1/36, No. Petak 36, Lot No. 20321, Mukim Bandar Seremban, Daerah Seremban, Negeri Sembilan Darul Khusus

Rubbercare Protection Products Sdn Bhd

Lot 110, Lorong Senawang 4/3Off Jalan Senawang EmpatSenawang Industrial Estate70450 SerembanNegeri Sembilan Darul Khusus

Title identifi cation:Lot No. PT 1345, H.S.(D) 133246 in Mukim Ampangan, Daerah Seremban, Negeri Sembilan Darul Khusus

Lot 17479, Jalan Senawang EmpatSenawang Industrial Estate70450 SerembanNegeri Sembilan Darul Khusus

Title identifi cation:No. Hakmilik PN 1290Lot No. 17479, Kawasan Perindustrian Senawang, Mukim Ampangan, Daerah Seremban, Negeri Sembilan Darul Khusus

Approximate age of the

building/Date of certifi cate of

fi tness

10 years/13.08.2010

11 years/12.02.1999

13 years/06.08.2010

Nil(aquired on 29.06.2009)

Tenure/Expiry date of lease

Leasehold/99 years

expiring on 12.09.2073

Freehold

Leasehold/99 years

expiring on 28.06.2077

Leasehold/99 years

expiring on27.05.2073

Description and existing use

Single-storey factory for packing,

warehouse and chlorination

plant

Ground fl oor unit commercial lot in shopping

complex, currently tenanted

Single-storey detached factory with an annexed double-storey offi ce building as our head

offi ce and our production

factory

Vacant land(under

construction)

Land area(Square feet)

41,947

Not applicable

43,560

392,040

Built-up area (Square feet)

9,000

689

24,920

Nil

Net book value as at

31 January 2011(RM)

921,198

260,198

1,320,000

3,661,147


ANALYSIS OF SHAREHOLDINGS AS AT 31 MAY 2011

Authorised Capital : RM50,000,000.00Issued and Fully Paid-Up Capital : RM21,000,000.00 comprising 210,000,000 Ordinary Shares of RM0.10 each Class of Equity Securities : Ordinary Shares of RM0.10 each (“Shares”)Voting Rights : One vote per Share

Distribution Schedule of Shareholders

Size of Holdings No of Holders No. of Shares %

Less than 100 shares 2 100 0.00100 - 1,000 shares 74 56,900 0.03 1,001 - 10,000 shares 694 4,833,600 2.30 10,001 - 100,000 shares 663 24,765,500 11.79 100,001 - less than 5% of issued shares 99 54,889,800 26.14 5% and above of issued shares 4 125,454,100 59.74

Total 1,536 210,000,000 100.00

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS (As per the Register of Substantial Shareholders) Direct Interest Indirect InterestName of Substantial Shareholders No. of Shares % No. of Shares % Lim Kwee Shyan 65,981,200 31.42 15,002,300(1) 7.14Ng Shu Si 15,002,300 7.14 65,981,200(1) 31.42Yew Nieng Choon 7,711,400 3.67 48,536,400(2) 23.11Chan Pek Harn @ Chan Wai Har 14,190,600 6.76 42,057,200(2) 20.03Thinking Cap Sdn. Bhd. 30,280,000 14.42 - -

Notes:(1) Deemed interested through his/her spouse’s shareholding in Careplus Group Berhad (“Careplus”)(2) Deemed interested through his/her spouse’s and his/her daughter’s shareholdings in Careplus and his/her shareholdings of more than

fi fteen percent (15%) in Thinking Cap Sdn. Bhd

DIRECTORS’ SHAREHOLDINGS (As per the Register of Directors’ Shareholdings) Direct Interest Indirect InterestName of Directors No. of Shares % No. of Shares %

Lim Kwee Shyan 65,981,200 31.42 15,002,300(1) 7.14Yew Nieng Choon 7,711,400 3.67 48,536,400(2) 23.11Loo Teck Looi 3,855,500 1.84 - -Yew Yee Peng 4,065,800 1.94 - -Tan Chuan Hock 2,000,000 0.95 - -Foong Kuan Ming 100,000 0.05 - -

Notes:(1) Deemed interested through his/her spouse’s shareholding in Careplus.(2) Deemed interested through his/her spouse’s and his/her daughter’s shareholdings in Careplus and his/her shareholdings of more than

fi fteen percent (15%) in Thinking Cap Sdn. Bhd


ANALYSIS OF SHAREHOLDINGS AS AT 31 MAY 2011 CONT’D

30 Largest Securities Account Holders as at 31 May 2011(without aggregating the securities from different securities accounts belonging to the same registered holder)

No Name No. of Shares held %

1 Lim Kwee Shyan 65,981,200 31.422 Thinking Cap Sdn. Bhd. 30,280,000 14.423 Ng Shu Si 15,002,300 7.144 Chan Pek Harn @ Chan Wai Har 14,190,600 6.765 Yew Nieng Choon 7,711,400 3.676 Yew Yee Peng 4,065,800 1.947 Loo Teck Looi 3,855,500 1.848 Lim Kau @ Lim Kwee Wu 3,585,600 1.719 Tan Chuan Hock 2,000,000 0.9510 Tan Z Kiat 1,750,000 0.8311 Lim Hoe Seng 1,400,000 0.6712 Tan Check Ee 1,000,000 0.4813 Khor Jan Yeow 1,000,000 0.4814 Wong Chee How 1,000,000 0.4815 Lai Chee Fong 980,000 0.4716 Soh Tian Chai 900,000 0.4317 Mak Weng Kit 859,000 0.4118 JF Apex Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account for Lee Sak Chong (Margin) 810,000 0.3919 Valentine Peter Jesudoss 776,000 0.3720 Chan Wah Heng 754,000 0.3621 Loo Chian 716,500 0.3422 Vibrant Model Sdn. Bhd. 710,000 0.3423 Kendek Industry Sdn. Bhd. 700,000 0.3324 Chuah Lay Leng 700,000 0.3325 Leong Moey Cheok 655,900 0.3126 Chong Looe Meng 600,000 0.2927 Tay Siew Tuan 600,000 0.2928 Lim Shu Hong 560,000 0.2729 Lim Hung Puan 529,600 0.2530 Lee Seng Thye 500,000 0.24


NOTICE OF FIRST ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the First Annual General Meeting of CAREPLUS GROUP BERHAD (“Careplus” or “the Company”) will be held at Greens II, Main Wing, First Floor, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 25 July 2011 at 10.00 a.m. to transact the following business:-

A G E N D A

1. To receive the Audited Financial Statements for the fi nancial period ended 31 January 2011 together with the Please refer to Note i reports of the directors and auditors thereon.

2. To approve the payment of directors’ fees for the fi nancial period ended 31 January 2011. Resolution 1

3. To re-elect the following Directors who retire in accordance with Article 103 of the Company’s Articles of Association :

i. Mr. Yew Nieng Choon Resolution 2 ii. Mr. Lim Kwee Shyan Resolution 3 iii. Mr. Loo Teck Looi Resolution 4 iv. Ms. Yew Yee Peng Resolution 5 v. Mr. Tan Chuan Hock Resolution 6 vi. Mr. Foong Kuan Ming Resolution 7

4. To re-appoint Messrs. Crowe Horwath as Auditors of the Company until the conclusion of the next Annual General Resolution 8 Meeting and to authorise the Directors to fi x their remuneration. 5. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 1965.

By order of the Board

TEA SOR HUA (MACS 01324)CHAN BEE FANG (MAICSA 7032385)Company Secretaries

Petaling Jaya, Selangor Darul Ehsan1 July 2011

Notes:i. The Agenda No. 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal

approval of shareholders and hence, is not put forward for voting.

ii. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.

iii. A shareholder shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting. Where a shareholder appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

iv. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing. If the appointor is a corporation, the instrument must be executed under its Common Seal or under the hand of an attorney so authorised.

v. The instrument appointing a proxy must be deposited at the registered offi ce of the Company situated at Third Floor, No. 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.


STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETINGThe Directors standing for re-election at the First Annual General Meeting of the Company pursuant to Article 103 of the Company’s Articles of Association are as follows:-

i. Mr. Yew Nieng Choon ii. Mr. Lim Kwee Shyan iii. Mr. Loo Teck Looi iv. Ms. Yew Yee Peng v. Mr. Tan Chuan Hock vi. Mr. Foong Kuan Ming

Article 103 – All the Directors shall retire from offi ce at the fi rst annual general meeting of the Company.

The Profi le of the Directors who are standing for re-election are set out in the Directors’ Profi le Section (page 10 to 11 of the Annual Report); while the details of their interest in the securities of the Company are set out in the Analysis of Shareholdings – Directors’ Shareholdings, which appears on page 81 of this Annual Report).

CAREPLUS GROUP BERHAD (896134-D) • ANNUAL REPORT 2011 85CAREPLUS GROUP BERHAD (Company No. 896134-D)

PROXY FORM

I/We (full name in capital letters) _____________________________________________ NRIC/Company No._________________________

of (full address) ___________________________________________________________________________________________________

being (a) member(s) of CAREPLUS GROUP BERHAD hereby appoint (full name in capital letters)______________________________________

NRIC No.____________________________________ of (full address) _______________________________________________________

_____________________________________________ or failing him/her, ____________________________________________________

NRIC No. ______________________________ of (full address) ____________________________________________________________

______________________________________________________ or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the First Annual General Meeting of the Company to be held at Greens II, Main Wing, First Floor, Jalan Kelab Tropicana, Tropicana Golf & Country Resort, 47410 Petaling Jaya, Selangor Darul Ehsan on Monday, 25 July 2011 at 10.00 a.m. and at any adjournment thereof.

Please indicate with an “X” in the appropriate spaces how you wish your votes to be cast. If no specifi c direction as to vote is given, the Proxy will vote or abstain from voting at his/her discretion.

No. Resolutions

1. To approve the payment of directors’ fees for the fi nancial period ended 31 January 2011.

2. To re-elect Mr. Yew Nieng Choon as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

3. To re-elect Mr. Lim Kwee Shyan as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

4. To re-elect Mr. Loo Teck Looi as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

5. To re-elect Ms. Yew Yee Peng as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

6. To re-elect Mr. Tan Chuan Hock as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

7. To re-elect Mr. Foong Kuan Ming as director who retires pursuant to Article No. 103 of the Company’s Articles of Association.

8. To re-appoint Messrs Crowe Horwath as Auditors of the Company.

For Against

Dated this _______ day of ____________________________ 2011

__________________________________Signature of Member(s)/Common Seal

Notes:1. A member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may

but need not be a member of the Company and the provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company.

2. A shareholder shall be entitled to appoint up to two (2) proxies to attend and vote at the same meeting. Where a shareholder appoints two (2) proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing. If the appointor is a corporation, the instrument must be executed under its Common Seal or under the hand of an attorney so authorised.

4. The instrument appointing a proxy must be deposited at the registered offi ce of the Company situated at Third Floor, No. 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.

NO. OF SHARES HELD

The Company Secretaries

Careplus Group Berhad (896134-D)Third Floor, No 79 (Room A)Jalan SS21/60Damansara Utama47400 Petaling JayaSelangor Darul Ehsan

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