Asian Micro
Asian Micro
Asian Micro
AnnuAl RepoRt
2011
CONTENTS
01 Corporate Information 02 Corporate Profile 04 Chairmans Message 06 Board of Directors 08 Key Management 09 Financial Highlights 11 Report on Corporate Governance 20 Directors Report 26 Statement by Directors 27 Independent Auditors Report 29 Balance Sheets 31 Consolidated Statement of Comprehensive Income 32 Statements of Changes in Equity 35 Consolidated Cash Flow Statement 37 Notes to the Financial Statements 93 Statistics of Shareholdings 94 Shareholders Information 95 Notice of Annual General Meeting Proxy Form
This annual report has been prepared by the Company and its contents have been reviewed by the Companys sponsor (Sponsor), Asian Corporate Advisors Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (SGX-ST). The Companys Sponsor has not independently verified the contents of this annual report including the correctness of any of the figures used, statements or opinions made. This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report including the correctness of any of the statements or opinions made or reports contained in this annual report. The contact person for the Sponsor is Mr. Liau H.K. Telephone number: 6221 0271
Corporate InformatIon
Board of directors
Executive Lim Kee Liew @ Victor Lim CEO and Group Managing Director Lin Xianglong Winchester Executive Director Ng Chee Wee Executive Director and Group Financial Controller Non-Executive Dr. Wang Kai Yuen Non-Executive Chairman Teo Kio Choon @ Chang Chiaw Choon Independent Director Chue Wai Tat Independent Director
remuNeratioN committee
Dr. Wang Kai Yuen Chairman
compaNy secretary
Lee Ellen
BaNkers
audit committee
Dr. Wang Kai Yuen Chairman
share registrar
NomiNatiNg committee
coNtiNuiNg spoNsor
Teo Kio Choon @ Chang Chiaw Choon Chairman Dr. Wang Kai Yuen Chue Wai Tat
Asian Corporate Advisors Pte Ltd 112 Robinson Road #03-02 Singapore 068902
auditors
Ernst & Young LLP One Raffles Quay North Tower Level 18 Singapore 048583 Partner-in-charge: Philip Ling (Since financial year ended 30 June 2011)
a s i a N m i c ro hoL diNgs L im it ed
Corporate profIle
Asian Micro Holdings Limited (listed in the SGX-SESDAQ in September 1999), provides Compressed Natural Gas (CNG) supply related products & services. The Groups secondary core business is in recycling and precision cleaning of packaging trays and media/disk cassettes used in the hard disk drive and semiconductor industries in Singapore and Thailand. The Group is also serving these industries with clean room grade plastic packaging bags and materials for packaging cleaned finished products. The Group is supplying CNG skids which are used for storing and transporting CNG to the local industries for gas cutting, heat treatment and power generation. It can also be used for powering of natural gas engines, and off-the-road vehicles. The Group continually explores innovative methods of introducing industrial consumers to the use of natural gas and energy saving methods. Our customers are namely from the oil and gas, marine and offshore, aviation, shipyard and manufacturing industries. The Group provides natural gas as an alternative fuels which is gaining popularity in the shipyard industries to be used for steel gas cutting, natural gas to the industries for powering up power generator to reduce electricity cost. The Group also imports, sells or leases specialized vehicles like CNG prime movers, CNG tractors and CNG forklifts which cut down CO2 emission, reduces pollutants PM2.5 and many other hazardous hydrocarbon emissions. The Group will embark on growth on energy related business and strive to add value to customers, shareholders and its staff.
CHaIrmanS meSSaGe
On behalf of the Board of Directors, I am presenting the Annual Report and the Audited Financial Statements of Asian Micro Holdings Limited and its subsidiaries for the financial year ended 30 June 2011. Dr. Wang Kai Yuen, Chairman
fiNaNciaL performaNce For FY 2011, the Groups consolidated revenue decreased 59% or S$12.1 million from S$20.7 million in FY 2010 to S$8.6 million in FY 2011. The decrease in revenue is mainly due to the decrease in sales of Natural Gas Vehicles (NGV) in Thailand, cessation of several businesses in China and decrease in sales of plastics bag manufacturing, partially offset by the infrastructure project which the Group has secured with one major industrial aviation customer. FY 2011 remained competitive for the Group as the global export market for storage devices was badly affected by the drop in demands for the hard disk drives (HDD). This ultimately affected our cleaning service and clean room plastic packaging bags manufacturing business. However, our effort to develop a new business based on clean energy has paid off. The Group has secured a contract with one major industrial aviation customer for the Compressed Natural Gas (CNG) downloading infrastructure project and the supply of CNG. Net loss attributable to shareholders after taking into consideration of taxation and minority interest amounted to S$3.9 million or an increase of 29% compared to the net loss of S$3.0 million in FY 2010. The net loss incurred in FY 2011 is mainly due to weakening of United States Dollar and Thailand Baht against Singapore Dollar and allowance for stocks obsolescence. The poor performance of tray cleaning business which was affected by the HDD downturn has resulted in the disposal of our subsidiaries in the second half of FY 2011. We believe that, with the closure of non-profitable companies, we would be able to reduce our losses and operate more efficiently to improve the Groups results.
CHaIrmanS meSSaGe
LookiNg ahead The precision tray cleaning segment in the HDD business will remain challenging and the Group will continue its cost cutting effort to render all the subsidiaries profitable. The Group has renewed a 2-year agreement with its major customer to provide tray washing and transport and logistical support service in Thailand. The Group will also upgrade its plastic bag manufacturing machineries progressively to ensure its quality so as to obtain more orders from our major customers. The Group will continue to promote the use of natural gas in the manufacturing and service industries for the purposes of gas cutting, heat treatment processes, powering of natural gas tractors and electrical power generation in the marine and offshore industries. The Group had secured a contract with one major industrial aviation customer for the supply of natural gas over a period of up to 5 years and one major shipyard customer in the construction of CNG cylinders storage skids and pressure regulating system skids for the gas-cutting activities. We will continue to improve on our business strategies to generate new sources of revenue and earnings for the Group, thereby enhancing shareholders value in the long run. corporate goverNaNce The Group remains committed to maintaining our regime of high standards of corporate governance. We pledge to provide timely and accurate information through announcements and investor relations activities for the benefits of all stakeholders. appreciatioN On behalf of the Board, I would like to thank all shareholders for their continued loyalty and support to the Company despite the continued losses. We also acknowledge the strong support of our customers, bankers and business associates of our Company in 2011 and we are looking forward to your strong support to help us to achieve a better 2012 and beyond. Last, but not least, I would like to thank all staff and management for their dedicated service and sacrifice in FY 2011 and hope that FY 2012 will yield better results.
BoarD of DIreCtorS
D C A
E F B
BOARD OF DIRECTORS
A. Dr. WAng KAi Yuen Dr. Wang Kai Yuen was appointed as the Independent Non-Executive Chairman of the Group on 26 August 2006. He had been an Independent Director of the Group since 1999. He is also the Chairman of the Companys Audit and Remuneration Committees and a member of the Nominating Committee. He retired as Managing Director of Fuji Xerox Singapore Software Centre in December 2009. He holds several other directorships including directorships in ComfortDelGro Corporation Limited, COSCO Corporation (Singapore) Ltd, Hiap Hoe Ltd, HLH Ltd, EOC Ltd, SuperBowl Holdings Ltd, Xpress Holdings Ltd, Ezion Holdings Ltd, Matex International Ltd, A-Sonic Aerospace Ltd and China Aviation Oil (Singapore) Corporation Ltd. Dr. Wang holds a Bachelor of Engineering (Electrical Engineering) (Hons) from the University of Singapore and a Masters of Science (Industrial Engineering), a Masters of Science (Electrical Engineering) and a PhD (Engineering) from Stanford University, USA. B. Mr. liM Kee lieW @ Victor liM Mr. Lim Kee Liew @ Victor Lim is the Chief Executive Officer and Group Managing Director of the Company. Victor Lim is the key founder of the Group and currently provides the overall strategic direction and policy decisions of the Group. Prior to setting up the Group, Victor Lim was the Engineering Support Manager in Micropolis Singapore Ltd (a producer of high capacity Hard Disk Drives) from 1983 to 1989. Victor Lim holds a Diploma in Production Engineering from the Singapore Polytechnic and has more than 25 years experience in the electronic and hard disk drive industry. c. Mr. chue WAi tAt Mr. Chue Wai Tat was appointed as an Independent Non-Executive Director of the Company in July 2011. He started his career with the Inland Revenue Department (now known as Inland Revenue Authority of Singapore) for 10 years before joining the private sector. He has accumulated more than 20 years of experience, mainly in senior finance position in MNC and GLC such as Group/Regional/Controller of MNC (Universal Furniture, Seagate Technology, Asia Pacific Resources International Ltd) and VP Group Finance of Media Corporation of Singapore Pte Ltd, before retiring on 31 December 2009. Since March 2011, he has taken up a retirement position with Boxson Packaging Industries Pte Ltd, an SME, assisting in its accounting and administration. Mr. Chue holds a Bachelor of Social Science (Economics & Political Science) (Hons) from the University of Singapore. He was qualified and admitted as a Fellow member of the Association of Chartered Certified Accountants (ACCA) and a non-practicing Fellow member of the Institute of Certified Public Accountants of Singapore (ICPAS). D. Mr. teo Kio choon @ chAng chiAW choon Mr. Teo Kio Choon @ Chang Chiaw Choon is an Independent Non-Executive Director of the Company since 1999. He is also the Chairman of the Groups Nominating Committee and a member of the Audit and Remuneration Committees. He is a partner of KC Teo Consultants, a management consultancy firm since 1992. Mr. Chang holds a Bachelor of Science (Hons) degree from the Nanyang University. e. Mr. ng chee Wee Mr. Ng Chee Wee joined the Group in August 2010 as Group Financial Controller and was appointed as an Executive Director of the Company in May 2011. He has the overall responsibility for the Groups finance, accounting, treasury, legal and tax functions. Mr. Ng has more than 10 years experience in the accounting and finance fields for various industries. He holds a Diploma with Merit in Accountancy from Ngee Ann Polytechnic in Singapore and completed the Association of Chartered Certified Accountants course in 2000. He is a Fellow member of the Association of Chartered Certified Accountants (ACCA) and a nonpractising member of the Institute of Certified Public Accountants of Singapore (ICPAS). F. Mr. lin XiAnglong Winchester Mr. Lin Xianglong Winchester was appointed as an Executive Director of the Company in August 2011. He is the Deputy Managing Director for the Groups Natural Gas Vehicle (NGV) related business division in Thailand. He is also the overall responsible person for marketing department for the Groups business activities in Singapore and Thailand. Besides overseeing the operation of the CNG conversion centres in Thailand, he is now responsible for the Clean Room packaging materials business for the Hard Disk Drive industries (HDD) in Singapore and Thailand. Prior to this, Winchester Lin joined the Group as a Sales Executive in June 2007 and was subsequently promoted to Business Development Manager in September 2008 and Deputy Managing Director in October 2008. He holds a Diploma in Marketing from Nanyang Polytechnic.
KeY manaGement
ms. LeoNg Lai heNg Ms. Leong Lai Heng was an Executive Director of the Company since February 1997 and has resigned from the Board in August 2011. She is currently working as an advisor for the Company and director of the subsidiaries. She is the spouse of the CEO and Group Managing Director, Victor Lim, and mother of the Executive Director, Lin Xianglong Winchester. mr. Lim see Wai Mr. Lim See Wai is the Assistant Engineering Director for AM NGV (S) Pte Ltd. He is responsible for the development and expansion of CNG-related projects and has more than 3 years experience in this field. He joined the company as a Mechanical Engineer and was subsequently promoted to Project Development Manager in October 2008 and Assistant Engineering Director in October 2009. He holds a Bachelors degree in Mechanical Industry Engineering (IE) from University Technology Malaysia (UTM). mr. Ng cher Lek Mr. Ng Cher Lek is the Production Manager for ACI Industries Pte Ltd. He is responsible for the cleaning and recycling operations in Singapore and supporting the Deputy Managing Director for business development and sales. He has more than 20 years of manufacturing experience in the hard disk drive and semiconductor industries in various operational departments and holding positions of Production/Manufacturing Manager, Senior Engineering Manager & Senior Operation Manager. He holds a Diploma in Mechanical Engineering from Singapore Polytechnic and a Diploma in Management Studies from SIM. ms. yaNg Lei Ms. Yang Lei is the Group Accountant responsible and overseeing the groups accounting, financial and tax functions. She has 10 years experience in accounting and finance fields for various industries. She holds a Bachelor of Science in Applied Accounting (Hons) from the Oxford Brookes University and completed the Association of Chartered Certified Accountants course in 2003. She is a member of the Association of Chartered Certified Accountants (ACCA) and a non-practising member of the Institute of Certified Public Accountants of Singapore (ICPAS). mr. mavet aNg Mr. Mavet Ang is the Sales and Marketing Executive for ACI Industries Pte Ltd. He is responsible for the marketing and operation for the manufacturing of the Clean Room PE Bags for the Hard Disk Drive industries (HDD) and other industries. Besides overseeing the operation, he is also responsible for the business development of the Company. He joined the Company as a Customer Service Officer and was subsequently re-designated to the current position.
fInanCIal HIGHlIGHtS
2007 S$000 ( restated) resuLts of operatioN Turnover Profit / (Loss) before taxation and non-controlling interest Taxation Profit / (Loss) from discontinued operation, net of tax Profit / (Loss) after taxation but before non-controlling interest Attributable to : Owners of the parent Non-controlling interest fiNaNciaL positioN Fixed Assets Goodwill on Acquisition Investment Property Associated Company Current Assets Current Liabilities Net Current Assets Non Current Liabilities represeNtiNg Shareholders Equity Non-controlling interest EPS before Taxation (S$cents) EPS after Taxation & NCI (S$cents) NTA per Share (S$cents) 12,576 306 0.49 0.52 4.00 12,204 404 (1.59) (1.59) 3.66 4,888 250 (2.17) (2.17) 1.45 1,997 170 (0.83) (0.84) 0.60 1,197 (419) (1.00) (0.96) 0.17 9,464 752 2,600 469 10,993 (8,515) 2,478 (2,881) 5,183 3,200 353 12,198 (6,576) 5,622 (1,750) 2,066 326 7,953 (5,023) 2,930 (184) 1,716 6,602 (6,047) 555 (105) 1,098 4,177 (4,028) 149 (469) 1,679 (125) (5,445) (187) (7,499) (171) (3,023) (58) (3,897) (532) 14,584 (777) (41) 2,372 1,554 21,115 (5,496) 9 (145) (5,632) 12,113 (7,678) 8 (7,670) 20,704 (3,011) (70) (3,081) 8,575 (4,640) 211 (4,429) 2008 S$000 2009 S$000 2010 S$000 (reclassified) 2011 s$000
fInanCIal HIGHlIGHtS
turNover
(S$000)
20,704
14,584
12,113
21,115
8,575
Thailand China/HK
Thailand 1,118
China/HK 357
2011
2010
2009
2008
2007
Singapore 7,100
2011
2010
2009
2008
2007
1,679
Manufacturing 2,014
BOARD MATTERS
Principle 1 Boards Conduct of its Affairs
The Board meets regularly, both formally and informally, and as frequent as warranted by particular circumstances. The principal functions of the Board, apart from its statutory responsibilities are: (a) to approve the Groups corporate policies, financial objectives and direction of the Group and monitoring performance of management; to approve annual budgets, key operational issues, major funding and investment proposals; to set overall strategies and supervision of the Groups business and affairs; to review the financial performance of the Group; to approve nominations of Directors and appointment to the various Board committees and key managerial personnel; and to assume responsibility for corporate governance.
(f)
The Board discharges its responsibilities either directly or indirectly through the various Board committees. The Board delegates the formulation of business policies and day-to-day management to the Chief Executive Officer. The Board conducts regular scheduled meetings. In the financial year under review, the Board met twice. Ad-hoc meetings are convened as and when required. The Articles of Association of the Company allows a Board Meeting to be conducted by way of a tele-conference or any other electronic means of communications. The attendance of Directors at meetings of the Board and Board committees, as well as the frequency of such meetings, is disclosed in this report. A formal letter of appointment is provided to all new Directors. The letter indicates the amount of time commitment required and the scope of duties. The Company has adopted a policy that welcomes the Directors to request for further explanations, briefings or informal discussions on any aspect of the Companys operations or businesses from the Management. Newly appointed Directors will receive appropriate training and orientation programmes to familiarize themselves with the operations of the Company and its major business processes. The Management monitors changes to regulations and accounting standards closely. To keep pace with accounting, legal, industry specific knowledge and regulatory changes, where these changes have an important bearing on the Company or Directors disclosure obligations, Directors are briefed either during Board meetings or at specially convened sessions.
11
Currently, the members of the Board are: Executive Directors Mr. Lim Kee Liew @ Victor Lim (Chief Executive Officer & Group Managing Director) Mr. Lin Xianglong Winchester (Executive Director) (Appointed on 24 August 2011) Mr. Ng Chee Wee (Executive Director & Group Financial Controller) (Appointed on 6 May 2011) Independent Non-Executive Directors Dr. Wang Kai Yuen (Chairman) Mr. Teo Kio Choon @ Chang Chiaw Choon Mr. Chue Wai Tat
The Nominating Committee is of the view that the current Board comprises Directors who, have the appropriate mix of diversity, expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The Board has reviewed its composition of Directors and is satisfied that such composition is appropriate for the nature and scope of the Groups operations and facilities effective decision-making. The Board will constantly examine its size, with the view to determining its impact upon its effectiveness. Members of the Board are constantly in touch with the Management to provide advice and guidance on strategic issues and on matters for which their expertise will be constructive to the Group. Key information on the Directors is set out below and on pages 6 and 7 of this Annual Report. Directorship (a) Date first appointed (b) Date last re-elected (a) (b) (a) (b) (a) (b) (a) (b) (a) (b) (a) (b) 18/2/1997 NA 24/8/2011 6/5/2011 20/8/1999 28/10/2009 20/8/1999 23/10/2008 6/7/2011
Age 54
Due for re-election at next AGM Retiring pursuant to Article 88 Retiring pursuant to Article 88 Retiring pursuant to Article 89 Retiring pursuant to Article 88
27
38
64
64
64
12
The roles of the Chairman and Chief Executive Officer are separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. The Chairman and the Chief Executive Officer are not related. The Chairman, Dr. Wang Kai Yuen, is an independent Director. The responsibilities of the Chairman include: (a) (b) (c) (d) (e) (f) scheduling meetings that enable the Board to perform its duties responsibly while not interfering with the flow of the Companys operations; exercising control over quality, quantity and timeliness of the flow of information between Management and the Board; assisting to ensure compliance with the Companys guidelines on corporate governance; encourage effective communication with shareholders; facilitating the effective contribution of non-executive directors; and encouraging constructive relations between executive, non-executive directors and management.
Mr. Lim Kee Liew @ Victor Lim, the Chief Executive Officer and Group Managing Director, sets business strategies and directions for the Group and manages the business operations of the Group with Mr. Lin Xianglong Winchester and Mr. Ng Chee Wee, who are Executive Directors and other management staff. Principle 4 Board Membership
The Nominating Committee (NC) comprises three Directors, of whom, including the Chairman, are independent non-executive Directors. The members are: Mr. Teo Kio Choon @ Chang Chiaw Choon Dr. Wang Kai Yuen Mr. Chue Wai Tat The principal functions of the NC are: (a) to identify candidates, review nominations for both appointment and re-appointment of the Directors to the Board for its approval. For the appointment of new candidates to the Board, the proposed appointees background, experience and other board memberships will be taken into account; to review the Board structure and size including the composition of the Board generally and the balance between executive and non-executive Directors appointed to the Board, and make recommendations to the Board with regard to any adjustments that are deemed necessary; to review the independence of each Director annually; to assess the effectiveness of the Board as a whole, and the contribution by each Director to the effectiveness of the Board; to decide how the performance of the Board may be evaluated and to propose objective performance criteria; to report to the Board its findings from time to time on matters arising and requiring the attention of the NC; and to undertake such other reviews, projects, functions, duties and responsibilities as may be requested by the Board. (Chairman)
(b)
(c) (d)
(e)
(f)
(g)
13
In determining the objective performance criteria for evaluation and determination for the FY2011, the NC had considered the attendance, participation and contribution of individual Directors at Board and Committee meetings to evaluate each Directors performance. The attendances of the Directors at meetings of the Board and Board Committees during the year are as follows: Board Meeting No. of meeting held : 2 Audit Committee 2 Remuneration Committee 1 Nominating Committee 1
Name of Director : Lim Kee Liew @ Victor Lim Leong Lai Heng1 Chan Sze Ming2 Dr. Wang Kai Yuen Teo Kio Choon @ Chang Chiaw Choon Tan Siew Bin, Ronnie3
1 2 3
2 2 2 2 2 2
NA NA NA 2 2 2
NA NA NA 1 1 1
NA NA NA 1 1 1
Principle 6
Access to Information
Board members are provided with adequate and timely information prior to Board meetings, and on an ongoing basis, have separate and independent access to the Companys senior management. Detailed Board Committee/ Board papers are prepared for each Board Committee/Board meeting. The Board papers include sufficient information on financial, business and corporate issues from Management to enable Directors to be properly informed on issues to be considered at Board Meetings. The Board has separate and independent access to the Companys senior management and the Company Secretary to address any enquires at all times.
14
REMUNERATION MATTERS
Principle 7 Principle 8 Principle 9 Procedures for Developing Remuneration Policies Level and Mix of Remuneration Disclosure on Remuneration
The Remuneration Committee (RC) comprises the following members: Dr. Wang Kai Yuen Mr. Teo Kio Choon @ Chang Chiaw Choon Mr. Chue Wai Tat The principal responsibilities of the RC are: to review and recommend to the Board an appropriate and competitive framework of remuneration for the Board and key executives of the Group to attract, retain and motivate employees of the required caliber to manage the Company successfully; to determine and recommend to the Board specific remuneration packages for each Executive Director, taking into account factors including remuneration packages of Executive Directors in comparable industries as well as the performance of the Company and that of the Executive Directors; to review Managements proposal of the fees for Independent Non-Executive Directors; and to ensure that the remuneration policies and systems of the Group supports the Groups objectives and strategies. The RC has adopted written terms of reference. The remuneration package adopted for the Executive Directors is as per the service contract entered into between the respective Executive Director and the Company. The NC, together with the RC, decides on the specific remuneration package for an Executive Director upon recruitment. Thereafter, the RC reviews subsequent increments, bonuses and allowances where these payments are discretionary. No Director or member of the RC is involved in deciding his or her own remuneration. The RC reviews what compensation commitments the executive directors service contracts would entail in event of early termination and aims to be fair and avoid rewarding inadequate performance. The service contract may be terminated by either the Company or Executive Directors giving to the other at least 6 months prior written notice. The RC is of the view that the Directors service contracts are not excessively long or with onerous removal clauses. Independent Non-Executive Directors do not enter into any Service Contracts with the Company. Save for the receipt of directors fees and participation in the Companys Employees Share Option Scheme, Independent NonExecutive Directors do not receive any remuneration from the Company. Directors fees are set in accordance with a remuneration framework comprising basic fees, attendance fees and additional fees for serving on any of the Board Committees. Directors fees are approved by the shareholders of the Company as a lump sum payment at the Annual General Meeting of the Company. (Chairman)
15
Fee %
Salary %
Total %
S$250,000 to below S$500,000 : Lim Kee Liew @ Victor Lim Leong Lai Heng* Below S$250,000 : Chan Sze Ming, William1 Dr. Wang Kai Yuen Teo Kio Choon @ Chang Chiaw Choon Tan Siew Bin, Ronnie Ng Chee Wee
1 2 3
95 93
5 7
100 100
89 95
11 5
resigned on 1 June 2011 resigned on 25 May 2011 appointed on 6 May 2011 Winchester Lin was the alternative director to Ms Leong during the financial year and his remuneration is disclosed below
The annual remuneration for key executives (in percentage terms) during the year is as follows: Other Benefits %
Key executives
Salary %
Bonus %
Total %
66 96 95 94 90
2 2
34 4 5 6 8 1
100 100 98 99
resigned as Financial Controller on 8 October 2010 resigned as Assistant General Manager on 30 June 2011 appointed as Group Financial Controller on 30 August 2010
16
In presenting the annual financial statements and half-yearly announcements to shareholders, it is the aim of the Board to provide the shareholders with a detailed analysis, explanation and assessment of the Groups financial position and prospects. Management currently provides all members of the Board with appropriately detailed management accounts of the Groups performance, position and prospects on a half-yearly and such management accounts are provided to executive directors on a monthly basis. Principle 11 Principle 12 Principle 13 Audit Committee Internal Control Internal Audit
The Audit Committee (AC) comprises the following members, all of whom are Independent Non-Executive Directors, appropriately qualified to discharge their responsibilities: Dr. Wang Kai Yuen Mr. Teo Kio Choon @ Chang Chiaw Choon Mr. Chue Wai Tat (Chairman)
The AC met twice (2) in FY2011. The principal functions of the AC are: to recommend to the Board of Directors the External Auditors to be nominated; to review the scope, audit plans, results and effectiveness of the External Auditors; to review any related significant findings and recommendations of the External Auditors, together with Managements responses thereto; to review the adequacy of the Groups system of internal controls, financial and management reporting systems; to review with Management on significant risks or exposures that exist and assesses the steps that Management has taken to minimize such risks to the Group; to review with Management the announcement of the interim and full-year results of the Group and its financial statements; to review interested party transactions as may be required by the regulatory authorities or the provisions of the Companies Act; to review legal and regulatory matters that may have a material impact on the financial statements and reports action and minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate; and to review arrangements by which staff of the Company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The AC had adopted written terms of reference. The AC has full access to and receives co-operation from the Management, and has full discretion to invite members of the management to attend its meetings. Reasonable resources have been given to enable it to discharge its functions. Minutes of the AC meetings are circulated to the Board for its information. The AC has conducted an annual review of all non-audit services by the external auditors to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors and has recommended to the Board the re-appointment of Messrs Ernst & Young LLP as the auditors of the Company. The AC has met with the external auditors annually, without the presence of the Companys management. Annual Report 2011
17
In line with the continuous disclosure obligations of the Company and pursuant to the Listing Manual of the SGXST and the Companies Act, Chapter 50, shareholders shall be informed of all major developments that impact the Group, in a timely manner. The Company does not practice selective disclosure. All material and price sensitive information as well as information on the Companys new initiatives are publicly released via SGXNET. In addition, the Company also responds to enquiries from shareholders, investors, analysts, fund managers and the press. All shareholders of the Company receive a copy of the Annual Report and Notice of Annual General Meeting (AGM) annually. The Notice of the AGM is also advertised in a daily newspaper and made available on the SGX-ST website. At the AGM, shareholders are given the opportunity to air their views and ask questions regarding the Company and the Group. The Articles of Association of the Company allows shareholders to appoint one or two proxies to attend and vote in their stead at the AGM. Each item of special business included in the Notice of meetings is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at meetings. The Chairmen of the Audit, Remuneration and Nominating Committees are normally available at the AGM to answer questions relating to the work of these committees. The external auditors are also present to assist the Directors in addressing any relevant queries from shareholders. The Company Secretary records minutes of every AGM and the minutes will be made available to the shareholders upon their request.
RISK MANAGEMENT
The Company does not have a Risk Management Committee. However, the Management reviews the Companys business and operational activities regularly to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Management reviews all significant control policies and procedures and highlights all significant matters to the Board and the Audit Committee.
DEALINGS IN SECURITIES
The Company has a clear policy on the trading of its shares by directors, executives and employees within the Group. The Company has adopted its own internal Code of Best Practices on Securities Transactions (the Securities Transactions Code); The Securities Transactions Code provides guidance to the directors and executives of the Group with regard to dealing in the Companys shares. It emphasizes that the law on insider trading is applicable at all times, notwithstanding the window periods for dealing in the shares. The Securities Transactions Code also enables the Company to monitor such share transactions by requiring employees to report to the Company whenever they deal in the Companys shares. The Group issues circulars to its directors, executives and employees informing them that they must not trade in the listed securities of the Company one month before the announcement of the Groups half-yearly and full year results and ending on the date of the announcement of such results.
18
MATERIAL CONTRACTS
Save for the service contracts between the Executive Directors and the Company, and the interested person transactions described below, there are no other material contracts of the Company or its subsidiaries involving the interest of the chief executive officer or any director or controlling shareholders which are either still subsisting at the end of the financial year or entered into since the end of the previous financial year.
Name of interested person Ultraline Technology (S) Pte Ltd Asian Micro Industries (Thailand) Co., Ltd
TREASURY SHARES
There are no treasury shares held by the Company.
19
DIRECTORS REPORT
The directors present their report to the members together with the audited consolidated financial statements of Asian Micro Holdings Limited (the Company) and its subsidiaries (collectively, the Group) and the balance sheet and statement of changes in equity of the Company for the financial year ended 30 June 2011.
Directors
The directors of the Company in office at the date of this report are: Dr. Wang Kai Yuen Lim Kee Liew @ Victor Lim Lin Xianglong Winchester Ng Chee Wee Teo Kio Choon @ Chang Chiaw Choon Chue Wai Tat
600,000
600,000
600,000
20
DIRECTORS REPORT
Directors interests in shares and debentures (contd)
Direct interest At At beginning end of the of the year year or date of appointment The Company Asian Micro Holdings Limited (Options to subscribe for ordinary shares) Lim Kee Liew @ Victor Lim Leong Lai Heng * Ng Chee Wee At 21 July 2011 Exercise price $
Exercise period
2,000,000 2,000,000 1,500,000 574,000 1,180,000 1,500,000 4,000,000 1,500,000 900,000 2,500,000
2,000,000 2,000,000 1,500,000 1,500,000 574,000 1,180,000 1,500,000 4,000,000 1,000,000 1,500,000 900,000 2,500,000 500,000
0.015 0.015 0.015 0.010 0.070 0.090 0.030 0.015 0.010 0.090 0.030 0.015 0.010
November 2011 October 2020 November 2011 October 2020 November 2011 October 2020 July 2012 October 2020 August 2004 September October 2004 September December 2010 September November 2011 October July 2012 October October 2004 September December 2010 September November 2011 October July 2012 October 2011 2011 2011 2020 2020 2011 2011 2020 2020
By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Lim Kee Liew @ Victor Lim and Leong Lai Heng are deemed to have an interest in shares of the subsidiaries of the Company. Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company or of related corporations either at the beginning or end of the financial year or 21 July 2011.
21
DIRECTORS REPORT
Share options Asian Micro Employees Share Option Scheme
1. Asian Micro Employees Share Option Scheme (the ESOS 2001) was approved by the shareholders at an extraordinary general meeting held on 28 September 2001. The ESOS 2001 was subsequently terminated by shareholders at an extraordinary general meeting held on 28 October 2010. Members who administered the ESOS 2001 during the financial year are: Lim Kee Liew @ Victor Lim Leong Lai Heng Teo Kio Choon @ Chang Chiaw Choon 3. 4. No option has been granted during the financial year. Details of the balance of the options to subscribe for ordinary shares of the Company pursuant to the ESOS 2001 as at 30 June 2011 are as follows: Exercise price (S$) 0.050 0.060 0.180 0.165 0.065 0.070 0.090 0.090 0.090 0.100 0.105 0.050 0.050 0.030
2.
Grant date October 2001 November 2001 May 2002 June 2002 August 2003 August 2003 October 2003 October 2005 May 2007 June 2007 June 2007 July 2008 September 2008 December 2009
Expiry date September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011 September 2011
Number of options 800,000 152,000 56,000 68,000 21,000 574,000 2,646,000 525,000 550,000 230,000 200,000 675,000 50,000 7,960,000 14,507,000
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DIRECTORS REPORT
Share options (contd)
5. Details of the options to subscribe for ordinary shares of the Company granted to directors of the Company pursuant to the ESOS 2001 are as follows: Aggregate options granted since commencement of ESOS 2001 6,380,000 Aggregate options cancelled since commencement of ESOS 2001 (2,000,000) Aggregate options exercised since commencement of ESOS 2001 (1,126,000)
Name of directors Dr. Wang Kai Yuen Teo Kio Choon @ Chang Chiaw Choon Ronnie Tan Siew Bin Chan Sze Ming 6.
(200,000) (16,000)
(1,700,000) (100,000)
Apart from the following who have in aggregate received 5% or more of the total number of options available under the ESOS 2001, none of the other executive directors and employees of the Group who participated in the ESOS 2001 has received 5% or more of the total number of options available under the ESOS 2001: Total options granted Dr. Wang Kai Yuen Teo Kio Choon @ Chang Chiaw Choon Chan Sze Ming *
* Resigned as director of the Company on 1 June 2011.
Except for the above, no options have been granted to other directors, controlling shareholders of the Company or their associates. The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other corporation. No options had been exercised from the financial year end to the date of this report. No unissued shares, other than those referred to above, are under option as at the date of this report. None of the options were granted at a discount during the financial year.
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DIRECTORS REPORT
Asian Micro Employees Share Option Scheme 2010
1. Asian Micro Employees Share Option Scheme 2010 (the ESOS 2010) was approved by shareholders at an extraordinary general meeting held on 28 October 2010. Members who administered the ESOS 2010 during the financial year are: Lim Kee Liew @ Victor Lim Leong Lai Heng Teo Kio Choon @ Chang Chiaw Choon 3. During the financial year ended 30 June 2011, the Company granted 25,950,000 share options under the ESOS 2010. These options are only exercisable after the first anniversary of the Date of Grant of options. These options expire on 28 October 2020 and are exercisable if the employee remains in service. Details of the balance of the options to subscribe for ordinary shares of the Company pursuant to the ESOS 2010 as at 30 June 2011 are as follows: Exercise price (S$) 0.015
2.
4.
Details of the options to subscribe for ordinary shares of the Company granted to directors of the Company pursuant to the ESOS 2010 are as follows: Aggregate options granted since commencement of ESOS 2010 Aggregate options cancelled since commencement of ESOS 2010 Aggregate options exercised since commencement of ESOS 2010
Options granted during the financial year Name of Directors Lim Kee Liew @ Victor Lim Leong Lai Heng Ng Chee Wee Dr. Wang Kai Yuen Teo Kio Choon @ Chang Chiaw Choon Name of Associates of controlling shareholders Lim Kee Hing Lin Xianglong Winchester 2,000,000 2,000,000 2,000,000 2,000,000 1,500,000 4,000,000
2,500,000
2,500,000
2,500,000
2,000,000 2,000,000
2,000,000 2,000,000
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DIRECTORS REPORT
Share options (contd)
6. Save as disclosed, none of the directors and employees of the Group who participated in the ESOS 2010 has received 5% or more of the total number of options available under the ESOS 2010. The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other corporation. No options had been exercised from the financial year end to the date of this report. No unissued shares, other than those referred to above, are under option as at the date of this report. None of the options were granted at a discount during the financial year.
Audit committee
The audit committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are detailed in the Report on Corporate Governance.
Auditors
Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.
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STATEMENT BY DIRECTORS
We, Lim Kee Liew @ Victor Lim and Lin Xianglong Winchester, being two of the directors of Asian Micro Holdings Limited, do hereby state that, in the opinion of the directors, (i) the accompanying balance sheets, consolidated statement of comprehensive income, statements of changes in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2011 and the results of the business, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date, and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due, on the assumption that, as stated in Note 2.1 to the financial statements, the Group and the Company will generate adequate cash flows from operations and continue to receive continuing financial support from two major shareholders of the Company.
(ii)
26
27
Ernst & Young LLP Public Accountants and Certified Public Accountants Singapore
7 October 2011
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BALANCE SHEETS
As at 30 June, 2011
Company 2010 $
Non-current assets Property, plant and equipment Investments in subsidiaries Investments in associate Other investments Current assets Inventories Trade and other receivables Prepayments Due from subsidiaries (non-trade) Due from related parties (non-trade) Fixed deposits Cash and bank balances 6 7 1,380,055 1,636,371 353,334 108,333 427,033 271,807 4,176,933 Total assets Current liabilities Trade and other payables Accrued expenses Loan from directors (non-trade) Provision Due to subsidiaries (non-trade) Due to related parties (non-trade) Bills payable to bank Obligations under finance lease Provision for taxation 10 13 8 14 8 8 11 12 1,777,647 920,001 784,828 455,833 72,884 17,036 4,028,229 Net current assets/(liabilities) Non-current liabilities Obligations under finance lease Deferred tax liabilities Loan from related party (non-trade) 12 23 8 168,393 585 300,000 468,978 Total liabilities Net assets/(liabilities) 4,497,207 777,625 104,815 581 105,396 6,152,603 2,166,548 15,740 585 16,325 2,175,725 (635,870) 22,925 581 23,506 1,360,161 1,368,068 148,704 2,228,286 1,913,654 400,472 51,797 161,706 916,353 129,424 245,515 6,047,207 555,429 149,488 582,277 1,420,451 7,184 2,159,400 (2,112,381) 200,669 1,129,431 6,555 1,336,655 (705,338) 5,274,832 2,598,789 2,111,314 460,312 5,136 376,972 1,050,113 6,602,636 8,319,151 4,335 13,502 2,561 25,666 955 47,019 1,539,855 16,815 7,716 522,085 76,151 8,550 631,317 2,728,229 3 4 5(a) 5(b) 1,097,899 1,716,515 33,805 1,459,031 37,835 2,059,077
8 8 9 9
29
BALANCE SHEETS
As at 30 June, 2011
Company 2010 $
Equity attributable to owners of the Company Share capital Share option reserve Foreign currency translation reserve Premium paid on acquisition of non-controlling interests Other reserve Accumulated losses Non-controlling interests Total equity Total equity and liabilities 15 16 38,673,928 389,987 1,524,093 17 96,189 (39,487,296) 1,196,901 (419,276) 777,625 5,274,832 37,173,928 212,944 147,417 (638,162) 96,189 (34,995,336) 1,996,980 169,568 2,166,548 8,319,151 38,673,928 389,987 96,189 (39,795,974) (635,870) (635,870) 1,539,855 37,173,928 212,944 96,189 (36,114,993) 1,368,068 1,368,068 2,728,229
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
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Note
2011 $
2010 $ (Reclassified) 20,703,625 (18,719,494) 1,984,131 836,761 (445,920) (4,027,106) (1,258,463) (2,910,597) (125,687) 3,590 21,657 (3,011,037) (70,621) (3,081,658)
Revenue Cost of sales Gross profit Other operating income Distribution and selling expenses Administrative expenses Other operating expenses Loss from operations Financial expenses Financial income Share of results of associated companies Loss before taxation Taxation Net loss for the year Other comprehensive income Foreign currency translation Foreign currency reserve realised on disposal of subsidiaries Other comprehensive income/(loss) for the year, net of tax Total comprehensive loss for the year Loss attributable to: Owners of the parent Non-controlling interests
18
19(a)
19(b) 21 21 20 23
459,666 (267,126) (3,857,170) (2,515,885) (4,576,112) (67,341) 3,290 (4,640,163) 211,103 (4,429,060)
Total comprehensive income attributable to: Owners of the parent Non-controlling interests (2,519,914) (588,844) (3,108,758) Loss per share attributable to owners of the parent (cents per share) Basic Diluted 24 24 (0.94) (0.94) (0.84) (0.84) (3,521,939) (80,031) (3,601,970)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements. Annual Report 2011
31
32
Attributable to owners of the Parent Equity attributable to owners of the Parent $ Share capital $ Accumulated losses $ Other reserve total $ Noncontrolling interests $ Foreign currency translation reserve $ Employee share option reserve $ Premium paid on acquisition of noncontrolling interests $ 4,888,107 (3,023,458) (498,481) (3,521,939) (3,023,458) (498,481) (498,481) (3,023,458) 36,653,215 (32,124,613) 96,189 645,898 (638,162) 255,580 249,599 (58,200) (21,831) (80,031)
2010 Group
Total equity $
Asian Micro Holdings Limited 110,099 152,735 110,099 (152,735) 520,713 630,812 1,996,980 37,173,928 520,713 152,735 (34,995,336) 520,713 96,189 147,417 (638,162) (42,636) 212,944 169,568
5,137,706
(3,081,658)
(520,312)
(3,601,970)
110,099
520,713
630,812
2,166,548
Total equity $
Equity attributable to owners of the Parent $ Other reserve total $ Noncontrolling interests $ Foreign currency translation reserve $ Employee share option reserve $
Opening balance at 1 July 2010 1,996,980 (3,896,590) 1,376,676 (2,519,914) (4,534,752) 1,376,676 638,162 (638,162) 1,376,676 638,162 (3,896,590) 37,173,928 (34,995,336) 96,189 147,417 (638,162) 212,944
2,166,548
(4,429,060)
1,320,302
(3,108,758)
Grant of equity-settled share options to employees (Note 16) 219,835 1,500,000 1,719,835 1,196,901 38,673,928 (39,487,296) 1,500,000 42,792 1,500,000 96,189 42,792
219,835
1,524,093
(419,276)
1,500,000
1,719,835
777,625
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Company
Balance as at 1 July 2009 Total comprehensive loss for the year Contribution by and distributions to owners Grant of equity-settled share options to employees (Note 16) Expiry of employee share options (Note 16) Capitalisation of payables to certain directors and a trade creditor Total transactions with owners in the capacity as owners Balance as at 30 June 2010
152,735
110,099 (152,735)
110,099
152,735 (36,114,993)
96,189
(42,636) 212,944
Balance as at 1 July 2010 Total comprehensive loss for the year Grant of equity-settled share options to employees (Note 16) Expiry of employee share options (Note 16) Capitalisation of payables to certain directors Total transactions with owners in the capacity as owners Balance as at 30 June 2011
96,189 96,189
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
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Note
2011 $
2010 $
Cash flow from operating activities Loss before taxation Adjustments: Allowance for doubtful debts (trade) Allowance for doubtful debts (non-trade) Write-off of doubtful debts Allowance for stocks obsolescence Write-back of allowance for doubtful debts Write-back of allowance for stock obsolescence (Write-back)/write-off of stocks Gain on disposal of subsidiaries Depreciation of property, plant and equipment Property, plant and equipment written off Gain on disposal of property, plant and equipment Impairment loss on property, plant and equipment Waiver of payables Write-back of provision for warranty Interest expense Interest income Share of results of associated companies Share-based payment expenses Operating loss before working capital changes Decrease in stocks Decrease/(increase) in trade and other receivables Decrease/(increase) in prepayments (Increase)/decrease in amount due from /(to) related parties Decrease in amount due from affiliated companies Increase in trade and other payables Increase in accrued expenses (Decrease)/Increase in provision (Decrease)/increase in bills payable to bank Increase in amount due to directors (non-trade) Cash (used in)/generated from operations Interest paid Interest income received Income taxes paid Income taxes refunded Net cash (used in)/generated from operating activities (4,640,163) 12,639 3,253 543 714,397 (6,207) (8,066) (163,214) 499,662 52,393 (91,000) 166,153 (2,050) (51,797) 47,704 (3,290) 219,835 (3,249,208) 664,349 580,415 128,819 680,899 817,537 (51,797) (460,520) (889,506) (47,704) 3,290 (38,836) (972,756) (3,011,037) 187,384 12,453 175,835 248,037 (262,266) 123,494 (221,480) 695,333 15,368 (13,084) 528,287 (230,806) 79,124 (3,590) (21,657) 110,099 (1,588,506) 1,368,584 (113,591) (10,505) 98,858 96,128 201,127 865,663 51,797 151,879 550,472 1,671,906 (79,124) 3,590 (141,606) 82,198 1,536,964
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Note
2011 $
2010 $
Cash flow from investing activities Net cash flow from disposal of subsidiaries Proceeds from disposal of property, plant and equipment Purchase of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Loan from related party Drawdown of finance lease obligations Repayment of finance lease obligations Fixed deposits pledged Net cash generated from/(used in) financing activities Net (decrease)/increase in cash and cash equivalents Effect of exchange rate changes in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 9 300,000 155,455 (145,290) (51,837) 258,328 (772,669) (5,637) 1,050,113 271,807 (240,250) (9,582) (249,832) 442,942 812 606,359 1,050,113 4 3 (13,948) 336,977 (381,270) (58,241) (763) 169,949 (1,013,376) (844,190)
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
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2.
2.1
Fundamental accounting concept The Group and the Company incurred a net loss after taxation of $4,429,060 (2010: $3,081,658) and $3,723,773 (2010: $4,081,345), respectively for the financial year ended 30 June 2011 and as at that date, the Companys current and total liabilities exceeded current and total assets by $2,112,381 (2010: $705,338) and $635,870 respectively. These factors indicate the existence of an uncertainty which may affect the validity of the going concern assumption on which the accompanying financial statements are prepared. Two of the Companys major shareholders (one of whom is also a director of the Company) have agreed to provide continuing financial support to the Group and the Company to enable the Group and the Company to meet their obligations as and when the need arises. In addition, they have given a commitment to (i) not to recall for payment of salaries due to them as at 30 June 2011 and deferring payment of future salaries, and (ii) allow the Group to defer payments of rental payable to companies controlled by them until such time as the Groups cash flow enables such payment. The Directors are of the view that it is appropriate to prepare these financial statements on a going concern basis on the assumption that the Group and the Company will generate adequate cash flows from operations and continue to receive continuing financial support from the two major shareholders. If the Group and the Company are unable to continue in operational existence for the foreseeable future, the Group and the Company may be unable to discharge their liabilities in the normal course of business and adjustments may have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ from the amounts at which they are currently recorded in the balance sheets. In addition, the Group and the Company may have to reclassify non-current assets and liabilities as current assets and liabilities. No such adjustments have been made to these financial statements.
2.2
Changes in accounting policies The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 January 2010. Except for the revised FRS 103 and the amendments to FRS27, adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group. They did however give rise to additional disclosures, including, in some cases, revisions to accounting policies.
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According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and liabilities that arose from business combinations whose acquisition dates are before 1 January 2010 are not adjusted. FRS 27 Consolidated and Separate Financial Statements (revised) Changes in significant accounting policies resulting from the adoption of the revised FRS 27 include: A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss recognised in profit or loss; Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses exceed the non-controlling interest in the subsidiarys equity; and When control over a subsidiary is lost, any interest retained is measured at fair value with the corresponding gain or loss recognised in profit or loss.
According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact the Groups consolidated financial statements in respect of transactions with non-controlling interests, attribution of losses to non-controlling interests and disposal of subsidiaries before 1 January 2010. The changes will affect future transactions with non-controlling interests.
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Description Revised FRS 24 Related Party Disclosures Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement INT FRS 115 Agreements for the Construction of Real Estate Amendments to FRS 107 Disclosures Transfers of Financial Assets Amendments to FRS 12 Deferred Tax Recovery of Underlying Assets
Except for the revised FRS 24, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the revised FRS 24 is described below. Revised FRS 24 Related Party Disclosures The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that persons family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for governmentrelated entities. The Company is currently determining the impact of the changes to the definition of a related party has on the disclosure of related party transaction. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Company when implemented in 2011. 2.4 Significant accounting estimates and judgements The preparation of the Groups financial statements requires management to make estimates, judgements and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosures at the end of each reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) Depreciation of plant and equipment The costs of plant and equipment for the manufacturing activities are depreciated on a straight-line basis over the useful lives of the plant and equipment. Management estimates the useful lives of the plant and equipment to be within 1 to 10 years. These are common life expectancies applied in the industry. The carrying amount of the Groups plant and equipment at 30 June 2011 is stated in Note 3 to the financial statements. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.
39
40
2.5
Basis of consolidation Business combinations from 1 January 2010 Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interests proportionate share of the acquirees identifiable net assets. Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Groups previously held equity interest in the acquiree (if any), over the net fair value of the acquirees identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.9. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.
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2.6
Transactions with non-controlling interests Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance sheet, separately from equity attributable to owners of the Company. Changes in the Company owners ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.
2.7
Foreign currency The Groups consolidated financial statements are presented in Singapore Dollars, which is also the Companys functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. (a) Transactions and balances Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
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2.8
Property, plant and equipment All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in Note 2.20. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is computed on a straight-line basis over the estimated useful life of the asset as follows: Years Furniture and fittings Air conditioners Machinery, equipment and motor vehicles Office equipment and computers Communications equipment Renovations and electrical installations 5 3 3 1 - 10 - 10 - 10 - 10 2 3 - 10
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2.9
Intangible assets Goodwill Goodwill is initially measured at cost. accumulated impairment losses. Following initial recognition, goodwill is measured at cost less
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in the income statement. Impairment losses recognised for goodwill are not reversed in subsequent periods. Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operation disposed of and the portion of the cash-generating unit retained. The Groups goodwill was fully impaired in prior year. 2.10 Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment assessment for an asset is required, the Group makes an estimate of the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
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2.11
Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Companys separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses.
2.12
Associates An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. The Groups investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is carried in the balance sheet at cost plus post-acquisition changes in the Groups share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the Groups share of the net fair value of the associates identifiable asset, liabilities and contingent liabilities over the cost of the investment is included as income in the determination of the Groups share of results of the associate in the period in which the investment is acquired. The profit or loss reflects the share of the results of operations of the associates. When the Groups share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Groups investment in its associates. The Group determines at each balance sheet date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in the profit or loss. The financial statements of the associate are prepared as of the same reporting date as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group. Upon loss of significant influence over the financial and operation decision in the associate, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profit or loss.
45
2.14
Financial assets Initial recognition and measurement Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement Loans and receivables Non-derivatives financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Available-for-sale financial assets Available-for-sale financial assets include equity investments, which are neither classified as held for trading nor designated at fair value through profit or loss. After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains or losses from changes in fair value of the financial asset are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss. De-recognition A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On de-recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised directly in other comprehensive income is recognised in profit or loss. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date, ie the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concern.
46
47
2.17
Inventories Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows: Raw materials purchase costs on a first-in, first-out basis; Finished goods and work-in-progress costs of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.18
Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Provision for warranty Provisions for warranty-related costs are recognised when the product is sold or service provided.
2.19
Financial liabilities Initial recognition and measurement Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs. Subsequent measurement After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.
48
2.20
Borrowing costs Borrowing costs are recognised as expenses in the period in which they are incurred. Borrowing cost consists of interest and other costs that an entity incurs in connections with the borrowing of funds.
2.21
Employee benefits (i) Defined contribution plan The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed. (ii) Employee share option plans Employees and directors of the Group receive remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share option reserve, over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Groups best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon a market or non-vesting condition, which are treated as vested irrespective of whether or not the market condition or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. In the case where the option does not vest as the result of a failure to meet a non-vesting condition that is within the control of the Group or the employee, it is accounted for as a cancellation. In such case, the amount of the compensation cost that otherwise would be recognised over the remainder of the vesting period is recognised immediately in profit or loss upon cancellation. The employee share option reserve is transferred to retained earnings upon expiry of the share option. When the options are exercised, the employee share option reserve is transferred to share capital if new shares are issued.
49
2.23
Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excluding sales taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised: (i) Sale of goods Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer, usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. (ii) Tray recycling services Revenue on tray recycling services is recognised when the work is completed and the recycled items are delivered to the customer.
50
2.24
Taxes (i) Current tax Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period, in the countries where the Group operates and generates taxable income. Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. (ii) Deferred tax Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised for all temporary differences, except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
51
2.25
Segment reporting For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective deputy managers responsible for the performance of the respective segments under their charge. The deputy managers report directly to the CEO of the Company who regularly reviews the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 31, including the factors used to identify the reportable segments and the measurement basis of segment information.
2.26
Share capital and share issue expenses Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.
2.27
Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities and assets are not recognised on the balance sheet of the Group.
52
The party is an associate; The party is a member of the key management personnel of the Group or its parent; The party is a close member of the family of any individual referred to in (a) or (c); and The party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (c) or (d).
2.29
Government grants The Group received cash grant from government relating to the Jobs Credit Scheme. Government grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income are presented as a credit in profit or loss as Other operating income.
53
54
30 June 2011
Air conditioners $ Total $ Machinery, equipment and motor vehicles $ Communications equipment $ Assets under construction $ Office equipment and computers $ Renovations and electrical installations $ 125,938 66,279 (3,441) 188,776 (97,858) (5,326) 85,592 7,350,710 268,461 1,026,026 10,122,716 458,384 (794,043) 16,300 (1,320,302) (558,041) (574,304) 779,881 19,162 (115,096) (387,154) (28,332) 3,011,420 (688,178) (1,194,872) (102,344) 229,568 59,179 (187,768) (16,300) (25,500) 59,179 9,855,194 794,285 (388,872) (137,891) 873,813 4,754 (3,008) (89,507) (6,171) 937,235 (937,235) 3,038,335 8,000 (3,617) (31,298) 229,568 15,118,555 1,102,886 (405,411) (1,044,920) (182,280) 14,588,830 536,725 (988,849) (2,123,576) (2,479,633) (716,450) 8,817,047
3.
Group
Cost
At 30 June 2010 and 1 July 2010 Additions Disposals Transfer Disposal of subsidiaries Written off Translation difference
At 30 June 2011
27,079
3.
Group
Air conditioners $
Machinery, equipment and motor vehicles $ Communications equipment $ Assets under construction $
Accumulated depreciation 124,106 4,749 (3,063) 125,792 23,893 (97,858) (5,561) 46,266 6,591,759 188,433 868,197 9,053,054 437,394 (768,066) (1,318,770) 157,049 (538,437) (430,465) 666,925 18,017 (93,867) 7,490 (382,614) (27,518) 2,780,476 16,917 (641,167) (1,194,872) (93,157) 8,365,750 499,048 (243,059) 514,352 (83,037) 690,382 53,312 (1,380) 9,447 (75,427) (9,409) 937,235 (937,235) 2,677,638 132,127 (2,329) (26,960) 13,052,564 695,333 (248,546) 528,287 (1,029,552) (125,771) 12,872,315 499,662 (775,104) (2,053,804) 166,153 (2,427,240) (562,834) 7,719,148
At 1 July 2010 Charge for the year Disposals Impairment Written off Translation difference
At 30 June 2010 and 1 July 2010 Charge for the year Disposals Disposal of subsidiaries Impairment loss Written off Translation difference
At 30 June 2011
24,493
Net book value 62,984 39,326 758,951 1,069,662 112,956 80,028 230,944 157,829 229,568 59,179 1,716,515 1,097,899
At 30 June 2010
10,401
At 30 June 2011
2,586
30 June 2011
55
Company
Motor vehicles $
Total $
Cost At 1 July 2009 and 30 June 2010 Additions At 30 June 2011 Accumulated depreciation At 1 July 2010 and 30 June 2010 Depreciation charge for the year At 30 June 2011 Net book value At 30 June 2010 At 30 June 2011 699 37,835 33,106 37,835 33,805 4,729 4,729 6,136 6,136 6,136 4,729 10,865 699 699 37,835 37,835 6,136 6,136 43,971 699 44,670
56
During the financial year, management performed an impairment test for the investments in AM NGV (S) Pte Ltd and SO NGV (S) Pte Ltd as these subsidiaries had been persistently making losses. Full impairment losses of $600,000 and $46, respectively, were recognised to fully write down the carrying amount of these subsidiaries as based on the financial budgets approved by the management, these subsidiaries are unable to generate sufficient operating cash flows. For the year ended 30 June 2010, an impairment loss of $1,431,142 was written-off as a result of disposal of subsidiaries. (i) Details of the subsidiaries held by the Company at the end of the financial year are as follows: Country of incorporation and place of business Effective equity interest held by the Group 2011 2010 % %
Name of company
Principal activities
Held by the Company Asian Micro (S) Pte Ltd (AMS) (1) Asian Micro (Thailand) Co., Ltd. (AMT) (2) Singapore Precision tray cleaning services Precision tray cleaning services and manufacturer of clean room grade polythene packaging materials Trading in natural gas vehicle (NGV) and compressed natural gas (CNG) supplies Trading in clean room supplies Currently inactive 100 100 3,865,290 3,865,290
Thailand
100
100
1,510,101
1,510,101
Singapore
100
100
600,000
600,000
ACI Industries Pte Ltd (ACI) (1) Asian Micro Sdn. Bhd. (AMM) (3)
Singapore
100
100
168,387
168,387
Malaysia
100
100
2,765,013
2,765,013
57
Name of company
Principal activities
Held by the Company A-P Engineering Pte Ltd (APE) (3) SO NGV (S) Pte Ltd (SO NGV (S)) (1) AM NGV (T) Co., Ltd. (AM NGV (T)) (6) AM NGV Auto Sales (Thailand) Co., Ltd. (AM NGV Autosales (T)) (2) Singapore Currently under liquidation Currently inactive 80.1 80.1 105,263 105,263
Singapore
74
74
74
74
Thailand
74
74
250,000
250,000
Thailand
49 (Note a)
49
42
42
9,264,170 (ii)
9,264,170
Details of the subsidiaries held by subsidiary companies at the end of the financial year are as follows: Country of incorporation and place of business Effective equity interest held by the Group 2011 2010 % %
Name of company
Principal activities
Held by subsidiary companies Micro Brite Technology Pte Ltd (MBT) (4) Asian Micro Technology (Wuxi) Co., Ltd (AMW) (3) Singapore Investment holding 100
Currently inactive
100
100
58
Name of company
Principal activities
Held by subsidiary companies Wuxi Asian Brite Technology Co., Ltd (ABT) (3) Peoples Republic of China Precision tray cleaning services and manufacture of clean room grade polythene packaging materials Precision tray cleaning services and manufacture of clean room grade polythene packaging materials Plastic waste collecting and recycling, and sales of scrap 100 100
100
51
Audited by Ernst & Young LLP, Singapore Audited by J.C. Accounting Office, Thailand Not required to be audited by the laws of its country of incorporation Disposed off during the year AM Suzhou is a subsidiary of MBT, which has been disposed off Audited by local auditors in Thailand
Note (a): While the Group holds 49% of issued share capital in AM NGV Autosales (T), it has control over the financial and operational policies via the majority representation on the board of directors of AM NGV Autosales (T). Accordingly, AM NGV Autosales (T) is accounted for as a subsidiary of the Group.
59
SAMRT
Cash and cash equivalents Plant and equipment Other assets Total liabilities Carrying values of net liabilities Less: Forgiveness of trade and other payables Foreign currency reserve realised on disposal Gain on disposal of SAMRT
(1)
MBT Group
Other assets Total liabilities Carrying values of net liabilities Less: Sale consideration Foreign currency reserve realised on disposal Allowance for doubtful trade and other receivables Gain on disposal of MBT Group MBT Group Sale consideration Less: Cash and cash equivalents Cash inflow Net gain on disposal of subsidiaries (Note 19(a)) Net cash outflow
(1)
(2)
1 1 (163,214) (13,948)
As at date of disposal, the Group recorded trade payables of $302,985 due to SAMRT. The buyer of SAMRT agreed to forgo the payables in exchange of the 51% equity interest in SAMRT. Upon disposal of MBT Group, the Group assessed the recoverability of the receivables from MBT Group and full allowance for doubtful trade and other receivables has been made.
(2)
60
61
(68,106) 68,106
(68,106) (68,106)
(84,926) 84,926
(84,926) (84,926)
Name of company
Principal activities
Suria Professional Service Centre Sdn. Bhd. (Suria) (1) Held by the Company Held by a subsidiary
Malaysia
20 7 27
(1)
During the financial year, the Group and the Company reclassified investment in associated company to other investments as the Group no longer has significant influence over the financial and operational decisions in this entity.
62
5(b)
Other Investments
Group and Company 2011 $ Available for sale financial assets Unquoted equity investment At 1 July Reclassified from investment in associated company Impairment loss At 30 June The Group has 27% effective equity interest in Suria Professional Service Centre Sdn. Bhd. Further details of the associated company are given in Note 5(a) to the financial statements.
68,106 (68,106)
63
During the financial year, the Group wrote down $714,397 (2010: $248,037) of inventories which are recognised as expenses in the income statement. The Group also wrote off $Nil (2010: $123,494) of inventories which are recognised as expenses in the income statement. During the year, the Group reversed $8,066 being part of an inventory write-down made previously, as the inventories were sold to customers above their carrying amounts.
7.
64
As at 30 June 2011, other receivables and deposits of the Group denominated in the foreign currencies are as follows: Group 2011 $ Singapore dollars United States dollars 73,700 7,248 80,948 Other receivables and deposits of the Company were denominated in its functional currency. The Groups trade and other receivables that are impaired at the balance sheet date and the movement of the allowance accounts are as follows: Group 2011 $ Movement in trade receivables allowance accounts: At 1 July Charge for the year Write-back Write-off Exchange differences At 30 June Movement in other receivables allowance accounts: At 1 July Charge for the year Write-off At 30 June 321,979 3,253 (245,000) 80,232 357,646 12,453 (48,120) 321,979 452,899 12,639 (6,207) (167,859) (17,025) 274,447 882,540 187,384 (262,266) (351,525) (3,234) 452,899 2010 $ 2010 $ 77,354 77,354
65
8.
Due from/(to) subsidiaries (non-trade) Due from/(to) related parties (non-trade) Loan from directors (non-trade) Loan from related party (non-trade) (non-current)
These amounts are unsecured and are to be settled in cash. These amounts are interest-free and are repayable on demand except for the loan from related party. The loan from related party bears interest at prevailing market interest rate of 5.25% as at year end and the related party has agreed not to recall for repayment until end of October 2012. During the financial year, the Company entered into an agreement with two executive directors to capitalise a portion of the loan from directors of $367,584 by the issuance of new ordinary shares at $0.015 each in the share capital of the Company. (See Note 15) Due from subsidiaries (non-trade) are stated after deducting the following allowance for doubtful receivables: Company 2011 $ Movement of allowance for doubtful receivables Balance at 1 July Provision during the year Write back during the year Written-off during the year Balance at 30 June 20,060,499 3,019,677 23,080,176 18,862,457 8,165,295 (4,171,215) (2,796,038) 20,060,499 2010 $
66
There is no allowance for doubtful debts for amount due from related parties (non-trade) being recorded in 2010. Movement of allowance for doubtful debts for amount due from related parties are recognised in other operating income as gain on disposal of subsidiaries.
9.
* This relates to fixed deposits pledged in connection with credit facilities granted by banks (Note 11).
Cash at bank earns interest at rates based on daily bank deposit rates ranging from 0.00% to 0.25% (2010: 0.00% to 0.25%) per annum. As at 30 June 2011, cash and bank balances of the Group and the Company denominated in foreign currencies are as follows: Group 2011 $ Singapore dollars United States dollars 25,794 81,560 107,354 2010 $ 133,481 247,795 381,276
67
10.
149,488 149,488
200,669 200,669
1,420,451 582,277
1,129,431
68
11.
Interest on bills payable to banks was charged at 2.88% to 6.75% (2010: 5.25%) per annum. The Groups trading facilities are secured by: (i) (ii) (iii) (iv) corporate guarantee of $2,540,000 (2010: $2,100,000) from the Company; fixed deposits from the Group and the Company of $427,033 (2010: $376,972) and $25,666 (2010: $76,151) respectively; a legal mortgage over a property of an affiliated company, American Converters Industries Pte Ltd (owned by two directors of the Company); and joint and several guarantee of $440,000 from the two directors of the Company. Annual Report 2011
69
Maturity 2011 $
Group 2010 $
Current: Obligations under finance leases (secured) (Note 26(b)) Non-current: Obligations under finance leases (secured) (Note 26(b))
7.19%
2012
72,884
129,424
7,184
6,555
7.19%
2013 - 2016
168,393
104,815
15,740
22,925
Obligations under finance leases These obligations are secured by a charge over the leased assets (Note 3).
13.
Accrued expenses
Group 2011 $ Accrued expenses Accrued personnel expenses 578,864 341,137 920,001 2010 $ 866,400 1,047,254 1,913,654 2011 $ 332,477 249,800 582,277 Company 2010 $ 284,520 844,911 1,129,431
Accrued personnel expenses include executive directors salaries payable of $246,637 (2010: $842,343) to two executive directors of the Company (See Note 2.1). During the financial year, the Company entered into an agreement with two executive directors to capitalise the directors salaries payable of $1,132,416 (2010: $150,000), by the issuance of new ordinary shares at $0.015 (2010: $0.027) each in the share capital of the Company.
70
During the financial year, the Group reversed the provision for warranty as the warranty period has lapsed.
15.
Share capital
Number of shares 2011 2010 Group and Company 2011 2010 $ $
Issued and fully paid ordinary shares: At 1 July Capitalisation of Trade payables Directors salaries Loan from directors At 30 June 363,591,043 75,494,400 24,505,600 463,591,043 344,795,487 13,240,000 5,555,556 363,591,043 37,173,928 1,132,416 367,584 38,673,928 36,653,215 370,713 150,000 37,173,928
During the financial year, the Company capitalised the directors salaries payable to certain executive directors and a portion of the loan from directors of $1,132,416 (2010: $150,000), and $367,584, respectively, by the issuance of new ordinary shares at $0.015 (2010: $0.027) each in the share capital of the Company. In 2010, the Company capitalised trade payables of $370,713 by the issuance of new ordinary shares at $0.028 each in the share capital of the Company. The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction. The ordinary shares have no par value. The Company has an employee share option plan (Note 25) under which options to subscribe for the Companys ordinary shares have been granted to employees.
71
17.
18.
Revenue
Group 2011 $ 2010 $ (Reclassified) 12,721,499 2,424,104 4,972,419 585,603 20,703,625
Natural Gas Vehicle (NGV) related business Sales of manufactured goods Tray recycling services Plastic scrap recovery
72
Gain on disposal of property, plant and equipment Write back of allowance for doubtful debts Write back of allowance for stocks obsolescence Gain on disposal of subsidiaries Write back of provision of warranty Sales of scrap Waiver of payables Claim from insurance Jobs credit
In 2009, the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme (Scheme). Under the Scheme, the Group received a 12% cash grant on the first $2,500 of each months wages for each employee on their Central Provident Fund payroll. The Scheme ceased with the final payment in June 2010. During the financial year ended 30 June 2010, the Group received its grant income of $35,294 under the Scheme. (b) Other operating expenses comprises the following: Group 2011 $ 2010 $ (Reclassified) 12,453 123,494 403,046 187,384 248,037 175,835 15,368 51,797 41,049 1,258,463
Allowance for doubtful debts (non-trade) Stocks written off Foreign exchange loss Allowance for doubtful debts (trade) Allowance for stocks obsolescence Write off of doubtful debts Fixed assets written off Provision for warranty Others
73
Included in the above is compensation of key management personnel as disclosed in Note 27(b).
21.
Financial expenses/(income)
Group 2011 $ Financial expenses Interest expense on: - bank overdrafts - finance leases - short term bank loans - late interest charges - bills payable to banks - others Bank charges 2,267 16,910 1,524 21,783 5,220 47,704 19,637 67,341 Financial income Interest income from - fixed deposits and bank balances (3,290) (3,590) 14 40,288 16,879 21,943 79,124 46,563 125,687 2010 $
74
2010 $ 1 1 5* 7
23.
Taxation
Major components of income tax expense for the year ended 30 June were: Group 2011 $ Current income tax - (over)/under provision in respect of prior years 2010 $
(211,103)
70,621
A reconciliation of the tax expense and the product of accounting profit multiplied by the applicable tax rate is as follows: Group 2011 $ Loss before tax Tax at the applicable tax rate of 17% Tax effect of expenses not deductible for tax purposes Tax effect on income not subject to tax (Over)/under provision of tax in respect of prior year Utilisation of deferred tax assets previously not recognised Deferred tax assets not recognised Effects of different tax rates in other countries Tax expense (4,640,163) (788,828) 519,957 (47,466) (211,103) 688,744 (372,407) (211,103) 2010 $ (3,011,037) (511,876) 217,695 (40,068) 70,621 (31,804) 431,342 (65,289) 70,621
75
(585) (585)
(581) (581)
(585) (585)
(581) (581)
24.
(3,896,590)
(3,023,458)
414,275,975
360,690,124
For the year ended 30 June 2011, 33,957,000 (2010: 22,307,000) of share options granted to employees under the existing employee share option scheme have not been included in the calculation of diluted loss per share because they are anti-dilutive for the current financial year presented.
76
Exercise price
October 2002 September 2011 November 2002 September 2011 May 2003 September 2011 June 2003 September 2011 August 2004 September 2011
$0.050
800,000
800,000
$0.060
152,000
152,000
$0.180
56,000
56,000
June 2002
$0.165
68,000
68,000
August 2003
$0.065
21,000
21,000
77
Option exercise period August 2004 September 2011 October 2004 September 2011 October 2006 September 2011 May 2008 September 2011 June 2008 September 2011 June 2008 September 2011 July 2009 September 2011 September 2009 September 2011 December 2010 September 2011
$0.090
2,646,000
2,646,000
$0.090
525,000
525,000
$0.090
550,000
550,000
June 2007
$0.100
230,000
230,000
June 2007
$0.105
200,000
200,000
July 2008
$0.050
675,000
675,000
$0.050
50,000
50,000
$0.030
15,760,000 22,307,000
(7,800,000) (7,800,000)
7,960,000 14,507,000
ESOS 2010 November 2010 November 2011 November 2020 $0.015 25,450,000 (6,000,000) 19,450,000
78
WAEP($) 2011
No. 2010
WAEP($) 2010
(1)
(2)
25,450,000 (6,000,000)
(4)
19,450,000
Included within these balances are equity-settled options that were not recognised in accordance with FRS102 as these equity-settled options were granted on or before 22 November 2002. These options have not been subsequently modified and therefore do not need to be accounted for in accordance with FRS102. The range of exercise prices for options outstanding at the end of the year was $0.03 to $0.18 (2010: $0.03 to $0.18). The weighted average remaining contractual life for these options approximates 3 months (2010: 1 year). The weighted average fair value of options granted during the year was $0.015. The exercise price for options outstanding at the end of the year was $0.015. The weighted average remaining contractual life for these options is 9 years.
(2)
(3)
(4)
Fair value of share options granted The fair value of share options as at the date of grant is estimated using the Binomial Option Pricing Model, taking into account the terms and conditions upon which the options were granted. The inputs to the model used for the years ended 30 June 2011 and 30 June 2010 are shown below. 2011 Dividend yield % (year) Expected volatility (%) Risk-free interest rate (%) Expected life of option (years) Share price ($) 0.0 121 1.6 5.5 0.02 2010 0.0 60 5.0 1.8 0.02
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.
79
The Group has not entered into any non-cancellable leases as lessee. Rental income is generated on an adhoc basis. (b) Finance lease commitments The Group has finance leases for certain items of machinery, equipment and motor vehicles (Note 3). There are no restrictions placed upon the Group by entering into these leases. The average discount rate implicit in the leases is 7.19% (2010: 4.46%) per annum. Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows: Group Minimum lease payments 2011 $ Not later than one year Later than one year but not later than five years Total minimum lease payments Less: Amounts representing finance charges Present value of minimum lease payments 87,187 183,951 271,138 (29,861) 241,277 Present value of payments 2011 $ 72,884 168,393 241,277 241,277 Minimum lease payments 2010 $ 142,048 113,813 255,861 (21,622) 234,239 Present value of payments 2010 $ 129,424 104,815 234,239 234,239
80
Minimum lease payments 2011 $ Not later than one year Later than one year but not later than five years Total minimum lease payments Less: Amounts representing finance charges Present value of minimum lease payments (c) Continuing financial support 8,928 17,100 26,028 (3,116) 22,912
As at 30 June 2011, the Company had given undertakings to certain subsidiaries to provide financial support to enable them to operate as going concerns and to meet their obligations for at least 12 months from the respective date of their directors report.
27.
* The Group has entered into contracts with affiliated companies, Asian Micro Industries (Thailand) Co., Ltd, Ultraline Technology Pte Ltd, American Converters Industries Pte Ltd and Ultraline Holdings (Thailand) Co. Ltd, all three companies owned by two directors, for the lease of factories on a time cost reimbursement basis.
81
28.
82
At the balance sheet date, approximately 38% (2010: 28%) of the Groups trade receivables were due from 3 major customers. Financial assets that are neither past due nor impaired Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and bank balances, that are neither past due nor impaired, are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default. Financial assets that are either past due or impaired Information regarding financial assets that are either past due or impaired is disclosed in Note 7 (Trade and other receivables). Liquidity risk Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Groups and the Companys exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Groups and the Companys objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
83
84
85
(22) 22
9 (9)
(24) 24
86
87
31.
Segment information
For management purposes, the Group is organised into business units based on their product and services, and has five reportable operating segments as follows: Tray recycling Tray recycling segment provides services of recycling and precision cleaning of packaging trays and media/ disk cassettes used in the hard disk drive and semiconductor industries. This segment also includes precision parts cleaning and parts visual inspection as well as clean room laundry cleaning services. Manufacturing Manufacturing segment refers to manufacturing of clean room grade packaging products such as LDPE/ HDPE bags, ESD bags and aluminum moisture barrier bags for the electronics and hard disk drive industries. Corporate The corporate segment is involved in Group-level corporate services.
88
89
90
30 June 2011
Manufacturing 2011 2010 $ $ Plastic waste recycling 2011 2010 $ $ Elimination 2011 2010 $ $ Natural Gas Vehicle (NGV) related business 2011 2010 $ $ Corporate and others 2011 2010 $ $ Consolidated 2011 2010 $ $ 2,014 251 2,265 (28) 587 27 (1,528) (1,253) (1,772) (1,050) 2,712 183 635 2,895 12,721 1,650 1,596 288 49 (1,901) 330 (1,933) 178 8,575 (4,576) (67) 3 20,704 (2,911) (126) 4 2,424 183 586 2,895 12,721 1,650 1,596 (1,901) (1,933) 8,575 20,704
31.
Segments
Asian Micro Holdings Limited (4,640) 211 (4,429) 22 (3,011) (71) (3,082)
The following table presents revenue and results information regarding the Groups reportable operating segments for the financial years ended 30 June 2011 and 2010 (in $000).
3,483
4,973
Total revenue
3,483
4,973
Segment results Financial expenses Financial income Share of results of associated companies
(1,605)
(1,373)
31.
Segments (contd)
Tray recycling 2011 2010 $ $ 1,389 1,452 1,005 4,449 7,577 2,563 2,336 (9,453) (15,819) 5,275 5,275 2,187 1,750 628 10,392 11,361 4,130 2,990 (34,063) (35,728) 3,499 998 4,497 98 29 16 51 220 172 5 70 462 842 1 38 (47) (173) (26) 537 500 8,319 8,319 4,756 1,397 6,153 1,103 695
Plastic waste recycling 2011 2010 $ $ Elimination 2011 2010 $ $ Consolidated 2011 2010 $ $
Natural Gas Vehicle (NGV) related business 2011 2010 $ $ Corporate and others 2011 2010 $ $
Segment assets
6,327
11,768
Total assets
23,755
Total liabilities
23
326
Capital expenditure Depreciation Impairment losses of property, plant and equipment 166 52
246
482
528
(52)
166
528
The following table presents revenue and assets information based on the geographical location of customers and assets, respectively, for the years ended 30 June 2011 and 2010 (in $000). Malaysia 2010 2009 $ $ Thailand 2011 2010 $ $ PRC 2011 $ 2010 $ Others 2011 2010 $ $ Total 2011 $ 2010 $
7,100
6,059
1,118 1,673
13,580 3,029
357 10
1,065 2,133
8,575 5,275
20,704 8,319
30 June 2011
Assets
3,591
3,154
91
33.
34.
92
STATISTICS OF SHAREHOLDINGS
As at 16 September 2011
NO. OF SHARES ISSUED CLASS OF SHARES VOTING RIGHTS : : : 463,591,043 ORDINARY SHARES 1 VOTE PER SHARE
The Company does not hold any treasury shares. NO. OF SHAREHOLDERS 4 2,686 1,311 29 4,030
SIZE OF SHAREHOLDINGS 1 999 1,000 10,000 10,001 1,000,000 1,000,001 & ABOVE TOTAL
36.38% of the Companys shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the Listing Manual, Section B: Rules of Catalist.
93
SHAREHOLDERS INFORMATION
As at 16 September 2011 SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders)
NAME OF SHAREHOLDER LIM KEE LIEW @ VICTOR LIM LEONG LAI HENG (a) (b) DIRECT INTEREST 138,741,217 118,646,760 29.93% 25.59% DEEMED INTEREST 125,218,304 145,312,761 27.01% 31.35%
Notes: (a) Mr. Lim Kee Liew @ Victor Lim's deemed interest arose through 496,000 shares held by DBS Nominees (Private) Limited, 1,449,105 shares held by Ultraline Technology (S) Pte Ltd and 3,866,439 shares held by American Converters Industries Pte Ltd. He is also deemed to have an interest in the 119,406,760 shares held by his spouse, Ms. Leong Lai Heng. Ms. Leong Lai Heng's deemed interest arose through 760,000 shares held by United Overseas Bank Nominees (Private) Limited, 1,449,105 shares held by Ultraline Technology (S) Pte Ltd and 3,866,439 shares held by American Converters Industries Pte Ltd. She is also deemed to have an interest in the 139,237,217 shares held by her spouse, Mr. Lim Kee Liew @ Victor Lim. * Mr. Lim Kee Liew @ Victor Lim and Ms. Leong Lai Heng each own 50% of the entire issued and paid-up share capital of Ultraline Technology (S) Pte Ltd and American Converters Industries Pte Ltd.
(b)
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2.
Mr. Ng and Mr. Lin are Executive Directors of the Company. Mr. Chue will, upon re-election as a Director of the Company, remain as a member of the Audit Committee, Nominating Committee and Remuneration Committee and will be considered independent. Mr. Teo will, upon re-election as a Director of the Company, remain as Chairman of Nominating Committee and a member of the Audit Committee and Remuneration Committee and will be considered independent. 3. To approve the payment of Directors fees of S$50,663.23 for the year ended 30 June 2011. (2010: S$51,840). (Resolution 6) To re-appoint Messrs Ernst & Young LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration. (Resolution 7) To transact any other ordinary business which may properly be transacted at an Annual General Meeting.
4.
5.
AS SPECIAL BUSINESS To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 6. Authority to issue shares That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of Section B of the Singapore Exchange Securities Trading Limited Listing Manual: Rules of Catalist (the Catalist Rules), the Directors of the Company be authorised and empowered to: (a) (i) (ii) issue shares in the Company (shares) whether by way of rights, bonus or otherwise; and/or make or grant offers, agreements or options (collectively, Instruments) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares,
at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and (b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instruments made or granted by the Directors of the Company while this Resolution was in force, Annual Report 2011
95
(2)
(c) (3)
in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Catalist Rules for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and unless revoked or varied by the Company in a general meeting, such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (i)] (Resolution 8)
(4)
7.
Authority to issue shares under the Asian Micro Employees Share Option Scheme 2010 That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options under the Asian Micro Employees Share Option Scheme (the Scheme) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed twenty five per centum (25%) of the total number of issued shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (ii)] (Resolution 9)
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(ii)
Notes: 1. A member entitled to attend and vote at the Annual General Meeting (the Meeting) is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company. The instrument appointing a proxy must be deposited at the registered office of the Company at 1 Tech Park Crescent, Singapore 638131 not less than 48 hours before the time appointed for holding the Meeting.
2.
97
IMPORTANT: 1. For investors who have used their CPF monies to buy Asian Micro Holdings Limiteds shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.
PROXY FORM
(Please see notes overleaf before completing this Form)
3.
I/We, of being a member/members of Asian Micro Holdings Limited, hereby appoint: Name NRIC/Passport No. Proportion of Shareholdings No. of Shares Address %
and/or (delete as appropriate) Name NRIC/Passport No. Proportion of Shareholdings No. of Shares Address %
or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/ proxies to vote for me/us on my/our behalf at the Annual General Meeting (the Meeting) of the Company to be held on 28 October 2011 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll. (Please indicate your vote For or Against with a tick [] within the box provided.) No. 1 2 3 4 5 6 7 8 9 Resolutions relating to: Directors Report and Audited Accounts for the year ended 30 June 2011 Re-election of Mr. Ng Chee Wee as a Director Re-election of Mr. Chue Wai Tat as a Director Re-election of Mr. Lin Xianglong Winchester as a Director Re-election of Mr. Teo Kio Choon @ Chang Chiaw Choon as a Director Approval of Directors fees amounting to S$50,663.23 Re-appointment of Messrs Ernst & Young LLP as Auditors Authority to issue new shares Authority to issue shares under the Asian Micro Employees Share Option Scheme 2010 day of 2011 Total number of Shares in: (a) CDP Register (b) Register of Members Signature of Shareholder(s) or, Common Seal of Corporate Shareholder No. of Shares For Against
Dated this
Notes: 1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 1 Tech Park Crescent, Singapore 638131 not less than 48 hours before the time appointed for the Meeting. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.
2.
3.
4.
5.
6.
7.
General: The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.
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