committed to excellence · 2017-03-13 · email : [email protected] auditors crowe horwath...

ANNUAL REPORT 2012

COMMITTED TO EXCELLENCE

OUR VALUES & BELIEFS

Our shared values and beliefs are the foundation upon which our company is built. We believe that our people, striving towards a shared vision and guided by a common set

of values and beliefs are our most valuable asset and the ultimate sustainable source of

our competitive advantage.

We are guided by our A.C.T.I.O.N.S. which underlie the culture of the KOBAY Group of Companies.

OUR VISIONTo be the market leader and pre-eminent supplier of innovative and compelling engineering solutions to customers worldwide.

OUR MISSIONOur core business is to pursue excellence in business, sales & marketing and manufacturing to serve our customers in the global market.

To achieve sustainable, profitable growth, we combine market leading process technology with a highly competent and committed workforce to achieve business excellence which is reflected in the products and services we offer.

Success is measured by our ability to create economic value, bond with our customers and suppliers, promote a sense of pride and ownership amongst our employees and produce a higher return of equity to our shareholders.

A gility

C an-Do attitude

T eamwork

I nitiative and accountability

O wnership and pride

N ever stop learning

S atisfy the customers

Kobay Technology Bhd. (Company No.: 308279-A) • Annual Report 2012 1

CONTENTS

Page

Corporate Information ................................................................................................ 2

Notice of Annual General Meeting ............................................................................. 3 - 6

Corporate Structure .................................................................................................... 7

Board of Directors ....................................................................................................... 8 - 10

Group Financial Highlights .......................................................................................... 11

Chairman’s Statement ................................................................................................ 12 - 13

Corporate Governance Statement .............................................................................. 14 - 19

Corporate Social Responsibility .................................................................................. 20

Internal Control Statement .......................................................................................... 21

Directors’ Responsibilities Statement ......................................................................... 22

Audit Committee Report ............................................................................................. 23 - 25

Other Information ....................................................................................................... 26

Financial Statements .................................................................................................. 28 - 88

Statistics of Shareholdings ......................................................................................... 89 - 90

List of Properties ........................................................................................................ 91 - 92

2 Kobay Technology Bhd. (Company No.: 308279-A) • Annual Report 2012

Board of directors Koay Cheng LyeExecutive Chairman / Chief Administrative Officer

Dato’ Koay Hean EngManaging Director / Chief Executive Officer

Koay Ah Bah @ Koay Cheng HockNon-Independent Non-Executive Director

Lim Swee ChuanExecutive Director / Chief Financial Officer

Tan Yok Cheng DJN, PJK, PJM

Senior Independent Non-Executive Director

Dr. Mohamad Zabdi Bin ZamrodIndependent Non-Executive Director

Khaw Eng Peng Independent Non-Executive Director

audit committee Tan Yok Cheng DJN, PJK, PJM

Chairman

Dr. Mohamad Zabdi Bin ZamrodMember

Khaw Eng PengMember

NomiNatioN committeeTan Yok Cheng DJN, PJK, PJM

Chairman

Koay Ah Bah @ Koay Cheng HockMember

Khaw Eng PengMember

remuNeratioN committeeTan Yok Cheng DJN, PJK, PJM

Chairman

Dato’ Koay Hean EngMember

Dr. Mohamad Zabdi Bin ZamrodMember

CORPORATE INFORMATION

secretariesChan Mun Shee (MAICSA 7003071)Wong Mee Choon (MACS01562)Email : [email protected]

registered officePlot 30, Hilir Sungai Kluang 1,Bayan Lepas Industrial Park, Phase 4,11900 Bayan Lepas, Penang.Tel: (04) 6411888Fax: (04) 6412888

registrarAgriteum Share Registration Services Sdn. Bhd.2nd Floor, Wisma Penang Garden42, Jalan Sultan Ahmad Shah10050 Penang.Tel: (04) 2282321Fax: (04) 2272391Email : [email protected]

auditorsCrowe HorwathChartered Accountants17.01 Menara Boustead Penang39 Jalan Sultan Ahmad Shah10050 PenangTel: (04) 2277061Fax: (04) 2278011

BaNkersMalayan Banking BerhadAlliance Bank Malaysia BerhadPublic Bank Berhad

stock exchaNge ListiNgMain Market, Bursa Malaysia Securities Berhad(Stock Code : 6971, Stock Name : KOBAY)

WeBsitewww.kobaytech.com


NOTICE OF ANNuAl gENERAl MEETINg

NOTICE IS HEREBY GIVEN THAT the Eighteenth (18th) Annual General Meeting (“AGM”) of Kobay Technology Bhd. will be held at Plot 30, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, Bayan Lepas, 11900 Penang on Friday, 28 December 2012 at 2.30 p.m. for the following purposes:-

ordiNarY BusiNess

1. To receive the Audited Financial Statements for the financial year ended 30 June 2012 and the Reports of the Directors and Auditors thereon.

Resolution 1

2. To re-appointment Dr. Mohamad Zabdi Bin Zamrod as Company Director, who has attained age seventy years old pursuant to Section 129(6) of the Companies Act 1965.

Resolution 2

3. To re-elect Mr. Koay Ah Bah @ Koay Cheng Hock as Company Director, who retires in accordance with Article 95 of the Company’s Articles of Association.

Resolution 3

4. To re-elect Mr. Koay Cheng Lye as Company Director, who retires in accordance with Article 95 of the Company’s Articles of Association.

Resolution 4

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

Resolution 5

sPeciaL BusiNess

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions:

6.ORDINARY RESOLUTION PaYmeNt of directors’ fees

“THAT the payment of Directors’ fees totaling Ringgit Malaysia Twenty Thousand (RM20,000) only to the Non-Executive Directors for the financial year ended 30 June 2012 be and is hereby approved.”

Resolution 6

7.ORDINARY RESOLUTION authoritY to aLLot shares iN accordaNce to sectioN 132d of the comPaNies act, 1965

“THAT subject always to the Companies Act, 1965 (“the Act”) and the approvals from the relevant governmental and/or regulatory authorities, the Directors of the Company be and are hereby empowered pursuant to Section 132D of the Act, to issue and allot shares in the capital of the Company from time to time upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit PROVIDED THAT the aggregate number of shares to be issued (inclusive any employee share option scheme exercised by the employees) pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being AND THAT the Directors are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad (“Bursa Securities”) AND THAT such authority shall continue in force until the conclusion of the next AGM of the Company.”

Resolution 7


8ORDINARY RESOLUTION ProPosed reNeWaL of share BuY-Back authoritY

“THAT subject to the compliance by the Company with all applicable laws, regulations and guidelines pursuant to the Act, the Company’s Memorandum and Articles of Association, the Main Market Listing Requirements of Bursa Securities and the approvals of all relevant authorities, the Company be and is hereby authorized to purchase and/or hold such amount of ordinary shares of RM1.00 each in the Company (“shares”) as may be determined by the Directors of the Company from time to time through the Bursa Securities upon such terms and conditions as the Directors may deem fit in the interest of the Company PROVIDED THAT :-

i) the maximum number of shares purchased and/or held pursuant to this resolution does not exceed ten per cent (10%) of the total issued and paid-up share capital of the Company at any given point in time;

ii) the maximum amount of fund allocated by the Company for the purpose of purchasing the Shares shall not exceed the retained profits and/or the share premium accounts of the Company based on its latest Audited Financial Statements available up to the date of the transaction. As at 30 June 2012, the audited retained profit and share premium account of the Company was RM13,805,870 and RM1,680,086 respectively; and

ii) the shares so purchased by the Company pursuant to this Proposed Share Buy-back Authority may dealt with by authority given to the Directors to either retain part of or entire shares as treasury shares or cancel part of or entire shares, or a combination of both. The shares so retained as treasury shares by the Company may, either be distributed as share dividends to shareholders or resell on Bursa Securities or in any manner pursuant to the Act, Bursa Securities Listing Requirements or any other relevant authority for the time being in force;

THAT such authority from the shareholders would be effective immediately upon passing of this resolution and would continue to be in force until:-

i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM at which such resolution was passed, at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed either unconditionally or subject to conditions; or

ii) the expiration of the period within which the next AGM is required by law to be held; oriii) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general

meeting,

whichever occurs first.

AND THAT authority be and is hereby given to the Directors to take all such steps as are necessary or expedient to implement or to give effect of the Proposed Share Buy-back Authority with full powers to assent to any conditions, modifications, re-valuations, variations and/or amendments (if any) as may be imposed by the relevant authorities from time to time.”

Resolution 8

9SPECIAL RESOLUTIONProPosed ameNdmeNts to the comPaNY’s articLes of associatioN

To consider and if thought fit, to approve the proposed amendments of the Company’s Articles of Association.

Resolution 9

10 To transact any other ordinary business of which due notice shall have been given.

BY ORDER OF THE BOARD

CHAN MUN SHEE (MAICSA 7003071)WONG MEE CHOON (MACS 01562)Company Secretaries

Penang, 6 December 2012

NOTICE OF ANNuAl gENERAl MEETINg (cont’d)


Notes : 1. A proxy may but need not be a Member or a qualified legal practitioner, or an approved company auditor or a person approved by the

Registrar and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

2. To be valid, this form, duly completed must be deposited with the Registered Office of the Company, at Plot 30, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, 11900 Bayan Lepas, Penang not less than forty eight (48) hours before the time for holding the meeting provided that in the event the Member(s) duly executes the form of proxy but does not name any proxy, such Member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, provided always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the Member(s).

3. A Member shall be entitled to appoint not more than two (2) proxies to attend and vote at the same meeting and the appointment shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

4. Where a Member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

5. If the appointor is a corporation this form must be executed under the corporation’s common seal, or under the hand of an officer or attorney duly authorized.

6. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.

7. In respect of deposited securities, only members whose names appear on the Record of Deposits on 21 December 2012 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

exPLaNatorY Notes :

Resolution 6The proposed Ordinary Resolution under item 5 is to obtain shareholders’ approval for the payment of Directors’ fees totaling Ringgit Malaysia Twenty Thousand (RM20,000) only to the four Non-Executive Directors for the financial year ended 30 June 2012 as required under Article 103 of the Company’s Articles of Association.

Resolution 7A mandate was sought and approved by the members during the Seventeenth (17th) AGM held on 15 December 2011. No new shares were issued and no proceeds were raised from the previous mandate.

If the proposed Ordinary Resolution is passed, the Directors will be empowered to issue and allot shares in the Company at any time and for such purposes as the Directors consider would be in the interests of the Company up to an aggregate not exceeding 10% of the Company’s issued capital (inclusive any employee share option scheme exercised by the employees) without the need to convene separate general meetings to obtain its shareholders’ approval so as to avoid incurring additional cost and time. This authority unless revoked or varied at the general meeting, will expire at the next AGM.

The mandate will provide flexibility to the Company for any possible fund raising exercises including but not limited to placing of shares for the purpose of funding future investment project(s), working capital and/or acquisition(s) and such other application as the Directors may deem fit in the best interest of the Company.

Resolution 8The proposed Ordinary Resolution under item 8 is of renewal and if passed, will allow the Company to purchase up to ten per cent (10%) of the total issued and paid-up share capital of the Company at any given point in time. This authority unless revoked or varied at the general meeting, will expire at the next AGM. The details of this proposal are set out in part A of the Circular to Shareholders dated 6 December 2012.

Resolution 9The proposed Special Resolution under item 9 if passed, will amend the Company’s Articles of Association per the proposed amendments set out in Appendix II of the Circular to Shareholders dated 6 December 2012.



statemeNt accomPaNYiNg Notice of aNNuaL geNeraL meetiNg

The profile of the Directors who are standing for re-election (as per Resolution 2, 3 and 4 as stated in the Notice of Annual General Meeting) at the Eighteenth (18th) Annual General Meeting of Kobay Technology Bhd. which will be held at Plot 30, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, 11900 Bayan Lepas, Penang on Friday, 28 December 2012 at 2.30 p.m., are stated on page 8 & 9 of the Annual Report 2012.

There is no individual standing for election as Director (excluding Directors standing for re-election) at this forthcoming Annual General Meeting.



CORPORATE STRuCTuRE

BusiNess uNit Effective equity interest @ 19.11.12

PrecisioN tooLiNg & equiPmeNt divisioN Polytool Technologies Sdn. Bhd. 100.00 %Megatool Precision (Suzhou) Co., Ltd. 100.00 %Maker Technologies Sdn. Bhd. 100.00 %Polytool Integration Sdn. Bhd. 100.00 %Microhandling Asia Pte. Ltd. ** 30.48 %

PrecisioN metaL comPoNeNts divisioNLipo Corporation Berhad and Subsidiaries 100.00 % - Paradigm Precision Components Sdn. Bhd.* 100.00 %- Paradigm Metal Industries Sdn. Bhd.* 100.00 %- Paradigm Precision Machining Sdn. Bhd.* 100.00 %- Lipo Precision Industry (Suzhou) Co., Ltd.* 100.00 %- Suzhou Univex Metal Tech Co. Ltd. * 100.00 %- Micro Surface Treatment Sdn. Bhd.* 88.00%

metaL faBricatioN divisioNBend Weld Engineering Sdn. Bhd. 100.00 %

others (iNvestmeNt, ProPerties maNagemeNt & tradiNg, etc)Kobay Assets Sdn. Bhd. 100.00 %Kobay Sawin Sdn. Bhd. 100.00 %Polytool Precision Sdn. Bhd. 100.00 %Kewjaya Sdn. Bhd. 100.00 %Fine Desserts Sdn. Bhd. (formerly known as Megatool Precision Sdn. Bhd.) 100.00 %Kobay Systems Sdn. Bhd. (formerly known as Kobay SCM Sdn. Bhd.) 100.00 %Kobay SCM (S) Pte. Ltd. 60.00 %- United Manufacturing Corporation Pte. Ltd.** 60.00 %Super Tropica Development Sdn. Bhd.* 100.00 % LD Global Sdn. Bhd. 100.00 %Lodge 18 Sdn. Bhd. 100.00 %

* Subsidiaries of Lipo Corporation Berhad** Subsidiaries of Kobay SCM (S) Pte. Ltd.


koay cheng LyeMalaysian – aged 64 Executive Chairman / Chief Administrative Officer / Member of Executive Committee

Mr. Koay Cheng Lye was appointed as Executive Director to the Board on 17 September 1994 and subsequently appointed as Executive Chairman on 11 October 2002. Being the co-founder of Kobay Technology Bhd (“Kobay” or “the Company”) and its subsidiaries (“Kobay Group” or “the Group”) he has more than 26 years of experience in the precision engineering industry and possesses in-depth knowledge of the overall operations of the Group.

As at 19 November 2012, Mr. Koay Cheng Lye has direct shareholding of 586,995 ordinary shares in the Company. He also has indirect shareholding of 17,523,007 ordinary shares in the Company, by virtue of his direct interest in Kobay Holdings Sdn. Bhd., a major shareholder of the Company. He is also deemed to have an interest in the shares of all the subsidiary companies of the Company to the extent that the Company has an interest, by virtue of his shareholding in the Company.

Ms. Koay Cheng Lye is subject to retirement by rotation under Article 95 of the Company’s Articles of Association at the forthcoming Annual General Meeting and being eligible, has offered himself for re-election.

dato’ koay hean engMalaysian – aged 54 Managing Director / Chief Executive Officer / Member of Remuneration Committee, ESOS Committee and Executive Committee

Dato’ Koay Hean Eng was appointed to the Board on 17 September 1994. He holds a certificate of vocational education and is the co-founder of Kobay Group. With more than 30 years of experience in the precision engineering industry, he has contributed significantly to the growth of Kobay Group. He holds directorships in the subsidiaries of the Company and other private limited companies.

As at 19 November 2012, Dato’ Koay Hean Eng has direct shareholding of 1,654,154 ordinary shares in the Company. He also has indirect shareholding of 17,523,007 ordinary shares in the Company, by virtue of his direct interest in Kobay Holdings Sdn. Bhd., a major shareholder of the Company. He has balance option to subscribe for 600,000 ordinary shares in the Company. He is also deemed to have an interest in the shares of all the subsidiary companies of the Company to the extent that the Company has an interest, by virtue of his shareholding in the Company.

koay ah Bah @ koay cheng hockMalaysian – aged 66 Non-Independent Non-Executive Director / Member of Nomination Committee

Mr. Koay Ah Bah @ Koay Cheng Hock, was appointed to the Board on 25 January 1999. He also sits on the Board of Polytool Technologies Sdn. Bhd., a subsidiary of the Company. He has more than 26 years of experience in mechanical engineering field and was a proprietor of an auto mechanical business prior to joining the Group in 1992.

As at 19 November 2012, Mr. Koay Ah Bah @ Koay Cheng Hock has direct shareholding of 569,665 ordinary shares in the Company. He also has indirect shareholding of 17,523,007 ordinary shares in the Company, by virtue of his direct interest in Kobay Holdings Sdn. Bhd., a major shareholder of the Company. He is also deemed to have an interest in the shares of all the subsidiary companies of the Company to the extent that the Company has an interest, by virtue of his shareholding in the Company.

Mr. Koay Ah Bah @ Koay Cheng Hock is subject to retirement by rotation under Article 95 of the Company’s Articles of Association at the forthcoming Annual General Meeting and being eligible, has offered himself for re-election.

BOARD OF DIRECTORS


BOARD OF DIRECTORS (cont’d)

Lim swee chuanMalaysian – aged 46 Executive Director / Chief Financial Officer / Member of ESOS Committee and Executive Committee

Mr. Lim Swee Chuan was appointed to the Board on 29 November 2001. He oversees the Kobay Group’s financial aspects and also holds directorships in several subsidiaries of the Company. He graduated in 1991 with a Bachelor of Accounting (Honours) degree from Universiti Utara Malaysia. He is a Chartered Accountant and a member of the Malaysian Institute of Accountants as well as Malaysian Institute of Taxation. Upon graduation, he worked for Cycle & Carriage (M) Sdn. Bhd. as a Group Internal Audit Executive from 1991 to 1992. Between 1992 and 1995, he was attached to Price Waterhouse (now known as PricewaterhouseCoopers) where his last position was an Audit Senior. He joined Kobay as an accountant in 1995 and is presently the Chief Financial Officer of Kobay Group.

As at 19 November 2012 Mr. Lim Swee Chuan has no direct/indirect shareholding in Kobay but has balance option to subscribe for 250,000 ordinary shares in the Company.

tan Yok cheng dJN, PJk, PJm Malaysian – aged 54Senior Independent Non-Executive Director / Chairman of Audit Committee, Nomination Committee and Remuneration Committee

Mr. Tan Yok Cheng was appointed to the Board on 15 October 1997. He was employed under Emico Plastic Industries Sdn. Bhd., a manufacturer of trophy and awards components, souvenirs, custom designed promotional items and related supplies, from 1988 to 1994 which his last position was as Group Human Resources and Administration Manager. Since 1994, he has been involved in his own business namely Pewterlink Creations Marketing, of which its principal activity is the supply of pewter ware. He was a Penang Municipal Councilor.

As at 19 November 2012, Mr. Tan Yok Cheng has direct shareholding of 1,250 ordinary shares in the Company.

dr. mohamad Zabdi Bin ZamrodMalaysian – aged 70 Independent Non-Executive Director / Member of Audit Committee and Remuneration Committee

Dr. Mohamad Zabdi Bin Zamrod was appointed to the Board on 30 March 2002. He holds a Doctorate in Curriculum and Teaching from the Columbia University, New York. He was a lecturer in Universiti Sains Malaysia for more than 10 years before retiring.

Dr. Mohamad Zabdi has no direct/indirect shareholding in Kobay as at 19 November 2012.

Dr. Mohamad Zabdi has offer for re-appointment as Director of the Company pursuant to section 129(6) of the Companies Act, 1965 in attaining age seventy years old in the forthcoming Annual General Meeting.

khaw eng PengMalaysian – aged 45Independent Non-Executive Director / Member of Audit Committee and Nomination Committee

Mr. Khaw Eng Peng was appointed as a Director to the Board of Kobay on 30 July 2010. He is a fellow member of the Association of Chartered Certified Accountants and a member of Malaysian Institute of Accountants. Upon completion of his professional examination, he joined Messrs. Coopers & Lybrand (now merged under the firm PricewaterhouseCoopers) in 1993, attaching to audit and compliance services division of the firm. In 1996, he left audit practice, as Assistant Audit Manager and joined Oriental Interest Berhad (“OIB”) Group as Senior Manager in Finance and Administration Department. He was promoted to Assistant General Manager in year 2001, overseeing all financial reporting, corporate compliance and administration aspects for OIB Group. On 5 November 2007, Mr. Khaw was appointed to his current position as Executive Director of OIB.

Mr. Khaw Eng Peng has no direct/indirect shareholding in Kobay as at 19 November 2012


other iNformatioN

family relationshipDato’ Koay Hean Eng, Mr. Koay Cheng Lye and Mr. Koay Ah Bah @ Koay Cheng Hock are brothers and they are also major shareholders of the Company via their shareholdings in Kobay Holdings Sdn. Bhd., a major shareholder of the Company.

Save for the above, none of the Directors have any family relationship with other Directors or major shareholders of the Company.

conflict of interestNone of the Company’s Directors has acted in conflict in any arrangement, contract or transaction during the financial year.

conviction for offencesNone of the Company’s Directors had convicted any offence (other than traffic offences, if any) within the past ten (10) years.

Number of board meetings attended in the financial year ended 30 June 2012Five (5) board meetings were held during the financial year ended 30 June 2012. Details of attendance of Directors at the board meetings are as follows:

directors attendanceKoay Cheng Lye 5/5Dato’ Koay Hean Eng 5/5Koay Ah Bah @ Koay Cheng Hock 5/5Lim Swee Chuan 5/5Dr. Mohamad Zabdi Bin Zamrod 4/5Tan Yok Cheng 5/5Khaw Eng Peng 5/5

directors’ and major shareholders’ interests

No. of shares held in kobay as at 19.11.2012

Name

directNo. of ordinary shares of

rm1.00 each % ^

indirectNo. of ordinary shares of

rm1.00 each % ^DirectorsDato’ Koay Hean Eng 1,654,154 2.46 *17,523,007 26.02Koay Cheng Lye 586,995 0.87 *17,523,007 26.02Koay Ah Bah @ Koay Cheng Hock 569,665 0.85 *17,523,007 26.02Lim Swee Chuan – – – –Tan Yok Cheng 1,250 # – –Khaw Eng Peng – – – –Dr. Mohamad Zabdi Bin Zamrod – – – –

Major ShareholdersKobay Holdings Sdn. Bhd. (“KHSB”) 17,523,007 26.02 – –Norinv Kapital Sdn. Bhd. 7,732,400 11.48 – –Dato’ Koay Hean Eng 1,654,154 2.46 *17,523,007 26.02Koay Cheng Lye 586,995 0.87 *17,523,007 26.02Koay Ah Bah @ Koay Cheng Hock 569,665 0.85 *17,523,007 26.02

By virtue of their interest in the shares of Kobay, Dato’ Koay Hean Eng, Mr. Koay Cheng Lye and Mr. Koay Ah Bah @ Koay Cheng Hock are also deemed to have an interest in the shares of all the subsidiary companies of Kobay to the extent that Kobay has an interest.

Notes:-* Deemed interest by virtue of the Directors’ direct interest in KHSB, a major shareholder of the Company# Interest is less than 0.01%^ The percentage of shareholding is calculated based on 67,352,550 ordinary shares after deducting 728,200 treasury shares (retained

by the Company as per Record of Depositors) from the fully issued and paid-up capital of the Company of RM68,080,750 consisting of 68,080,750 ordinary shares of RM1 each.

BOARD OF DIRECTORS (cont’d)


gROuP FINANCIAl HIgHlIgHTS

financial Year ended 30 June2008*

rm’0002009

rm’0002010

rm’0002011

rm’0002012

rm’000statement of comprehensive incomeRevenue 89,405 56,097 81,804 111,216 98,263 Profit before tax 6,863 1,717 5,707 12,884 3,923 Profit after tax 7,792 1,158 4,107 9,782 1,293 Net profit/(loss) attributable to equity holders 7,783 1,663 1,411 6,553 (1,292)

statement of financial PositionTotal Assets 120,203 153,482 167,115 169,897 170,226 Total Borrowing 1,730 – – 157 213 Shareholders’ Equity 105,284 106,299 105,925 111,782 109,205

financial indicatorsEarning/(loss) per share (sen) 11.56 2.47 2.10 9.73 (1.92)Gearing ratio (%) 1.61 – – 0.10 0.14 Net assets per share (RM) 1.56 1.58 1.57 1.66 1.62 Tax exempt dividend per share (sen) 3.0 2.0 1.5 2.0 – Share price as at the financial year end (RM) 0.62 0.59 0.61 0.77 0.84 Price earning (PE) ratio as at financial year

end (times) 5.36 23.89 29.05 7.91 –

* inclusive of discontinued operation

REVENUE

RM

’000

120,000

100,000

80,000

60,000

40,000

20,000

0

89,405

2008*

56,097

2009

81,804

2010

111,216

2011

98,263

2012

PROFIT BEFORE TAx

RM

’000

15,000

12,000

9,000

6,000

3,000

0

6,863

2008*

1,717

2009

5,707

2010

12,884

2011

3,923

2012

PROFIT AFTER TAx

RM

’000

10,000

8,000

6,000

4,000

2,000

0

7,792

2008*

1,158

2009

4,107

2010

9,782

2011

1,293

2012

NET PROFIT/(LOSS) ATTRIBUTABLE TO EQUITY HOLDERS

RM

’000

8,000

6,000

4,000

2,000

0

-2,000

7,783

2008*

1,663

2009

1,411

2010

6,553

2011

-1,292

2012


On behalf of the Board of Directors, I am pleased to present to you the Annual Report and Financial Report of Kobay Technology Bhd. for the financial year ended 30 June 2012.

BusiNess overvieWFor the financial year 2012, the Group’s business environment was challenging and filled with uncertainties. Volatility in world economy as a result of continued economic uncertainty faced by Europe, United States of America and China has affected businesses and consumers sentiment resulting weak market demand. Besides, the volatilities in foreign currency exchange rate, the after-effect of Japan March 2011 earth quake and tsunami and Thailand flood in October 2011 have disrupted the global electrical and electronic manufacturing supply chain. Manufacturers in the semiconductor industry were badly hit and have turned caution and hesitant in their production planning and adopted ‘wait and see’ mode and just-in-time concept for their inventory holding. These have affected the Group’s business activities.

fiNaNciaL revieWFor the financial year under review, as a result of the challenging and uncertainty environment, the Group recorded total loss attributable to owners of the company of RM1.2 million with revenue of RM98.2 million as compared to profit of RM6.5 million and revenue of RM111.2 million in last financial year ended 30 June 2011.

The major business units of the Group that consist of precision metal components division (under Lipo Corporation Berhad Group of companies) continued to deliver profitability although it was less favourable compared to last financial year. The precision components division’s Malaysia operations managed to sustain its profitability but its China operations had suffered loss of RM0.9 million as compared to profit of RM2.6 million in preceding year.

The Group’s precision tooling & equipment division and metal fabrication division delivered negative results. The uncertain global economic condition prompted customers of these divisions to place orders on a minimal need-only basis. Consequently, business volume was significantly affected and inventories in hand were moving slow. On prudent ground, the Group has written down RM2.9 million of slow moving inventories during the financial year under review.

Another factor that accounted for the significant drop in 2012 result was due to the one-off impact on the gain recorded in year 2011 arising from disposal of property and subsidiary amounted to about RM5.4 million.

In respect of financial position, the Group maintains its sound financial footing with net assets per ordinary share attributable to owners of the company as at 30 June 2012 stood at RM1.62 and cash & cash equivalents of RM58.6 million or RM0.87 per share. Although the selective capital reduction and repayment scheme undertaken by Lipo Corporation Berhad (“Lipo”) will reduce the Group’s cash balance by RM29.5 million, the reduction is not expected to bring negative impact to the Group.

oPeratioN revieWFor the companies in precision metal components division, most of them continued to perform well as a result of successful broadening the customer base and expanding into new business market. Loss was incurred in China operation due to decline in incoming orders and discontinued of a major product in view of profit erosion. The newly set-up surface treatment subsidiary in China also suffered loss. The management has decided to cease the China surface treatment operation after financial year end in view of unfavourable prospects.

For the precision tooling & equipment division, the precision tooling company which is in a matured industry managed to produce positive results with their services met up with customers’ expectations in providing one stop engineering solution. The equipment company suffered heavy losses as a result of drop in automation equipment orders with intense competition in the market, coupled with impairment loss for inventory obsolesces for its standard machines. The entry into providing automation solution for solar energy sector did not yield result either, as the sector is faced with fund depletion from the pull out of global governmental funding and provision for debts has to be made for shelved project. The Group has carried out business restructuring by downsizing the manpower and resources of the equipment company during the end of financial year.

For the metal fabrication division which provides heavy machining and fabrication for oil and gas industry, the company suffered loss as a result of cost overrun in meeting the tough and stringent requirements of oil and gas industry. Efforts have been put in to review the business operation to turnaround the company.

For the Group’s other segments, the hotel and food division also suffered losses as a result of intense market competitiveness and the operations have not performed as anticipated. Consequently, the management has decided to discontinue the food business.

CHAIRMAN’S STATEMENT


outLook aNd ProsPectLooking forward, the world market is entering a period of slower growth and more caution as sentiment is clouded by the heightened uncertainty in recovery of major global economies, the continued economic woes in Euro Zone and waning consumer confidence. We foresee a lackluster global demand and global economic slowdown taking place and tough times ahead.

We are taking sustainable strategy to face the impact of world economy uncertainties by practicing prudent cost management, efficient operations and organic growth to diversify into other more resilient industries such as aerospace and medical which are relevant to our core competency. At the mean time, we will continuously explore for good business opportunity to optimize our healthy financial position.

In March 2012, the Group embarked on a privatization scheme of Lipo Corporation Berhad, a 53.16% owned subsidiary which is listed on the Main Market of Bursa Malaysia Securities Berhad. The privatization exercise was completed on 30 October 2012. The Lipo Group houses the precision components division which is the major contributor of Kobay Group’s revenue and net profit. With the privatization, we will account 100% of the division’s financial performances, integrate the management teams and operations of the two Groups and create synergies from the improved economies of scale and more efficient resource allocation.

The consolidation of the Kobay Group and Lipo Group will make our Group a one-stop center for high precision engineering needs which is in line with the Group’s vision to be a pre-eminent supplier of innovative and engineering solutions to our customers. By having a more comprehensive group operations structure, we hope to attain a stronger footing to face the challenges ahead.

divideNdsFor the financial year ended 30 June 2012, in view of the Group’s poor performance, the Board of Directors has decided not to recommend the payment of dividend.

aPPreciatioNLastly, I would like to take this opportunity on behalf of the Board of Directors, to record our sincere appreciation and gratitude of the unwavering support of our customers, business partners and government authorities that have been extended to our Group of companies. We would also like to express our heartfelt thanks to all our employees for their hard work, dedication and commitment.

Thank you.

koaY cheNg LYeexecutive chairman

CHAIRMAN’S STATEMENT (cont’d)


The Board of Directors of the Company is committed and undertakes full accountability of actions towards creation of wealth in achieving the short term and long term shareholders’ value. The Board recognizes good corporate governance as set by the Malaysian Code of Corporate Governance (“MCCG” or the “Code”). With the revised MCCG 2012 of which issued by Securities Commission (“SC”) in March 2012 which will take effect on 31 December 2012, the Board is taking the necessary steps to apply all the principles and implement the best practices recommended in the MCCG 2012 that suits the Company’s circumstances in the coming financial year and report on its compliance in year 2013 Annual Report as required under MCCG 2012.

The Board has embarked on the best practices recommended under Principle 1 and 2 of MCCG 2012 in the financial year under review and has its Board Charter formalized and approved by the Board on 25 November 2010.

Pursuant to Bursa Malaysia Main Market Listing Requirements Chapter 15.25, the Board wishes to disclose herewith those principles under the MCCG and best practices that the Company has applied as set out in the Code.

Board of directors aNd its committees

The Board is entrusted with the role of stewards and guardians of the Company. The Board recognizes the necessity of compliance not just in regulatory but foster the good corporate governance by moving ahead and adopting the Board Charter which constitute and form an integral part of each Director’s duties and responsibilities. Its objective is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislation and regulations affecting their conduct and best practices of good Corporate Governance are applied in all their dealings in respect and on behalf of the Company.

Under the Board Charter, it has clearly established roles and responsibility of Chairman and Chief Executive Officer and each of the Board committees namely Nomination, Remuneration and Audit Committee. The Charter has also clearly stated the authority limit of the Executive Committee as well as the scope of approval for major transactions. Under the Charter, the Board has also adopted how the assessment of each individual board member and committee be carried.

The Charter clearly defined the Board’s responsibilities of which should not be limited to the following six specific responsibilities in discharging it’s stewardship responsibilities :-

1) Reviewing and adopting a strategic plan for the Company. The Board should adopt a well aligned strategic plan and business plan aligned to ensure obligations to the shareholders and stakeholders are met;

2) Overseeing the conduct of the Company’s business. To evaluate whether the business is being properly managed and the Board should therefore provide entrepreneurial leadership;

3) Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks. The Board should appraise the Company’s major risks and ensure that appropriate risk management and internal control procedures are in place;

4) Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management. The Board should oversee the human capital development process, monitoring and documentation against pre-determined evaluation criteria;

5) Developing and implementing an investor relations programme or shareholder communication policy for the Company; and

6) Reviewing the adequacy and integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules and directives and guidelines. The Board should determine that procedures in place are designed to ensure the assets of the Company are safeguarded against loss from unauthorized use/disposition and all transactions of the Company are properly authorized and that they are recorded as necessary to enable the preparation of true and fair financial statements and their related disclosures as required of the Company.

There are total seven (7) Directors in the Board of which three (3) out of the total are Executive Directors whereas three (3) out of the four (4) Non-Executive Directors are independent. Independent Directors’ presence are important especially each of the Non-Executive Director could contribute their skill and expertise in various scope and profession to ensure the strategies formulated or major transactions proposed by the management are of the best interest of the Company and the minority shareholders. The Board views the current composition fairly represents the interest of the shareholders.

All the Independent Non-Executive Directors are members of the Audit Committee whilst two of them sit on the Nomination Committee and Remuneration Committee respectively. Profile of Directors are set in page 8–9 of the Annual Report elaborates each of the Director’s background and experiences.

During the financial year ended 30 June 2012, the Board had five (5) Board Meetings where the Directors reviewed and discussed the Group’s operations, periodic financial statements, strategic plans and risk management matters inclusive but not limited to the reports from Board Committees on various scope of coverage of each Board Committee to ensure obligations to shareholders and stakeholders are met. Special Board Meetings would be called should there be urgent and important issues to be discussed and decided.

CORPORATE gOVERNANCE STATEMENT


No individual or group of individuals dominates the Board’s decision making. Each Director contributes his skill, experience and expertise accordingly and issue raised is carefully considered of each agenda during the meeting with documents and information furnished in relations to any corporate or business issue to be discussed in the meeting. The Board members review updates and/or reports inclusive Board attendance, resolutions passed quarterly, Directors’ dealing in securities, financial information, internal control report, external auditors feedback and corporate developments.

Records of the deliberation, issues discussed and conclusion were recorded by the Company Secretaries whom attended all the meetings. The minutes will then be circulated to all Directors for their confirmation before it was signed off by the Chairman of the meeting and kept at the Company’s registered office.

Each and every Director is able to access directly to the senior management and/or to the advice and services of the Company Secretaries, whenever is necessary. The appointment and removal of the Company Secretary is a matter for the Board as a whole. Directors may also seek external independent professionals’ advice for more information to be well informed prior to any decision made by them at the Company’s expense, on a case to case basis, if necessary.

The roles of the Chairman and the Chief Executive Officer are segregated to ensure that there is a balance of power and authority. The Chairman is responsible for ensuring the effectiveness of the Board policies and conduct whilst the Chief Executive Officer is responsible for the day-to-day running of operations, organisational effectiveness, overseeing as well as coordinating the development and implementation of Board policies, corporate strategies and decisions. The Chairman of the Board chaired every Board meetings held in the financial year ended 30 June 2012.

In discharging the Board’s fiduciary duties, the Board has delegated its power respectively to each Board Committee as disclosed below. The Terms of Reference of each Committee has been approved by the Board and has included in its Board Charter in compliance with the recommendations of the Code. The Board reviews these Committees’ performance from time to time and will revise, if necessary, their authorities granted.

executive committee

The Board has established an Executive Committee (“ExCO”) which comprises of three (3) Executive Directors to manage the day-to-day operations of the Group. The primary function of the Committee among others include:-

i. Execute all matters decided by the Board of Directors.ii. Assist the Board in establishing the Corporate Vision and Mission (and revise it if deemed necessary), as well as the

philosophy of the Company, setting aims of the management and monitoring the performance of the management.iii. Assist Board in maintaining and executing the operational day-to-day functions and assist the Board in monitoring

the operational performance of the Company/Group and overseeing the operational formulation, implementation and governance of the Company/Group.

iv. Receive, review and discuss with the management financial reports of the Company/Group inclusive the forecast and budget variance report.

v. Receive, review and approve proposals in relation to matters valued at RM250,000 and above submitted by the management of the Company/Group as per Authority Limit Matrix

vi. Assist the Board in monitoring the risk management matter and the system of internal controls.vii. Assist the Board in appointment of Advisor as and when is required.viii. Receive, review and recommend to the Board on all legal administrative policies, organization, bye-laws, rules and

regulations.ix. Undertake any other functions that may be delegated by the Board from time to time.

The Committee Members meet weekly for perusing ExCO proposal paper submitted via Company Secretary from the Companies within the Group. Company Secretary shall record and keep all ExCO proposal papers under her custody.

audit committee

The Board has established an Audit Committee on 1 September 2001. The Committee comprises of three members, all of them are Independent Non-Executive Directors and are financially literate where one of them is a member of a professional accounting association or body. The Audit Committee’s composition, terms of reference and the report are set out in page 23-26 of this Annual Report.

Nomination committee

Since establishment on 1 September 2001, Nomination Committee comprises of two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The composition is set out on page 2 of this Annual Report.

This Committee is responsible to recommend to the Board of any new Director, Non-Executive or Executive, appointment and assessment of the effectiveness of each Director or the Board as a whole on an on-going basis. Notices will be sent by the Company Secretary to those Directors whom due for retirement. Upon consent of the said Director to offer themselves for re-election, the Nomination Committee will evaluate their performance individually and as a team if the said Director was also member of the Board Committee as a whole. Then only the Nomination Committee will recommend to the Board those Directors retired and eligible for re-election during the forthcoming Annual General Meeting (“AGM”).

The Nomination Committee has on 22 November 2012 conducted its meeting and deliberated on the agenda set and has made their recommendation to the Board for re-electing/re-appointing those Directors whom retired for approval of the members in the forthcoming AGM set on 28 December 2012. The assessments and evaluations carried out by the Nomination Committee in the discharge of all its functions are properly documented.

CORPORATE gOVERNANCE STATEMENT (cont’d)



remuneration committee

The Remuneration Committee comprising two (2) Independent Non-executive Directors and one (1) Executive Director was set up on 1 September 2001 and its detailed composition is set out on page 2 of this Annual Report.

This Committee is responsible in determining, reviewing and recommending salary, benefits, general remuneration policy and practices of the Company’s Executive Directors. Remuneration of Non-Executive Directors is determined by the Board as a whole and Non-Executive Directors shall abstain in the discussion of their own remuneration.

The Committee had on 28 August 2012 proposed Directors’ fee payable for the members’ approval in the forthcoming AGM and evaluated the performance of the Executive Directors and individual Director who eligible to salary increment were awarded with amount correlates with their yearly performance in accordance to the Group’s Human Resource Policy and Procedure.

appointment and re-election of directors

Pursuant to the Company’s Articles of Association, one-third (1/3) of the Directors including Managing Director for the time being, shall retire from office by rotation at each AGM. Provided always that all Directors shall retire from office once at least in each three (3) years and if eligible, they can offer themselves for re-election. Directors newly appointed to the Board, either to fill a casual vacancy or as an addition to the existing Directors are subject to re-election by the shareholders at the next AGM to be held subsequent to their appointments.

Directors aged above seventy (70) years old are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965.

The Nomination Committee has evaluated the appointment or re-election of Directors who eligible for re-election are listed in page 8-9 of this Annual Report of which one of them is Dr. Mohamad Zabdi Bin Zamrod whom attain the age of seventy (70) years old.

directors’ training

All Directors have undergone the Mandatory Accreditation Programme and complied with the Listing Requirements.

The Nomination Committee has formalized an orientation programme, of which included the introduction of Company’s background and the strategic plans and directive of the Company as well as the Group, for all newly appointed Directors.

The Board as a whole acknowledges the importance of training and encourages the Directors to attend training programme in order to keep abreast of the latest development, advances in corporate governance and to further enhance their skills and knowledge where relevant so to enable them to contribute to the Company.

All Directors are updated on a continuing basis by the Company Secretaries on new/amended Listing Requirements as and when the same are advised by Bursa Securities.

The followings are additional courses and training programmes attended by the Directors for the financial year ended 30 June 2012:-

directors training Programmes attended dateLim Swee Chuan Outlook of Malaysia Economy in 2012 by Citibank

Shaping Sustainable Growth by PricewaterhousecoopersCorporate Disclosure (Main Market) by Bursa MalaysiaUnderstanding Money Lending Act by Ministry of Housing & Local GovernmentTax Planning Using Company Restructuring by Bridge KnowleMFRS – The New IFRS Compliant Framework Effective 2012 by

Pricewaterhousecoopers

12.09.201119.10.201108.12.201112.12.201109.04.201215.06.2012

Khaw Eng Peng Economic & Treasury Seminar 2012 by OCBCAdvocacy Session on Disclosure for CEOs & CFOsCFOs Briefing – Managing Change & ReinventionPreparing Your First MFRS Quarterly ReportMalaysian Code on Corporate Governance 2012

08.03.201220.03. 201205.04. 201220.04. 201213.06. 2012

The Board will continuously evaluate the training needs of the Director and determine relevant training particularly in new laws and regulations, essential practices to enhance corporate governance and risk management so to enable the Director could participate in deliberations and effectively discharge their duties.


directors’ remuNeratioN

The Remuneration Committee was guided by the Group Human Resource Policy and Procedures to reward the individual Executive Directors via their performance tracked half yearly with the Key Performance Indicator set with the aim to “attract and retain” committed and performed Executive Directors to drive the Company or the Group in achieving its Vision and Mission.

The compensation of Non-Executive Directors are proposed by the Remuneration Committee which link to their experience and level of responsibility taken will be tabled for the Board’s approval as a whole.

The Company pays its Executive Directors salaries, bonuses and other emoluments and for Non-Executive Directors, Directors’ fees that are approved at the AGM.

A summary of the Directors’ remuneration is reflected as follows:-

1. directors’ fees Directors’ fees are payable only to Non-Executive Directors. For the year under review, the Board proposed a fee of

RM5,000 for each Non-Executive Director. Director who has not served the full financial year, the payable Director fee will be apportioned accordingly. Breakdown of Directors’ fees payable to each and every Non-Executive Director for the financial year ended 30 June 2012 is as follows :-

Non-executive director Proposed directors’ fees (rm)Mr. Koay Ah Bah @ Koay Cheng Hock 5,000Dr. Mohamad Zabdi Bin Zamrod 5,000Mr. Tan Yok Cheng 5,000Mr. Khaw Eng Peng 5,000

total Payable 20,000

2. Non-executive directors’ other BenefitNon-Executive Directors are paid a perquisite for their every attendance of meeting and during the financial year ended 30 June 2012, a total of RM8,050 meeting expenses have been paid to Non-Executive Directors.

3. directors’ remunerationA summary of the Directors’ remuneration of the listed issuer, both for Executive and Non-Executive Directors, categorised into appropriate components and into each successive band of RM50,000 is disclosed below :-

executive directors(rm)

Non-executive directors(rm)

Fees – 20,000Other benefits – 8,050Salary and other emoluments 784,505# 36,000*Bonus 125,771# 839*Allowance & Statutory Contributions 113,024# 5,335*

Per annum executive directors Non-executive directors

0 to RM 50,000 – 4*RM50,001 to RM100,000 – –RM100,001 to RM150,000 – –RM150,001 to RM200,000 – –RM200,001 to RM250,000 – –RM250,001 to RM300,000 1 –RM300,001 to RM350,000 1 –RM350,001 to RM400,000 – –RM400,001 to RM450,000 1 –

employees’ share option scheme

executive directors (No. of options over ordinary shares)

Non-executive directors (No. of options over ordinary shares)

total (No. of options over ordinary shares)

Dato’ Koay Hean Eng 600,000 – 600,000Lim Swee Chuan 250,000 – 250,000

Note:- * The Non-Executive Director of the Company also serves as Executive Director of a subsidiary company.# Three (3) Executive Directors of the Company also serves as director of the listed subsidiary company during the financial year ended 30 June 2012 of which

one of them drew his salary from the listed subsidiary company.



commuNicatioN With sharehoLders/iNvestors

The Board views communication as one of the value in the Group’s culture and communication not only confined with its stakeholder under its day-to-day operations but it is a powerful foundation to have continuous communication with the shareholders for the Company’s success.

The Board took opportunity at every General Meeting to meet and interact with shareholders in person beside the written communication via notice or circular to shareholders. The Board also ensured that sufficient information is disclosed to Shareholders and adhere to the Corporate Disclosure Policies recommended by Bursa Securities.

The Company disseminates information on all its announcements through Bursa Securities’ website (www.bursamalaysia.com). Shareholders and stakeholders could also access through the Company’s website (www.kobaytech.com) globally to obtain information in relates to Group’s strategy, performance and major development besides communicating through e-mail. The Company will review and update related information quarterly for information of the shareholders and public at large.

Shareholders may direct or post to Mr. Tan Yok Cheng, the Senior Independent Non-Executive Director for any queries or concerns regarding the Company at the registered office of the Company at Plot 30, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, 11900 Penang. At all times, shareholders may contact the Company Secretary, Ms. Chan Mun Shee or Ms. Wong Mee Choon via office contact number or email to [email protected] for information.

accouNtaBiLitY aNd audit

financial reporting

The Audit Committee, on behalf of the Board, scrutinises information to be disclosed to shareholders of the Company and public in its quarterly (within 2 months after each quarter end) and annual financial statements (within 4 months after the financial year end) prior to the Board’s approval for announcement via Bursa Securities’ website in compliance with the Listing Requirements.

A Statement of Directors’ Responsibilities is shown on page 22 of this Annual Report.

internal audit

The Board acknowledges internal audit function is an integral part of an effective system of corporate governance and has an in house Internal Audit Department to periodically review on the adequacy, effectiveness and integrity of the Group’s internal control system, management information system, risk management and governance processes. The internal auditor reviews and highlights weaknesses in control procedures and makes recommendations for improvement. One of internal auditor’s functions is also to investigate any complaints on mismanagement of Company’s properties and assets and any instances of fraud or malpractice. The Internal Audit Department reports directly to the Audit Committee, to ensure the independence of the internal audit function.

Summary of the activities of the Internal Audit Department is set out in the Audit Committee Report on pages 23 of this Annual Report.

internal control

The purpose of internal control is to manage and control risk. The Board of Directors is aware and responsible in ensuring that the Company maintains an effective internal control system. The Company maintains written documentation of the Company’s values, expected code of conduct, policies and procedures besides clearly defines authorities and responsibilities for the Board, its Committees, each manager, employee and department.

The management is accountable to the Board in monitoring the Company’s internal control system and provides reasonable assurance regarding the reliability of the financial information used within the business, as well as safeguarding the assets against unauthorised use or disposition and problems are identified on a timely basis with suggested solutions.

The Company has also implemented its customized Enterprise Resource Management System which enables the management to monitor and manage each individual subsidiary company’s key performance indicators to ensure their operations are operating to the management expectation.

The Board or its Committee reviews individual subsidiary’s internal control activities during the monthly and quarterly meetings as an on-going monitoring process.

The Internal Control Statement is set out on page 21 of this Annual Report.



risk management

As regards to risk management, there is a yearly strategic planning programme conducted which analyse the strengths, weaknesses, opportunities and threats faced by the Group. Strategic plans and goals and Key Performance Indicators (“KPI”) are drawn out for each of the business operating units. On a quarterly basis, the strategic plans and goals and KPIs are reviewed and action plans are discussed for implementation.

The strategic planning programme is an on-going process carried out by the Group in identifying, evaluating and managing significant risks faced during the journey of attaining its vision and mission.

reLatioNshiP With auditors

The Company has established transparent and appropriate relationship with both its internal and external auditors. External auditors have been invited to all Audit Committee Meetings held by the Company. Separate dialogue sessions have been held by the Audit Committee without the presence of the Executive Directors with the internal and external auditors at quarterly meeting held on 25 August 2011 and 24 May 2012 during the financial year ended 30 June 2012.

statemeNt of comPLiaNce With the Best Practices of the code

The Company has complied with the Code during the financial year under review except for disclosure of details of the remuneration of each Director. The Board is of the view that disclosure of Directors’ remuneration by applicable bands of RM50,000 under Listing Requirements of Bursa Securities is sufficient to meet the principle of the Code.

The Board has reviewed this Corporate Government Statement and has approved it on 22 November 2012.



As a corporate citizen, the Company acknowledges that success of the Company is measured by our ability to satisfy beside the shareholders, stakeholders such as customers, vendors, employees and community at large via its effort to realize its social responsibility on top of achieving its business excellence in attaining sustainable growth. Hence, the Company commit towards Corporate Social Responsibility of which recorded as below.

employeesThe committed workforce working continuously towards vision of the Company is the Company’s greatest assets. In attaining the vision of the Company, the employees shall implant with not just the value of the Company but shall be equipped with soft and hard skill via continuous training and re-training in order to enrich and sharpen their skills so to compete in the ever challenging world and marching towards the Company’s vision.

In return, the Company does also care and supports its employee in providing them not just rewards on their hard work via various incentive scheme but also encourage employee to mingle around with other subsidiary company’s employees of the Group in order to have not just physical but mental health via company dinner, activities e.g. cycling event to cultivate team spirit.

The Company recognizes employees’ contribution and rewards them accordingly via incentive for performer either in team or individually and service award yearly.

Workplace safetyWorkplace safety is mandatory in Kobay where Kobay has since year 2006 established the Best 5S Company award not just reward those employees whom jointly promotes quality and safe working environment but also enforced it with periodic audits to ensure compliance and sustaining its standard.

suppliersKobay Group recognizes suppliers as our business partners whom we believed that we could work together for a win-win which benefits not only Kobay but also grow hand-in-hand in term of business.

Hence, the Company meets suppliers periodically to understand and rectify any challenges so to achieve manufacturing and business excellence.

customers Kobay always viewed our customers as our long-term business partners. It is only with the customers’ continual support, we will learn, grow and be profitable.

We continuously set and review our Key Performance Indicators right from quotation furnished up to delivery lead time for any job enquiry or order to maintain the quality service and continuous support where the customer grow and we will follow.

community It is the Company’s belief in giving back to the society and help the needful. The Company continuously educates its employees and setting as example in taking up re-cycling event bi-yearly to fund the less fortunate and underprivileged by donating the fund raised.

The Company encourages employees to participate or embark on any donation whether in money or in kind e.g. Lipo Corporation Berhad, a subsidiary of the Company has initiated the food donation to ‘Persatuan Kebajikan Kanak-kanak Cacat Yee Ran Jing Sheh’ on 11 February 2012. In addition, the Company Secretarial Department of the Company has helped Mount Mariam Cancer Hospital Charity Food and Fun Fair 2012 to raise fund via selling tickets.

environmentWe are working responsibly towards minimizing environmental accidents through our own enforcement and implementation, thus building up our business efficiency as well.

The Group has since year 2006 embarked in reducing its documents in prints via setting up of electronic document management system to store the soft copy of reports, policies and manuals where all these documents via internet downloadable at anywhere. The Company has also re-structure its electricity wiring and air condition installation to reduce the electricity consumption.

The Group encourages to re-use and re-cycled packaging for its products so to not just save cost but also environmental friendly.

CORPORATE SOCIAl RESPONSIBIlITY


The Board of Directors (“Board”) acknowledges its responsibilities on the Group’s system of internal control and in reviewing the system adequacy and integrity. The Board is fully aware that the system of internal control cannot totally eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. This Statement is prepared based on Bursa Malaysia Securities Berhad’s guidelines on “Statement on Internal Control – Guidance for Directors of Public Listed Companies”.

For the year under review, the Board confirms that there is an on-going process of identifying, evaluating and managing significant risks faced by the Group and reviewing internal control system to safeguard shareholders’ investment and Group’s assets. Key elements of the Group’s system of internal control are described below: -

1. Formal Group Organisation Structure defines clearly the framework on line of reporting and hierarchy of authority and the Group’s core activities are managed by segregation into different strategic business groups.

2. Group Policies and Procedures Manuals on Financial, Human Resource and Sales and Operations are adopted and lay down the objectives, scopes, policies and operating procedures to be complied by business units.

3. Clearly defined authorisation limits at appropriate management levels are set out in a Financial Authority Matrix for controlling and approving capital and revenue expenditure.

4. Budgetary control system is in place to establish the responsibilities and accountabilities of each business unit in term of resources employed and contributions, control over costs and expenses and for measuring the business unit’s overall financial performance. Executive Committee of the Board (“ExCO”) that consists of Executive Directors approves the budgets.

5. Individual companies with active business operations hold monthly management meeting to review the financial performance, business overview, direction and development with senior management staff at corporate level.

6. Executive Directors hold weekly ExCO meeting to discuss and resolve any major issues arising from business operations

and plan for corrective actions.

7. Internal Audit Department is established to report directly to Audit Committee and is assigned with tasks to assist Audit Committee in discharging its duties and responsibilities.

8. Regular internal audit visits to business units are carried out by Internal Audit Department to ensure compliance of Group Policies and Procedures and to review effectiveness of the existing internal control system.

9. Internal control issues noted are tabled for discussion and resolution in business unit’s monthly management meeting

and presented in operational review meeting at ExCO level. Improvements in existing policies and procedures or implementation of new policies and procedures are carried out when needed to keep in pace with the evolving business environment.

10. Audit Committee and Board of Directors hold quarterly meeting to discuss on internal audit reports, periodic financial statements and issues that warrant the Committee’s and Board’s attentions.

The Board would like to confirm that the Group’s system of internal control is in place and functioning. There was no significant material internal control weakness noted during the financial year under review. The management is continuously taking measures to strengthen and improve the Group’s internal control environment.

This Statement is made in accordance with the resolution of the Board of Directors dated 22 November 2012.

INTERNAl CONTROl STATEMENT


The Board of Directors is required under the Listing Requirements of Bursa Malaysia Securities Berhad to issue a statement explaining their responsibilities for preparing the annual audited financial statements.

The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group at the end of the financial year and of their results and cash flows for the financial year then ended.

In preparing the financial statements for the financial year under review, the Directors have:• selected suitable accounting policies and then apply them consistently;• made judgements and estimates that are reasonable and prudent;• ensured that the applicable accounting standards have been followed; and• prepared the financial statements on a going concern basis.

The Directors have kept proper accounting records which disclose with reasonable accuracy at any time, the financial position of the Company and the Group and taking such steps that are reasonably open to them to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

The Board has reviewed the content/disclosure of this Annual Report inclusive of the Corporate Governance Statement, Internal Control Statement and Audit Committee Report and approved this Annual Report for dissemination to all shareholders.

The Statement is made in accordance with the resolution of Board of Directors dated 22 November 2012.

DIRECTORS’ RESPONSIBIlITIES STATEMENT


comPositioN aNd desigNatioN

members of the audit committee

1. tan Yok cheng DJN, PJK, PJM

Chairman, Senior Independent Non-Executive Director

2. dr. mohamad Zabdi Bin Zamrod Independent Non-Executive Director

3. khaw eng Peng Independent Non-Executive Director secretaries to the audit committee

1. chan mun shee (MAICSA 7003071)2. Wong mee choon (MACS 01562)

terms of refereNce

1. composition

1.1 The committee members shall consist of at least three (3) members appointed by the Board of Directors from amongst the Directors of whom all the members of the Committee are Non-Executive Directors and financial literate with majority are Independent Directors. At least one committee member shall be a member of an accounting association or body or fulfills such other requirements as prescribed and approved by Bursa Malaysia Securities Berhad.

The definition of “Independent Directors” shall have the meaning given in Chapter 1.01 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and the Practice Note 13.

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

1.3 The members of the Audit Committee shall select a Chairman from among their number who shall be an Independent Director.

1.4 The Chairman of the Committee shall engage with senior management such as the Chairman of the Board, Chief Executive Officer, the Head of Internal Audit and the external auditors on a continuous basis, in order to be kept informed of matters affecting the Company.

1.5 In the event of any vacancy in the Audit Committee resulting in the non-compliance of sub-paragraph 1.1 above, the Board of Directors shall fill the vacancy within three (3) months.

1.6 The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board of Directors at least once every three (3) years to determine whether the Audit Committee and its members have carried out their duties in accordance with the Terms of Reference.

2. authority

2.1 The Committee is authorised by the Board:

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

functions or activity and be able to obtain independent professional or other advice; and (e) to be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance

of other Directors and employees of the Company, whenever deemed necessary.

AuDIT COMMITTEE REPORT


AuDIT COMMITTEE REPORT (cont’d)

3. duties and responsibilities

3.1 The duties of the Audit Committee should include the following:

(a) review the following and report the same to the Board of Directors of the Company:(i) with the external auditors, their audit plan, evaluation of the system of internal controls and audit report; (ii) the quarterly results and year end financial statements, prior to the approval by the Board of Directors,

focusing particularly on:(aa) changes in or implementation of major accounting policy changes;(bb) significant adjustments arising from the audit;(cc) the going concern assumption;(dd) significant and unusual events; and(ee) compliance with accounting standards and other legal requirements;

(iii) in relation to internal audit functions, to do the following:(aa) the adequacy of the scope, functions, competency and resources of the internal audit functions and that

it has the necessary authority to carry out its work;(bb) the internal audit programme, process, the results of the internal audit programme, processes or

investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

(cc) review any appraisal or assessment of the performance of members of the internal audit function;(dd) approve any appointment or termination of senior staff members of the internal audit function; and(ee) inform itself of resignations of internal audit staff members and provide the resigning staff member an

opportunity to submit his reasons for resigning;

(b) review any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

(c) discuss with the external auditors before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;

(d) discuss problems and reservations arising from the interim and final audits, and any matter the auditors may wish to discuss (in the absence of management where necessary);

(e) review the external auditors’ management letter and management’s response on findings arising from the interim and final audits;

(f) consider and recommend the appointment of the external auditors, the audit fee and any question of resignation or dismissal;

(g) review major findings of internal investigations and management’s response;

(h) verify the allocation of options pursuant to the Company’s Employees’ Share Option Scheme in compliance with the criteria as stipulated in the by-laws of the scheme at the end of each financial year; and

(i) discuss any other topics or functions as may be agreed to by itself and the Board of Directors.

4. meetings and quorum

4.1 The Audit Committee should meet regularly, at least every quarter with due notice of issues to be discussed and should record its conclusions in discharging its duties and responsibilities. Majority of Committee members present must be Independent Director to form a quorum to the meeting.

4.2 At least twice a year, the Audit Committee shall meet with the external auditors, the internal auditors or both, without the presence of Executive Directors and employees of the Company.

4.3 The Chief Financial Officer, Head of Internal Audit and a representative of the external auditors shall attend the Audit Committee meetings. Other Board members may attend meetings upon invitation of the Audit Committee.

4.4 The Company Secretary shall be the secretary of the Committee.


5. reporting Procedures

5.1 The Chairman of the Audit Committee is continuously engage with senior management and auditors in order to be kept informed of any matters affecting the Company.

5.2 The Secretary of Audit Committee may regulate its procedure, in particular:

(a) the calling of meetings;(b) the notice to be given of such meetings;(c) the voting and proceedings of such meetings;(d) the keeping of minutes; and(e) the custody, production and inspection of such minutes.

meetiNgs

The Audit Committee met four times in the financial year ended 30 June 2012. The meetings were structured through the use of appropriate agenda and reports, which were distributed to members with sufficient notification and minutes recorded on its conclusions in discharging its duties and responsibilities. Details of attendance were as follows:

Name of audit committee members attendanceTan Yok Cheng 4/4Dr. Mohamad Zabdi Bin Zamrod 3/4Khaw Eng Peng 4/4

The Audit Committee held a dialogue session with the external auditors together with the internal auditors on 25 August 2011 and 24 May 2012 and noted no specific issue that required further discussion.

summarY of activities of the audit committee

During the financial year, the Audit Committee has reviewed:

1. the external audit plan with the external auditors.2. the quarterly unaudited results and the audited annual financial statements before submission to Board for their

consideration and approval for the purpose of announcement to Bursa Malaysia Securities Berhad. 3. the audit review memorandum of external auditors and management response. 4. the Internal Control Statement, Audit Committee Report and Recurrent Related Party Transactions for disclosure in the

Annual Report. 5. the semi-annual returns before submission to the Board for approval for the purpose of submission to Bursa Malaysia

Securities Berhad.6. the related party transactions and recurrent related party transactions transacted within the Group.7. the re-appointment of Messrs. Crowe Horwath as external auditors of the Company. 8. the internal audit plan and the internal audit activities.

The details of training attended by members of the Audit Committee are disclosed in page 16 of this Annual Report.

internal audit function

The Company has an Internal Audit Department, which reports directly to the Audit Committee and assists the Committee in discharging its functions and duties. The internal audit function is independent of operational activities and has its own service charter to ensure the internal audit activities are performed with impartiality, proficiency and due professional care. The costs incurred for the internal audit function in respect of the financial year ended 30 June 2012 amounted to RM68,955.

During the financial year, the Internal Audit Department carried out the followings:a) reviewed the internal control system of the Group on its compliance and effectiveness taking into consideration factors

that have arisen from evolving business environment. b) conducted compliance, operational and financial audits covering Group Policies and Procedures and key internal control

areas. c) presented audit findings and discussed corrective actions to be taken in business unit’s management meeting, corporate

level’s operations review meeting and in the quarterly Audit Committee meetings.d) conducted follow-up audits to ensure corrective actions on audit reports were implemented.e) reviewed related party transactions in relation to the Bursa Malaysia Securities Berhad’s Listing Requirements and

reported to Audit Committee.

statement pertaining to the allocation of share options to employees

During the financial year ended 30 June 2012, the Company did not allocate or grant any share options to eligible employees pursuant to the Company’s Employees’ Share Option Scheme. There are no options being offered to and/or exercised by Non-executive Directors pursuant to the Company’s Employees’ Share Option Scheme in respect of the financial year ended 30 June 2012.

AuDIT COMMITTEE REPORT (cont’d)


OTHER INFORMATION

utiLisatioN of Proceeds

No proceeds were raised by the Company from any corporate proposals during the financial year.

share BuY-Backs

The Board has obtained a mandate from the shareholders of the Company through its Annual General Meeting held on 15 December 2011 to purchase and/or hold its own shares up to a maximum of ten per cent (10%) of the issued and paid-up share capital of the Company.

During the financial year under review, the Company did not purchase any of its own shares and none of the 728,200 treasury shares currently held by the Company in accordance with Section 67A of the Companies Act, 1965 were resold or cancelled by the Company.

oPtioNs, WarraNts or coNvertiBLe securities exercise

The Company has not issued any option, warrants or convertible securities during the financial year under review.

americaN dePositorY receiPt (“adr”)/ gLoBaL dePositorY receiPt (“gdr”)

During the financial year, the Company did not sponsor any ADR or GDR programme.

saNctioNs aNd/or PeNaLties

There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies.

NoN-audit fees

There were no non-audit fees paid to the Group’s external auditors for the financial year under review.

variatioN iN resuLts

There is no significant variance between the results for the financial year and the unaudited results previously announced. The Company did not make any release on the profit estimate, forecast or projections for the financial year under review.

Profit guaraNtee

During the financial year under review, there was no profit guarantee given by the Company.

revaLuatioN PoLicY

The Company and its subsidiaries carried its leasehold land and buildings at revalued amounts and placed reliance on the transitional provision when Malaysian Accounting Standards Board first adopted International Accounting Standards 16 which provides exemption from the need to make regular revaluations for such assets. Since financial year ended 30 June 1997, no further revaluation was carried out.

materiaL coNtracts

There was no material contracts entered into by the Company and its subsidiary companies which involving Directors’ and substantial shareholders’ interests during the financial year.

recurreNt reLated PartY traNsactioNs

Shareholders’ mandate was not procured for recurrent related party transactions entered into during financial year ended 30 June 2012. The amounts transacted during the financial year were within the threshold as prescribed by Bursa Malaysia Securities Berhad’s Listing Requirements and no announcement was made.

CONTENTS

Page

Directors’ Report ..…..…………………………………………………………………........ 28 - 32

Statement by Directors .………………………………………………………………........ 33

Statutory Declaration.…..………………………………………………………….….......... 33

Independent Auditors’ Report.……………………………………………………….......... 34 - 35

Consolidated Statement of Financial Position.……………………………………........... 36

Consolidated Statement of Comprehensive Income..…………………………….......... 37

Consolidated Statement of Changes in Equity...…………………………………............ 38 - 41

Consolidated Statement of Cash Flows...……………………...…………………........... 42 - 43

Statement of Financial Position..…………………………………………………….......... 44

Statement of Comprehensive Income..…………………………………………….......... 45

Statement of Changes in Equity..…………………………………………….……............ 46

Statement of Cash Flows.………...………………………………………………….......... 47

Notes to the Financial Statements..…………………………………………………......... 48 - 87

Supplementary Information - Realised and Unrealised Profits or Losses……….......... 88

FINANCIAl REPORT30 JUNE 2012



The directors hereby submit their report and the audited financial statements of the Group and the Company for the financial year ended 30 June 2012.

PriNciPaL activities

The principal activities of the Company are those of investment holding and provision of management services. The principal activities of the subsidiaries are disclosed in Note 7 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and the Company during the financial year.

resuLts

the group the companyrm rm

(Loss)/Profit for the financial year attributable to:-- Owners of the Company (1,291,845) 884,889- Non-controlling interests 2,585,232 0

1,293,387 884,889

divideNds

During the financial year, the Company paid a final tax exempt dividend of 2.0 sen per share amounting to RM1,347,051 in respect of the financial year ended 30 June 2011.

No dividends were proposed, declared or paid by the Company in respect of the financial year ended 30 June 2012.

reserves aNd ProvisioNs

There were no material transfers to or from reserves or provisions during the financial year apart from those disclosed in the financial statements.

issue of shares or deBeNtures

There was no issue of shares or debentures by the Company during the financial year.

Purchase of oWN shares

The shareholders of the Company, by a resolution passed at the Extraordinary General Meeting held on 3 July 2002, approved the Company’s plan to purchase its own shares. The directors are committed to enhancing the value of the Company to its shareholders and believe that the purchase plan can be applied in the best interests of the Company and its shareholders.

There was no purchase of own shares by the Company during the financial year.

The renewal mandate given by the shareholders at the Annual General Meeting held on 15 December 2011 will expire at the forthcoming Annual General Meeting at which a resolution will be tabled for shareholders to grant a fresh mandate for another year.

DIRECTORS’ REPORT


emPLoYees’ share oPtioN scheme

The Employees’ Share Option Scheme (“ESOS”) of the Company is governed by the Bye-Laws approved by the shareholders at an Extraordinary General Meeting held on 27 December 2002.

The principal features of the ESOS are as follows:-

(i) The maximum number of shares in the Company which may be subscribed on the exercise of options granted under the ESOS shall not, in aggregate, exceed 10% of the issued and paid-up share capital of the Company or such maximum percentages as allowable by any other relevant authorities at any point of time during the existence of the ESOS.

(ii) In order to qualify for participation in the ESOS, a participant must be an eligible executive director or employee of the Group. Eligibility, however, does not confer an eligible executive director or employee a claim or right to participate in the ESOS unless an offer has been extended to the eligible executive director or employee.

(iii) The number of new shares that may be offered and allotted to any eligible executive director and employee of the Group, who are entitled to participate in the ESOS, shall be at the discretion of the committee appointed by the Board of Directors (“Option Committee”) after taking into consideration the performance, seniority and length of service of the eligible executive directors and employees in the Group and such other factors that the Option Committee may deem relevant subject to the following:-

(a) not more than 50% (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS shall be allocated, in aggregate, to directors and senior management of the Group; and

(b) not more than 10% (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS shall be allocated to any individual director or employee who, either singly or collectively through his/her associates (as defined in the Companies Act 1965), holds 20% or more in the issued and paid-up share capital of the Company;

provided always that it is in accordance with any prevailing guidelines issued by the Securities Commission (“SC”) or any other relevant authorities as amended from time to time.

(iv) The ESOS shall continue to be in force for a period of 10 years and expiring on 17 February 2013.

(v) The price payable upon exercise of each of the option shares granted under the ESOS shall be set based on the 5-days weighted average market price of the Company’s shares, as quoted on Bursa Malaysia Securities Berhad, immediately preceding the date the option is granted, with a discount of not more than 10%, if deemed appropriate, or such lower or higher limit in accordance with any prevailing guidelines issued by the SC or any other relevant authorities as amended from time to time, or at the par value of each of the shares in the Company, whichever is higher.

(vi) The new shares to be allotted and issued upon exercise of any option shall upon allotment rank pari passu in all respects with the existing issued and paid-up shares in the Company except that the new shares so allotted shall not be entitled to any dividend, rights, allotment or other distribution unless the shares so allotted have been credited into the relevant securities accounts maintained by Bursa Malaysia Depository Sdn. Bhd. before the entitlement date and will be subject to all the provisions of the Articles of Association of the Company relating to the transfer, transmission or otherwise of the shares in the Company.

The movements in the number of options during the financial year are as follows:-

exercise Number of options over ordinary shares of rm1.00 each

Price at at exercisable from rm 1.7.2011 granted exercised Lapsed 30.6.2012

18 February 2003 1.20 2,369,000 0 0 (160,000) 2,209,000

DIRECTORS’ REPORT (cont’d)


Bad aNd douBtfuL deBts

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

At the date of this report, the directors are not aware of any circumstances which would render the amount written off for bad debts or the amount of the allowance made for doubtful debts inadequate to any substantial extent.

curreNt assets

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

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

vaLuatioN methods

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

coNtiNgeNt aNd other LiaBiLities

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

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

(ii) any contingent liability in respect of the Group or the Company that has arisen since the end of the financial year.

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

chaNge of circumstaNces

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

items of aN uNusuaL Nature

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

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



directors of the comPaNY

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

Dato’ Koay Hean EngKoay Cheng LyeKoay Ah Bah @ Koay Cheng HockTan Yok Cheng, D.J.N., P.J.K., P.J.M.Lim Swee ChuanDr. Mohamad Zabdi Bin ZamrodKhaw Eng Peng

Particulars of the interests in shares in the Company and its related corporations of the directors in office at the end of the financial year, as shown in the Register of Directors’ Shareholdings, are as follows:-

Number of ordinary shares of rm1.00 eachdirect interest deemed interest

Name of directorat

1.7.2011 Bought soldat

30.6.2012at

1.7.2011at

30.6.2012

Shares in the Company(Kobay Technology Bhd.)

Dato’ Koay Hean Eng 1,654,154 0 0 1,654,154 17,523,007 17,523,007Koay Cheng Lye 586,995 0 0 586,995 17,523,007 17,523,007Koay Ah Bah @ Koay Cheng Hock 569,665 0 0 569,665 17,523,007 17,523,007Tan Yok Cheng, D.J.N., P.J.K., P.J.M. 1,250 0 0 1,250 0 0

Number of options over ordinary shares of rm1.00 eachat at

Name of director 1.7.2011 granted exercised 30.6.2012

Options in the Company(Kobay Technology Bhd.)

Dato’ Koay Hean Eng 600,000 0 0 600,000Lim Swee Chuan 250,000 0 0 250,000

Options in a Subsidiary(Lipo Corporation Berhad)

Koay Cheng Lye 500,000 0 0 500,000

By virtue of their interests in shares in the Company, Dato’ Koay Hean Eng, Koay Cheng Lye and Koay Ah Bah @ Koay Cheng Hock are also deemed to have interests in shares in the subsidiaries to the extent of the Company’s interests, pursuant to Section 6A of the Companies Act 1965.

Save as disclosed above, none of the other directors in office at the end of the financial year held any interests in shares in the Company or its related corporations during the financial year.



directors’ BeNefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than the directors’ remuneration received or receivable from the Company and related corporations) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to have arisen by virtue of those related party transactions as disclosed in Note 26 to the financial statements.

Neither during nor at the end of the financial year, was the Company a party to any arrangement, apart from the ESOSs of the Company and a subsidiary, whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

auditors

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

signed in accordance With a resolution of the directorsdated 18 october 2012

dato’ koay hean eng

Lim swee chuan



We, Dato’ Koay Hean Eng and Lim Swee Chuan, being two of the directors of Kobay Technology Bhd., do hereby state that in the opinion of the directors, the financial statements set out on pages 36 to 87 have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and the Company as at 30 June 2012 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the directors, the supplementary information set out on page 88 is prepared, in all material respects, in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

signed in accordance With a resolution of the directorsdated 18 october 2012

dato’ koay hean eng

Lim swee chuan

STATuTORY DEClARATION

I, Lim Swee Chuan, being the director primarily responsible for the financial management of Kobay Technology Bhd., do solemnly and sincerely declare that the financial statements set out on pages 36 to 87 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by Lim Swee Chuanat Georgetown in the State of Penangon this 18 October 2012

Lim swee chuan

Before meNachatar singh a/L Bhag singh, PJk(No. P 126)Commissioner for Oaths

STATEMENT BY DIRECTORS


rePort oN the fiNaNciaL statemeNts

We have audited the financial statements of Kobay Technology Bhd., which comprise the statements of financial position as at 30 June 2012 of the Group and the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 36 to 87.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and the Company as at 30 June 2012 and of their financial performance and cash flows for the financial year then ended.

INDEPENDENT AuDITORS’ REPORTTo The Members Of KOBAY TECHNOLOGY BHD.


INDEPENDENT AuDITORS’ REPORTTo The Members Of KOBAY TECHNOLOGY BHD. (cont’d)

rePort oN other LegaL aNd reguLatorY requiremeNts

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

(i) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(ii) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 7 to the financial statements. We have also considered the unaudited financial statements of Suzhou Univex Metal Tech Co., Ltd.

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

(iv) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

The supplementary information set out on page 88 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“the MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

other matters

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

crowe horwath eddy chan Wai hunFirm No: AF 1018 Approval No: 2182/10/13 (J)Chartered Accountants Chartered Accountant

Date: 18 October 2012

Penang


2012 2011Note rm RM

NoN-curreNt assetsProperty, plant and equipment 4 58,432,492 58,588,158 Land held for property development 5 13,241,377 7,114,053 Intangible assets 6 219,317 219,317 Investment in associate 8 0 2 Available-for-sale financial assets 9 2,327,545 1,861,933

74,220,731 67,783,463

curreNt assetsInventories 10 10,437,359 10,891,988 Receivables 11 23,588,263 26,648,326 Financial assets at fair value through profit or loss 12 2,320 2,220 Prepayments 1,752,829 1,562,867 Current tax assets 1,577,458 1,411,801 Cash and cash equivalents 13 58,646,674 61,596,269

96,004,903 102,113,471

curreNt LiaBiLities Payables 14 15,363,013 14,612,301 Loans and borrowings 15 99,563 156,806 Advance payments from customers 1,086,243 356,169 Current tax liabilities 98,662 698,840

16,647,481 15,824,116 Net curreNt assets 79,357,422 86,289,355

NoN-curreNt LiaBiLitiesLoans and borrowings 15 113,804 0 Deferred tax liabilities 16 3,626,712 3,437,255 Deferred income on government grants 17 82,175 123,263

3,822,691 3,560,518

Net assets 149,755,462 150,512,300

equitYShare capital 18 68,080,750 68,080,750 Treasury shares 18 (888,447) (888,447)Share premium 1,680,086 1,680,086 Fair value reserve 82,024 73,409 Legal reserve 19 108,305 0 Currency translation reserve 222,429 55,693 Retained profits 39,919,758 42,780,074 Equity attributable to owners of the Company 109,204,905 111,781,565 Non-controlling interests 40,550,557 38,730,735 totaL equitY 149,755,462 150,512,300

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

CONSOlIDATED STATEMENT OF FINANCIAl POSITIONAs At 30 June 2012


2012 2011Note rm RM

Revenue 20 98,263,379 111,216,432

Cost of sales (78,300,603) (83,816,430)

Gross profit 19,962,776 27,400,002

Other income 4,681,322 8,898,186

Administrative and general expenses (17,588,649) (20,556,700)

Selling and distribution expenses (3,117,425) (2,857,696)

Finance costs (15,426) 0

Profit before tax 21 3,922,598 12,883,792

Tax expense 23 (2,629,211) (3,101,438)

Profit for the financial year 1,293,387 9,782,354

Other comprehensive income:-

Gain on available-for-sale financial assets 14,387 145,246

Currency translation differences for foreign operations 284,435 (353,464)

Reclassification adjustments on:-- Derecognition of available-for-sale financial assets (40,673) (99,359)- Impairment of available-for-sale financial assets 34,901 0

Other comprehensive income for the financial year 293,050 (307,577)

Total comprehensive income for the financial year 1,586,437 9,474,777

(Loss)/Profit for the financial year attributable to:-- Owners of the Company (1,291,845) 6,552,955 - Non-controlling interests 2,585,232 3,229,399

1,293,387 9,782,354

Total comprehensive income for the financial year attributable to:-- Owners of the Company (1,116,494) 6,387,440 - Non-controlling interests 2,702,931 3,087,337

1,586,437 9,474,777

(Loss)/Earnings per share:- 24- Basic (sen) (1.92) 9.73 - Diluted (sen) (1.92) 9.73


CONSOlIDATED STATEMENT OF COMPREHENSIVE INCOMEFor The Financial Year Ended 30 June 2012

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at

30 J

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68,0

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(888

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82,0

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108,

305

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.


CONSOlIDATED STATEMENT OF CASH FlOWSFor The Financial Year Ended 30 June 2012

2012 2011Note rm RM

cash fLoWs from oPeratiNg activitiesProfit before tax 3,922,598 12,883,792Adjustments for:-Amortisation of deferred income on government grants (41,088) (41,088)Bargain purchase gain 0 (14,222)Depreciation of property, plant and equipment 5,336,097 5,781,363 Dividend income (7,458) (27,901)Gain on derecognition of available-for-sale financial assets (40,673) (99,359)Gain on disposal of property, plant and equipment (1,807) (1,693,058)Gain on disposal of subsidiaries 0 (3,612,253)Impairment loss on available-for-sale financial assets 34,901 0 Impairment loss on loans and receivables 425,629 2,423,599 Impairment loss on property, plant and equipment 672,507 189,198 Interest expense 15,426 0 Interest income (1,643,805) (1,351,980)Inventories written down 2,958,051 2,955,121 Property, plant and equipment written off 348,328 220,981 Reversal of impairment loss on loans and receivables (1,041,405) (35,538)Unrealised gain on financial instruments at fair value through profit or loss (2,320) (2,220)Unrealised gain on foreign exchange (206,674) (32,442)Operating profit before working capital changes 10,728,307 17,543,993 Changes in:-Inventories (2,503,422) (2,594,885)Receivables and prepayments 3,673,770 (3,852,152)Payables and advance payments 1,463,608 358,496 Financial instruments at fair value through profit or loss 2,220 0 Cash generated from operations 13,364,483 11,455,452 Tax paid (3,298,410) (4,276,333)Tax refunded 90,806 112,167 Net cash from operating activities 10,156,879 7,291,286



CONSOlIDATED STATEMENT OF CASH FlOWSFor The Financial Year Ended 30 June 2012 (cont’d)

2012 2011Note rm RM

cash fLoWs from iNvestiNg activitiesAcquisition of associate 0 (2)Acquisition of subsidiaries, net of cash acquired 0 (79,294)Disposal of subsidiaries, net of cash disposed of 0 8,937,450Dividends received 6,996 27,901 Interest received 1,652,925 1,321,788 Proceeds from disposal of associate 2 0 Proceeds from disposal of available-for-sale financial assets 1,020,363 2,612,350 Proceeds from disposal of property, plant and equipment 218,224 4,879,835 Purchase of available-for-sale financial assets (1,471,588) (1,689,154)Purchase of land held for property development (6,127,324) (7,507)Purchase of property, plant and equipment 25 (5,923,956) (12,796,660)Net cash (used in)/from investing activities (10,624,358) 3,206,707

cash fLoWs from fiNaNciNg activitiesAcquisition of shares from non-controlling interests (234,602) (337,362)Capital repayment to non-controlling interests 0 (125,280)(Decrease)/Increase in short-term loans and borrowings (156,806) 156,806 Dividend paid to owners of the Company (1,347,051) (1,010,288)Dividends paid to non-controlling interests (761,622) (297,120)Interest paid (15,426) 0 Issue of shares to non-controlling interests 0 3,665,000 (Placement)/Withdrawal of term deposits pledged as security (5,197) 11,411 Repayment of hire purchase obligations (86,633) 0 Net cash (used in)/from financing activities (2,607,337) 2,063,167

Currency translation differences 120,024 (62,084)

Net (decrease)/increase in cash and cash equivalents (2,954,792) 12,499,076

Cash and cash equivalents brought forward 61,214,745 48,715,669

Cash and cash equivalents carried forward 13 58,259,953 61,214,745



2012 2011Note rm RM

NoN-curreNt assets Property, plant and equipment 4 302,445 385,377 Investments in subsidiaries 7 41,883,183 40,732,454 Investment in associate 8 0 2 Available-for-sale financial assets 9 1,915,349 1,861,621

44,100,977 42,979,454

curreNt assetsReceivables 11 15,319,642 13,988,269 Prepayments 236,685 0 Current tax assets 911,936 860,809 Cash and cash equivalents 13 23,589,844 27,535,684

40,058,107 42,384,762

curreNt LiaBiLities Payables 14 1,394,897 2,150,373

1,394,897 2,150,373 Net curreNt assets 38,663,210 40,234,389

Net assets 82,764,187 83,213,843

equitYShare capital 18 68,080,750 68,080,750 Treasury shares 18 (888,447) (888,447)Share premium 1,680,086 1,680,086 Fair value reserve 85,928 73,422 Retained profits 13,805,870 14,268,032 totaL equitY 82,764,187 83,213,843


STATEMENT OF FINANCIAl POSITIONAs at 30 June 2012


2012 2011Note rm RM

Revenue 20 4,541,058 9,040,625

Other income 1,388,545 3,447,249

Administrative and general expenses (4,311,841) (3,469,787)

Profit before tax 21 1,617,762 9,018,087

Tax expense 23 (732,873) (1,988,966)

Profit for the financial year 884,889 7,029,121

Other comprehensive income:-

Gain on available-for-sale financial assets 12,506 68,014

Reclassification adjustment on derecognition of available-for-sale financial assets 0 (27,175)

Other comprehensive income for the financial year 12,506 40,839

Total comprehensive income for the financial year 897,395 7,069,960


STATEMENT OF COMPREHENSIVE INCOMEFor The Financial Year Ended 30 June 2012


STATEMENT OF CHANgES IN EQuITYFor The Financial Year Ended 30 June 2012

Non-distributable distributableshare

capitaltreasury

sharesshare

premiumfair value

reserveretained

profitstotal

equityrm rm rm rm rm rm

Balance at 1 July 2010 68,080,750 (888,447) 1,680,086 32,583 8,249,199 77,154,171

Gain on available-for-sale financial assets 0 0 0 68,014 0 68,014

Reclassification adjustment on derecognition of available-for-sale financial assets 0 0 0 (27,175) 0 (27,175)

Other comprehensive income for the financial year 0 0 0 40,839 0 40,839

Profit for the financial year 0 0 0 0 7,029,121 7,029,121 Total comprehensive

income for the financial year 0 0 0 40,839 7,029,121 7,069,960

Final tax exempt dividend of 1.5 sen per share (representing total transactions with owners) 0 0 0 0 (1,010,288) (1,010,288)

Balance at 30 June 2011 68,080,750 (888,447) 1,680,086 73,422 14,268,032 83,213,843

Gain on available-for-sale financial assets (representing other comprehensive income for the financial year) 0 0 0 12,506 0 12,506

Profit for the financial year 0 0 0 0 884,889 884,889 Total comprehensive

income for the financial year 0 0 0 12,506 884,889 897,395

Final tax exempt dividend of 2.0 sen per share (representing total transactions with owners) 0 0 0 0 (1,347,051) (1,347,051)

Balance at 30 June 2012 68,080,750 (888,447) 1,680,086 85,928 13,805,870 82,764,187



STATEMENT OF CASH FlOWSFor The Financial Year Ended 30 June 2012

2012 2011Note rm RM

cash fLoWs from oPeratiNg activitiesProfit before tax 1,617,762 9,018,087 Adjustments for:-Depreciation of property, plant and equipment 94,281 76,263 Gain on derecognition of available-for-sale financial assets 0 (27,175)Gain on disposal of subsidiaries 0 (2,379,640)Gain on winding up of subsidiary (176,529) (2,750)Gross dividend income (4,139,058) (8,612,000)Impairment loss on investments in subsidiaries 478,802 241,800 Impairment loss on loans and receivables 1,538,251 818,446 Interest income (1,211,374) (1,028,884)Property, plant and equipment written off 5,179 209 Reversal of impairment loss on investment in subsidiary (2) 0 Operating loss before working capital changes (1,792,688) (1,895,644)Changes in:-Receivables and prepayments (230,441) (87,058)Payables (483,476) 72,910 Cash absorbed by operations (2,506,605) (1,909,792)Tax paid 0 (174,000)Net cash used in operating activities (2,506,605) (2,083,792)

cash fLoWs from iNvestiNg activitiesAcquisition of associate 0 (2)Acquisition of shares from non-controlling interests (225,002) (337,362)Capital repayment from subsidiaries 0 699,920 Dividends received 3,355,058 6,599,000 Increase in amounts owing by subsidiaries (2,887,368) (4,902,627)Interest received 1,222,874 1,006,786 Proceeds from disposal of associate 2 0 Proceeds from disposal of available-for-sale financial assets 0 780,375 Proceeds from disposal of property, plant and equipment 4,166 0 Proceeds from disposal of subsidiaries 0 8,788,831 Purchase of available-for-sale financial assets (41,222) (288,199)Purchase of property, plant and equipment 25 (20,694) (10,098)Subscription for shares in subsidiaries (1,499,998) (2,255,000)Net cash (used in)/from investing activities (92,184) 10,081,624

cash fLoWs from fiNaNciNg activitYDividend paid (1,347,051) (1,010,288)Net cash used in financing activity (1,347,051) (1,010,288)

Net (decrease)/increase in cash and cash equivalents (3,945,840) 6,987,544

Cash and cash equivalents brought forward 27,527,684 20,540,140

Cash and cash equivalents carried forward 13 23,581,844 27,527,684



NOTES TO THE FINANCIAl STATEMENTSFor The Financial Year Ended 30 June 2012

1. geNeraL iNformatioN

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

The principal activities of the Company are those of investment holding and provision of management services. The principal activities of the subsidiaries are disclosed in Note 7.

The registered office and principal place of business of the Company are located at Plot 30, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Phase 4, 11900 Penang.

The consolidated financial statements set out on pages 36 to 43 together with the notes thereto cover the Company and its subsidiaries (“the Group”). The separate financial statements of the Company set out on pages 44 to 47 together with the notes thereto cover the Company solely.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 18 October 2012.

2. sigNificaNt accouNtiNg PoLicies

2.1 Basis of Preparation of financial statements

The financial statements of the Group and the Company are prepared under the historical cost convention, modified to include other bases of measurement as disclosed in other sections of the significant accounting policies, and in accordance with Financial Reporting Standards (“FRSs”) and the Companies Act 1965 in Malaysia.

The financial statements are presented in Ringgit Malaysia (“RM”).

The following amended/revised/new FRSs became effective for the financial year under review:-

frs

effective for annual periods beginning

on or after

Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters 1 January 2011

Amendments to FRS 1 Additional Exemptions for First-time Adopters 1 January 2011Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions 1 January 2011Amendments to FRS 7 Improving Disclosures about Financial Instruments 1 January 2011Amendments to IC Interpretation 14 Prepayments of a Minimum Funding Requirement 1 July 2011Amendments to FRSs contained in the document entitled “Improvements to FRSs (2010)” 1 January 2011IC Interpretation 4 Determining whether an Arrangement contains a Lease 1 January 2011IC Interpretation 18 Transfers of Assets from Customers 1 January 2011IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments 1 July 2011

The adoption of the above amended/revised/new FRSs did not result in any significant changes in the accounting policies of the Group and the Company.


2. sigNificaNt accouNtiNg PoLicies (cont’d)

2.2 future accounting standards

financial reporting standards

For the existing FRS framework, the Malaysian Accounting Standards Board (“MASB”) has issued the following amended/revised/new FRSs which are not yet effective:-

frs (issued as at the end of the reporting period)

effective for annual periods beginning

on or after

Amendments to FRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 January 2012

Amendments to FRS 1 Government Loans 1 January 2013Amendments to FRS 7 Disclosures - Transfers of Financial Assets 1 January 2012Amendments to FRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities 1 January 2013Amendments to FRS 101 Presentation of Items of Other Comprehensive Income 1 July 2012Amendments to FRS 112 Deferred Tax: Recovery of Underlying Assets 1 January 2012Amendments to FRS 132 Offsetting Financial Assets and Financial Liabilities 1 January 2014FRS 9 Financial Instruments 1 January 2015FRS 10 Consolidated Financial Statements 1 January 2013FRS 11 Joint Arrangements 1 January 2013FRS 12 Disclosure of Interests in Other Entities 1 January 2013FRS 13 Fair Value Measurement 1 January 2013FRS 119 Employee Benefits (amended in 2011) 1 January 2013FRS 124 Related Party Disclosures (revised in 2010) 1 January 2012FRS 127 Separate Financial Statements (amended in 2011) 1 January 2013FRS 128 Investments in Associates and Joint Ventures (amended in 2011) 1 January 2013IC Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013

Management foresees that the initial application of the above amended/revised/new FRSs will not have any significant impacts on the financial statements except as follows:-

FRS 9 Financial Instruments

FRS 9 replaces the guidance in FRS 139 Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets by dividing them into 3 classifications: (1) those measured at amortised cost; (2) those measured at fair value through profit or loss; and (3) those measured at fair value through other comprehensive income. Management foresees that the adoption of these new classifications will not result in any significant changes to the existing measurement bases of financial assets of the Group and the Company.

FRS 10 Consolidated Financial Statements

FRS 10 replaces the consolidation guidance in FRS 127 Consolidated and Separate Financial Statements and IC Interpretation 112 Consolidation - Special Purpose Entities by introducing a single consolidation model for all entities based on control. Under FRS 10, control is based on whether an investor has (1) power over the investee; (2) exposure, or rights, to variable returns from its involvement with the investee; and (3) the ability to use its power over the investee to affect the amount of the returns. Management foresees that the adoption of these new control criteria will not result in any significant changes to the existing composition of the Group.





2.2 future accounting standards (cont’d)

malaysian financial reporting standards

In November 2011, the MASB issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRS”) framework. The issuance was made in conjunction with the MASB’s plan to converge with International Financial Reporting Standards (“IFRS”) in 2012. The MFRS framework is a fully IFRS-compliant framework and equivalent to IFRSs. It comprises standards as issued by the International Accounting Standards Board (“IASB”) that are effective on 1 January 2012 and also amended/revised/new standards recently issued by the IASB that will be effective after 1 January 2012. The MFRS framework is to be applied by all entities other than private entities for annual periods beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and/or IC Interpretation 15 Agreements for Construction of Real Estate, including their parents, significant investors and venturers (“Transitioning Entities”). Transitioning Entities will be allowed to defer adoption of the MFRS framework to annual periods beginning on or after 1 January 2014.

Being a Transitioning Entity as defined above, the Group and the Company have elected to continue preparing their financial statements in accordance with the existing FRS framework for the financial years ending 30 June 2013 and 2014 and will first adopt the MFRS framework for the financial year ending 30 June 2015. Management is currently examining the financial impacts of transition to the MFRS framework.

2.3 Basis of consolidation

A subsidiary is an entity that is controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries made up to the end of the reporting period using the acquisition method. Under the acquisition method, the consideration transferred, the identifiable assets acquired and the liabilities assumed are measured at their acquisition-date fair values. The components of non-controlling interests that are present ownership interests are measured at the present ownership instruments’ proportionate share in the recognised amounts of the identifiable net assets acquired. All other components of non-controlling interests are measured at their acquisition-date fair values. In a business combination achieved in stages, the previously held equity interest in the acquiree is remeasured at its acquisition-date fair value and any resulting gain or loss is recognised in profit or loss. All acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss as incurred.

Goodwill at the acquisition date is measured as the excess of (a) over (b) below:-

(a) the aggregate of:-(i) the acquisition-date fair value of the consideration transferred;(ii) the amount of any non-controlling interests; and(iii) in a business combination achieved in stages, the acquisition-date fair value of the previously held equity

interest in the acquiree.

(b) the net of the acquisition-date fair values of the identifiable assets acquired and the liabilities assumed.

Goodwill is recognised as an asset at the aforementioned amount less accumulated impairment losses, if any. The impairment policy is disclosed in Note 2.9. When the above (b) exceeds (a), the excess represents a bargain purchase gain and, after reassessment, is recognised in profit or loss.

A subsidiary is consolidated from the acquisition date, being the date on which control is obtained, and continues to be consolidated until the date when control is lost. Intragroup balances, transactions, income and expenses are eliminated in full on consolidation. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Upon loss of control of a subsidiary, the assets (including any goodwill) and liabilities of, and any non-controlling interests in the subsidiary are derecognised. All amounts recognised in other comprehensive income in relation to the subsidiary are accounted for on the same basis as would be required if the related assets or liabilities had been directly disposed of. Any consideration received and any investment retained in the former subsidiary are recognised at their fair values. The resulting difference is then recognised as a gain or loss in profit or loss.



2.4 Property, Plant and equipment

Property, plant and equipment are stated at cost or at valuation less accumulated depreciation and accumulated impairment losses, if any. The impairment policy is disclosed in Note 2.9.

The last revaluation of certain land and buildings was made in 1997 and has not been updated. The Group has followed the transitional provisions of IAS 16 (Revised) Property, Plant and Equipment issued by the Malaysian Accounting Standards Board to retain the carrying amounts of the assets on the basis of their previous revaluation subject to continuity in their depreciation and impairment policies.

A revaluation increase is recognised in other comprehensive income and accumulated in equity as revaluation surplus or recognised in profit or loss to the extent that the increase reverses a revaluation decrease of the same asset previously recognised in profit or loss. A revaluation decrease is recognised in profit or loss or recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of the same asset.

Freehold land and capital work-in-progress are not depreciated. Leasehold land is depreciated on a straight-line basis over the lease terms of 43 to 80 years. Other property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets using the following annual rates

Buildings 2%Building improvement and renovation 2-33%Factory machinery, moulds and equipment 9-20%Furniture, fittings, office equipment and computer software 9-33%Tools and accessories 10%Motor vehicles 10-20%

The residual value, useful life and depreciation method of an asset are reviewed at least at the end of each reporting period and any changes in expectations from previous estimates are accounted for prospectively as changes in accounting estimates.

2.5 Land held for Property development

Land held for property development is stated at cost less accumulated impairment losses, if any. The impairment policy is disclosed in Note 2.9.

2.6 intellectual Property

Intellectual property with an indefinite useful life is stated at cost less accumulated impairment losses, if any. The impairment policy is disclosed in Note 2.9.

2.7 investments in subsidiaries

As required by the Companies Act 1965, the Company prepares separate financial statements in addition to the consolidated financial statements. In the separate financial statements of the Company, investments in subsidiaries are stated at cost less impairment losses, if any. The impairment policy is disclosed in Note 2.9.

2.8 investments in associates

An associate is an entity, other than a subsidiary or a joint venture, over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the entity but is not control or joint control over those policies.

In the consolidated financial statements, investments in associates are accounted for using the equity method. Under the equity method, the investment in associate is initially recognised at cost and the carrying amount is subsequently adjusted to recognise the Group’s share of the post-acquisition profit or loss and other comprehensive income of the associate. After application of the equity method, the carrying amount of the investment is subject to further impairment assessment. The impairment policy is disclosed in Note 2.9.

In the separate financial statements of the Company, investments in associates are stated at cost less impairment losses, if any. The impairment policy is disclosed in Note 2.9.




2.9 impairment of Non-financial assets

At the end of each reporting period, the Group and the Company assess whether there is any indication that a non-financial asset, other than inventories, may be impaired. If any such indication exists, the recoverable amount of the asset, being the higher of its fair value less costs to sell and its value in use, is estimated. Irrespective of whether there is any indication of impairment, goodwill and other intangible assets with indefinite useful lives are tested for impairment annually. Any excess of the carrying amount of the asset over its recoverable amount represents an impairment loss and is recognised in profit or loss or, in respect of a revalued asset, treated as a revaluation decrease.

An impairment loss on an asset, other than goodwill, is reversed if there has been a change in the estimates used to determine the recoverable amount and it is reversed only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss been recognised. The reversal is recognised in profit or loss or, in respect of a revalued asset, treated as a revaluation increase. An impairment loss on goodwill is not reversed.

2.10 inventories

Inventories of materials and goods are valued at the lower of cost (determined principally on the first-in, first-out basis) and net realisable value. Cost consists of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and costs necessary to make the sale.

2.11 financial assets

Financial assets of the Group and the Company consist of quoted investments, receivables, derivatives and cash and cash equivalents.

recognition and measurement

A financial asset is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the financial instrument. A regular way purchase or sale of financial assets is recognised or derecognised using settlement date accounting. A financial asset is initially recognised at fair value plus, in the case of a financial asset not at fair value through profit or loss, directly attributable transaction costs. The subsequent measurement of a financial asset depends on its classification as follows:-

(i) financial assets at fair value through profit or loss

All derivatives, except for those designated as hedges, are classified as held for trading under this category. After initial recognition, such financial assets are measured at fair value. Any gain or loss arising from a change in the fair value is recognised in profit or loss.

(ii) held-to-maturity investments

The Group and the Company do not have any financial assets classified under this category.

(iii) Loans and receivables

All receivables and cash and cash equivalents are classified under this category. After initial recognition, such financial assets are measured at amortised cost using the effective interest method. Any gain or loss is recognised in profit or loss when the financial asset is derecognised or impaired as well as through the amortisation process.

(iv) available-for-sale financial assets

All quoted investments (other than interests in subsidiaries) are classified under this category. After initial recognition, such financial assets are measured at fair value. Any gain or loss arising from a change in the fair value, except for impairment loss, is recognised in other comprehensive income and accumulated in equity as fair value reserve until the financial asset is derecognised, at which time the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

A financial asset is derecognised when, and only when, the contractual rights to the cash flows from the financial asset have expired or all the risks and rewards of ownership have been substantially transferred.




2.11 financial assets (cont’d)

impairment

At the end of each reporting period, the Group and the Company assess whether there is any objective evidence that a financial asset or group of financial assets is impaired. If any such evidence exists, the impairment loss is measured as follows:-

(i) financial assets carried at amortised cost

An impairment loss on loans and receivables is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted using the asset’s original effective interest rate. The asset’s carrying amount is reduced through the use of an allowance account and the impairment loss is recognised in profit or loss. The gross carrying amount and the associated allowance are written off when there is no realistic prospect of future recovery.

If, in a subsequent period, the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the increased carrying amount does not exceed what the amortised cost would have been had no impairment loss been recognised at the reversal date. The reversal is recognised in profit or loss.

(ii) available-for-sale financial assets

When there is a significant or prolonged decline in the fair value of an investment classified as available-for-sale, the cumulative loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment even though the financial asset has not been derecognised. Such cumulative loss reclassified from equity to profit or loss represents an impairment loss and is measured as the difference between the acquisition cost and current fair value, less any impairment loss previously recognised in profit or loss. The impairment loss is not reversed through profit or loss in any subsequent period.

determination of fair values

The carrying amounts of receivables and cash and cash equivalents which are short-term in nature or repayable on demand are assumed to be reasonable approximations of fair values.

Fair value measurements recognised in the statement of financial position are categorised into the following levels of fair value hierarchy:-

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of quoted investments are determined by reference to their quoted closing bid prices at the end of the reporting period (i.e. Level 1).

The fair values of forward exchange contracts are quoted by the financial institutions. If such quotation is not available, the fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (i.e. Level 2).




2.12 financial Liabilities

Financial liabilities of the Group and the Company consist of payables, loans and borrowings and derivatives (including financial guarantee contracts).

recognition and measurement

A financial liability is recognised in the statement of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is initially recognised at fair value less, in the case of a financial liability not at fair value through profit or loss, directly attributable transaction costs. After initial recognition, all financial liabilities, except for financial liabilities at fair value through profit or loss and financial guarantee contracts, are measured at amortised cost using the effective interest method. Any gain or loss is recognised in profit or loss when the financial liability is derecognised as well as through the amortisation process.

(i) financial liabilities at fair value through profit or loss

All derivatives, except for financial guarantee contracts or those designated as hedges, are classified as held for trading under this category. After initial recognition, such financial liabilities are measured at fair value. Any gain or loss arising from a change in the fair value is recognised in profit or loss.

(ii) financial guarantee contracts

After initial recognition at fair value, if any, financial guarantee contracts are measured at the higher of the amount initially recognised less appropriate amortisation and the estimate of any probable obligation.

A financial liability is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires.

determination of fair values

The carrying amounts of payables and loans and borrowings which are short-term in nature or repayable on demand are assumed to be reasonable approximations of fair values.

The fair values of long-term loans and borrowings are estimated by discounting the expected future cash flows using the current market interest rates for similar liabilities.

Fair value measurements recognised in the statement of financial position are categorised into the following levels of fair value hierarchy:-

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of forward exchange contracts are quoted by the financial institutions. If such quotation is not available, the fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate (i.e. Level 2).

The fair values of financial guarantee contracts are estimated based on probability-adjusted discounted cash flow analysis after considering the probability of default by the debtors (i.e. Level 3).




2.13 Leases

finance Lease

A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee.

A finance lease, including hire purchase, is initially recognised as an asset and liability at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The minimum lease payments are subsequently apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the remaining balance of the liability. The depreciation policy for depreciable leased assets is consistent with that for equivalent owned assets.

operating Lease

An operating lease is a lease other than a finance lease.

Lease payments under an operating lease are recognised in profit or loss on a straight-line basis over the lease term.

2.14 foreign currency transactions and translation

The consolidated financial statements and separate financial statements of the Company are presented in Ringgit Malaysia, which is also the Company’s functional currency, being the currency of the primary economic environment in which the entity operates. Items included in the financial statements of each individual entity within the Group are measured using the individual entity’s own functional currency.

A foreign currency transaction is recorded in the functional currency using the exchange rate at transaction date. At the end of the reporting period, foreign currency monetary items are translated into the functional currency using the closing rate. Foreign currency non-monetary items measured at cost are translated using the exchange rate at transaction date whereas those measured at fair value are translated using the exchange rate at valuation date. Exchange differences arising from the settlement or translation of monetary items are recognised in profit or loss. Any exchange component of the gain or loss on a non-monetary item is recognised on the same basis as that of the gain or loss, i.e. in profit or loss or in other comprehensive income.

In translating the financial position and results of a foreign operation whose functional currency is not the required presentation currency, i.e. Ringgit Malaysia, assets and liabilities are translated into the presentation currency using the closing rate whereas income and expenses are translated using the exchange rates at transaction dates. All resulting exchange differences are recognised in other comprehensive income and accumulated in equity as currency translation reserve until the foreign operation is disposed of, at which time the cumulative exchange differences previously recognised in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment.

Any goodwill and fair value adjustments arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation to be expressed in its functional currency and translated into the presentation currency using the closing rate.

2.15 share capital

Ordinary shares are classified as equity. Transaction costs that relate to the issue of new shares are accounted for as a deduction from equity.

Own shares purchased are held as treasury shares in accordance with the requirements of Section 67A of the Companies Act 1965. The total amount of consideration paid, including directly attributable costs, is recognised directly in equity. When treasury shares are distributed as share dividends, the cost of the shares distributed is applied in the reduction of share premium and/or distributable reserves. When treasury shares are cancelled, an amount equivalent to their nominal value is transferred from share capital to a capital redemption reserve and the total cost of the treasury shares cancelled is adjusted to share premium and/or other suitable reserves.

Dividends on shares declared and unpaid at the end of the reporting period are recognised as a liability whereas dividends proposed or declared after the reporting period are disclosed in the notes to the financial statements.




2.16 income recognition

Income from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer.

Income from the rendering of services is recognised when the services are performed.

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

Interest income is recognised using the effective interest method.

2.17 government grants

Government grants are recognised when there is reasonable assurance that the Group will comply with the conditions attaching to the grants and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Grants related to assets are presented in the statement of financial position as deferred income which is amortised on a straight-line basis over the estimated useful lives of the assets. Grants related to income are presented under “other income” in the statement of comprehensive income.

2.18 employee Benefits

short-term employee Benefits

Short-term employee benefits such as wages, salaries, bonuses and social security contributions are recognised in profit or loss in the period in which the associated services are rendered by the employee.

defined contribution Plans

As required by law, employers in Malaysia make contributions to the statutory pension scheme, Employees Provident Fund (“EPF”). The Group’s foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. Contributions to defined contribution plans are recognised in profit or loss in the period in which the associated services are rendered by the employee.

equity compensation Benefits

The Employees’ Share Option Schemes (“ESOSs”) of the Company and a subsidiary grant the Group’s eligible employees options to subscribe for shares in the Company and the subsidiary at pre-determined subscription prices. These equity compensation benefits are recognised in profit or loss with a corresponding increase in equity over the vesting period as share option reserve. The total amount to be recognised is determined by reference to the fair value of the share options at grant date and the estimated number of share options expected to vest on vesting date.

2.19 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, which is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, are capitalised as part of the cost of the asset, until such time as the asset is substantially ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.




2.20 income taxes

Income taxes for the year comprise current tax and deferred tax.

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

Deferred tax is provided for under the liability method in respect of all temporary differences between the carrying amount of an asset or liability and its tax base except for those temporary differences associated with goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting nor taxable results at the time of the transaction.

A deferred tax liability is recognised for all taxable temporary differences whereas a deferred tax asset is recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the end of the reporting period.

2.21 cash and cash equivalents

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

3. JudgemeNts aNd estimatioN uNcertaiNtY

Judgements made in applying accounting Policies

In the process of applying the accounting policies of the Group and the Company, management makes the following judgements, apart from those involving estimations, that can significantly affect the amounts recognised in the financial statements:-

(i) classification of leasehold land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in determining the extent to which risks and rewards incidental to ownership lie. Despite the fact that there will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the land, management considered that the present value of the minimum lease payments approximated to the fair value of the land at the inception of the lease. Accordingly, management judged that the Group has acquired substantially all the risks and rewards incidental to ownership of the land through a finance lease.

(ii) impairment of available-for-sale financial assets

When there is a significant or prolonged decline in the fair value of an investment classified as available-for-sale, the cumulative decline represents an impairment loss. The determination of what constitutes “significant or prolonged” requires judgement. In making this judgement, management continuously evaluates the historical share price movements and the duration and extent of the decline in fair value below cost. For the financial year ended 30 June 2012, the Group has recognised impairment loss of RM34,901 on available-for-sale financial assets.

sources of estimation uncertainty

The key assumptions about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:-

(i) depreciation of property, plant and equipment

Property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives of the assets. Management estimates the useful lives to be within 3 to 50 years. Changes in the expected level of usage and technological development will impact on the economic useful lives and residual values of the assets and therefore, future depreciation charges may be revised. The carrying amounts of property, plant and equipment are disclosed in Note 4.



3. JudgemeNts aNd estimatioN uNcertaiNtY (cont’d)

sources of estimation uncertainty (cont’d)

(ii) impairment of non-financial assets

When the recoverable amount of a non-financial asset is determined based on its value in use, estimates on future cash flows and appropriate discount rate are required to determine the present value of those cash flows. The carrying amounts of non-financial assets subject to impairment assessment are disclosed in Notes 4, 5 and 6.

(iii) allowance for inventories

Reviews are made periodically by management on inventories for excess inventories, obsolescence and decline in net realisable value below cost. These reviews require the use of judgements and estimates. Possible changes in these estimates may result in revisions to the valuation of inventories. The carrying amounts of inventories are disclosed in Note 10.

(iv) impairment of loans and receivables

The Group and the Company make allowance for impairment based on an assessment of the recoverability of loans and receivables. Allowance is applied to loans and receivables when there is objective evidence that the balances may not be recoverable. Management specifically analyses historical bad debts, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment. Where expectations are different from previous estimates, the difference will impact on the carrying amounts of loans and receivables as disclosed in Note 11.

(v) income taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimates. The Group and the Company recognise tax assets/liabilities based on their understanding of the prevailing tax laws and estimates of whether such assets/liabilities will be realised/settled in the ordinary course of business. Where the final tax outcome of these matters is different from the amounts initially recognised, the difference will impact on the tax recognition in the period in which the outcome is determined. The carrying amounts of tax assets/liabilities as at 30 June 2012 are as follows:-

the group the companyrm rm

Current tax assets 1,577,458 911,936Current tax liabilities 98,662 0Deferred tax liabilities 3,626,712 0


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4. ProPertY, PLaNt aNd equiPmeNt (cont’d)

The details of land and buildings are as follows:-

the group

Long-term short-term freehold leasehold leasehold

land land land Buildings total rm rm rm rm rm

cost/valuationBalance at 1 July 2010 3,163,669 2,257,794 10,519,000 23,037,013 38,977,476 Additions 463,634 0 0 4,302,208 4,765,842 Disposals 0 0 (1,010,000) (843,183) (1,853,183)Reclassifications 0 0 0 468,130 468,130 Balance at 30 June 2011 3,627,303 2,257,794 9,509,000 26,964,168 42,358,265

Representing:-- Cost 3,627,303 2,257,794 4,320,000 19,499,168 29,704,265 - Valuation 0 0 5,189,000 7,465,000 12,654,000

3,627,303 2,257,794 9,509,000 26,964,168 42,358,265

Balance at 1 July 2011 3,627,303 2,257,794 9,509,000 26,964,168 42,358,265 Additions 0 0 0 114,985 114,985 Balance at 30 June 2012 3,627,303 2,257,794 9,509,000 27,079,153 42,473,250

Representing:-- Cost 3,627,303 2,257,794 4,320,000 19,614,153 29,819,250 - Valuation 0 0 5,189,000 7,465,000 12,654,000

3,627,303 2,257,794 9,509,000 27,079,153 42,473,250

accumulated depreciationBalance at 1 July 2010 0 404,385 2,375,620 4,682,731 7,462,736 Depreciation 0 33,849 194,481 474,856 703,186 Disposals 0 0 (277,134) (231,472) (508,606)Balance at 30 June 2011 0 438,234 2,292,967 4,926,115 7,657,316 Depreciation 0 33,850 187,818 537,193 758,861 Balance at 30 June 2012 0 472,084 2,480,785 5,463,308 8,416,177

carrying amountBalance at 1 July 2010 3,163,669 1,853,409 8,143,380 18,354,282 31,514,740

Balance at 30 June 2011 3,627,303 1,819,560 7,216,033 22,038,053 34,700,949

Balance at 30 June 2012 3,627,303 1,785,710 7,028,215 21,615,845 34,057,073




Certain short-term leasehold land and buildings stated at valuation were revalued in 1997 based on the market values given by independent professional valuers using the comparison method. Had the short-term leasehold land and buildings been carried at historical cost less accumulated depreciation, the total carrying amounts of the entire class of short-term leasehold land and buildings that would have been recognised in the financial statements are as follows:

the group2012 2011

rm RM

Short-term leasehold land 4,564,242 4,689,496Buildings 20,597,104 20,993,207

25,161,346 25,682,703

The carrying amounts of property, plant and equipment pledged as security for credit facilities granted to the Group are as follows:-

the group2012 2011

rm RM

Short-term leasehold land 0 1,801,888Buildings 0 1,954,625

0 3,756,513

A motor vehicle of the Group with carrying amount of RM586,687 (2011 : NIL) was acquired under hire purchase financing which remained outstanding as at the end of the reporting period.





the company

furniture, fittings

tools

and office and motor

renovation equipment accessories vehicles total

rm rm rm rm rm

cost

Balance at 1 July 2010 43,735 872,888 825 542,168 1,459,616

Additions 0 10,098 0 0 10,098

Disposals/Write-offs 0 (7,796) 0 0 (7,796)

Balance at 30 June 2011 43,735 875,190 825 542,168 1,461,918

Additions 0 20,694 0 0 20,694


Balance at 30 June 2012 43,735 837,506 825 542,168 1,424,234

accumulated depreciation

Balance at 1 July 2010 30,948 434,196 825 541,896 1,007,865

Depreciation 4,374 71,709 0 180 76,263


Balance at 30 June 2011 35,322 498,318 825 542,076 1,076,541

Depreciation 4,374 89,818 0 89 94,281


Balance at 30 June 2012 39,696 539,103 825 542,165 1,121,789

carrying amount

Balance at 1 July 2010 12,787 438,692 0 272 451,751

Balance at 30 June 2011 8,413 376,872 0 92 385,377

Balance at 30 June 2012 4,039 298,403 0 3 302,445


5. LaNd heLd for ProPertY deveLoPmeNt

the group2012 2011

rm RM

Freehold land, at cost 13,241,377 7,114,053

6. iNtaNgiBLe assets

the group

goodwillintellectual

property totalrm rm rm

Balance at 1 July 2010 214,489 199,750 414,239Disposal of subsidiary (199,491) 0 (199,491)Currency translation differences 319 4,250 4,569Balance at 30 June 2011 15,317 204,000 219,317Movement during the year 0 0 0Balance at 30 June 2012 15,317 204,000 219,317

7. iNvestmeNts iN suBsidiaries

the company

2012 2011rm RM

Unquoted shares, at cost 21,923,762 20,373,201Impairment losses (5,346,213) (4,946,381)

16,577,549 15,426,820Quoted shares in Malaysia, at cost 25,305,634 25,305,634

41,883,183 40,732,454

Market value of quoted shares in Malaysia 32,390,006 20,076,450




7. iNvestmeNts iN suBsidiaries (cont’d)

The details of the subsidiaries are as follows:-

Name of subsidiarycountry of

incorporation

effectiveownership interest

2012 2011 Principal activity

Bend Weld Engineering Sdn. Bhd. Malaysia 100.00% 100.00% Manufacture of metal works and structures, modules and parts for oil & gas production and extraction equipment

Elite Paper Trading Sdn. Bhd.(a) Malaysia 0.00% 55.00% Inactive

Fine Desserts Sdn. Bhd. (formerly known as Megatool Precision Sdn. Bhd.)

Malaysia 100.00% 100.00% Food and beverage business

Kewjaya Sdn. Bhd. Malaysia 100.00% 100.00% Money lending and leasing

Kobay Assets Sdn. Bhd. Malaysia 100.00% 100.00% Property letting

Kobay Sawin Sdn. Bhd. Malaysia 100.00% 100.00% Inactive

Kobay SCM (S) Pte. Ltd.(b) Singapore 60.00% 60.00% Investment holding

Kobay Systems Sdn. Bhd. (formerly known as Kobay SCM Sdn. Bhd.)

Malaysia 100.00% 100.00% General trading

LD Global Sdn. Bhd. Malaysia 100.00% 60.00% Inactive

Lipo Corporation Berhad Malaysia 53.16% 53.16% Investment holding and provision of management services

Lodge 18 Sdn. Bhd. Malaysia 100.00% 100.00% Hotel operation

Maker Technologies Sdn. Bhd. Malaysia 100.00% 100.00% Manufacture of precision moulds and parts

Megatool Precision (Suzhou) Co., Ltd.(b) China 100.00% 100.00% Manufacture, design, sale and after-sale service of precision moulds and monotype precise tools and fittings

Polytool Automation Sdn. Bhd.(a) Malaysia 0.00% 85.00% Inactive

Polytool Integration Sdn. Bhd. Malaysia 100.00% 85.00% Design and manufacture of saw-ing machines, vision and inspec-tion machines/ systems, fluid/epoxy dispensing machines, test handling machines, production machinery and parts thereof for solar industry

Polytool Precision Sdn. Bhd. Malaysia 100.00% 100.00% Investment holding



7. iNvestmeNts iN suBsidiaries (cont’d)

Name of subsidiarycountry of

incorporation

effectiveownership interest


Polytool Technologies Sdn. Bhd. Malaysia 100.00% 100.00% Manufacture of industrial equipment, machinery parts and tooling, encapsulation moulds, trim and form dies and progressive tooling for lead frames

Subsidiaries of Kobay SCM (S) Pte. Ltd.

Microhandling Asia Pte. Ltd.(b) Singapore 30.48% 30.48% Manufacture of semiconductor assembly and testing equipment

United Manufacturing Corporation Pte. Ltd.(b)

Singapore 60.00% 36.00% Provision of engineering design and services, engineering research and experimental development

Subsidiaries of Lipo Corporation Berhad

Lipo Precision Industry (Suzhou) Co., Ltd.(b)

China 53.16% 53.16% Manufacture of precision machined components

Micro Surface Treatment Sdn. Bhd. Malaysia 46.78% 46.78% Precision plating and surface treatment

Paradigm Metal Industries Sdn. Bhd. Malaysia 53.16% 53.16% Manufacture of precision metal stamping and sheet metal parts

Paradigm Precision Components Sdn. Bhd.

Malaysia 53.16% 53.16% Manufacture of precision machined components

Paradigm Precision Components (Thailand) Ltd.(a)

Thailand 0.00% 53.16% Inactive

Paradigm Precision Machining Sdn. Bhd. Malaysia 53.16% 53.16% Inactive

Super Tropica Development Sdn. Bhd. Malaysia 53.16% 53.16% Property development

Suzhou Univex Metal Tech Co., Ltd.(c) China 53.16% N/A Inactive

(a) Dissolved during the financial year

(b) Not audited by Crowe Horwath

(c) Incorporated in July 2011, and consolidated using unaudited financial statements



changes in ownership interests in subsidiaries

During the financial year, the Group acquired additional ownership interests in LD Global Sdn. Bhd., Polytool Integration Sdn. Bhd. and United Manufacturing Corporation Pte. Ltd. for total cash consideration of RM234,602. The effects of the changes in ownership interests on the equity attributable to owners of the Company are as follows:-

RM

Amounts by which non-controlling interests are adjusted 121,487Cash consideration paid (234,602)Decrease in equity attributable to owners of the Company (113,115)

8. iNvestmeNt iN associate

the group and the company

2012 2011rm RM

Unquoted shares, at cost 0 2

The details of the associate are as follows:-

Name of associatecountry of

incorporation

effective ownership interest


L Dessert (S) Pte. Ltd. Singapore 0.00% 50.00% Inactive During the financial year, the Group disposed of its entire ownership interest in the associate for cash consideration of RM2.

9. avaiLaBLe-for-saLe fiNaNciaL assets

the group the company2012 2011 2012 2011

rm RM rm RM

fair value (Level 1)Shares quoted:-- In Malaysia 234,387 312 0 0- Outside Malaysia 177,809 0 0 0Unit trust quoted in Malaysia 1,915,349 1,861,621 1,915,349 1,861,621

2,327,545 1,861,933 1,915,349 1,861,621

10. iNveNtories

the group2012 2011

rm RM

Raw materials and consumables 1,813,222 3,260,218Work-in-progress 5,174,028 4,765,039Finished goods 3,374,728 2,268,784Goods-in-transit 75,381 597,947

10,437,359 10,891,988



11. receivaBLes


rm RM rm RM

Trade receivables 22,499,081 22,226,855 0 0Allowance for impairment (370,587) (333,505) 0 0

22,128,494 21,893,350 0 0

Loan receivables (fixed rate) 3,926,454 5,184,428 0 0Allowance for impairment (3,350,000) (4,080,000) 0 0

576,454 1,104,428 0 0

Subsidiaries 0 0 17,639,447 14,752,079Allowance for impairment 0 0 (2,428,029) (905,850)

0 0 15,211,418 13,846,229

Other receivables 884,887 3,650,548 109,796 142,040Allowance for impairment (1,572) 0 (1,572) 0

883,315 3,650,548 108,224 142,040

23,588,263 26,648,326 15,319,642 13,988,269

The currency profile of receivables is as follows:-


rm RM rm RM

Ringgit Malaysia 13,437,998 16,253,361 14,933,048 13,545,576Renminbi 3,180,265 5,017,774 0 0US Dollar 5,104,432 3,371,174 0 0Others 1,865,568 2,006,017 386,594 442,693

23,588,263 26,648,326 15,319,642 13,988,269

trade receivables

Trade receivables are unsecured, non-interest bearing and generally on 30 to 90 day terms.

The movements in allowance for impairment are as follows:-

the group2012 2011

rm RM

Balance at 1 July 333,505 35,958Impairment loss recognised 348,487 343,599Impairment loss reversed (311,405) (35,538)Impairment loss written off 0 (10,514)Balance at 30 June 370,587 333,505

All the above impairment losses were individually determined after considering the adverse financial conditions of the debtors who have defaulted/delayed in payments.



11. receivaBLes (cont’d)

trade receivables (cont’d)

The ageing analysis of trade receivables not impaired is as follows:-

the group2012 2011

rm RM

Not past due 17,559,788 17,133,006Past due 1 to 30 days 2,953,082 2,352,000Past due 31 to 120 days 1,572,731 2,240,481Past due more than 120 days 42,893 167,863

22,128,494 21,893,350

Trade receivables that are neither past due nor impaired mainly relate to creditworthy customers who have regular transactions and good payment records with the Group.

Management determines credit risk concentrations in terms of counterparties and geographical areas. As at 30 June 2012, the Group did not have any major credit risk concentration relating to any individual customer or counterparty. The credit risk concentration profile by geographical areas of trade receivables is as follows:-

the group2012 2011

rm RM

Malaysia 14,162,763 12,088,272China 2,814,271 4,643,837Singapore 2,529,245 1,781,171Others 2,622,215 3,380,070

22,128,494 21,893,350

Loan receivables

Loan receivables are unsecured and repayable on demand. The effective interest rates as at 30 June 2012 ranged from 8.00% to 10.00% (2011 : 6.00% to 10.00%) per annum.


the group2012 2011

rm RM

Balance at 1 July 4,080,000 2,000,000Impairment loss recognised 0 2,080,000Impairment loss reversed (730,000) 0Balance at 30 June 3,350,000 4,080,000




11. receivaBLes (cont’d)

subsidiaries

The amounts owing by subsidiaries are unsecured, non-interest bearing and repayable on demand except for certain amounts totalling RM8,653,963 (2011 : RM5,513,264) which bear interest at 5.25% to 6.00% (2011 : 5.25% to 6.50%) per annum.


the company2012 2011

rm RM

Balance at 1 July 905,850 87,404Impairment loss recognised 1,522,179 818,446Balance at 30 June 2,428,029 905,850


other receivables

Other receivables are unsecured and non-interest bearing. The amounts mainly consist of refundable deposits and advances which have no fixed repayment terms.



rm RM rm RM

Balance at 1 July 0 3,735,826 0 3,735,826Impairment loss recognised 77,142 0 16,072 0Impairment loss written off (75,570) (3,735,826) (14,500) (3,735,826)Balance at 30 June 1,572 0 1,572 0


12. fiNaNciaL assets at fair vaLue through Profit or Loss

the group

2012 2011rm RM

Derivatives classified as held for trading, at fair value (Level 2) 2,320 2,220

Derivatives consist of forward exchange contracts which are used to hedge the exposure to currency risk. The Group does not apply hedge accounting. As at 30 June 2012, the Group had contracts due within 1 year to buy RM476,000 (2011 : RM610,000) and sell USD150,000 (2011 : USD200,000) at contractual forward rates.



13. cash aNd cash equivaLeNts


rm RM rm RM

Highly liquid investments 15,564,606 14,475,882 1,565,314 3,020,787Term deposits with licensed banks (fixed

rate) 35,109,900 40,190,841 21,609,990 24,083,990Cash and bank balances 7,972,168 6,929,546 414,540 430,907

58,646,674 61,596,269 23,589,844 27,535,684

The effective interest rates of term deposits as at 30 June 2012 ranged from 1.50% to 3.20% (2011 : 2.00% to 3.15%) per annum.

The currency profile of cash and cash equivalents is as follows:-


rm RM rm RM

Ringgit Malaysia 53,760,447 57,867,138 23,589,844 27,535,684Renminbi 2,161,759 1,645,759 0 0US Dollar 2,327,299 1,874,430 0 0Others 397,169 208,942 0 0

58,646,674 61,596,269 23,589,844 27,535,684

For the purpose of statement of cash flows, cash and cash equivalents exclude certain term deposits pledged as security for credit facilities granted to the Group and the Company as follows:-


rm RM rm RM

Cash and cash equivalents 58,646,674 61,596,269 23,589,844 27,535,684Term deposits pledged as security (386,721) (381,524) (8,000) (8,000)

58,259,953 61,214,745 23,581,844 27,527,684

14. PaYaBLes


rm RM rm RM

Trade payables:-- Related party(a) 80,964 40,467 0 0- Related party(b) 33,221 190,895 0 0- Unrelated parties 9,319,785 8,970,137 0 0

9,433,970 9,201,499 0 0Subsidiaries 0 0 1,166,060 1,997,000Other payables 5,929,043 5,410,802 228,837 153,373

15,363,013 14,612,301 1,394,897 2,150,373

(a) Being a company in which a director has a substantial financial interest

(b) Being a company in which close family members of a director have substantial financial interests



14. PaYaBLes (cont’d)

The currency profile of payables is as follows:-


rm RM rm RM

Ringgit Malaysia 11,902,459 10,560,284 1,394,897 2,150,373Renminbi 1,101,984 2,412,779 0 0US Dollar 1,567,323 1,013,264 0 0Others 791,247 625,974 0 0

15,363,013 14,612,301 1,394,897 2,150,373

Payables are generally short-term in nature or repayable on demand and their carrying amounts will approximate to the remaining contractual undiscounted cash flows.

trade Payables

Trade payables are unsecured, non-interest bearing and generally on 30 to 90 day terms.

subsidiaries

The amounts owing to subsidiaries are unsecured, non-interest bearing and repayable on demand.

other Payables

Other payables are unsecured and non-interest bearing. The amounts mainly consist of sundry payables and accruals for operating expenses which are generally due within 30 to 150 days.

15. LoaNs aNd BorroWiNgs

the group

2012 2011rm RM

securedHire purchase payables (fixed rate) 213,367 0

unsecuredTrust receipts (fixed rate) 0 156,806

213,367 156,806

Disclosed as:-- Current liabilities 99,563 156,806- Non-current liabilities 113,804 0

213,367 156,806



15. LoaNs aNd BorroWiNgs (cont’d)

hire Purchase Payables

Hire purchase payables are repayable over 3 years. The repayment analysis is as follows:-

2012 2011rm RM

Minimum hire purchase payments:-- Within 1 year 108,132 0- Later than 1 year and not later than 2 years 108,132 0- Later than 2 years and not later than 5 years 9,005 0Total contractual undiscounted cash flows 225,269 0Future finance charges (11,902) 0Present value of hire purchase payables:-- Within 1 year 99,563 0- Later than 1 year and not later than 2 years 104,836 0- Later than 2 years and not later than 5 years 8,968 0

213,367 0

Hire purchase payables are secured against the asset acquired thereunder (Note 4). The effective interest rate as at 30 June 2012 was 5.08% per annum. The carrying amount of hire purchase payables is reasonable approximation of fair value as the effective interest rate also approximates to the current market interest rates for similar liabilities.

trust receipts

The effective interest rate of trust receipts as at 30 June 2011 was 7.60% per annum. Trust receipts were generally short-term in nature and the carrying amount would approximate to the remaining contractual undiscounted cash flows.



16. deferred tax LiaBiLities

the group

2012 2011rm RM

Balance at 1 July 3,437,255 3,691,497Deferred tax income relating to origination and reversal of temporary differences (159,833) (509,251)Deferred tax liabilities under provided in prior year 349,290 255,009Balance at 30 June 3,626,712 3,437,255

In respect of:-- Taxable temporary differences of:-

- Financial instruments 2,000 0- Property, plant and equipment 3,981,712 3,575,255

- Unused capital allowances (67,000) (59,000)- Unused tax losses (290,000) (79,000)

3,626,712 3,437,255

Save as disclosed above, as at 30 June 2012, deferred tax liabilities and deferred tax assets have also effectively been recognised and offset against each other by the Group and the Company to the extent of approximately RM335,000 and RM86,000 (2011 : RM292,000 and RM108,000) respectively. No further deferred tax assets have been recognised for the excess of the deductible temporary differences, unused capital allowances and tax losses over the taxable temporary differences as follows:-


rm RM rm RM

Deductible temporary differences of financial instruments 3,556,000 4,330,000 0 0

Unused capital allowances 2,926,000 2,244,000 584,000 583,000Unused tax losses with:-- Expiry date in 2017 317,000 0 0 0- No expiry date 13,661,000 10,116,000 18,000 18,000Taxable temporary differences of:-- Financial instruments (49,000) (53,000) (49,000) (53,000)- Property, plant and equipment (1,290,000) (1,115,000) (296,000) (378,000)

19,121,000 15,522,000 257,000 170,000

17. deferred iNcome oN goverNmeNt graNts

the group

2012 2011rm RM

Balance at 1 July 123,263 164,351Amortisation (41,088) (41,088)Balance at 30 June 82,175 123,263

The Group received grants from the local government for the purchase of waste water treatment plant and Enterprise Resource Planning software. The grants were recognised as deferred income and amortised on a straight-line basis over the useful lives of the assets. The grants covered 50% of the project budgets as approved by the local government.



18. share caPitaL

2012 2011rm RM

Authorised:-100,000,000 ordinary shares of RM1.00 each 100,000,000 100,000,000

Issued and fully paid-up:-68,080,750 ordinary shares of RM1.00 each 68,080,750 68,080,750

Purchase of own shares

The shareholders of the Company, by a resolution passed at the Extraordinary General Meeting held on 3 July 2002, approved the Company’s plan to purchase its own shares. The directors are committed to enhancing the value of the Company to its shareholders and believe that the purchase plan can be applied in the best interests of the Company and its shareholders. The details of the shares purchased from the open market using internally generated funds and held as treasury shares are as follows:-

2012 2011Number of

shares rmNumber of

Shares RM

Balance at 1 July/30 June 728,200 888,447 728,200 888,447

The number of outstanding shares in issue after excluding the treasury shares is 67,352,550 (2011 : 67,352,550).

employees’ share option scheme

The Employees’ Share Option Scheme (“ESOS”) of the Company is governed by the Bye-Laws approved by the shareholders at an Extraordinary General Meeting held on 27 December 2002.

The principal features of the ESOS are as follows:-

(i) The maximum number of shares in the Company which may be subscribed on the exercise of options granted under the ESOS shall not, in aggregate, exceed 10% of the issued and paid-up share capital of the Company or such maximum percentages as allowable by any other relevant authorities at any point of time during the existence of the ESOS.

(ii) In order to qualify for participation in the ESOS, a participant must be an eligible executive director or employee of the Group. Eligibility, however, does not confer an eligible executive director or employee a claim or right to participate in the ESOS unless an offer has been extended to the eligible executive director or employee.

(iii) The number of new shares that may be offered and allotted to any eligible executive director and employee of the Group, who are entitled to participate in the ESOS, shall be at the discretion of the committee appointed by the Board of Directors (“Option Committee”) after taking into consideration the performance, seniority and length of service of the eligible executive directors and employees in the Group and such other factors that the Option Committee may deem relevant subject to the following:-

(a) not more than 50% (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS shall be allocated, in aggregate, to directors and senior management of the Group; and

(b) not more than 10% (or such percentage as allowable by the relevant authorities) of the shares available under the ESOS shall be allocated to any individual director or employee who, either singly or collectively through his/her associates (as defined in the Companies Act 1965), holds 20% or more in the issued and paid-up share capital of the Company;

provided always that it is in accordance with any prevailing guidelines issued by the Securities Commission (“SC”) or any other relevant authorities as amended from time to time.



18. share caPitaL (cont’d)

employees’ share option scheme (cont’d)

(iv) The ESOS shall continue to be in force for a period of 10 years and expiring on 17 February 2013.

(v) The price payable upon exercise of each of the option shares granted under the ESOS shall be set based on the 5-days weighted average market price of the Company’s shares, as quoted on Bursa Malaysia Securities Berhad, immediately preceding the date the option is granted, with a discount of not more than 10%, if deemed appropriate, or such lower or higher limit in accordance with any prevailing guidelines issued by the SC or any other relevant authorities as amended from time to time, or at the par value of each of the shares in the Company, whichever is higher.

(vi) The new shares to be allotted and issued upon exercise of any option shall upon allotment rank pari passu in all respects with the existing issued and paid-up shares in the Company except that the new shares so allotted shall not be entitled to any dividend, rights, allotment or other distribution unless the shares so allotted have been credited into the relevant securities accounts maintained by Bursa Malaysia Depository Sdn. Bhd. before the entitlement date and will be subject to all the provisions of the Articles of Association of the Company relating to the transfer, transmission or otherwise of the shares in the Company.

The movements in the number of options during the financial year are as follows:-

Number of options over

ordinary shares of rm1.00 each

Weightedaverage exercise

Pricerm

range ofexercise

Pricesrm

Weightedaverage

remaining contractual Life

Outstanding at 1 July 2010 2,456,000 1.20 Lapsed (87,000) 1.20 Outstanding at 30 June 2011 2,369,000 1.20 1.20 1.6 years

Exercisable at 30 June 2011 2,369,000 1.20

Outstanding at 1 July 2011 2,369,000 1.20 Lapsed (160,000) 1.20 Outstanding at 30 June 2012 2,209,000 1.20 1.20 0.6 year

Exercisable at 30 June 2012 2,209,000 1.20



19. LegaL reserve

the group

Legal reserve is used to record the transfers of profits by certain foreign subsidiaries upon each dividend declaration in accordance with their respective countries’ statutory requirements.

20. reveNue


rm RM rm RM

Sale of goods 97,294,913 106,762,632 0 0Rendering of services 502,232 4,062,441 402,000 428,625Dividend income 7,458 27,901 4,139,058 8,612,000Interest income 266,976 363,458 0 0Rental income 191,800 0 0 0

98,263,379 111,216,432 4,541,058 9,040,625

21. Profit Before tax


rm RM rm RM

Profit before tax is arrived at after charging:-

Auditors’ remuneration:-- Current year 189,795 170,395 24,000 25,000- Prior year 780 (1,194) (1,000) 0Depreciation of property, plant and

equipment 5,336,097 5,781,363 94,281 76,263Directors’ remuneration:-- Fees 22,500 22,500 17,500 22,500- Other emoluments 1,065,474 1,044,059 719,661 689,625Fee expense for financial instruments

not at fair value through profit or loss 79,478 72,516 2,167 2,054Impairment loss on available-for-sale

financial assets 34,901 0 0 0Impairment loss on investments in

subsidiaries(a) 0 0 478,802 241,800Impairment loss on loans and

receivables:-- Subsidiaries 0 0 1,522,179 818,446- Unrelated parties 425,629 2,423,599 16,072 0Impairment loss on property, plant and

equipment(a) 672,507 189,198 0 0Interest expense for financial liabilities

not at fair value through profit or loss 15,426 0 0 0Inventories written down 2,958,051 2,955,121 0 0



21. Profit Before tax (cont’d)


rm RM rm RM

Property, plant and equipment written off 348,328 220,981 5,179 209Realised loss on foreign exchange 388,951 687,997 0 81Rental of machinery and equipment 16,638 63,865 0 0Rental of motor vehicles 7,446 13,510 0 0Rental of premises 1,168,259 1,155,179 24,000 24,000Research and development costs 0 308,968 0 0

and crediting:-

Amortisation of deferred income on government grants 41,088 41,088 0 0

Bad debts recovered 18,000 8,800 0 8,800Bargain purchase gain(b) 0 14,222 0 0Gain on derecognition of available-for-

sale financial assets 40,673 99,359 0 27,175Gain on disposal of property, plant and

equipment 1,807 1,693,058 0 0Gain on disposal of subsidiaries(b) 0 3,612,253 0 2,379,640Gain on financial instruments at fair value

through profit or loss (classified as held for trading) 2,320 2,220 0 0

Gain on foreign exchange:-- Realised 0 0 490 0- Unrealised 206,674 32,442 0 0Gain on winding up of subsidiary 0 0 176,529 2,750Grants related to income 35,128 1,078 0 0Gross dividend income from investments

quoted in Malaysia 7,458 27,901 0 0Gross dividend income from subsidiaries 0 0 4,139,058 8,612,000Interest income for financial assets not

at fair value through profit or loss 1,910,781 1,715,438 1,211,374 1,028,884Rental of premises 323,528 31,008 0 0Reversal of impairment loss on

investment in subsidiary(b) 0 0 2 0Reversal of impairment loss on loans and

receivables 1,041,405 35,538 0 0

(a) Included in administrative and general expenses

(b) Included in other income



22. emPLoYee BeNefits exPeNse


rm RM rm RM

Short-term employee benefits 26,018,029 23,101,355 1,634,902 1,723,517Defined contribution plans 2,127,227 1,715,592 193,247 198,732

28,145,256 24,816,947 1,828,149 1,922,249

23. tax exPeNse


rm RM rm RM

Tax based on results for the year:-Malaysian income tax 2,418,599 3,000,435 715,000 1,812,654Overseas income tax 92,062 288,438 0 0Real property gains tax 0 174,000 0 174,000Deferred tax (159,833) (509,251) 0 0

2,350,828 2,953,622 715,000 1,986,654Tax (over)/under provided in prior year:-Malaysian income tax (57,700) (120,400) 17,873 2,312Overseas income tax (13,207) 13,207 0 0Deferred tax 349,290 255,009 0 0

2,629,211 3,101,438 732,873 1,988,966

The numerical reconciliation between the applicable tax rate, which is the statutory income tax rate, and the average effective tax rate on results for the year is as follows:-


% % % %

Applicable tax rate 25.00 25.00 25.00 25.00Non-deductible expenses 25.50 6.24 36.10 5.82Non-taxable income (2.80) (7.59) (18.24) (1.66)Tax incentives claimed (19.01) (7.77) 0.00 0.00Effect of differential tax rates 8.31 (3.92) 0.00 (7.17)Increase in unrecognised deferred tax assets 22.93 10.97 1.34 0.04Average effective tax rate 59.93 22.93 44.20 22.03

As at 30 June 2012, the Company has sufficient tax credits and tax exempt income to frank/distribute its entire retained profits if paid out as dividends. It may also distribute its entire retained profits as at 30 June 2012 as tax exempt dividends under the single tier tax system.



24. (Loss)/earNiNgs Per share

the group

The basic (loss)/earnings per share is calculated by dividing the Group’s (loss)/profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year as follows:-

2012 2011

(Loss)/Profit for the financial year attributable to owners of the Company (RM) (1,291,845) 6,552,955

Weighted average number of shares in issue 67,352,550 67,352,550

Basic (loss)/earnings per share (sen) (1.92) 9.73

The diluted (loss)/earnings per share equals the basic (loss)/earnings per share due to the anti-dilutive effect of the share options which has been ignored in calculating the diluted (loss)/earnings per share.

25. Purchase of ProPertY, PLaNt aNd equiPmeNt


rm RM rm RM

Cost of property, plant and equipment purchased

6,223,956 12,796,660 20,694 10,098

Amount financed through hire purchase (300,000) 0 0 0Net cash disbursed 5,923,956 12,796,660 20,694 10,098



26. reLated PartY discLosures

Significant transactions with related parties during the financial year are as follows:-


rm RM rm RM

Key management personnel compensation:-

- Short-term employee benefits 1,648,881 1,894,735 658,291 640,128- Defined contribution plan 146,263 143,017 78,870 71,997

1,795,144 2,037,752 737,161 712,125Capital repayment from subsidiaries 0 0 0 699,920Disposal of property, plant and

equipment to subsidiaries 0 0 4,166 0Dividends received from subsidiaries 0 0 3,355,058 6,599,000Interest charged to subsidiaries 0 0 415,101 383,434Management fees charged to subsidiaries 0 0 402,000 428,625Purchase of goods from other related

party(a) 316,277 235,867 0 0Purchase of goods from other related

party(b) 146,783 413,050 0 0Purchase of property, plant and

equipment from subsidiary 0 0 1,650 0Rental of premises charged by subsidiary 0 0 24,000 24,000Subscription for shares in subsidiaries 0 0 1,499,998 2,255,000

(a) Being a company in which a director has a substantial financial interest

(b) Being a company in which close family members of a director have substantial financial interests

27. segmeNt rePortiNg

the group

operating segments

For management purposes, the Group is organised into business units based on their products and services and has the following reportable operating segments:-

(i) Precision tooling and equipment - Manufacture of precision moulds, tooling and dies, design and manufacture of automated machines, semiconductor assembly and testing equipment

(ii) Precision metal components - Manufacture of precision machined components, precision stamping, sheet metal parts and surface treatment

(iii) Metal fabrication - Manufacture of metal works and structures, modules and parts for oil & gas production and extraction equipment

(iv) Property development - Property development

Except as indicated above, no operating segments have been aggregated to form the above reportable segments. “Other operating segments” category consists of small operations related to food and beverage business, money lending, general trading and hotel operation.

The accounting policies and measurement bases of the segment items reported are the same as those disclosed in Note 2. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with external parties.

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27. segmeNt rePortiNg (cont’d)

geographical information

In presenting information about geographical areas, segment revenue is based on the geographical location of customers whereas segment assets are based on the geographical location of assets.

external revenue Non-current assets2012 2011 2012 2011

rm RM rm RM

Malaysia 63,548,042 63,444,580 65,234,226 58,373,980China 8,725,637 14,819,539 6,327,854 7,135,061Singapore 16,142,375 15,408,227 331,106 412,487Other foreign countries 9,847,325 17,544,086 0 0

98,263,379 111,216,432 71,893,186 65,921,528

major customers

For the financial year ended 30 June 2011, there was 1 major customer from the operating segment of precision metal components that contributed approximately 12% of the Group’s total revenue and the total revenue generated from the customer amounted to approximately RM13,140,000. No individual customer has contributed 10% or more of the Group’s total revenue for the financial year ended 30 June 2012.

28. commitmeNt for Purchase of ProPertY, PLaNt aNd equiPmeNt

the group

2012 2011rm RM

Approved but not contracted 1,070,000 0Contracted but not provided for 640,000 3,642,000

1,710,000 3,642,000

29. coNtiNgeNt LiaBiLities - uNsecured

the company

The Company has entered into financial guarantee contracts to provide financial guarantees to financial institutions for credit facilities granted to certain subsidiaries up to a total limit of RM33,528,000 (2011 : RM1,750,000). The total utilisation of these credit facilities as at 30 June 2012 amounted to approximately RM78,000 (2011 : RM157,000). An unutilised credit line of RM31,778,000 has been cancelled after the reporting period.

The aforementioned financial guarantee contracts should have been recognised in the statement of financial position in accordance with the recognition and measurement policies as stated in Note 2.12. After considering that the probability of the subsidiaries defaulting on the credit lines is remote, the financial guarantee contracts have not been recognised as the fair values on initial recognition are not expected to be material.




30. fiNaNciaL risk maNagemeNt

The activities of the Group expose it to certain financial risks, including credit risk, liquidity risk and currency risk. The overall financial risk management objective of the Group is to ensure that adequate financial resources are available for business development whilst minimising the potential adverse impacts of financial risks on its financial position, performance and cash flows.

The aforementioned financial risk management objective and its related policies and processes explained below have remained unchanged from the previous financial year.

credit risk

The Group’s exposure to credit risk arises mainly from receivables, derivative financial assets and deposits placed with financial institutions. The maximum credit risk exposure of these financial assets is best represented by their respective carrying amounts in the statement of financial position. The Company is also exposed to credit risk in respect of its financial guarantees provided for credit facilities granted to certain subsidiaries. The maximum credit risk exposure of these financial guarantees is the total utilisation of the credit facilities granted as disclosed in Note 29.

As the Group only deals with reputable financial institutions, the credit risk associated with derivative financial assets and deposits placed with them is minimal. The Group manages its credit risk exposure of receivables by assessing counterparties’ financial standings on an ongoing basis, setting and monitoring counterparties’ limits and credit terms.

Liquidity risk

The Group’s exposure to liquidity risk relates to its ability to meet obligations associated with financial liabilities as and when they fall due. The remaining contractual maturities of financial liabilities are disclosed in their respective notes.

The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities whilst maintaining sufficient cash and the availability of funding through standby credit facilities.

currency risk

The Group’s exposure to currency risk arises mainly from transactions entered into by individual entities within the Group in currencies other than their functional currencies. The major functional currencies within the Group are Ringgit Malaysia (“RM”) and Renminbi (“RMB”) whereas the major foreign currency transacted is US Dollar (“USD”).

The Group observes the movements in exchange rates and acts accordingly to minimise its exposure to currency risk. Where necessary, the Group enters into derivative contracts to hedge the exposure. Such exposure is also partly mitigated in the following ways:-

(i) The Group’s foreign currency sales and purchases provide a natural hedge against fluctuations in foreign currencies.

(ii) The Group maintains part of its cash and cash equivalents in foreign currency accounts to meet future obligations in foreign currencies.

Based on a symmetric basis which uses the foreign currency as a stable denominator, the following table demonstrates the sensitivity of profit or loss to changes in exchange rates that were reasonably possible at the end of the reporting period, with all other variables held constant:-

the groupincrease/

(decrease) in Profit

Increase/(Decrease)

in Profit2012 2011

rm RM

Appreciation of USD against RM by 10% 312,442 241,030Depreciation of USD against RM by 10% (312,442) (241,030)Appreciation of USD against RMB by 5% 7,037 (16,316)Depreciation of USD against RMB by 5% (7,037) 16,316


31. caPitaL maNagemeNt

The overall capital management objective of the Group is to safeguard its ability to continue as a going concern so as to provide fair returns to owners and benefits to other stakeholders. In order to meet this objective, the Group always strives to maintain an optimal capital structure to reduce the cost of capital and sustain its business development.

The Group considers its total equity (including non-controlling interests) and total loans and borrowings to be the key components of its capital structure and may, from time to time, adjust the dividend payouts, purchase own shares, issue new shares, sell assets, raise or redeem debts, where necessary, to maintain an optimal capital structure. Management has not formulated any formal policies and processes for monitoring the Group’s capital in view of its simple structure. Nevertheless, management will always strive to improve those policies and processes whenever the need arises.

32. sigNificaNt eveNts duriNg aNd after the rePortiNg Period

On 22 March 2012, the Company issued a letter to its subsidiary, Lipo Corporation Berhad (“Lipo”), proposing the privatisation of Lipo via a selective capital reduction and repayment exercise pursuant to Section 64 of the Companies Act 1965 (“Proposed SCR”). Under the Proposed SCR, up to 29,929,250 ordinary shares of RM1.00 each in Lipo will be cancelled and the holders of the shares cancelled, other than the Company, will receive a capital repayment of RM1.25 per share. Upon completion of the Proposed SCR, Lipo will become a wholly-owned subsidiary of the Company.

The Proposed SCR was approved by the shareholders of Lipo at an Extraordinary General Meeting held on 10 August 2012. Following that, the petition to obtain an order of the High Court of Malaya at Penang (“High Court”) to confirm the Proposed SCR had been filed on 22 August 2012 and the High Court had, on 28 September 2012, granted the said order.

At the date when the financial statements were authorised for issue, all required approvals for the Proposed SCR had been duly obtained and the entitlement date to receive the capital repayment had been fixed on 25 October 2012. The capital repayment is expected to be made within 10 days from the entitlement date, and the Proposed SCR shall become effective upon lodgement of the High Court order with the Companies Commission of Malaysia.




rm RM rm RM

Total retained profits of the Company and its subsidiaries:-

- Realised 55,574,914 59,919,553 13,805,870 14,268,032- Unrealised (2,659,134) (2,718,009) 0 0

52,915,780 57,201,544 13,805,870 14,268,032Consolidation adjustments and eliminations (12,996,022) (14,421,470) 0 0Total retained profits as per statement of

financial position 39,919,758 42,780,074 13,805,870 14,268,032

The above supplementary information is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

SuPPlEMENTARY INFORMATIONRealised And Unrealised Profits Or Losses


SHAREHOlDINg STATISTICAs At 19 November 2012

Authorized Share Capital : RM100,000,000Issued and Paid Up Capital : RM68,080,750Class of Equity Shares : Ordinary Shares of RM1.00 eachVoting Rights : One vote per shareholder on a show of hands or one vote per ordinary share on a poll

aNaLYsis of sharehoLdiNgs

size of shareholdings shareholders shareholdingsNumber %^ Number %^

1 – 99 522 11.236 24,835 0.037100 – 1,000 384 8.265 240,451 0.3571,001 – 10,000 3,345 71.997 9,293,729 13.79910,001 – 100,000 363 7.813 8,990,198 13.348100,001 – < 5% 30 0.646 23,547,930 34.9625% and above 2 0.043 25,255,407 37.497TOTAL 4,646 100.000 67,352,550 100.000

suBstaNtiaL sharehoLders

Name of substantial shareholders direct interest deemed interestNo. of shares %^ No. of shares %^

Kobay Holdings Sdn. Bhd. 17,523,007 26.02 – –Norinv Kapital Sdn. Bhd. 7,732,400 11.48 – –Dato’ Koay Hean Eng 1,654,154 2.46 *17,523,007 26.02Koay Cheng Lye 586,995 0.87 *17,523,007 26.02Koay Ah Bah @ Koay Cheng Hock 569,665 0.85 *17,523,007 26.02

directors’ sharehoLdiNg iN the comPaNY

Name of directors direct interest deemed interest

No. of shares %^ No. of shares %^

Dato’ Koay Hean Eng 1,654,154 2.46 *17,523,007 26.02Koay Cheng Lye 586,995 0.87 *17,523,007 26.02Koay Ah Bah @ Koay Cheng Hock 569,665 0.85 *17,523,007 26.02Tan Yok Cheng 1,250 # – –Lim Swee Chuan – – – –Dr. Mohamad Zabdi Bin Zamrod – – – –Khaw Eng Peng – – – –

Notes:-

* Deemed interest by virtue of the Directors’ direct interest in Kobay Holdings Sdn. Bhd., a major shareholder of Kobay

# Interest is less than 0.01%

^ The percentage of shareholding is calculated based on 67,352,550 shares after deducting 728,200 treasury shares (retained by the Company as per Record

of Depositors) from the fully issued and paid-up capital of the Company.

Dato’ Koay Hean Eng, Koay Cheng Lye and Koay Ah Bah @ Koay Cheng Hock are deemed to have interest in the shares of all the subsidiary companies of Kobay Technology Bhd. (“Kobay”) to the extent that Kobay has an interest, by virtue of their deemed interests in the shares of Kobay.


SHAREHOlDINg STATISTIC (cont’d)

As At 19 November 2012

thirtY (30) Largest sharehoLders (as at 19 November 2012)

Name of shareholdersNo. of

shares held%

shareholding^

1 Kobay Holdings Sdn. Bhd. 17,523,007 26.0172 Norinv Kapital Sdn. Bhd. 4,369,600 6.4883 Norinv Kapital Sdn. Bhd. 3,362,800 4.9934 Ho Kok Seng 3,291,100 4.8865 Premiergrow Capital Sdn. Bhd. 2,946,600 4.3756 Inna Capital Sdn.Bhd. 1,788,716 2.6567 Ch’ng Chuon Ghee 1,745,100 2.5918 Koay Hean Eng 1,654,154 2.4569 Inna Capital Sdn. Bhd. 1,531,200 2.27310 Ch’ng Chuon Ghee 1,366,200 2.02811 Ch’ng Kean Hong 1,110,000 1.64812 Ng Mun Fye 1,088,800 1.61713 Tan Lai Hock 714,600 1.06114 CIMSEC Nominees (Tempatan) Sdn. Bhd. pledged securities 587,200 0.872

account for Ting Swee Swee (Penang-CL)15 Koay Cheng Lye 586,995 0.87216 JF Apex Nominees (Tempatan) Sdn. Bhd. pledged securities account 582,200 0.864

for Wah Fang Fang (STA5)17 Koay Ah Bah @ Koay Cheng Hock 569,665 0.84618 Sim Chin Chuan 494,500 0.73419 Lai Chin Loy 486,600 0.72220 Wong Mei Kuan 470,000 0.69821 Ong Kok Hoe 357,000 0.53022 Chan Foong Cheng 240,000 0.35623 Kong Food Kim 220,600 0.32824 Sapiah Binti Abu 162,500 0.24125 Lew Yok Kee 155,000 0.23026 Tang Wing Kean 150,000 0.22327 Lee Eng Wooi 140,100 0.20828 Yong Ki Lin 136,000 0.20229 Tang Theng Kow 120,000 0.17830 Ariffin Bin Mohamed Isa 111,250 0.165

TOTAL: 48,061,487 71.358

Note:

^ The percentage of shareholding is calculated based on 67,352,550 shares after deducting 728,200 treasury shares (retained by the Company as per Record

of Depositors) from the fully issued and paid-up capital of the Company.


lIST OF PROPERTIESAs At 30 June 2012

Location with address description/existing useLand area(Built-up area)

date of acquisition

tenure(age of Buildings)

Net Book value

@ 30/6/12rm’000

* HS(D) No. HSD 11895, PT 3020, Mukim 12, Daerah Barat Daya, Pulau Pinang

Plot 38, Phase IV Hilir Sungai Kluang 2, Bayan Lepas Industrial Park, 11900 Pulau Pinang

Single storey factory

Existing use : Industrial use as factory premises

Approx. 45,738 sq. ft./(12,102 sq. ft.)

09.07.1992 Leasehold for 60 years expiring on 24.11.2053/(18 years)

2,000

* HS(D) PN5918, Lot 12383, Mukim 12, Daerah Barat Daya, Pulau Pinang

Plot 30, Phase IV, Hilir Sungai Kluang 1, Bayan Lepas Industrial Park, Pulau Pinang

Single storey factory with an annexed two storey office block in front


Approx. 130,681 sq. ft./(85,007 sq. ft.)


8,307

Hakmilik No. PN4028, Lot 12461, Mukim 12, Daerah Barat Daya, Pulau Pinang Plot 83, Medan Bayan Lepas, Bayan Lepas Industrial Park IV, 11900 Pulau Pinang

Single storey factory building with an annexed two storey office block


Approx. 87,599 sq. ft./ (41,797 sq. ft.)


5,307

HS(D) No. HBM38, PT 1528 & HS(D) No. HBM39, PT 1530, Mukim 1, Daerah Seberang Prai Tengah, Pulau Pinang 2631, Lorong Perusahaan 10, Phase 3, Prai Industrial Estate, 13600 Pulau Pinang

Single storey factory building with an annexed two storey office block


Approx. 118,099 sq. ft./ (73,336 sq. ft.)


3,646

HS(D) No. HSD 42050, PT 5, Mukim 1, Daerah Seberang Perai Tengah, Pulau Pinang 967, Kawasan Perusahaan MIEL, Pulau Pinang

Single storey factory building


Approx. 22,500 sq. ft./ (20,000 sq. ft.)


810

HS(D) No. HSD 11700, PT80020 Mukim of Hulu Kinta, District of Kinta, Perak Plot 19, Zon Perdagangan Bebas, Jelapang II, Jalan Jelapang, 30020 Ipoh, Perak


Existing use : Vacant

Approx. 449,801 sq. ft./ (122,123 sq. ft.)


5,104


lIST OF PROPERTIES (cont’d)

As At 30 June 2012

Location with address description/existing useLand area(Built-up area)

date of acquisition

tenure(age of Buildings)

Net Book value

@ 30/6/12rm’000

Jenis dan No. Hakmilik :GRN52732 Lot 990,GRN52733, Lot 992GRN28219, Lot 996GRN46882 Lot 36, andGRN28204 Lot 249Bandar Tanjung Bungah,Daerah Timur Laut, Pulau Pinang

Land


Approx. 31,812 sq. ft.

01.12.2009 Freehold 4,587

Jenis dan No. Hakmilik :GRN28217 Lot 993,GRN28218 Lot 995,GRN46881 Lot 35 andGRN44961 Lot 251Bandar Tanjung Bungah,Daerah Timur Laut, Pulau Pinang

Land


Approx.15,872 sq. ft.

25.02.2010 Freehold 2,518

Jenis dan No. Hakmilik :Geran 459888, 459887, Lot No. 6348, 6341, Mukim Rimba Terjun, Daerah Pontian, Negeri Johor



Approx.490,317 sq. ft./(25,000 sq.ft.)

10.06.2009 Freehold/(1 year)

4,227

Jenis dan No. Hakmilik :Geran 24324, Lot No. 2628, Sek 4, Daerah Seberang Prai Utara, Butterworth, Pulau Pinang

9 storey hotel building Existing use : hotel

Approx.4,305 sq. ft./(36,822 sq.ft)

06.01.2011 Freehold/(30 years)

4,656

GRN47092, Lot 34, Bandar Tanjung Bungah, Daerah Timur Laut, Pulau Pinang

Land

Existing use : vacant


18.05.2011 Freehold 5,336

Lot 991, 994 & 997, Bandar Tanjung Bungah, Daerah Timur Laut, Pulau Pinang.

Land

Existing use : vacant


29.02.2012 Freehold 800

Note:-

* The property was revalued at 22 August 1996. The Group carried its leasehold land and buildings at revalued amounts and placed reliance on the transitional

provision when Malaysian Accounting Standards Board first adopted International Accounting Standards 16 which provides exemption from the need to

make regular revaluations for such properties.

Kobay Technology Bhd. (Company No.: 308279-A)

Plot 30, Hilir Sungai Kluang 1Bayan Lepas Industrial Park, Phase 4

11900 Bayan Lepas, Penang, MalaysiaTel: 604-6411 888 Fax: 604-6412 888

www.kobaytech.com

committed to excellence · 2017-03-13 · email : [email protected] auditors crowe horwath...

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